Yesterday, Matthew gracefully pointed to my post over at Bob Laszewski’s Health Care Policy and Marketplace Review, which I called "The Tougher Health Care Problem." Bob’s readership leans heavily toward the DC-based health care policy types who may not follow the happenings over here. The policy crowd is a slightly different but very important audience that I hoped might be receptive to a different message than they are typically pitched.
Reform is a complicated topic, particularly because the discussion tends to be so narrowly defined around its objectives: access, quality and cost. But an equally important issue is that American health care is fundamentally about power and money. Achieving reform requires a real understanding of the power dynamics involved.
For a lot of reasons, I’ve come to believe that there’s little point
in trying to get (most) health care organizations to collaborate on
reforms. While I know its very un-PC, and while I understand that every
"advocacy" group believes it has a right to be at the table, the table
is current dominated by these groups and, you may have noticed, we’re
not making much progress toward reform. The major players make little
noises about change, but mostly they’ve retreated into silos where
they’re trying to figure out how to get as large a piece as possible of
the diminishing pie, and get control over the reform process.
Yes, in yesterday’s article I argued that cost is as important an
issue to address as access. But here are a few deeper points that I
also wanted to get out there for discussion.
You’ll note that I keep using the term "meaningful" reform. This is
shorthand for measures that can drive down cost, improve quality and
broaden access. Half-measures – like giving tax credits to people who
can’t afford to lay out the money for health care or coverage in the
first place – don’t count.
1) With few exceptions, we shouldn’t hold our breath for the
leaders of the health care industry to help drive meaningful reform.
We know that as much as half or more of all health care cost is
unnecessary, inappropriate or waste. If reforms involve eliminating
some portion of that waste and the revenues they represent, the
industry will be against it. Nobody willingly gives up money. This is
why the drives to interoperability, evidence-based standards,
pricing/performance transparency, and performance-based reimbursement
have taken so long.
2) Getting meaningful reform will require that Congress sign off
on it. There are only two ways for that to happen. One is that Congress
must somehow become resistant to the health care industry’s lobbying
efforts. (Somehow this doesn’t seem very likely to me.) Or the
non-health care business community must determine that health care
reform is in its interests, find a way to galvanize and mobilize on
change, and exert greater influence than the health care industry on this issue.
Policy change must occur in Congress, which has demonstrated time and again (e.g., Medicare D)
that it is most receptive to special interest influence. As the largest
single economic sector – one dollar in every seven and one job in every
eleven in the US economy – health care constitutes about 16 percent of
all the lobbying dollars spent on Congress. In 2006, this was about
$350 million of $2.5 billion in total lobbying dollars from all
sectors, according to Open Secrets. Without question, health care is the most influential and powerful lobby.
3) The leaders of non-health care business have two big reasons
to want meaningful health care reform. One is that they’re between a
rock and a hard place on coverage. If their employees lose coverage,
productivity plummets. If they keep it in its present form, employer
costs will continue to explode at multiples of general inflation,
workers earnings and business income growth. (This is why so many large
employers are installing worksite clinics, but that’s another post.)
The other is that if the health care economy, as the larger economy’s
largest component, descends into turmoil, the turbulence will likely
cascade to and disrupt every other economic sector. In other words, it
is in business’ interests to back reform because the current situation
will ultimately threaten the national economic security.
America’s non-health care business leaders are aware that, to a
large degree, they’re being held hostage by a health care industry
resistant to adopting tools and processes for streamlining (e.g., lean
techniques) that other industries installed long ago. Medicine is still
a cottage industry, there is still almost no transparency, there is still more discussion about than action on quality, and most of the industry is still hugely profitable.
4) The most promising scenario for meaningful reform would be for
non-health care business leaders to come together around a set of
structural (not ideological) change principles, jump start a larger
effort that recruits the support of the whole of American business, and
exerts its overwhelming influence on Congress for real change. This is
where the power in America lies, and health care is now a case where
the public interest intersects with the special interest.
The real question is whether the leadership currently exists within
American business to drive an effort that is in the common interest
rather than the special interest.
Finally, there are important changes afoot in market-based reform. The Health 2.0 meeting
will present discussions of the potential inherent in a market-based
paradigm shift, but one in which many of the important players are NOT
the usual suspects. They are from outside health care.
There are other examples in the works. I mentioned worksite clinics.
The drive toward MUCH larger physician practices; clinical, patient and
purchaser decision support tools; refinement of chronic disease
management; performance-based reimbursement methods; and on and on.
The increasing dysfunction of our current system will make all these
and other approaches more workable. But markets still must work in the
context of policy. American health policy is in desperate need of
reform. But the health industry is conflicted and won’t drive what’s
needed. That impetus must come from outside.