Health Reform: Back to the Future

Everywhere I go, people constantly ask me: So, where are we headed with this healthcare reform effort?  In recent weeks, the mantra has changed to: So, will anything really happen?  First, I’m learning that Washington is an experience that can hardly be predicted.  Second, at the current rate of departure of various Members of the US Senate and House, we are increasingly facing the specter of wholesale change in leadership.  Third, why are we waiting for Washington?  The answer is in the trenches.   You can do this!!

That being said, here are some thoughts on what we can expect over the next several months.  Healthcare – regardless of the impasse in Washington, DC – continues to be the elephant in the room as the long-term economic consideration for the United States.  We are at 17.2 percent of GDP allocated to healthcare now.  We are headed to +20 percent in the not-too-distant future.  The question is not if change will happen, but rather when it will occur.  The current state is not the steady state.  The global economy is not going to go away.  We are no longer the economic engine of the world.  For the first time in probably a century, the United States is facing the “limit” of its resources.  We need to make decisions, and unfortunately, Washington does not seem prepared to be the leader.

So, what is going to happen? 

#1: Expect some cherry picking of the legislative agenda which will occur in the middle.  Regardless of what Senate and House leaders decide on in terms of a course of action, I anticipate that practical House and Senate Members will pursue a bipartisan strategy.  The American public has clearly had it with the partisan bickering.  Solutions are not only wanted but demanded.  Those solutions will be the sliver solutions I described last week.  Don’t expect the “big bang.”  Rather, the areas where agreement is obvious will be presented as pieces of legislation.  For example, I would expect that cross-state competition will be fostered and guaranteed issue or disallowing pre-existing conditions will be considered – among a host of more centrist options – which hold support on both the Republican and Democrat sides of the equation.

#2: The states will assume a leadership role.  There is clearly residual momentum for making change in healthcare.  The states stepped back when Obama was elected from my perspective because of his clearly articulated goal of national healthcare reform.  However, in the face of no action, the states will clearly move forward.  This is consistent with a general observation that the states represent the laboratories of democracy.  We will now see more exploration, consideration, and implementation of alternative models at the state level.  Given the pressure on their economies, expect new ideas to emerge.  Actually, it will be “old” ideas that finally see the light of day…

#3:  Demonstration projects will assume added importance.  Over the last couple of decades, we’ve seen the use of “demonstration projects” by the Centers for Medicare and Medicaid Services (CMS) as a stimulus for promoting change.  These changes are done through administrative fiat – not policy change.  Many of the ideas embedded within the House and Senate healthcare reform bills can be accomplished via demonstration efforts at the state level.  CMS has the authority to move the agenda forward, but it takes leadership.  We should not expect the underlying bureaucracy to take the lead.  However, could a CMS leader who knew they were going to be there for two years make a difference?  Absolutely!!  So, if the right leader gets implanted into the CMS structure – expect experimentation.  If I was there, I’d push it hard!!

So, what’s the E-I-E-I-Oh-Oh thing all about?  Well, I believe that the drivers for change are: Economy, Infrastructure, Effort, Incentives, Organization, and Outcomes or E-I-E-I-Oh-Oh.  Specifically, the economy projections are that the unemployment rate will continue at +6 percent through 2015, and 5 percent is considered full employment.  We are currently at 9.7%.  The deficit is projected to grow to more than $8 trillion.  Our infrastructure is crucial as the basis for supporting change.  On the IT side, the Office of the National Coordinator is clearly moving the bar.  Aside from home and public healthcare – which need further investment – the healthcare infrastructure is in fairly good shape.  The IT investment will get us to the next level in terms of core capability.  Effort is a more complex issue.  By effort, I mean leadership.  I’m actually disappointed in the leadership emanating from healthcare.  We are not stepping up to the plate.  We must lead – not wait!!  I discussed in my Report last week about how the American public trusts us and expects us to promote change, but we’re not doing it.  More on that issue later.  Incentives are clearly a problem.  My concern about the potential demise of a national healthcare reform issue relates to this core issue.  We need to align incentives.  We currently have a system that rewards providers and others to “do” things.  We need to change the system to reward results and outcomes.  Organization is a core issue in that we currently support a “mom and pop” operation in much of healthcare across the country.  Despite the fact that we consume 1/5 of American resources, we are basically a disaggregated, dispersed, and disparate delivery organization.  Except for the few notable exceptions – Geisinger, Kaiser, Aurora, and a host of similar organizations that come to mind – we do not provide coordinate, continuous, and cooperative care.  That increases costs and reduces outcomes.  We’ve got to promote change on this front.  Finally, outcomes – at the end of the day – are the final mark of credibility.  We need to create national standards and expect that we will all deliver to those standards, or even better, exceed them!!  So, it is E-I-E-I-Oh-Oh!!  Very simple.  Very pragmatic.  Very doable.

Kevin Fickenscher, MD

The views and opinions expressed herein are my own and do not necessarily represent the views and opinions of Dell Services or its affiliates.