Inauguration Week is a Time for Broad Thinking in Health Care

IN THIS ISSUE:


? Galvin and Berwick in Health Affairs

? Bill Frist Lays Out a Vision for 21st Century Health Care

? John Goodman ? Ten Easy Reforms

? Laura Trueman ? Doing Tax Credits Right

? Lewin Group — MedCath Outperforms Competitors


Galvin and Berwick in Health Affairs


This inaugural week seems to be a time for thinking broadly. One example is a discussion between Robert Galvin and Don Berwick published in “Health Affairs.” Mr. Galvin is the director of global health care at General Electric and Dr. Berwick is the founder of the Institute for Healthcare Improvement (IHI). The two agree on the need for quality improvement and transparency throughout the health care system, but disagree profoundly on the role of the patient in forcing change. Throughout the interview Dr. Berwick argues that the power centers in health care have failed to provide leadership and in fact are wedded to inefficiency as a source of profits. He says, “There’s a deficiency of will and ambition in the major centers of power in the delivery of health care in America.” And he says, “The average hospital, the average doctor, cannot improve what they do, because they don’t know how.” But he is also contemptuous of empowering patients. He says:



“The one part of the [pay for performance] plan that I am absolutely against at the moment is the shifting of burden to individual patients. I do not believe that making the individual American patient more ‘cost-sensitive’ has any rationale in science, ethics, or evidence. It will fail, and it will fail miserably. It will result in a shifting of care away from the people who need it the most. It is a displacement of responsibility for changing the system. You know, if CalPERS or Xerox or GE can’t change care through using its purchasing power, then I absolutely promise you that Mrs. Jones can’t. The idea that she will now be more sensitive because she pays an extra ten bucks out of pocket is, to me, nearly stupid. So I really disagree with that element of the agenda.”



Mr. Galvin replies, “Despite your reservations about pay-for-performance and incentivizing consumers, getting employees financially engaged [as health care consumers] is one of the few levers we have to drive efficiency, and it has proved to be very effective.” But Berwick is undeterred, saying, “I don’t think that incenting individual consumers is a lever of efficiency. I think what it drives is inequity. Sick people are poor, and poor people are sick.” So, doctors and hospitals can’t do it, employers can’t do it, insurers can’t do it, and patients can’t do it, according to Dr. Berwick. Apparently only the government is able to improve health care in America.

SOURCE: http://content.healthaffairs.org/cgi/content/full/hlthaff.w5.1/DC1


Bill Frist Lays Out a Vision for 21st Century Health Care


Since Dr. Berwick is deferring to the government he may want to read the current issue of “The New England Journal of Medicine,” in which Senate Majority Leader Bill Frist lays out a vision of “Health Care in the 21st Century.” Senator Frist says, “The focus of the 21st-century health care system must be the patient. Such a system will ensure that patients have access to the safest and highest-quality care, regardless of how much they earn, where they live, how sick they are, or the color of their skin.” He adds, “The new system also must be responsive primarily to individual consumers, rather than third-party payers.” He goes on to discuss restoring the patient/physician relationship and the role of information in helping patients and doctors make mutual decisions about the care delivered. But, “Consumers and patients must be in control” and “must be able to choose what best meets their needs.” He praises HSAs and tax credits but also says that “policymakers need to reexamine tax incentives that tightly bind health benefits to employment and drive the inflation of health care costs.” He is also interested in liability reform, long term care, and refocusing “federal research entities to take advantage” of the coming revolution in medical innovation.

SOURCE (subscription required): http://content.nejm.org/cgi/content/short/352/3/267


John Goodman – Ten Easy Reforms


John Goodman, president of the National Center for Policy Analysis (NCPA), also has some big ideas in a short new paper called “Ten Easy Health Reforms.” His list includes: Roth HSAs for seniors; HSAs for Medicaid; Allowing FSA rollovers; Private insurance options for Medicaid; Allowing employers to count health benefits in meeting their minimum wage obligation; Allowing employers to purchase non-group policies for their workers; Allowing employees to cash-out the value of their health insurance benefits; Allowing part-time employees to choose between health insurance and higher wages; Repealing state laws that prohibit hospitals from charging lower prices to uninsured patients; and Allowing more flexibility in HSA design.

SOURCE: http://www.ncpa.org/pub/ba/ba497


Laura Trueman – Doing Tax Credits Right


NCPA has also published a paper by Laura Trueman on “Health Care Tax Credits for the Uninsured.” She argues that an effective tax credit must meet several criteria: it must be refundable for low-wage workers; it must be advanceable so it can be used to pay monthly premiums; it must avoid costly mandated benefits; it must be widely available to attract a critical mass of buyers and sellers; it must be limited in dollar amounts to avoid wasteful spending; and it must work with HSAs. She goes on to discuss some of the mistakes policy makers have made in developing tax credit proposals.

SOURCE: http://www.ncpa.org/pub/ba/ba498


Lewin Group — MedCath Outperforms Competitors


The Lewin Group published a study comparing the MedCath cardiac hospitals to community and teaching hospitals that conduct open-heart surgery. It finds that the MedCath group of hospitals have a 20.3% higher case mix severity index than the community and teaching hospitals, but a 17.1% lower mortality rate. It has a 20.2% shorter average length-of-stay and is far more likely to discharge patients to their homes rather than a nursing facility or home health agency. It also finds that the MedCath group has a lower rate of medical complications and treats about a median volume of Medicaid and uninsured patients.

SOURCE: http://www.medcath.com/corp/content/Lewin-executive-summary-5-13-03.pdf


Please send all comments/questions directly to me at gmscan@aol.com.


“Consumer Choice Matters” is a free weekly newsletter published by the Galen Institute, a not-for-profit public policy organization specializing in research and education on health policy. Visit our website at http://www.galen.org for more information.


If you wish to subscribe/unsubscribe or update your address, please send an e-mail to galen@galen.org.


The views expressed in this newsletter are the opinions of the authors and do not necessarily reflect the views of the Galen Institute or its directors.




SHARE THIS ARTICLE

About the author

IN THIS ISSUE:


? Galvin and Berwick in Health Affairs

? Bill Frist Lays Out a Vision for 21st Century Health Care

? John Goodman ? Ten Easy Reforms

? Laura Trueman ? Doing Tax Credits Right

? Lewin Group — MedCath Outperforms Competitors


Galvin and Berwick in Health Affairs


This inaugural week seems to be a time for thinking broadly. One example is a discussion between Robert Galvin and Don Berwick published in “Health Affairs.” Mr. Galvin is the director of global health care at General Electric and Dr. Berwick is the founder of the Institute for Healthcare Improvement (IHI). The two agree on the need for quality improvement and transparency throughout the health care system, but disagree profoundly on the role of the patient in forcing change. Throughout the interview Dr. Berwick argues that the power centers in health care have failed to provide leadership and in fact are wedded to inefficiency as a source of profits. He says, “There’s a deficiency of will and ambition in the major centers of power in the delivery of health care in America.” And he says, “The average hospital, the average doctor, cannot improve what they do, because they don’t know how.” But he is also contemptuous of empowering patients. He says:



“The one part of the [pay for performance] plan that I am absolutely against at the moment is the shifting of burden to individual patients. I do not believe that making the individual American patient more ‘cost-sensitive’ has any rationale in science, ethics, or evidence. It will fail, and it will fail miserably. It will result in a shifting of care away from the people who need it the most. It is a displacement of responsibility for changing the system. You know, if CalPERS or Xerox or GE can’t change care through using its purchasing power, then I absolutely promise you that Mrs. Jones can’t. The idea that she will now be more sensitive because she pays an extra ten bucks out of pocket is, to me, nearly stupid. So I really disagree with that element of the agenda.”



Mr. Galvin replies, “Despite your reservations about pay-for-performance and incentivizing consumers, getting employees financially engaged [as health care consumers] is one of the few levers we have to drive efficiency, and it has proved to be very effective.” But Berwick is undeterred, saying, “I don’t think that incenting individual consumers is a lever of efficiency. I think what it drives is inequity. Sick people are poor, and poor people are sick.” So, doctors and hospitals can’t do it, employers can’t do it, insurers can’t do it, and patients can’t do it, according to Dr. Berwick. Apparently only the government is able to improve health care in America.

SOURCE: http://content.healthaffairs.org/cgi/content/full/hlthaff.w5.1/DC1


Bill Frist Lays Out a Vision for 21st Century Health Care


Since Dr. Berwick is deferring to the government he may want to read the current issue of “The New England Journal of Medicine,” in which Senate Majority Leader Bill Frist lays out a vision of “Health Care in the 21st Century.” Senator Frist says, “The focus of the 21st-century health care system must be the patient. Such a system will ensure that patients have access to the safest and highest-quality care, regardless of how much they earn, where they live, how sick they are, or the color of their skin.” He adds, “The new system also must be responsive primarily to individual consumers, rather than third-party payers.” He goes on to discuss restoring the patient/physician relationship and the role of information in helping patients and doctors make mutual decisions about the care delivered. But, “Consumers and patients must be in control” and “must be able to choose what best meets their needs.” He praises HSAs and tax credits but also says that “policymakers need to reexamine tax incentives that tightly bind health benefits to employment and drive the inflation of health care costs.” He is also interested in liability reform, long term care, and refocusing “federal research entities to take advantage” of the coming revolution in medical innovation.

SOURCE (subscription required): http://content.nejm.org/cgi/content/short/352/3/267


John Goodman – Ten Easy Reforms


John Goodman, president of the National Center for Policy Analysis (NCPA), also has some big ideas in a short new paper called “Ten Easy Health Reforms.” His list includes: Roth HSAs for seniors; HSAs for Medicaid; Allowing FSA rollovers; Private insurance options for Medicaid; Allowing employers to count health benefits in meeting their minimum wage obligation; Allowing employers to purchase non-group policies for their workers; Allowing employees to cash-out the value of their health insurance benefits; Allowing part-time employees to choose between health insurance and higher wages; Repealing state laws that prohibit hospitals from charging lower prices to uninsured patients; and Allowing more flexibility in HSA design.

SOURCE: http://www.ncpa.org/pub/ba/ba497


Laura Trueman – Doing Tax Credits Right


NCPA has also published a paper by Laura Trueman on “Health Care Tax Credits for the Uninsured.” She argues that an effective tax credit must meet several criteria: it must be refundable for low-wage workers; it must be advanceable so it can be used to pay monthly premiums; it must avoid costly mandated benefits; it must be widely available to attract a critical mass of buyers and sellers; it must be limited in dollar amounts to avoid wasteful spending; and it must work with HSAs. She goes on to discuss some of the mistakes policy makers have made in developing tax credit proposals.

SOURCE: http://www.ncpa.org/pub/ba/ba498


Lewin Group — MedCath Outperforms Competitors


The Lewin Group published a study comparing the MedCath cardiac hospitals to community and teaching hospitals that conduct open-heart surgery. It finds that the MedCath group of hospitals have a 20.3% higher case mix severity index than the community and teaching hospitals, but a 17.1% lower mortality rate. It has a 20.2% shorter average length-of-stay and is far more likely to discharge patients to their homes rather than a nursing facility or home health agency. It also finds that the MedCath group has a lower rate of medical complications and treats about a median volume of Medicaid and uninsured patients.

SOURCE: http://www.medcath.com/corp/content/Lewin-executive-summary-5-13-03.pdf


Please send all comments/questions directly to me at gmscan@aol.com.


“Consumer Choice Matters” is a free weekly newsletter published by the Galen Institute, a not-for-profit public policy organization specializing in research and education on health policy. Visit our website at http://www.galen.org for more information.


If you wish to subscribe/unsubscribe or update your address, please send an e-mail to galen@galen.org.


The views expressed in this newsletter are the opinions of the authors and do not necessarily reflect the views of the Galen Institute or its directors.




SHARE THIS ARTICLE

About the author