The Case for a Health Care Fed
By Jonathan P. Weiner, DrPH
No industrialized nation spends more than America on medical care, excludes more of its citizens from coverage, and is less rational in setting spending priorities.
Health care costs cannot be harnessed, nor can coverage become universal, until we come to grips with the unpleasant but manifest truth that there will never be enough resources to provide every possible medical technology to every American who might benefit from it.
Though thorny, this challenge is not insurmountable. Most other nations use public health principles to systematically assess medical technologies and to allocate these resources effectively and ethically. The U.S. can, too.
This country needs an accountable, transparent mechanism that makes use of population-based scientific evidence, ethics, and community values to decide what we can and cannot afford to cover as part of a basic insurance package. We might term this organization (as do the British) the National Institute of Clinical Effectiveness, or NICE.
NICE must be well-respected, independent, and powerful, much like the U.S. Federal Reserve Board. Its board of governors should include health care evaluation experts, clinicians, ethicists, and consumers, and they must be protected from political and corporate pressures, of which there will be many.
The first task of this Health Care Fed would be to grade all major medical technologies, procedures, and services. The lowest grades would be given when there was no evidence of effectiveness. The highest would go to technologies that have proven significant patient benefit.
Phase two would be more difficult. For every technology and for each common clinical indication, a benefit-to-cost ratio would be determined. Using a common denominator, such as dollars per quality-adjusted life-years, the relative value of each major intervention could be determined. For example, it’s clear that repeat liver transplants are extremely costly given the total benefit they provide, whereas most vaccines provide considerably greater benefit per dollar expended.
Based on the available resources and the number of people to be covered, a line would then be drawn. Services that fall above this line would be included in the market basket of basic coverage provided to all. Below the line, less effective services or prohibitively expensive ones with very low benefit-to-cost ratios would not be part of the plan. For example, a new medication with a price tag that is 10 times that of its almost as effective generic equivalent would not be included. But it would always be possible for persons to obtain these marginal services by purchasing high-option coverage or by paying for them on their own.
Yes, this process would generate tremendous friction, and it would never be perfect or complete. But it would be far more rational and legitimate than what we do now. In time, the Health Care Fed’s ranking system could be coupled with a fully integrated computer-based, clinical-decision support process to help both practitioners and patients decide the best (and most cost-effective) course of action for any set of symptoms and circumstances.
Legislation establishing the Health Care Fed should be linked to expanded coverage for the uninsured. Along with this newly insured population, Medicare, Medicaid, and federal workers should come under its aegis immediately. Within a few years, coverage decisions for all Americans should come under its umbrella.
If universal health care and reasonable levels of health care cost growth are ever to be achieved, a Health Care Fed is the only answer. The longer we avoid this truth, the longer we support a status quo that is unjust for many, and inefficient for all.
Jonathan P. Weiner, DrPH ’81, is a professor of Health Policy and Management. Versions of this editorial have appeared in Managed Care and on public radio’s Marketplace.