Health Reform 2.0: What Should Happen PRIOR to Policy Design, and Why Consumer-Centric Innovation Will Drive Change

I'm going to chime in with a broadly generalized, highly qualitative op-ed here.

This blog edition will NOT be a particularly eloquent piece with tons of quotes and sources (I haven't had any coffee yet, so we'll all be lucky if I can string together graphs with some semblance of grace).

Plenty of commentators with higher IQs and many more years of involvement in various aspects of the system are providing heavy-hitting commentary (just check out a few of the writers in my blog rolls at left).

I'm not the sharpest tool in the shed, but I do have a significant personal investment in how the system evolves. Here's my simplistic, blunt-instrument look at where I think we're headed.

Plenty of us are quoting facts and figures, but my purpose this beautiful gray morning, typing from Natural Sound Studio in Minneapolis/St. Paul, is to take a step back and gut-check some basic assumptions driving the political end of the health reform debate. (For your reference, dear readers, I tend to identify with consumer/market competition-centric portions of Huckabee, Hunter, Romney, Thompson, and Dodd's proposals).

Last weekend, two uncles and I were standing around the kitchen talking some business. As we are wont to do in my family (thanks Uncle Tim), we moved the discussion from a relatively friendly overview of the market ("Cash is king until mid 08 ") to a deep and visceral healthcare debate, with comments ranging from "healthcare spending will bankrupt the system" to "it'll be a tsunami."

Talk got hot and heavy ("is the healthcare industry more interested in defeating death or maintaining quality of life?") until we backtracked; there are a few fundamental questions we had to answer before we could hypothetically design the next cocktail-napkin generation of H/HC reform.

I'm going to play devil's advocate this weekend and ask you to consider the debate in terms of broad, sweeping generalizations.

Chew things over and give me your detailed, down-to-the-nitty-gritty responses in the comments.

So here we go:

Before we design policy, we must answer two fundamental questions:

Is healthcare for US citizens a right or a privilege? Does the game change if we modify "US citizens" to read "US residents?"

Who should pay? Employers? Employees? The government? Non-profits?


My answer:

I believe healthcare is a right, but as with many other rights, citizens bear some level of responsibility for the system and their place within it. Those who can economically afford to be 'responsible' for some level of their care should be (e.g. we need an individual pay system designed using models including Sweden and Nederland as examples).

Second, the contributions of those who can pay combined with certain resources redistributed into the collective civic service bank of our government (via income taxes and other funding models) should help support those who cannot pay for care (e.g. we need a socialized or 'universal' system where everyone has access to more than emergency care provided via government funding, a la the systems in Canada and France). These funds should be redistributed through a program that provides basic services to those consumer populations who need them most, like WIC.

In addition, I expect our nonprofit sector will continue to provide some level of care for those who cannot otherwise afford to pay, creating a third slice of the H/HC reform pie.

None of the suggestions above are shockingly new. None of them are impossible to administer. The hybridization and collective efforts of these systems, however, is failing to deliver care in a sustainable, cost-effective, wellness-maintaining manner. I believe some of this failure may be attributed to of a lack of incentivization.

My soapbox:

If consumers are largely divorced from the real costs of care in the current marketplace, what incentives are we providing for people to manage their personal health and wellbeing?

Very few. Give us more market transparency. Let us see the real prices for care versus what our insurance companies are paying. Let us purchase insurance plans across state lines. Let us select healthcare services from a menu of options that includes cost and quality data.

If healthcare providers continue to provide services for patients indulging in excessive use of care and they continue to be adversely impacted personally, professionally, and economically by these experiences, what incentives do they have to continue practicing?

Very few. Let's plug the holes jettisoning docs from the system. Combat decreasing interest in primary care and other service lines/specialties that don't offer incentives to practice, such as work-life balance, timely payment for services, ability to operate in a transparent, competitive marketplace, etc. with more training in design, implementation, and care delivery.

Let's provide docs with realistic ways to set up and manage businesses (step it up entrepreneurs - we need many more firms like Athena Health to smash H/HC silos of inefficacy). Let's increase training in areas that are increasingly important in healthcare, and augment clinical coursework with patient-centric communications and general management knowledge.

Why will some aspects of a federally-funded, 'socialized' or 'citizen'-centric system work?

We pay a certain percentage of our incomes into the larger federal pot - those funds are redistributed based on the needs of the nation as a whole (or they should be).

Another working example of this model is present in many of our municipal services; in cities and states a portion of our taxes are used to pay for (subsidize) services like trash collection, the public school system, fire departments, police departments, water and other utilities, etc.

So what type of system will ACTUALLY work in the US with all of our big-gun lobbies heavily investing in candidates and thus influencing outcomes?

Do we move to an individual payer system, where the responsibility to pay for our healthcare transfers completely from employers to workers? Or do we move to a federally-funded, government-paid, socialistic, 'universal' system, where the government funds and administers healthcare at a national level?


My answer: A hybrid system is the only type that will ACTUALLY have a chance of working in the US.

A unified move to a socialized, government-paid, supposedly government administered* national or 'universal' healthcare system would collapse under the lobbying power of the HMOs, or these same firms would put so much time and money into the legislative process that the design that emerges would be advantageous to corporations rather than consumers (Exhibit A: Medicare Part D). *Portions of Medicare/Medicaid enrollment, processing, and administration are outsourced, creating a shadow industry whose operations are partially hidden behind the exposed profile of the governmental plans.

Plus, a unified move to an individual payer system would provide untenable pressures on HMOS and other insurers - these behemoths would not be able to adapt fast enough to respond competitively to the variety of demands that would be placed on the system by consumers seeking services significantly more a la carte in nature than the current employer based, broad-spectrum package deals. This means they'd put up significant dukes to stop such a move.

In addition, our consumers just aren't ready to consider healthcare options within a competitive marketplace.

We aren't teaching healthcare providers and healthcare consumers to communicate on a level that partners providers' knowledge with patients' goals for quality of life. We aren't fostering game-changing, market-morphing, Health 2.0 style movement towards innovative, user-influenced care modalities.

We aren't teaching these things yet, but some entrepreneurial types aren't waiting for the 08 election outcomes to seize opportunities. Startups following in the footsteps of consumer-centric success stories like Starbucks, Google, and Apple, will innovate ways to avert the coming coverage crisis, and change the way the industry offers care.

Oh, and they'll probably make lots of money in the process. The transformation of the healthcare marketplace may provide the next leg-up in national productivity, GDP growth, and booming small business sector employment. The space is of increasing interest to venture capitalists as well...and why not? The more users are involved in their health management, the more users there are to utilize web-based services and a plethora of other new products.

A hybrid system, driven by competitive pressures from an exploding Big Bang of market-based innovation, is the way I hope we'll go - who's with me?