Many governments and private households are struggling with budget deficits. For example in Minnesota over the next 20 to 25 years, rising health care costs are projected to leave little additional money for spending on other state programs such as education, affordable housing, job development, etc. that arguably contribute more to population health than health care (1). Rising health care costs means there is less money for these other factors, which contributes to less healthy populations leading to higher health care costs which leads to less money to spend on the other factors. We will be creating a vicious, downward spiral.
There is a way out. It reminds me of the famous legendary quote of the bank robber Willie Sutton when he was asked, “Why do you rob banks? He replied, “Because that’s where the money is.“ Why should we, in population health, care about total cost of care (TCOC) or per capita costs of health care? Because that’s where the money is.
We have the most expensive health care system in the world with the highest per capita spending. Yet, we do not have commensurate quality, access or equitable outcomes. The Institute of Medicine (IOM) recently created info-graphics illustrating health care costs as well as waste in the system (2). For example since 1945, if the price of eggs had increased as quickly as health care costs, a dozen eggs would cost $55 today and a dozen oranges $134. Of the $2.3 trillion in 2009 health care costs, the IOM estimates that $765 billion is waste in unnecessary services, excessive administrative costs, inefficiently delivered services, high prices, fraud, and missed prevention opportunities.
This inexorable increase in health care costs demands our explicit attention for two reasons. One is to stop the downward unhealthy spiral, and second is to provide a mechanism for investments in the other factors that make populations healthy.
I propose that TCOC (or at least the dollars in waste) be a population health indicator. This focus will require two things. First, we must bring the topic of costs into the inner sanctum of public health, quality, equity, experience and access of care without imploding. With our colleagues and the public, we must discuss costs without inflammatory accusations of injury to the doctor-patient relationship, rationing, denials of care, death panels, etc. Since we live in a society that believes that more is better and more expensive is better, trusted voices will be needed. And with every dollar of “waste” being someone’s income or revenue, it will be a challenge to identify and discuss waste.
Second, we must actively support measures of total cost of care. National Quality Forum’s recent adoption of a TCOC indicator is a good beginning (3). Measures of efficiency and resource utilization are also applicable, but we must focus on total health care costs if we are to identify savings that can be captured for reinvestment in the non-clinical factors that make populations healthy.
In Willie Sutton’s biography, he denied making the above quote but actually said, “Go where the money is and go there often” (4). I think we in population health could heed his words and focus our attention on TCOC. We must go where the money is (i.e., waste in health care) as a way to fund investments that will create a community reinforcing loop for health (5) – an upward spiral for healthy populations.
We must do it for our children.
Sanne Magnan, MD, PhD is President and CEO of the Institute for Clinical Systems Improvement in Bloomington, MN.
- https://www.slideshare.net/smalltofeds/minnesota-and-the-new-normal-by-tom-stinson-u-of-m-econonmist#btnNext; slide 17.