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Too Hot for Health-Care Reform

The Brookings Institution got a lot of press last week for a report on bending the cost curve on health care. David Brooks used his column in the New York Times to ask Obama to read it. The implication was that this report was too radical, too transformative, too hot for the political debate. It's "politically risky," warned Brooks, but it's the essence of change.

But actually, it's a reminder that many of the promising ideas on cost control are small, technocratic tweaks that haven't been anywhere near the center of the conversation. "Align Medicare payments to better support the use of allied health professionals," for instance. Or "increase payment rates for primary care, off-set by reductions for specialty care." Or "restructure non-group and small-group markets around an Exchange model that promotes competition on cost reduction and quality improvement." Nothing in there is a Big Idea. It's all small stuff, a vision of savings that would amass through the accretion of unnoticed efficiencies.

And much of it exists in the current bills. Max Baucus's framework, for instance, proposes that "primary care practitioners, as well as general surgeons practicing in a health professional shortage area, would receive a 10% Medicare payment bonus for five years. Half of the cost of the bonuses would be offset through an across-the-board reduction in all other services of approximately 0.5%." Elsewhere, "a percentage of hospital payment would be tied to hospital performance on quality measures related to common and high-cost conditions, such as cardiac, surgical and pneumonia care."

There's pages and pages of this stuff in there. Small changes to the delivery system and the reimbursement rates and payment incentives that are getting very little attention. This stuff, no less than the public plan or the treatment of immigrants, is the meat of health-care reform. It doesn't have a constituency, and it doesn't get much attention on the shows, but it accounts for the bulk of the pages in the legislation, and much of the savings -- not to mention quality improvements -- we're likely to see.

By Ezra Klein  |  September 15, 2009; 1:18 PM ET
Categories:  Health Reform  
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I think the one and only "Big Idea" that was put completely off the table is a Wyden-Bennet style complete break from the employer based health insurance system.

I consider myself a progressive, but would gladly trade the public option for an end to government subsidies for employer based insurance. The system is a historical accident that makes healthcare insurance fragmented, misaligns incentives for health care costs, and takes a heavy toll on small business and the self-employed. It also contributes to a break-down in our primary and preventive care safety net: Americans change employers, and thus insurers, frequently, and no one is incentivized to make moderate preventative care investments now for a payoff a long time down the road.

Hopefully, once the Exchanges are established as an effective means of purchasing insurance we can revisit the employer based system.

Posted by: CarlosXL | September 15, 2009 1:41 PM | Report abuse

It's been a mystery to me that all the brain power available and not a jot about the efficacy of a cost reduction program. The excercise feeds on itself and once in the mindset, ideas flow. You always get some big opportunities no one saw coming. The caveat and it's a big one is to flog your ideas to death to be sure ideas are robust.

Posted by: BertEisenstein | September 15, 2009 1:58 PM | Report abuse

If you really believe that this small, minor, easy changes would save so much money then you would be in favor of them even if the rest of the healthcare bill failed right?

Posted by: spotatl | September 15, 2009 2:00 PM | Report abuse

The statement that such matters are "too hot" for public Congressional discussion is all too true.

The difference between incentivising good and bad treatment is subtle. Nobody wants to see a patient shuttled out of cardiac intensive care by a hospital eager to receive a bonus; likewise, few are willing to trade a legally-privileged relationship with a trained and licensed physician for an unprivileged relationship with even the most skilled not-a-doctor. Who stops the hospital from selecting the bonus over the health of its patient? Will the enforcer be an unelected bureaucrat without medical training and experience, or an elected official responding directly to a simple majority vote?

Addressing such subtleties in statute is difficult and protecting even a perfectly-crafted statute is virtually impossible. Take ERISA for example: over the years a statute intended to protect workers' retirement has been tweaked with minor changes ("and" to "or" and such) rendering it more of a sword for greedy retirement plan operators. Since few have the time to read the statute's entire bulk, many nuances (favorable to special interests) only see daylight when challenged in court by already-injured litigants forced to pay a premium in an often futile attempt to secure rights they thought they had.

The focus somehow has to be on care and fiscal responsibility, not merely cost-cutting, somehow striking a practical balance between the two. Health care in the UK is an example of good intentions leading to historically less-than-popular results: health care in Japan is an example of good care leading to a system on the verge of financially insolvency. Would it be wise though to attempt to find the balance through, say, a series of FoxNews political broadcasts? No.

Posted by: rmgregory | September 15, 2009 2:00 PM | Report abuse

OT: this is more about the affordability question. via Maggie Mahar, an interactive "What's in HR3200 for you" widget.

Posted by: eRobin1 | September 15, 2009 2:11 PM | Report abuse

As spotatl rightly pointed out, these things should be tried (and are being tried) whether or not we force people to buy overpriced insurance.

The question before the public should be, how are we going to guarantee (not hope for) the affordability and sustainability of the individual mandate?

Posted by: bmull | September 15, 2009 2:14 PM | Report abuse

As spotatl rightly pointed out, these things should be tried (and are being tried) whether or not we force people to buy overpriced insurance.

The question before the public should be, how are we going to guarantee (not hope for) the affordability and sustainability of the individual mandate?

Posted by: bmull | September 15, 2009 2:15 PM | Report abuse

Why isn't the administration trying these cost-saving ideas? Presumably it disagrees with Brookings.

Posted by: tomtildrum | September 15, 2009 2:25 PM | Report abuse

Ezra has turned me into a wonk.

Posted by: PoliticalPragmatist | September 15, 2009 3:43 PM | Report abuse

IMO we are looking for a magic bullet. There are none. The path to reduction and improvement is incremental. The political environment is so charged that no one wants to invest in suggesting myriad minor changes. Especially if you have to fight tooth and nail over every one. "We have met the enemy and he is us."

Posted by: BertEisenstein | September 15, 2009 5:08 PM | Report abuse

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