The big story of the health care reform debate is not what the bills moving through Congress provide, but what they don’t provide. There’s no liability overhaul and no serious effort at cost containment.
American health care may bankrupt the nation unless the waste and inefficiency — an estimated 30 to 40 percent of total costs (http://www.nchc.org/documents/Press%20Releases/PR%2010-23-09%20NCHC%20WHITE%20PAPER%20Press%20Statement.pdf
nchc.org/documents/Press%20Releases/PR%2010-23-09%20NCHC%20WHITE%20PAPER%20Press%20Statement.pdf
http://gmj.gallup.com/content/111778/other-700-billion-question.aspx
pwc.com/us/en/healthcare/publications/the-price-of-excess.jhtml) annually — is wrung out of the system. But building a coherent new framework is almost impossible in our political system.
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Underlying incentive structures conspire to drive doctors and hospitals to do what they’re reimbursed for, not what is needed. Providers spend their days in a bureaucratic maze, focused on compliance and avoiding legal risks. Patients have no incentive to be prudent in their demands on health care providers, or in their personal habits.
Studies indicate that the largest drivers of waste, with rough percentages of each contributing to unnecessary costs, are: fee-for-service incentives (http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande
newyorker.com/reporting/2009/06/01/090601fa_fact_gawande
mckinsey.com/mgi/publications/US_healthcare/pdf/US_healthcare_Chapter1.pdf
pwc.com/us/en/healthcare/publications/the-price-of-excess.jhtml(
http://content.nejm.org/cgi/content/full/349/8/768
nhcaa.org/eweb/DynamicPage.aspx?webcode=anti_fraud_resource_centr&wpscode=TheProblemOfHCFraud
The numbers total more than 100 percent because the skewed incentives overlap — a doctor orders expensive tests because it is profitable, they provide a potential defense in a lawsuit and the patient has no financial incentive to question the decision. Fraud thrives in a dense bureaucratic thicket with no patient incentive to check the false invoice.
Because the skewed incentives reinforce each other, no reform is likely to be effective without overhauling the entire thing. But the political deal making in Congress make it impossible to create a coherent new structure. It’s very hard to move in a process dominated by special interest politics.
Congress should delegate the responsibility to a group that has neither the debilitating political pressures nor the balkanization of responsibility.
The best model is probably a commission in which a group recommends a plan that Congress can either vote up or vote down — but not alter. In health care, such a “cost-containment commission” would be given the task of recommending overhauls that would address the core components of waste.
The bill proposed by the Senate Finance Committee has the germ of that idea in an independent “Medicare Commission,” a body that would recommend changes in Medicare reimbursement. But its mandate is limited to details of Medicare payments, not overhauling the structure of health care for all participants.
A new overhaul would likely involve:
» New reimbursement models, with bundled payments and other ways of compensating providers based on overall effectiveness;
» A requirement that patients who can afford it contribute to their care, as other countries such as Switzerland do;
» Models to improve reliability of justice, such as special health courts (http://www.nytimes.com/2009/04/02/opinion/02howard.html
nytimes.com/2009/04/02/opinion/02howard.html
» Radical simplification of health care bureaucracy, with common reimbursement forms and regulations based on goals and principles, not micromanagement.
The usual objection to special commissions is distrust — everyone fears that the deck will be stacked in favor of someone else. But the proposed independent Medicare Commission in the Senate bill provides a balanced appointment mechanism that ensures representation by experts recommended by both parties and confirmation by the Senate.
The other objection to special commissions is that they make recommendations but nothing ever happens. Indeed, if Congress chooses to ignore the recommendations, then rising health care costs will continue to drive America toward a fiscal crisis. The pressures here work powerfully in favor of change. The one thing that we know won’t work is 535 members of Congress coming up with a coherent plan. That’s why America needs a special commission to do the job.
Philip K. Howard, a lawyer, is chairman of Common Good http://www.commongood.org
commongood.org
