Friday, August 29, 2003
Health Care System Redesign and Politics - Oil and Water
An editorial by former Speaker Newt Gingrich that appeared in the August 18, 2003 issue of Modern Healthcare illustrates the limited contribution government can make to the necessary redesign of our system of health care.
The editorial deals with the Medicare reform bill currently under consideration in the federal Congress – the one that includes the drug benefit. Rather than giving a summary of the bill’s provisions and a logical explanation of just how they would improve things, Gingrich offers a polemic that throws out one shibboleth after another, each intended to appeal to the prejudice of the reader. He leaves the impression that if the bill is properly designed (i.e., as the administration wants it), quality will improve, costs will go down by as much as 40%, and nobody will be worse off.
Of course, that is absurd. The only way to reduce cost is to spend less money. Spending less means that somebody gets less. Whoever gets less is not going to like it.
But successful politicians are experts at playing on the part of our human nature that wants to believe that the impossible is possible.
This general principle was well illustrated by the Clinton reform effort, which justified itself as a cost control exercise while proposing to increase spending by tens of billions.
So most of the work of health care redesign will have to take place in the private sector. Government will have a role, but for the most part it will be a barrier to progress, not a leader.
An editorial by former Speaker Newt Gingrich that appeared in the August 18, 2003 issue of Modern Healthcare illustrates the limited contribution government can make to the necessary redesign of our system of health care.
The editorial deals with the Medicare reform bill currently under consideration in the federal Congress – the one that includes the drug benefit. Rather than giving a summary of the bill’s provisions and a logical explanation of just how they would improve things, Gingrich offers a polemic that throws out one shibboleth after another, each intended to appeal to the prejudice of the reader. He leaves the impression that if the bill is properly designed (i.e., as the administration wants it), quality will improve, costs will go down by as much as 40%, and nobody will be worse off.
Of course, that is absurd. The only way to reduce cost is to spend less money. Spending less means that somebody gets less. Whoever gets less is not going to like it.
But successful politicians are experts at playing on the part of our human nature that wants to believe that the impossible is possible.
This general principle was well illustrated by the Clinton reform effort, which justified itself as a cost control exercise while proposing to increase spending by tens of billions.
So most of the work of health care redesign will have to take place in the private sector. Government will have a role, but for the most part it will be a barrier to progress, not a leader.
Wednesday, August 27, 2003
Incoming Comments
Last week I announced this blog by e-mail to about 50 people (down through the letter L in my address book). Friend Norman DePuy, who operates something almost like a blog himself, then distributed the announcement to his mailing list.
Notes of encouragement came from Jim Bentley, a senior staffer at the American Hospital Association, from Michael Jhin, CEO of St. Luke’s Episcopal Hospital in Houston, and personal friend Ginny Klein, for which thanks.
Steve Borst, friend and colleague from Saudi Arabia days referred to a recent article in the New England Journal of Medicine that discussed the high administrative costs of the U.S. health care system in comparison with that of other countries. Steve’s comment was: It would be easy and understandable to say 'That's terrible. Our system is way out of line. Something drastic must be done.' And that is true. Something must be done. But instead of leaving these big scary soundbites to those most willing to use them like so many weapons of mass destruction, it is should fall to those with the best intelligence, the most experience, the greatest insight, and the broadest knowledge to "disenthrall ourselves" and "think anew and act anew". If those in the best position to fix the system don't, I believe we are in for catastrophic change at the hands of those least qualified to implement it.
So what do you say, guys? What has to be done to fix the system?
Last week I announced this blog by e-mail to about 50 people (down through the letter L in my address book). Friend Norman DePuy, who operates something almost like a blog himself, then distributed the announcement to his mailing list.
Notes of encouragement came from Jim Bentley, a senior staffer at the American Hospital Association, from Michael Jhin, CEO of St. Luke’s Episcopal Hospital in Houston, and personal friend Ginny Klein, for which thanks.
Steve Borst, friend and colleague from Saudi Arabia days referred to a recent article in the New England Journal of Medicine that discussed the high administrative costs of the U.S. health care system in comparison with that of other countries. Steve’s comment was: It would be easy and understandable to say 'That's terrible. Our system is way out of line. Something drastic must be done.' And that is true. Something must be done. But instead of leaving these big scary soundbites to those most willing to use them like so many weapons of mass destruction, it is should fall to those with the best intelligence, the most experience, the greatest insight, and the broadest knowledge to "disenthrall ourselves" and "think anew and act anew". If those in the best position to fix the system don't, I believe we are in for catastrophic change at the hands of those least qualified to implement it.
So what do you say, guys? What has to be done to fix the system?
Monday, August 25, 2003
Doctors to Lead Redesign of Health Care System?
This morning’s Boston Globe carried a letter from Dr. Thomas E. Sullivan, President of the Massachusetts Medical Society, in response to the recent proposal for National Health Insurance presented by the organization called Physicians for a National Health Program.
Although distancing himself from the substance of the proposal, Sullivan welcomed renewed focus on the topic it addressed. He then said “As the cornerstone of the health care delivery system, physicians are well positioned to lead such a dialogue.”
One begs to differ. A core problem with the system is that the role being played by physicians is out of proportion to the ability of the profession to accept accountability for the cost and quality problems that plague it.
Later today, the latest (August 25) issue of Modern Healthcare came in the mail. It has a list of the 100 most powerful people in health care. The Executive Vice President of the AMA is number 100. No other representative of organized medicine made the cut.
Point made.
This morning’s Boston Globe carried a letter from Dr. Thomas E. Sullivan, President of the Massachusetts Medical Society, in response to the recent proposal for National Health Insurance presented by the organization called Physicians for a National Health Program.
Although distancing himself from the substance of the proposal, Sullivan welcomed renewed focus on the topic it addressed. He then said “As the cornerstone of the health care delivery system, physicians are well positioned to lead such a dialogue.”
One begs to differ. A core problem with the system is that the role being played by physicians is out of proportion to the ability of the profession to accept accountability for the cost and quality problems that plague it.
Later today, the latest (August 25) issue of Modern Healthcare came in the mail. It has a list of the 100 most powerful people in health care. The Executive Vice President of the AMA is number 100. No other representative of organized medicine made the cut.
Point made.
Friday, August 22, 2003
National Health Insurance? Not Likely.
An organization called Physicians for a National Health Program and boasting 6,000 physician members made a big splash recently with a call for national health insurance (NHI) that was published in JAMA (August 13, 2003).
The dedication and hard work behind the proposal must be admired, but it almost certainly will come to nothing. The reason is that in the real world of politics, NHI, at the time of adoption, inevitably increases the amount of money spent for health services and the problem in the U.S. is that we spend too much for health care already.
The other consequence that ought to concern those who think about policy is the barrier that NHI would throw up against the needed redesign of our alarmingly inefficient health care system. The practical consequence of every NHI scheme (including the British and Canadian systems as well as our own Medicare) has been to freeze the existing system in place and then slowly starve it to death. This creates the worst of both worlds; i.e., a system that is both inefficient and inadequately supported.
There is, of course, the matter of the uninsured, which is a national embarrassment, but not a serious political issue. There are people who will march in the streets and get themselves arrested over world trade, but the uninsured don’t even write letters to the editor.
National health insurance may be a solution – but not for our problem.
An organization called Physicians for a National Health Program and boasting 6,000 physician members made a big splash recently with a call for national health insurance (NHI) that was published in JAMA (August 13, 2003).
The dedication and hard work behind the proposal must be admired, but it almost certainly will come to nothing. The reason is that in the real world of politics, NHI, at the time of adoption, inevitably increases the amount of money spent for health services and the problem in the U.S. is that we spend too much for health care already.
The other consequence that ought to concern those who think about policy is the barrier that NHI would throw up against the needed redesign of our alarmingly inefficient health care system. The practical consequence of every NHI scheme (including the British and Canadian systems as well as our own Medicare) has been to freeze the existing system in place and then slowly starve it to death. This creates the worst of both worlds; i.e., a system that is both inefficient and inadequately supported.
There is, of course, the matter of the uninsured, which is a national embarrassment, but not a serious political issue. There are people who will march in the streets and get themselves arrested over world trade, but the uninsured don’t even write letters to the editor.
National health insurance may be a solution – but not for our problem.
Saturday, August 09, 2003
Patient Safety – Whose Responsibility?
In an article yesterday, the Boston Globe stated that 400 reports on unexpected deaths and serious injuries in Massachusetts hospitals had piled up unread at the state medical board. It quoted a former editor of the New England Journal of Medicine as stating that those reports included cases where patients died because community hospitals took on overly complex surgeries or because teaching hospital residents were too busy to get to a patient in time.
The focus of the article was on the failure of the board to do its work properly. Towards the end, it made reference to pressure that “hospital officials” said the board was putting on them to ensure patient safety.
It seems to me that having a patient “die unexpectedly” ought to be enough by itself to make a hospital do whatever was necessary to keep it from happening again. Why does it take pressure from a state board to make it do so?
I think we are altogether too tolerant about such things.
In an article yesterday, the Boston Globe stated that 400 reports on unexpected deaths and serious injuries in Massachusetts hospitals had piled up unread at the state medical board. It quoted a former editor of the New England Journal of Medicine as stating that those reports included cases where patients died because community hospitals took on overly complex surgeries or because teaching hospital residents were too busy to get to a patient in time.
The focus of the article was on the failure of the board to do its work properly. Towards the end, it made reference to pressure that “hospital officials” said the board was putting on them to ensure patient safety.
It seems to me that having a patient “die unexpectedly” ought to be enough by itself to make a hospital do whatever was necessary to keep it from happening again. Why does it take pressure from a state board to make it do so?
I think we are altogether too tolerant about such things.
Thursday, August 07, 2003
No Radical Reform for Health Care?
In the June 6, 2003 issue of The New Republic, there is a column by Jonathan Cohn titled “Rating the Dems on Health Care.” It says that “….while the [Democratic] candidates’ visions differ in shape and scope, they share a common political premise: reviving Clintoncare would be a big mistake. ‘We’ve learned from that,’ [candidate Howard] Dean said on NBC’s ‘Meet the Press’ last year. ‘We’ve learned that we cannot radically reform the health care system.’”
Dean hadn’t looked quite far enough. In 1982, the California legislature gave permission for MediCal, the state’s Medicaid program, as well as private insurers, to contract competitively and selectively with hospitals: i.e., bargaining for care and contracting with only those hospitals with which they came to terms. Before that, they had to pay any licensed hospital chosen by the patient.
The pattern spread and took the form of what came to be known as managed care, a movement that produced radical changes in the design of the health care delivery system. There was a major consolidation of hospitals into so-called “systems.” Many physicians shifted away from private practice towards some form of institutional practice (although in a number of cases this did not work out and was later reversed). The movement brought health care costs under control during most of the 1990’s.
But people didn’t like the restrictions associated with managed care and so the movement stalled out. Redesign of the health care system then went into hibernation before it could run its full course. But the lesson it taught remains: radical reform of the health care system is possible. You just have to push the right buttons and keep pushing them.
In the June 6, 2003 issue of The New Republic, there is a column by Jonathan Cohn titled “Rating the Dems on Health Care.” It says that “….while the [Democratic] candidates’ visions differ in shape and scope, they share a common political premise: reviving Clintoncare would be a big mistake. ‘We’ve learned from that,’ [candidate Howard] Dean said on NBC’s ‘Meet the Press’ last year. ‘We’ve learned that we cannot radically reform the health care system.’”
Dean hadn’t looked quite far enough. In 1982, the California legislature gave permission for MediCal, the state’s Medicaid program, as well as private insurers, to contract competitively and selectively with hospitals: i.e., bargaining for care and contracting with only those hospitals with which they came to terms. Before that, they had to pay any licensed hospital chosen by the patient.
The pattern spread and took the form of what came to be known as managed care, a movement that produced radical changes in the design of the health care delivery system. There was a major consolidation of hospitals into so-called “systems.” Many physicians shifted away from private practice towards some form of institutional practice (although in a number of cases this did not work out and was later reversed). The movement brought health care costs under control during most of the 1990’s.
But people didn’t like the restrictions associated with managed care and so the movement stalled out. Redesign of the health care system then went into hibernation before it could run its full course. But the lesson it taught remains: radical reform of the health care system is possible. You just have to push the right buttons and keep pushing them.
Monday, August 04, 2003
Prescription Drug Issue Exposes Weakness of Health Care System
The prospect of adding a prescription drug benefit to Medicare exposes weaknesses at the core of our health care system and the need for basic redesign.
On the one hand, few would debate the need. If Medicare is to provide health care security for seniors, it ultimately will have to make provision for drugs, which are ever more important and ever more costly.
On the other hand, if the benefit is added, it will further inflate the already-too-high cost of health care. For one thing, it will pump new money into the system. Second, it will make it easier for drug companies to further ratchet up their high prices. Finally, it will encourage even greater use of drugs.
On this latter point, anyone who peeks into the medicine cabinet of the typical aged person can’t help but wonder if all those drugs are really necessary.
That raises a quality as well as a cost issue. To the extent there is overuse and/or inappropriate use of drugs, people will be made less healthy, not more so.
What we need is a health care system that lets us add benefits like prescription drugs without bringing on a new set of woes. In this case, the system should include market forces that restrain prescription drugs prices and create effective accountability for appropriate drug use. The present system, in which individual physicians are free to prescribe whatever they want, with accountability only to God and the malpractice courts for the cost and quality consequences, and with some hapless third party paying the bill, doesn’t do it.
The prospect of adding a prescription drug benefit to Medicare exposes weaknesses at the core of our health care system and the need for basic redesign.
On the one hand, few would debate the need. If Medicare is to provide health care security for seniors, it ultimately will have to make provision for drugs, which are ever more important and ever more costly.
On the other hand, if the benefit is added, it will further inflate the already-too-high cost of health care. For one thing, it will pump new money into the system. Second, it will make it easier for drug companies to further ratchet up their high prices. Finally, it will encourage even greater use of drugs.
On this latter point, anyone who peeks into the medicine cabinet of the typical aged person can’t help but wonder if all those drugs are really necessary.
That raises a quality as well as a cost issue. To the extent there is overuse and/or inappropriate use of drugs, people will be made less healthy, not more so.
What we need is a health care system that lets us add benefits like prescription drugs without bringing on a new set of woes. In this case, the system should include market forces that restrain prescription drugs prices and create effective accountability for appropriate drug use. The present system, in which individual physicians are free to prescribe whatever they want, with accountability only to God and the malpractice courts for the cost and quality consequences, and with some hapless third party paying the bill, doesn’t do it.
Sunday, August 03, 2003
Health Insurance Rates to Leap in Boston
The headline article in the July 25, 2003 issue of the Boston Globe announced that local health insurance companies were asking for premium increases of up to 16% for next year. The article points out that managed care succeeded in stabilizing costs during the 1990s, but people didn’t like it and so the insurance companies backed off. It also quotes Paul Ginsburg, executive director of Harvard Pilgrim, the big local HMO, as saying that the 1% annual increases of the 1990’s won’t come back “unless something dramatic happens to force them down, like the next new idea to succeed managed care. But no one knows what that’s going to be.”
As secret lovers supposedly say to each other – we can’t go on like this. According to the rule of 70 (7% growth doubles in 10 years, 10% growth doubles in 7 years, etc.), that rate produces a doubling in between 4 and 5 years. So if your monthly health insurance premium is $1000 this year, it would be $2,000 four and a half years from now and $4,000 by 2012.
There is ample evidence that costs are higher than they need to be. So the question is, what ought to be done about it? The only things that have worked so far are financial incentives: market forces, if you will. DRG’s were effective in the 1980’s, but were directed at the cost per episode, not the overall cost of care. As mentioned in the Globe article, managed care worked in the 1990’s but was abandoned. Shouldn’t we be looking at ways to bring market forces back in some form?
The headline article in the July 25, 2003 issue of the Boston Globe announced that local health insurance companies were asking for premium increases of up to 16% for next year. The article points out that managed care succeeded in stabilizing costs during the 1990s, but people didn’t like it and so the insurance companies backed off. It also quotes Paul Ginsburg, executive director of Harvard Pilgrim, the big local HMO, as saying that the 1% annual increases of the 1990’s won’t come back “unless something dramatic happens to force them down, like the next new idea to succeed managed care. But no one knows what that’s going to be.”
As secret lovers supposedly say to each other – we can’t go on like this. According to the rule of 70 (7% growth doubles in 10 years, 10% growth doubles in 7 years, etc.), that rate produces a doubling in between 4 and 5 years. So if your monthly health insurance premium is $1000 this year, it would be $2,000 four and a half years from now and $4,000 by 2012.
There is ample evidence that costs are higher than they need to be. So the question is, what ought to be done about it? The only things that have worked so far are financial incentives: market forces, if you will. DRG’s were effective in the 1980’s, but were directed at the cost per episode, not the overall cost of care. As mentioned in the Globe article, managed care worked in the 1990’s but was abandoned. Shouldn’t we be looking at ways to bring market forces back in some form?
