Focus on results, not treatments

Alarmed by increases in healthcare costs, policymakers and insurers have adopted a series of reforms over the years -- such as price controls and HMOs -- whose savings proved to be With that history in mind, some experts say that the only sure way to control the growth in healthcare spending is for the government to cap it, a cure that would be worse than the disease. There may be no quick fix, but there certainly are ways to deliver and pay for healthcare that can give consumers more value for their money. If we undertake them now, the eventual result will be a higher-quality system that's more sustainable and affordable.

The cost problem has multiple causes, but a primary one is the overuse of medical services and technology. Today's health insurance system gives physicians and hospitals little incentive to practice medicine cost-effectively. And as long as they can pass their costs on to consumers in the form of ever-rising premiums, insurance companies don't need to be disciplined spenders either. To create the right incentives, insurers should move away from paying for each treatment or service performed for a patient -- an approach that rewards volume, not effectiveness -- and instead base reimbursements on the treatment plans that produce the best results.

It's a fundamental shift that would take years to implement, in part because of the work healthcare providers must do to create and maintain treatment guidelines for doctors and hospitals. To help advance the process, Congress included $1.1 billion in the economic stimulus bill in February for research that compares the effectiveness of different treatments. There's much that remains unknown about how best to treat various illnesses and injuries, and each new drug or device that's developed raises new questions about effectiveness. There are significant issues too about how to enforce such guidelines. But the development of "best practices" could help doctors by providing a shield against malpractice claims, reducing the incidence of wasteful tests and other "defensive" procedures.