Are We Doing Enough?

With a relatively slower week in Washington – despite the Saturday Congressional vote – I thought it would be a good opportunity to take a step back and reflect on the changes that have been proposed in the ongoing healthcare debate. On Wednesday, The Washington Post ran an interesting article discussing an opinion shared by many analysts that the Congressional plans are too weak on cutting costs. While the reforms are well intentioned, many feel that the current legislation fails to truly reform our healthcare system and create a platform for sustainable change they feel is necessary in the healthcare debate.  The theme I hear repeatedly over coffee and in the hallways is the question: Are we doing enough?  Most respond by raising their eyebrows and looking away…

I’ve been advocating for what I call “reasoned reform,” and others call consensus reform , of healthcare for nearly 40 years.  In that time period, there has never been a better time for fixing our country’s healthcare system.  Why?  It comes down to economics and expectations .  On the economics side, we are now consuming nearly 18 percent of GDP for healthcare which exceeds the next highest nation by more than 6% of GDP. While I’m a firm advocate of a healthcare reform program that provides equitable access to healthcare for all, I also believe that the current system is relatively inefficient.  Most doctors, administrators, policy makers, and others that I talk with tend to agree.  The problem is not in the recognition of the problem but in developing a consensus on resolution of the problem.  If we could reset the budget to 15 percent of GDP, the US would suddenly have access to nearly $500 billion in resources.  That brings us to expectations .  As I’ve traveled the world over the last several years, people not only want access to quality, affordable and service-oriented healthcare, they now demand it.  But, there are other expectations.  People want better education, better day-care programs for their children, roads without potholes, libraries with connectivity, shorter lines at the Department of Motor Vehicles, and a whole host of other requirements from the government.  So, the question is: when there are only so many resources available in a society, how should we divide them up?  That’s the question facing America.  Given our desires, how do we want to allocate our increasingly scarce resources?

It was clear from the last election that the nation elected a President and a Congress to sponsor a change of direction.  Healthcare is one of the first issues on the forefront of those change efforts.  But many are wondering if we are squandering this critical opportunity. While the healthcare reform plan is important for insuring more Americans – the consistent question that I hear from all quarters is: Does it go far enough in changing the incentives that got us here in the first place?  As Robert Graboyes, a senior healthcare economic advisor for the non-profit National Federation of Independent Business (NFIB), recently observed: “Current legislative proposals heavily emphasize insuring the uninsured, rather than bringing down costs for those who already have insurance. Coverage expansion is an admirable goal but adds costs rather than subtracting them.”

Many of the funding proposals which purport to reform Medicare simply reduce the funds while sustaining the current form of healthcare delivery. As an example, one plan calls for $110 billion in Medicare savings by cutting reimbursements to insurers who participate in the private Medicare Advantage program. While the change is well intentioned, it seems to do little to reform the fundamentals of how our country’s healthcare system actually provides services. So, while virtually everyone agrees that the nation needs to slow the rising costs of healthcare, many are concerned that Congress is not really doing enough to change the incentives and move healthcare delivery in a new direction.

As an example, comparative effectiveness has been put aside because of pressure from the pharmaceutical and medical device companies.  Instead of simply cutting reimbursements or imposing new taxes, it seems reasonable that we should be looking at research and comparing results to truly create a cost-saving reform package.  Equivalent care with similar outcomes costs twice as much in Florida as it does in Minnesota.  Why?   The chief actuary for the Centers for Medicare and Medicaid, Richard Foster, notes, “If [we studied] comparative effectiveness in a way that looked at whether to approve a new therapy because it is cost effective and is an improvement, then you'd have a fighting chance of slowing down the rate of growth…nobody's proposing that…”

I continue to believe that the healthcare system is responding to the incentives in place – it’s doing exactly what it should do.  One potential game changer is the case made for a proposal to strip the tax exempt nature of employer-sponsored insurance. Peter Orszag (a Democrat), now the Director of the Office of Management Budget and former Director of the Congressional Budget Office (CBO), and Douglas Holtz-Eakin (a Republican), past Director of CBO, have proposed that taxing health insurance would create a more cost-conscious public while forcing providers to offer more affordable policies. According to many estimates, this added revenue would bring more than $250 billion into the government per year and could easily cover the cost of the proposed $894 billion House healthcare proposal in just four years. In comparison, such plans that include a “Cadillac” tax only raise $200 billion over the course of a decade .  

But, such a proposal cuts against the grain.  Neither Republicans nor Democrats want to be responsible for enacting a policy that – although helping to truly finance our nation’s healthcare system – ultimately changes the way income is achieved by the American people. It seems that as a country we want change to occur but don’t want to change ourselves.  But, my faith in the American way is not dampened.  I continue to believe that Winston Churchill was right when he observed, “Americans can always be relied upon to the do the right thing after they have exhausted all other possibilities.”  So, it seems we are on track… 

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.