Government Innovation - Long on Talk, Short on Performance

Government does not have a sterling reputation for innovation. Instead , government is noted for its sprawling inefficiencies and expanding bureaucracies.

Health Reform Maze: A Blueprint for Physician Practices (Greenbranch Publishing, 2011)

March 13, 2012 – In my recent book, The Health Reform Maze, I had the audacity to suggest government is poor at innovation. I listed these reasons why.

• It cannot manage failure.

• It seldom abandons a project.

• It is not gambling with its own money.

• Its success is measured in good intentions, not results.

• It succeeds by growing too big to fail , and too influential to stop.

• It can’t go out of business, can print money to keep on going, and is propped up by taxpayer money.

But the dream of government innovation lives on. Its poor innovation track record has not kept government for taking another stab at innovation. The Center of Medicare and Medicaid Innovation (CMMI) has announced it will spend $1 billion to reward private and public innovators to better health, improve care, reduce costs – noble goals all.

CMMI’s goals?

1) to test new delivery and payment modes;

2) to identify new ways to target and promote population health;

3)to support new models of care in conjunction with new public and private sector partners.

Awards and rewards for innovation winners will range from $1 million to $30 million and will be measured. The winners will be announced on March 30, 2012.

I applaud this reaching out to innovators beyond national government. But will throwing money at innovators work? .I have my doubts. So does Douglas Holtz-Eakin, an economist who was Directot at Congressional Budget Office from 2003 to 2005 and who is now President of the American Action Forum a conservative D. C. think tank .

A better place to start, says Douglan Holtz-Eakins, may be :

1)to lower capital gains taxes to make the United States competitive with the rest of the world;

2) to restructure the FDA to speed up the approval rate for new innovations, which now take years;

3) by encourage and facilitate the entry of foreign entrepreneurs by easing = visa restrictions;

4) to revising Obamacare by eliminating such features as the Independent Payment Advisory Board, the main purpose of which is to clamp down on the cost of new innovations that might cost Medicare too much.

In the words of Douglas Holtz-Eakin, “ If you were an innovator, why would you want to bring something new to market when the biggest payer in the land is periodically lopping off spending?”

It is difficult for government to facilitate innovation until its change the fundamental barriers to innovation growth.

Tweet: CMS, the biggest health care buyer, has launched a $1 billion “Health Innovation Challenge,” to promote health care innovation.