Health Reform: Is Consolidation the Answer?

I meant no harm. I most truly did not.

But I had to grow bigger. So bigger I got.

And I’m figuring

On biggering,

And biggering,

And biggering.

Doctor Suess, The Lorax

This afternoon I read Steven Brill’s January 19, 2013 Time Magazine muckraking article “what I learned from My $190,000 Surgery.”


The article is about his heart surgery, his hospital bill, his interviews with CEOs of three large integrated hospital systems –Steven Corwin of New-York Presbyterian, Delos Cosgrove of the Cleveland Clinic, and Jeff Monoff of the University of Pittsburgh Medical Center; the high price of MRIs, artificial hips and knees, back pain; and how to fix health care and to cut 30% off the U.S. health care bill.

Brill is an ObamaCare supporter, and says high health costs are nothis fault. It’s the fault of those deals he had to cut with health plans, drug companies, and others to get the bill passed.

Brill’s answer on how to fix the system and cut the costs is simple: have the government consolidate, then regulate the system.

He sums up his recommendations for a fix with these six regulations.

1. Hand the system over to large, fully-integrated health systems providing less-expensive storefront urgent-care centers and customer-friendly services.

2. Cap the profits of dominant systems at, say, 8% compared to the current 12%.

3. Cap the salaries and bonuses of an those who are hospital employee and who did not practice medicine.

4. Streamline appeals for patients who believed they were denied adequate care or were pressured to skimp on care.

5. Make it a requirement that these government-regulated oligopolys have as a chief executive a licensed physician who has practiced medicine for a minimum number of years.

6. Cut out those middlemen, the insurers, and if you can’t, make a rule they can’t charge the uninsured more than the insured.

The result of these regulations, instituted by liberal-minded government reformers, would save 20% of nongovernment health care costs and maybe $100 million for Medicare and Medicaid, with a total savings of $500 billion.

Brill does not say how much it would cost to support the bureaucracies needed to to enforce these various regulations or how government would develop its own insurers to replace private insurers. But never mind the details.

Says Brill, “The momentum for consolisation I have in mind is clearly there. We just need to seize it rather than resist it, and then control it and push in the right direction,” which is the left direction.