Toward the end of a long phone conversation over the weekend, Stuart Altman got to what I believe is the essential lesson from every futile attempt to wrestle with rising health care costs in America for the past 40 years.
“Ultimately,” Altman said, “the pressure to spend money is much greater than the pressure not to spend money.”
This comes from the chairman of a Massachusetts commission that last week voted its unanimous dissatisfaction with a plan for Partners HealthCare System, the state’s most powerful medical organization, to merge with South Shore Hospital, on the grounds that it would drive up prices.
Altman, 76, has been around this block many times. The Brandeis University professor is an academic who works in the real world and has been involved in efforts to control medical costs for four decades.
As a much younger man, Altman first tried to get his hands around America’s health care expense problem for President Nixon.
In those days, he worked on Nixon’s Cost-Of-Living Council and even helped draft a law intended to give health maintenance organizations a boost to compete against private insurers.
Expensive even back then, the cost of medical care has since gone through the roof. As a growing percentage of the nation’s economy, the rising cost of health care is sobering and unsustainable. Expressed in actual dollars, it takes your breath away.
I couldn’t imagine what it was like to be in the middle of that, pushed back by such a strong tide for so long. So I asked him: After all these years, doesn’t that drive you nuts?
“Maybe it’s just in my psyche, but the answer is really no,” Altman said. “It’s a really big issue, and it isn’t going to be solved easily. I enjoy being part of the process but I don’t have any illusions on success. I don’t go in every day feeling frustrated.”
The Health Policy Commission that Altman leads oversees the state law capping increases in medical spending. The commission can review mergers of institutions and even express disapproval of them, as it did last week, but doesn’t have the power to stop them.
However, it can provide useful ammunition for others. Attorney General Martha Coakley and the US Department of Justice could attempt to block the Partners deal on antitrust grounds and use the commission’s findings to bolster the argument.
In our conversation, Altman focused on two themes that surely have implications for Massachusetts hospital mergers in general — and the ambitions at Partners in particular.
For one, Altman will tell you that strategies to create more efficiencies — like those typically presented in merger plans — are by themselves not persuasive arguments that prices will decline.
“We need efficiencies but we need to figure out a way to have them translate into lower prices to consumers,” Altman said. “It’s not a one-stop process. In the past, those efficiencies have been spent in other ways within the health system — higher wages, more employees or equipment or buildings. It never finds its way into lower costs to the patient.”
For another, he said, countries that really manage to control rising health costs do so in ways that would not be popular in America — with a single government payer or a strong regulator who tells providers what the price of care will be, period.
Altman will tell you that he’s a no cost-containment zealot. But before too long, he argued, health care costs really will become unaffordable.
Massachusetts, which has become a national test lab for health care economics, chose a middle ground on cost control when it created the health policy commission and put Altman in charge. He calls it a “semi-regulatory, bully-pulpit kind of organization.”
And what happens if that arrangement faces too much resistance and fails to keep rising costs under control? The commission could fold its tent. Or start wielding a bigger stick.
“This commission is [set up] so that it could be given more power if the current structure fails,” Altman said.
That wouldn’t be his choice.
Stuart Altman has spent a long career trying to find the middle ground between good care and affordable prices — fighting against a very powerful tide.