Yesterday, Barack Obama visited Green Bay, Wisconsin, to tout that city’s successful efforts to rein in the costs of healthcare. Obama used the occasion to make the case for federal healthcare reform, modeled on the success of Green Bay and other cities like it. But Green Bay’s experience teaches a very different lesson: when the federal government butts out, state and local governments can experiment creatively. This, rather than a national health policy, has the potential to ultimately solve our country’s vexing healthcare-related challenges.
Picture this: a room full of a hundred bureaucrats in the Department of Health and Human Services in Washington, D.C., tasked with evaluating the costs and benefits of a particular medical procedure. Most have been in the department for twenty or thirty years, while others have volunteered for rotations in other government agencies like the Department of Education or the Department of Transportation. None has spent any significant amount of time in the private sector. None has lived outside of the D.C. area in decades. Few have direct experience in thehealthcare industry.
Now picture this: fifty different states, each with dozens of municipalities, formulating healthcare policy at a local level. Some of these policies are objectively superior and constituencies in other states and cities can apply pressure on their elected representatives to adopt the same reforms. Other policies are simply more appropriate to the circumstances of that particular state. Either way, there is room for customization, trial and error, and emulation.
Which of these two scenarios is likely to yield more innovation and better results for patients?
This was one of the Founders’ central insights. They argued that a federal system allows for a diversity of approaches, making it more likely that somebody somewhere will discover the approach that works best. Justice Louis Brandeis later articulated it thusly: “It is one of the happy incidents of the federal system that a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.”
Put differently, federalism provides at the governmental level what the free market provides in the private sector. It fosters competition, resulting in a dialectic process that enables good ideas to clash openly with bad ideas. The bad ideas can be discarded along the way, while the good ideas can be honed and replicated. There are other ways to achieve progress, butmillennia of human experience suggest this is the best.
Green Bay provides concrete evidence in support of this theory. The city’s health system has implemented electronic medical records, limited access to certain procedures that it has deemed costly and ineffective, and promoted treatments that reduce the prevalence of conditions that require expensive medical care. In doing so, it has attracted attention from other cities in Wisconsin and other states throughout the country, some of which are already incorporating elements of Green Bay’s healthcare reforms. This is precisely how federalism is meant to work.
9 responses so far
1 ottovbvs // Jun 12, 2009 at 8:12 am
This piece presupposes that the two are mutually exclusive. The US healthcare system consists of a million moving parts, layer upon layer of complexity which most of those working in it like because it makes seeing the wood for the trees very difficult. Let’s be clear here all that’s being talked about at present is how the system is funded not how the healthcare is delivered. To the extent the govt is involving itself it is in benign ways like encouraging electronic record keeping. Republicans and industry advocates would have a lot more cred if they hadn’t for example railed against this very obvious move to efficiency and tried to strip it from the stimulus bill. When you cut through all the smoke the Republicans and the insurance industry and much of the medical industry want to keep the status quo because it’s highly profitable.
2 Mike K // Jun 12, 2009 at 3:16 pm
The feds would have far more cred on electronic medical records if they had EVER developed an IT system that worked. The FBI still does not have a system that allows all agents and offices access to common records. The air traffic control system still runs on COBOL software. There are lots of companies developing good EMR systems and some hospitals have done a good job of linking doctors offices to the hospital system. This is a perfect example where federalism and the market will deal with the problem. There are protocols, similar to FTP protocols for linking systems and it is growing. A federal one-shot solution for EMR has about as much likelihood of succeeding as this Obamacare program has of saving money.
Of course, Republicans and “industry advocates” (In other words, people who know what they are doing) want the “status quo.” I wonder if the commenter even knows what that is.
3 sinz54 // Jun 13, 2009 at 6:53 am
As I’ve explained before, streamlining medical record keeping would save money–but it’s a one time saving. Even if all the providers and all the insurers made ZERO profits somehow, the base cost of providing service will still continue to rise faster than inflation.
Obama’s little junket to Green Bay demonstrated something he didn’t acknowledge in his speech: The largest saving between Green Bay and surrounding communities is due to utilization rates: Green Bay is relatively affluent and better educated. Its people live healthier lifestyles, practice preventive care, and thus make less use of medical services. They’re just healthier people all around.
Milwaukee, on the other hand, is poor and costs are much higher there. In poor areas, the hospitals still must treat the poor who have neglected their own self-care due to high cost, bums (a.k.a. “homeless”), gang members, criminals wounded by cops, drug addicts, and illegal aliens, none of whom is insured (and still won’t be insured under Obama’s proposed health care reforms). There are just these pockets of America that resemble Third World countries–with huge public health care costs.
This suggests that the biggest savings in health care expenses will come from healthier lifestyles–including fighting poverty.
http://tinyurl.com/nge2pz
4 barker13 // Jun 13, 2009 at 7:50 am
Re: Mike K; 3:16 PM –
“The feds would have far more cred on electronic medical records if they had EVER developed an IT system that worked. The FBI still does not have a system that allows all agents and offices access to common records. The air traffic control system still runs on COBOL software.”
(*SHRUG*) Anyone care to dispute the doc?
BILL
5 Mike K // Jun 13, 2009 at 10:06 am
Here’s some reading material:
http://www.washingtonpost.com/wp-dyn/content/article/2006/08/17/AR2006081701485.html
Here’s more:
http://www.sltrib.com/news/ci_12584509
There are good systems out there. Intermountain Healthcare has an excellent decision support integrated EMR system for ICU care but a system that includes all medical facilities is going to be very expensive and the feds are not the ones to do it.
Obama seems to be in love with the One Big System that was so characteristic of the USSR.
6 midcon // Jun 13, 2009 at 11:14 am
Mike K.
1. The federal government has developed many IT systems that work. Go check out the origin of eVerify and TCP/IP enabled systems (the Internet).
2. The NAS (National Airspace System) does have some legacy systems that employ COBOL. They also have systems that employ C++, assembly, Visual Basic, and other software languages. But you can’t extrapolate that use into a generalized statement that the system runs on COBOL or any other language.
3. We do have protocols for linking information, including FTP, TCP/IP, XML, and others. We’ve been using them for years and are currently building more standards for interoperability. The most significant probablems are not the hardware or software, it is simply definition. As an example, if I wanted to send you only conservative data, I would have to code all the data so we know what the data is. So someone needs to provide me with a definition for “conservative” so that I can code the data. Any volunteers to come up with a common definition?
7 Mike K // Jun 13, 2009 at 3:34 pm
The TCP/Ip protocols came from Arpanet and were written by a team including guys named Bob Kahn and Vinton Cerf. Arpanet and Darpanet are exceptions to the general rule that government can’t get anything right in technology. The fact that Defense had a hand in it probably helped.
The Air Traffic Control system has been needing modernization for decades. Maybe they should fix that before trying to build a national medical data system.
My point is that bureaucracy is a crappy place to write software They haven’t gotten one right since Arpanet. There are lots of medical informatics systems that are slowly growing into major systems. Taking all these entrepreneurial systems over would be a good way to wreck the whole thing.
I was an assembly language programmer a very long time ago and also have experience working on government projects. That was before C and right after FORTRAN. I’ve been a member of the American Medical Informatics Association for years. I suggest that they leave it alone and let the market work. There are better systems every year.
Maybe Obama could concentrate his genius on Chrysler and GM for a few years before he screws up anything else.
8 sinz54 // Jun 16, 2009 at 11:35 am
Mike K: Only the fans of Ayn Rand would deny that government can fund excellent research, both theoretical research and applied research (which is what the ARPANET really was).
The problem is that the market hasn’t worked–because the patients don’t have enough skin in that game. Medical informatics is not a high priority, because that’s not what patients look for. When you’re sick, you look for the hospital that has the best doctors for the illness you’ve got. You never look for the hospital that has the most streamlined document process.
The poor document management adds to extra cost–but the cost is overhead, buried inside your medical bill, and paid by the insurance companies. Your bill shows you fees from doctors, labs, and so on. There isn’t a line item called “Document Management.” At least, none of my hospital bills show any such thing.
9 sinz54 // Jun 16, 2009 at 11:39 am
Mike K: Visa and American Express are examples of the One Big System that came right out of American capitalism.
I can take my Visa and American Express cards to virtually any Western nation, and use them to pay hotels, restaurants, transportation, etc. How come they can do that, but America’s hospitals can’t do that? Why don’t I have a medical ID card that I can swipe at any doctor’s office or hospital in the nation, and instantly access all my medical records, no matter where they were created?
Because there isn’t One Big Company, like American Express, seeking to make a profit by streamlined operations. American medicine is still fee-for-service. The more you get, the more that America pays for. You can go to three different hospitals for your illness, they will all order up the exact same tests, and all give you the same diagnosis–and your insurance company will pay for them all.
I went through this myself. What’s wrong with a blood test from last week? In lieu of a major injury, is my blood chemistry going to change radically from last week, requiring me to have the same tests all over again this week?
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