humani nil a me alienum puto

random rants about news, the law, healthcare law, economics and anything I find amusing

A Hodgepodge Bends the Curve?

In the health care reform season, this seems to be another necessary read.  As I have posted before, I think that Dr. Gawande is channeling many of the administration’s views — or at least those views of Mr. Orzag (see December 7, 2009 post).  I don’t mean, at all, that Dr. Gawande is taking a lead from the administration or that he is not the intellectual owner of many of the ideas in this article — particularly the analogy in this article with the U.S.D.A.   I mean that it seems that he is simpatico with at least some of the administration’s views on health care reform and deserves thoughtful review for that reason.

The article can be summed up with this paragraph:

There are, in human affairs, two kinds of problems: those which are amenable to a technical solution and those which are not. Universal health-care coverage belongs to the first category: you can pick one of several possible solutions, pass a bill, and (allowing for some tinkering around the edges) it will happen. Problems of the second kind [e.g., bending the health care cost curve], by contrast, are never solved, exactly; they are managed. Reforming the agricultural system so that it serves the country’s needs has been a process, involving millions of farmers pursuing their individual interests. This could not happen by fiat. There was no one-time fix. The same goes for reforming the health-care system so that it serves the country’s needs. No nation has escaped the cost problem: the expenditure curves have outpaced inflation around the world. Nobody has found a master switch that you can flip to make the problem go away. If we want to start solving it, we first need to recognize that there is no technical solution.

via How the Senate bill would contain the cost of health care : The New Yorker.

He’s saying that to bend the curve, significant but micro/local involvement and almost ‘federal’ (in the political sense – giving great authority to subunits to find better solutions) problem solving is necessary.  There is no elegant single panacea by legislative fiat to address the problem of escalating health care costs .   Ergo, the Senate bill’s reliance on a ‘hodgepodge’ of pilot programs coupled with an agency, the new Medicare advisory commission, that can expand pilots that work, may be an organic and evolving mechanism to ‘manage’ the challenge.  This, at least, is the thesis.

Dr. Gawande believes that the U.S.A.D.’s experience is a good analogy to the current health care industry challenges.  I’m not convinced of the analogy made here to the U.S.A.D.’s initiatives of early last century (and on to today).  It does seem to have some merits, while simplifying the unique economic distortions in the health care market.  Individual farmers, once they experienced the production benefits that modern techniques (and access to capital machinery) could yield, had every economic incentive to pursue these.   First, because they could make much more crop; second, that if they did not do what their neighbors did, they’d soon be unable to compete as market prices declined.  He does make the point that continuing government ‘help’ – particularly to individual farmers with limited resources, continues today.

To make my own metaphor, the farmers’ trucks were stuck in the mud on a downhill slope with the government giving them some assistance to get them out.  Once out of the mud’s inertia, the market took over.  But query what type of mud the ambulance of health care is stuck in and what’s the grade of the health care market’s hill?

But in any event, given the number of pilot programs and experiments in health care payment and quality measures in both the Senate (see recent amendments proposed by Warner – D Virginia – BNA access only) and the House’s bills, we’re in for an interesting period of experimentation in health care payment systems.  As always, those that can quickly react to this change will be in a far better position than their competitor organizations.  It will be particularly important, if Dr. Gawande’s vision is correct, for organizations not participating in these pilots to closely monitor them, identifying what seems to be working and plan how to adapt to them if they are put more widely into use.

In any event, a necessary read.

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