Who will limit what the health-care system pays for?

WASHINGTON —

The question at a recent forum came from a Colorado neurologist: "Mr. President, what can you do to convince the American public that there actually are limits to what we can pay for with our American health-care system? And if there are going to be limits, who ... is going to enforce the rules for a system like that?"

President Obama called it the "right question" — then failed to answer it. Not surprising: The query is the ultimate challenge in reining in health-care costs that consume $2.5 trillion per year, or 15.2 percent of the economy. In a country where "rationing" is a dirty word, who will say no?

The question permeates all levels of medicine: the use of tests that many argue are unnecessary (U.S. doctors order five times as many MRIs as German doctors); how early to intervene with common conditions such as heart disease and prostate cancer; how aggressively to treat patients nearing life's end.

Although Obama and his advisers have held up providers' spending patterns as the crux of the crisis, proposals go only so far in addressing the thorniest questions about who gets what care. Instead, cost-saving measures are focused on introducing a public insurance option to compete with private insurers, or on general cuts in Medicare and Medicaid payments.

House and Senate bills would put new emphasis on evaluating treatments according to their "comparative effectiveness," or weighing risks and benefits of different treatments for the same illness, but the bills stop short of incorporating cost-benefit analyses into the findings or of requiring that providers abide by conclusions.

Lawmakers also are considering ways to reform Medicare payments to emphasize overall quality of care over quantity of treatments. But lawmakers are not going as far as Massachusetts did; it is considering shifting entirely from a fee-for-service model to one where salaried physicians would be paid an overall annual price for covering a given person or family.

Such a shift probably would be a shock to the system of many Americans, who have grown used to having any and all health-care options, regardless of cost.

"The questions of who gets what, these difficult choices ... really are not posed in the current health-reform legislation," said Drew Altman, president of the Kaiser Family Foundation. "The challenge is us, the American people: We want the latest and the best, and we want it now."

The Democrats' caution has not kept Republicans from accusing them of embracing rationing. They raise the specter of the British agency that decides whether that country's nationalized health-care system will pay for items such as costly cancer drugs that extend lives a few months on average.

"You're going to be saying to people: 'We're not going to care for you, because we've decided it's too expensive to care for you,' " said Robert Moffit of the conservative Heritage Foundation.

Others retort that the United States already has rationing: The uninsured and underinsured do not get proper care. "We're already doing it," Stanford University epidemiologist Randall Stafford said. "We're just doing it in such a way that it doesn't service societal interests."

But reformers clearly are spooked by the notion they could be accused of denying, for example, hip surgery to an 80-year-old.

Scott Wallace, a Bush administration official who is now the Batten Fellow at University of Virginia's Darden School of Business, said factoring cost into treatment decisions would create the same backlash that hit HMOs in the 1990s. "A mother of five with cancer wins against any rationing scheme ever created," he said.

Many physicians and health-care experts argue, though, that it is precisely by marshaling better research data, partly with the help of electronic health records, that a case can be built for limiting certain treatments. If doctors were to demonstrate to heart-disease patients how few advantages coronary artery bypass graft surgery has over less expensive treatments, for example, many patients probably would not choose the surgery.

All signs in Washington suggest that cost considerations will be kept at arm's length. A senior administration official who requested anonymity acknowledged that research might point to obviously wasteful practices, but that the reform for now would not get at the "harder question" of what to do "if new technology does work better and reduces risks but costs a lot more, and how to evaluate that."

The other half of the "saying no" challenge, reformers agree, is giving providers the right incentives and structures to deliver high-quality care as affordably as possible. The goal is to spread the "accountable care" models featured by the Mayo Clinic and others, where a network of providers works together to coordinate a patient's care, increasing the odds of keeping them healthy and decreasing unneeded procedures.

Massachusetts, which has achieved near-universal health coverage but is struggling with high costs, is considering major changes in this direction.

Skeptics say such a system would force the state's many solo practitioners or small groups of physicians into big networks and would renew complaints from the HMO era about limiting patients' choice.

The plans being considered in Washington do not go nearly as far in seeking to change providers' spending habits. They contemplate changing some Medicare payments from fee for service to a "bundling" system in which providers would be paid for an entire episode of care, giving them an incentive to reduce repeat hospital admissions. Another idea is to empower the Medicare advisory panel whose recommendations now tend to be ignored by Congress, or to create a separate, Federal Reserve-like entity to make tough decisions about federal health-care spending.

John Goodman, president of the conservative-leaning National Center for Policy Analysis, questions this approach, citing new research by his group that shows that areas with high Medicare spending do not correlate with high medical spending overall, suggesting that fixing excesses in Medicare will not necessarily translate to the broader system.

Henry Aaron of the center-left Brookings Institution, said real cost reform would mean giving all physicians incentives to leave behind the fee-for-service model for accountable-care networks. The transition will take a long time, he said, and people initially could sign up for fee-for-service plans. But they would see neighbors getting good care at a much lower price and hopefully switch over.

"We're just not going to be able to all have everything ... regardless of cost," Aaron said.