Rethinking Healthcare Spending

Recent attempts to fundamentally alter Medicare, and the public outcry that followed, provide a working template for how to view broader health care reform.  Everyone agrees that our healthcare system – and Medicare in particular – is financially unsustainable. Any step we take to address this requires a choice to either cut services or be smarter about the way we deliver them.

Since health care discussions can quickly bog down in complex terminology and political rhetoric, lets consider instead how such a decision process plays out on a simpler landscape: a family’s food budget.

Picture the Ryan family of four: smart, responsible, and hard working.  The want to live well, but worry that their monthly food budget has skyrocketed out of control.  They rely a lot on the high-end grocer down the street, where they can pick up prepared filet of sole francaise in butter sauce –

We really should eat more fish!

– on the way home from work.  A couple of times a week they stop somewhere for pizza or burgers, and the kids just love going to one of those national chains of neighborhood restaurants after soccer games. As for portion size – well more is always a better deal, isn’t it?

But the cost is adding up.  And that’s not the only problem.  Everyone’s putting on a few extra pounds, the nutritional content of the prepared food (when they are able to determine it) is far from ideal, and more subtle but just as important, taking personal responsibility for their nutrition has devolved into a search for comfort and convenience.

The Ryans’ solution to this budget catastrophe? Keep doing the same thing, only less of it.  That may show a certain lack of imagination, but does offer an appealing ring of righteous self-discipline. They cut back to eating just breakfast and dinner.

Get over it, kids; lunch is for wimps.

They buy the fancy filets just for the adults.

Mmmmm.  Frozen fish sticks are yummy. 

Each family member gets a $1 coupon to bring to the fast food joint.

If you want more than fries, Suzy, better bring your piggy bank.   (It will make Suzy a savvier consumer.) 

They insist to the restaurant manager that they are only willing to pay half the price of the menu items.

What do you mean you won’t seat us?

Sure enough, the food budget shrinks. Everyone’s unhappy and the family’s nutrition has only gotten worse, but hey, mission accomplished!

Now picture the Ryan family’s neighbors who live just across the street, another busy family of four who have developed similar habits and attitudes.  They too recognize that they need to cut back their food spending significantly.  They also recognize that, just as importantly, they need to eat better. So they decide to buy basic foods that have no hidden ingredients, and do their own simple preparation and cooking, including packing their own lunches. This family serves plenty of food, but not an excess. Why in the world would they? They plan ahead for meals on busy nights. Everyone has to help out.

Aw, Mom. Couldn’t we just color on placemats while you guys have a drink?

Conversation starts to flow in a more natural way, as the social and practical aspects of mealtime blend. Saving money for this family, it turns out, also means eating and living better.  And they can still budget for those special occasions that call for a higher priced meal.

Who would argue against such a plan – except maybe the entire food industry lobby and the politicians they fund?

What does the Ryan family’s approach to a food budget teach us about healthcare spending?  Think about less primary services, while still funding overpriced and unnecessary tests and procedures.  Think vouchers that shift the burden of cost to the patient, and a lowering of physician reimbursements that only limits access and delays treatment. Think short-term savings and long- term complications.  Measures of quality don’t even factor into the equation.

What happens when we cross the street to the Ryans’ neighbors? Imagine us using our limited health care dollars more wisely: payment systems that rely on specific measures of quality and outcome, that incentivize good primary care instead of rapid patient turnover or unnecessary procedures. Think of strategies like medical homes and accountable care organizations, where bundled payments encourage teamwork and coordinated care.  Think about the Affordable Care Act.  Its not perfect, but it at least moves us across the street.

This is our choice now, not only for Medicare but also for every aspect of healthcare spending:  less or smarter. Less will sound especially good to people who believe that cuts will only apply to others.

Could you pass the ketchup please?  You sure won’t be needing it.

For the more sensible among us, a strategy for more cost-effective healthcare is the smarter approach.

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