Health Care Quality: At What Cost? - Len M. Nichols
Publications Friday, May 1st, 1998Introduction:
After Congress rejected universal health insurance coverage in 1994, much of the nation’s health policy attention has turned to quality assurance. The hundreds of specific clinical requirements for health plans introduced by state legislatures and Congress reflect widespread concern that too much access and service quality is being sacrificed for cost containment in the private sector. At the same time, some policymakers are demanding that our largest public programs, Medicare and Medicaid, emulate recent private sector cost savings, the very ones that have sparked the current concern over quality. Therefore two key health policy challenges for the future will be maintaining a high level of quality as we contain costs in public programs, and striking the right policy balance in monitoring and regulating the quality of health care in the private sector. After ten years of double-digit health insurance premium inflation in the 1980s, the current decade has seen a steady decline in the rate of private premium growth. A leading private consulting firm estimates that premiums for employer-sponsored insurance increased only about 0.5 percent in 1996, and total national health spending grew at only 4.4 percent, the smallest rate of growth since 1960. Slower national health care cost growth means that we have more resources available for other desirable uses. These cost containment successes are widely attributed to the spread of managed care.
Yet, some consumers and policymakers have come to fear the techniques that managed care health plans use to contain costs, such as limiting access to specific providers and services and creating incentives for providers to curtail access to care. These techniques can reduce costs but also risk reducing actual or perceived quality of care. The legislative proposals and the recent presidential commission on quality in health care are responses to this perceived risk.
“Health Care Quality: At What Cost?” Future of the Public Sector Issue Brief # 13, (May 1998).
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