06/19/2009 12:03 am ET Updated May 25, 2011

The One-Eyed King

In this kingdom of the blind, the one-eyed person is not a happy king: he is frustrated. President Obama and his new Secretary of HHS are leading us toward quicksand. The one-eyed king sees where we are heading. He is unsure whether our leaders are truly blind or simply have their eyes closed. Sadly, the one-eyed king can do nothing (except write this).

The latest stumble-blindly-in-the-wrong-direction is the government's touted 'fix' for healthcare. Their Plan is nothing more (and nothing less) than a new competitor in the health insurance industry called The Federal Government. There are a multitude of things wrong with this approach that the one-eyed king can readily see by activating his non-special power - a power that everyone has - called root cause analysis.

The government's Plan is intended to fix two problems: millions of Americans without health insurance and unsupportable individual as well as national healthcare expenditures (not costs). 1) Will the Plan get health CARE (not just insurance) for all Americans? 2) Will the Plan reduce expenditures on healthcare, which has become the leading cause of personal bankruptcies and is approaching 20% consumption of GDP?

Fixing healthcare requires - to use the President's own words - dealing with "root causes." Does his Plan address the reasons for uninsured Americans and escalating healthcare outlays? My answer to this question is a resounding no!

BEWARE. Do not let anyone use the crisis excuse: that it is always better to do something now than to wait. A 'something (anything!) now' is quicksand: it always produces a fix-that-fails-or-worse-backfires.

What are the root causes of high healthcare costs? There are ten. The first two we want to keep. The others should be prohibited, minimized, reversed, eliminated, excised, prevented, removed (?), and prosecuted.

1. New Value. Health care can do things that it could not before. They cost money.
2. More People. There are more Americans and they are living longer.
3. Act w/o evidence. [] People in authority make decisions without proof that their decisions will produce the intended outcomes.
4. Bureaucracy (especially regulatory), Inefficiency, and Reconciliation. This non-value adding element consumes at least one third of all healthcare dollars. Regrettably, a single payer system will have little impact on this cost factor.
5. Disconnection. [] In healthcare, consumer, cost-driver, and payer are three different people. Because of disconnection, 'markets' cannot balance supply and demand.
6. Perverse incentives. The system rewards outcomes we do not want.
7. Defensive medicine. In our adversarial litigious environment, providers spend money preemptively to defend themselves.
8. Adverse outcomes and errors (not necessarily the same). These consume resources in extra medical expenses, loss of productivity, and legal costs.
9. Profit-taking. Money is taken out of healthcare as profits.
10. Fraud and embezzlement. Healthcare has its share of Jay Skellings and Bernie Madoffs.

Repeatedly, I ask my fellow Americans to judge for themselves and not simply put their blind trust in our leaders, self-styled experts, or me. Many moons ago, I offered a simple test guide called a "Quorum & A Chant" to help you decide. So decide: Will the President's Plan address (fix) any of the root causes noted above or not?

Is the Government fixing root causes or are we getting more snake oil?