Investing in Public Health: a Life-Cycle Approach

By Jack Meyer

Better health at lower cost. This book proposes sound investments to achieve these twin goals. Rooted in a life-cycle approach, key investments start with timely prenatal care, immunizations, better educational attainment, a healthier and active work force, and healthy aging. Dr. Meyer distills the forces driving people into the health care system -- poverty, tobacco use, obesity, and pollution and presents policy prescriptions aimed at core drivers of poor health and high costs.
This book presents the concept of a positive life spiral, in which carefully targeted investments result in better health outcomes, health care savings, and more people working productively. This lowers public assistance costs and broadens the tax base. Some of the savings are plowed back into more investments, continuing the upward spiral.
The author presents a solid strategy to finance the new investments with an in-depth plan to reduce the huge amount of wasteful spending inside our health care system. He offers new approaches to health care delivery and financing, along with modern policies to assess the value of medical technology. Savings are placed in a new and secure trust fund that will redirect spending toward high-value investments in public health, education, and work force development.

• Language: English
• Publisher: Xlibris US
• Release date: Apr 3, 2014
• ISBN: 9781493178964

Jack Meyer

Jack Meyer is an unaffiliated freelance writer living in Green Bay, Wisconsin. His prior works include The Odyssey of the Western Spirit: From Scarcity to Abundance and Alcibiades: A Play in Three Acts.

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Copyright © 2014 by Jack Meyer. 606828

Library of Congress Control Number: 2014904618

ISBN: Softcover 978-1-4931-7897-1

Hardcover 978-1-4931-7898-8

EBook 978-1-4931-7896-4

All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the copyright owner.

Rev. date: 03/20/2014

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Contents

Executive Summary

About the Author

Acknowledgments

Background

ACTION ITEM NUMBER ONE

Generating Substantial Savings in the Medical Care System

ACTION ITEM NUMBER TWO

Identifying and Implementing High-Value Interventions to Improve the Health of the Population

ACTION ITEM NUMBER THREE

Financing The New Investments

ACTION ITEM NUMBER 4

Obtaining Public Support

Conclusion

Executive Summary

The US has tried in vain to control long-term health care spending. Most of the alleged cost control is really cost shifting, and many initiatives ignore the waste in the base of the system and simply try to cap the growth in provider and health plan payments. This approach is doomed to fail.

To control the growth of health spending while improving the health of our population, the US needs to redirect resources from low-value, high-tech interventions inside the medical care system toward high-value investments designed to keep people out of the health care system in the first place. The latter include clinical and community-based prevention strategies with a solid evidence base. We also need investments in both the social environment and the built environment.

The analytic framework here is a life-cycle approach to smart investments in high-value interventions that improve the health of our population in a cost-effective fashion. This begins with healthy pregnancies, family preservation, and early childhood education; it includes initiatives to reduce poverty, improve lifetime education, help people prepare for work and participate in the labor force; and encompasses reforms leading to cleaner air and water along with other improvements in our infrastructure.

We need to combine real cost control within the health care system with new approaches that reduce the need for health care. Real cost control will require replacing the fee-for-service payment system with global payments that will create incentives for people to trade off health care without a supporting evidence base for measures with solid evidence of positive impact; better evaluating new medical technology and targeting it to those who really need it; assuring competitive health care markets; limiting open-ended tax subsidies; promoting multidisciplinary team-based care delivery; and reducing inefficiency.

One major portion of the savings from these and other policy reforms can be used to reduce the growth of the federal debt and lower health care premiums. Another major portion of the savings would be secured and transferred to a new High-Value Investments to Improve Public Health Trust Fund. This Fund would provide resources for promising interventions that keep people healthy and out of our health care system for as long as possible. Financing for this fund would come from the savings associated with health care reforms, higher excise taxes on tobacco and alcohol, and perhaps also from social investment bonds.

If just 10% of wasteful health care spending can be captured and secured, we could redirect $50-100 billion annually to sound public health investments that will improve population health, further reduce health spending, and help our economy. This amounts to a positive life spiral (in contrast to the term death spiral so frequently used in health care).

Success for this program will depend not only on the careful design of the initiative, but also on convincing the public that the new approach is not just an add-on to our current spending, but rather a sound investment that will yield long-term savings and lead to a healthier population.

About the Author

Jack Meyer, Ph.D., is a Managing Principal in the Washington, D.C. office of Health Management Associates, a national research and consulting organization. From 2006 through 2013 he was also a Professor at the University of Maryland in the Schools of Public Policy and Public Health. Dr. Meyer was the Founder and President of the Economic and Social Research Institute.

Acknowledgments

This report was prepared during the author’s sabbatical at the UCLA School of Public Health over the Summer of 2013. The author would like to thank Professor Thomas Rice at UCLA for helping to arrange this sabbatical and also for providing helpful suggestions throughout this project. I also thank the leadership of Health Management Associates for making this sabbatical possible.

The author wishes to acknowledge the advice and very helpful suggestions provided by Dr. Jonathan Fielding, the Director of the Los Angeles County Department of Health and the County Health Officer. Dr. Steven Teutsch, Chief Science Officer of the Los Angeles County Department of Health, conducted a thorough review of an earlier draft of this report and offered many valuable ideas and suggestions for improvement.

I would also like to thank four colleagues at Health Management Associates for carefully reviewing an earlier draft of the report—Elliot Wicks, Sharon Silow-Carroll, Barbara Smith, and Chad Perman. The author would like to acknowledge the helpful assistance of Patrick Sheehan, who provided the layout and design for this document.

Background

The goal of health policy should be to make the American population healthier. Health care professionals, policymakers—and the population generally—tend to look to the medical care system as the major path to maintaining and improving health. But the medical care delivery system is only one—and probably not the most important—influence on the population’s health.

A 2012 study by the Institute of Medicine estimated if the health care in every state were of the quality delivered by the best state, an estimated 75,000 fewer deaths would have occurred in the US in 2005 and an estimated $750 billion in care that is wasteful and produces no significant positive health benefits could have been avoided in 2009.¹ Waste includes spending on health services that lack evidence of producing better health outcomes compared to less-expensive alternatives; inefficiencies in the provision of health care goods and services; and costs incurred while treating avoidable medical injuries, such as preventable infections in hospitals.² We have the knowledge to reduce wasteful and cost-ineffective medical spending while at the same time improving quality of care and improving population health.

The paradox of the American health care system is succinctly summarized by the Institute

of Medicine:

The past 50 years have seen an explosion in biomedical knowledge, dramatic innovation in therapies and surgical procedures, and management of conditions that were previously fatal, with ever more exciting clinical capabilities on the horizon. Yet, American health care is falling short on basic dimensions of quality, outcomes, cost, and equity. Available knowledge is too rarely applied to improve the care experience, and information generated by the care experience is too rarely gathered to improve the knowledge available.³

Chronic medical conditions account for more than 75% of total health spending. One quarter of US adults have multiple chronic conditions. Among people 65 years of age and older, 43% have three or more chronic illnesses and 23% have more than five. In fact, chronic medical conditions associated with modifiable risk factors such as smoking, nutrition, weight, and physical activity represented six of the ten costliest medical conditions in the US, with a combined medical care expenditure of $338 billion in 2008.⁴

These figures show that a considerable amount of health care spending is accounted for by a comparatively small number of very high-cost