William Schwartz
Dr. William B. Schwartz was a nationally prominent kidney specialist and researcher when, in 1976, he left his post as chairman of Tufts University’s department of medicine to assume a new professorship devoted solely to health policy. Concerned that important questions of health policy could wind up being decided by economists and other nonmedical personnel rather than by physicians, he moved his focus from individual patients to the medical system in which they were treated.
Within a few years, Schwartz was certain that rising U.S. health-care costs would meet resistance from both government and employers, and he decided to study rationing in Britain, “to see what lessons we could learn from a country which culturally and scientifically was much like ours but where cost constraints had limited the availability of care for decades.”
His resulting 1984 book, “The Painful Prescription: Rationing Hospital Care,” co-written with economist Henry J. Aaron, fueled a national debate on medical expenses long before HMOs came under such strong attack, and “Life Without Disease: The Pursuit of Medical Utopia,” just published, again weighs the financial and social costs of medical progress.
A long-time advisor to Rand Corp.’s health sciences program, Schwartz relocated from Tufts to Los Angeles’ USC in 1992. Here, as in Boston, he continually thinks and writes about options for a health-care system he considers in severe economic crisis. Now 76, the Alabama-born physician may look like a courtly gentleman doctor, but he is clearly a zealot determined, as he puts it, “to lay out the options and trade-offs that could help policy-makers and the public resolve the chaos in medical care.”
As a professor of medicine focusing on issues of health policy, Schwartz works out of the USC Medical Building adjacent to County Hospital in an office decorated by his wife of eight years, corporate art advisor Tressa Miller. (He has three children from a previous marriage.) Surrounded by brightly colored contemporary prints and shelves of books on everything from chaos theory and economics to medical malpractice and kidney function, Schwartz discussed why health-care costs have escalated so much in recent years and what lies ahead.
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Question: After years of modest increases, insurance premiums are projected to go up 10% to 12% in the coming year. At the same time, patient complaints seem to be going up just as rapidly. What’s going on?
Answer: Nobody ever dreamed it would happen, but so much of our fiscal troubles really stem from all the research encouraged by ever-increasing congressional appropriations to the National Institutes of Health over the last 50 years. Particularly over the last 20 or 25 years, a flood of medical advances, such as organ transplants, coronary bypass grafts, MRIs and new anti-depressant and anti-psychotic drugs, have added major expenses each year.
As a physician, I have unalloyed enthusiasm for what has happened. People who were bedridden and in severe pain with hip disease are now walking about and leading virtually normal lives by virtue of hip replacements. Patients with coronary artery disease, who suffered severe chest pain after walking just a few yards, can now function free of pain by virtue of angioplasty and coronary bypass grafts. Individuals with unexplained abdominal pain or symptoms suggesting a brain tumor were, in the past, subjected to risky and painful exploratory surgical procedures often yielding little useful information. MRIs and CT scans have provided a noninvasive, painless and far more effective means of diagnosis.
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Q: And your reactions as a policy analyst?
A: As a policy analyst and, to some degree, as a health economist, I have to ask myself what are the costs to society of these advances, and the answer is that costs are very high. In the process of making these new technologies available, we have increased expenditures on health care from 6% or 7% back in the mid-’70s to 14% of gross national product today.
When health-care costs rose dramatically in the late 1970s and early 1980s--about 10% per year--managed care was seen as the savior. The idea was that managed care organizations such as HMOs could contain costs by stepping into a wasteful system and eliminating its inefficiencies. And, indeed, from the mid-1980s to the mid-1990s, they did just that. The chief targets were unnecessary hospital admissions and hospital days and tests and treatments which yield no medical benefits. Premium increases were slowed to only a few percentage points a year.
As long as HMOs were able to largely offset costs for these technological advances by greater efficiencies, health insurance costs rose only modestly. The recent problem with rising premiums stems from the fact that HMOs have just about run out of ways of becoming more efficient . . . . There’s nowhere else for them to go to save money without denying patients useful medical care, and the problem is going to be aggravated because scientific creativity isn’t going to stop. There will be a continuous flow of exciting but expensive new ways of diagnosing and treating disease.
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Q: Are you advocating that we discourage or even stop that medical advancement?
A: It’s not my job as a policy analyst to advocate one course or another. My job is to lay out the options we as a society face.
We have a hard choice between two options, and that hard choice has not been openly faced by the government, by employers or by the general public. If we want all of these open-ended advances in medical care to be made available to virtually everyone who might benefit from them, costs will inevitably continue their upward surge, and we will devote an ever larger potion of our national resources to health care. This may sound all right at first glance, but the result will be the diversion of valuable dollars from other important activities such as the environment and education.
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Q: And the other option?
A: The other option is to contain costs through rationing--that is, by deciding which patients are to receive a particular treatment and which patients are to be denied it. That is a very painful idea and one totally unfamiliar to Americans who have health insurance, although, sadly, not to those who are uninsured.
We can’t have it both ways--access to all useful care and containment of costs. This is a dream which has been put forth by the managed-care community--but it is only a dream.
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Q: Aren’t you suggesting a sophisticated form of triage?
A: That’s right. In wartime, when injured soldiers are brought back to medical clearing stations and there aren’t enough doctors, nurses and drugs to care for them, hard choices have to be made as to how resources are to be allocated. Triage is just a form of rationing, and rationing will become a way of life if we insist on cost containment as our highest priority.
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Q: How would rationing work? How would decisions be made as to who receives care?
A: HMOs are already beginning to deny some expensive care under one pretext or another--such as that the treatment is still experimental, even when there is a general agreement among physicians that it is not experimental. They also reject other interventions on grounds which are not clear. The process is opaque, and what we need is to move toward a transparent rationing process, in which the public understands the basis for any given patient being denied access to a particular kind of care.
As I say in my new book, “Life Without Disease: The Pursuit of Medical Utopia,” the logical way to ration care is to eliminate expensive procedures for those individuals who have the least prospect of benefiting significantly from those procedures. Thus, if a patient is in the 1% least likely group to benefit appreciably from an angioplasty or a hip replacement, those dollars should be moved to a high-value treatment such as a new and effective treatment for cancer.
The public should know that’s the way it’s being done, but there will still be unhappiness about those few patients with a poor prognosis who were denied care when this allocation strategy was used . . . . If we are unwilling to let anyone who could benefit even slightly be denied care, then we cannot ration, and we must accept steady and rapid rises in health-care premiums. If we mean business about cost containment, denying care to those who will benefit least is the logical and crucial strategy which the public must accept. The choice is theirs, not that of physicians or anyone else in the system.
As a physician, as with any physician, my primary concern is the patient and getting him or her the best care possible, regardless of costs. But society has to make the decision as to whether or not [doctors] practice that way anymore.
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Q: So we have either rationing of health care or unchecked medical costs as our two options. Neither sounds very good. What do you think will happen next?
A: You’re going to have cost containment achieved by rationing but with a constant struggle between managed care and society, with Congress as a major player on society’s behalf.
We’re already seeing that cost containment is a high priority as evidenced by the various restrictions imposed on managed care that are constantly discussed in the media. Gag rules [on doctors] and drive-through deliveries [of babies] were the first obvious examples, but there have also been prior approvals for emergency room visits and limited opportunities to appeal denial of care.
The response of the public and government shows the conflict between our desire for cost containment and our desire for access. A congressional bill of patient rights, now under consideration, would remove some of these restrictions but add to costs, and it seems very likely that some form of this legislation will be passed in the near future. I thus foresee an ongoing struggle between managed care [organizations] trying to contain costs and government trying to loosen their restrictions . . . .
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Q: Do you see this going on endlessly, or is there hope for the longer term?
A: Happily, in the longer term, there is hope of a solution to the cost problem while dramatically advancing the effectiveness of disease prevention and treatment. We’re in the process of identifying all the 100,000 human genes within the next several years. As genes are identified, individual researchers are relating particular genes to particular diseases. Once we know which gene causes which diseases, and the nature of normal and abnormal protein induced by the gene, we have open to us a number of therapeutic possibilities.
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Q: In other words, you could treat the cause of the disease rather than its consequence?
A: You might not always succeed, but that would be your primary goal. Instead of waiting for hip disease to occur and doing a hip replacement, or for coronary disease to occur and doing an angioplasty, genetic techniques could be used to prevent this type of damage from occurring.
Although no one can be certain, it seems highly probable that, as our understanding of genetic and cell function deepens, we will find simpler and more targeted approaches to treatment which will not only extend our lives considerably, but be far less costly than current treatments.
