To Fix Obamacare: Give Insurers a Bigger Stake
This is the second installment in a series on correcting the mistakes in the Democrats' health reform bill. Click here to read the rest of the series.
As I discussed earlier, Obamacare cannot succeed: the American healthcare system is too large to be controlled from Washington.
A better plan for preserving patient choice and insuring quality care while managing cost increases is to unite insurers and providers into an integrated health delivery system. Insurers can provide the budget and the provider network can then allocate the money to provide the best care. Health consumers will have greater choice by being able to choose amongst competing systems on a regional basis.
But what steps are needed to create this new approach?
First, there must be a reliable health information technological system that will allow the competing systems to measure and manage care. Without such a system that is available among all healthcare systems, there is no way to manage patients if, in the event of an acute illness, they should end up under the care of a provider system that is not their “home” system.
Such a robust and comprehensive IT system will allow monitoring of care, reporting of under-use of care, over-use of technologies that cannot measurably improve care, and a focus on useful preventative approaches to care like vaccinations and proper screening efforts. Once these information systems are in place, then a real organizational reform of healthcare will be possible.
The formation of the care delivery systems will be crucial to a rational healthcare system. Without regional, competitive systems, the only approach to controlling the growth in spending will be government setting the budget and when funds run out, lengthening the waiting lists and closing hospitals as has been the case in Canada, for example.
On the other hand, if the care delivery systems have the opportunity to manage the funds from collection to disbursement, they will have a strong monetary incentive to scrutinize every aspect of care, to put in place systems that will reduce unnecessary expenditures and create local control of their budgets.
They will also have the ability to set the insurance premium based on the level of care and complexity of care they wish to provide the population, thus maintaining the principle of price competition that will be required to incentivize the most cost-effective model.
More to come...