Viewpoint: We Must Repair Our Ailing Healthcare System

David M. Walker Comptroller General of the United States

A consensus is building among policymakers, industry experts and medical practitioners that the U.S. healthcare system is in critical condition. The growing chorus calling for reform now includes Senate Majority Leader and former heart surgeon Bill Frist, M.D., who concluded in a recent speech that the status quo of healthcare delivery in this country is unacceptable. That prognosis extends to both the public and the private sector.

The fact is that the current system provides doctors and patients with few incentives to be prudent in their treatment choices; little transparency about the actual value and costs of various healthcare services, particularly new technology; and inadequate mechanisms to hold healthcare plans and providers accountable for meeting basic standards for appropriate use and quality.

Despite efforts to rein in healthcare spending, costs continue to climb. The United States now spends more than 15 percent of its gross domestic product on healthcare — far more than other industrialized nations. Between 1990 and 2000 overall healthcare spending rose from $696 billion to $1.3 trillion; it is projected to more than double again by the end of this decade. This growth in spending is unsustainable, especially when it comes to government programs such as Medicare.

And what exactly are the American people getting for their healthcare dollars? The advances in medical treatment in recent decades have been dramatic. Yet the United States actually lags behind many other nations when it comes to life expectancy and other mortality measures. For example, in 2000 the United States had an infant mortality rate that was 23 percent higher than the United Kingdom and more than twice the rate in Japan.

The United States also exceeds many other industrialized nations when it comes to the rate of premature and preventable deaths. Finally, higher healthcare costs have not reduced medical errors. An oft-cited study by the Institute of Medicine estimates that hospital deaths caused by medical errors are greater in number than deaths caused by car accidents, breast cancer, or AIDS.

At the same time, broad access to basic healthcare coverage remains an elusive goal. More than 40 million Americans have gone without health insurance in recent years, and a growing percentage of workers at major companies lack health insurance. Even among those with insurance, coverage often limits or excludes certain benefits, such as long-term care and prescription drugs.

The problems with our healthcare system have far-reaching effects. The rising cost of government healthcare programs increases the budget deficit at both the federal and state levels. The tax base is shrinking because more and more employee compensation is coming in the form of nontaxable benefits like health insurance. In addition, it is highly likely that soaring health insurance premiums are contributing to company decisions to move offshore and hire part-time rather than full-time workers.

Comprehensive healthcare reform is unavoidable. The federal government now faces a serious long-term fiscal imbalance. The confluence of higher healthcare costs, an aging population, the war against terrorism and reduced revenues is already contributing to a rising tide of red ink. The cost of the new Medicare prescription drug benefit alone is estimated to exceed $8 trillion in current dollars over the next 75 years. Without changes to current policy, we now confront decades of deficits. As a result, the pressure to overhaul our medical system will only increase.

Ultimately, we need to reconsider how we define, deliver and finance medical care in this country in all sectors of the economy. We need to weigh individual wants against societal needs and decide how responsibility for healthcare should be divided among employers, individuals and government. In the end, we may need to accept that our healthcare system can guarantee only a foundation of medical care; individuals who want greater coverage or optional procedures will need to pay for them.

Future healthcare reform propos-als should be evaluated in a consistent and systematic manner. In my view, healthcare proposals must be judged according to how well they address the problems of affordability, sustainability, uneven access and inconsistent quality. Successful proposals need to offer incentives for providers and consumers to make prudent choices about medical coverage and treatment; foster transparency about the value and cost of care; and demand accountability from health plans and providers when it comes to appropriate use, quality and cost.

The reality is that comprehensive reform may need to be achieved incrementally to minimize disruptions and forge political consensus. The hope is that an objective framework similar to the one I just mentioned can be used to guide one of the most important public policy debates in our time. Our healthcare crisis can be cured. What we need now is a sound prescription for progress.

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