Deriving Value from Health Care Funding

Access to health care can be achieved across the U.S., asserted David Cutler, Dean for the Social Sciences in the Faculty of Arts and Sciences at Harvard, so long as the funding is made possible. In the long run, he noted, the value derived from the amount of funding spent on health care is an important issue.

"The hardest question is how to get increased value from medical care," said Cutler, author of Your Money or Your Life: Strong Medicine for America's Health Care System. "There are a number of promising ways we can do it. It is going to be very hard to get it right, but it is a challenge well worth taking. Universal care is not the hard part. The hard part is getting the system to work better."

David Cutler

Cutler, who is a senior health policy advisor to Democratic presidential candidate Barack Obama, spoke at HSPH on February 25 in Kresge G-2 at a lecture sponsored by the HSPH Student Health Policy Forum.

"If you have the money, you can cover people," said Cutler. Providing universal coverage would cost an estimated $100 billion to $120 billion per year — compared to $400 billion each for Medicare and Medicaid.

The title of Cutler's talk was "The Value Equation in Health Care." One way to add value is to examine how doctors are reimbursed, he said. For example, information technology is underutilized in the health care setting, partly because it is not properly reimbursed, he said. Only three percent of doctors use e-mail to communicate with patients because they are not reimbursed by insurers to do so.

"The way to justify it is if you are delivering better care to people," he said. "I believe there is money to be saved, but framing this as a way to save money is not the way to do it. I'm saying we should do it because it will improve the quality of care and over time lead to savings."

Other ideas that may be considered when seeking value, he said, are pay that is tied to patient outcomes and new ways to share costs. "We must reimburse for better quality care, not just higher-tech care," he said. "And under the Medicare prescription drug plan, patients pay the same amount for each prescription. Maybe patients should pay less for more valuable drugs and more for less valuable ones."

Cutler suggested that patients might have personal health care consultants, in addition to their primary care doctors, who can answer questions for them, remind them of tests they should have, and so forth.

"Right now, the only ones who send you reminders are dentists and veterinarians," he said.

Just how such consultants would be paid would need to be worked out, he said. "But if you could get it right, it would be an enormously valuable product," he said.

—Michael Lasalandra. Photo by Suzanne Camarata.