Hope vs. Reality: Annals of Internal Medicine on Obama Options

Annals of Internal Medicine has an excellent summary on its web site of the Obama Administration’s options to control health care costs. The article is entitled “Hope vs. Reality”

In essence, the authors point out that the keys to controlling costs are

- Controlling price The US has lower utilization than most developed countries – but dramatically higher costs per unit. Lower prices are not very popular with providers!

- Regulating insurance to decrease underwriting and other administrative costs. Insurance regulation can be very unpopular with insurance plans – see an interesting op-ed piece on this from the LA Times.

- Overall explicit budget caps. Budget caps seem fine in theory. However, they can become very unpopular once people realize that it might be their own care which would be foregone under such a regimen. 

The authors note, as I have in this blog, that the popular “solutions,” including HIT, disease management, prevention, P4P and comparative effectiveness, will only yield limited short-term savings.