Berwick Tells AJMC Healthcare Spending Can Be 15% of GDP, "Without a Hint of Rationing"

FOR IMMEDIATE RELEASEAUGUST 26, 2016

PLAINSBORO, N.J.—Healthcare spending in the United States could be capped at 15% of gross domestic product (GDP) without limiting access to care, according to Donald M. Berwick, MD, MPP, president emeritus and senior fellow at the Institute for Healthcare Improvement.

“I see no reason at all why we couldn’t have all the healthcare we want and need, without a hint of rationing, with say, 15% of GDP,” Berwick said in an interview with The American Journal of Managed Care (AJMC). The most recent CMS data put healthcare spending at 17.5% of GDP.

Berwick, who served as administrator of the Centers for Medicare and Medicaid Services during passage of the Affordable Care Act (ACA), discussed the disconnect between healthcare spending and Americans’ satisfaction with their care during a wide-ranging interview, in which he shed light on Aligning Forces for Quality (AF4Q) a 10-year investment by the Robert Wood Johnson Foundation (RWJF), which sought to improve the quality of care through a regional approach. Berwick edited a series of reports on AF4Q, which were just published as a supplement to AJMC.

AF4Q underscored weaknesses of the US system that the ACA sought to address: namely, that it is highly fragmented and extremely expensive. As Berwick discussed, a new phase of RWJF investment will address the social determinants of health, highlighting the fact that Americans’ overspending on healthcare is offset by this country’s lack of investment on things like child care, transportation, and housing. This “rebalancing,” Berwick said, “is really where the action needs to be.”

All healthcare is local. A feature of AF4Q is the focus on delivering healthcare within a region, and Berwick said the future success of reform efforts will depend on the agenda of “better health, better care, and lower costs”—the Triple Aim—being “owned by communities.”

While federal regulatory policy “sets the stage,” Berwick said, real change is hard without commitment from “a relatively self-contained population who know each other and have a common stake.”

Change is hard. Both AF4Q, and the ACA more broadly, have shown that changing the mindset of a $3 trillion healthcare system is “very hard,” Berwick said. Things like transparency, believed to be important, turned out to be hard to execute. Still, AF4Q “was a great effort … It taught us how hard it’s going to be to get all the forces working in the same direction.”

For all the challenges, Berwick said, “I personally regard the Affordable Care Act as an immense American achievement. We have 20 million people who have coverage who didn’t have it before.”

Health as a “common good.” The way healthcare is delivered—with insurers competing to deliver care—works against the need to bring care to all, Berwick said. “The biggest challenge in improving American healthcare may be to forge cooperation.”

While Berwick did not address these developments, critics of the way the ACA has played out point to the lack of a public option, as well as the fact that for-profit insurers are leaving the exchanges in many markets while retaining contracts for Medicare and Medicaid.

“Is it unrealistic to expect cooperation? Yes, if we’re paying for fragmentation,” Berwick said. With proper leadership, he said, healthcare can move to a “communitarian” model, and, “healthcare can be a win-win.”

Engaging consumers. AH4Q showed how difficult it is to engage consumers, both in paying attention to their own health and in educating them on healthcare issues. This is easy to understand, Berwick said; people lead busy lives and have many things competing for their attention. It is possible, however, to have a “mature” conversation about being more involved in one’s own care. “Healthcare’s not going to get better by screaming louder,” he said.

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