The Health Care Spending Disconnect: Star Wars vs. Flintstones

When it comes to the boundless potential and well-recognized limitations of America’s health care system, it goes without saying that we live in an era of Star Wars science and Flintstones delivery.

New breakthrough treatments for costly diseases are commonplace, but patients struggle to gain access to them. The recent introduction of the first gene therapy to cure a rare form of blindness is a sign that the time has come to move our current stone age care-delivery model to the space age.

Up until this point, individuals with inherited retinal disease have most often progressed to complete blindness; however, with the introduction of gene therapy, their prospects for restored eyesight have never been greater. Critics point out the cost — $425,000 per eye — as a primary concern, but it’s clear that gene therapy is illustrative of a broader and potentially more optimistic trend in health care.

Today, the price paid for a clinical service rarely reflects the intrinsic value in terms of health gains achieved. Ideally, we should define high value as it relates to its effects on patients, such as curing a disease or providing meaningful improvements in quality of life over the long term. But this rarely happens.

Drug prices — or spending for all medical services — are just one part of the problem. It becomes an issue when we realize how little Americans receive in return in terms of improved health. One-time treatments like gene therapies have the potential to dramatically change lives and, in certain circumstances, reduce long-term health care expenditures.

In fact, average life expectancy has gone down in the U.S. for the second year in a row, according to the National Center for Health Statistics. As reported by the U.S. Department of Health and Human Services’ Agency for Healthcare Research and Quality, about 86 percent of our health care spending — now over $3.3 trillion and rising — is on patients suffering from chronic conditions.

Research and development have led to the creation and delivery of services that produce impressive — and sometimes not-so impressive — health improvements. While most stakeholders agree that there is more than enough money in our $3.3 trillion U.S. health care system, our focus should not be on how much we spend, but instead on how well our increasingly scarce health care dollars are allocated.

I have seen spectacular innovations in the quarter century that I have practiced medicine. The enormous clinical potential of gene therapy sheds light on the critical importance of how clinical benefit — not acquisition price — should guide and improve how well we spend health care dollars.

Defining value in health care is very challenging in that it can only be determined at the individual patient level. To illustrate this critical concept of “clinical nuance,” I like to tell people that my three favorite high-value services are colon cancer screening, coronary artery stents and back surgery, and my three least-favorite, low-value services are colon cancer screening, coronary artery stents and back surgery. This highlights the point that the same service can be life-saving in one person and harmful to another.

One-time “cures,” if you will, present a new question altogether: Are we willing to embrace what science has to offer, even if we have to pay for an entire lifetime of benefit at time of use? Access to personalized, life-altering — yet expensive — services shouldn’t be determined by the type of insurance one might have, nor the amount of savings a person has in the bank.

The stone-age model that we currently use to pay for medical services is clearly not suited for groundbreaking one-time treatments — particularly those with clinical benefits that are incurred in the near and distant future. Decisions moving forward must be grounded by sound medical guidance, and medical dollars should be spent via guiding principles.

If we as a society devote more money to services that improve health and eliminate the wasteful spending on unnecessary care, this clinically driven re-allocation would undoubtedly translate into a markedly more patient-centered and efficient system. The recent news surrounding gene therapy is an opportune moment to remind us that the ultimate goal of health care spending is to improve health, not save money.

Dr. A. Mark Fendrick is the director of the Center for Value-Based Insurance Design, a professor of internal medicine in the School of Medicine, and a professor of health management and policy in the School of Public Health at the University of Michigan.

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