A Government Plan is Needed for Innovation?


In an editorial in the July 28th Washington Post, Jacob S. Hacker writes in part, “In fact, such a plan (government run health plan), empowered to work with Medicare, is Congress’s single most powerful lever for reforming the way care is paid for and delivered.  With appropriate authority, it can encourage private plans to develop innovations in payment and care coordination that could spread through the private sector, as have past public-sector innovations”

I don’t know what public-sector innovations he is talking about, but I do know that a report from the CBO points out the inefficiency in Medicare and the lack of any management while it notes, Medicare just processes claims. It is true that years ago the federal government tried to jump start the HMO concept, but most of the federally funded plans failed, mainly because the people running them had no idea what they were doing.  I know that first hand, as I sat on the Boards of four such plans all of which eventually went under and none that met the goal of an HMO concept.  The Feds handed out money like drunken sailors and got nothing for it.

In reality, it is large employer plans that have tried every type of innovation in providing health care coverage and paying for care (who killed capitation?) and employer plans that have been frustrated by costs in part because of the arbitrary fee setting practices of Medicare.  Many employers have gone beyond merely tweaking the benefits, but have become heavily involved in disease management, case management, patient advocacy and of course health and wellness efforts. Some observers, including myself, have questioned if employers have gone too far intervening in the health care of workers. Nevertheless, employers have taken these steps because they are frustrated with the escalating cost of health care.

I continue to be amazed at the people who think health care reform is centered on what Medicare pays physicians and hospitals and thus there is a demonstration of the efficiency of that system.  This is presented under the guise of affordable health care and yet, with a modestly close look one sees little of an affordability factor.  Affordable health care is comprised of the premiums one pays and the out of pocket costs that are part of the plan.  The current plans from Congress move money from here to there, claim to lower costs (for the federal government) and yet in the final analysis there is much to drive up the premiums for the private sector, encouragement to shift costs to employees and nothing to lower the rate of health care inflation.  But who am I, a recent report from the White House Council of Economic Advisors claims that government can lower health care spending by 15% over the next ten years, by providing fewer services, not by lowering payments or the quality of health care.  Sound like the “R “word to me.

On the other hand, there are some very good ideas in the report and very clearly identified steps that need to be taken to actually control health care costs.  Read it for yourself, it is worth the time TheEconomicCaseforHealthCareReform

The real problem is that health care reform as currently constituted is more about expanding the current system than changing it and the American people are unaware of the type of change that is necessary (and apparently so is the AMA).

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