Health Policy Expert Marc Roberts, PhD, Urges Physicians to Be on the Front Lines of Change in the Health Care System

Kristine M. Conner
University of Pennsylvania Cancer Center
Last Modified: October 23, 2000

Inevitable changes in how services are paid for in our current health care system require physicians to take the initiative to get involved, said Marc Roberts, Harvard University Professor of Political Economy and Health Policy, during this morning's keynote address on the second day of the ASTRO meeting. During an hour-long talk peppered with witty insights and humorous analogies, Dr. Roberts addressed the rather serious subject of "The Politics and Economics of American Health Care: Past and Future." Even in what has been an excellent economic situation in this country, he said, health care costs and demand have continued to rise-and this trend is only going to continue. As consumers continue to expect more and insurance companies and employers try to pay less, the system will be squeezed even more than it already has been. Physicians need to make sure that their interests are represented in the process of deciding what should come next, Roberts stressed.

Before going on to violate Yogi Berra's aphorism that one should "never make predictions, especially about the future", Dr. Roberts said that he first needed to talk about the recent past. He began by discussing the generally rosy economic situation, which he called a "Goldilocks economy": not too hot, not too cold, but just right. He gave credit to the Clinton Administration for a fiscally conservative economic policy that has resulted in a positive chain reaction. Tax increases have led to budget surpluses, which in turn have led to low interest rates, which led to high private investment, which increased productivity, which led to price stability.

"We have finally begun to have productivity increases in the service sector," Roberts noted, asking his audience members to reflect on all the convenient and efficient services that they take advantage of when they travel, from airline e-ticketing to on-the-spot check-in of rental cars to automatic teller machines.

Deregulation, another result of this economic policy, has increased competition. "We have knocked down barriers that prevent newcomers from entering business in this country," Roberts said. Furthermore, the increase in foreign trade, combined with greater productivity overseas, has also increased competition. At the same time, we have high rates of employment. "If you had told any economist just a few years ago that less than 4% unemployment would accompany less than 1% inflation, he would have said that it's impossible," noted Roberts.

Continuing Challenges in the Health Care Sector: Rising Cost, Rising Demand

So why then aren't these benefits carrying over into the health care sector? Why do we continue to hear about an impending health care crisis? Roberts outlined what he sees as the four large-scale forces that are to blame and that "aren't going to go away": the aging baby boom population, increases in the numbers of people with chronic disease, the increasing availability of (and demand for) better and more expensive technology, and increases in consumers' expectations. These explain why demands for health care and health care costs have been rising and will continue to rise in the foreseeable future. Roberts told the audience to think of these forces as more analogous to global climate change than a tornado. In other words, going into the basement and waiting for the turbulence to pass will accomplish nothing. Rather, one must realize that these forces "will be with us forever and will only get worse."

Many experts have already pointed out that the large aging population of baby boomers will continue to increase demand for health care services. Roberts elicited a chuckle from the audience when he called the modern American middle-aged male a "literal layer cake of pharmaceuticals", asking them to think about all the medications, from Rogaine to Claritin to Viagra, that are available for just about every middle-aged bodily system. Aging is known to bring about more serious health problems, too, and we now have the means to keep the high users of health care services alive much longer. In a way, Roberts reflected, "our success has been our failure"-in other words, the success of our health care services creates more long-term demand for additional services, which in turns places more burdens on the system and drives costs up.

At the same time, more higher-end technology is becoming available, and physicians have an incentive to use it to help patients even if it is more expensive. In turn, people's expectations for their health care are higher, particularly as they age into their 60s, 70s, 80s, and beyond. "No one is content to sit around on the porch anymore and wait around to die", Roberts emphasized. "Now everybody wants to go around the world! And that puts more demand on you."

As these forces have driven cost and demand, they also have led to certain very noticeable changes in the health care system. Dr. Roberts pointed to managed care as perhaps the best-known change. Many companies are shifting their employees to managed care plans, even against employees' will at times. Customers' dissatisfaction with the limits on choice has been well-documented. These limits are the result of managed care companies' desire to limit both the price of services and the quantity, in an effort to drive down overall costs. Yet another trend is the consolidation of insurance companies with providers, as both seek to "get market power." However, Roberts noted, many of the merging entities are finding that this process is "much more difficult than early enthusiasm would have indicated."

This election year's political agenda is also a telling reflection of these current trends. What is on the agenda? Drug coverage for seniors and the HMO Patients' Bill of Rights. And what is off? Any discussion of giving more money to physicians and health care providers. As the two candidates compete for the swing vote, stressed Roberts, they need to appeal to the key voting block of older Americans. He added that no Congressperson is ever likely to suggest that the health care providers deserve more money, especially as the large baby boom generation is beginning to retire.

Predicting the Future for Physicians

So what is the likely outcome of this situation for physicians? Roberts outlined certain trends that he believes will become a reality over the next several years. The first is more carve-outs, meaning that more health care providers will carve out more limited "niche markets" for themselves. By limiting their services, they also can provide them more cheaply, thanks to economies of scale (since it is cheaper to provide a large quantity of a few services rather than smaller quantities of many services). Related to that trend will be more differentiation and competition among physician practices. This phenomenon, said Roberts, would parallel what has gone on in the economy in recent years, with consumers having an almost overwhelming range of choices-whether they are shopping for sneakers or watching satellite TV. The day will come when primary care practices are differentiated, he said: you might have the high-tech group, which emphasizes technology as a tool and does everything from making appointments to keeping patient records electronically; the whole-earth group, which stresses diet and alternative medicine approaches such as acupuncture; or what he called the "yuppie businessman's practice," which doesn't hold your hand but gets you in and out on time.

He also sees a much greater role for information technology, particularly in the treatment of chronic diseases such as diabetes. In the current climate, he noted, it would be extremely difficult to schedule a sufficient number of appointments with chronic disease patients to be absolutely sure that they are complying with their disease management plan. Interactive disease management software programs could make a significant difference.

Changing How the System Pays for Care

But Dr. Roberts also made clear that such emergent trends will not fix what is fundamentally wrong with the current health care system: the way it pays for care. Predicting a "time of substantial turmoil" and "major changes in the economics of the system" in the next few years, Roberts stressed that the current financial situation cannot persist, for a number of reasons. First, academic medical centers, which do not just treat patients but also train new doctors, need additional funding sources. Teaching necessarily generates higher costs, but no one seems to want to cover them. Second, there are high numbers of people without health insurance in this country-as many as 19% of the current under-65 population. Roberts predicted that this number will increase during the next recession. Furthermore, he said that he sees the way that we treat the uninsured in this country as "completely irrational." Since these people seek care primarily through emergency rooms and inpatient services, rather than on an outpatient basis, the system has to subsidize this cost by charging other sick people more. "With this crazy financing system, we actually raise our costs!" he exclaimed.

In addition, there is a fundamental tension between businesses' resistance to absorbing ever-increasing health care costs and consumers' expectations that they can and should have it all. Everyone wants access to the best and most advanced services, but no one wants to bear the news that this cannot happen. "Americans are twelve-year-olds when it comes to health care," Roberts observed, drawing on his experience at the parent of an adolescent son. "They want it all without having to give anything up."

So what would be the features of a health care system that can best deal with these problems? Dr. Roberts outlined what he sees as the required characteristics of any working solution. He argued that coverage cannot be tied to employment, because this ignores the unemployed, part-time workers, and independent contractors in business for themselves. Furthermore, the system would have to be tied to taxation: "We can only get universal coverage through broad-based taxes, with the non-poor paying for the poor," he said. The existing players in the insurance industry will have to be left intact, mainly because they are politically powerful, and consumers will have to be given choices. At the same time, however, we have to be realistic and understand that we cannot cover everything.

Dr. Roberts suggested vouchers as a possible model for a workable system. Everyone would receive vouchers for health care services, and insurance companies would have to honor them, with payments they receive risk-adjusted for the patient's age and health status. Supplemental corporate and private insurance plans could then provide additional coverage for those who want it and can afford it. But the voucher system potentially could ensure that everyone receives at least a certain level of care. Roberts noted that a voucher system with corporate and private add-ons is currently used in Australia.

Whatever does happen -- and Roberts made clear his belief that change will come, out of necessity -- physicians and other health care providers have to stay involved. "The system is clearly overbuilt," he stressed, and providers need to help chart the coming changes. "Otherwise, Senator Kennedy's 27-year-old assistant, who only has maybe a master's degree in health policy, will write the new legislation," he suggested, using this hypothetical to make the point that the wrong people could very well determine what happens next. Instead, the people who know health care services best need to be involved in any changes.

Roberts urged his audience not only to get involved, but also to keep patients' interests in mind and avoid self-interest. "You have to find ways to make suggestions that respond to legitimate social concerns," he said. And perhaps most important, Roberts added, physicians must resist free market advocates. Those who argue that a free market is the best model for delivering health care are ignoring the fact that physicians' economic interests and patients' best medical interests are often diametrically opposed. When physicians have an economic incentive to see more patients and perform more procedures, he noted, it is the patient who loses.