David Ignatius has an interesting piece in today’s Washington Post on what Dr. Denis Cortese, the head of the Mayo Clinic, is saying about the health-care debate as it has been playing out this summer.
Dr. Cortese certainly comes to the reform table with unsurpassed credentials. Mayo is universally acknowledged to be an industry leader in high quality, low cost health-care — the kind of health-care people would like to see available in every town in America. So when Dr. Cortese speaks, people listen, and rightfully so.
And what is Dr. Cortese saying? According to Ignatius, it’s no ringing endorsement of Obamacare. He is concerned that the legislation moving in Congress is too focused on new insurance coverage and not enough on getting better health-care value for what is already being spent. He advocates focusing first on reform of the programs the government already runs — Medicare, Medicaid, the VA, military and federal employees health care — to make them much more efficient than they are today. If the government paid for value instead of services, Dr. Cortese suggests, new more efficient, and patient-focused integrated systems of care — other Mayos — would replace the fragmented and disorganized arrangements which are dominant in most communities today.
So far, so good. But how exactly will the government move from paying for “services” to buying value? Here, it appears both Ignatius and Dr. Cortese fall into the same trap as the Obama administration. They all seem to hold the view that if central planners were just given the chance, they could devise new and clever ways to pay for health-care that will drive physicians and hospitals to act differently than they do today.
But why would we expect future efforts to be any more successful than the scores of governmental initiatives that have been launched in the past. The federal government has been running Medicare for nearly half a century, and for at least twenty-five years, there have been repeated initiatives to move the program in exactly the direction Dr. Cortese recommends. They have come up woefully short. Why? First, there’s politics. Buidling a network of high value providers of care means excluding some hospitals, physician groups, labs, and home health agencies from favored status. That is nearly impossible for Congress to sustain, especially when those left out complain that the data used to measure their performance is inaccurate or of poor quality. A few years ago, HHS tried to designate certain hospitals as “Centers of Excellence.” The effort died when the centers deemed not so excellent went to Congress and complained of an unfair designation process.
But even if political considerations could be overcome, the idea that the federal government has the capacity to construct a new payment system which will provide on-going rewards for innovation and quality is foolhardy. The U.S. health system is too complex, diverse, and dynamic to fit neatly into the kinds of one-size-fits-all payment systems bureaucracies inevitably devise.
If we want our health-care system to be patient-focused and provide the highest quality care possible, we have to give patients the financial power to hold doctors and hospitals accountable. That can only happen in a market-based system where consumers have the ability to take their money elsewhere if they are dissatisfied with how they are being treated. Building such marketplace will require changing the tax treatment of employer-sponsored insurance to give workers more control over the federal tax subsidy for such insurance, and reform of Medicare and Medicaid to give the beneficiaries more control over their entitlement. The government can provide appropriate oversight of the marketplace, but, fundamentally, it needs to be driven by consumers selecting the kinds of insurance and medical care arrangements they find most satisfactory for the prices that are charged. In that context, is there any doubt that organizations which can deliver high value at a reasonable cost — more Mayos — will flourish?