The health care system is changing. I have been hearing this, and sometimes saying it myself, for nearly thirty years. It is the common refrain of nearly every major health conference or industry meeting. There is much about health care today that is different than in 1981 when I was fresh out of medical school. An extensive article in yesterday’s Wall Street Journal, “The Future of U.S. Health Care,” delved into the perspectives of five key players in the $2.6 trillion American health care system…doctors, hospital CEO’s, health insurance executives, human resource executives, and patients, to explore how things are changing and where we are going.
The article was well written, filled with accurate insights, and it covered a number of the important trends that drive the nature of our current system. However, as one of a very small number of people who actually has had a role in each of the five sectors, and who thinks about the health industry and advises its leaders daily, I found myself saying, “We are back to the future again.” Today’s health care dilemma is much like what we faced in the early 1990’s. Except that now we are spending roughly twice as much as then, and the government is four times more deeply involved. People’s expectations are higher. The Rubik’s Cube is bigger and more complex!
Our national experiment with managed care in the 1990’s worked in many respects. I know. I was there when costs actually went down in real terms. I understand why they went down. However, Americans then were not yet ready for limits on their health care choices and decisions, or for market driven changes in their financial contributions. We have seen an explosion of cost growth since that time as open network benefit designs, market consolidations, and anti-competitive government policies have further driven up spending.
Fast forward to today. What else has changed? For one thing, the government is running out of money (despite the printing presses humming at full speed), and Medicare and Medicaid are headed toward default. Second, Obamacare is committing us to entitle another 32 million people with comprehensive health coverage while leaving the main cost drivers essentially unchanged. What will effectively limit costs (while maintaining quality and reasonable access to care) that is politically and culturally feasible? That is our central question and it remains unanswered.
The trends described in the Wall Street Journal article, while holding out hope for the desired result, are largely small bites at the apple and of marginal impact. And some trends, such as hospital consolidations, or physician group mergers with hospitals, may make cost control less likely. All parties today in the health care ecosystem react and respond to the incentives and the constraints they must work with. Remarkably, we still have innovation and disruption that actually does increase value. But so much more could be done if the financial incentives and market dynamics could be fully addressed.
The one party that could change this situation (which is actually not a single party but a broad swatch of changing and diverse points of view) is the government itself. The federal government now sets the main rules for health care and how the industry operates. Like many, I believe current government rules, and those to be implemented under Obamacare, drive incentives in the wrong direction and are more likely to take us off a fiscal cliff than to higher ground. However, it is not too late to move in a different direction – making clear to every person the responsibility that each has to his or her own health, and to the cost of this care. Individual responsibility, engagement in the purchase of health services, transparency of prices and markets, choice, competition, clear reasons for staying healthy and consequences for bad behavior – these are the elements of reform I want to see. The sooner we get to this state of affairs, the closer we will be to the future of U.S. health care that we want and badly need.
The Wall Street Journal – The Future of U.S. Health Care – Dated: December 12, 2011