"Value-Based" Repeal & Replace

There's a lot of Repeal and Replace work to be done across the board, and I have some other material on many of those other issues. You can find it at www.aei.org/repeal and replace. That reads as a "slash" after aei.org and right before "repeal and replace," and you should indeed slash most of the new health law.

Coming soon also, with my co-authors Bob Moffit, Jim Capretta, and Grace-Marie Turner: Why ObamaCare Is Wrong for America, published by HarperCollins at first-year anniversary time on March 22 later this year. Look for it.

But today, John Goodman asked me to focus on something else: How to improve the health care delivery system and health care "quality" through less political and governmental ways and means.

First of all, we have to change how we define and talk about the issue. The two key measures are health outcomes, and value. Health care quality too commonly is viewed in process terms, or as how to execute a predictable, less flawed, somewhat more efficient manufacturing process --- instead of a personal balancing act in determining the best "value" combination of costs and quality for which you as a consumer, patient, third-party purchaser, or taxpayer/subsidizer of health actually are willing to pay.

There is no single setting that is just right, or even unquestionably adequate, for everyone. That doesn't mean there aren't some institutional process "no-brainers" that we don't need to clean up along the way, but that's just not the big story for how to obtain better value.

We also need to reach well beyond the conventional health care delivery system per se (because a wider range of factors and actors shape our health). That means that we need to look beyond our myopic bias toward dwelling almost exclusively in most health policy debates on health care financing, health insurance costs and access, and official benefits coverage, and then fighting over the political flow of dollars without considering what they actually achieve-in terms of better health outcomes at lower costs.

Two different individuals can have exactly the same health insurance, and their actual differences in health-both initially and even after getting the same diagnosis--can be vastly different depending on where and who they go to for treatment, how they make decisions as patients, and a host of other factors earlier in their life that brought them to that particular point. We always forget to look for the health outcome keys that are lost further away from the health care funding lamppost.

So, let's first be much more humble about promising simple, guaranteed answers-but particularly through the distorting, evidence-free mechanism of national health care politics. The Patient Protection and Affordable Care Act (PPACA) is only the latest, though perhaps the worst, incarnation of promising what's unbelievable and delivering what's sadly all too predictable

In the flyover land of the law devoted to the unicorns of future health delivery reform miracles, or science fair projects that never get out of the exhibition hall, we essentially have various new iterations of repackaged centralized command and control edicts from the usual sources who issued the previous ones that either failed outright or just extended and aggravated the system's pre-existing chronic conditions.

The latest establishment cliché is that just about every idea for controlling health care costs and improving quality is in the law. Well, it is true that almost every bad idea made its way in there, because who really reads that stuff anyway-certainly not members of Congress. But they managed to leave out a few important ideas-like choice, competition, personal responsibility, truth in labeling, market pricing, respect for personal preferences, incentives for better performance and decision-making, double-entry bookkeeping, and even arithmetic.

Moreover, most of the health quality experts are trying to sell a message that most Americans don't want to hear and don't believe. Yes, we complain a lot about how health care costs too much (even though we usually only see a fraction of their full expense directly), or that there are too many other barriers in the way to getting it more of it when we want it. But a vast majority think the healthcare they receive is either excellent or good-just look at the Gallup poll's latest Health and Healthcare survey from last November. So that's partly why you will hear politicians talk a lot more in public about high health care costs, or expanding coverage of the uninsured, that pointing proudly to the PPACA's health care delivery provisions.

The less exciting reality is that our health delivery system-though excellent in many important ways--actually is not perfect, and some very different approaches could improve its value balance, its consistency, its consumer-friendliness, its accountability, and, with some more honest choices pushed forward in a more competitive and transparent marketplace,--its real "unsubsidized" affordability.

The meter is running on my time, so here's the simplified menu:

Throttle back a good bit of the overbearing, counterproductive regulation that gets between the needs (and resources) of patients and the capabilities of health care providers.

Guarantee a socially acceptable floor of health care services for the less fortunate, but stop pretending to subsidize so much of everyone else's bills, when it mostly becomes more wasteful rounds of dollar trading through clogged political filters.

Stop pretending that all care must, let alone can, be high-quality and provided equally to everyone all the time. Instead, let's encourage more competition in seeking and delivering care whose value continues to improve, from wherever it is at the moment. To do that, we can't just imagine the miracles of a totally unfettered free market, although a freer one will help. We will have to rely--very, very carefully--on some public policy changes that can help private parties compete in measuring and reporting better how different parts and parties in the health care system perform-so that they then can be rewarded differently for doing much better, or at least not doing as badly as before.

I've written about this at greater length elsewhere, and the new health law is not totally moronic about this in terms of developing some preliminary infrastructure (that's called "damning with faint praise")--but it remains far too fixated on a lengthy, politically determined set of consensus standards that, by the time they are derived will be either too weak, too unrealistic, or too outdated-and perhaps all three at the same time. While other provisions in this law would drive us to a more concentrated health care marketplace that is less competitive but more politically dependent.

So the short alternative vision is:

  • Patients, providers, and other payers all need better information, not more info.
  • We can't expect it to be perfect and we cannot measure everything or maybe not even most things, but we should use what is the "best available," within limits of current data and measures, while acknowledging those limits. And then just try to just shut up about quality when we really don't know one way or the other-then-just check the all-in costs, and decide how you want to save or waste your own money, or pay for some other dimension of patient experience.
  • We need information much more about provider performance than about insurers and the insurance they offer. And about physicians-not always at the group level--and particularly more than at the level of big-box hospitals which obscures substantial variation in care inside of them. The information needs to be about the combination of measurable health outcome (or intermediate markers for them) and all-in costs for the relevant episode of care. It's the value combination that matters; not just quality, cost, or price alone. But other subjective preferences, in terms of patient experience, are also important, as determined by the unsubsidized patient/payer.
  • This whole area is complicated, contentious, evolutionary, and full of cautions and caveats-such as statistical validity, level of measurement, and attribution. But we ignore it at our peril, if we decline to engage this issue.
  • To credibly empower patients and help them customize their care, we have to arm them with much more than what they currently can find. Everyone else in the system has made plenty of mistakes, purportedly on their behalf. It's time consumers and patients can both insist on accountability from those who serve them, while also seeing more of the costs directly and living better with their own responsible choices.
  • At the public/political level, we'll have to solve the issues of data gathering, aggregation, and synthesis. Some initial level of measurement also requires standardization. But the only way to ensure improvement and refinement is to allow for private competition in making sense of data that's stored responsibly but open to trial and error interpretation. Delivering a single centralized answer through government channels to most value questions will ensure that we keep getting the wrong ones.

 

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About the Author

 

Thomas P.
Miller
  • Thomas Miller is a former senior health economist for the Joint Economic Committee (JEC). He studies health care policy and regulation. A former trial attorney, journalist, and sports broadcaster, Mr. Miller is the co-author of Why ObamaCare Is Wrong For America (HarperCollins 2011) and heads AEI's "Beyond Repeal & Replace" health reform project. He has testified before Congress on issues including the uninsured, health care costs, Medicare prescription drug benefits, health insurance tax credits, genetic information, Social Security, and federal reinsurance of catastrophic events. While at the JEC, he organized a number of hearings that focused on reforms in private health care markets, such as information transparency and consumer-driven health care.
  • Phone: 202-862-5886
    Email: tmiller@aei.org
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