Brian Klepper and David Kibbe have written a terrific piece on how and why health care is in a handbasket and wondering where it’s going. But as we ex-futurists know, there’s lots of luck required to make a good forecast.
When I met Brian five years ago he told me that the sky would fall within five years, and at the time he was trying to persuade players in the health care system to self-reform. He suggested to them that the alternative would be soon be much worse.
I said, “no no, it'll take longer (10-15 years) and the system players will never self reform”. Instead I thought “reform” would be be done to them by the government when the system hit crisis. My guess was a combination of Medicare with 5 years of baby boomers on board and a middle class with 80 million uninsured would arrive around 2012–15. And then the brown stuff would be hitting the whirly object soon after that when the Chinese wanted their money back.
As it turns out we were both wrong and both right.
I was right to think that the system would never self-reform and that the players are still delusional about the long-term consequences, as they fight to maintain their short-term interests. The current activities of AHIP, PhRMA & ADVAMED are proving me right.
Brian was right to say that crisis was coming to health care in more like five rather than 15 years. But, Brian was lucky in his forecast because it's currently the wider economy taking health care down, not vice versa. But as health care becomes a bigger piece of a shrinking pie, the reverse is a real risk. If employers can barely afford to add $14,000 family coverage in good times, things sure as hell are not going to get better when employment is falling off a cliff at the rate of almost a million jobs being lost every month. And of course, even those on the government nickel are going to find that they’re not immune—especially as cities and government agencies find that they’re going to have to account for future liabilities and have balance sheets that look like GM’s.
So I think the worse things get on the economy and/or in the system, real reform remains inevitable–probably coming in the shape of de facto single payer (other than for the 15% at the top) with price controls and fixed budgets. Which looks somewhat like the UK without the pay for performance part. But I still think it’s a few years off.
Sadly, we have probably one shot at doing this right before then–and by right I mean doing two things. #1 Creating a universal social insurance pool which has a dedicated tax base (or at least a politically visible cost). And #2 creating an Enthovian/Dutch system of rewarding private intermediaries to ensure providers reduce cost while improving both outcomes and the patient experience.And I increasingly think we're going to have to do those two things effectively at the same time. (I used to think that we could do #1 and #2 a little later).
But instead it seems that we're going to blow it mainly through Presidential and Senatorial timidity (not to mention health industry opposition). Instead, as I’ve been saying for a while, it seems very real that we’re going to leave the industry in charge of fiddling while Rome burns, and come up with some type of unenforceable pay-for-play withut real insurance reform–meaning we don’t do my #1, and leaving in place the current mess of FFS and peverse incentives meaning we don’t do #2.
And by the time we’ve seen in a few years that what we’re about to do won’t work, there’ll be no appetite for getting it structurally right.
My fantasy is that after Obama puts the 20 bankers in a room and beats them to a pulp the way Tom Friedman wants him to, he puts the 50 health care players in a room and does likewise. Handing off the mike to Karen Ignagni (as apparently he did at the conclusion of last week's White House summit), a happy precedent does not set.
Categories: Matthew Holt