LR: In recent years, medical prevention has been at least eight to nine percent of total medical spending. And, of course, we spend lots outside the medical sector, on everthing from highway safety to safe water.
TL: Is that enough? Is there an ideal number that policy makers should aim for?
LR: There is no number we should aim for. Instead, we should evaluate each intervention—whether it’s prevention or treatment—and focus our efforts on making sure that the ones that bring the most health for the money are provided to everyone who can benefit from them before we spend money on less effective care.
TL: What should we be doing to really control the costs of medical care?
LR: We have to decide how much we are going to spend as a country and then stop when we reach that point. We need to set a cap on total spending in some way. We already spend so much more than other countries that any cap would in the end be quite generous.
TL: Who would oppose such caps?
LR: Just about everybody. Patients who think that a cap means they won’t get the care they need. Hospitals, clinics, and doctors who know that it means they will not be able to grow as they have in the past or, in some cases, continue to be paid as well. Insurers who benefit from the large flows of revenue that come through their companies. Drug and device manufacturers that have seen their markets grow rapidly.
TL: If we don’t set such caps, ultimately what will happen?
LR: Medical spending will continue to rise as a share of national income. We currently spend sixteen to seventeen cents of every dollar on medical care. If we don’t change things, that number will keep growing.