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Delivery System Day!

There are two halves to health-care reform. There's the coverage half, which relies on changes to the insurance market. Then there's the cost half, which relies on changes to the delivery system. The problem is that it doesn't get talked about that way. The argument over the public plan, for instance, was an effort to make the cost half about the insurance market as well. But if you look at the plans on offer, it's the delivery system reforms that show the most promise for cost control. It's also the delivery system changes that take up the bulk of the pages.

In a way, this makes a lot of sense. Our health-care system costs a lot of money. To save some money, we'd probably make a bunch of changes to the health-care system, not just the insurance system. And indeed we are. In fact, it's looking like that's where we're going to save the bulk of our money, particularly as insurance-side reforms like the public option have been watered down. But the medical system changes are not getting much coverage.

There are, I think, a couple of reasons for this. One is that insurers are much more politically polarizing, and politicians put a lot of energy into keeping them at the front of the conversation. The second is that the longest-running arguments in health-care reform -- the single-payer debate, the moral outrage of the 46 million uninsured, and so forth -- are primarily about how we structure and fund insurance coverage. The third is that fairly few political journalists know anything at all about the medical delivery system.

Despite my best efforts, I'd include myself in that number. I focus too much on insurance. And I don't have as tight a grasp on medical delivery questions as I'd like. I get the basic sketch -- pay for quality rather than volume, manage care coherently rather than episodically, develop evidence and integrate it with IT platforms that help providers put the knowledge into practice -- but I'm no expert. So today on the blog, I'll be posting up thoughts from a range of actual experts. I've asked them to contribute a paragraph or two each on the most important, but under-covered, curve bender in the bills. It's delivery system day on the blog. Aren't you excited!?

By Ezra Klein  |  September 22, 2009; 8:15 AM ET
Categories:  Health Reform  
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Comments

Actually, I am excited! I work at a Federally Qualified Health Center here in DC, and I agree that information about changes in the delivery system has been relatively hard to come by--at least in a cogent, coherent, and comprehensive way, as you've been giving us all along with your explanations to potential and probable changes in the health insurance system. I look forward to seeing what comes later today!

Posted by: DavidMNDC | September 22, 2009 8:39 AM | Report abuse

Let's hope Mark McClellan is among those experts. He has more knowledge about this than probably anyone in Washington.

Posted by: GRKarr | September 22, 2009 8:45 AM | Report abuse

Just like a tire, I'm PUMPED!!

Thanks Ezra, I'll be reading all day!

Posted by: emmas | September 22, 2009 8:50 AM | Report abuse

I'm definitely interested in this. I am pretty much in the camp that believes that there aren't any real cost control measures in this bill so I am really curious to see where people think the cost savings are going to come from. To me the way to control costs is to isolate the medicare decision making as much as possible from the political process. To increase scale so you can press down on compensation to providers. (whether they be doctors or Pharma) To greatly increase the prevalence of nurse practitioners and increase what they are allowed to treat for. To remove the doctors incentive to overtest and overtreat. To give people more incentive to care what they spend on healthcare. To somehow actually ration end of life care in a smarter more focused way so its not just throwing money down a hole. I don't see any of these things in this bill so I am thinking that the cost savings are mostly wishful thinking so hopefully these posts will change my mind.

Posted by: spotatl | September 22, 2009 9:06 AM | Report abuse

"Aren't you excited!?"

I wouldn't say *excited*, but certainly quite interested. I'm not a healthcare junkie, but this is the part I've been wanting to hear more about all summer. For instance, I'm hoping to hear about whether Comparative Effectiveness Review is still alive in some form.

Posted by: rt42 | September 22, 2009 9:39 AM | Report abuse

Good stuff.

"There are, I think, a couple of reasons for this. One is that insurers are much more politically polarizing, and politicians put a lot of energy into keeping them at the front of the conversation. The second is that the longest-running arguments in health-care reform -- the single-payer debate, the moral outrage of the 46 million uninsured, and so forth -- are primarily about how we structure and fund insurance coverage. The third is that fairly few political journalists know anything at all about the medical delivery system."

Dead on. And kudos for knowing (some of) your own limits. I'm curious to see who the so-called "experts" are that you will be posting, because I'm definitely in the Cortese/Halvorson camp-- guys in the trenches, not academics-- who believe this bills falls dramatically short on delivery system reform. I'm really curious who thinks otherwise. I'm guessing Gruber types-- who aren't experienced on this subject either-- but I guess I'll see soon enough.

Posted by: wisewon | September 22, 2009 9:47 AM | Report abuse

Um... Nobody's going to save a dime under any kind of government reform. To think otherwise is delusion. Fantasy. To say otherwise is either ignorant, or agitprop.

Posted by: msoja | September 22, 2009 9:50 AM | Report abuse

its not about bending the cost curve below what is current spent. Without rationing that is impossible. Some ways to do it. Eliminate insurers, pay doctors a flat set salary (ala the Cleveland Clinic).


The idea is to bend it so that instead of increasing at 7-10% it increases at 3%. That is much more realistic. If you want to bend it below the 3% figure or to a negative number you'll have to ration in some form or another to a point that many Americans won't allow.

Posted by: visionbrkr | September 22, 2009 10:02 AM | Report abuse

--"a point that many Americans won't allow."--

That's a larf, innit? What the bloody mob will allow.

The whole point of "reform" is to co-opt the few things that *are* still allowed, bloody ethics, sense, and freedom be damned.

Each governmental step in the process, over many decades, has driven costs higher and higher. The next steps will be no different, except likely in driving costs higher, faster, and the only trick that government will be able to try to pull will be in disguising, hiding, or obfuscating those costs.

Posted by: msoja | September 22, 2009 10:44 AM | Report abuse

A comment above makes a distinction between academic theories and "in-the-trenches" practices, which is significant. Over the past few days, I've heard more and more people remark that they feel as if they're part of a laboratory experiment -- where legislators without practical experience are determining policies based solely on suggestions from theoreticians.

Posted by: rmgregory | September 22, 2009 10:52 AM | Report abuse

rmgregory, do you think that the ideas of compensation via "value" based systems for example are theoretical? Mayo Clinic has been around for quite a long time.

My own proposals are structured to reward systems like Mayo and other scattered success stories that are more effective than average and offer good value.

Posted by: HalHorvath | September 22, 2009 11:15 AM | Report abuse

I can't think of a way to make an accurate nutshell of my pay-for-outcomes-over-time system, which handles complexity, partial success, drug cost incentives, evolving dynamic outcome criteria, etc. But one quality I'll mention is this system does not specify how providers must operate, but rather leaves them free to innovate.

http://findingourdream.blogspot.com/2009/06/new-way-to-hold-down-health-care-costs.html

Posted by: HalHorvath | September 22, 2009 11:45 AM | Report abuse

If the Mayo Clinic can't seek its own rewards, then they don't merit government's stolen rewards. If the Mayo Clinic does do things successfully, then they don't need political "redistributions".

That's the collectivist's conundrum.

Collectivism prospers under the first-bag-is-free theory of governmental handout addiction.

The Mayo Clinic, and everywhere else, should succeed or fail on their own merits. Giving them *extra* money for successes they would have achieved anyway will only distort the future incentives.

Posted by: msoja | September 22, 2009 11:49 AM | Report abuse

msoja, you've happened onto a market-advocate. The reason operations like Mayo Clinic are unusual, instead of dominate, in the current market isn't that Mayo can't make some profits, but that it's natural advantages of offering better value (higher quality per dollar of cost) are not rewarded in the existing odd market structure, which doesn't act like a normal market you or I use all the time. In markets offering better quality generally fetches *higher* prices, not *lower* prices. But if another provider (other than Mayo) simply does more ineffective procedures, that provider earns *more* profits. See?

In other words, the normal way of a superior product value gaining ground in a market is checked, stopped.

To resolve this you only need to apply your own principles more completely, with more complete information. :-) Paste the link I offered and see for yourself.

Posted by: HalHorvath | September 22, 2009 1:11 PM | Report abuse

If I may quote myself from above: --"the only trick that government will be able to try to pull will be in disguising, hiding, or obfuscating those costs."--

From a Yahoo news story just out on a $4 billion a year tax proposal, to be imposed on the "medical devices industry":

"He's trying to avoid the perception that the middle class is going to be taxed," said Dan Mendelson, president of Avalere Health, an information company that serves the health industry and government. "The trick is to get funding for the bill but not to have anything that smacks of a middle-class tax."

//--end quote.

Hide those costs, boys, fool the rubes.

Is everyone clear on why health care costs keep rising, rising, rising, now?

Eh?

Posted by: msoja | September 22, 2009 6:20 PM | Report abuse

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