Tag Archives: public plan

Health Reform – an Update

Several people have asked me in the past few days for my perspective on what's happening to health reform in Washington.

For what it's worth, here goes

Congress is in recess until Labor Day, and they are back home having lots of meetings with their constituents. President Obama is also hosting events almost daily to discuss health reform with the American people.

We have a governmental system that is chaotic and messy at times and this is surely one of them. Remember the quote about making laws is like making sausage ¦

Several points I'd make

1. Although President Obama won handily (53 percent to McCain's 47 percent), there are a lot of Americans who did not vote for him. So it should be no surprise that many of them are showing up at events and town hall meetings and voicing their opposition to whatever the Democrats and the Obama Administration are working toward. The fact that politics has intruded is shocking to some people, I know, but that's the American way.

2. We still badly need to reform the American health care system and as hard as this public policy and political process is, we need to press ahead as a nation.

3. As we deal with the all too familiar problems of the cost of health care, the lack of access due to uninsurance, and the quality and safety of health care in America, a lot is up for grabs. A few weeks ago it seemed like the Congressional leadership were just going to steamroll the process and enact thoroughgoing reform of the entire system. Now the sheer magnitude of all this is scaring a lot of people, especially at a time of such great economic uncertainty.

4. Proposed reform that does not take seriously the need to constrain cost growth should not itself be taken seriously. And as much as I support prevention (and I do, I put Prevention in the name of the CDC), it likely will not reduce health care expenditures though it will make us all healthier. And as much as I support Health Information Technology (and I do, very much), it is likely to add to costs for the foreseeable future, not save.

5. We need to have a serious discussion as a nation about end of life care and we are beginning that conversation now. We waste (yes, that's the right word) a huge amount of resources there. But we as a nation don't want the government making these decisions like taking your mother off the respirator. My sister and brothers and I had some tough decisions to make as our mother and father were gravely ill, and we made them. But not the government.

6. But critics of the President are crassly scaring the American public with this issue and we need to counter their fears with an honest conversation about the limits of medical care, and help patients and families with those tough decisions.

7. There are some things the government does right and the Medicare program is one of them. We should be proud of it. And I am proud to say that for several years in the 1980s I was responsible for administering it. But it is not a model for the rest of the health care system it is outmoded and frozen in time, tied to a payment system of fee for service that does not make sense for doctors or patients.

8. That is one of the risks of the public plan option that is being debated right now can a government plan innovate and be creative over time?

9. Also, Medicare pays rates to doctors and hospitals that are below the actual costs of delivering that care. A new public plan, if linked to Medicare, would have tremendous clout in the market place institutions like ours would almost certainly have to take whatever rates they offered, even if greatly below our costs, which would surely worsen the crazy quilt of cross subsidization that we now have in health care finance in our country.

10. One of the ironies right now is that many in Congress are insisting on the public plan option because of their faith in the government's ability to run the program, yet many of the same Members are urging that a new independent body MedPAC enhanced be set up to make decisions and oversee the entire system, because they don't trust the regular governmental agencies (like HHS and CMS) and processes (like the Congress) to manage things well.

11. So ¦ where are we? I think the Senate Finance Committee proposal, which is yet to be completed, will be the plan that ultimately holds sway. Yes, there will be some who say it is too conservative, and others will say that it is too liberal (whatever those words mean in this complicated area). But I believe it is likely to pass this fall, surely amended many times. The political stakes are just too high for the President and the Congress they cannot allow failure.

12. So I'd suggest you keep your eye on Senator Baucus and his colleagues on the Senate Finance Committee, and try not to get too distracted by the sound and fury around the whole process.

13. Will such legislation be good for the country? I very much believe so. But this is woefully complicated and it needs to be done right. So taking a little more time is not a bad thing.

14. And what will such legislation mean for UNC Health Care? It's way too soon to answer that question with any finality, but given our huge problems with the uninsured, we would have to be better off, at least in the short and medium term, if those now uninsured are covered. The longer run is harder to predict because the risk is as costs rise, and they inevitably will, will our payments be cut so much that we end up worse off? Time will tell.

15. And in the meantime, we have recently launched an effort to redesign how we deliver care, so that we can be one of the places that people point to as an institution that delivers top quality care in an efficient manner, with lower overall costs. I very much believe that is do-able, but it won't be easy. It will stretch us as an institution, requiring our doctors and hospitals and others to work together in creative ways that we haven't even begun to try yet. But we must I want us to be a part of the solution, not a part of the problem.

More to come ¦ stay tuned.

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.