WHAT AILS HEALTHCARE, AND WHAT CAN REALLY HEAL IT?

As economist and author J.D. Kleinke points out in his book Bleeding Edge; The Business of Healthcare in the New Century, much of the dissatisfaction we experience with our health care system today stems from economics and history.

In a market where consumers don't pay directly for most care and providers determine the need for their services, there is little accountability and conflicting incentives. Historical power struggles among physicians, hospitals, and third party payers have fragmented the delivery side of healthcare, making matters worse.

For all Americans to be able to reap the benefits of patient-focused high quality healthcare, we need to fundamentally restructure the organization, delivery and financing of healthcare to align incentives and create a true system of care.

This CAN be done, but not through the current patchwork legislative approach to healthcare reform focused on mandates and liability. These tactics may address some symptoms, but they raise costs and will not cure the disease. They create new problems and are bad medicine for any hope of an organized healthcare system.

The reality is that the core problems we face--the rising number of uninsured citizens, escalating costs, and widespread quality problems--are unavoidably linked. We cannot adequately address one without considering the impact on the others. Finding the right balance is essential.

Let's consider the relationship between access and affordability.

Well-intentioned coverage mandates and small group reform state laws have tacked thousands of mandates for various services and providers onto health plans across the country, imposing heavy health care costs on purchasers. Savvy business leaders recognize that the syndrome of small companies and their workers being priced out of the medical coverage marketplace is a blueprint for a sicker, less competitive, and less prosperous America.

To create a system that will expand accessibility to health insurance, without breaking the bank, we must accept that creating additional benefits for the already insured is far less vital than providing affordable access to basic care for the uninsured.

And what about the link between cost and quality?

Quality is the least talked about but probably the most serious healthcare problem we face. According to the Institute of Medicine, indisputable data exists that shows quality of healthcare in the US is grossly uneven, with unexplained variations in medical care, overuse, underuse, and widespread avoidable medical errors.

It is important to note that these quality problems existed long before managed care and are found even at our most prestigious institutions. They do not occur because of incompetent health care providers. Health care is extremely complex and health professionals today work in a flawed system with inadequate data and quality controls.

This poor quality with its associated waste is a major factor in increasing costs. Who pays these costs? We all do, as insurers pass the costs on to employers and patients. Quality is much more than choice and appeals processes or the right to sue!

Dr. Henry Simmons, President of the National Coalition on Healthcare, summarized the inter-relatedness of these three problems very well when he said, "It's a vicious cycle. In the absence of quality you cannot contain costs, without cost containment you cannot afford universal coverage, and without universal coverage, you cannot assure quality."

So, from a policy perspective, how do we address these serious problems in our country's health care system while ensuring we protect and preserve what we all value? The right public policy initiatives can help move us forward by removing barriers that exist or by creating incentives for development of the right infrastructure.

To accomplish the required transformation in health care service and delivery the roles of all key stakeholders--providers, insurers, and employers--need to evolve to support a more consumer-directed and accountable system. A system organized from the perspective of consumers and integrated to create continuity of care. One where quality is integral to healthcare interactions, measurable through improved outcomes. At a minimum, we must align economic incentives and apply basic business principles to healthcare.

Public policy should support individual responsibility for health and reward health plans and systems that demonstrate best practices in improving health status of populations. Consumers need to be empowered with choice and control over their healthcare. Insurers should have incentives to cover and providers to manage the care of the chronically ill, the group that represents the greatest opportunity to control costs and improve care. Public disclosure of results by plans and provider groups is necessary to help purchasers and consumers make wise choices.

Government should encourage, facilitate, and enable the healthcare industry to exploit the promise of information technology and the Internet. IT can enable us to efficiently allocate scarce resources, eliminate fragmentation of care, promote quality and drive accountability. Yet, until recently, the healthcare industry investment in IT has seriously lagged behind virtually all other industries. Health policy must encourage development of the integrated data bases needed for a performance-driven healthcare system, while sensitively addressing patient confidentiality concerns.

We need to move toward universal access to health insurance, as the morally and fiscally right thing to do, and eliminate health care inflation due to cost shifting. As a start, we should level the playing field for small business and the self-employed by eliminating bias in the tax code and creating opportunities for pooled purchasing.

The issue of access to quality healthcare for all Americans is one that is too important to be politicized. We need to work collaboratively to promote a bipartisan approach to solving these problems. Public policy should focus on preserving what currently works and expanding it to those without access, while enabling us to move toward a more satisfying healthcare system, one characterized by individual choice and accountability.

 Back to top

 Return to Publications Menu