Free Now To Do the Right Thing

As the health care reform debates enter their final phases this fall, the Republicans have ended the pretense and revealed themselves to be unwilling to compromise to produce a bipartisan health care reform bill. So, having been freed of the Republican albatross, the president and congressional leaders can concentrate on trying to engineer a compromise that can enlist all the Democrats.

As a first step, they should articulate a vision of what the health care system should look like after reform and an understanding of why our present system does not meet that standard. Here is a start in that direction.

Following reform, we want everyone to have access to the care they need to keep them healthy, return them to health when necessary, and help them manage their chronic conditions. We want access to good primary care to be a reality for everyone. We want sufficient services to be available so that everyone can get those they need. And we want them to be of reliably good quality.

We want to avoid any system features that discourage patients from seeking appropriate care from the most appropriate source at the most appropriate time. And we want to avoid other system characteristics that encourage providers to reject some patients or that discourage them from providing the care they believe their patients really need.

And, finally, while we want patients to get needed services, we want them not to get unnecessary ones; and we want providers to be efficient in delivering those services so that money is not wasted. These things are important for individuals and also because a healthy populace is good for the society and the economy. Moreover, without the stability and predictability these achievements imply, the service delivery subsystem will deteriorate further and become increasingly unreliable.

To get to this end state, we need all of the following key provisions:

• Everyone must have comprehensive health insurance. Indeed, there is no good justification for any other outcome.
• Everyone needs access to a personal primary care physician and, through him or her, early access to needed care.
• All needed services must be covered; and providers should know that, if they use their best clinical judgment, they will be reasonably compensated for their work.
• Costs - from insurance premiums and utilization, including patients' out-of-pocket costs - must be kept under control. High out-of-pocket costs discourage individuals from seeking needed care. And high total expenditures will force insurers to cut back covered services and will make insurance too expensive for many to afford.
• To improve quality, opportunities must be maximized to take advantage of information technology and to build teams and coordinated care; and system-generated obstacles to good quality care must be eliminated.

In looking for solutions, the first thing to notice is that the problems - high and rising costs, many Americans without insurance, and unreliable quality of care - are the aggregate result of millions of separate decisions made by individuals acting either for their own benefit (for example, as patients or doctors) or as representatives of various groups or organizations. Moreover, while we usually think of lack of insurance and runaway expenditures as the problems, they are really results of other causes. Therefore, to change the outcomes, we need to identify and overcome the underlying causes so that people will make different choices.

So, why do people make dysfunctional decisions? The main answer is cost. To cover the cost of services used by their subscribers, insurers raise premiums, among other things. In turn, faced with high insurance costs, employers drop coverage altogether or reduce their own costs by increasing employees' share of premiums and out-of-pocket costs of care, and drop family members from coverage. And many employees react to higher premiums by rejecting the insurance offered to them and, even if they do buy it, many don't use needed services because out-of-pocket costs are too high. Providers raise their fees to cover their own increased costs incurred to cope with the huge variety of insurance provisions and to pay for innovations, like information technology.

The aggregation of all the independent decisions to buy or not buy insurance or to use or not use services have created the problems that need to be solved. Democrats should appreciate the gift Senators Enzi and Grassley have provided. Relatively simple solutions are available at modest cost if we are serious about solving the problems and no longer need to placate reluctant Republicans. They should roll up their sleeves and get to work.

(Davidson, a Boston University School of Management professor, is author of the forthcoming book, In Urgent Need of Reform: The U. S. Health Care System.)