August 25, 2009

Health Care Reform: Simplify

There are two major questions to health care reform:

1) How do we reform how we pay for health care? The goal of this reform is to make health care affordable for patients, to make sure health care workers are getting reimbursed fairly, and to figure out a way for our government to help subsidize this type of system without increasing our national debt too much.

2) How do we reform how we provide health care? The goal of this is to make health care better. This means putting best practices into effect so that patients everywhere can benefit from them. It means

But like any good market system, systems reform is inextricably tied to financial reform - and a good health care reform plan must address both.

I would like to draw attention to two articles, each focusing on one of these questions while simultaneously showing that the two questions are inter-related and any real reform must take into account.

First, a column in the New York Times Economix Blog by Princeton Economist Uwe Reinhart. Professor Reinhart divides the reforms proposed into those aimed at the supply side (health care provision) and those for the demand side - because yes, he's an ecomonist. He argues for the increased use of electronic medical records and other measures to increase efficiency, but his focus is on how to create the pool of people who will be insured. He says that a good system must include everyone, regardless of their health condition and whether they want to opt into health insurance - so a mandate for insurance companies to accept everyone and a mandate that everyone purchase at least basic insurance. He also admits that even the most basic insurance may not be affordable for many families (especially in the current economy) and that subsidies must be made available - assuring that everyone is in the insurance pool.

The second article is by one of my favorite physician/writers, Atul Gawande in the New Yorker. Dr. Gawande examines the differences between some areas of the country where health care costs are absurd versus areas of the country where they are virtually under control - and finds that in the areas where we spend more money, care is actually worse. The themes in the places where patients receive incredible care AND health care spending is under control seem to have in common several key characteristics including: doctors worked more as a team than as separate entities, there was more of a divide between physicians and expensive procedures (as in, they didn't own the machines that did the scans), agreements about charging similar fees regardless of insurance (so there's no incentive to see the patient with private health insurance over the person with medicaid), and many hospital-wide electronic medical records.

These articles are encouraging in that, from an economics perspective and a practical perspective, they break down health reform from confusing seemingly impossible ideas to concrete - dare I say, logical? - policies that we can and should implement.

"The lesson of the high-quality, low-cost communities is that someone has to be accountable for the totality of care. Otherwise, you get a system that has no brakes." -Atul Gawande, MD MPH in the new yorker article referenced above

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