Do we need healthcare reform?
Perhaps the question "Do we need healthcare reform" is more than a bit rhetorical. Just about anyone who has had a significant interaction with our health care system (with or without the benefits of health insurance), is likely to conclude that reform is needed -- even if only to fix the broken and inefficient system for determining what is covered and who should pay how much for each service. Those less fortunate who have no health insurance would certainly benefit from reforms that lead to universal coverage.
The current discussions and proposals for healthcare legislation prompted me to summarize my own thinking on why we need healthcare reform, and record those thoughts here.
Healthcare costs are damaging our global competitiveness
The current US healthcare payment system is unsustainable, causes economic harm, and is damaging America’s ability to compete in the world marketplace -- GM and Chrysler are just the tip of the iceberg. As Craig Barrett said when he was CEO and Chairman at Intel,
"...if you are interested in U.S. competitiveness, as I am, then you have to say that healthcare is the biggest boat anchor, the Achilles heel going forward. We need to do something … If you continue along the current track... every job that can be moved out of the Unites States, will be moved out of the United States because of healthcare costs." [keynote address to HIMSS, Sep 26, 2006]
We are leaving key segments of our population uncovered for healthcare
Despite the largest per capita spending on healthcare of any nation in the world (now over $8000 per person per year, consuming over 17% of our GDP), we leave large segments of our population uninsured for healthcare treatment. At any point in time, about 45 million people have no coverage. An astonishing 86 million people in the U.S. were uninsured at some point during 2007 and 2008, and 66 million were uninsured for at least 6 months during that 2 year period. [http://www.familiesusa.org/assets/pdfs/americans-at-risk.pdf]. Huge inequities also exist because health insurance can be canceled when an illness causes a job loss, and chronic or past illnesses cause health insurance to be unaffordable.
We rank poorly on measures of effectiveness of our healthcare system
We are in last place among 19 industrialized nations on deaths that could have been prevented with better healthcare. On the most recent comprehensive analysis of the quality of our healthcare system, we averaged a score across 37 performance indicators of 65 out of 100, where a benchmark score of 100 has been achieved by best practices within the U.S., or in other nations. [Results from the National Scorecard on U.S. Health System Performance, 2008, http://www.commonwealthfund.org/Content/Publications/Fund-Reports/2008/Jul/Why-Not-the-Best--Results-from-the-National-Scorecard-on-U-S--Health-System-Performance--2008.aspx]. The reasons for this performance are complex - it is also true that for a variety of conditions (for example, heart attack and breast cancer), if you have health insurance, then your survival appears to be greater in the U.S. that it is in other countries with advanced healthcare systems (for example, Canada).
The current system of delivering and paying for U.S. healthcare is incredibly inefficient, because it spends inordinate amounts of money, and fails to provide basic and needed services for a large segment of the population. The need for healthcare reform is acute, and the Obama administration has said it believes any reform package must necessarily address all of these problems.
Why haven't we fixed this crazy system already?
Unfortunately, there is a reason that reform efforts over the last 30 years have failed. The complexities of figuring out viable reforms include:
-It is not economically possible to add coverage to the uninsured using the current system to deliver care.
-The current healthcare players (EG, insurance and pharmaceutical companies, and healthcare providers) will resist powerfully any changes to their current business models.
-The public is susceptible to media messages that will portray any proposed change as a government takeover of private healthcare, or a taking away of existing rights and access to care. The current media bias in reporting of the benefits (and weaknesses) of other countries' systems of healthcare is striking.
Competition in healthcare versus universal coverage
There is a strong business sentiment to harness market forces to improve efficiency in healthcare. For example, Health Savings Accounts exist to encourage people to make cost-efficient decisions in their healthcare spending. Unfortunately, people have few resources to assess the quality of care they will receive and to make judgments about cost-effectiveness - although it is clear how to select the lower cost options. Unfortunately, when life is threatened or severe pain is involved, most people stop paying attention to the cost of healthcare services, and want only the best possible and immediately available care.
A bigger problem with the increased use of market forces to drive personal choice in healthcare is that such systems must allow people not to buy if the price is too high. So people of low or modest means are more likely to choose not to be covered or not to purchase expensive care. This is dramatically at odds with the expectation that people should not die or suffer serious consequences because they have no access to needed healthcare.
Is there a solution?
Based on our history and legislative traditions, and the acknowledgment of same by our current administration, it does seem that any reform that has a hope of making it into law will be incremental rather than transformative, and will build on the existing parts of our healthcare patchwork. The challenge will be to combine market-driven or incentive-based mechanisms that drive real reductions in cost with a subsidized option for healthcare coverage for those who currently cannot afford it (or choose not to purchase it).
The viable solutions to this problem will likely include reform or regulation of private health insurance companies, a public insurance option that forces economic efficiency on the private insurance companies (and that allows some to fail), plus financial incentives to providers that lead to improved quality and efficiency.
There will be discussion of how we can use prevention as a means to reduce the need for healthcare, but to date, no method of delivering systematic improvement in our healthy behaviors has been offered.
I'm afraid there is a danger that we will end up expanding coverage only incrementally for those who need it most, and we will be tempted to pay for that by reducing payments to providers, without reducing administrative inefficiencies and alleviating both direct and hidden costs of malpractice. True reform and the ability to expand coverage to all who need it will require structural changes that will be politically very difficult to achieve.
In fact, if we do not create a more efficient healthcare system, we will not be able to keep people insured, let alone expand coverage to those who do not have it now. Based on recent speeches by Obama, and on comments made by secretary of HHS Sibelius, it appears that the administration does understand this issue.
I'm hopeful that the recent groundswell of support for reform, including specific support for a public health insurance option, will be sufficient cover to allow our politicians to pass an effective reform plan. My great concern is that the forces lined up against a truly effective and efficient public option could lead to a public option that is by design unable to force cost reductions (such a design for the public option would harm the viability of private insurance companies' current business models). Without cost reductions, we just won't get significantly expanded coverage.
I hope not. It still seems inconceivable that we can leave in place a system that spends more money per person on healthcare than does any other nation, and yet fails to deliver care to such a large number of people who need it.


I'm saddened to tell you that a young and beautiful member of the HealthBlogger network recently passed away. Shawndra Turner was just 32 years old when she lost her very valiant and courageous battle with colon cancer. Shawndra wrote an inspired blog (





