Aug 6 2009, 12:41PM
Fixing Healthcare, Part Two: The Path to a New Healthcare System
The goals of reform are clear: provide universal care that is affordable. So far, however, Congress has avoided any proposals that would require a major organizational shake-up--tabling Senators Wyden (D-OR) and Bennett's (R-UT) "Healthy Americans Act" ("Wyden-Bennett"), because it would eliminate employer-based healthcare as we now know it.
Conceptually, the most obvious way to achieve universal care without eliminating existing employer policies is through a voucher--plus an exchange where the voucher can be traded in. Employers would be free to top up the voucher and provide a more generous plan if they wanted to.
Most of the proposals on the table can be described as providing some sort of voucher. Massachusetts in effect gives vouchers to the needy. Wyden-Bennett also provides subsidies that can be reframed as voucher. But most of the proposals lack the clarity of a straightforward voucher framework. Vouchers provide a simple analytical framework for expanding care, for defining public assistance, and for deciding how much we want to spend. Moreover, by defining the amount of care we can afford, vouchers provide incentives for providers to improve efficiency in order to provide care within those limits, and provide a clear framework for evaluating cost and funding of universal healthcare. Vouchers do not require a "public option." Vouchers need not be universal, although some sort of offset for employer plans would be required if we want employers to maintain the incentive to provide their own plans.
A voucher system, combined with an overhaul of the regulatory and liability system, would dramatically shift the incentives towards a more effective system of healthcare delivery. Thus:
1. Transition into a voucher system. The most effective way of driving providers towards a new model of delivery is to transition all public assistance (starting with Medicaid) into the voucher program. This will put enormous pressure on insurers and providers to shift to a capitated system. Set up a federal authority to evaluate providers annually and help define baseline care. If we're going to have socialized healthcare for any significant part of the population (government already pays for half of all healthcare), there is no way to avoid government oversight. The challenge is to create authority structures that are transparent and accountable.
2. Overhaul regulatory and liability structures so that providers can focus on care, not compliance and defensive medicine. Congress should require special health courts with the goal of reliability. (Wyden-Bennett provides bonuses to states that implement liability reform.) Congress should establish a medical version of a base-closing commission to propose a rationalization of federal and state regulation, including easing antitrust restrictions so that, for example, providers can share expensive diagnostic equipment.
Insurers and providers must be required to reorganize themselves to provide care for an annual fixed fee, adjusted for performance. But they must be given the freedom to figure out how to innovate towards this end--subject always to oversight and accountability for good results. Top-down dictates can never work. A voucher system will put enormous pressure on them to become efficient. A reliable legal and regulatory system will give them room to innovate. And a new regulatory authority will make sure they provide competent care.
Healthcare reform ultimately requires a proposal that everyone understands. It's too easy now to blow smoke over any proposal. Universal care can be accomplished through vouchers. Cleaning out the legal jungle will create room for innovation and productivity. People can understand these principles for change. That gives them a chance of actually happening.
Philip K. Howard
The average American can't afford to pay for full healthcare insurance including pre-existing conditions if any, so why should anyone think the country as a whole could afford it. The only reasonable and humane alternative is to have self-pay health care for those who want and can afford it and publicly supported clinics for others, staffed and supplied by the professionals and providers who are dedicated.
Philip Howard is a hero of mind. I enjoy his books, speeches, and willingness to offer creative solutions to important problems. I agree with some of his recommendations and disagree with others.
Agreement:
1-Certainly the broken medical liability system has to be fixed. Medical courts are one possibility and deserve a demonstration trial in one or more volunteer states that do have not effective caps and other reforms. Caps on non-economic damages are a proven performer in California and Texas and no federal legislation should override those laws.
2-Vouchers are a prudent way for the government to turn a defined benefit program such as Medicare into a defined contribution plan. The same can be done for Medicaid. Doing so allows the government to know at the beginning of the year what will be spent at the end of the year. That takes care of the government programs and can be used for those who truly are uninsured.
3- Allowing individuals to buy insurance across state lines and have a true cafeteria-style option of choices rather than mandates that increase the cost of health insurance. This also overcomes the market concentration problem of some insurers in some states known as monopsony power.
4- No public option. Certainly agree with that conclusion. The government public option will eradicate the private system because the government has unlimited tax money and can set rules that eradicate competition. Government needs to get out of medicine.
5- "Top down dictates can never work." Strongly agree.
6- Fix the antitrust laws so physicians are judged under the rule of reason rather than the "per se" rule when they get together as independent physicians to negotiate for issues such as quality and efficiency of practice for the welfare of patients.
Disagreement:
1-from part 1 of series: "Change the reimbursement model for primary care and chronic care, migrating from fee-for-service to a capitation model with pay-for-performance adjustments. To avoid under-treatment, there needs to be end-of-year audits to review effectiveness."
This system should be voluntary and used only if the patient choses that model. By that I mean, each person should have the ability to purchase their own insurance and have the advantage of tax credits to help with the purchase. Then real competition enters the picture. The patient is in charge and the doctor is the trusted advisor for medical care. Health savings accounts with catastrophic coverage policy over the account should be one of the options. Patients have maximum control. Pay-for-performance is insulting in the way it is proposed in medicine. Doctors are ethically bound to do the best for the patients. Such schemes never work as the performance rules never mesh with reality of medical practice. Educate the patients and let them make the choices and evaluate the care.
2- Government boards: I urge that we avoid more government boards. Setting up boards that can turn into mechanisms that ration care must be avoided.
3- Rather than government or insurance companies controlling, let the patient and physician have the option to privately contract for fees and services. That will decrease cost. Third party control will never decrease cost except by creating long lines for care and rationing care. Price-fixing always results in scarcity of the product or service. Read Economics in One Lesson and the Road to Serfdom. And while you are reading, get Animal Farm.
Read more about respecting the patient-physician relationship and putting the patient in control at:
http://www.protectpatientsrights.org/newsroom/?id=144
This link is an OP-ED I wrote with two other former presidents of the American Medical Association
and see my comments to the American Enterprise Institute at:
http://www.protectpatientsrights.org/newsroom/?id=98
Finally read the Journal of the American Medical Association May 12, 2004 for more details about tax credits, individual ownership of policies, and market enhancements.
Thanks again to Philip Howard for continuing to stimulate debate on health system reform. Medical care in America is the best in the world. We just have to fix some of the problems in the financing and availability of health insurance. Putting the patient in control is the only way to decrease costs. Let's fix the system with reforms that work after careful study and debate. And remember the words of Louis Pasteur:
“Imagination should give wings to our thoughts, but we always need decisive experimental proof . . .”
Donald J. Palmisano, MD, JD
www.intrepidresources.com
Vouchers for health insurance are, in a word, idiotic. The whole point about health insurance is that it's, well, insurance. You don't know in advance how much you'll need. You can't predict whether an individual will be lucky and have good health, requiring little in the way of major interventions, or unlucky. You can't predict whether you will have a child with a congenital, treatable but expensive, condition. Vouchers *may* make sense for an expense which is more or less predictable and fixed -- primary school education comes to mind. The absolute last place where vouchers make sense is health care.
I think that vouchers can have a place in health care, but it is unclear from your post in what way you intend for them to be used. Nowadays, much of the discussion regarding vouchers entails employers giving employees vouchers to choose a different insurance carrier by giving a voucher for the same amount that would be utilized towards health insurance in a traditional model. The goal in this case is increasing competition, and moving away from a "group discount" model and towards a free market model. THere are many subtleties which may determine its effectiveness.
However, this does not lead to decreased costs or rationing of care by any means. Utilizing vouchers instead of insurance makes no sense, as pointed out by the poster above. How can one possible predict exactly what one will need to pay for? The whole purpose of insurance is to cover for things one cannot predict.
People will inevitably find a major loophole in the system and take advantage of it even more than they do today: pay the lowest amount possible in vouchers, and then use the ER for any additional care. Under EMTALA, they cannot be turned away. How will this be avoided?
Just a quick comment on vouchers. This was first described when the AMA suggested advancable refundable tax credits on a sliding scale to those under 500% of the federal poverty level. These individuals would get a "voucher" rather than a cash refund that they could then exchange for an insurance policy. Vouchers are just a way to pay for health insurance. It is obvious that if you give people cash to pay for the insurance they will use it for something else. Anytime you are trying to help someone purchase insurance the voucher system is better than the cash system.