Saturday, August 4, 2007

Health Reform Predictions - Early Odds on Health Reform Horse Race

Four horses are at the starting gate.

Status-Quo (SQ): SQ may prevail because any significant reform gores someone’s ox, pardon, horse, i.e., other entrenched, special, vested interests. On the other hand, absolute SQ seems unlikely in this era of accelerating health care inflation. Odds: 7/10

•Single payer(SP): SP unlikely because of America’s culture—the Red/Blue cultural war, distrust of government, preference for incrementalism, distaste for programs requiring greater taxation, and current struggles of coverage-for-all programs in Massachusetts, California, Pennsylvania, and Illinois. Could happen with Democratic sweep in 2008. Americans want something simple, understandable, and equitable, with one billing source. Odds: 3/10

Consumer-Driven System (CDS): CDS hard to explain. Going too slowly politically for government and business payers, and populace as a whole. Essential ingredients are: more health care choices, universal $15,000 tax credit for all families, same tax code deductions for corporations and individuals, HSAs, medical malpractice reform, and nationalizing insurance market across states. Requires Republican president in 2008. Odds: 2/10

Serious Managed Care (SMC): Highlights: The three (Ts) - quality, price, and outcomes transparencies, the three Ps (provider profiling, P4P, and protocols), and the big E (exclusion from networks of doctors and hospitals who fail to mind their Ps and Ts). Combines elements of previous three scenarios.

The return of serious managed care may be the horse to watch for these reasons.

•All other horses are fading in the stretch.

•Horse owners - business leaders, desperate for health inflation relief and desire to be globally competitive, have the technology and political leverage to effect a change.

•Trainers for horse owners - health plan executives, now have the whips, management platforms, and information technologies to track and clamp down on providers.

•Horses themselves, now have the tools -- physically integrated systems, Toyota-lean models to cut costs, and virtually integrated systems - with leverage to make “right” things happen – price and quality transparency, sharing comparative data, paying for total disease episodes rather than fee-for-service, and managing chronic disease.

•The workhorses, and the studs - primary care physicians, and a few specialists, are either demoralized, or having a hard time making a living, paying malpractice premiums, paying off educational debts, and in their distress, are joining hospital staffs as salaried employees, running work site clinics in corporate settings, or in one way or another, consolidating into larger organizations to managed realities of more competitive world. To breed truly competitive race entries, they will need to develop new training methods, new business models, and entrepreneurial and innovative ways of doing things to win present and future races. Odds: 6/10

Ladies and Gentlemen, please place your bets and tell us how you would change the odds in favor of your favorite horse.

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