The Stimulus Bill – also know more formally as the American Recovery and Reinvestment Act (ARRA) – allocates about $150 billion out of over $780 billion to the health care sector, perhaps the highest percentage devoted to a particular area. This illustrates, on one level, the importance of health care to the President and Congress, and, on another level, suggests the important economic impact of this investment. What is the nature of these investments: Monies for the states to match federal assistance for Medicaid and increased funding for the National Institutes of Health (NIH), health information technology, and comparative effectiveness research. Is this money being well spent and are these wise investments?
At a time when almost all the states are struggling with budget deficits, the matching Medicaid funds are most welcome, enabling these states to continue serving those on Medicaid. As needed as these funds are, they do not fundamentally change the system of care for these patients. Rather it offers both relief and “more of the same.”
The investment in NIH is important because NIH has in recent years lost real purchasing power as its budget has been relatively flat since the doubling of its budget was completed years ago. The nation must support its premier biomedical research enterprise for many reasons, including the increasing urgency of such research based on scientific progress and the heavy investments many research-intensive institutions have made in science and scientists to ensure America’s preeminence in biomedical science.
Health information technology has been lagging behind in its development in the U.S. and it is thought that the stimulus dollars may get us over the hump. While these funds may spur some improvement and adaptation of IT, foster some needed efficiencies, and prevent some medical errors, it is important to note that they do offer for the first time potential financial incentives for IT adoption. The importance of these incentives reflect the need make the adoption of Health IT both cost-effective and competitively necessary, as seen, for example, by the rapid adoption of IT in the restaurant and the airline industries.
Finally, there is the funding for comparative effectiveness research which will ramp up the effort to demonstrate which therapies and therapeutic approaches are most “effective’” and thereby improve quality of care and presumably incur some cost savings. But, as I have noted before, the development of guidelines is not enough (see my post below from July 14th) – there must be ways to directly link best treatments with actual clinical practice, something that is currently lacking. There is also the problem in effectiveness research of assuring that we can conduct the necessary clinical trials which are the backbone of such research. We have pointed out the increasing regulatory burden on those who conduct clinical trials and the compelling need for reform in this area. But I am not aware of any concrete efforts to do so.
The overarching theme of the stimulus package as it relates to health care involves the four concrete areas of Medicaid, NIH, Health IT, and effectiveness research. But it does not address structural reform of the nation’s health system by, for example, creating pilot projects or other mechanisms to consider fresh options for health care delivery. Rather it serves to support and bolster trends already underway. How stimulating is the stimulus?
