In a recent blog post I shared my concern about President Obama’s proposal to expand healthcare insurance coverage at a time when the economic stimulus plan and TARP will result in historic federal deficit levels, leading to an even greater financial crisis. Now let’s address the different perspectives of others who have outlined what should be done to confront this challenge.
In an article from The New Yorker, “Getting there from here,” (01/26/09) Atul Gawande MD, suggests neither ideological master plans nor transformation at a single stroke will lead to a successful expansion of healthcare coverage to all Americans. Instead, he proposes that we “cannot swap our old system for a new one…but we can build a new system on the old one.” He uses the development of national healthcare coverage in Great Britain, France, Canada and Switzerland as evidence of the efficacy of this approach. In fact, he states this process is consistent with a theory espoused by social scientists referred to as “path dependent processes,” where increasing returns are realized as more people organize their activities around earlier decisions.
Dr.Gawande’s most provocative recommendation is that we design our system by building on what we already have. He proposes we open our existing health insurance programs to others, giving citizens the opportunity to join Medicare, the Veterans Administration plan or even the federal employees program. While acknowledging this would “undoubtedly be messier than anything an idealist would devise,” he believes “the results would almost certainly be better.”
Unfortunately, Dr. Gawande repeats the error of so many others. He focuses on how to organize a better system to achieve universal coverage without confronting the more difficult and intractable issue - how to pay for it. It is much easier to “nibble around the edges” by looking to free market concepts like alternative insurance plans with high deductibles or technology advancements (such as IT) as the solution while ignoring the fact that all of the countries he identifies as having evolved into their current system have also adopted expense control measures that many Americans view as unacceptable.
In 1991, I had the privilege to spend a month in Germany on a fellowship to study the German healthcare system. Of all of the European systems, Germany’s most closely resembles our own. But this system includes measures they adopted to specifically control the level of expenditures:
- a strict national Certificate of Need policy to control capital spending;
- funding of all major capital expenditures by state and national government;
- negotiation of hospital per diem rates by health insurers bargaining as a single group;
- global budgets for physicians qualifying for fee-for-service payment (primary and ambulatory physicians);
- specialists employed by the hospitals; and
- government negotiations with pharmaceutical companies.
Until this country acknowledges that the “elephant in the room” - the continued increasing rate of healthcare costs - is an essential element in the discussion of expanding coverage, we will avoid the tough decisions required, which other countries have already confronted, in bringing about healthcare reform.