Friday, July 20, 2007

Clinical Innovations to bring down costs - A Chronology of Innovation and Health Reform

“That mysterious independent variable of political calculation: Public Opinion.”

Thomas Huxley, 1826-1895

As I write these daily blogs, I sometimes wonder what their central theme ought to be. It occurs to me they’re nothing more or less than an historical chronology of events surrounding the politically charged issue of health reform.

This issue has three essential converging elements,

1)At the federal level, the presidential candidates debate about what form this reform should take: more government intervention versus a more market-driven system.

2)At the State level, comprehensive coverage initiatives in these bellwether States – Massachusetts, California, Illinois, and Pennsylvania – which generally force citizens to buy insurance. tax providers and businesses to subsidize those who can’t pay, and add billions to state budgets.

3)At ground level, struggles of various health care stakeholders and entrepreneurs to come up with a workable market-based system that’s uniquely American patient-centered, convenient, acceptable, and affordable.

These elements have countless permutations and combinations and unpredictable outcomes. Only one thing is certain. Somehow, each initiative has to bring down the cost of the system in ways acceptable to that Great Independent Variable – American Public Opinion.

There’s an urgency to the debate if America is to compete globally and if we are to stave off Medicare bankruptcy, now projected to occur in 2017 at current rates of spending.

At the national debate level, still in its formative stages, the Democrats favor more government intervention. Their plans, as yet sparse on details, include bringing down costs, assuring affordable care, promoting prevention, installing information systems, mandating quality, raising taxes for the “rich,” negotiating Medicare drug prices, expanding the State Children’s Health Insurance Program (or Schip). Of the Schip initiative, to which Democrats would give a $60 billion booster shot, opponents warn of stealthy creeping socialism.

The Republicans have yet to engage fully on what should be done, but their platform will almost certainly include a market –based system financed by tax parity between employees and individuals, universal tax credits, or a standard family tax deduction of $15.000. The Republicans want a system based on market principles and more consumer choice.

At the State level, initiatives to ensure universal coverage are struggling, even in liberal Massachusetts, because of resistance to more taxes on businesses and health providers, guaranteed coverage by health plans of those with pre-existing illnesses, and mandating individuals reluctant to being forced to pay for insurance.

In California, Governor Schwarzenegger’s plan would force all Californians to buy insurance, tax hospitals and doctors, compel insurers to accept all customers, compel business that didn’t offer coverage to pay 4% of their payroll taxes into a state fund.

This plan – opposed by many in the health care community, including Well-Point, Inc, the state’s biggest health insurer, and the business community – has profound implications. California, after all, has 6.8 million uninsured, more than the entire population of the Commonwealth of Massachusetts.

Meanwhile Well-Point is running “Harry and Louise” type ads warning of the “unintended consequences” of the government’s plan, such as turning the state’s $200 billion health industry upside down and shaving margins it needs to operate profitably.

While all of this is going on, I have been explaining and documenting innovations going on at ground zero in These innovations include,

•retail clinics,

•work site clinics created by major employers,

•new forms of physician practices,

•hospital-group practice mergers and acquisitions,

•moving care out of hospitals and institutions into homes,

•telemedicine monitoring of embedded devices and vital signs,

•focusing on care of the chronically ill,

•using information technologies to bring care to those in locations outside of medical offices and hospitals,

•new forms of financing care,

•decentralizing care by offering one-stop medical shopping in convenient locations where people live, work, and retire;

•organizing specialized and integrated facilities to handle common disease problems;

•making costs of care more transparent by bundling bills and paying for episodes of care rather than charging fee-for-service.

Cumulatively, these innovations are changing American health care, but they don’t have high visibility in the health care reform debate.

Even though Americans are by nature innovative and optimistic, it isn’t easy to convince them that their health destinies are in their own hands – not in the pocket books of some higher authority.

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