High costs reduce our willingness to give

September 1, 2008

Healthcare leaders must begin forecasting where Americans will draw the line on their generosity when it comes to the healthy subsidizing the sick, the insured subsidizing the uninsured, and the wealthier subsidizing the less wealthy.

He is the relative who inspires you to stop hosting family dinner parties. He is the relative who teaches you where you draw the line on your generosity.

Healthcare leaders must begin forecasting where Americans will draw the line on their generosity when it comes to the healthy subsidizing the sick, the insured subsidizing the uninsured, and the wealthier subsidizing the less wealthy. That's the basic model of insurance, but observers say high costs are reducing our willingness and/or ability to be generous.

I believe it's both. And it's as much a philosophical issue as it is a financial one.

FEW ALTERNATIVES

Tax payers and health plan members wouldn't fuss if you told them some of their tax or premium dollars are being applied to care for a young mother who has breast cancer. Tell them that the drugs to treat the breast cancer are now $55,000 a dose, and they might decide they are not so willing to be generous after all.

As prices climb higher, they will vote with their feet by opting out of health coverage, which essentially ends their financial contribution.

NEJM authors believe costly tier-4 specialty drugs "are a microcosm of medicine's future." How we approach these expensive but life-sustaining new drugs today can become a model for managing the inevitably high-cost innovations of tomorrow. Whose generosity-or subsidy-will pay for treatments as they become progressively more expensive? How will we share the financial burden, and where will our generosity run out?

We need to figure this out and quickly. If we can't reasonably share the financial burden of new treatments, some of our alternatives include: the flat-out stifling of innovation, denying care based solely on cost, and reserving such care only for those who can afford to pay for it. Not the best options.

Continuing the dinner party analogy, no one is proposing that we leave hungry Uncle George on the front step to starve to death. What everyone is proposing is that we budget for a good dinner and skip some of the extra appetizers, wine and lavish desserts.

In other words, the healthier and wealthier will find the generosity to support a healthcare system that provides good, effective treatments. What it takes to get from here to there is much more effectiveness research.

Pay attention to the tier-4 model as it unfolds in the coming years. No doubt you'll see a preview of tomorrow's funding dynamics.

Julie Miller is editor-in-chief of MANAGED HEALTHCARE EXECUTIVE. She can be reached at julie.miller@advanstar.com