Connecting Value and Costs

AS A SOCIETY, we are in conflict with ourselves about the cost of health care. 1 On one hand, we want the best care possible, regardless of cost. On the other hand, we are not willing to pay the cost of the care we want. Our conflict parallels a flaw in the medical marketplace. An essential condition for achieving an equilibrium between cost and value is that the two must be connected through decisions. When people decide what products and services (goods) they want, they must not only see the value they will receive, but they mast also be responsible for the costs. Because of a variety of features of the medical marketplace-most notably third-party coverage, third-party advice, and uncertainty about outcomes-the required connection between value and cost is severed. The result is what we see. One side of our collective mind demands more services while the other side cries that costs are too high. Resolving our conflict will require connecting value to cost. An essential step in accomplishing this will be to incorporate costs in practice policies. 1 As controversial as that thought might seem (the great majority of practice policies currently do not take costs into account except in the most rudimentary way), arriving at the conclusion is the easy part. A more difficult issue is how to implement the goal of connecting value to cost. Suppose we agree that, in principle, costs should be considered when practice policies are designed, and that an activity should be recommended and covered only if its health outcomes (benefits minus hanns) are deemed to be worth its costs. The next questions are, Who should do the deeming? What should the deemers be asked?