Health reform — the key issues

As the debate on national health reform intensifies in Washington, there are several issues that are important to keep an eye on. They are rather arcane, but worth paying attention to.

1. The Public Plan Most of the Democrats (including the Obama Administration) support the creation of a publicly run health insurance plan that would exist along side the private ones like Blue Cross and Aetna, and would compete with them. Of course, we have long had a public plan for senior citizens (Medicare) and for lower-income Americans (Medicaid).

People who favor the public plan tend to have more faith in government than those who oppose such an idea. The proponents like the lower administrative costs of Medicare, and want the public plan for others to have these same economies. The opponents fear that such a public plan will be given the same purchasing clout that Medicare regularly uses to compel doctors, hospitals and others to accept lower prices and other government rules. Another concern about the public option is that it will be slow to innovate and change with the times, as Medicare has been.

As these points indicate, this question about whether to support a public plan is a classic case of the devil's in the details. I believe we will see lots of pulling and tugging on this with lots of minute tweaks to the details before we finally come to the up or down vote.

2. Cuts in Provider Payments The huge issue staring us in the face is the gigantic cost of health care in America. After trying to avoid the issue, the Congress is now working on refining their health reform plans to have them scored by the Congressional Budget Office as not being so very expensive. One way that they can get the costs to be lower is to cut the amount of payments to doctors, hospitals and other providers.

My day job is serving as CEO of a large, public academic health center, so these cuts are a major issue for me. It would be foolish of me to argue that no cuts in provider payment are possible of course. But if everything is left the same, and we are simply told to get by with lower payments from Medicare, Medicaid and others, that is a recipe for disaster for our organization. We are already in financial difficulty, given our public, safety-net mission.

So again the devil's in the details. If the cuts are just across-the-board whacks that is a problem. If the reductions are more targeted, then that's a different matter.

Actually, what is needed is reductions in many areas and increases in many other areas. In truth, though, that requires a level of intervention and micro-management that we are not likely to see, and the government is really not very good at.

3. Delivery System Reform One of the major problems with American health care is that (for decades) we have had a payment system that is mostly piece-work based. It's called fee for service. This rewards those who do more and penalizes those who figure out how to deliver care more efficiently.

This realization is what has led many in Washington to push for delivery system reform, to encourage the development of many more organized systems of care like Group Health Cooperative of Puget Sound (in Seattle) or Kaiser (in many locations, mostly in the west). These organizations are able to manage care efficiently and effectively, and they are willing to be paid a lump sum for the care of a patient, rather than the piece-work system of fee for service.

But compared to the blunt instruments of cutting all provider payments, for example, delivery system reform is incredibly complex requiring the overhaul of relationships among individual doctors and between doctors and hospitals, etc.

To get started on this important but daunting project, academic health centers like ours are a good starting point. For the most part we are already integrated into single entities, and we can deliver care in a much more organized fashion.

I'd like to see national health reform build on the work that is already underway in academic centers like UNC.

4. Comparative Effectiveness For us really to save lots of money in health care, we need good information on what works and in what settings, and then we need the political will and discipline to enforce those decisions that's called RATIONING.

We tend to avoid that word in our polite discussions, but clearly we need to be much smarter about how we spend the trillions of dollars we have in health care.

I hope we invest much more in comparative effectiveness research done by NIH and AHRQ, especially. But all the research in the world will not accomplish anything if we are not willing to put it to use. That is the much bigger issue.

Unless we are willing to say there is no evidence that treatment X is any better than the much less expensive treatment Y, and so your health plan (private or public) will not pay for the gold-plated treatment we have no hope of doing anything serious about health cost containment.

Up until now most political leaders have not been willing to take this on, except in a highly disguised form but I believe they need to lead us on this issue and that starts with telling us the truth, that about 30 percent of what is done in health care is of no value. And here's the very difficult part they need to say that they advocate a reformed health system that will stop this waste by putting in place rationing systems.

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