It’s a good week for Bob Kocher, a key architect of the ACA, to be leaving Mckinsey and moving into the word of venture capital. There’s lots of fuss in wonkdom about whether Mckinsey’s survey of employers was statistically correct and peer reviewed or more of a push poll. There’s lots of fuss even apparently within the firm about the validity of the estimate that 30% of employers (or is it employees) will be moved over to the exchanges. But despite ballyhoo over the Mckinsey report, because in 2009 the White House got stuck into the mantra that “if you like your insurance you can keep it” the fact that it’s good to get employers out of providing health insurance has been missed. If you have insurance from an employer that puts you in the exchange it’s a fair bet that your coverage was anyway going to move to levels worse than that mandated by the government. And the levels of coverage and behavior of the plans in the exchange which will hopefully actually be enforced–with the threat of being booted out being a motivator. And as we all know employers are the worst purchasers of health care out there and need to be got out of the game. That was what the very sensible Wyden-Bennet plan did, but as the collective stupidity of the nation’s unions and chambers of commerce is very high, we ended up with the ACA instead. Oh well, welcome to America.
The Boston Massacre
Tuesday’s Republican victory in Massachusetts means the current Democratic health care bills will not be on the President’s desk in 2010.
Forget the crazy talk of ramming something through—including just having the House pass the pending Senate bill.
I’ve talked to lots of people in the past few months that didn’t like the Democratic effort but conceded that the Dems won the 2008 election on a platform to do health care their way. They would say, “elections matter” and could, albeit begrudgingly, understand Democratic attempts to pass their brand of health care.
But losing Ted Kennedy’s former seat in Massachusetts with the singular issue being health care?
The game has changed. Democrats just can’t any longer spin the polls that for months have been so negative on the Democratic health care efforts.
The conclusion is now crystal clear—the people don’t want this. For goodness sakes—they rejected it in Massachusetts! On the political shocker scale this rivals “Dewey Defeats Truman” and the ’94 elections.
Saving Health Care, Saving America
So far, Congress’ response to the health care crisis has been alarmingly disappointing in three ways. First, by willingly accepting enormous sums from health care special interests, our representatives have obligated themselves to their benefactors’ interests rather than to those of the American people. More than 3,330 health care lobbyists – six for every member of Congress – contributed more than one-quarter of a billion dollars in the first and second quarters of 2009. A nearly equal amount has been contributed on this issue from non-health care organizations. This exchange of money prompted a Public Citizen lobbyist to comment, “A person can reach no other conclusion than this is a quid pro quo [this for that] activity.”
Second, by carefully avoiding reforms of the practices that drive health care’s enormous cost growth, Congress pretends to make meaningful change where little is contemplated. For example, current proposals would not rebuild our failing primary care capabilities, which other developed nations depend upon to maintain healthy people at half the cost of our specialist-dominated approach. They fail to advance the easy availability and understandability of information about care quality and costs, so purchasers still cannot identify which professionals and organizations are high or low performers, essential to allowing health care to finally work as a market. They do little to simplify the onerous burden associated with the administration of billing and collections. The proposals continue to favor fee-for-service reimbursement, which rewards the delivery of more products and services, independent of their appropriateness, rather than rewarding results. Policy makers overlook the importance of bipartisan proposals like the Wyden-Bennett Healthy Americans Act that uses the tax system to incentivize consumers to make wiser insurance purchases. And they all but ignore our unpredictable medical malpractice system, which nearly all doctors and hospital executives tell us unjustly encourages them to practice defensively.
Most distressing, the processes affecting health care reflect all policy-making. By allowing special interests to shape critically important policies, Congress no longer is able to address any of our most important national problems in the common interest – e.g., energy, the environment, education, poverty, productivity.
Over the last four years, a growing percentage of individual and corporate purchasers has become unable to afford coverage, and enrollment in commercial health plans has eroded substantially. Fewer enrollees mean fewer premium dollars available to buy health care products and services. With diminished revenues, the industry is unilaterally advocating for universal coverage. This would provide robust new revenues. But they are opposing changes to the medical profiteering practices that result in excessive costs, and which often are the foundation of their current business models. And these two elements form the troublesome core of the current proposals.
Each proposal so far contemplates additional cost. But we shouldn’t have to spend more to fix health care. Within the industry’s professional community, most experts agree that as much as one-third of all health care spending is wasted, meaning that a portion of at least $800 billion a year could be recovered. There is no mystery about where the most blatant waste is throughout the system, or how to restructure health care business practices to significantly reduce that waste.
Make no mistake. A failure to immediately address the deep drivers of the crisis will force the nation to pay a high price and then revisit the same issues in the near future. It is critical to restructure health care now, without delay, but in ways that serve the interests of the nation, not a particular industry.
Congress ultimately must be accountable to the American people. The American people must prevail on Congress to revise the current proposals, build on the lessons gleaned throughout the industry over the last 25 years, and directly address the structural flaws in our current system. True, most health industry groups will resist these efforts over the short term, but the result would be a more stable and sustainable health system, health care economy and national economy, outcomes that would benefit America’s people, its businesses and even its health care sector.
Finally, the American people should demand that Congress revisit and revise the conflicted lobbying practices that have so corroded policymaking on virtually every important issue. Doing so would revitalize the American people’s confidence in Congress, and would re-empower it to create thoughtful, innovative solutions to our national problems.
Brian Klepper is a health care analyst and industry advisor. David C. Kibbe is a family physician and a technology consultant to the industry. Robert Laszewski is a former senior health insurance executive and a health policy analyst. Alain Enthoven is Professor of Management (Emeritus) at the Stanford University Graduate School of Business.
