The Value of Power

The legislative fight to secure government funding to provide the public with the disease specific treatments and interventions, created by the last 30 years of research, will cause the development of antagonism between health organizations that have been traditional political allies. Budget deficits and a slower economy will force internal redistribution of a flat Medicare budget, as always there will be winners and losers. For example the mechanical heart assist pump could require 15% of the current Medicare budget; if the over all budget is not increased some other interventions will need to have there reimbursements frozen or cut. The effect will be redistribution based more on the power of constituencies rather then on demonstrated needs.

In 1965 Medicare became law, and set off a golden age of medicine with the promise to pay “customary and usual fees’’. For the first time there was a third party payer for all Americans above age 65. Hospital construction boomed, existing procedures that had been effectively rationed became common, new innovative medical diagnostics and treatments arrived, and the income of health care professionals rose dramatically. In the Early 1970’s the Nixon Administration embarked on ‘wars’ against cancer and heart disease bringing the age of big science to heath care. In due course medical research spending dramatically increased leading to further technological improvements, new drug therapies, and advanced procedures. A knowledge boom was underway. In the late 1980’s concern developed that health care costs were going out of control; managed care arrived in force and Medicare began to cap the rate of spending. Hospitals saw shrinkage in patient days and a concomitant fall in income. In the 1990’s hospital closings and reductions in patient beds became the norm. The ratio of hospital staff giving care to patients dropped as a new bureaucracy and processes to manage the costs and reimbursement of care went into place. Health care costs were held close to the rate of inflation until the late 1990’s when rapid increases again materialized.

In the early 21st century we will see the potential for the rapid introduction of new pharmaceuticals, diagnostics and therapies that have resulted from the research investment of the previous 30 years. Unfortunately this potential for unprecedented health care progress coincides with a world wide economic downturn and an ageing demographic. With total Medicare spending capped, the number of uninsured under age 65 growing and the number of underinsured expanding rapidly, health care rationing exists and is a growing reality.

Economics dictate that not everyone, unless they can privately pay, can get every available treatment. It is an inevitable reality that decisions on care will increasingly be made in the political arena. New and existing treatments will compete for the same limited dollars. In order to secure care for their constituency health care organizations like ACS will depend increasingly on their ability to form and effectively manage coalitions, that out competes other coalitions, in the battle to influence government and other third party health care purchasers. Bone marrow transplants as therapy will compete with mechanical heart assist devices; stem cell therapy for spinal injury or MS will compete with both. The arguments will be emotional and attempts will be made to base them on the values and quality of life criteria. Decisions however will be made on the real and perceived power of the constituencies affected. It is likely that the treatment debate will result in a serious secondary debate on the wisdom of funding future research when we cannot afford to provide the treatments already in existence.