Saturday, October 31, 2009

Meaningless Use?

The American Recovery and Reinvestment Act of 2009, better known as the economic stimulus package, includes a whopping $19 billion to support the development of electronic (i.e., computerized) health records to be used by hospitals and doctors.

In order to be eligible for grants, applicants must demonstrate that the application they wish to develop will have a “meaningful use.” Much negotiation is going on between the industry and the government as to how “meaningful use” will be defined. For example, what percentage of drug orders has to be computerized by what date.

This whole story is a commentary on how the management of health care is perceived. The insistence on “meaningful use” reflects a suspicion that health care providers, particularly hospitals, are more interested in the appearance of achievement than in its actual realization – a concern that hospitals would proudly announce success in receiving a big government grant and then spend it on computer hardware and software without actually doing anything that improved the quality or reduced the cost of care.

It also raises the question of why health care providers should need a major infusion of government money to take advantage of information technology. Banks didn’t need it to get rid of checks and airlines didn’t need it to get rid of travel agencies. The money they saved by reducing cost was more than enough to justify the cost of computerization. Why shouldn’t the same be true of health care?

The answer is that the providers of health care have yet to become serious about reducing cost and the public has yet to ask them to.

In other words, we have yet to get serious about reforming health care.

Tuesday, October 27, 2009

Unrecognized Issue in Health Care Reform

One of the things I find interesting about the current health care reform debate is the number of issues that are going unrecognized and undiscussed.

One is the issue of national health insurance or, as it is more euphemistically known, single payer.

There is a sizeable group of people, including much of the left wing of the Democratic Party and almost all of the health policy people in academia, who are strongly committed to the idea of national health insurance. Their commitment is so strong that no other ideas have been forthcoming as to the shape of the reformed health care system of the future.

The problem they have had is that there is little support for it among the public at large and among political leaders.

While President Obama denies that he is in favor of national health insurance, its advocates comprise his political base and he needs their support for his health care reform initiative. It appears that his gesture to them has been the so-called public option – a federal health insurance program that would operate in competition with private health insurance companies.

One version of that proposal has the public option program paying providers the same rates as Medicare, and requiring providers to accept those payments as a condition of participation in Medicare. The final version may tone that down some but still with the potential of underpricing private health insurance companies and of eventually getting all of the health insurance business. At that point we would effectively have national health insurance.

For the advocates of national health insurance, the public option is not only the best chance of achieving their goal that they have ever had, it is probably the last one of their lifetimes. If the public option is defeated with a liberal Democratic president and sizeable Democratic majorities in both houses of congress, national health insurance is probably dead for decades. That undoubtedly accounts for the strength and persistence of their support for it.

The issue is worthy of debate and it is too bad there isn’t any.

Monday, October 05, 2009

Harry, Louise, and Global Payment

The health care powers-that-be in Massachusetts want to abolish fee-for-service in favor of what is being called global payment. Global payment is a softer term for what used to be called capitation – a system in which the insurance company pays a provider organization a flat amount per month per subscriber, in return for which the provider is responsible for providing whatever health care the subscriber might need.

Massachusetts Blue Cross Blue Shield has a pilot program going, called Alternative Quality Contract. It is like the old HMO contracts, but with the edges smoothed off with financial incentives for meeting quality goals and other features.

If the idea of global payment is to succeed, the public needs to be prepared for some of its implications. In that connection, the thought occurs to me that it might be useful to air some ads like the Harry and Louise ones that have been given so much credit for scuttling the Clinton health reform effort. Here is what such an ad might look like:

Harry and Louise are in their den. Louise is seated and Harry is bringing her a glass of wine.

Harry: I went to a meeting this afternoon that was put on by the company’s benefits people. They’re offering a new health insurance plan. They call it an Alternative Quality Contract. It’s really a sort of HMO. If we take it, the company will pick up a good piece of what is now being deducted from my paycheck for health insurance.

Louise: We could sure use the money. If we don’t repair that back porch pretty soon it is going to fall right off the house.

Harry: The benefits people say they want to get away from fee-for-service. They say that fee-for-service drives up cost by giving doctors and hospitals an incentive to give us services we don’t really need.

Louise: They are probably right about that.

Harry: The main complication I see is that the contract is with West Side General Hospital and I don’t think Dr. Nichols practices there.

Louise: You mean we would have to change doctors?

Harry: I think so.

Louise: We’ve gotten very comfortable with Dr. Nichols.

Harry: That’s true.

Louise: On the other hand, we had to change doctors when we moved here two years ago and we managed OK. I’m sure they have good doctors at West Side General.

Harry: The benefits people say they made sure of that before deciding to offer the contract.

Louise: Let’s give it a try. If that is the way health care should go, we might as well be part of it.

Harry: Shall I drop by tomorrow and sign up?

Louise: Sure.

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