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The point of a health-care system isn't to spend as little money as possible on it

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In the podcast this week, I talk a bit about how Democrats and Republicans have converged on the same basic theory of what's wrong with American health care — and how that theory is completely wrong.

The theory is that the problem with America's health-care system is it costs too much. That's what animates Paul Ryan's budget and Hillary Clinton's prescription drug plan and Marco Rubio's health-care plan and Bernie Sanders's support for single payer. It's as if Washington believes the point of having a health-care system is to spend less on it.

But the problem isn't that America's health-care system costs too much. It's that it delivers too little. Value, not cost, is the problem. And cutting costs may actually be counterproductive.

To see why, consider two possible futures for American health care:

  1. The federal government passes a law making all health-care services illegal. Systemwide costs drop to zero.
  2. Researchers at the National Institutes of Health invent a pill that, if taken daily, guarantees a healthy life until the age of 168. The pill is expensive, and giving it to every American requires raising health-care spending to 34 percent of GDP.

Does anyone prefer No. 1? Anyone? Bueller?

The question in American health care isn't how much it costs. It's how much it's worth. People complain that America spends about a fifth of its GDP on health services. But in isolation, the statistic is meaningless. The question is whether the health services Americans get are a good value at a fifth of GDP.

On that, the answer is easy: hell no. Americans spend roughly double what other developed nations spend but get basically the same outcomes. We're not paying more to get more. We're paying more and getting ripped off.

You can fix that problem by paying less for health care of the same quality, by paying the same — or more — for health care of higher quality, or some combination of the two. But our political discourse focuses simply on cutting costs.

To be fair, some ideas for cutting costs also look to improve quality. Medicare, for instance, is trying to tie 90 percent of its payments to measures of value. If they succeed in defining value well and paying for it effectively, they may be able to cut costs by paying for fewer, better treatments.

But many efforts to cut costs don't look to improve quality. Higher deductibles and copays, for instance, really do cut spending — but there's no evidence that they lead patients to get better care. We've known since the Rand Health Insurance Experiment in the '70s that when you make people pay more for care, they cut back on both high-value and low-value treatments.

Or take one insurers have held premiums down in Obamacare,. The innovation there is "narrower networks": Insurers are more tightly regulating where people can go for care. That cuts costs by cutting access to expensive providers. But while I think narrower networks are a good idea, there's no evidence that they improve quality.

All this speaks to the priorities of Washington's health policy conversation. There's a lot of focus on the uninsured, and a lot of focus on costs. Those priorities speak to both a concern with the most disadvantaged and a budget process that forces attention to rising health costs. But it's worth remembering that there's a reason we want people to be insured, a reason we spend so much money on health care: health.

For the nearly 90 percent of Americans who are insured, the biggest win in health policy isn't covering more people or even cutting their premiums by a few tens of dollars a month. It's making sure they and their loved ones live longer, healthier lives. It's finding better treatments — or a cure — for Alzheimer's. It's making sure retirement comes without disability.

This is why, as comical as his campaign appears, there's something to Zoltan Istvan's candidacy. He's right that how long and healthy our lives are matters a helluva lot more than the top marginal tax rate. And the government — through its design of intellectual property laws, its funding for basic science and research, its health-care payments systems, and much more — has a real role here.

The most important problem in health care, in other words, is health.

If the health-care system got much better at delivering health, then it might make sense to spend what we do now — or to spend even more than that. So long as the system isn't delivering good value for the money, then yes, cutting costs makes sense. But it's important not to lose sight of the real goal: more health, not less health spending. Washington's myopic focus on costs risks doing just that.

More: 8 facts that explain what's wrong with American health care

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