As market forces and regulation continue to reshape our health
care system, one issue consistently raised is whether there will
be casualties. Will reform cause the loss of programs,
institutions or capabilities?
The short answer: almost certainly. Health care purchasers of
all stripe, whether they are businesses or the government, are
increasingly interested in seeing that health care services be
available to them at the lowest unit cost possible. Their
collective buying power is more and more often forcing that to
come about. For health care providers, the reduction in revenue
from payers must be offset in some way, which means there's
clearly a very strong possibility of some casualties.
In the past, health care providers have accommodated demands
for lower costs and prevented casualties by shifting costs of
care for lesser-paying groups to other groups with deeper
pockets. The most obvious example is the Medicare program, which
typically pays significantly less than the true cost of care,
forcing health care providers to charge private patients
considerably more. A much less well-known example of cost
shifting _ and one which may ultimately have much greater
consequences, should revenues not be available to adequately fund
it _ has to do with a remarkable distinguishing feature of
American health care: research.
In their fervent pursuit of rock-bottom costs of care,
purchasers of health care are saying to the health system that
they will not allow the kinds of cost shifting that have gone on
in the past to continue. This is a particularly troublesome
attitude for research, because the drive toward the most
efficient level of pricing for the delivery of health care
services undervalues biomedical innovation. If traditional
methods of covering the costs for biomedical research and
innovation are no longer options, one must ask from what other
sources the funds will come.
There is some debate over just what amount of biomedical
research is truly necessary. Proponents rightly point out that at
the most basic level, biomedical research is intended to give
patients and physicians the tools and knowledge to prevent
disease and maintain health.
Yet some critics argue that biomedical research and innovation
in the end increases our nation's health care costs. They say
that since we all must face the grim reaper, biomedical
innovation that cures a person at one stage of life simply
provides that person an opportunity to live longer and die later
of a more expensive disease.
There is some truth in the argument. As the average age of our
population and our average life expectancy increases, we in fact
are more likely to die of a debilitating, long-term,
expensive-to-treat disease, thus multiplying the cost of health
care to society many times.
The same critics also cite the miracles that are performed
every day in high-tech medical centers in which weak, underweight
and sickly newborns are saved that in the past would have been
lost. In some cases, critics say, these survivors become a
long-term burden to society, requiring special care their entire