Health Care Reform Must Cover the Costs of Research

By Hupfeld, Stanley E. | THE JOURNAL RECORD, February 1, 1995 | Go to article overview

Health Care Reform Must Cover the Costs of Research


Hupfeld, Stanley E., THE JOURNAL RECORD


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 lives. …

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