It should be clear, after decades of tinkering around the margins, that creating a health care system that is both affordable and sustainable requires transformational change. To do so, we need to step back and start by looking at the system itself, by deciding what we want it to do, by identifying the outcomes we want it to produce for us—not just as individuals but as a society—and by defining its purpose. We then need to realign the financial incentives within the system to reward those activities which will achieve that purpose.
The single most important step in transformational change is to agree on the long-term outcome, on the vision, if you will. This will allow us to fundamentally change the nature of the debate, from “where we are going” to “how will we get there.
Debating “Means” Before Defining the “End”
For decades, our efforts to make our system more affordable have focused largely on “means,” rather than “ends:” a single payer system, “market driven” reforms, consumer-directed health care with high deductibles and health savings accounts, the expansion of Medicare, Medicaid and SCHIP, insurance exchanges, and individual mandates, to mention but a few.
All of these approaches are a means to an end. Single payer advocates, for example, believe that something will happen if a single payer system is created. It is the “something” that is important here, not the single payer system, which is a means to that end.
By the same token, those who advocate a “market” approach also believe that something will happen if the right market forces are brought to bear. And again, it is the “something” that is important here, not the market approach. It also is a means to an end.
But without a clear understanding and articulation of the underlying problem, without agreement on the something, the “end”—on what a solution to that problem would look like—we will continue to debate means without defining the end. We need to start with the end in mind and then develop the means to get there, not the other way around.
Political Gridlock
The problem lies in the transition from our current system to a new affordable and sustainable system because of the sheer number of economic stakeholders involved, each of which will be affected in some way by the transition to a new system. This, in turn, narrows the solutions space and limits our ability to agree on a shared vision.
These stakeholders include: the uninsured, workers with good employer-sponsored coverage, those on Medicaid, seniors on Medicare, those with disabilities and other special needs, public payers, private employers, both large and small, those offering and not offering coverage doctors, hospitals, nurses and other providers, insurance companies and health plans, the pharmaceutical industry, and medical device manufacturers…the list goes on.
When any proposal to change the system is put on the table, each stakeholder does a quick bit of mental calculus, and often concludes that moving from the current system to the proposed system would disadvantage them economically, particularly in the short term. Thus, each of these stakeholders becomes an advocate for or against a proposed vision for a new health care system based on how they think it will impact them economically.
These competing economic interests have thus been able to effectively block any serious consideration of a solution to a problem that poses a clear and present danger to our nation, out of fear that if that particular strategy is even discussed, it will somehow legitimize it and thus increase the likelihood that it might actually be adopted.
Making the Politics and Economics Explicit
Putting together the politics of meaningful reform requires that we explicitly acknowledge the economics of this transition period, that we recognize and consider the huge number of individuals and institutions which are deeply vested in the current structure of the U.S. health care system—not because of what it produces in terms of health, but because of the financial incentives which define and shape it.
If today, for example, we could successfully change those lifestyle choices and behaviors which have such an effect on the modifiable contributors to the development of diabetes, heart disease and cancer—thus dramatically reducing the incidence of those conditions—many hospitals would have a difficult time meeting their operating margins under the current financial structure and incentives. By the same token, if a hospital can generate $20,000 for managing someone with congestive heart failure as an inpatient—and only $200 for preventing the acute episode—there is a huge economic disincentive and institutional resistance to move toward prevention.
We also need to understand and appreciate the fact that today, there are millions of people whose jobs depend on the current dysfunctional structure of the U.S. health care system. One out of every fifteen jobs in America is in the health care sector, which is the largest employer in the nation. And one out of every five dollars in our economy is related to health care. Nobody wants to lose their job. It is unrealistic to expect hundreds of thousands of people to willingly go on the unemployment rolls in the interest of creating a more effective and efficient health care system. It is simply not going to happen.
We need to understand and acknowledge that while eight percent of Americans have no health insurance coverage, 92 percent do. And they are not going to willingly give it up, even if isn’t very good, because something is better than nothing. It is human nature to cling to the familiar in the face of the unknown.
We need to recognize that there is a lot of trapped equity in the current structure of the U.S. health care system. Hospitals have invested, and continue to invest, in bricks and mortar, in imaging centers, cardiac centers and cancer centers. Many physicians have also invested in these same facilities, and in MRIs and ambulatory surgery centers. Providers are paid well for doing things that may have little population health benefit and, in many cases, for which there is little evidence to support their efficacy. Nobody is going to willingly just walk away from all that.
There are two important points we can draw from this situation. The first point is that it took us a long time to create the system we have today. And because of the huge number of individuals and institutions which are deeply and economically vested in its current structure, it is not only politically impossible, it is also economically impossible to move from our current system to a new system overnight. It may take five years, it might take a decade. In other words, there must necessarily be a transition period.
The second point is that in order to successfully put together the politics of health care reform, we must somehow be able to separate the process of agreeing on the vision—on deciding what the optimal health care system should look like—from the process of realizing the vision through our political system.
Creating a Safe Forum
In other words, we need to create a safe forum, a “space”—outside and separate from our current legislative and governance structures—in which two things can happen. First, we must be able to engage key stakeholders in a discussion of what this optimal system should look like “if anything were possible”—without having that discussion limited or constrained by either the structure of the current system or by the perceived and/or real political and economic obstacles that may exist to actually creating such a system.
Second, once we have described the new system—once we have agreed on what we want this system to do, what we want it to deliver for us as individuals and as a society—we need to make explicit, acknowledge and legitimize the politics and economics involved with moving from our current system to this future system. This will allow us to shift the focus of the debate from how systematic, transformational reform will affect a given economic stakeholder in the short term to a broader and much more productive discussion of how the economic impact of the necessary changes on any given stakeholder can be mitigated during the inevitable transition period.
We can describe this challenge by comparing the vision of a new system (the future state) and the current system (the current state) with the economic burden on the various stakeholders involved. If we could move from the current state to the future state while reducing the economic burden on all of the stakeholders in the process, the politics would be simple and straightforward. Everyone would win.
The problem is that because of the significant trapped equity in the way our current system is organized and financed, the economic burden will necessarily go up for most stakeholders during the transition period. And, as I indicated earlier, these stakeholders all have a significant influence over the political process and are able individually and/or collectively to block anything that will adversely affect their short-term economic interests. The real challenge here lies in managing the transition state.
But without first, agreeing on where we want to end up, there is no political pathway by which to get there.
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“No wind is the right wind, if you don’t know what port you are sailing for.”
Seneca, Roman statesman and philosopher
