Saturday, February 9, 2008

Government vs. Market Reforms - Health System Reform Choices

This high octane presidential campaign season overflows with health reform proposals. I was recently asked what I see as reform options. Here are my choices and realistic likelihoods. The final solution will likely be combinations of these choices with gridlock in the near term.

Choice I – Universal top-down government coverage based on individual mandated coverage. This is Senator Clinton proposal and is basis of California (collapsed) and Massachusetts experiments (big cost overruns anticipated.)

Choice II – Expanded coverage based on cost reductions and universal coverage of children. This is Senator Obama proposal (untested).

Choice III – Expanded coverage based on market reforms, universal tax credits, severing employer-based coverage, bolstering of HSAs, aggressive insurance marketing to the uninsured with low-cost premiums, subsidies to those who can’t pay, portability across state lines with reduction and uniformity of mandates This is basic Republican approach (mostly untested with limited progress).

Choice IV – Universal coverage administered by private plans, not requiring employer participation and modeled after Dutch and Swiss plans (untested and unlikely).

Choice V –
Universal coverage with vertical integration in large health systems (e.g Kaiser) and with virtual integration of independent practices, health plan and Medicare bonuses to hospitals and doctors who comply with performance guidelines, universal online linkages connecting government, health plans, doctors, and patients and focusing on coordinating acute care, chronic care, prevention, compliance, and end-of-life care (this sometimes goes under banner of doctor-patient connectivity or medical homes (in progress but complicated, difficult to explain in simple sound bites and opposed by many doctors because of hassle factors and fear of e-Big Brother monitoring, tiering, and exclusion from networks).

Choice VI
- Innovation with improved access, more choices, and stability and persistence of present system with retention of current practices of most businesses, health plans, pharmaceutical companies, hospitals and physicians with opposition to bigger government and costs of reform falling on them (most likely but messy as are all things in a democracy)

1. J. Oberlander, “Presidential Politics and The Resurgence of Health Care Reform, NEJM, November 22, 2007.

2. P. Kuttner, Market-Based Failure – A Second Opinion, NEJM, February 7, 2008.

3. G.M. Turner, “Moving Forward,” The Galen Institute, February 8, 2007.

4. G. Halvorson, Health Care Reform Now! John Wiley & Sons, 2007.

5. A.C.Enthoven, “Going Dutch – Managed-Competition Health Insurance in the Netherlands, NEJM, December 15, 2008.

6. L.D. Brown, “The Amazing Noncollapsing Health Care System – Is Reform Finally at Hand?” NEJM, January


Unknown said...

Interesting that you equate "Health system" reform with mostly solutions about how to work with insurance.

I think we'll see a "reform" be largely ineffective until we change the paradigms for health payment. Right now, in the insured model, its mostly a low margin, high volume paradigm for anything in primary care.

I think reform will come from increased choice with higher margins for providers than from any gaming of the current system (which is focused on commoditizing providers)

Richard L. Reece, MD said...

Vijay: Basically I agree with you. I find more doctors are going cash only or concierge and shedding HMOs. Insurance is a deeply flawed model, as shown by suit lodged by Andrew Cuomo attorney general of New York Sates, who is suing United HealthGroup for soaking patinets who go aout of network through some dubious calculation of what consstituutes "usual and customary."