PUBLIC HEALTH AND COST CONTROL: ESSENTIAL FOR HEALTH REFORM

As advocates for public health, we value proposals by the Senate Finance Committee and the Obama Administration to encourage prevention, fund public health functions, expand the public health workforce, and reduce health disparities. All could improve the health of our nation, and help reduce the burden and the costs of illness. We offer initial comments on strengthening these proposals.

However, these measures can only help to control unsustainable health care costs if they are aligned with reforms of the fragmented system for reimbursing and financing care. Finance Committee proposals would begin this process through Medicare. A new public insurance plan must extend these reforms systemwide.

Public health is integral to health reform. Public health agencies, programs and policies protect and improve our health as individuals and communities, and provide coverage and care directly to many. Greater investments in public health are essential to protect against new strains of the flu and the effects of climate change, to treat chronic illnesses early, and to address the factors that undermine health and drive up costs, such as tobacco use, obesity, social and economic inequalities, and unsafe communities.

Health reform is essential to public health. Universal coverage for affordable health care would improve individuals’ physical health as well as the financial and social security of communities and the nation. Reorienting health care spending priorities could unleash resources for public health.

However, our fragmented, investor-driven financing system routinely defeats savings from improvements in health status and in the quality of care. Private insurers, drug companies, equipment suppliers and hospital chains are able to soak up every dollar we might save by focusing primarily on health care features most visible to consumers but limiting needed benefits that are essential for the nation’s health and pocket book. A system whose core responsibility is to share holder profit leads to cherry picking low risk beneficiaries, limiting as many benefits as possible and providing an extra service or product, or charging a higher price. Instead of reducing costs, potential savings are diverted instead into high administrative expenses and profits..

Americans do not use more pharmaceuticals, doctor visits or hospital days than people in other countries – in fact we in the U.S. use fewer. We are acutely aware that even people with insurance too often face limits on needed services. As a result of our fragmented investor-driven system, the U.S. pays higher prices per unit of service, compared with other countries, and experiences, and also experiences more intensive use of new technologies.

The Senate Finance Committee proposals address these problems in one important system which the federal government can influence directly: Medicare, which covers people over age 65 and some people with disabilities. These proposals combine financial and organizational incentives to provide appropriate, high quality care. Because Medicare is a publicly financed, publicly administered program, the Finance Committee is able to serve the public by proposing to control Medicare’s costs.

The most effective reform would be to improve and expand Medicare’s ability to control costs to all Americans. Strengthening and expanding public insurance programs builds on what works best in our system.
A transitional policy solution is to offer a public insurance plan, similar to Medicare, that can succeed in covering a stable, substantial population sufficiently substantial to influence and realign the costs and quality of care. A strong public plan could use careful levers to control costs by limiting the use of unnecessary revenue-driven care that compromises patient safety.
We have an historic opportunity to transform the human suffering and economic disruption caused by the fragmented and competitive nature of the investor-driven health care financing system, and by the underfundiung of public health programs and policies. We call on Congress to enact legislation that would include the following recommendations:


I.Establish a Public Insurance Plan, with key features to assure that it improves coverage, affordability and quality of care.
Our goals are universal, affordable coverage, with fair and stable financing, that controls costs; an accountable delivery system that offers quality, appropriate, accessible and equitable care; eliminating social and economic disparities that undermine health; and a strong public health system.[iii]

II. Reform Medicare: Implement incentives to cMedicare reimbursement policies ontrol costs and improve quality, and extend eligibility to people under age 65.
We support the Finance Committee’s proposals for incentives to control costs and improve the quality of care through Medicare, which will be strengthened if applied to a larger population through the public insurance plan.

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III. Improve public health, reduce health inequalities and address social determinants of health.
We support Finance Committee initiatives to improve preventive health services through Medicare, to address health disparities, and to expand the health care workforce. They should be expanded to strengthen the public health infrastructure, and prevention at the community-level, and to implement national policies and programs that address the political, social, economic and environmental forces and policies that shape health and can prevent illness.


[1] The Congressional Budget Office has observed (Health care activities at CBO, December 10, 2007): The main factor [contributing to the large projected increase in federal spending on Medicare and Medicaid] is excess cost growth-or the extent to which the increase in health care spending exceeds the growth of the economy. Substantial evidence exists that more expensive care does not always mean higher-quality care. (http://www.cbo.gov/publication/41743)
[2] Anderson, Gerard, et al, It’s the Prices, Stupid: why the US is so different from other countries, Health Affairs 22(3) May/June 2003.
[iii] EQUAL Criteria for Health Reform. In 2008, the Center for Policy Analysis and a network of organizations representing public health and women’s health formed EQUAL Health, for Equitable, Quality, Universal, Affordable health care. The Criteria to Evaluate Health Care Reform (2008) calls for universal, affordable coverage, with fair and stable financing, that controls costs; an accountable delivery system that offers quality, appropriate, accessible and equitable care; eliminating social and economic disparities that undermine health; and a strong public health system. http://www.centerforpolicyanalysis.org/id2.html[iii]

Full testimony at http://www.centerforpolicyanalysis.org/