Imagine a patient with a persistent cough. Her doctor diagnoses her with bronchitis and prescribes an antibiotic. When the cough gets worse, he diagnoses her with pneumonia and prescribes an anti-viral. When that doesn’t work, he diagnoses her with asthma, then sarcoidosis, then fibrosis. But no treatment works. Her cough keeps getting worse.
The treatments aren’t working because the problem isn’t in her lungs. She has acid reflux, which is inflaming her esophagus and causing her to cough.
America is this patient. Our persistent, worsening symptom is the rising cost of health care and insurance coverage, and Washington is our doctor. From the creation of Medicare and Medicaid in 1965 to the Affordable Care Act in 2010, Washington’s approach to solving this challenge has been finding ways to enroll more Americans in health insurance, be it public or private.
The results of Washington’s repeated attempts at so-called “health care reform” speak for themselves. Per capita health care spending has increased dramatically since 1970, rising from $353 per person in 1970 to $11,582 in 2019. Average family premiums have more than tripled since 1999, far outpacing wage growth. Out-of-pocket costs have increased for patients, too, growing by 10 percent or more in recent years.
The reason for this failure is simple. Much like our hypothetical patient’s doctor who kept focusing on her lungs, Washington is trying to treat our health care affordability crisis in the wrong place. Health insurance is just a pass-through vehicle for health care spending. So, while expanding coverage can help make individual health care spending more predictable, it cannot make health care more affordable.
Unfortunately, the new administration’s plans for health care are just an extension of the failed approach of the past five decades. Proposals such as a public option and lowering the Medicare eligibility to age 60 will fail to make health care more affordable because they are focused on insurance, not health care. This tired, insurance-focused approach is likely to fall into the same partisan battle lines that have defined the debate over health care affordability for two decades.
It is time for a new treatment plan for what ails American health care, one that gets to the root cause of the problem and that both parties can unite around. It is not lack of coverage that is causing health care costs to rise. Instead, it is high health care prices and high health care demand. There is no way to make health care affordable without reducing both. Here are three strategies to make health care more affordable that President Biden and a narrowly divided Congress should be able to agree on.
First, we must fix the broken marketplace for health care goods and services that has led to runaway price increases. The track record of the past 50 years shows that third-party health insurers are, at best, incapable of controlling health care prices. At worst, they are contributing to the price escalation. We also know that when governments impose price controls, it leads to scarcity. Neither runaway prices nor rationing is acceptable for our health care.
Instead, we need to embrace what works in every other market to lower prices, increase quality and expand options: individual customers (in this case, patients) making informed choices between providers that are given the freedom to innovate. Research shows that 70 percent of inpatient services and 90 percent of outpatient services are shoppable. Reforms that give patients more visibility of price and quality, along with real incentives to act on that information and the elimination of barriers that make it harder for doctors to practice medicine, are the only way to bring real choice and competition to health care to lower prices. President Trump’s price transparency rules for hospitals and providers were a strong first step. Democrats and Republicans should be able to unite around reforms that reinforce and build upon that rule. Polls show that price transparency in health care is favored by 90 percent of Americans.
Second, we must reduce chronic illness in America. These largely preventable conditions account for 75 percent of all health care spending and most clinician visits, prescriptions, home health visits and inpatient stays. We can start with reforms to prioritize preventative medicine and high-quality primary care. Our largely acute care-focused system is very good at keeping you alive, but not very good at keeping you healthy.
However, chronic illness is as much a cultural challenge as it is clinical. Research shows that 80 percent of health outcomes are due to factors outside the doctor’s office. Changing the cultural and societal patterns that lead to chronic illness will require a decades-long, society-wide effort. We should apply lessons from our success in reducing smoking to other lifestyle risk factors for chronic illness to build a culture of healthy longevity in America. COVID-19’s disproportionate impact on those with underlying health issues has put renewed attention on America’s poor health. Republicans and Democrats should be able to unite around a plan to “make America healthy again.”
The third strategy is to accelerate the rate of scientific and technological progress in health care by increasing public and private investment in research and development, and streamlining the pathway from lab to the patient. The genetic revolution holds the promise of cures for inherited illnesses that otherwise would lead to decades of expensive treatments. New science is emerging about the underlying biological process of aging that could extend our healthy years of life by making us much more resistant to age-related diseases. In addition, technologies such as health wearables, telehealth, home health kits and artificial intelligence give people more options for care and can drive prices down. New treatments and a renewed focus on prevention could one day eliminate chronic disease in America.
Empowering patients and doctors to lower prices and improve quality; focusing on reducing chronic illnesses in the clinic and the culture; and heavily investing in scientific research and removing bureaucratic obstacles to accelerate the availability of new treatments and technologies in health care — these three approaches are very different from the typical Washington approach to “health care reform.” But only by changing our focus to the real causes of the rising cost of health care can cure the disease.
Joe DeSantis is chief strategy officer at Gingrich 360 and leads their Bettercare Project. Follow him on Twitter @joedesantis.