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Posted at 2:10 PM ET, 01/24/2011

The people who will really decide whether health-care reform succeeds or fails

By Ezra Klein


The New Yorker isn't allowing Atul Gawande's latest article out from behind the paywall, but you can read the abstract here. The basic point is well worth keeping in mind amid all the arguments over the Affordable Care Act: Health-care costs -- and thus our paychecks, and the federal budget -- won't be decided by how we deliver and structure health-care insurance. They'll be decided by how we deliver and structure health care. And though national policy has a role in that, it's not always a huge role, and it's not usually a controversial one.

Gawande relates a series of stories showing innovation in the toughest corners of the care-delivery system. The most inspiring is about Jeffrey Brenner, a Camden-based physician who began playing with his city's hospital claims data and making maps of where the money was being spent. It turned out that there were two city blocks, containing two particular buildings, where 900 people were responsible for "more than four thousand hospital visits and about two hundred million dollars in health-care bills" over the past seven years. So that's where he focused.

Insurers try to run from the costliest patients. They try to kick them out for having preexisting conditions, or they rescind their coverage, or they price coverage beyond their reach. That just makes them costlier, of course. Inconsistent access to medical care means more medical emergencies, and more medical emergencies mean higher medical costs. Brenner, by contrast, is lavishing them with attention. He's calling them daily. He's checking up on their medications, their lifestyles, their habits. He wants to open a doctor's office in their building. His patients averaged "sixty-two hospital and E.R. visits per month before joining the program and thirty-seven visits after — a forty-per-cent reduction. Their hospital bills averaged $1.2 million per month before and just over half a million after — a fifty-six-percent reduction."

We don't really know if his success can be replicated. But somebody's can be. And that'll be where policy -- in particular, where Medicare -- comes in. The administration's vision sees things running something like this: A promising experiment or pilot program will come to the attention of the newly established Center for Medicare and Medicaid Innovation. The center will fund it on a larger scale and study it more intensely if. If it proves promising, the Independent Payment Advisory Board will force Medicare to implement it fairly quickly. And history shows that if something works in Medicare -- and, quite often, even if it doesn't -- it's soon adopted by private insurers.

That's if all goes well, of course. And all may not go well. But it's important to keep in mind that we know who costs the system money: Sick people. And we know what costs the system money: Their health care, particularly when it involves catastrophic or chronic conditions. So from a cost and quality perspective, this is where health-care reform will live and die: In doctor's offices, in community health centers, in operating rooms and in people's homes.

Insurers can play a role here, as can Medicare. But for the next few years, cost control is going to be less about setting national policy than about setting up the experiments that allow us to test what national policy should be. The Affordable Care Act's contribution to this is money, a center dedicated to bringing these experiments up to scale and a reform process that makes it easier to seed them in Medicare. But for all that to work, the component pieces need to remain in place, and some of the experiments actually need to pan out.

Photo credit: By Pat Sullivan/Associated Press

By Ezra Klein  | January 24, 2011; 2:10 PM ET
Categories:  Health Reform  
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Next: Should the Affordable Care Act have bipartisan oversight?


this is fantastic but as the writer notes correctly without knowing each individual specific case the data could be flawed (ie one or several persons could have accounted for the high costs and could have died thus ending the costs).

Without knowing each case individually (and HIPAA prohibits that for privacy sake) we can't ever know if this works or not but it is a noble thought nonetheless.

Thus you calling it a "success" could be flawed. it could be that the persons claiming such high amounts died. Again your views slant your opinion which is further proven by this incendiary statement.

"Insurers try to run from the costliest patients. They try to kick them out for having preexisting conditions, or they rescind their coverage, or they price coverage beyond their reach"

You really should try to better understand the pricing of medical care Ezra. I thought you did but I guess not.

Insurers (because of HIPAA) cannot legally "run from the costliest patients" or kick them off for having pre-existing conditions.

Really great article but you really kind of destroyed it with your biases.

Again I mentioned this morning this article from MA. Why not look into that as well???

Posted by: visionbrkr | January 24, 2011 2:33 PM | Report abuse

While I most often find myself in agreement with you Ezra on health care issues I think you have sold the health insurers a little short in the above article. The large insurers have identified their chronically ill members and do make outreach calls to them routinely to aid them in being compliant with their medical regime and/or to enroll them in disease management programs. One insurer also makes outreach calls to physicians and their patients when the members' claims' data shows them to be at risk for a major health event. For example, the member who is on medication for hypertension and has not filled their prescription while having recently been seen in the ER for chest pain would receive this type of outreach. This is to prevent illness, yes, for both the member's and the insurer's sake. In the spirit of full disclosure I am retired from a major insurer whose actions are not always right, but who should get credit when they are beneficial.

Posted by: reddog3 | January 24, 2011 2:58 PM | Report abuse

"sixty-two hospital and E.R. visits per month before joining the program and thirty-seven visits after — a forty-per-cent reduction."

That is insane. Does the article state the main causes (I imagine chronic diseases) for these geographic spikes? What percentage of the cost were from - largely - preventable diseases (e.g. Type II diabetes)?

Posted by: chrisgaun | January 24, 2011 3:16 PM | Report abuse

Ezra says:
"... it's important to keep in mind that we know who costs the system money: Sick people. And we know what costs the system money: Their health care, particularly when it involves catastrophic or chronic conditions."

You mean chronic conditions like obesity? I can't wait until Ezra and the progressives start regulating what I'm allowed to eat and drink each day, and mandate that I log 30 minutes of daily exercise with my local neighborhood ACA bureaucrat. You know, because if I become obese I will cost 'the system' more money....

Now, I know I'm just a hateful, fear-mongering right-winger. It's probably ludicrous to jump to the conclusion that government would EVER use the excuse that they now fund our health care as a reason to meddle in our daily diets and madate exercise regimens.

Posted by: dbw1 | January 24, 2011 4:02 PM | Report abuse

Once you establish that everyone is covered, it makes it 10 times easier to do cost control.

Before, the incentive is to figure out ways to drop the sick patient from coverage. After, the incentive is to try to bring down the cost of treating the sick patient.

It's amazing that conservatives are willing to spend trillions MORE just to ensure that millions of their fellow citizens DON'T get coverage.

They want health care to stay a status symbol, even if it kills and bankrupts the entire nation.

Posted by: dstr | January 24, 2011 4:55 PM | Report abuse

There was a podcast of an interview with Dr. Brenner on NPR's Fresh Air last week. It fleshed out the study a bit more than Ezra has here, but probably not to the extent the New Yorker article did - IF anyone has paid to read it.

Posted by: zspam | January 24, 2011 5:18 PM | Report abuse

Well before we progressives authorize the Diet and Exercise Police in our Ever-Growing Nanny State, we will probably look at obesity and other chronic diseases with rising incidences (allergies? asthma?) from a public health standpoint, and question whether our agricultural subsidy policies that make the most unhealthy food the cheapest, or our lack of regulation of man-made environmental toxins that could be contributing to respiratory or hormonal diseases, should be tackled instead.

Addressing many of these problems from a public health standpoint leads us to solutions that are economy-wide and society-wide, enabling the whole populace to better lifestyle practices without ever directing any action to individuals. That should always remain in the domain of the patient and his/her doctor.

Posted by: jshafham | January 24, 2011 5:46 PM | Report abuse

Insurance companies take your weight and height into account when they come up with rates for you, as well as whether you smoke or not. I mean, you can be overweight, but you're going to pay more for insurance, just as if you had a pre-existing condition. They now try to push the preventative thing, and if your doctor's any good they will always advise you to stop smoking, eat healthy, etc.

Posted by: nickthap | January 24, 2011 7:23 PM | Report abuse

Please do not point to articles behind a paywall. It's useless to us. For all we know, you could be making it up. I know you wouldn't really do that, but it's not good.

Posted by: tqwhite | January 24, 2011 10:57 PM | Report abuse


Posted by: jparksmd | January 25, 2011 6:52 AM | Report abuse


Posted by: jparksmd | January 25, 2011 6:52 AM | Report abuse

Most major insurance companies engage in data analysis for issues such as this within their insured populations. They also do outreach for disease and condition management to assist in cost control, not only for the insurer but for the member/patient as well. Unfortunately, some of these types of functions don't fall under the guise of medical management as it is classified under the new PPACA law thus falls outside of the new MLR ratios -- meaning it is administrative. As insurers now must meet the MAR guidelines, much of these 'administrative' actitities will ultimately be curtailed or halted. Unfortunately, good ideas often cost money to implement.

Posted by: bchurch1 | January 25, 2011 12:25 PM | Report abuse

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