Today, our health care system in the United States is untenable. As a nation we already spend over $2.6 trillion on health care, and without drastic changes the costs are going to continue to spiral out of control. Current projections indicate that in just over one decade, health care costs will double, reaching $5.2 trillion, or 20 percent of the United States’ GDP.[1] At the same time we face the worst economic crises we have seen since the Great Depression. This fatal combination throws into relief the flaws in our health care system and amplifies the need to ensure fiscal responsibility in any reform effort. Ironically, though, it is the economic crises itself, a crises that strains our resources at every level, that helps to create a rare window of opportunity in Washington D.C.

The momentum towards health reform is already gathering. The 111th congress successfully reauthorized the Children's Health Insurance Program and passed the economic stimulus package that includes over $150 billion in health care provisions[2] In addition, the Obama Administration recently published the budget blueprint that sets aside a $634 billion dollar reserve fund as a “down payment” on health reform. Yet, Obama’s budget plan is only blueprint, and the details about how the money will actually be used looms on the policy agenda. President Obama’s “Plan for a Healthy America” lays out a three-pronged strategy that works to provide universal health insurance, contain costs, and promote prevention[3]. However, given the reality of limited resources and limited political mobility, choosing the best combination of reforms and the order in which the reforms occur is crucial.

The economic crisis threatens to escalate the already daunting number of uninsured Americans, so the first priority must be to provide affordable insurance to everyone. Experts from the Congressional Budget Office assert that both risk pooling and mandates for insurance must be enacted in combination in order to lower the cost of insurance premiums[4] Therefore, President Obama should push for initiatives similar to his idea of a national insurance exchange to increase competition in the market. In addition, President Obama should support enforceable mandates to employers or “pay or play” legislation as well as individual mandates to ensure that effective risk pooling can actually take place.

Many would argue that initiatives like this hold little political feasibility given the history of health care reform in the United States. Special interest groups like the Health Insurance Association of America and the National Federation of Independent Business spent millions of dollars to fight what they labeled “socialized medicine”, ultimately contributing to the defeat of the Clinton plan in 1992[5]. However, it is precisely the political difficulty of reforming the insurance market that amplifies the importance of immediate action before the window of opportunity closes.

Even with insurance market reforms, however, simultaneous legislation must target the flaws in the health care system itself. The health care package in the economic stimulus bill already invests in health information technology and comparative effectiveness research that will undoubtedly help cut down administrative costs and add to the arsenal of tools that physicians can use as they develop effective treatment plans[6]. However, without changing the entire orientation of the health care system, we will not be able to reap the full potential of these initial investments. The perverse fee for service payment schemes generate skyrocketing health care costs by paying physicians based upon volume of care rather than quality of care, by neglecting to look at the relative value of different treatment options, and by rewarding specialists over primary care physicians. In effect, our system takes the focus away from prevention and towards treatment of acute illness.

To remedy these problems, eventually the reformed system must pay physicians based upon measurable outcomes and must bundle payments across the full spectrum of care by promoting schemes like bonus eligible physician groups. However, redefining the entire health care system takes time and resources, and the synergistic effects of enacting comprehensive reforms are little understood[7]. In addition, given the power of American Medical Association and other special interest groups that have defeated health reform bills starting as early as 1917, it would be politically infeasible to enact legislation that changes the payment scheme for all physicians across the United States without effective demonstrations.

Therefore, in prioritizing initiatives, the immediate steps in this direction should target existing programs and the populations that generate the most costs: Medicare and the chronically ill. In 2006 Medicare comprised 22% of total health care spending[8] and 95% of Medicare spending was linked to the treatment of chronically ill patients[9]. As the “baby boomers” become eligible for Medicare, current trends project costs to reach unsustainable levels. Thus, President Obama must work to restructure the physician payment system in Medicare and to promote pilot programs like the "medical home model."[10]

In this way, Medicare reforms can act as a catalyst of change for the broader system. For instance, by reforming the reimbursement mechanism in Medicare Part B towards bundled payments and “pay for performance” and by using medical home pilots to demonstrate the cost-savings of comparative effectiveness research and interoperable medical health records, broader changes may follow. In fact, with Medicare reform, the public plan option in the national insurance exchange may even be politically viable. Thus, by reorienting Medicare towards a patient centered model that promotes primary care, we can get on the path towards a system that aims to promote prevention rather than one that treats disease after the fact.

As policy makers decide how to best to proceed with health care reform, does the devil really lie in the details, as the quip goes, or will the 111th congress and president Obama finally enact the changes we desperately need? It remains to be seen whether policy makers will be able to take advantage of this window of opportunity. As Tom Daschle asserts, the question is not whether we can afford to reform our health care system, but whether we can afford not to. [11] The answer is that we cannot.