Politics & Policy

Hillary-Care Again?

Top-down health-care systems don't work.

The Bush administration is now facing the Herculean task of implementing the Medicare Modernization Act (MMA) that passed through Congress last year. The agency responsible for running the Medicare program, the Center for Medicare and Medicaid Services (CMS), is churning out initiative after initiative. And while the MMA has many positive features, such as the recently launched prescription-drug discount-card program and health savings accounts, there are a few items that have a great potential to go awry.

One of these, based on a proposal of Sen. Hillary Clinton, is a requirement that the government perform “comparative effectiveness” research to evaluate how health-care goods stack up to their competitors and how certain procedures may be over-used or under-used to treat illness and disease. This research–intended to look into goods and services that “impose a high cost”–may, for example, assess the relative value of using angioplasty versus bypass surgery to address heart disease; the comparative benefits of different cholesterol lowering drugs; or the value of undertaking no medical intervention at all in certain instances.

While this type of research has merits, we should question how its results will be used and what impact that will have on the quality of health care. The hope is that such information will help patients, along with their physicians, make educated decisions about their treatment options. The fear is that the government and other health-care purchasers will use it to limit access to care–particularly effective but expensive care–for those in need.

CMS administrator Mark McClellan has stated he wants to see this research yield information necessary to “personalize” medicine by providing individuals with the tools they need to evaluate their options. This is a laudable and supportable goal that would make the research effort quite valuable–if done right.


One can’t help but think, however, that Sen. Clinton and others who support this effort may see other benefits to the research as well. There is a significant cadre of dedicated health-care professionals who believe the information would allow us to engineer a more efficient health system from the top down–one that would make people behave the way we want them to. This notion defined Sen. Clinton’s ill-fated attempt to overhaul the health system a decade ago. While the intentions of these reformers are almost always good, their solutions are almost always wrong, because they tend to ignore two simple truths: People respond to incentives, not social engineering; and every person is different–what is good for one may not be good for another.

Top-down solutions by definition do not recognize these truths. Instead, they lead to inequitable rationing of health services. For example, at the recent “listening session” hosted by CMS–intended to allow stake-holders to comment on research priorities for the comparative-effectiveness studies–patient groups, health-care providers, and employer representatives endorsed the need for research focused on the usefulness of drugs, particularly costly drugs. Yet they paid scant attention to other areas of health care or how drug usage may have a positive impact on hospital stays and worker productivity. While focusing on costly drugs sounds like a good place to start–who doesn’t want cheaper drugs?–such efforts can also be code for “if it costs too much, we’re not going to pay for it.”


And therein lies the concern with the government’s efforts in studying comparative effectiveness. Medicare is a single payer. Like any payer, Medicare would like to pay its bills in a smarter way. But–to use a phrase that was often used to describe the Clinton health plan in 1993–there is “no exit” from Medicare. Except for the relatively small number of seniors able to participate in private managed-care plans, Medicare is the only game in town, and if it chooses not to cover a treatment because a “comparable” one is already covered, seniors will likely go without. No one thinks the government should have a blank check to pay for all health services, but neither should it limit seniors’ opportunities to get the care that best meets their needs. Finding the right balance will come only when the consumer’s and the purchaser’s incentives are aligned to seek out quality care.


Part of the challenge of aligning incentives is changing the way we finance health-care. Consumers make value judgments everyday when shopping for groceries, clothes, cars, etc. Yet this is something that confounds us when it comes to health care, primarily because consumers are not the real customers in our health-care system–payers are. The payers are employers, who purchase health benefits for their employees, and the government, which purchases health care for millions through Medicare, Medicaid, the Veterans Administration, the Department of Defense, and the Public Health Service.

When the consumers of health services don’t control the resources to purchase those services, there is little incentive for providers of care and manufacturers of health-care goods and services to compete. What results is a dearth of information needed to make real value judgments about how one drug may compare to another, how one form of surgery may be preferable to another, or how one doctor may have better outcomes than another. Research on “comparative effectiveness” may help fill the void, but the real value of that information won’t be realized until health-care consumers are better able to target their own resources to the care that best meets their needs.

In the meantime, here’s to hoping that two principles will guide the government’s research efforts: One size does not fit all, and value is in the eye of the beholder. A treatment that may not work for one person’s cancer may cause another person to go into remission. As we learn more about the human body and how it works, we will continue to develop more targeted therapies to combat disease. We are learning that not all people with the same disease respond to the same treatments. Studying why this happens, having information systems that are capable of culling data to yield this information, and packaging that information so that it may be used to educate patients and better target resources can have a significant impact on the quality, and therefore the cost, of health care in America. But to do so, the goal has to be providing good care, not Hillary-care.

Carrie J. Gavora is a founding partner of the Stanton Park Group.


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