Tag: Health Care Reform

Patient-based Health Reform or “Fannie Med?”

Mar 27, 2009• 73

By Richard Scott

Set against the backdrop of the $787 billion stimulus bill and deficit spending that dwarfs the federal outlays of FDR’s New Deal and LBJ’s “Great Society,” the idea of spending hundreds of billions – or even trillions of tax dollars – to buy universal health care coverage for all Americans isn’t much of a stretch anymore.

Faced with $30 to $80 trillion in unfunded healthcare liabilities ($110,000 to $300,000 per American under the age of 65) “health care reform” discussions are underway between President Obama and members of Congress in the 111th Congress to spend even more on health care, and Americans are beginning to hear more and more about “patients’ rights” and similar jargon.

The problem is that “universal health care” and “patients’ rights,” while sounding harmonious, are in direct conflict. The path to effective health care reform must be approached from the perspective of individual patients and their relationship with their doctors, and not from a top-down, big government perspective. Anything that interferes with an individual’s freedom to consult their doctor of choice to make health care decisions defeats the purpose of meaningful health care reform.

True health care reform centers on four “pillars” of Patient’s Rights:

Choice – Any health reform proposal must guarantee a patient’s right to choose their own doctor, and must protect a consumer’s right to choose the health insurance that best fits their needs and budget. Reform efforts should expand the choices without dictating or distorting them..

Competition – In addition to increasing patient choice, eliminating state regulations on health insurance would allow for broader competition and lower prices for consumers. Patients also benefit when doctors are free to run their practices like any other business, competing on the basis of results and price. Requiring health care providers to publicly post their pricing and results so consumers can shop and compare will make our health care system more efficient at delivering quality care at an affordable price. Effective reform must rely on market dynamics, not government controls.

Accountability – Health reform efforts must reward individuals who are accountable for themselves. Those who pay for their own health insurance should get the same tax breaks employers get. Creating one standard reimbursement form, regardless of insurance company, will reduce costs and shift accountability where it belongs – to the individual whose life is most affected by the decisions that need to be made. Rare is the politician who would argue that an insurance executive or a bureaucrat in Washington D.C.is in a better position to make critical health care decisions than individual Americans and their doctors.

Responsibility – Successful health care reform must place responsibility squarely where it belongs: on the shoulders of the patient. Encourage individuals to take responsibility for their personal health by allowing insurance companies to charge lower rates for people who make healthy lifestyle choices. Infusing personal responsibility into health care reform allows us all to maintain our cherished freedom to live our lives without government intrusion. This principle works now: a 40 year-old who has been smoking since he was 16 knows his life insurance policy is going to cost more than that of a non-smoker. A driver with a heavy foot knows his car insurance rates reflect his need for speed.

Any serious discussion of health care reform that does not include choice, competition, accountability and responsibility – the four “pillars” of patients’ rights – will result in our government truly becoming a “nanny-state,” making decisions based on what is best for society and government rather than individuals deciding what is best for each of us..

Because of budget constraints, regulators in the United Kingdom dropped pap smears for women under 25. The result – young women are dying of cancer that could have been treated if the cancer was discovered in its early stages. Many Canadians have to wait months for diagnostic tests to determine whether their tumors are malignant, giving cancerous tumors time to worsen, spread and progress to an irreversible stage.

Some of the ideas being advanced by our leaders in Washington fail to consider patients’ rights , focusing instead on “government oversight boards,” “negotiations” with drug companies, and other bureaucratic solutions that refuse to put the patient-doctor relationship first.

Worse, the danger of Washington’s recent willingness to spend inordinate sums of money on anything deemed to be a problem, is that we are conditioning ourselves to believe that our government has unlimited resources – and that any problem can be solved by simply spending vast amounts of cash. What politician wants to be in office when it comes time to admit we can no longer spend for services we have come to expect?

Fannie Mae’s and Freddie Mac’s failed experiment to improve home ownership for “low and middle income families” should be a wake-up call to those who believe more government involvement in American healthcare will help “low and middle income families”. These two initiatives resulted in politicians being accused of receiving favored treatment, low and middle income families being forced out of their homes and a federal bailout that could cost taxpayers as much as $2.5 trillion. We never envisioned politicians receiving favored treatment, the housing meltdown caused by the expansion of these programs, nor the unbelievable number of low and middle income families being evicted from their homes with their life savings depleted. It’s not difficult to imagine similar results under a national health care system.

Given the evidence, now is the time for an investment of political willpower to institute a dramatic shift away from the influence of government, and toward a patient-centric system with the principles of choice, competition, accountability and responsibility powering a revolution in American health care. The shakiness and uncertainty that permeate our economy, some of which is caused by our lack of competitiveness because of healthcare costs, argue vocally for patients’ rights as opposed to government control.

Ultimately, the decision will come down to who we believe will better allocate our limited healthcare dollars: the government or each of us. If we get this right, everyone wins. If we get it wrong, the damage to our economy and our quality of life and the quality of life for our children and grandchildren may be irreversible. The last thing America needs is for Fannie Mae to become “Fannie Med.”

Richard Scott is co-founder and chairman of Solantic Corporation, a Florida chain of 23 urgent care centers which posts prices on the internet and on a “Starbuck’s style” menu board. He’s best known for being the CEO of
Columbia/HCA which grew to quickly being the largest for-profit
hospital chain in the 1990s before he was forced out when the Federal
government investigated allegations of fraud. After Scott left, HCA settled the suits for over $1.7 billion. More recently Scott has become a participant in the national debate over health reform. In 2009, He formed the Washington-based political action group “Conservatives for Patients Rights”, an organization dedicated to market-based reform of the healthcare system.

Saving Health Care, Saving America

Feb 1, 2009• 47

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.

Op-Ed: Healthcare Reform Lessons From Mayo Clinic

Jan 21, 2009• 45

By LEONARD L. BERRY and KENT D. SELTMAN

Three goals underscore our nation’s ongoing healthcare reform debate:1) insurance for the uninsured, 2) improved quality, and 3) reduced cost. Mayo Clinic serves as a model for higher quality healthcare at a lower cost.President Obama, after referencing Mayo Clinic and Cleveland Clinic, advised, “We should learn from their successes and promote the best practices, not the most expensive ones.”

Atul Gawande writes in The New Yorker, “Rochester, Minnesota, where the Mayo Clinic dominates the scene, has fantastically high levels of technological capability and quality, but its Medicare spending is in the lowest fifteen per cent of the country-$6,688 per enrollee in 2006.”Two pivotal lessons from our recent in-depth study of Mayo Clinic demonstrate cost efficiency and clinical effectiveness.

A Detailed Analysis of Barack Obama’s Health Care Reform Plan

Mar 21, 2008• 115

Thanks to a very high Google ranking this has been the most popular ever post on THCB. And it's an excellent analysis by Robert Laszewski. who writes The Health Policy and Marketplace Blog. However, it was written during the Democratic primaries in 2008 and is of course out of date. THCB suggests that you checkout a few other intriguing posts too.

For more recent posts on health care reform, try a smattering of these:

Health Reform and Obama's Leadership by Rahul Parikh
The Affordability Model by Robert Laszewski
No Country for Old Men by Jeff Goldsmith
Two Rules by Which to Judge a Health Reform Bill by Matthew Holt
Ditching the Public Option by Robert Laszewski
No Alternative: An Analysis of the GOP Plan by Harris Meyer

and of course enjoy Bob's analysis too!:

By Robert Laszewski

Rt_obama_070116_sp_1 Barack Obama’s health care plan follows the Democratic template—an emphasis on dramatically and quickly increasing the number of people who have health insurance by spending significant money upfront.

The Obama campaign estimates his health care reform plan will cost between $50 and $65 billion a year when fully phased in. He assumes that it will be paid from savings in the system and from discontinuing the Bush tax cuts for those making more than $250,000 per year.

By contrast, the McCain Republican strategy for health care reform would first emphasize market reforms aimed at making the system affordable so more Americans can be part of the system and he claims that there would be no additional upfront cost.

Obama breaks his health care reform plan down into three parts saying that it builds “upon the strengths of the U.S. health care system.”

The three parts are:

1. Quality, Affordable & Portable Health Coverage For All
2. Modernizing The U.S. Health Care System To Lower Costs & Improve Quality
3. Promoting Prevention & Strengthening Public Health

Obama claims that his health care reform plan will save the typical family up to $2,500 every year through:

* Health information technology investment aimed at reducing unnecessary spending that results from preventable errors and inefficient paper billing systems.
* Improving prevention and management of chronic conditions.
* Increasing insurance industry competition and reducing underwriting costs and profits in order to reduce insurance overhead.
* Providing reinsurance for catastrophic coverage, which will reduce insurance premiums.
* Making health insurance universal which will reduce spending on uncompensated care.

Will Obama be able to cut the typical family’s health care costs by $2,500 a year?

Well, yes and no.