Saturday, April 10, 2010

Interviews for Medinnovation Blog: #2, Market Forces in Health Reform

Interview with Tom Coburn, MD, Republican Senator from Oklahoma

If you believe you have something innovative to contribute to improve the health system and if you would like to have your print interview appear in this blog, call me at 860-395-1501 or email me at to learn how to qualify for the interview and what the interview entails.

You will have my permission to use the interview as you see fit.

You may be unaware that over the years, I have conducted over 300 interviews with leading health care thought leaders. Forty two of these interviews formed the basis of my 2005 book Voices of Health Reform, and twelve interviews are now appearing in

Preface: This interview took place on January 26, 2010 – a critical time when Obamacare’s fate hung in the balance. After the bill passed, Senator Coburn, a conservative Republican and a fierce opponent of the health reform bill, caused a stir and raised a few eyebrows by defending Nancy Pelosi as a “nice person” and by taking a swipe at the objectivity of Fox News.

This interview occurred one week after the stunning victory of Senator Scott Brown in Massachusetts and one day before President Obama’s State of the Union Address. It subsequently appeared in

Q: What effect do you think the Scott Brown election has on health reform?

A: It certainly impacts the Democrats ability to pass what they intend to pass – the government-centered takeover of health care. It slows down for sure the momentum of where they wanted to go.

Hopefully, it will redirect us to address costs and access in health care, look at the cost-drivers, and put more market forces into the health care system.
We are never going to solve the problem unless markets help us allocate this scarce resource. It is definitely going to help us get back at a more patient-centered look at reform rather than government-centered.

Q: Do you think the President’s and Democrats’ ideology will permit a market-centered system?

A: I don’t know. We will have to wait and see. I don’t assume anything. I don’t think either the President or the Democratic leadership is stupid.

The question is: Do their constituencies allow them to move to the market? Will those who want a single-payer government-run system and those who are hard out on a more socialistic-bent get the message, the message being what they are doing isn’t working?

Leadership is about doing what is right, not in doing what is right for your constituents.

Q: Do you believe the Scott election changes the dynamics of the November 2010 mid-term elections? You’re an incumbent Senator up for re-election. You must have some thoughts about prospects for November.

A: Ten months in politics is a long time. If the election were today, I would say, yes, it’s going to have a major impact. But I don’t think anybody can tell you now about November.

If Obama moves to the center and really tries to accomplish what the vast majority of people in the country want and what is good policy, he could reverse a lot of the perceived losses.

Q: You’re still a practicing physician?

A: I only practice on Monday mornings. I am a family practice obstetrician. I did a general surgery residency and then did family practice.

Q: What impact do you think this Scott Brown election will have on doctors? How should doctors view this election?

A: I think they should take this lesson. They should not count on their professional lobbying groups to represent their best interests.

Look. What is ultimately good for patients will be good for doctors. If doctors are most concerned about their patients and the care they give, they will do just fine.

The reason doctors are in a pinch right now is that we have government-mandated price controls, which do not pay them to give the best care. We need to get back to where we reward great care and don’t reward poor care.

Q: One of the things that concerns me, and which I wrote a great deal about in my book Obama, Doctors, and Health Reform is the impending and growing doctor shortage. I know this shortage is acute in Oklahoma, where I practiced for five years, because Oklahoma has fewer doctors per capita than almost any other state. The next crisis is going to be access to doctors.

A: You are right. It’s important to keep in mind the federal government has mandated the doctor shortage. When the payment differential between primary care doctors and specialists averages about 300 percent, and that is based on Medicare payment rates, Medicare created the primary care doctor shortage.

Medicare augmented too much of a move to sub-specialization through their payment practices. Again we have not allowed market forces to work.

When only one of 50 doctors who graduated from medical school last year went into primary care, you know we are going to have a shortage. We need to let the market solve the shortage.

But we won’t do that. There are things in this health bill to correct the situation, but the plan we need the most is to pay them what they are worth rather than some fixed price that Medicare sets.

Q: Could you tick off the market forces you think are necessary to rectify this situation?

A: Transparency in the market as to price and outcomes, in other words, quality; and reconnecting the consumer with the purchase and payment of health care, rather than saying someone else is paying my bill. In other words, reconnect that. If you look at the Safeway model, what they’ve done, besides emphasizing prevention and management of chronic disease, is that they’ve made good consumers out of their employees by having a $2000 deductible.

The consumers now make a choice and they also shop for price and quality. If you do just those two things and you allow market forces to reward good care, you will get a whole lot more primary care, and you’ll do it by the very tenets you and I were taught in medical school, i.e. listen to the patient. If something has already been done, then don’t do it. And don’t do any harm.

Q: What about these other factors, like shopping across state lines, facilitating health savings accounts, or heath care tax credits for all, for the self-employed and individuals, rather than just corporate employees?

A: Those factors are good as well. We need a real national market for health insurance. Just look at the market for auto insurance and how those rates has come down with real competition throughout the country.

In health insurance, we have regulated minimal competition. Part of that is because we buy it through our employer. Recently many major employers are beginning to copy what Safeway and Pitney Bowes and several others have done. We are going to see those costs come down as we get more aggressive. But we limit that because we have a HIPPA limitation on how much employers with ERISA can do.

Shopping across state lines brings you real competition and is something we need to do. The other thing is to allow consumers to buy what they need rather than what is mandated by a bunch of state legislators that they have to have.

Consumers aren’t stupid. They will buy what they need. That includes the ability to buy a high deductible plan that is truly competitive. Right now the high deductible plans are too expensive, because there is not really any true competition for them.

Q: In my book Innovation-Driven Care, I have an interview with a health agent who sells HSAs to 120 employers in Minnestoa , and he said high deductible plans have taken off in that liberal state. Why haven’t HSAs taken off elsewhere?

A: They have taken off, but they are still too expensive because there hasn’t been enough competition. We limited the amount they could grow by statute, and we’ve limited the true competition for the pricing of the product. When you’ve limited the pricing and how many people can get them, you can see where that’s a restraint on growth.

Q: So your position is we’ve got to free up market forces so they can do what only they can do – bring down costs and raise quality.

A: Well, markets work. We can interfere with them so they don’t work. You can come back and create a safety net for those who need our help, but market forces will certainly allocate costs down and minimize those who need help.

Q: To get back to the health bill, will something pass?

A: I don’t know. If Democrats want to come back to the middle and work on costs, not on government takeover, something can pass.

Q: If we unleash market forces, do you envision that will expand access enough to satisfy those on the left?

A: The only thing that will satisfy those on the left is single-payer universal coverage.

Q: So liberals see health care as their historical legacy, and they have got to pass a comprehensive bill while they can.

A: Massive Health care reform should not be the number one priority for our nation right now. The number one priority is to downsize the cost and increase the efficiencies of the federal government so people can have more of their own money to spend on things that concern them most


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