Here’s Healthcare Reform

Other than the obvious political reasons (I didn’t like the process, lack of transparency, messaging), I’ve been unhappy with the Healthcare Reform bill(s) because they were healthcare finance reform, not healthcare cost reform.

And no matter what financial engineering you do to hide escalating costs, eventually you have to pay them.

Here’s a great presentation from Kaiser CEO George Halvorsen – forgive me if it’s been passed around – that nails my objections and talks about solving the problems in ways that make sense to me.

Smart people do not kill the geese who lay lots of golden eggs.

Health care is awash in both golden eggs and very smart people.

3 thoughts on “Here’s Healthcare Reform”

  1. I haven’t seen it, and I’m skimming it now.

    I find myself nodding along, but there are certainly some issues that bear discussion. Two jump out at me on slides 75 and 76.

    Yeah, it makes a lot of sense to pick the top five (or three or ten or whatever) treatable, chronic cost drivers, and hammer on them without mercy. But, now that we have, perhaps irrevocably, politicized health care funding, can we even do that on a rational basis? Or are we going to face increasing pressure to pick them not on their rational benefits but their political benefits?

    And a side nitpick is that Halvorsen’s delivery may be more subtle than the raw text of the presentation, but that notion, “pick some diseases and do what must be done,” sounds authoritarian. I know, from personal family history, that some diabetics will do everything in their power to manage their disease, while others seem almost indifferent to the damage they’re doing to themselves. So… what does “do what must be done,” mean in context of asthmatics who smoke, or diabetics with sky-high blood sugar levels?

    On slide 79, what is a mandatory care registry and care linkage? Mandatory for who? Mandatory for hospitals to remain licensed? Okay. Mandatory for the patients? It’s not clear to me.

  2. Of course this power point is two years before the health care bill, so I’m not sure it says very much about the health care bill that passed.

    Speaking with a Kaiser director in senior managment over dinner, he points out that the universal mandate and the inability of insurance companies to exclude applicants based on pre-existing conditions will force providers to compete on results. The health care bill, he thinks, levels the playing field between insurance companies. They can no longer make money by doing a better job at excluding the sick, which means in order to make more money they will have to get better results. This in turn will have a beneficial effect on costs. The most successful plans will be those plans that provide the most effective care at the best price.

    In addition, he believes that competition based on results will put pressure on specialist fees because if all the plans compete on results, one way to reduce costs will be to reduce specialist costs. This seems to be another area where the bill will have a beneficial effect on costs.

  3. Roland, that’s actually an interesting argument for the health care bill.

    What lever they have to compete on those results is something I’d like to see elaborated. I’m not sure how far that can really go without concrete incentives at the individual level, vid. MV’s point.

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