Thursday, August 20, 2009

Starting Points for Change

President Obama has challenged America to a fresh dialogue about how to improve our healthcare system. Yet, proposed steps for health care reform recapitulate old failed strategies. We can not reduce payments to hospitals and doctors, decrease payments for pharmaceuticals, replace physicians with nurses, and deny care based on age and anticipated life years, as our first steps to reform.

We all acknowledge that Healthcare is one of our Nation’s top priorities. Health (cost and quality as measured by health status) determines our productivity, our competitiveness in the world economy, and ultimately the strength of our national defense.

So what is it that has to change in order for our President and our country to succeed in making us a healthier nation at an affordable cost?

First, we must recognize that health, like democracy, requires active participation of our citizens. Our government does not work when we fail to vote; our health system can not work when most of us fail to actively participate in taking care of ourselves and our families according to known guidelines for prevention and disease management.

Every person in America needs to have a clear understanding of the rules of the road for health and follow them. We have plenty of precedents that require individual behavioral change to reduce high cost damage to society. “Click it or Ticket” is one example. We have to begin to drive on the right side of the road to health or some of us must pay more for their health care. Paying for health care with increased taxes will not change the behavior of rich and poor who do not participate in their own individual health reform. The knowledge gap that needs to be closed is to let uninsured and insured of all socioeconomic groups know the truth about the quality of their health care. Quality is defined as compliance to known standards for preventive health and medical condition management.

Americans put off proactive management of health, choosing to exchange low cost opportunities for high cost treatment of advanced disease that is often preventable. We have been seduced by our technological success and then blame pharmaceutical companies and health providers for the high cost of health care.

There are other mechanisms to achieve health care reform without adding new insurance programs. The technology already exists to provide every member of society a simple straight forward outline of their individual responsibilities for health care.

We have come to believe that if some kinds of care are not covered by insurance, we do not need it. We have also become sidetracked into believing that limited access to physicians who accept low fees is good enough. It is not. The economics of health cost in America is a demand side problem, not a supply side problem. The economics of health is market driven, and much like the failed war on drugs, can not be won by eliminating the suppliers. (Alcohol Prohibition 1930’s !)

Runaway health costs can only be reigned in by reducing demand for services; not by limiting access to care that will certainly result from reducing payments to hospitals and doctors. This insurance company strategy of lowering payments for services has not worked for the past 40 years; why would one think it will work today? Contrary to traditional thinking, the rising cost of health care is not as much related to how much is paid for a unit of service, a procedure, or a specific drug as it is to diagnostic and treatment plans outlined by doctors. The real driver of medical inflation is lack of use of existing resources in a rational manner and according to known guidelines for preventive care and chronic disease management.

One recent development gaining momentum in America which successfully aligns physicians, their patients, and their claims administrators is Value Based Health Care. This new benefit design links compliance to health care standards required by each individual plan member to the cost of his contribution for premium. The components of such plans use existing web based personal health records as the vehicle to communicate an individual’s preventive and condition management responsibilities. Aggregate reporting highlights improved population health status as costs decrease. Hospitals and physicians adjust to less demand, and irrational regional expense differences for care are reduced. Physicians and hospitals, who achieve better health status among their patients, can receive better payments.

Change is required and simple is better. Health Care is a behavioral and social problem; it is not amenable to change by administrative economic fiat as currently proposed.

The Health Gadfly

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