Thursday, February 8, 2007

Americanization of Health Care

In this blog, I‘ve experimented with essays on innovation in building patient-doctor trust, excerpts from an unpublished book on patient-doctor relationships under difficult patient circumstances, health care predictions, personal tributes, poetry, even a limerick or two. This outpouring lacks focus, but they may come.

Today I will return to doing what this blogger is supposed to do: write a daily log on the subject of innovation. I shall share conversations with two individuals about the "Americanization" of health care and how to bring this about through innovation.

What differentiates the U.S. health care from other health systems is innovation. As I have noted in Innovation-Driven Health Care (Jones and Bartlett, 2007), we produce more than 80% of the world’s new drugs, Nobel Prize winners, and clinical advances. This is innovation and entrepreneurialism at work.

America is a unique place, which is why our health care differs from that of other nations. In 1831, Alexis de Tocqueville coined the term “American Exceptionalism” to describe the U.S. We have a distinctly different culture, based on our beliefs that we represent a place of hope and opportunity for humanity, have checks and balances for private and public interests guided by the Constitution, possess personal and economic freedoms, and have the ability and spirit to conquer geographic and conceptual frontiers.

These beliefs sometimes give us a false sense of moral superiority and domestic and foreign overreaching . This sense of exceptionalism may explain why a single payer system has never taken hold here. Our penchant for innovation and entrepreneurialism, individualism, egalitarianism, distrust of government, and belief in equal opportunity but not equal results, leaves little room for single-payer.

Today I spoke to two individuals concerned with America’s health care future. Both seek “Americanization” of our system. By this they mean providing innovation-driven high quality care in the United States based on the freedom of well-informed consumers to choose in a market-based environment. According to Peter F. Drucker in Innovation and Entrepreneurship (Harper and Row, 1986), “So far, the entrepreneurial economy is purely an American phenomenon. Innovation is the specific tool of entrepreneurs. There are fast-growing hospital chains. Even faster growing are ‘freestanding’ health facilities, such as hospices, medical and diagnostic laboratories, surgical centers, maternity homes, ‘walk-in’ clinics, centers for geriatric diagnosis and treatment.”

Both the individuals with whom I spoke disbelieve that a socialized, European-style system can universalize, reform, or improve American health care, nor do they buy into reasoning that government’s moral duty is to redistribute income and to prove the market system is inherently unfair. They believe government-run systems stifle innovation.

Ever since Medicare-Medicaid was enacted in 1965, American politicians have vigorously promoted universal coverage, but to no avail. The latest effort to fall by the wayside was the Clinton initiative in 1994. Now, with health costs skyrocketing and with 47 million uninsured, the latest crop of politicians are pushing again for universal coverage – government-led and government-fed but increasingly paid for through taxes on employers and providers.

The two to whom I spoke today say government medicine is the wrong way to go. Their pragmatic reasons are vested economic interest groups’ resistance, American culture’s desire for freedom and choice, potential diminution of quality, inevitable bureaucratic burdens , and prohibitive costs.

On the latter point, I remember in 1966 when the Johnson administration assured Americans Medicare-Medicaid spending would never exceed $9 billion. Today these costs are just North of $500 billion.

The economic lesson, I suppose, is that when you’re spending someone else’s money, the sky’s the limit. This skyscraping is sometimes called the entitlement syndrome. Many Americans think health care is a special case and ought to be "free", i.e., not ut of their pocket, just as in Europe where, by the way, and not by chance, the tax burden on the economy averages 45 percent compared to less than 30 percent in the U.S., economic growth is one-half that of the U,S., and unemployment is twice ours.

But back to the two persons who argue they represent the American health consumer and who champion American free-enterprise.

• Dave Racer is founder of Alethos Press, LLC, a St.Paul, Minnesota, based publishing house. Its latest two books are: Your Health Matters: What You Need to Know About U.S. Health Care (April, 2006) and Facts, Not Fiction: What Really Ails the U.S. Health System (January, 2007). Greg Dattilo, owner of a St. Paul insurance agency providing health benefits, and Dave wrote the two books, which contain more than 350 footnotes documenting their case.

Basically the two argue as follows: single-payer systems abroad result in health monopolies, global budgets, rationing, stifling of innovation and individual freedom, and stagnant national economies with high unemployment.

They maintain the United States, given its current health system, has a strong vibrant economy built on freedom, a free market, and competition. These attributes , they say, are why the U.S. has the discretionary income to spend two times on health care those other nations do.

I will not go deeply into the counter-arguments here – that government care costs less with better and more equitable results – except to say that Datillo and Racer says these counter-arguments rest on myths rather than facts. In any event, the two authors are criss-crossing the country, speaking to many groups, predominantly made up of insurance agents, delivering their message. and distributing their books.

• The second person to whom I spoke was Phil Micali. He called to speak to me about a book proposal. The book is tentatively called Be Well-Informed About Your Health Insurance and is directed towards health consumers and American ex-patriots. He includes the latter because he spent four years abroad in Europe, primarily in Italy, working with European health systems and living under a single-payer system. He feels qualified to compare Europe and American systems and the American and European cultures.

Micali is founder and CEO of BWell International, Inc. (, and now spends time educating employers and employees about consumer driven health care. He seeks to make health consumers better informed about insurance options for sickness and wellness. He looks upon good health as a necessary investment – not an accidental luxurty.

What I found fascinating about Micali was that he has worked multiple sides of the health care aisle – building and implementing government and business sponsored HMOs, public and private behavioral and chronic disease management programs, and had direct experiences living under and helping Europeans single payer systems manage care of the elderly.

Upon returning to the U.S., he joined a consumer-led health venture—Lumenos, one of the early firms selling high-deductible health plans linked to HSAs. Based on this and his current activities with BWell International, Inc., he foresees the emergence of a freer market-led American health system, requiring non-biased guides for learning and decision support. He often speaks and presents his views before employer, employees, and consumer groups on this on consumer issues.

For Racer’s and Micali’s views to prevail will be an uphill fight. These views will require Americans to take responsibility for their health, to become sophisticated health care shoppers, to choose between health care competitors, and to overcome the notion that health care is a special entitlement, immune to market forces and to which they are universally owed , regardless of cost t the American economy.

Alternatives for U.S. universal health, briefly stated, are.

• Universal health vouchers for all Americans
• Medicare for all based on government paternalism
• A consumer-driven, market-based, innovative system covering mostly all and requiring government subsidies at the edges
• Universal government care for all, based on European-style coverage
• Public-private partnerships and reforms guaranteeing universal coverage
• Apocalyptic events during which all bets are off– a nuclear World War, a deep international depression, massive global warming, or Argemegdon.


Unknown said...

Interesting post. But the correct word is "expatrates," not "ex-patriots."

Unknown said...

Oops. I misspelled "expatriates" in the previous comment.

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