Today there are only a few who still argue that the nation should spend as much for medical care as is technically possible, regardless of costs and benefits. Acceptance of the relevance of economics to health care policy has grown so rapidly that for some audiences it is necessary to add a few words of warning against uncritical application of general economic principles with insufficient attention to the special characteristics of health care. There is increasing worldwide acknowledgment that no nation can provide all of its citizens with the desired level of health care. Resources must be allocated. The challenge for every society is to allocate those resources as fairly as possible and to do as much good as possible.
Health care is the outcome of a process that involves patients and health care professionals working together. Mutual trust and confidence contribute greatly to the effectiveness of that process. However desirable it might be in other markets, an arms-length, adversarial relationship between buyer and seller should not be the goal of health care policy. It is one thing for a healthy individual to choose among competing health care plans, and another to expect a patient to shop among competing physicians and hospitals. Not only is cooperation between patients and physicians often essential in the production of health care, but cooperation among physicians is also valuable. Thus, the atomistic competition that economists set as the ideal market structure for producing and distributing most goods and services is far from ideal for health care.
There is no doubt that we could improve our health care by modifying our lifestyles, but it is also true that most of the great advances in health care have come from discovering new and better ways of preventing or treating diseases. In arguing that the marginal benefit of health care is small relative to its cost, we have always tried to distinguish between the payoff from increasing the quantity of health care and the benefits from raising the quality of health care through scientific research and development. The latter is of crucial importance because only limited improvement in health care can be purchased by increasing the number of physicians or hospital beds.
With regard to health care outcomes, the emphasis on the importance of individual behavior such as cigarette smoking, alcohol consumption, exercise, and diet continues to be warranted, especially if we want to understand why mortality rates vary within and between countries. The answer to the question "who shall live better" is still more likely to be explained by genetic, environmental, and behavioral factors than by differences among populations in the quantity or quality of their health care. Health care professionals provide important care and validation services even when they do not change health care outcomes. Moreover, it is widely believed in many countries that national health insurance contributes to social solidarity.
The patient-physician relationship is an integrative system characterized by reciprocal rights and responsibilities. Managed health care tends to transform this relationship into an exchange system characterized by a market mentality similar to what is found in the markets for most commodities. Similar changes are occurring in physicians' relationships with one another. Policymakers should be aware that health care can suffer from too much competition, just as it suffered in the past from too little. Physicians and patients possess very different information; honesty and trust on both sides are extremely important; and patients often benefit from cooperation among physicians. Thus health care professional norms are necessary elements in the social control of health care along with market competition and government regulation. The challenge is to discover, through trial and (not too much) error what forms, types, and scales of organization can do the most effective job of managing health care for the benefit of patients and society as a whole.
These efforts proceed under programs such as "evidence-based health care", "outcomes research on health care" and "clinical guidelines on health care." Particularly important, in my view, is the "new technology assessment," which goes beyond the traditional concern over safety and efficacy to encompass measurement of quality of life, determination of patient preferences, and the evaluation of costs and benefits of health care technologies. Technological change, more than any other factor, is the driving force behind rising health care expenditures; every health care system must find some way of modifying its speed and direction.
Most industrialized nations are sitting on a demographic time bomb: the number of elderly will increase sharply at a time when the number of workers will be stable or shrinking. The potential consumption of health care by the elderly is enormous, especially when one includes rehabilitation and assistance with daily living as well as treatment for acute and chronic illnesses. Nations will be hard-pressed to reconcile a desire to deliver services to the elderly within the constraints of competing claims on resources.
Scientific discoveries, innovations, inventions and their convergence in genetics, the neurosciences, and other fields will open up many new opportunities for better diagnosis and treatment. Some of the breakthroughs may actually lower the cost of health care, but others will, if implemented on a wide scale, lead to large increases in expenditures. Moreover, the problems of resource allocation will be exacerbated by concerns over privacy and autonomy. The bottom line is that both individuals and societies will have to make difficult choices.
In conclusion, I'd like to make four recommendations of a general nature, all of them involving the need for greater integration in approaches to health care.
First, integration of in-hospital and out-of-hospital health care: Most physicians already try to do a good job of integrating services for patients regardless of whether they are in or out of the hospital. But the structure of most health insurance policies creates a big problem. In too many cases private and public third-party coverage induces a misallocation of resources because in-hospital care is more generously covered than out-of-hospital care. This biases the choices that physicians and patients make and often leads to inappropriate decisions on narrow financial grounds.
Second, integration of the personal health care service and public health care service traditions: The personal health care service tradition builds on a strong foundation of the natural sciences and a commitment to the needs of the individual patient. The public health care service tradition draws heavily on the social and behavioral sciences and focuses on the health care needs of populations. Today our most important health care problems involve chronic diseases, deaths from suicide, homicide, accidents, mental illness, drug abuse, and genetic disorders. To deal with these problems effectively we need to integrate the skills and understandings of both traditions.
Third, integration of physical and mental health care services: The artificial separation of the health care problems of mind and body has persisted too long in medicine. New discoveries in basic science confirm what many have known intuitively: there is often a close relation between physical and mental phenomena. Most health care problems today have a significant emotional and behavioral component, and we need to integrate the physical and mental elements of health care services.
Fourth, integration of health and social services: Most health care services today are delivered to patients who are in need of more than health care. They include the elderly, the emotionally disturbed, the physically and mentally handicapped, alcoholics and other drug abusers, and so on. Unless there is greater appreciation that these patients need an integration of health and social services, we will continue to pour billions into each with less than optimal effect.
