Dr. Warren Siegel of New York's Coney Island Hospital demonstrates the "Asthma Buddy" handheld computer to one of his young patients. Researchers with the New York City Health and Hospitals Corporation are investigating whether this new "telehealth" technology can help children with asthma manage their condition better, reduce trips to the emergency room, and lower treatment costs.

President's Message
Achieving a High Performance Health System
A Look in the Mirror
Uncovering the Hidden Costs of the Uninsured
Rationalizing a Fragmented Insurance System
Rethinking Assumptions about Cost and Quality
Putting the Patient First
A High Performance Health Care System

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(20 pages)

United States national expenditures on health, by source — $1.4 trillion total

Levit et al., "Trends in U.S. Health Care Spending, 2001," Health Affairs 22 (January/February 2003)
istening to patients is an important strategy for health care reform. What Americans want is not the cheapest care but the best care, plus clear information and access to health care when they need it. Not surprisingly, they prefer that someone else pay, whether employers or government. But they also want assurances that money is not being wasted on inefficient or ineffective care, excessive profits, or high administrative costs. Those demands are reasonable ones to make on a health care system that is the costliest in the world, consuming an estimated $1.4 trillion in resources in 2001.
The two major efforts of the 1990s to reform the American health care system — one led by government, the other by employers — ended in failure. The first, laid out in a proposal by the Clinton Administration in 1993, would have provided universal health insurance and fundamental reform of health care delivery and financing. The second, a movement initiated by employers, sought to rein in health care costs by shifting employees into private managed care and giving them incentives to choose less-expensive plans. The Clinton plan was defeated in the political arena, while the move to managed care foundered as patients chafed at restrictions on their care and physicians and hospitals demanded higher prices or left managed care networks.
In the wake of those experiments, health care costs have again accelerated, more Americans are uninsured, and the quality of care falls far short of what is possible and desirable. Gaps in health insurance coverage remain one of the most important challenges facing the nation. With more than 15 percent of all Americans uninsured and at least another 10 percent with inadequate or unstable coverage, far too many people are unable to obtain care that could keep them healthy and productive.
Improving quality and efficiency requires a strategy different from those advanced in the 1990s. No industry should expect its customers to lead the way in preventing defects, eliminating waste and duplication, improving productivity, and increasing the rate of return on investment, yet that is exactly what the failed reforms expected of health care consumers. Both approaches relied on consumers to make cost-conscious choices but did not demand change — by adopting new payment methods, for example, to reward efficiency and quality — from the health care sector.
Genuine reform must come from within the health care sector itself, as a new generation of reformers learns to tap the potential of modern information technology, measure performance against relevant benchmarks, learn from best practices, and adopt systems, processes, and tools that improve performance. This "supply side" strategy is being pursued by innovative and visionary leaders in the public and private sectors. We can achieve even more if we make special efforts to increase efficiency, rationalize our fragmented insurance system, and seize opportunities to improve the quality and effectiveness of American health care.
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Karen Davis