April 23, 2008 | Executive Summary on Health Care
State and federal lawmakers are focusing increasingly on health care reform, and a growing number are expressing serious interest in "patient-focused" or "consumer-centered" approaches. This is certainly a positive development. Lawmakers of both parties are now more inclined to advocate making the patient the focus of America's health care system.
However, the vocabulary of health care policy is often elastic, and different people use the same terms to express significantly different concepts. This elasticity adds to the general confusion among the public and policymakers that seems to plague this area of public policy and often results in legislators and taxpayers talking at cross-purposes or past one another.
Consequently, clarifying the rationale, objectives, and principles of consumer-centered health care reform is important so that participants in the discussions, particularly the taxpayers, accurately comprehend the concepts and implications of this approach and are better equipped to evaluate the various proposed reforms at the federal and state levels.
Key Principles. The fundamental objective of a patient-centered health care system is to maximize value for individuals and families so that they receive more benefit and better results for their health care dollars, both as patients and as consumers buying health insurance. Only when individuals choose and own their own health insurance will the other actors in the system-health plans and providers-have the right incentives to deliver better value in the form of improved results at lower prices.
If policymakers are serious about real patient-centered, consumer-driven health care reform, they should ensure that their legislative proposals embody six key principles:
Conclusion. The current debate over health care reform is usually framed in terms of addressing cost and access problems, accompanied by occasional discussions about the need to improve quality and outcomes in the system. Yet those issues are all manifestations of a more fundamental dissatisfaction with the status quo. Implicitly, both policymakers and the public are motivated by a sense that health care today is not living up to their expectations for value at either the individual or the societal level.
While America's current health system has clear strengths, it also has significant weaknesses. For all the benefits that it provides in helping people to live longer and healthier lives, America's health care system seems too costly, confusing, inefficient, and uneven in its results, and it leaves too many people without adequate access to its benefits. Fundamentally, Americans as individuals and as a society intuitively recognize that the present health system could do a much better job of delivering value.
Put simply, Americans rightly sense that either they are paying too much for their present health system or the system should be delivering better results given what they are already paying.
The solution and the challenge for policymakers is to undertake the reforms needed to transform the present system into one that does a much better job of seeking and rewarding the creation of better value. As the experience of other economic sectors shows, health care need not be a zero-sum game in which costs can be controlled only by limiting benefits or benefits can be expanded only by increasing costs. Rather, a value-maximizing system will simultaneously demand and reward continuous improvements in benefits while continuously reducing costs.
Such a value-maximizing result can be achieved in health care only if the system is restructured to make the consumer the key decision maker. When individual consumers decide how the money is spent, either directly for medical care or indirectly through their health insurance choices, the incentives will be aligned throughout the system to generate better value-in other words, to produce more for less.
All Americans should be able to agree with the goal of creating a value-maximizing health care system. Consumer-centered health care reforms are the only effective means for achieving that goal.
Edmund F. Haislmaier is Senior Research Fellow in the Center for Health Policy Studies at The Heritage Foundation.