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POLICY: Unusal book review–Voices of health reform

Richard Reece is the Editor-in-Chief, Physician Practice Options, and he has written a book which mostly consists of interviews with a wide variety of observers and participants from across the health care system. You can order his book Voices of health reform or see an interview with Kaiser’s George Halvorson first before you buy.  But to save me the trouble of writing a review, Richard wrote one himself, or at least interviewed himself to find out what he thought. You may notice if you are a careful THCB reader that he has shared notes with Brian Klepper at the Center for Practical Health Reform. I think you’ll enjoy his auto-review.

Question: Can we talk frankly?

Answer: There’s no other way we can talk. After all, this interview is one-on-one, mano el mano, me-on-me.

Question: Isn’t it highly unorthodox to interview yourself about your own book?

Answer: Of course. But this is a highly unorthodox book. The book consists of interviews with 40 leading health care stakeholders at work across the ideological spectrum. You won’t find this kind of book anywhere else. It calls for an unorthodox review. Anyway, this is an interview book so an interview review makes sense, doesn’t it?

Answer: I’ll ask the questions here. Who are these "leading health care stakeholders at work?"

Answer: Health care leaders who work full-time at their jobs. These leaders include hospital administrators, practicing physicians, consultants, heads of reform think tanks, author critics, single payer system advocates, consumer-driven care enthusiasts, health plan executives, academic pundits, disease management experts, physician innovators, medical directors of large multispecialty clinics, government insiders, a Chamber of Commerce leader, supply chain executives, and presidents, CEOs, or executive directors of the AMA, AAFP, MGMA, and the Blue Cross Blue Shield Association.

Question: Didn’t you bite off more than you could chew?

Answer: Perhaps. But keep in mind health care consumes one of every seven dollars in the American economy and employs one in every 11 Americans. That’s a lot to chew on, and I wanted to cut across the health care leadership landscape.

Question: Who would be interested in your book?

Answer: Leaders I interviewed, their employees, their followers, and those they serve.

Question: But that would include almost everybody in the health system.

Answer: You catch on fast, don’t you?

Question: Did these stakeholders you selected agree on anything?

Answer: Yes, the need for reform and collaboration on such overarching solutions as basic coverage for all, management platforms to monitor the performance of major players, and medical liability reform.

Question: How did you go about the interviewing process?

Answer: I did all interviews by phone, and I invited my subjects to edit the final transcript. These interviews reflect their opinions, not mine. I remained neutral in the interviewing process. In other words, I ground no ideological ax. I sought to engage in straight talk about what these leaders really thought. I waited until the end of the book before I jumped to conclusions.

Question: And what did the stakeholders conclude?

Answer:Well, in general, they thought the system was hurtling towards an economic abyss. We can’t keep spending two to six times the general inflation rate on health care. The typical premium has risen by double-digits each year over the last five years, with a total increase of 60 percent. That’s unsustainable. Health care is pricing itself out of business. Health insurance now covers less than one-half of private American employees. The erosion of private coverage is growing at 2 ½ percent a year, and the number of uninsured and uninsured is mounting. In the end, without paying health care consumers, revenues will dry up for every sector in the system. When the health care ship sinks, all participating in the system will go down with it. .

Question: You’re giving me a sinking feeling. Some stakeholders must have said you were all wet. Did everybody buy into that shipwreck scenario?

Answer: No, especially those doing well, like high tech medical specialists, health plans, the pharmaceutical industry, and supply chain companies.

Question: So who is suffering the most?

Answer: The have-nots, more and more of the middle class, hospitals, and physicians on the front lines – public hospitals, family physicians, general internists, pediatricians, emergency room physicians. Even the seniors are suffering. They’re paying more out of pocket (21 percent), than before Medicare was introduced (19 percent). Safety net hospitals are the canaries in the coal mine. In July, for example, the St. Vincent’s Health System in New York, one of that state’s largest health systems, filed for bankruptcy. And over 65 emergency rooms in the last 10 years in California have closed their doors.

Question: What are prospects for single-payer?

Answer: Everybody, no matter what their political persuasion or their desire for such a solution. says single-payer isn’t in the immediate cards. Much of the reason is political. The Democrats are still gun-shy after the Clinton fiasco of 1994, and the Republicans are betting the farm on consumer-driven market reform. Some of the wishful thinking "progressives" foresee a collapse of the system between 2008 and 2012, after Bush leaves office.

Question: What about consumer-driven care? Is it a flash in the pan?

Answer: Hard to say. But many observers, George Halvorson, head of Kaiser, and hospital CEOs, are profoundly skeptical about the commercial viability, social desirability, and ultimate sustainability of consumer-drive care. Everybody is watching and waiting to see if consumer-drive care floats, or sinks without a trace of change… Some of the CEOs of major national health plans – McGuire of United, Hanway of Cigna, and Rowe of Aetna – say consumer-driven plans will have a bigger impact than managed care and may completely replace HMOs and PPOs. To these CEOs, consumer-driven care is the "next big thing."

Question: What about Medicare? Is it sustainable?

Answer: Not in its present form. It’s already costing $300 billion, and it will jump to $400 billion next year when the Medicare drug bill kicks in. Medicare now has 42 million beneficiaries and eats up 15 percent of the federal budget. By 2020, it will have 60 million beneficiaries and will swallow 25 percent of the budget. The consensus is that Medicare can’t keep rewarding all providers the same, whether the care is good or bad, no matter what the outcomes. Medicare’s movements towards pay-for-performance, quality measurements, and quality rewards are for real and may have a profound effect on reimbursements of hospitals and doctors. The operative word is "may." It "may" also have a Hawthorne effect, with providers adjusting to meet quality indicators, with no drop in cost levels.

Frankly, the medical establishment harbors deep skepticism about the fairness or workability of pay-for-performance. Doctors don’t believe government can separate the good doctors from the bad using quality indicators or patient satisfaction surveys alone.

Question: What about Medicare payments to doctors?

Answer: Everybody I spoke to expressed pessimism about doctors’ abilities to reverse the 26 percent to 30 percent cuts in reimbursement slated to take effect over the next five years. And most interviewees thought pay-for-performance for hospitals and doctors based on meeting quality indicators was the principle federal strategy for containing federal costs.

Question: Did your interviewees think "seamless interoperable computerization" of doctors’ offices would help save the system?

Answer: Most thought a national information infrastructure would take ten years to build. And most said it would take federal intervention and federal financial incentives to small practices to move doctors off the EMR dime and to make a national system workable.

Question: Does your book have flaws?

Answer: You bet. There are always those damnable typos. And not everybody likes reading interviews. They dismiss interviews as mere "Q&A, " mere opinion-swapping. Interviews are too subjective for some tastes. Also the book has no charts and tables and not many references. It’s just talk from an questioner biased towards physicians. This is a doctor-oriented humanistic, rather than a scientific book. But it’s balanced and presents multiple points of view. I believe reform will depend on high touch high tech innovative solutions emanating out of the private sector, not out of government. But for reform to work, government must incorporate these innovations into their programs. Also never forget some major innovations, like the Internet, started with the federal government.

Question: Did anything surprise you while doing these interviews?

Answer: A few things leap to mind.

One, I was surprised how positively and how fast employers, brokers, bankers, and other financial institutions, are viewing and moving on HSA-linked consumer driven plans. The banks see these plans as a golden opportunity to serve as HSA repositories, to use their information infrastructure to process claims, and to introduce debit and smart cards at the point of care. One health plan executive says HSA-plans will capture most of the market in two years. For physicians, the positive aspect of these developments is that doctors will be paid at the point of care with the swipe of a card. Physicians’ offices will be like ATM stations.

Two, I was surprised how big a role American culture plays in shaping our health system. Since our founding 229 years ago, Americans have believed in a relatively weak centralized federal government, in choices and freedom of action, and in equal opportunity, rather than equal results, for its citizens. Americans, for example, want choice and equal opportunities for access to the marvels of high medical technology. These cultural characteristics will dictate the direction and pace of health reform.

Three, I was taken back by the tremendous strides being made in the disease management field. This is an important development. Keep in mind chronic disease afflicts 125 million Americans. Chronic disease progresses mostly outside of physician offices and depends on patients understanding of their disease and their life style and compliance. When monitored closely and intimately in their homes and at their work and educated about their disease, patients respond intelligently and their health and outcomes improve significantly. Readmission rates to hospitals for chronic heart failure, for example, often drop to near zero.

Four, I was surprised how powerful an overall influence Medicare has. It sets the rules for the rest of the system, and other payers and all providers must follow its lead. One person I interviewed called the Medicare "The Sheriff "of the system, and said nobody bucks the man with the badge. Any reform, therefore, will depend on interactions between Medicare and the private sector. Medicare could, for example, could mandate it would only pay doctors with EMR systems. Here is how Andrew Grove, former chairman of the board of the Intel Corporation, explains the extraordinary power of Medicare, "What is needed to cause the industry to act is customer demand. The largest customer – approaching half of total health care spending – is the Medicare system. The entire health care industry would benefit if Medicare mandated the adoption of a Rosetta code (agreed-upon standards for all computer users) for the health care industry before institutions were granted permission to participate in Medicare business (Grove, A,S, Efficiency in the Health Care Industries: A View form the Outside, JAMA, July 27, 2005)

Question: After completing this book, are you optimistic about the future?

Answer: Not totally. Leading stakeholders in their own "health care silos" are reluctant to jump into reform unless their fellow silo dwellers crawl out of the silo and jump with them… You can take leaders to the brink of reform, but you can’t make them leap. They resist being the first lemming over the reform cliff. This attitude is particularly prevalent among health plans, hospitals, and health care associations. Physicians strike me as most eager for reform, perhaps because they see first-hand what’s happening in the clinical trenches.

On the other hand, I’m optimistic because Americans are a very entrepreneurial, innovative, and adaptable people who like solving problems. I think we’ll end up with a uniquely American public-private collaborative with lots of innovation and multiple payers.

Question: Who do you think ought to buy this book?

Answer: Health care stakeholders who want to know what their fellow stakeholders really think and who want to get a sense of what reforms are likely to occur.

Question: Thank you for your penetrating, insightful, and profound comments.

Answer: It was nothing really. The pleasure was all mime.

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Matthew HoltEric NovackAbby Recent comment authors
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Eric Novack
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Matt- thank you for responding, and I hope your regular visitors will stop by these posts. The issue of preexisting conditions is a significant one in the current environment. The current world of insurance has many patients I see probably report that an injury/ problem is new- to avoid having it fit under pre-existing condition restrictions. From the insurance point of view- they do not want to be responsible for insuring a used car, for example, that needs a new transmission one day after the policy is bought. In the scenario I propose, the tax credits will go into HSA.… Read more »

Matthew Holt
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Eric re: #1 You are right that high deductible plans CAN have a premium of $60 a month BUT if you have pre-existing conditions they cost 10-20 times that. Check any of the numerous comments from Abby or Sue, or some of my posts. Note that I said that I wanted you to come up with basic coverage for EVERYONE — no one on your side of the HDHP/HSA argument seems to get that part of the problem. (I tried in vain to get Ron to understand it). re#2 & 3 I dont understand. Health plans are making absolute bank… Read more »

Eric Novack
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Matt- 1. currently, high deductible HSA would can have rates 1/10 of $1500/ month. 2. With the expansion of HSA and the removal of the connection between HSA and insurance (note the ever decreasing number of major insurers nationwide with quarter after quarter of record profits)- routine expenses would be covered pre-tax. 3. With Universal Tax Credits- to every American citizen (funded by the elimination of business tax exclusion, medicare and medicaid)- every American could afford routine care. 4. To answer (b)- that is what insurance is for… I lived in SF during the Berkeley Hills fires- how many could… Read more »

Matthew Holt
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Abby–typepad has “publish in the future” function, so I tend to set it for early a.m. Calif time for articles I do the daya before. I was not up at 3am writing, though it has been known Eric — I’m totally fine with your solution when you a) come up with a way of making everyone have at least equivalent basic coverage that doesn’t include paying $1500 a month for a $5000 deductible, and b) explain to me how the cost-conscious relationship between patient and doctor works when the patient is lying, dying & unconcious on your operating table. Failing… Read more »

Eric Novack
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Matt- your last two posts explain exactly why we need to move away from government control over healthcare— currently, as the author suggests, everything is based upon medicare– rates, regulations, lobbying power. Currently, insurers, providers, and patients try to utilize the 3rd party payer system to their advantage.
It appears in these last posts you are inadvertently revealing the greatest flaws of government controlled single payer.
The solution lies, in part, in making all players- patients, doctors- and not just insurers more cost conscious through making healthcare a relationship between patient and doctor- and not put the government/insurer squarely between.

Abby
Guest
Abby

I wake up and decide to go online before heading out the door at 7 AM EST (that’s 4 AM in California). What time did you post this thing between midnight and 4?