David Cutler, Professor of Economics at Harvard, explains how an emphasis on cutting costs has made us lose sight of the most important issues in healthcare reform

Question: What must healthcare reform accomplish?

David Cutler: I think of what reform has to accomplish is three things.  One is it has to cover everybody. Both for moral reasons as well as economic reasons, it’s untenable to be in a society where any change in your circumstance, like, for example, a recession, can mean you’re out of the health care system.

Second, is it has to modernize the health care systems so that we really get money for what we put into it—we really get value for what we put into it.  The misconception that you referenced is that the idea, the goal, is to save money.  The goal is not to save money, the goal is to do things where they’re appropriate, and not do them where they’re not appropriate. Which is a way of looking at it that’s much more consistent with where people are and the values that we have.

And then the third thing that we need in reform is, we need a public health system that actually works to keep us healthy—to keep us safe—that reinforces our medical care system from things like H1N1 Flu, to Avian Flu, to food and water safety, to obesity and smoking cessation. 

Question: What do people need to understand about the healthcare debate?

What people need to understand about health care reform is that we can improve the quality of care and lower spending at the same time. Think about those patients with chronic disease who are not getting treated appropriately. Treat them more appropriately, they don’t go to the hospital, they spend less and their quality of life—their length of life is increased.  That’s what we can do if we really do it right.  So, yes we need to save money, but we will save money as a by-product of having a system that works better. 

We are not going to save money by taking a meat axe and just clawing off some part of health care spending.  That’s what a lot of the alternative is, if we don’t do this, what’s going to happen?  Probably, a lot of the employers will just say “Hey, you know what, we’re just going to stick you in health plan with very high cost sharing—you go out and deal with it.” Everything we know is that people will stop taking their medications to save money and their health will deteriorate. 

We have to find a way, and we believe there are ways, where we can save money and we can improve health. And people know this, people know that the healthcare system costs more than it should and a part of that is because the thing doesn’t work right job and you wind up having people in very expensive circumstances after-the-fact, when you could have prevented it.

So, I don’t think that convincing people of that presumption is that hard. I think what we have to do is: one, make sure we do that, make sure that we put the steps in place to do that; and second, is we need to make sure we don’t demagogue it, so we just say to people ‘Oh, what the President wants is to ration your care; or what Senator Kennedy wants is to make sure you don’t get some.’ We need to get away from that, because… its complicated enough, no one’s going to understand all of the details, and if people hear those things and they get scared then they will be tempted to back off—and that would be the worst of all situations. 

Recorded on: July 06, 2009