Health care and the fiscal cliff

Health care is part of the debate and discussion regarding the fiscal cliff and how the federal government might solve its near and long-term economic problems.

Wharton Health Care Management Professor Jonathan Kolstad said that while there are health-care issues in resolving the immediate problem of the fiscal cliff, the long-term problem of deciding how the nation pays for health care extends beyond the Nov. 6 election and the Jan. 2 deadline.

“Perhaps you can use the near-term negotiations to look for ways structure future costs, but if you come at it from a budgetary perspective, those are very blunt instruments,” Kolstad said.

Kolstad said that reform of payment systems and the often-conflicting incentives for doctors, hospitals, insurance companies, pharmaceutical companies and patients are the difficult long-term challenges, and unlike other businesses. Everybody wanting more from the system while paying less makes for difficult math.

“Health care is different and hard to model. If you said to people you can have the health-care percentage of GDP from 1965, but you also have to have the health care of 1965, we probably wouldn’t make that trade.”

Peyton Howell, President of AmerisourceBergen Consulting Services, the consulting arm of the Chesterbrook-based pharmaceutical wholesaler, said a failure to pass legislation updating payments to hospitals and pharmacies for drugs will be a problem, along with a payments to physicians.

“Any cut to reimbursements for pharmaceuticals is a particular concern because the rate of reimbursement has not kept up with inflation,” Howell said. “We remain confident that there will be bi-partisan efforts to solve it.”