COST / ISSUES   (C/I)

The pressure for continued increases in expenditures for health care may be dealt with by
  1. Spending more:
    a. Employer.
    b. Government.
    c. Enrollee.
  2. Holding down payments for the factors of production: (a) profits/surplus of provider institutions, (b) income of physicians and other practitioners, and (c) prices for pharmaceuticals and other supplies.
  3. Restricting (rationing) benefits (e.g., for further information Tiers of care; Oregon Medicaid program).
  4. Restricting eligibility for insurance (e.g. by income for public plans; by health status for private plans).
  5. Making care more efficient.
  6. Reducing sickness and disabilities, i.e. improving the health status of the population.
Note that when either a public or private insurance plan faces increasing costs that go beyond the willingness to increase expenditures (approach #1), the short-term response usually is limited to approaches #s 2, 3, and/or 4.

All of the first four approaches create losers, and the politics then become how to allocate the losses.

Approaches #s 5 & 6 are those that may avoid creating financial losses. They both, particularly #6, also offer substantial improvements in quality of life. But these are long-term approaches and they require up-front investments in research and education. They are more difficult politically because of the necessary investment and because of the delay in payoff.

For further information, the distribution of benefits and costs raise major political issues, that in part are being played out in the move to defined contribution plans