The stakes in Washington's epic battle to reform healthcare are high. Trillions of dollars, the re-election prospects of dozens of politicians--including the president--and, last but far from least, the quality of care available in the U.S. all depend upon a successful outcome.
And what, exactly, would constitute "success?" Broadly, success in this case would be defined as achieving two goals; extending medical coverage to uninsured Americans and bringing skyrocketing costs under control. Unfortunately, the two are tough to reconcile, Ralph de la Torre, president and CEO of the community-based hospital network Caritas Christi Health Care, told CEOs attending a discussion on healthcare reform.
"If you increase access and you don't change the underlying methodology by which you provide healthcare, then cost goes up linearly," notes de la Torre, who is also a physician. "There's no way around it. And in every reform bill, what's popular right now is to increase access and then rearrange the deck chairs on the Titanic to hide the costs."
Where We Are
But even long before reform was a serious possibility, healthcare costs had been rising steadily. In 2007, Americans spent approximately $2.2 trillion on doctors, hospitals, drugs and other health-related care. Over the past decade, the spiraling cost of healthcare has been increasingly cited as a threat to both the global competitiveness of U.S. companies and to the nation's budget.
Chief among the factors contributing to the nation's steadily rising healthcare spending rate is a propensity among both American doctors and patients toward overtreatment. "What's killing healthcare today is utilization," said de la Torre. "For various reasons we as individuals use too much."
A system designed to treat and manage illness, rather than preserve wellness, contributes to overuse, noted Thomas Harrison, CEO of Omnicom Group's Diversified Agency Services, who pointed out that people do the bulk of their healthcare consumption at the end of their lives. "The longer we keep people healthy, the less healthcare they will consume," he says.
The system also encourages medical professionals to be overly proactive. Doctors are often motivated to order unnecessary tests and procedures by the risks of medical malpractice litigation or the need to recover an investment in new equipment. "Medicine somewhere along the line stopped being a vocation and became a business," said de la Torre. "You're getting paid for the...