Health Reform -- Fixing the Core Problem or Just Symptoms?
The health reform debate has passed another milestone, but the question I keep getting asked by friends and family is whether the proposed legislation will actually improve our health delivery system. I want to be optimistic, but I’m skeptical that the kind of comprehensive change we need to truly reform the system will happen.
As I talk to so many folks across the country (and around the world), I find that most agree on one thing -- our current system is ‘broken’, and it can and should get better. But when it comes to getting to a deeper understanding and discussion of the details -- the core problems, the choices for change, the costs and impact of these changes, and so on, folks just aren’t getting a very clear picture from the MSM. Often what’s highlighted is the political drama versus the real issues, the real story.
I don’t claim to fully understand the actual legislation or even to comprehend the hysterical politics that seem to surround the conversation. But I do know that the central question people want and need answered is HOW to make the system better. As a business guy, when I try to solve a problem, I focus on understanding the ‘root cause’ to make sure I’m fixing the core problem and not just a symptom or secondary effect. And I think we’ve got to do the same when it comes to solving ‘health’.
Everyone (citizens and politicians) wants more and better ‘health’ -- a better health delivery system, more prevention, more therapies to cure complex diseases like cancer, more and better doctors and the like. And we all recognize that more ‘health’ is not free. The current system has lots of waste and inefficiencies. If we could figure out how to remove these from the system, we would get more ‘health’ for the same amount of money. This is clearly very hard, from both a legislative perspective (why neither bill really tackles it) and from a practical implementation perspective. But it needs to be done, and after we get it done, we then have to figure out how to invest the dollars to provide more ‘health’. Alas, more health insurance does not necessarily turn into more ‘health’.
Practially, there are several fundamental questions we need to answer. First and foremost, what framework or system of rules, incentives, relationships, markets etc. will lead to more ‘health’ for Americans over time? Should we as a society, provide healthcare (unlimited?) to all citizens? And then, how should we finance this new economic liability? What role do individuals play in being responsible for their own health -- in terms of paying for it, being accountable for healthy or risky behaviors and consuming health delivery resources?
It is hard to be a market oriented capitalist today, particularly in the health debate. Everyone loves to hate the insurance profiteers, the bad drug companies and the greedy medical device companies. The public seems to easily forget that economic growth and the principles that support economic growth are the reasons that we can even have a conversation about providing subsidies for the less fortunate.
Ten years from today, we could have a society with a GDP of $16 trillion or one of say $17 trillion (the actual numbers don’t matter). In the scenario of higher economic growth, where society has created $1 trillion more dollars of GDP, we could make a choice to consume/finance more ‘health’ than if we were to have a smaller GDP. Given the inevitable pressures on the health care system -- an increasing proportion of the population over 50 and people living longer -- as a society we know we would like to be able to afford more ‘health’ not less. Just raising taxes alone without creating more wealth might patch things in the short run but not in the long run. One illustrative example is the Medicare system -- which is projected to go bankrupt in a few years, even after increasing taxes to support it. There are really only three approaches to preventing it from going bankrupt; cut benefits, grow GDP faster, and improve value (more ‘health’ for the same dollars).
To have a meaningful debate about ‘health reform’, we’ve got to consider the overall context of the principles leading to economic growth and the core questions raised about rules, roles and incentives in the health delivery system. Creating substantive legislation in a democracy is messy. But for a democracy to thrive, it needs an informed and engaged public, a transparent legislative process and stakeholders who are willing and able to advocate without fear of being penalized.
From what I can read and learn -- in this critical debate and time – it seems like we may be failing in all three areas.