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Bill George

Harvard Business School Professor, former Medtronic CEO

Now the Hard Work Must Begin . . .

The politicians chatter Sunday night during the historic House vote on access to health insurance gave the impression that reform was done. Speaker Pelosi called it an extension of the Declaration of Independence, declaring, “health care is a right,” not a responsibility. Republican Boehner all but claimed it marked the end of free enterprise.

Wrong on all counts.

Passing this bill is a momentous step in granting health case insurance to 32 million Americans who lack access, something we can finally take pride in. But it certainly doesn’t end the urgent need for health care reform. Rather, this is the end of the beginning. Now the hard work must begin in earnest. 

The bill addresses only one of four essential elements of health care.  Left unaddressed are cost, quality and lifestyles.  Unless we focus on all four, we will continue to have a dysfunctional system with unaffordable costs.

The bill does virtually nothing to constrain health care costs. It is “paid for” with tax increases that take effect this year and projected cuts in Medicare reimbursement, while delaying most benefits until 2014. If we don’t get health care costs under control before then, the CBO projected deficit reductions will turn into a trillion dollar increase the following decade.

Even the current round of Medicare cuts – over 20% for many physicians and hospitals – is unsustainable, as politicians plan to reverse them retroactively. If they don’t, many physicians and hospitals will refuse to take Medicare patients, just as the Baby Boomers enter the Medicare system. Last month Mayo Clinic in Scottsdale announced it could not afford to accept Medicare patients. Longer term, this could push the U.S. toward the British system of splitting into private and public systems.

Nor does this bill constrain insurance premiums. Wellpoint’s 38 percent rate hikes in California are going into effect, in spite of jawboning by HHS Secretary Kathryn Sebelius. Expect other insurers to follow. Can you think of any other product or service that could pull off price increases of this magnitude?

To bring health care costs under control and sustain access for all Americans, three things are urgently needed:

 

  1. Realigning incentives for individuals and health care professionals
  2. Improving quality of medicine
  3. Taking responsibility for healthy lifestyles

 

Incentives. The incentives in the current system are perverse. There are no rewards for people who stay well, and no penalties for leading unhealthy lifestyles or overusing the system.  Nor are there incentives for doctors and hospitals to keep people healthy and to prevent disease. Studies have shown that those who do so find themselves losing income.

As a result, primary care physicians are forced to pack more office visits into already crowded schedules, while spending less time with each patient. Specialists are incentivized to do more procedures, even when lower cost alternatives are available.  Hospitals are forced to conduct more tests and get people out of the hospital before they are ready.

We need to realign these incentives by rewarding people for healthy lifestyles and taking more cost-effective approaches to their health. Hospitals and physicians should be rewarded for keeping people well, by paying for outcomes and managing groups of patients with similar disease states, as well as for prevention and wellness.

Quality. Experts like Donald Berwick, MD of Institute for Health Improvement and Charles Denham, MD of Texas Medical Institute of Technology have identified ten quality issues whose correction could save tens of billions each. Managing chronic disease, which accounts for 75 percent of health care costs, in a systematic manner instead of as a series of acute events, could improve outcomes and quality of life for millions of people, while dramatically lowering the cost of care. Yet there is no national push to get either of these things done.

Lifestyles. It is estimated that lifestyle issues like unhealthy diets, smoking, alcohol, lack of physical exercise, and unmanaged stress account for more than half of all health care costs. Addressing these issues requires a national movement for wellness and prevention, modeled after the highly successful anti-smoking campaign, something virtually ignored in the current legislation.  To motivate people to take responsibility for their health and live healthy lives, there also must be rewards for those who do and penalties for those who don’t. Many successful ideas have been demonstrated locally through consumer-driven health plans and the integrated health movement. Now those must be taken to scale nationally.

This is a complex set of priorities to realize in an already-stressed system. It is too complex to leave in the hands of politicians who lack deep knowledge of health care and are swayed by lobbyists. For these reasons it is likely that solutions will be demonstrated in local communities and then taken to scale nationally. This is a long, arduous process. But unless we being immediately, the U.S. health care system will make our country less competitive and less healthy.

Now is the time for health care leaders locally and nationally to step up to these challenges and to lead the movement of the U.S. to healthy lifestyles and an effective health care system. Let’s get on with the hard work.