First of all, if you haven’t already, you should read Atul Gawande’s piece in the New Yorker on the health care crisis in America. It’s incisive, not too long for a New Yorker article, and interesting — so much so that OMB Director Pete Orszag decided to post on it. Sayeth Orszag:
The McAllens [the town central to Gawande’s piece] of our country present a real challenge and opportunity for health care reformers. The challenge is to reconfigure the incentives and norms in our health care system so that we promote better medicine, not just more medicine. The opportunity presented by the nation’s McAllens is that we can realize significant savings by bringing these towns more in line with the more efficient ones – without compromising the quality of care. This is the thinking behind the Recovery Act’s unprecedented investments in health IT, patient-centered research, and prevention and wellness, as well as our ongoing efforts to reform the health care system.
With all due respect to Orszag, I think his post is a bit too coy. Here’s Gawande.
Something even more worrisome is going on as well. In the war over the culture of medicine—the war over whether our country’s anchor model will be Mayo or McAllen—the Mayo model is losing. In the sharpest economic downturn that our health system has faced in half a century, many people in medicine don’t see why they should do the hard work of organizing themselves in ways that reduce waste and improve quality if it means sacrificing revenue.[…]
[…]As America struggles to extend health-care coverage while curbing health-care costs, we face a decision that is more important than whether we have a public-insurance option, more important than whether we will have a single-payer system in the long run or a mixture of public and private insurance, as we do now. The decision is whether we are going to reward the leaders who are trying to build a new generation of Mayos and Grand Junctions. If we don’t, McAllen won’t be an outlier. It will be our future.
The piece itself delves into the differences between comprehensive, quality driven health systems, like those at the Mayo Clinic, and hypercapitalist, “entreprenureal” environments like those in McAllen, TX. Gawande argues persuasively that runaway costs in healthcare primarily result from heavy financial incentives that edge doctors to prescribe more care than needed. Gawande argues that so long as the incentives are aligned to promote more care and not quality care, it won’t matter who pays — it’s still going to place upward pressure on prices. Without addressing the incentives of doctors, we’ll only be curbing growth, not addressing it.
Now, I highly doubt that Orszag doesn’t understand this. Indeed, Orszag said this to Ryan Lizza in an earlier New Yorker about the potential impact of comparative effectiveness on health care reform:
Far from a huge government bureaucracy, he proposes a simple adjustment of incentives: “You get paid more if the treatment has been shown to be effective and a little less if not.”
The question of course is whether whatever winds up passing — if indeed, anything passes at all — will allow for coverage decisions to be based on comparative effectiveness data, and what scope comparative effectiveness will be granted. Conservatives and industry have railed hard against it, and what seemed like a minor detail in the stimulus bill could have all the impact in the world.