Yesterday, Matthew gracefully pointed to my post over at Bob Laszewski's Health Care Policy and Marketplace Review, which I called "The Tougher Health Care Problem." Bob's readership leans heavily toward the DC-based health care policy types who may not follow the happenings over here. The policy crowd is a slightly different but very important audience that I hoped might be receptive to a different message than they are typically pitched.

 

Reform is a complicated topic, particularly because the discussion tends to be so narrowly defined around its objectives: access, quality and cost. But an equally important issue is that American health care is fundamentally about power and money. Achieving reform requires a real understanding of the power dynamics involved.

 

For a lot of reasons, I've come to believe that there's little point in trying to get (most) health care organizations to collaborate on reforms. While I know its very un-PC, and while I understand that every "advocacy" group believes it has a right to be at the table, the table is current dominated by these groups and, you may have noticed, we're not making much progress toward reform. The major players make little noises about change, but mostly they've retreated into silos where they're trying to figure out how to get as large a piece as possible of the diminishing pie, and get control over the reform process.

 

Yes, in yesterday's article I argued that cost is as important an issue to address as access. But here are a few deeper points that I also wanted to get out there for discussion.

 

You'll note that I keep using the term "meaningful" reform. This is shorthand for measures that can drive down cost, improve quality and broaden access. Half-measures - like giving tax credits to people who can't afford to lay out the money for health care or coverage in the first place - don't count.

 

1) With few exceptions, we shouldn't hold our breath for the leaders of the health care industry to help drive meaningful reform.

 

We know that as much as half or more of all health care cost is unnecessary, inappropriate or waste. If reforms involve eliminating some portion of that waste and the revenues they represent, the industry will be against it. Nobody willingly gives up money. This is why the drives to interoperability, evidence-based standards, pricing/performance transparency, and performance-based reimbursement have taken so long.

 

2) Getting meaningful reform will require that Congress sign off on it. There are only two ways for that to happen. One is that Congress must somehow become resistant to the health care industry's lobbying efforts. (Somehow this doesn't seem very likely to me.) Or the non-health care business community must determine that health care reform is in its interests, find a way to galvanize and mobilize on change, and exert greater influence than the health care industry on this issue.

 

Policy change must occur in Congress, which has demonstrated time and again (e.g., Medicare D) that it is most receptive to special interest influence. As the largest single economic sector - one dollar in every seven and one job in every eleven in the US economy - health care constitutes about 16 percent of all the lobbying dollars spent on Congress. In 2006, this was about $350 million of $2.5 billion in total lobbying dollars from all sectors, according to Open Secrets. Without question, health care is the most influential and powerful lobby.

 

 

3) The leaders of non-health care business have two big reasons to want meaningful health care reform. One is that they're between a rock and a hard place on coverage. If their employees lose coverage, productivity plummets. If they keep it in its present form, employer costs will continue to explode at multiples of general inflation, workers earnings and business income growth. (This is why so many large employers are installing worksite clinics, but that's another post.) The other is that if the health care economy, as the larger economy's largest component, descends into turmoil, the turbulence will likely cascade to and disrupt every other economic sector. In other words, it is in business' interests to back reform because the current situation will ultimately threaten the national economic security.

 

America's non-health care business leaders are aware that, to a large degree, they're being held hostage by a health care industry resistant to adopting tools and processes for streamlining (e.g., lean techniques) that other industries installed long ago. Medicine is still a cottage industry, there is still almost no transparency, there is still more discussion about than action on quality, and most of the industry is still hugely profitable.

 

4) The most promising scenario for meaningful reform would be for non-health care business leaders to come together around a set of structural (not ideological) change principles, jump start a larger effort that recruits the support of the whole of American business, and exerts its overwhelming influence on Congress for real change. This is where the power in America lies, and health care is now a case where the public interest intersects with the special interest.

 

The real question is whether the leadership currently exists within American business to drive an effort that is in the common interest rather than the special interest.

 

Finally, there are important changes afoot in market-based reform. The Health 2.0 meeting will present discussions of the potential inherent in a market-based paradigm shift, but one in which many of the important players are NOT the usual suspects. They are from outside health care.

 

There are other examples in the works. I mentioned worksite clinics. The drive toward MUCH larger physician practices; clinical, patient and purchaser decision support tools; refinement of chronic disease management; performance-based reimbursement methods; and on and on.

 

The increasing dysfunction of our current system will make all these and other approaches more workable. But markets still must work in the context of policy. American health policy is in desperate need of reform. But the health industry is conflicted and won't drive what's needed. That impetus must come from outside.