POLICY: Enthoven’s lament, with UPDATE

The new Health Affairs is out and it’s fascinating. This journal is over 20 years old and getting better and better. I’ll try to run something from it every day this week. Sadly if you want the full articles you have to subscribe, at about $100. It’s well worth it (and I do) but I think that it’s so valuable that I wish RWJ or someone would just fund it in perpetuity so that it’s all freely available.

The first article that jumps out at me is a commentary from Alain Enthoven about not why competition has failed but why (in his words from a decade or so ago) “it hasn’t been tried.” I learnt much of what I know (and believe) about health care from Enthoven in his classes at Stanford and he in those days delivered a biting expose of the failure of government regulation to create the conditions for sensible competition in the healthcare system, which remains true to this day. His “managed competition” model was at least the partial basis for the Clinton plan, although he fell out with the Hillary team fairly early on in the process.

I somewhat parted the ways with his philosophy when he put (at the time of the Clinton plan) the interests of the market over the interested of universal insurance — as it turned out neither happened legislatively. But what is very interesting is that Enthoven has also been watching the slow emergence of what Bob Leitman calls the problem of the Nascar dads, and the rest of the baby boomers heading to, but not quite getting to Medicare by 2008-16. Here’s his forecast, and lament:

    Why not “Medicare for All”?

    It is late, probably too late, to avert the inexorable progression to “Medicare for All.” U.S. employers would need to have an epiphany soon. But when it comes to health care, most of their horizons are so limited and their vision so constrained that such a change seems unlikely.

    What is becoming most likely is that the winning candidate in 2008 will make “Medicare for All” a foundation of his or her platform. And employers, incapable of controlling costs and desperate to get medical expenses off their financial statements, will lead the candidate’s campaign finance committee. Labor and small business will join them. The large and growing numbers of uninsured, by then reaching well into the middle class, will consider the issue to be of top priority.

    While I would welcome universal coverage as long overdue, I think it would be a tragedy to lock in FFS Medicare and deny people the opportunity to save money by choosing less costly options. The recent Medicare “reform” debate shows that it will be almost impossible to dislodge FFS from Medicare. FFS makes doctors and payers adversaries. It punishes doctors for innovating in ways that make their costly services less needed. The burden of chronic disease is growing rapidly, yet our FFS delivery system is oriented toward episodic, acute care. FFS promotes the wide variations in practice patterns documented by John Wennberg and colleagues. And it certainly does not motivate quality improvement in the sense of discouraging overuse, underuse, and misuse. Providers do not bear the costs of their poor quality.

I think his forecast is right and that his fears of a locked -in over politicized fee-for-service Medicare-for-all at some point out beyond 2010 is the likely scenario. The alternate is the Brazilianization of the US social welfare system into one for the very rich and chaos for everyone else. However, I’m not as pessimistic as Alain about the end result of that first option.

First, whatever its faults Medicare-for-all would be better for a significant chunk of the population than what we have now–including the uninsured, the underinsured and those under 65 who really need help but can’t get it, as well as those over 65 who need better drug coverage than they have now (and still won’t have after PDIMA). It would not be that much worse for anyone (other than vastly over-paid specialists, who would still get by OK).

Second, Americans love medical technology and even under a state run system they’ll happily tax themselves to get it, so we are not heading to Canada or the Soviet Union (and you won’t catch me lumping those two together that often!)

Third, I’ve concluded that meaningful reform is only possible under a single-payer system. The things we need like universal pooling of risk, and public funding for a common data exchange system can only come about easily under a single-payer/government system. It may take us a long time to get there after Medicare-for-all, but for an example look at the Brits who, much influenced over the years by Enthoven, are making the right moves to get a single-payer system in place that rewards the pay-for-performance (or at least pay-for-process) that Enthoven favors, and are putting the information technology in place that will deliver the consumer friendly health-care Jeff Goldsmith wants. (More on that later!)

UPDATE: Don Johnson (a non-foaming-at-the-mouth Republican, and yes there are some!) has some criticism of both my and Enthoven’s approach over at the Business Word. Read his point and my reply at his post.

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