High Value Health Care

We are spending far too much on health care, and getting far too little in return.

People living in the United States have access to some of the best medical care in the world, from lifesaving drugs, to advanced medical devices, to cutting-edge surgical techniques. But our health system is seriously flawed, with out-of-control costs leaving many Americans spending more but often receiving substandard care, or care that is not based on best evidence.

We can do better. We need to shift incentives toward high-quality care outcomes rather than paying for more treatment that adds no value. We have the knowledge to stop paying for treatments that do not work and instead support care that improves health. We must hold insurance companies accountable to ensure they are delivering on their commitments to members. And we must drive down the cost of prescription drugs.

If we do that, our system will cost less by spending money where necessary to improve health. And that gives people security and meaningful control over decisions related to their health.

More spending, lower quality care

Health care costs too much in this country because our system is inefficient and often prioritizes treatments that don't work or tests that are unnecessary. From unreasonable price hikes for decades-old medicines such as insulin to unfair surprise medical bills, unjustifiably high costs are everywhere in the U.S. health care system. At $10,000 per person each year, we spend twice as much money as similarly wealthy countries per person.

These excessive costs can be partially attributed to widespread waste that doesn’t actually improve quality of care — waste that is estimated to represent 25 percent or more of every dollar we spend on health care.

America’s high and rising expenditures for health care might be “worth it” if those expenditures translated into better health. But a large and growing body of research suggests that spending more on health care doesn’t necessarily translate into better health. Life expectancy gains that you’d expect from spending more on health care lag behind many other countries. In 1970, when our health spending was more in line with other countries, American’s life expectancy was one year above the 36 economically similar countries. Now it lags two years behind these countries despite significantly increasing spending compared to those other nations.

You can see these results play out in key health outcomes such as infant mortality, unmanaged asthma and diabetes, and heart attack mortality. In general, we often rank in the lower half of care results around the world despite spending more.

Americans spend $1,000 more per person on prescription drugs than other wealthy nations, despite receiving the same health benefits from those prescriptions. Photo credit: wavebreakmedia via Shutterstock.

Back to the drawing board

Illinois PIRG Education Fund is calling on our leaders to go back to the drawing board and start working on solutions that will fix the fundamental problems in the American health care system.

Debate in Washington has been focused almost entirely on how to assign the extraordinary cost of health insurance. Special interests who want to preserve their high profits lobby for policies that often make things worse for millions of Americans by degrading the quality of care and allowing prescription drug prices to skyrocket. Too many Americans, facing high premiums and out-of-pocket costs, are forced to give up the coverage they currently have.

But the biggest failure with these proposals is that they do little to address the underlying problem with the American health care system: We are spending far too much, and getting far too little in return, for our health care dollar. Despite a health care system world-renowned for developing advanced treatments, and an army of skilled and well-meaning doctors, nurses, researchers, hospital and pharmacy staff, our patchwork health care system still fails to deliver an acceptable value proposition for consumers.

Injecting value into our health care system

America’s health system is world-renowned for developing advanced treatments. But we often miss the mark when it comes to getting the basics right, failing to provide effective, lower-cost care that works to prevent illness. The result is poorer health which triggers unnecessary testing, more low-value treatments and higher costs down the line. By expanding research into evidence-based medicine and tying payments to high value care, we can hold providers accountable to higher standards of care. We know we can make progress toward high value care by improving transparency about health outcomes and the cost-drivers in our health system.

Illinois PIRG Education Fund is working toward solutions that will shift our health care system to focus on the value people receive, including:

  • Comprehensive prescription drug reform. Americans spend $1,000 more per person on prescription drugs than other wealthy nations, despite receiving the same benefits from those prescriptions. Often that’s because the system encourages egregious price hikes, the development and marketing of the next “blockbuster” drug that may be of marginal health benefit, or delaying cheaper alternatives. Overhauling the patent system, encouraging the development and use of generic drugs, and increasing consumer choice can help boost health while saving money. And better enforcement of laws to prevent anti-competitive business practices by drug companies will create an environment for a marketplace that won't tolerate deceptive practices and price gouging.
  • Consumer protection. Surprise medical bills can cost consumers hundreds to thousands of dollars for care from an out-of-network provider that they didn't choose. And these charges drive up costs throughout the health system. New laws are in place to protect consumers from these unfair bills from certain providers and hospitals. But there is more work to be done — starting with making sure consumers know their rights and that the states enforce the new No Surprises Act in 2022.
  • Making health care safer for patients. Medical errors are the third most common cause of death in America, yet we do surprisingly little to prevent them. For example, checklists have been shown to cut hospital-acquired infections in half, yet many hospitals have yet to implement this simple solution or have failed to do so effectively. Consumers should be able to track infections and errors in their local hospitals with recent data so they can know which systems are doing their utmost to provide better patient outcomes.
  • Preserving competition. With countless mergers in recent years between hospital systems, health insurers, and pharmaceutical corporations, health care is increasingly consolidated. Unfortunately, bigger is not always better for consumers; studies show consolidation often leads to higher prices and worse service. More scrutiny of health care mergers and tougher anti-trust enforcement against companies that seek to avoid competition could make a big difference.
  • Investing in prevention. Our current system rewards hospitals and doctors for performing as many procedures and prescribing as many drugs as possible, with little consideration given toward whether they actually keep us healthy and out of the hospital. We need to change those incentives and provide easier access to preventative services. Moving toward payment structures that incentivize keeping patients healthy is a way to achieve high value care.
  • Holding health insurers accountable. There is often too little oversight to ensure insurance companies are delivering on their commitments to their members. In many states, insurers are not held to meaningful standards to ensure adequate access to needed services. Health insurance rate hikes receive little scrutiny even though states that review rates have cut a great deal of waste from premiums — for example, in Oregon, close scrutiny of health insurance rates by our state partner OSPIRG Foundation has helped prevent $280 million in unjustified premium rate hikes since 2010. By focusing on insurers’ payment strategies and quantitative goals and results, closer scrutiny of health insurers can complement other efforts to drive system reforms to improve safety, increase care coordination, boost prevention, and bring down costs for consumers and small businesses.
  • Price transparency for health care services. The very least we can do about rising health care costs is make sure consumers can get prices for services or treatment up front, to allow for more informed decisions about value, encourage price competition that could help keep costs in check, and create accountability for unreasonably high-cost providers.
  • A public option health plan. A public option health plan — e.g., providing Americans under 65 with the option of buying into Medicare or Medicaid — could provide consumers with a cheaper alternative to commercial health insurance, ensure that there are coverage options for consumers who lose their employer-based coverage, and put pressure on health insurers to provide a better deal or lose their customers to the public option health plan.
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Top photo: VGstockstudio via Shutterstock.com