This is the first installment in a series on correcting the mistakes in the Democrats’ health reform bill. Click here to read the rest of the series.
There’s a joke mentioned whenever a tough problem arises: “It’s easier to get Middle East peace”. But there is a lesson there for healthcare reform. It comes in the “Road Map” approach where specific achievements occur in a proposed timeline until a final resolution might result. Healthcare reform needs such a road map but the ideological, political and economic agendas seem to prevent plain talk and achievable steps.
What we have had so far is a tepid insurance reform that has focused on the uninsured and has done nothing substantive to control costs. It has advanced a few minor approaches like accountable care organizations and a central commission that will try to control utilization and costs. These are doomed to failure because they attempt to control healthcare in the U.S. from a no doubt soon-to-be-constructed mega-building in Washington, D.C. The system is simply too big and too diverse for central control. European countries have learned this and each one is about the size of one or our larger states. Three hundred million people are simply too many for the government to do anything more than pay bills (see the Medicare system).
The end game is a healthcare system that preserves most individual patient choice regarding which doctor or hospital provides care, has a cost that grows (it must grow) at a rate that approximates the growth of healthcare costs around the world or at least the current general rate of inflation, incorporates effective technology, results in access times that are tolerable, and maintains the ability of the system to care for seriously ill patients as well as or better than any country on earth.
In order for these outcomes to occur, we will need an insurance system that provides some of the features of managed care wherein a health plan takes the economic risk of care in exchange for the opportunity to manage utilization of care. However, the managed care approach is doomed to failure (see managed care from 1992-onward) if the economic risk and the provision of care are separated, for example when an insurance company contracts with a separate provider network. When the payer tries to control the delivery of care, the physician and patient become the adversary of the payer each time there is a patient-physician interaction. Politically, this was doomed.
Rather, the provider network must be an integrated delivery system that is provided a budget and allowed to allocate the money in ways it deems necessary to provide care. It must assume the risk of care as well as the economic risk of funding that care. There are models that approximate this proposed system but they fail to achieve real success since they exist in the midst of another, competing model — our current chaotic system. Successful examples are components of the Geisinger Health Care System in rural Pennsylvania and the Kaiser–Permanente system in the West. The insurance arms of these systems are forced to deal with providers and hospitals outside their system and this markedly limits their ability to create a comprehensive and cost-effective model. Nonetheless, if properly implemented, they are examples of a successful, cost-effective reform of healthcare. But as will be seen, the key to success of this proposed new model is that there are competing systems available for the patient/consumer so innovation and quality are maintained.
That is the destination of the road map for healthcare reform. But how to get there? What will need to be in place for these systems to operate, compete, and provide high quality and eventually, more affordable care?
This is the first installment in a series. Click here for Part 2.