More Spending Is Not Always Bad
September 22, 2020
The underlying goal of Going Below The Surface is the examination of the drivers of health spending – it says so right on our home page – so last month’s New England Journal of Medicine article, “Do We Spend Too Much on Health Care?” hit with a special thrill. The article, by the University of Chicago’s Katherine Baicker and Harvard’s Amitabh Chandra, manages to dodge a binary answer to the question posed in the title while opening up an even more important conversation.
Baicker and Chandra make the point that more spending should not automatically be viewed negatively, especially in a high-income country such as the United States, where individuals and government may be willing to pay more, particularly for high-quality care. Instead, the authors suggest a more rigorous focus on whether the care delivered is high value or low value, not high cost or low cost.
Why It Matters: The NEJM article makes clear that a re-thinking of how health care is allocated with a focus on value has clear policy implications. A value-first approach means that there should be great skepticism around what the authors call “crude cost-sharing implementations” such as “across-the-board high deductibles,” coupled with a greater willingness to pay for fewer – but more high-value – services in an effort to cover more Americans. Still, as we’ve documented over the months, it’s not always clear which interventions drive the most value, meaning that Baicker and Chandra’s piece should – at a minimum – be seen as a call to action to build a better evidentiary base.