Overview

The intensifying health care crisis has recently elicited reform proposals from the White House, several states, Congress, Presidential candidates and the movies. While each abstractly acknowledges the need for cost control, most are focused on providing basic or comprehensive universal coverage. Aside from making sure that everyone in America has insurance, few proposals describe what actions will be required to re-establish stability and sustainability in our health care system.

It seems clear, though, that we’re still early in the process of developing change. So it makes sense to try to fully describe the structural drivers of the crisis, and the concrete action steps associated with solutions. We hope this framework can be helpful to policy developers, particularly those who wish to meaningfully reform American health care.

Over the last nine years, my colleagues and I have solicited input on structural health care change from prominent practitioners from business and the full continuum of health care. We asked that their suggestions address deep problems within the current system, and focus on the changes that will be required to re-establish stability and sustainability in American health care.

This document is not exhaustive. I have not included lengthy discussions of each point, though an ample literature is available to justify every item. Instead, we suggest specific reform “planks” that our advisors are convinced comprise a skeleton of necessary changes to make American health care whole again. The planks are organized around five major principles, each representing a key element in any effort that would course-correct the current system’s structural deficiencies.

It is worth noting that these principles and their associated action steps adhere to several design criteria.

• In general they are not specific to health care, but apply longstanding, broadly-accepted business principles – e.g., pricing/performance transparency, industrial standardization, payment tied to performance – that have worked well in many other industries.
• They emphasize that our health system’s problems are not limited to one part of the system (e.g., health plans, or the pharmaceutical industry). Excess cost creation, the core of our crisis, occurs throughout the three major sectors of the health care continuum – supply, care delivery and finance -and many of the structural drivers of that excess extend to most or all health care operations.
• They acknowledge that all health care stakeholders – patients, group purchasers, industry professionals and corporations – must be responsible and accountable to all other stakeholders. No reform effort can meaningfully succeed without focusing on the behaviors of all groups.
• They seek an achievable and workable system, not an ideal one, given the existing power structure.

And finally, while no specific action step can address this, the concrete reforms recommended here will not be possible without significant leadership from the non-health care business community, which has less short term stake than the health care sector in maintaining the status quo. But bringing these changes to fruition offers the promise of re-stabilizing health care. That is a prospect that would benefit us all.

Overview

Wednesday, October 24, 2007