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Three keys to curbing costs

By Paul Mango and Nicolaus Henke

26 February 2009

Is it possible to provide adequate care to all? The short answer to this question is an emphatic yes, from both an economic and an ethical perspective. Yet we must understand that achieving these goals poses radically different challenges depending on local conditions, extends far beyond the traditional boundaries of the health care system alone, and requires reciprocal obligations between the government and the individual. These three caveats deserve closer analysis.

There are fundamentally different challenges, country by country, depending on the degree of economic development.

Developing and developed countries face different challenges when it comes to providing adequate health care for all. In developing countries, diseases, and therefore medical risks, are still largely a function of larger public-health issues: basic sanitation, the cleanliness of the water system, education, access to electricity, the prevalence of vaccinations, and access to basic medical care. The most serious challenge in these regions is the eradication of contagious, water-borne, blood-borne, and insect-borne diseases—malaria, typhus, tuberculosis, HIV/AIDS, and cholera, to name just a few. The potential for progress is dramatic. Some countries that have focused on such priorities, like Egypt, have achieved an increase of average life expectancy of 22 years over the last four decades. In countries that are still facing severe economic struggles, the fundamental challenge is to create the stable political environment, public-utility infrastructure, basic civic institutions, education system, and primary-care network that can help extend basic medical knowledge and technology.

In more developed nations, by contrast, the problem is not access to health care but rather its cost. The increase in the cost of health care in wealthy nations has outpaced GDP growth for the past 50 years by about 2 percent per year. If costs were to continue to soar at this pace—which, of course, is impossible—by 2100, health care would consume 70 to 90 percent of the GDP of the wealthy nations forming the Organisation for Economic Cooperation and Development (OECD).

Four factors are provoking runaway health care costs: wealth, technology, lifestyles, and aging. Lifestyle factors—such as lack of exercise, overconsumption of calories, smoking, excessive alcohol consumption, and the like—are the ones most important to alter. Fundamentally, it is an issue of behavior modification aimed at reducing chronic disease, and thereby dramatically improving the overall affordability of health care. Most health systems around the world spend between 1 and 2 percent of their budgets on the prevention of lifestyle-related disease or its progression. Nonetheless many of these initiatives are some of the highest-return initiatives in all health care, such as smoking cessation. Creating a delivery infrastructure with effective marketing to achieve behavior modification should be a key priority for health care policymakers.

This is not simply a health-system performance issue.

The challenge of providing adequate health care extends well beyond the direct authority of a nation’s health care system, since outcomes are driven fundamentally by social factors rather than just the health care system. The linkages to the workplace and to local economic and environmental infrastructure are important.

Consider that just within the region of Glasgow, Scotland—where there are few local differences among health systems—there is a local variance in life expectancy at birth of 22 years, within a driving distance of only eight miles. That variance is similar to the difference between life expectancies in Scotland and Sudan.

In developed countries, the issue is affordability—and the chief culprit is the treatment of lifestyle-induced chronic disease, which can now extend for decades. The key to success here will be altering several key behaviors: increasing exercise, moderating the intake of calories, reducing the incidence of unprotected sex, and reducing the abuse of narcotics, alcohol, and tobacco. Also crucial: improving primary and secondary education systems, imposing constraints on the food-processing industries, and developing a deeper understanding of the biases that shape what are seemingly irrational personal behaviors.

Obligations are reciprocal, involving commitments by both individuals and institutions.

When it comes to the most critical factors in health care—safeguarding public health, mobilizing multiple institutions, imposing regulations to control negative externalities, and building awareness of health dangers—the State is often a necessary and effective intermediary. Indeed, some of the greatest advancements in the overall health status of the world’s population have come from government-sponsored efforts to reduce the incidence of tobacco consumption, to prevent the transmission of HIV/AIDS, and to cleanse the water system. In addition, collaboration among such institutions as the global pharmaceutical companies, prominent academic medical centers, and the National Institutes for Health has led to marvelous discoveries and to greater practical applications of scientific advances. Thus there is a legitimate, and perhaps essential, role for government, nongovernmental organizations (NGOs), and commercial institutions in ensuring that adequate health care is available to all.

The result is a paradox: while the world’s population may be entitled to access to good basic health care services, it is not necessarily entitled to good health. On the contrary: good health in today’s society requires a reciprocal obligation. The State and other institutions are required to provide the education, the infrastructure, and the access necessary for good health. In return, individuals and families are required to engage in healthy behaviors (or at least to avoid fundamentally destructive ones); to commit to recommended vaccinations and screenings; and, when illness occurs, to adhere to agreed-upon and prescribed courses of therapy. These obligations are destined to intensify, as medical technology will increasingly move from curing disease to improving the functioning of the body (for example, through memory enhancement or cosmetic surgery). In a world where behaviors are increasingly the primary determinants of health status and medical risks—and, therefore, of medical-resource consumption—the individual must behave in ways that promote health, reduce risk, and conserve scarce resources.

Ensuring adequate health care for all will require bold decisions. Society must reach a consensus on the extent of health insurance coverage that will be available to all on a tax-funded basis (recognizing that even the market-focused United States provides 61 percent of health care spending from taxes); a consensus on how to foster the social determinants of health, in particular economic development; and a consensus on an ethos of reciprocal obligation. The government and its institutions must meet their obligations; at the same time, the individual and families must live up to theirs.

Comment [30]

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Good article.

Unhealthy lifestyes —- smoking, riding a motorcycle withut a helmet, excessive alcohol consumption, and others should provide a basis for higher health insurance for this portion of the population, let alone taxing some of them (tobacco, for example).
On a broader note, we need to reinforce/reimburse medical schools to increase family physicians vs. specialists. The former is what is needed in a “prevention” type of medical focus.
Third, everyone should have a deductible and co-pay. These economic incentives slow down the use of healthcare facilities and services.
Fourth, tort reform is needed.

Posted 6 May 2009, 14:16 by Nick Wilson
I believe .. patient power can heal a sick healthcare system

The Indian healthcare system has become sick. In the private sector, doctors are no longer held in high regard. The doctor-patient relationship has deteriorated and patients believe that the medical profession has become commercialized. The dismal state of the government’s healthcare services for the poor and the middle-class has also been extensively documented.
Most people believe that the reason for this sorry state of affairs is that India is an over-populated poor country, which means we have too many patients; not enough doctors; not enough hospital beds; and not enough money to be able to take care of so many patients.
The knee-jerk reflex has been to train more doctors ; set up more hospitals; and force corporate hospitals and doctors to provide subsidised medical care. This is simply a form of “ band-aid medicine” which is doomed to fail , as has been proven by our experience over the last 60 years.
So what’s the solution ? It’s surprisingly simply – we need to rely on the one resource which is almost inexhaustible—the people themselves. The principle is simple – educate them so they can manage their own health problems. This means we can convert what seems to be a liability into an asset !
The reason that India is shining today is that we are in a demographic “sweet spot.” What used to be considered our major liability – our “ overpopulation” – how now become our major asset ! India’s major strength is its middle-class, with its millions of educated young adults , and protecting their health should be a high priority. Unfortunately , healthcare remains a neglected area , because we have wasted our resources on hospitals and doctors, rather than on patients. As a result of this, millions of working years ( and billions of rupees ) are being wasted on preventable illnesses .
The biggest mistake we make is to assume that people are incapable of tackling their own medical problems and that we need to look to doctors for solutions. We need to change our focus. Instead of trying to provide sophisticated healthcare services ( blindly imported from the West) , which need expensive technology, fancy machines and highly trained specialists, we need to tap the people themselves. People are smart and motivated , and are capable of remaining healthy, if we give them the right tools and teach them how to use them.
Doctors are illness experts – and not healthcare experts. Healthcare needs to learn from the revolution which has occurred in microfinancing. When given money and the freedom to use it as they see fit , even very poor people have come up with remarkably innovative ideas which could never have been planned, designed or anticipated by the traditional experts – bankers!
Information Therapy – providing the right information at the right time for the right person – is powerful medicine ! Ideally, every clinic , hospital, pharmacy and diagnostic center should have a patient education resource center, where people can find information on their health problem . Every hospital should have a Department of Patient Education, just like Mayo Clinic does !
We have made a start by setting up the world’s largest free patient education resource center, HELP – Health Education Library for People. HELP was established in 1997 to empower people by providing them with the information they need to promote their health , and prevent and treat medical problems in the family in partnership with their doctor. We have access to information on every health and medical topic under the sun – explained in terms which the layperson can understand.
HELP has become a prototype of the modern digital library. Our website at http://www.healthlibrary.com is India’s leading health portal, and receives over half a million hits a month ! We are a public library – everyone is welcome ! Entry to HELP is free ! We are open Monday through Saturday, from 10 am to 6.30 pm. For those unable to come personally to the library, we also answer questions by post or e-mail. This is an innovative service called MISS-HELP ( Medical Information Search Services from HELP ) which allows us to provide medical information to users from all over India .
HELP helps patients save money on medical care by
1. Promoting SelfCare and helping them to do as much for themselves as they can
2. Helping them with Evidence-Based Guidelines , so that they can ask for the right medical treatment that they need – no more and no less
3. Helping them with Veto Power, so they can say No to medical care they don’t need, thus preventing overtesting and unnecessary surgery .
Our focus areas now are:
1. encouraging health insurance companies to invest in patient education
2. advocating information therapy
3. setting up a national network of patient education centers
4. developing patient educational materials in Indian languages for the web at www.myhealthpedia.in
The key is to develop patient-friendly materials which people will want to watch and can learn from. Most of us are visual learners, so this should be in graphic format. Modern technology has made creating and sharing visuals easy, so each community can build its own customised health video libraries with ease ! A simple example would be to find an articulate doctor with excellent communication skills, and to record a doctor-patient consultation with her about the top ten common clinical problems. A library of such videos could then be published online as “open source content” ; and patients and doctors could download and dub these in local languages . This version can again be uploaded to the web and shared with other patients from all over the country. Web 2.0 technology empowers patients to form support groups and communities where expert patients can help others. As the technology improves, it will soon be possible to deliver this graphic educational content on the third screen which is quickly becoming universal – the cellphone. Patients will find these videos much easier to relate to, since the videos are in their own language; deal with their immediate personal concerns; use local characters they can identify with; and provide local solutions which they are familiar with .
Information Therapy enhances patient autonomy by putting patients first; promotes patient-centered healthcare; respects the fact that the patient is the expert on himself; emphasizes personal responsibility for health; reduces the risks of medical errors; improves patient compliance with therapy; reduces the risk of litigation, because the patient has realistic expectations of the treatment; empowers patients to make their own decisions; and allows the intelligent use of integrative medicine, ( such as yoga , homeopathy and ayurveda) , so people can explore what works best for them. It creates expert patients and allows patients and doctors to form a healthy partnership, by improving doctor-patient communication. Finally, it saves money on medical care , both by promoting self-care (thus encouraging patients to do as much for themselves as they can, and not become dependent on doctors) ; and helping them with veto power, so they can refuse medical care they don’t need, thus preventing overtesting and unnecessary surgery .
Is educating people about their health and medical issues too expensive ? In fact, it’s too expensive not to do it ! Human capital is India’s most precious resource and we cannot afford to squander it. Information Therapy is free ; has no side effects ; and provides a terrific return on investment. We should insist that doctors dispense information therapy every time they do a consultation; advise a lab test; or prescribe medicines. In fact, both the government and insurance companies can make prescribing information compulsory . Information Therapy can be Powerful Medicine – let’s make the most of it !

Posted 18 April 2009, 00:15 by Aniruddha Malpani
50% of healthcare expenses in the US is spent on 5% of the population because of chronic disease. The appropriate amount of study and effort should be focused on solving this problem. A large part of the dialogue (and energy) is currently spent on migrating to electronic medical records which, even if it is adopted 100%, would only provide savings of $77 billion. Electronic MR is important for a variety reasons but it is reform by incrementalism. Studying and lowering chronic disease care costs will provide much more cost containment potential in the long-term.

Posted 13 April 2009, 20:44 by Camille Schenkel
This piece holds much of the hope and pitfalls that characterize the plaintive national pleas calling for change in the system. On one hand, I find this the most important statement in the essay:

“The State and other institutions are required to provide the education, the infrastructure, and the access necessary for good health.”

I read this to mean that as a society we must assert that we value health apart from the “fix-it” system that we have. “Good health,” or wellness should enjoy the same level of societal valuation that we assign to the “fix-it” system: as a parallel infrastructure that organizes resources, talents, and institutions specifically to sustain and advance wellness. Good health/wellness shouldn’t be in the existing box; it should have its own box.

But that good refocusing statement is followed immediately by this:

“In return, individuals and families are required to engage in healthy behaviors (or at least to avoid fundamentally destructive ones).”

What will we do when we have a “Personal Predisposition DNA Database” at hand, which prescribes everything we are “allowed” to take in, even the activities we engage in: Don’t be out there skiing if your PPDD tell us you were born with a brittle bone condition. (It’s there in your PPDD which, I am sorry to say, you can’t have access to. You didn’t pass your Personal Self Healing Knowledge Test last month.)

Since the forces at work truly are erecting a “personalized, individualized consumer-directed health system,” it will be important to make sure that its compulsory elements are not just dropped out of the sky, but are deployed in sensible ways that are defined by the consumers themselves.

That is going to take some time. And right now we are just starting to understand what a concept of “optimal personal wellness” might even mean.

Posted 2 April 2009, 18:56 by Taylor
This is a stimulating read.
The link between nutrition and health is obvious to most people. If we can start again to create healthy people (via healthy lifestyles) from childhood and early adulthood we could start the process of closing down some of our cardiac units and hospitals. Technology may help? There are solutions out there that for the first time can accurately map personal diet-nutrition deficiencies and / or over-nutrition (obesity), and can enable the individual to be better informed about health and diet issues, (see www.cremesoftware.com for example). We can show how retail catchment areas (i.e, retailers) impact local health and start the process of putting the consumer much more in charge of data and facts. We can hold Local Government responsible for citizens health with accurate information and choices about school diets and menus. It is logical, ethical and less expensive to stop the process of illness and disease, where possible, rather that treating those that get sick through negative lifestyle habits. Companies responsible for ingredients within food chains that negatively impact consumers can be easily identified with tools like Creme and action taken to correct complex national problems.
So we have no excuse to not take action. We can reduce the negative effects of diet, all we need is the stomach to do it.

Posted 31 March 2009, 12:12 by Dermott Reilly
If we are talking of HEALTH care, the answer is YES.
If it is MEDICAL care, the answer is DOUBTFULLY YES.
Why? Because so called health care refers to Medical care – a process of crisis management. It is like putting out a fire using dozens of fire engines when the fire could have been averted or put out with a cup of water when it was a spark ( to begin with.)
MEDICAL CARE – the entreprenurial aspect of so called health care, has as its twin flagships the Medical Technology and Pharmaceutical sectors. When the care provider is a slave to these twins – the return on investment in terms of HEALTH of the community is limited.
We need to wean the care providers and their patients away from the concept of the “magic pill” which these profit orineted industries market at great cost.!

Rama Para.

Posted 30 March 2009, 06:36 by PARARAJASEGARAM
Fantastic argument in favor of public health efforts. How can we tackle the other three factors which create “runaway health care costs”? That is wealth, technology, and aging.

Posted 26 March 2009, 12:47 by R Delgado
Health care should be available to all. Government’s role should be limited to providing health care option for the retirees and for low income individuals , say families with less than 200% of poverty level income. Everyone else must purchase insurance if their employer does not provide health care insurance ala Massachusetts health care reform. Provider payments need to be changed to episodes/quality adjusted capitation. In addition Physicians must contract in groups of atleast 50. They can form virtual groups.

Posted 25 March 2009, 10:52 by Vinod sahney
Nevertheless we see macro level variables playing a huge role in these “unavoidable” micro level behaviors. We have seen dramatic decreases in smoking correlate with campaigns such as Truth.com, lawsuits supporting the negligence and harmfulness of corporate practices, and public health efforts to ban smoking in public spaces. And on the other side of the coin we have seen an incredible decrease in the nutritional value of our diets as we have subsidized sugar, corn, and other mono-crops that must then find their way into our food stream. There are many things that we are doing and many more that we should be doing to promote health from ensuring access to healthy food, to providing open spaces in which to exercise, and making sure we don’t allow our corporations to prey on our children.

Posted 19 March 2009, 16:40 by Jason Azuma
I enjoyed reading the article and all of the comments. I think the biggest problem in the U.S. alone, is that it is so difficult to get people to take care of themselves. How many smoke and drink, knowing that it is not good for them. How many exercise regularly, knowing that it would be good for them. Psychiatric problems prompt alot of bigger issues as well. As we are learning, nutrition has alot to do with our health also. So the discussion will continue, but I do think all people should be given access to good health care services. Whether they take advantage of it and do as their providers tell them is another story. No one can walk in my shoes, and I cannot walk in theres.

Posted 17 March 2009, 19:08 by Michelle S. F.