NEW YORK – Analysts digesting the healthcare reform plan of Sen. Hillary Clinton (D-NY) say it will be most effective in provoking discussion.
However, the plan does little to address the many factors that lead to higher costs, such as defensive medicine, the lack of standardized approaches to care, and significant incentives to encourage wellness and preventive medicine.
Clinton released details of her plan, the “American Health Choices Plan," this week at a campaign stop in Iowa. Her approach emphasizes making public and private health insurance options available to everyone; in fact, coverage would be mandatory for the nation’s 47 million uninsured residents.
“The plan is a significant change from what the Clintons proposed 13 years ago,” said Barry Calogero, president of Tefen USA, a management consulting firm.
“There’s a likelihood of getting universal coverage in place, and an idea like that will get some support,” Calogero said. “However, this plan does little to nothing to address the cost side of the equation.”
Clinton’s plan is somewhat vague regarding how to fund its reforms; it suggests funding through tax increases, potential payments by all businesses to supply health insurance and hoped-for efficiencies through the use of healthcare information technology.
“The plan addresses coverage, but not the root causes of cost in the system,” said Andy Slavitt, CEO of Ingenix, a healthcare information and research company.
Despite attempts to constrain costs, they’re growing at a rate of 8 percent to 12 percent per year. If the Clinton plan adds an estimated $100 billion in additional expenses, “those costs have to go somewhere,” Slavitt said.
“The best thing would be to change the incentives in the system so costs can be reduced,” he added. “We have to get at some of the underlying supply costs, the cost of labor, the cost of bringing drugs to market and system efficiency.”
Calogero sees a need for reform to reduce the need for defensive medicine, which is not addressed in Clinton’s proposal.
While Clinton acknowledges the need for wider use of IT in healthcare, her plan underestimates the cost and marginalizes the need to improve processes in place at healthcare systems.
Reform that could effectively reduce costs also needs to give consumers incentives for improving their health and taking preventive tests that have been shown to reduce health risks.
“We need to put more focus on early detection and eliminate complications of chronic disease,” Calogero said. “We need process improvement and we need to eliminate variations in care. Even if we move forward with the Clinton plan, if we don’t take care of the demand side, we’ll be talking about having to ration healthcare in the next five to 10 years,” he predicted.