Restructuring American health care financing: first of all, do no harm!

Health care costs are climbing throughout the western world. Aging populations and the costs of advanced technology are the principal forces behind much of this global increase. No country has yet succeeded in containing these growing costs other than by some form of rationing. A variety of experimental strategies, including managed competition, are being considered or tested, but none is clearly effective. American health care expenditures differ, not in that they are rising, but in their enormously high starting point. Among other things, our higher costs reflect administrative costs of more than 20%, double those of Canada and nearly triple the European average; a malpractice system that, whatever its possible advantages, costs more than 10 times as much as it pays out to the injured; the enormous medical costs of poverty; maldistribution of physician specialties and incomes; and reimbursement systems that eliminate consumer input and oversight. Restructuring the system of health care financing to bring administrative costs in line with those of other nations could save at least $70 billion annually; another $25 billion or more could be saved by replacing the malpractice system with more cost-effective alternatives. These savings could defray the costs of insuring all those not now covered, without increasing either costs to the middle class, through taxation of benefits, or total health care expenditures. With all Americans covered, the necessary restructuring of the system of health care delivery could be conducted without the current pressure for immediate drastic reform, which carries with it the risk of serious error. In dealing with the sick, physicians are taught to apply two maxims: "primum non nocere" or "first of all, do no harm!"; and the rule of therapeutic restraint. The latter states that a severe chronic illness may respond better, and with fewer complications, to gradual corrective measures than to highly aggressive therapy. Both rules could well be applied to curing the American health care system.