RAND: Making Healthcare Affordable

“Affordable Health Care”
Dr. Arthur L. Kellermann, M.D.
Farsighted Leadership in a Shortsighted World
September, 2012

Medicine Drug Pills on Plate
Medicine Drug Pills on Plate (Photo credit: epSos.de)

The issue of healthcare reform has become as divisive as any other debate in American politics today, to the point where simply suggesting that the system requires reform is enough to color you a Democrat. This is a shame, because while it would be foolhardy to set the country on the road to socialized medicine, it would be doubly so to behave as though our system does not contain serious flaws.

Foremost among those flaws is the high (and rising) cost of care, and much of that cost is wrapped up in waste and inefficiency. As physician Art Kellermann, a senior RAND policy analyst notes, “the United States has the least efficient healthcare system in the developed world.”

Kellerman notes that even with the Affordable Care Act (“Obamacare”), the health care system costs too much and will continue to get more expensive. Having spent over a decade analyzing health care costs in the U.S., he notes that the system needs changes that seem simple but that imply a massive change in the way medical care is administered, if not delivered.

  • Switch to electronic medical records at once;
  • Reduce costly and unnecessary testing and imaging;
  • Switch to a system that pays doctors and hospitals to be more efficient and effective;
  • Move to consumer-directed, high-deductible health care plans while sustaining the use of recommended care.

These are all good steps, but the most important one he identifies is the need to shift the effort in healthcare innovation from developing more expensive procedures to finding ways to deliver better care less expensively. He doesn’t offer many examples, but telemedicine, in-home care, and merging healthcare preventative care, monitoring, and healthier lifestyles are likely candidates.

Kellermann’s essay would do better if fortified with these points, and with an examination of the problem of legislative and regulatory capture by the medical professions, the pharmaceutical industry, medical equipment manufacturers, the insurance sector, and managed care providers.

Nonetheless, his rational, non-partisan approach to the problem, bolstered by his own credentials as a physician, offer an important starting point for genuinely solving America’s health care problems.