Matthew Holt

What’s good for General Motors is good for America

In 1953, Charles Erwin Wilson, then GM president, was named by Eisenhower as Secretary of Defense. When he was asked during the hearings before the Senate Armed Services Committee if as secretary of defense he could make a decision adverse to the interests of General Motors, Wilson answered affirmatively but added that he could not conceive of such a situation “because for years I thought what was good for the country was good for General Motors and vice versa”. Later this statement was often misquoted, suggesting that Wilson had said simply, “What’s good for General Motors is good for the country.” (From Wikipedia’s History of General Motors)

The American auto industry exploited the loophole by ramping up production of big passenger vehicles that sat on truck beds. The mini-van evolved into the the extended pick-up trucks and SUVs that proliferated during the next two decades. The American public loved the big vehicles, which were affordable because national energy policy made low gasoline prices a priority. The SUVs and trucks were hugely profitable for the manufacturers, offsetting losses incurred partly because of labor-related costs. Detroit’s dependence on these vehicles though was risky, as became clear last year when fuel prices rose steeply and the industry effectively crashed. (Peter J Boyer, The Road Ahead, The New Yorker, April 27, 2009)

This has been a tough couple of weeks for anyone believing in radical change, Obama-style. There has been unnecessary compromise over closing Gitmo and investigating torture. The lobbyists for America’s health care immediately recanted their promised voluntary cost cutbacks. The response so far from the White House has been a statement from Orszag that’s none too radical, essentially saying that bending the curve is OK.

And now there’s the revelation that some idiot at Blues of N. Carolina had already planned a smear campaign against reform, even while the AHIP crowd seems to be winning, as represented by the mealy-mouthed proposals coming out of Baucus’ committee—as Baucus himself ducks meaningful dialogue over alternatives.

So realistically, as I’ve been saying for several months, the best we can hope for from the current body politic is some kind of national exchange and a sorting out of the scummy underbelly of the individual health insurance market. (Incidentally I was watching The Rainmaker, made back in 1997, over the weekend and life has totally imitated fiction in the individual market since then—yes, I’m talking about MEGA but not just them!).

But even if we get some kind of exchange with some kind of vaguely unenforceable individual mandate and some type of guaranteed issue, the basic structure of health insurance passing through the excesses of the FFS system won’t change. Real sustainable change will only happen if we create a single universal pool and give the insurance intermediary some type of global budget, such as a fixed voucher payment per member. No one in the Baucus world or the White House, with the exception of Zeke Emmanuel is talking about that, so it’s not going to happen. And the second best choice—the establishment of a competing public plan that is budget limited—is likely to be bargained away.

So unless some secret mechanism that we’re not being told about will be sprung from the wings, realistically the best that can be done is that we’ll end up with the Massachusetts scenario. More people insured at more cost, unsustainably. And widespread practice and cost variation will continue.

The data of course tells us that on any metric you pick, spending doesn’t equal quality. Just this week the Dartmouth guys found a nil or negative correlation between spending per patient in individual hospitals and outcomes. It’s got to the point when you barely need to read the abstract on these studies. (I guess if you like you can read Atul Gawande running through the numbers yet again in this weeks New Yorker)

But if something can’t for on forever, it will stop (known as Stein’s law). Which is why I opened this piece with a reference to that wonderful New Yorker article about the meltdown in the auto industry.

The auto industry’s last two decades resulted from three irrational government policies that were kept in place by a weird combination of political forces. First, fuel prices were kept artificially low—in part by a deal between Reagan & the Saudi’s to break the Russians, and also by the reticence of American politicians to put European-level taxes on gasoline. Of course, fossil fuel producers and users didn’t have to bear the real costs of these cheap prices. But the planet and its (present & future) inhabitants do.

Second, as pointed out in the New Yorker article, the CAFE standards ridiculously excluded SUVs and mini-vans—proving that partial regulation is much worse than using taxes to do the same thing. We’re still waiting for a sensible carbon tax. Third, partial taxation is just as bad. For weird historical reasons there is a 25% tariff on foreign trucks and SUVs which means that the Japanese couldn’t compete effectively (e.g. destroy the lumbering big 3) in that market, and the big 3 could make far more profit on the SUVs than they would have done in a free market. A combination of the auto companies, the oil companies, the unthinking consumer, and bought-and-paid-for politicians enabled this to happen.

The parallels are obvious. In American health care policy, for the Big 3, substitute the AHA, PhRMA, AHIP, ADVAMED and the AMA. For the dumb carbon fuel policies, substitute an irrational employer-based insurance system with a wrap-around and uncontrolled Medicare and Medicaid system, all paying suppliers using Fee-For-Service. For the problems of global warming and pollution substitute the societal ill-effects of spending too much money on health care services that make outcomes worse, and leave less money for education, infrastructure and other more worthwhile spending. For SUVs and mini-vans substitute cardiology, orthopedics, neuro-surgery, general surgery, oncology drugs, and all the other service-lines that make hospitals profitable, but do very little for the overall health of the population. And of course the whole thing stays together because Congress is in the special interests’ pocket, the public responds well to prods from special interests (especially doctors), and it doesn’t understand the raw deal it’s getting in the bigger picture.

There’s even a parallel lies and dissemination industry. The auto and oil industries fund their “global warming is a myth crowd”, health care has Betsy McCrackers, Grace Marie Turner and the rest of the free-market nut-jobs—all on the teat of some sub-segment of the health care business which should rationally be put out to pasture.

So assuming that we don’t fix this problem in 2009, what happens when health care has its meltdown moment, or when as Alan Greene and George Lundberg like to say, the health care bubble will burst?

Lundberg argued earlier this month on THCB that there was an excessive trillion dollars spent in health care—somewhere around 40% of current spending. Actuarial firm Milliman did more work on this and suggested that we can move health care spending from the current 16% of GDP to 12%. Now they and fellow travelers like George Halvorson seem to hope that this can be done in some seamless and painless fashion. But that hardly seems realistic. Instead my scenario is that some future cataclysmic event finds the next President offering the health care industry the kind of choices that Obama has just been offering the auto industry.

Which takes me back to Boyer’s wonderful piece about the auto industry. Essentially the industry has been given extremely limited choices of how to restructure itself. They were told to:

  • Massively restructure their obligations to their retirees and employees
  • Change their work arrangements to match those of the Japanese transplant factories
  • Close many factories and lay-off many employees
  • Change their present and future product mix to reflect the worldwide energy crisis
  • Reeducate the buying public as to what to expect from a car (50 miles range and being plugged in nightly?)

Note that many of the Senators from “transplant states” with like Tennessee and Alabama felt pretty aggrieved that GM and Chrysler were getting all this help to compete with their “foreign” imports. Those of you who get Sen Dave Durenberger’s occasional (and prescient) health policy commentary emails may note that he frequently describes Medicare as being a redistribution mechanism whereby doctors and hosptials in high costs states like Louisiana and Florida get subsidies from taxpayers in low cost ones like Minnesota.

The way these hard choices were made at GM and Chrysler were essentially that the Treasury took over the companies and their strategy. Both the CEOs of GM and Chrysler are either gone or going, and the Federal government is directing traffic.

There isn’t quite the centralization of production in health care that there is in autos, but a 40% fall in revenues would effectively mean the government would take over the industry. So what might the equivalent of a fast GM-type restructuring look like in health care?

  • Massively restructure their obligations to their retirees and employees. The health care industry mostly rewards specialists, technology & pharma manufacturers, and certain segments of the hospital business. Those payment schemes would necessarily be slashed. We’re not talking about narrowing the RVU imbalance here, we’re talking about some kind of massive fee-cut backed up by a global budget cap.
  • Change their work arrangements to match those of the Japanese transplant factories. No prizes for guessing this. Virgin Mason and a few others have already significantly reduced all of their costs by introducing Japanese-style quality innovation process. Under current payment schemes that was a crazy thing to do. But in this scenario those hospitals and physician groups that survive would not get the choice. If the accountable health care organization, or medical home ever gets off the ground, the customary relationship of referrals from PCP to specialist and from specialist to hospital will change remarkably.
  • Close many factories and lay-off many employees. If you replace the word “factories” with the words imaging center, hospitals and clinics, you’re getting the picture.
  • Change their present and future product mix. From inpatient care and intensive procedures to prevention and primary care, with extreme makeovers in terms of chronic care process management.
  • Reeducate the buying public as to what to expect from a car. This may be one of the hardest parts of all. The American public regards $4 a gallon gasoline as a pestilence sent to punish them. Similarly, the move to reduce inappropriate health technology use, overhauling end of life care, and changing how people approach their health, is fraught with political peril. But the need is the same, and at some point we’re all going to have to realize that the consequences of our orgy of medical care overuse are dreadful.

Any restructuring like this will cause extreme pain. In addition, we need to make sure that the reduction in health care spending is balanced by a comparative increase in wages, or other spending. In other words, we can’t suck 3–4% out of local economies without adding it back in.

But in the end, like the auto restructuring, we desperately need this health care restructuring. And what’s now necessary for GM will end up being a good thing for both the nation’s health care system and the nation.

This doesn’t mean it will happen, or at least not soon. But one way or another, the health care system needs to share Detroit’s fate.

Coda: Mike Cassidy, San Jose Mercury News Columnist wrote a not dissimilar piece piece on Saturday which I saw on Sunday. I’d started this piece last week, so this is a case of great (?) minds thinking alike—not plagiarism, honest!

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22 replies »

  1. Today GM is bankrupt. Tomorrow the USA is gone, crushed by unfunded liabilities. Keep it up and no one will get healthcare.

  2. Why does the left have such a hard time with basic facts?
    “might make some sense if private health insurance — which these days comes primarily via HMOs”
    Is Paul Krugman really that much of a cave dweller? First if HMOs are so bad why are we giving their father Ted Kennedy a seat at the reform table again? Is the thinking he can’t screw up that bad a second time? Why did Ted make it a federal law employers had to offer HMOs? Now the left is complaining that employers actually followed the Federal Law?
    On the purely factual basis;
    Outside DC, Hawaii, and CA no State is above 40%. Most States are under 20%. HMOs have been losing market share for years and by no measure are they the primary insurance delivery mechanism.
    How dishonest can this hack be?
    “They fear that many people would prefer a government plan to dealing with private insurance companies”
    The same private insurance companies that administer Medicare, so Paul is claiming dealing with the 3rd floor at BCBS is worse then dealing with the 2nd floor?
    “routinely deny clients their choice of doctor”
    I forgot Medicare was open access and allowed you to see any doctor you wanted….oops that’s right a doctor could go to jail for treating a Medicare patient if the doctor doesn’t participate. And the Medicaid provider list is just a dream as well, all those highly rated top tier providers you get to choose from.
    David Kibbe, what you discuss has been happening for years. Most urban public hospitals have been bailed out for years and even decades. Mass rural closings has already happened. Urban hospitals already get the majority of their funding from public sources.
    Bill 80% of those with Private insurance are Harry and Louise and 20% are Greg and Sharon. Why should the 80% that are happy be forced to give up the insurance they are happy with for the sake of Greg and Sharon? We already pay taxes and inflated premium to assist Greg and Sharon and now you want to take away our freedom of choice to choose the health plan we want?
    “and we would have to have a very serious rationalization managed by the Feds of how the health system is funded and structured.”
    The current system is failing because of the public healthplans. Why should we allow the government who collapsed the system to reform it? It has been 40+ years of government reform that destroyed it. More likely Medicaid and Medicare will continue to grow out of control and become such a financial burden the press will be forced to write about the real causes of failure at which time the public will finally wake up and see we need to remove government from healthcare not hand it over to them. Does the left really think they can continue to fool the public forever?
    “How do we reward people who lead healthier lifestyles?”
    This is very true and exactly why we have such a problem. Why do people need rewarded to be healthy, that should be enough of a reward in its self. As a society we have much bigger problems then healthcare if we only do the right thing when rewarded.
    Rick government has ran over the public with serious cost-containment. 10-20% of private insurance premium is cost shifting from public plans. Ted Kennedy forced us into HMOs. Government dictates its fee schedules. You have this exactly opposite, it is the government preventing private insurance from implementing cost-containment not the other way around. Any willing provider, UR limitations, benefit mandates.

  3. James – I agree that the potshots are not productive. Neither side of the ideological fence has all the answers, although they claim they do. There’s no room for ideologically driven decisions right now. We need to prioritize the cost drivers and develop solutions that hit them head on. The order of attack will be key, because addressing certain drivers early on will make addressing certain other drivers easier. For example, I feel we should go for some quick wins on the cost side before we open up the flood gates to universal coverage. There’s some low hanging fruit to be found in the area of administrative waste.

  4. “There has been unnecessary compromise over closing Gtimo and investigating torture.”
    When 95 members of the senate – with your party in firm control – vote against you, then any compromises made are not “unnecessary”. They are actually considered “dealing with political reality” where I come from.
    “We’re still waiting for a sensible carbon tax.”
    The wait will be a long one, as there is no such thing.
    Raising energy prices is also one of the most regressive forms of taxation you can conceive. How can the left possibly support it? It just hammers low-income people who have kids, drive to work, or own/rent older homes. It punishes energy-intensive blue-collar industries like manufacturing and China will be tickled to have us send them even more of our industrial base.
    “But one way or another, the health care system needs to share Detroit’s fate.”
    I don’t want health care to look like Detroit, thank you. What sensible person would advocate such!
    Most of the public doesn’t favor the taxpayer bailout of the auto industry and will revolt if fuel costs go back to last summer’s sky-high levels (and they should, as it punishes working class families). We don’t want cars that go 50 miles and then we plug them in at night. Hey, we will then get to pay higher electric bills due to that carbon tax on our electricity
    Arguing that something similar needs to happen with health care as happened with the auto industry is a not how to sell reform.
    It amounts to: we will take away your consumer choices, break up your contracts, close your local employers, raise your taxes a whole lot, and you will have no say in the matter.
    The auto industry debacle is the exact opposite of what I would be pointing at right now.
    Also, I ask with sincerity, why the needless shots at conservatives on issues that don’t have doodle-squat to do with health care? Guess what: I am a life-long GOP-libertarian who actually has worked in the area of Medicaid policy for some time now (including writing a lot of law in this area). Yes, I am a pretty right-wing kind of guy. But, I can also look at an unsustainable system and see that it is heading towards an iceberg. I can even agree with some of the fixes advocated by THCB as logical (not all, but some).
    So, given that I might be an ally on some issues, why start out by taking potshots? Hate to break it to you, but some of the folks you diss actually have an idea or two worth hearing. Their criticism also should be examined, not sneered at. I worked the legislative process for years and learned (sometime the hard way) that criticisms must be addressed, not dismissed.

  5. This has been a very interesting discussion. I am a cardiology sub specialist and agree that reasonable health care reform needs to happen.
    I have one comment and then a question:
    “The lobbyists for America’s health care immediately recanted their promised voluntary cost cutbacks.”
    The promises were not from lobbyists. They were from representatives from the various health care governing bodies like the AMA, AHA, ACC, etc. All parties acknowledge that change is necessary. They agreed to cut costs. Their stance is that they did not agree to specific dollar amounts or percentages. I don’t think their intention was disingenuous. They just felt that their comment was over stated by President Obama.
    There is a lot of focus on how to cut costs including cutting physician reimbursement. My training lasted 12 years post college and for the most part involved making less than or equivalent to minimum wage for my hours worked. During that time I chalked up $176,000 in student loan debt. When you look at countries with socialized medicine, their medical training is either free or inexpensive. I am curious what people think a “fair” physician salary is?
    As an aside:
    “For SUVs and mini-vans substitute cardiology, orthopedics, neuro-surgery, general surgery, oncology drugs, and all the other service-lines that make hospitals profitable, but do very little for the overall health of the population.”
    Do people really believe this?

  6. Deron S, you had me until the last paragraph. Personal vows will not get us out of this mess, only coordinated action (almost certainly through government) will.
    Matt, great post, and it kicked off a nice discussion with a little more (helpful!) navel gazing than usual.
    For my own .02, I think there is way too much impatience and hand-wringing about reform. The healthcare sector will not turn on a dime. It is worse than trying to turn the proverbial battleship…more like turning a flotilla and driving it against the current, when you have admirals from multiple nations each in control of some vessels.
    In the end we want a system that is coherent and vastly improves the value we get per dollar spent, but we will have to get there in fits and starts. I think it was Atul Gawande who did a nice study recently on how the national systems of other nations were also constructed piecemeal. Speaking of which, his latest in the New Yorker is excellent.
    For my money, what wonks can best take to heart from that article is the conclusion that who pays the bills isn’t nearly as important as what is paid for, and how.
    First lets get universal health care and pay for it out of a dedicated tax (whether a deduction from payroll, a VAT, a line item on the 1040 form, etc.) so that middle class voters are more conscious of the cost. Pressure needs to build from the grassroots before we can fix the perverse incentives and atomization of care. Seeing the costs, having lots more articles like the one from Gawande, and having a government that uses the bully pulpit to talk about the cost drivers are all critical to make that happen.

  7. I want to come back to the issue that Dr. Val raised: I too believe that a large subset of US Americans favor high tech medicine in shiny buildings and the newest drugs advertised on TV (or promoted to doctors), without getting much bang for the buck. To stay with the analogy, there were enough people buying all these SUVs, despite only minimal advantages in comfort and great disadvantages re. economic and ecologic cost.
    I think you can differentiate the mindset when people are recommended a borderline necessary test: (in my view) reasonable people ask whether the test is really necessary, even if they don’t foot the bill. The other camp wants the fanciest medical experience, regardless of cost (almost always people with good coverage, and be it medicaid). Too many people of the 2nd camp will drive any health care system without rationing (and with aggressive litigators) into bankruptcy. I think this mindset is a completely underappreciated challenge.
    Anyways, you can have fancy stuff within a publicly financed system, too, if you are otherwise ressourceful (face transplant: some value at a high price; MRI and back surgery for axial back pain: no value at a high price). Remember that the 1st face transplant was done in France.

  8. As long as there is pure capitalism, we will experience these problems. I agree that the buck stops nowhere. Patients are not innocent victims in all of this. The blame is so widespread, which is why we’re struggling to get a handle on it.
    Until we all get an IV with social responsibility directed into our veins, we will face these problems. At least other countries have some semblance of it. There are forces at work that are far stronger than anything United Healthcare or Rick Scott could muster, so let’s find some perspective. Today it’s the healthcare and financial services industries. Tomorrow it will be…
    We can continue to have the same academic discussions day in and day out, or we could strive to find some real context. Our problems will not be solved, at least not completely or sustainably, by AllScripts, Athena, or comparative effectiveness research. They will only be solved when we step up and say “I, David Kibbe, Matthew Holt, Deron S. etc., am prepared to do my part to get us out of this mess. I will take care of myself. I will hold my doctor accountable for quality. I will demand that my insurance company be more transparent. Here is what I will give up in the name of the greater good.”

  9. tcoyote and all: Right. Let’s have a friendly discussion, it’s much more interesting. 😉 Here’s my point: if 5 years ago, one of your friends had predicted that on May 27, 2009, the federal government headed up by an American president of color, would own 70% of General Motors’ stock (one could say assets instead), well…I think most of us would look the friend staight in the eye and search for some Thorazine, because we just wouldn’t believe anyone would say such a stupid thing unless seriously psychotic. It would be unthinkable! General Motors? GM? One of the biggest, richest car manufacturers in the world? Never going to happen!
    But the new world dis-order is constantly surprising us, no? Ok, so GM is a firm; and HCA isn’t a firm? Is KP not a corporation? Isn’t Ascension Health a firm?
    I’m not arguing that the sky is falling. I’m trying to understand the manner in which an unsustainable level of, a self-destructive level of expenditure..on health care will ultimately be reduced to sustainable levels, given all that we agree on are the impediments and barriers to self-generative and rational change. I agree with you that GM’s fall was a “catastrophic management failure.” But I don’t see health care as anything less catastrophic, and it certainly is a management failure.
    ‘nuf said. Regards, DCK

  10. I’m not sure why tcoyote thinks the end game of government takeover is so incomprehensible that he says, “There isn’t a chance in hell that the government ends up with a 70% equity stake.”
    When you add up Medicare, Medicaid, FEHBP, Indian Health Service, the VA, TRICARE/CHAMPUS and the dependents and retirees thereof, the federal government is already the payor, carrier or sponsor of well over 55% of the medical expenses covered in this country right now. Throw in state and local government employees, and we’ve probably got some government or other on the hook for close to 60 percent of the nation’s “risk” already.
    We give government all that responsibility and risk, but we don’t let the government do any serious cost-containment, and prevent global budgets by keeping it balkanized and politicized and privatized. The absurdity of the situation would be funny if the lost opportunity of other things that could be done with the money weren’t so tragic.

  11. Emphasis must also be put on keeping people in better health. How do we reward people who lead healthier lifestyles? Who knows, it’s not very democratic.
    I will say that trying to insure the masses without some type of price constraints will end in epic failure.

  12. I think the real problem is a philosophical one: are Americans prepared to put aside their personal interests for the good of the population? Hollywood offers us a fascinating look at our own ideology with its blockbuster plot recipe: lay it all on the line to save a few in a dramatic way.
    Now, at the risk of giving away my Memorial Day social calendar… Star Trek was about fierce individualism – Kirk is constantly doing what HE thinks is best, not what’s in the best interests of the majority. Terminator was about risking the lives of others to save John Connor or his surrogate (at great expense to many human lives)… and I’m sure readers can think of many other plot lines that embody American individualism and perilous behavior.
    I don’t blame politicians or industry for the healthcare system’s priorities – fabulous technology, high stakes procedures, game-changing targeted therapies that cost more than most can afford… Crazy as it is, that’s what Americans value. It leads to health disparities, unfairness, inequality – but we can save a child from a cancer that requires the removal of 6 of her internal organs, and we can do face transplants in people who’ve been shot and left for dead…
    We’ll need to spend a lot on re-education efforts to help people understand the need for primary care, preventive health, healthy lifestyle choices – and to change their underlying values. I myself have serious doubts about changing America’s culture any time soon. Because basically, we all believe that Spock is going to swoop in and save us just before Vulcan becomes a black hole. What we don’t accept is that the chances of US actually being one of the 5 that he saves is 1:1,000,000,000 Why else are lotteries so profitable? 🙂

  13. Kibbe comments are gone and apologies offered. Twice is too many times. Why fight when we agree on so much? I just think we’ve had enough of the “End of The World Is At Hand” stuff. It’s getting old and the catastrophizing isn’t helping us.
    Neither our country nor our health system are going bankrupt. And the analogy Matt offered just doesn’t wash .
    My problem with Matthew’s post is simply that GM is a firm. Firms have owners, debt and shareholders and, most importantly, managements that owners expect to perform. This was, at bottom, a catastrophic management failure. What’s happening now is a result of customers simply not tolerating a shoddy and poorly designed product. Why that is, even on a transient basis, a problem which requires $billions in public money I still have a little trouble understanding.
    There is actually blame in healthcare which is simply impossible to allocate in a sensible way – a $2.5 trillion sector which is fully as messed up as Matthew, George Lundberg, David K and others have offered. The crucial difference w/ healthcare is that no-one’s in charge (that’s the way we patients want it). As some wise commentator wrote a few years ago, “The Buck Stops Nowhere”.
    If someone WAS in charge, then we’d have someone to blame for the state of the industry. There is no-one to blame for the mediocre care experience and systemic results except, per Pogo, ourselves. The tragedy is all the alternative uses of the money we’re wasting- the opportunity costs in lost life chances and unmet needs.

  14. Hey I know tcoyote likes his cheap shots, and that’s OK on THCB, (which is why he uses a pseudonym) but here he’s missing my point. I AGREE with tcoyote that we wont get anything out of the current reform process that makes a real difference. So for a while afterwards we’ll bumble along. That “while” might be 2 years, 5 years, or 15 years, but if “reform” doesn’t bend the curve sufficiently on cost or the uninsured, then the “collapse” or “burst bubble” scenario becomes realistic.
    In that scenario the country basically runs out of money and can’t fund health care “as is” any more. Then the GM scenario is a real likelihood. What I’m saying here is that it would be very, very different to what we have now, and we would have to have a very serious rationalization managed by the Feds of how the health system is funded and structured. That would be the same as is happening now to the autos and finance sector.
    And while it is my scenario, (although I don’t see that as being in the least unrealistic (although it’s a scenario not an absolute forecast). But one more thing, I think it would in the end be positive for the nation to resize and radically reform the health care system, as I think it’ll be positive for the world if the energy/auto sector is radically restructured.
    And in the end we’ll make those changes or suffer the consequences.

  15. The centers of influence in the US health care industry have mastered their public messaging to play on fears that change can only make things even worse than they are today. The best way to counter that is to be equally visible about the issues of the status quo. If Harry and Louise are worried about seeing their employer health insurance system and relationships with health care providers disrupted by health care reform, perhaps Greg and Sharon can talk about having to choose between paying their home mortgage or getting necessary medical care without health insurance, not being able to afford the routine medications for a chronic medical condition, about why neither of their employers offer health benefits, and about how they can’t get an appointment with a primary care doctor. I think Greg and Sharon’s woes hit much closer to the truth of where the US health care system is today.

  16. I didn’t make up the phrase I’ve heard about “being GM’d” If hospital administrators use the phrase, then the comparison must have some validity, however wrong-headed in tcoytote’s opinion.
    And further, health care may be decentralized, but its financing is not. The federal government already pays for about 50% of health care expenditures in this country, and that amount is going to grow as the population ages, as we all know. It is not absurd to compare a government bailout of health care facilities, such as might be necessary if Matthew’s scenario plays itself out, with government ownership of the the auto industry’s asset and the closure of thousands of dealers. This could happen in a number of ways, some of them gradual, for example through increased funding and expansion to the VA, and to FQHC’s, and it might happen more precipitously if large, urban hospitals fail and require either state, federal, or a combination of the two for funding.
    I see this as a last resort, occurring after many years of recession and the collapse of the commercial insurance industry. But this eventuality is no more strange to contemplate than the government’s ownership of 70% of GM would have been 5 years ago. As a matter of fact, I think we ought to seriously consider an NHS-like schema in this country for portions of the health care system. Let me suggest that a tripling of Kaiser’s market share, or mergers between IHC and Kaiser and the VA, are worthwhile contemplating in a rapidly changing and very unstable national and global economy.
    Regards, DCK
    (comment edited at authors request)

  17. A terrific piece, Matthew.
    BTW, I hope tcoyote is wrong. But unfortunately his concerns are exactly what I worry about as well.
    To your point, the revelation from the Center for Responsive Politics that the health industry has, in 2009, already contributed $128 million to Congress, more than any other sector and most of it to the Democrats, underscores the difficulty of creating a unified and non-conflicted front.
    It seems clear that the industry will seek Massachusetts-style reform, where the concessions are made by purchasers rather than vendors, and no changes are made to the business models that produce so much waste. The Dems could easily buy into that, and declare themselves reformers.

  18. The reason people might be disappointed in health reform is that nearly everybody participating in the process is so traumatized by what happened to the Clintons that they are scared to death of taking any risks whatever. They’ve gone to the classic “prevent” defense: a sure recipe for losing a football (sorry, Matthew) game.
    We are going to pay a dreadful social price for tossing Daschle overboard, because the process is going to be dominated by an intellectually impoverished and tired Democratic Congressional leadership, who between them haven’t had a credible new idea in at least two decades. The administration brought “A” players (Orszag, DeParle, Lambrew, Zeke Emanuel, Blumenthal) to a “C” political process, but no coach.
    Of course, the right will be disappointed that we did not meaningfully shift economic responsibility for better outcomes and costs or hold anybody (including especially patients) accountable for anything. The old left and comrade Holt are going to be disappointed by all the concessions to the “industry”, the reformers by the failure to tilt resources to primary care, reducing variation and achieving better chronic care, the tech community, who will see abject mediocrity richly rewarded by HITECH, and consumers/voters, who will notice absolutely no change whatsoever in any aspect of their healthcare experience (including the bad parts-the complete incoherence of the care experience).
    The analogy to GM is, frankly, rubbish. GM was absurdly centralized, bureaucratic and unionized. Our health system is absurdly decentralized, bureaucratic and disorganized. There isn’t a chance in hell that the government ends up with a 70% equity stake. I think we should declare a moratorium on poorly thought thru analogies to the business world.
    (note: comment edited at authors request)

  19. David, It is sad but true. The way things are going, there will be reform. But the beneficiary would be mostly the industries and not the individuals.
    Unless, the administration can pull some tricks.
    It dawned me….and I have written abit on my blog…WHAT IF WE HAVE BIG MARCH LIKE THE CIVIL RIGHT MOVEMENT in every city leading up to DC. Please take a look at the idea.

  20. Dear Matthew: Great piece, certainly one of your best. I’ve heard through the grapevine that some hospital administrators are already using GM as a verb, as in, “we don’t want to get GM’ed by the government, so we’ve got to control our expenses now.”
    It’s a powerful analogy, health care and the auto industry, but not such a stretch when you think about how dominant the automobile has been on our way of life, our consciousness, our movies and books…for the past 75 years.
    Thanks for writing this.
    Regards, DCK

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