Herzlinger, Regina Herzlinger Discusses Consumer-Driven Cure

June 5, New York City, – Here I am at the Harvard Club in New York City, along with 95 others listening to Regina Herzlinger discuss her new book, Who Killed Health Care: America’s $2 Trillion Problem and The Consumer-Driven Cure (McGraw –Hill, s007).

The other listeners include venture capitalists, major media representatives, think tank types, capital managers. health care lawyers, medical academics, public relations people, government officials, drug company executives, health care public relations experts, heads of consulting firms, financial firm executives, and even a few doctors. I’m here because Regina, a tenured professor at the Harvard Business School taught me a little about economics at an advanced management course at Harvard Business School many years ago. She also wrote the foreword to my book Innovation-Driven Health Care: 34 Concepts for Transformation (Jones and Bartlett, 2007), so I owe her one.

Regina’s presentation is one of a series of forums given by the Manhattan Institute, a think tank here that stresses policy research. In addition to her Harvard position, Regina is a senior fellow at the Institute, The brochure I have in my hand as I listen to Regina, it says,

We have cultivated a staff of senior fellows and writers who blend intellectual vigor, sound principles, and strong writing ability. Their provocative boos, reviews, interviews, speeches, articles, and op-ed pieces have been the main vehicle for communicating our message and influencing the debate.

From our founding, support for books have been a unique feature of the Manhattan Institute’s approach. We ensure that our authroes meet the regious intellectual and editorial standards demanded by major publishers, and we promote the books to the media, opinion leaders, and the general public. Nothing allows us to make a sustained comprehensive argument more effectively.

Our mot successful books have opened new intellectual frontiers and given new impetus to whole movements for political and social reform.

Regina’s book certainly qualifies as a new “intellectual frontier” and as “whole movement for political and social reform.” In her book and her podium presentation, which she admits “shamelessly” promotes her book, she lambastes those powerful special interests who wield the power that maintain the current health atatus quo. These include general hospitals, health insurers, the employers, the U.S, Congress, and elite police makers.

These power-mongers, she argues, act in their own interest rather than the interest of health care consumers and their physicians. The health care establishment’s problems are both attitudinal and altitudinal.

• Their attitude problem is that they, not health consumers and doctors, know what’s best for patients and their health. It is a paternalistic attitude that they, and only, they have the intellect and information to preside over the nation’s health system, and patients and the doctors lack the brains and intelligence to know what’s good for them.

• The altitude problem is that hospitals, insurers, employers, Congress, and the academic are so far removed from the clinical frontlines – from what patients want in their everyday lives and what innovative doctors can deliver – that they are unaware of the problems they have wrought.

The problems include limited consumer choice, rules and regulations that stifle innovations, oligopolies and monopolies that kill competition, bureaucracies that impede care, unrealistic fee schedules that demoralize doctors, government agencies that have believe the know how to practice medicine, uncoordinated and fragmented care that endangers patients, and soaring costs that unnecessary and a burden on the economy.

The cure?


•Everyone is required to buy his or her insurance, using tax-sheltered income.
•Government subsidizes those who cannot afford to buy health insurance.
•Government, employers, insurers, hospitals, and policy makers get out of the way of consumers spending their own money and doctors who compete for consumer business.
•Doctors and hospitals are freed to bundle care as they want to and to quote their own prices.
•Government requires publication of data on the perofmrance of all medical practices.
•Prices are risk adjusted.

Will the consumer-driven cure work? Not if those currently in power and control of the system have their way. But it just might work if the current consumer-driven forces at play – high deductible plans, HSAs, and proven performance by physician-led specialized and integrated facilities – show they reduce costs, provide better results, and lead to more consumer demands for more choice, lower costs, and more control over their health destinies.