Matthew Holt

Enthoven beats up Gawande

I finally got around to reading Atul Gawande’s New Yorker piece on why the current reform bill mirrors early 20th century agriculture. I learned lots about the role of the Department of Agriculture in teaching farmers what to do. In post-war Britain the radio soap opera The Archers did much the same thing.

I was actually encouraged to remember that in almost every industrialization process, intelligence, leadership, and usually money, from the government was a key factor.

But I felt very uncomfortable with the analogy. First, the incentive for the farmers was to be more productive—even if in the long run productivity meant a relative fall in the price of food and eventually the rise of agri-business decades later. If they did things right there was an immediate market reward. Whereas we know that (from the Virginia Mason and Intermountain examples) increasing quality and productivity in health care leads to negative financial consequences.

Secondly, Gawande seems to be fine with saying that “we don’t know how to be more efficient, productive and effective, so let’s do pilots for years and figure it out.” This is just crap. We’ve both done pilots for decades, and have examples of organizational forms (you know who I mean!) that get it right. It’s just made no sense for most of the health care system to adopt those techniques and organizational forms because they make more money by doing what they’re doing—and government and employers keep paying them.

I was going to write a long piece detailing my complaints blow by blow, but luckily Alain Enthoven has done it for me!

This doesn’t mean I’m against the current bill as I suspect Enthoven is. There is some hope that ACOs and other modern terminology for the types of organization he’s espoused over the years, will arise more quickly from the “pilots” in the bill than Enthoven suspects. But more importantly, I support the bill because the saving money part is the second of my “two rules to judge a bill.” The first and most important rule is

Rule 1 A health care reform bill needs to guarantee that no one should find themselves unable to get care simply because they cannot afford it. Neither should anyone find themselves financially compromised (or worse) because they have received care.

And the current bill just about does that….although Maggie Mahar is pretty doubtful, especially for near-seniors in the first few years.

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Stephan WyssHeatherMGJoe The UserNate Recent comment authors
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Stephan Wyss
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Stephan Wyss

Atul Gawande is a narcissist. I realize this is a blow to many, who have not picked up on that. His ideas are useless. To praise the Cheesecake Factory, which may be a fun birthday spot, is batshit doubleplus nuts. Ivory tower idiot.
Big question: Walrus or elephant. That his absurd ramblings are taken seriously by some is worrisome.

Heather
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Heather

MG – thanks for making all the points that I was about to regarding CDHPs and the current barriers to their success. Nate – how can you support your claim that pricing transparency is readily available? Real world example: you injure your knee and your doctor tells you that you should get an MRI. The majority of the time, if you call around to local hospitals or standalone imaging centers they will NOT provide you with an out-the-door price quote on how much that is going to cost you. I would add that the lack of price transparency plus the… Read more »

Nate
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Nate

MG swiping that debit card and having the money deducted from your HSA is SOOOOOOOOO hard.
Quality and sfatey is a bogus argument. CDHP or regular plan this doesn’t differ. If you can’t guage the quality and saftey of your doctor under a CDHP how do you do it under your normal plan? Argument lacks any logic.
Pricing transparency is readily available.
Any other concerns?

MG
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MG

Atawande’s comparison of medicine and healthcare really was a weak one at best. If you really want to talk about 20th century American agricultural policy, there are several things that were much more fundamentally important including the various New Deal policies which fundamentally set the gov’t role in agriculture until Butz and the Nixon administration changed a number of key components of them.
I love comparisons as a way to explain things but to me education and healthcare share much more in common right now than agriculture.

MG
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MG

I would love to see the defenders of CDHPs make valid points about the following: 1. You have the necessary information on pricing transparency to make them work. 2. You have the necessary information on quality and safety transparency to make them work. 3. They aren’t a pain in the a$$ to use because of the cumbersome and clunky tools offered and the awkward submission of reimburseable expenses. 4. Paying for services is incredibly efficient or you can easily link their HSA/HRA to your CDHP plan. Part of these issues are larger overall issues with the healthcare industry but reason… Read more »

Joe The User
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Joe The User

Ah,
The New Yorkers article has to be one of the more disheartening products of the current debate. It actually begins by outlines the extremity of the problem fairly well and then engages in one of the most disingenuous analogies I’ve seen in any discussion on current policy – Bush’s argument for invading Iraq was a work of careful and exact logic in comparison. Shame on a usually intelligent publication for polluting the debate with such ill-purposed inanity.

Nate
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Nate

Rick your starting with the false assumption that the cost of healthcare is a problem. If people where unhappy with the cost they would buy CDHPs. Not everyone is driving or buying fuel efficent cars, becuase they have the disposable income to afford big gas guzzlers. People are overinsuring themselves becuase they have the money to blow and choose to blow it on excessive care consumption. Indeminity plans are no where close to 8% you wont even find 1%. “Simply put, If they were a better deal, people would buy them.” This is just fundementally false. You can make unlimited… Read more »

Biotech Analyst
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Biotech Analyst

@Rick: Did you bother reading the link Matt provided to Enthoven’s article (http://healthaffairs.org/blog/2009/12/22/would-reform-bills-control-costs-a-response-to-atul-gawande/)? Enthoven points out that most employers do not offer CDHP’s as an option. Furthermore, employers also pick up most or all of the premium for any plan of the employee’s choice, so what incentive do employees have to choose the lower-priced CDHP’s when the higher priced, less efficient plans are effectively the same price to the employee? For example, in contrast to the average annual family premium of around $13K (IIRC), my family’s HSA premiums are about $4,500 (i.e., about a third the cost of the average… Read more »

tcoyote
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tcoyote

I’m relieved to hear Maggie say these bills are unaffordable. She’s right. Unfortunately, the big unaffordable part is off the federal budget: the 60 million person Medicaid program from whose costs states (except Nebraska!) will get three years of shelter. Medicaid will enroll one in five Americans! States will be compelled to increase enrollment, and three years later find the money to pay for a large chunk of the cost. The true cost of health reform- getting to 97% coverage- was actually north of $1.6 trillion . The only way to pay for the huge Medicaid expansion will be to… Read more »

maggiemahar
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Matthew — I agree with rule #1. And while I see serious problems ahead for older upper-middle class American couples earning $60,000 to $100,000 (making them too wealthy to qualify for subsidies, but not rich enough to afford to pay triple what younger Americans pay) it does provide access for low-income and lower-middle class Americans who qualify for subsidies. It also expands Medicaid, hikes pay for primary care docs etc. Finally, the Medicare Commission is still in the bill. But– and this is terribly important– we need the Rockefeller-Lieberman amendent to strenghten it. The Commission must begin controlling hospital costs,… Read more »

Health Plan Veteran
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Health Plan Veteran

My criteria for judging the health care reform legislation is whether or not we will be better off with it or without it. Given the poor status quo relative to health care quality, cost and access, the bill wins easily on my scorecard.

turntostoneblog
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Let me suggest that the author’s Rule 1 as admirable a goal as it expresses, has little to do with Health Care Reform. I would suggest, instead, a Rule 1 that states that “A health care reform bill needs to reduce the actual cost of health care.”
Unfortuantely, it is not clear that the Senate Bill will ultimately achieve that goal.

R Quinn
Guest

Rule Number 1 is fine, I think most people will agree. the problem is that to implement this rule in today’s environment means that there will be subsidies, mandates on the level of benefits, mandates on someone else paying to assure Rule 1 is working. What is missing is addressing the cost of the care that people cannot afford. You don’t solve the problem of a leaky faucet by asking someone else to pay the water bill. What good will it do us to meet rule number 1 if the cost of doing so bankrupts us all? My wife recently… Read more »

Dr. Rick Lipin
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The biggest lesson of the entire exhausting most recent US health care reform debate is how terribly dysfunctional our US legislative process has become.
THIS DEBATE REVEALED IN PAINFUL DETAIL HOW VERY SICK OUR CURRENT AMERICAN POLITICAL PROCESS ISIt is a very malignant cancer within us and within our nation.
Where are the most promising ideas to begin to remedy this very deep and widespread pathology?
The American people have had it!This could bring our once great nation down.
IF YOU DON’T BELIEVE IT- YOU ARE NAIVE.
Dr. Rick Lippin
Southampton,Pa
http://medicalcrises.blogspot.com

Rick
Guest
Rick

Liz, you’re not the first person I’ve heard advance the notion of CDHPs as a solution to healthcare costs. Just last night I heard Sen. Judd Gregg of NH name it as the first idea off the top of his head when Matthews asked him where was the Republican plan to reduce healthcare costs. My thought then is the same one I will give you: CDHPs are universally available now, especially for those purchasing in the individual market, and their premiums, generally, are already significantly lower than those of more traditional plan designs. The first HRAs and HSAs came available… Read more »