Most Countries Make Health Care Spending Trade-offs. Should the United States?

In an article posted today on the Health Affairs Blog, Francois Dionne, PhD, and Craig Mitton, PhD, argue that it’s time for the United States to consider making trade-offs, or decisions about the various types of services they will cover, as a way to rein in health care spending.

Many European countries, as well as Canada and Australia, face limits in their amount of health care spending and utilize trade-offs in their health spending decision processes. The authors note that trade-offs could occur at two levels: the total health care budget and within a set health care budget. For example, at the total budget level, governments could decide whether to devote more public resources to health care and less to education and social services, or vice versa.

Within a health care budget, the kinds of trade-offs could include what services or interventions are included in the coverage. They wrote, “[t]rade-offs have the effect of reducing the marketplace by removing specific interventions that are judged to provide low value. In that sense, they do not deny the importance of proper incentives in the system or the ability of the market to identify low-value care. They simply limit the space within which these incentives apply and the choices are made.

Without trade-offs, cost control in the U.S. is left to individual decisions. The result has largely been a combination of increases in the patients’ copayments (higher deductibles), increases in premiums, and reluctance to include new treatments in coverage.” Most other countries that utilize trade-offs follow specific multi-criteria decision analyses or other deliberative framework processes, Dr. Mitton noted in an interview.

They conclude, “The U.S. health care system can accommodate trade-offs… at many levels in the system. One necessary step there, as elsewhere, is to appreciate that trade-offs are made in other countries for good reason and that payment incentives alone are not sufficient.”