I think we’d all agree that the healthcare debate continues to intensify. Many say it has entered a new stage as conversations move to proposals -- with Senate Democrats recommending a bill that will amplify the debate even more -- to decide if the US will adopt universal coverage.
Access seems to have replaced change as the word of the day. Everyone seems to be focused on it -- including Peter Orszag and Virginia Postrel. There’s no doubt that access is important -- but addressing access prior to reengineering the system is like adding passengers to a sinking ship. And in this case, the ship is going down in a sea of red -- the growing debt that will be incurred.
What we really need to do is what I highlighted in my contribution to the Washington Post’s new Daily Dose Panel Blog, Diagnosing and Treating the Health Non-System.
It’s not just about access. There are multiple symptoms and ailments that interact with one another. The three principal "diseases" are:
· Access (too many uninsured people)
· Value (too much spending for the health results delivered)
· Ignorance (at every level - who really pays for health, misaligned incentives, true costs, quality measures, transparency and more)
The most important to fix is value -- how do we improve health outcomes for the same or lower economic cost? Why is this most important? Everyone acknowledges that health spending is already in an economic crisis -- both in the near term and certainly in the long term (Medicare's unfunded liability exceeds $36 trillion!). Even if everyone in the country woke up tomorrow morning with health insurance coverage, it still would not address the hard economic truth -- we must get more value, as measured by better health outcomes, for every dollar we spend on health. The recent article in the New Yorker illustrates this particularly well.
The whole operating framework surrounding the health delivery system requires re-engineering to realize value. We need a system that supports and rewards innovation in health around new drugs, new devices or new procedures. Today, this innovation happens on a small scale, at times producing great results. But what we need is broad-scale innovation around health delivery for chronic disease management (which accounts for 70% or more of total spending) as well as prevention and wellness.
The reason this innovation and re-engineering isn't happening right now in the delivery of health services is because of the inflexibility in the payment system and misaligned incentives -- largely the result of Medicare rules and regulations driven by Congress today.
Each of us pays for health care (taxes, lower incomes, cash) whether we realize it or not, but as consumers, we’re rarely informed and engaged with our own health. We can’t get the basic data we need to make the right daily decisions.
I believe that Congress must focus on building an operating framework of rules and regulations that aligns physician and hospital payment with health outcomes and encourages innovation on how best to deliver it. This is evidenced by an amazing statistic I read this week. In June 2008, the Congressional Budget Office estimated that up to one-third of 2006 spending – roughly $700 billon or nearly 5% of our GDP – did not improve health outcomes. And we want to add more people into this system?
We’re just wrapping up our annual Connected Health Conference. I wanted to share some insights and observations