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January 22, 2010

Holy Mackarel: Scott Brown, Health Reform Redux and What Can (Should) Happen Next

Today's story begins in the Massachusetts State House Senate chamber.  Prominent in the chamber is the Holy Mackarel.  (Really.  The House chamber is graced by the Sacred Cod of Massachusetts; the Senate had to get something.)

A recent alum of the Massachusetts Senate, one Scott Brown, has been eliciting cries of Holy Mackarel (and worse) this week.  The stunning setback to health reform represented by Brown's election to Ted Kennedy's seat the people's seat in the US Senate is just sinking in -- inside the Beltway, across Massachusetts, and around the country.  While we all try to figure out what brand of libertarian/conservative/republican Brown really is (he's already disavowed some of his campaign rhetoric as just that, and he did vote for health reform as one of the very few Republican state senators in Massachusetts), and Congressional leadership and the White House go into a tizzy figuring out what Health Reform Redux is going to look like, a number of wise men (and women) have been prognosticating about what a politically viable bill might look like Health Reform Redux -- see, e.g., the recent posts by Kevin Pho and Ken Thorpe.

The now-likely-dead health reform bills are classic political sausage; my fave commentary on this point this week was the neologism, "the Nebraska Purchase."  In the end, nobody was happy with the outcome -- the bills are too socialist for the gummint-outta-my-Medicare crowd, and too conservative for the idealistic progressives among us.  Given the enormity of this setback, and the likelihood that any gains to be made legislatively this session are going to be far more incremental even than those in the recent bills, it is time to think about other avenues towards the improvement of the health care system in this country.

The federales control most of the dollars that flow through the medical-industrial complex; however, with or without a federal health reform statute, there are several paths forward to improving health care in this country along the parameters of access, cost and quality -- the famous three-legged stool of health reform. The laboratories of the states, CMS demos and pilots, and initiatives that may be undertaken without the blessing of the federales or state governments (e.g., patient-centered medical home (PCMH) pilots initiated by large -- and often self-insured -- employers) are fertile ground for experimentation.

Here are some of the changes that I would like to see, without waiting for that promised summer blockbuster, coming soon, Health Re-Reform, the Sequel:

I would hope that CMS would be as liberal as possible in rolling out demos that build on some of the demos to date (and perhaps Congress could authorize some broader demo authority for CMS to tinker with while the Sequel is in production).  I'd like to see more pay for performance and value-based purchasing, including gainsharing, global payments and more.

While some (e.g., Jeff Goldsmith) believe that we've already bent the cost curve, others (e.g., Jacob Hacker) seem to think that the federales have done pretty well for themselves on the bending-the-cost-curve front for the Medicare population, and that the lessons learned can be applied to other populations.

I expect that private employers will continue to expand PCMH programs, given the positive response from employees, and the significant ROI realized through implementation of these programs, including management of chronic disease.  The trick in this arena will be expanding PCMH programs beyond big employer-big network partnerships, so that smaller providers may be able to participate on an equal footing.

Which brings me to the states -- our laboratories.  State-level PCMH demos that provide a la carte services (including innovations like the "timesharing" of nurse case managers) to small physician practices that need them in order to participate in PCMH plans ought to become more widespread.  Again, the ROI is there, so the investments should be made by the states.  Other supports for primary care, prevention and public health should be explored, since well-conceived and well-executed programs can have a significant ROI as well.

All in all, it seems to me that there are opportunities to address the access, cost and quality issues without waiting for broad legislative action. 

What do you think?

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

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Okay,

I'll bite...and chime in.

First, I'd like to say that it seems more than fair and perfectly responsible and caring to have everyone in our country insured. To me, this is the golden egg of reform, first to cover all Americans.

However, the viability for this is something that will take many, many years. Perhaps decades of time.

The chief reason is that our healthcare system is so intertwined with for-profit business and publicly-owned companies, that a large number of varying participants simply don't want to sacrifice or participate, where there is a chance to lose financially.

Sure it would make sense to have pay-for-performance. It makes perfect sense, keeps with our country's idea of free market and will definitely promote cost-effectiveness and efficiency. But what happens to those hospitals, practices and providers who don't make the grade? Where do they go? Out of business? To the unemployment line?

Its efficient, to be sure. But at 1/6th of our GDP, can we afford to have large numbers of companies failing, massive displacement of employment, etc. My God, look at how the Govt bailed out GM - solely for the good of its 100,000 pension plan participants.

What about an ENTIRE INDUSTRY?

Secondly, why would private health insurers want to compete against a government plan? Their rates cannot compete...they will lose huge market share. Again, no doubt it makes sense to use plans which can bring less expensive prices...but will the price be too steep?

As an example, what if Aetna, Cigna, United or the like were to lose significant markets to govt-run public plans? What happens to the shares of stock and the value of 401ks, insurance policies, etc., for those funds and plans who have hundreds of billions of dollars invested in these insurers? What about the hundreds of thousands of employees? Where are they displaced to?

See, my point is that its going to take a generation worth of time and sacrifice to fix this. It certainly won't happen in a few years - although you won't be popular in Washington unless you seemingly try to find quick solutions for long-term problems.

Best,
Steve


What went wrong in Massachusetts? I'd say, a lot went 'right' there. The policy and opaque, backroom strategey were repudiated in a blue state, where Democrates controlled the seat for nearly 60 yrs. The blame game is always an entertaining spectacle as the scapegoating process revs up. But, are they pointing at the right culprits? I don't think so, even though there are many convenient targets. Democrats are reeling and spooked as Massachusetts should have been their cakewalk. November is only months away. More thoughts with some humor at http://bit.ly/64qwGg

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