American Hospital Association Arizona Health Care Cost Containment System Congressional Budget Office Coronary care unit Civilian Health and Medical Program of the Uniformed Civilian Health and Medical Program of the VA Congressional Research Service ABBREVIATIONS ADAMH Alcohol, drug abuse, and mental health AHCCCS AMA CBO CCU CHAMPUS CHAMPVA CON CRS CT DOD DRG EPA ESRD FACS FBI FEHBP FTC GAO GMENAC GNP HCA HCFA HIAA HMO ICU IHP IHPP IOM IPA NAEHCA NCHCT NMR OPM OSHA OTA Computed tomographic Department of Defense Diagnosis related group Environmental Protection Agency End-Stage Renal Disease Freestanding ambulatory surgery center Federal Bureau of Investigation Federal Employees Health Benefits Program Federal Trade Commission General Accounting Office Graduate Medical Education National Advisory Committee Hospital Corporation of America Health Care Financing Administration Health Insurance Association of America Health Maintenance Organization Intensive care unit Institute for Health Planning Intergovernmental Health Policy Project Institute of Medicine Individual practice association National Association of Employers on Health Care Alternatives National Center for Health Care Technology Nuclear magnetic resonance Office of Personnel Management Occupational Safety and Health Administration PGP PPO PPS PRO PSRO SHMO SSI TEFRA VA WIC Prepaid group practice Preferred Provider Organization Peer review organization Professional Standards Review Organization Supplemental Security Income Tax Equity and Fiscal Responsibility Act of 1982 Women, Infants, and Children CHAPTER 1 ISSUES AND PERSPECTIVES The nation has made a commitment to provide all Americans with access to high quality health care. While this commitment has afforded innumerable benefits to many persons, it has contributed to ever-increasing health care expenditures. Today, the federal and state governments as well as the private sector are focusing their attention on ways to constrain spending while preserving the quality of the health care system. This report explores the debate over health care cost containment, examines the options available, and directs attention to the key issues facing the nation in containing health spending. Rising health expenditures were the impetus for the development of these issues; of equal importance, however, was the potential impact of cost controls on access to and quality of health care. The issues we identified relate to the impact of the supply of certain health resources on expenditures, alternative methods of delivering care cost-effectively, ways of reducing inappropriate utilization of the system, and more efficient methods of paying for health care. OBJECTIVES AND APPROACH Our objectives were to develop a comprehensive overview of the factors contributing to increases in national health care expenditures, discuss what efforts have been attempted in the public and private sectors to constrain expenditures so far, and identify issues in need of attention to constrain future expenditures while preserving the quality of the health care system. Many alternative strategies are available to policymakers to deal with these issues, and virtually every alternative has advocates and critics. By presenting the available alternatives, including a discussion of their pros and cons, policymakers will be able to consider a wide choice of options. In developing this report, we focused mainly on methods to improve efficiency; that is, minimize the costs of our health care system without reducing access to and quality of care. Much of the debate in the cost-containment arena, however, suggests that improving efficiency will not be sufficient to deal with the crisis of rising expenditures. If this is so, then it will be necessary to confront broader issues regarding the allocation of resources to health care. Such issues, which are beyond the scope of this report, will require value judgments and encompass controversial ethical, legal, economic, and political issues. Specifically, decisionmakers may have to address, as a matter of public policy, the priority we ought to place on health as reflected in the percentage of the gross national product (GNP) that we are willing to spend on health |