There was nothing really radical or transformative in the health care reform platform that Barack Obama presented during the election campaign. While it had much in common with the centrist proposals of Hillary Clinton and John Edwards, it didn’t even go as far as his primary opponents’ plans did, because Obama’s proposal didn’t require all adults to obtain health insurance. In terms of reforming the health care delivery system, Obama also echoed other Democrats’ (and some Republicans’) calls for better preventive and chronic care and the rapid adoption of health IT—neither of which would shake up the health care establishment, especially if these initiatives were supported by new federal funds.
Nevertheless, a new report from the Center for American Progress, which is closely allied with Obama’s transition team, suggests that the next Administration might be prepared to go much further in restructuring the system than Obama’s campaign platform indicated. Entitled The Health Care Delivery System: A Blueprint for Reform, this relatively brief tome (117 pp.) was written by 15 health-policy experts, including John Podesta, the head of the transition team, and Dora Hughes, Obama’s senior health-policy advisor. Among the other luminaries who penned this report are Robert Berenson, a senior fellow at the Urban Institute and formerly a top Medicare official; Donald Berwick, president of the Institute for Healthcare Improvement and one of the leaders of the hospital safety movement; David Blumenthal, a Harvard Medical School professor and director of the Institute for Health Policy; Paul Ginsburg, president of the Center for Studying Health System Change; Jeanne Lambrew, a senior fellow at the Center for American Progress and a professor at the University of Texas; Thomas Lee, network president for Partners Healthcare System and also a Harvard professor; and Steven Schroeder, a professor of health policy at the University of California, San Francisco, who was president and CEO of the Robert Wood Johnson Foundation from 1990 to 2002.
While all of these experts are mainstream thinkers, some of the ideas they advocate in this report are positively radical. Among other things, they’re talking about having physicians join larger organizations and work in care teams as part of a major effort to create a high-performance health care system. In addition, they propose fundamental changes in how physicians and hospitals are reimbursed. They’d move away from fee for service and embrace various prospective payment systems, including bundled case rates and capitation. They’d move the emphasis of American medicine from specialty to primary care and from personalized medicine to population health. In all of this, the federal government would play the lead role.
Here just a few of the proposals to smash through our century-long gridlock in health care reform efforts:
Organizing providers. “The most effective way to address our cost and quality challenges is to confront the root cause—the chaos in everyday health care,” write Robert Berenson and Thomas Lee. “We should focus our efforts on accelerating the organization of health care providers so that they can adopt systems that are likely to reduce errors and improve the overall coordination of care.”
In the current environment, they note, approaches such as disease management and health IT are of limited value. To use these tools to help build a high-performance system, the federal government “should provide compelling incentives to encourage providers to become part of organizations, and then achieve the efficiencies that will enable them to reduce costs.” To overcome patient resistance to large clinics, they suggest, small offices should be maintained within these organizations and tied together with the aid of information technology.
According to Berenson and Lee, changing how providers are reimbursed is the key to shifting the system’s center of gravity from small independent practices to large integrated delivery systems, such as those of Kaiser Permanente and Partners Healthcare, which they view as the ideal type of organization. Instead of paying doctors primarily fee for service and “lite” pay for performance based on process measures, they would use “robust” P4P tied to patient outcomes, case rates, and capitation that includes quality incentives. Physician groups could be paid more if they accepted a higher level of financial risk and delivered high-quality care.
Quality improvement. Donald Berwick and Chiquita Brooks-LaSure state, “Most health care providers, even large hospitals, still lack both the will and the competence to improve the processes of care, and most health care boards of senior executives and trustees view the improvement of care as a strategic agenda at best secondary to maintaining revenues and stabilizing public reputation.”
While some hospitals and doctors do their best to improve quality, they note, hospitals lose money when they do the right thing—such as trying to prevent congestive heart failure patients from being readmitted—and primary-care doctors lack the resources to coordinate care properly. In other advanced countries, they note, the need to work within limited budgets has forced providers to become more creative and to provide better health care for specified populations. They propose that the U.S. system be restructured to create similar conditions. “Integrated care structures and population-based budgets provide the conditions for far higher value and lower cost,” they conclude.
Reimbursement reform. Throughout the report, the coauthors cite the perverse payment system in the U.S. as a key obstacle to change. Fee for service encourages providers to do more, even when it won’t improve health. And even in Medicare’s prospective payment system for hospitals, far too much is paid for certain surgical procedures, while medical services are undervalued.
Paul Ginsburg would change all of this with a mixture of payment methods to incentivize more appropriate provider behavior. He’d reimburse episodes of acute care with case rates covering hospital, physician, outpatient lab and drug services, and would pay providers more when their patients had better outcomes. In addition, he supports the idea of the patient-centered medical home, in which primary care doctors would receive capitation payments for care coordination services that today are not covered by either Medicare or private payers.
Cost effectiveness research: David Blumenthal and Karen Davenport would have Medicare look not only at the clinical effectiveness of tests and treatments, but also at their cost effectiveness--an idea that has been banished from American political discourse since the demise of the U.S. Office of Technology Assessment in the early ‘90s. They would have Congress give Medicare authority to examine the clinical impact of especially costly interventions and give providers incentives to use less expensive, equally effective methods.
Clearly, these experts have a number of different agendas,
and some specific details of their reform plans conflict with each other. But
their main point—that we need to change how doctors and hospitals provide
care—comes across loud and clear. If President-Elect Obama heeds their call, we
could see real reform in his first term in office—at a price that we can afford
as a nation.
Clearly, these experts have a number of different agendas, and some specific details of their reform plans conflict with each other. But their main point—that we need to change how doctors and hospitals provide care—comes across loud and clear. If President-Elect Obama heeds their call, we could see real reform in his first term in office—at a price that we can afford as a nation.