Why Incentives Will Not Control Health Care Costs

On November 1 and November 8 the New England Journal of Medicine published two important articles on rising health care costs by Peter Orszag, director of the Congressional Budget Office. (The November 8 article is available to non-subscribers.)

Orszag and Phillip Ellis (his coauthor) don’t beat around the bush about the importance of controlling health care costs: “The long-term fiscal balance of the United States will be determined primarily by the future rate of growth of health care costs.”

Their analysis and proposals are sound. They argue that we don’t have enough information on comparative effectiveness and that our payment systems provide no incentives to patients or providers to choose treatments that offer the best quality at the lowest cost. They endorse a value-based approach to insurance design.

But these excellent ideas aren’t new. Proposing them will accomplish nothing without public understanding and public support. And we will not get understanding and support without a form of educative political leadership that -- with the exception of former Oregon governor John Kitzhaber -- has been almost altogether lacking. (Also see the speech I proposed for the Vermont governor in my October 27 post.)

I’m not a politician. I can’t claim to know how a political leader could pursue this kind of educative strategy and win votes. The political challenge, however, is like a clinical challenge that nurses and doctors deal with every day. Hectoring patients about losing weight or cutting down on tobacco or alcohol doesn’t work. But motivational interviewing, which involves meeting patients where they are in their understanding and readiness for change, and helping them take the next step, however small, often does. Skillful clinicians do this well with individual patients. Skillful political leaders can do the same with populations.

The fact that the two New England Journal articles come from the non-partisan Congressional Budget Office is important. Orszag and Ellis lay out the extent of the problem posed by health care costs in a careful, hard-to-challenge manner. They suggest many of the steps we will have to take. What they don’t do is make any mention of the need for political leaders to take the analysis and run with it. Let’s hope that some the Representatives and Senators they advise take the baton from them.