HEALTH CARE
To fix Obamacare, the GOP needs The GOP needs to tackle this major flaw in the health-care system
Rita Numerof, PhD, president of Numerof & Associates
CNBC.com
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Win McNamee | Getty Images
Speaker of the House Paul Ryan (R-WI) answers questions during a press conference at the U.S. Capitol November 15, 2016 in Washington. Also pictured are (L-R) House Majority Leader Kevin McCarthy (R-CA), Republican Conference Chairman Cathy McMorris Rodgers (R-WA), and House Republican Whip Steve Scalise (R-LA).
As Republicans in Washington get set to reshape national health-care policy, it is critical that the surrounding debate distinguishes between two related but distinct issues: access to coverage and access to care.
In other areas of policy, we understand this distinction. We know that the issues of homelessness and affordable housing are linked, but not the same. Solutions for one are not automatically fixes for the other. We see the same thing with other basic health issues like food security and nutrition.
Only in health care do we consider the decades-long challenge of delivering high-quality and cost-efficient care "solved" once everyone nominally has access to some sort of insurance.
But real health-care reform is not just about coverage. Getting people into exchange plans they can barely afford, with heavy (and increasing) deductibles and taxpayer-funded subsidies, is a "homeless shelter" fix. It's better than being on the streets — for sure — but a homeless shelter isn't a home any more than a high-deductible "bronze" plan is a real health-care solution for a family that can barely afford to pay the rest of its bills.
If we want to fix this system, it's time to get serious about replacing fee-for-service provider reimbursement with approaches that link costs to outcomes, like bundled payments and population health.
"If we are serious about reform, we need to move beyond the current obsession with coverage to a real debate about accountability, transparency, cost and quality."
The Obama administration has pushed forward on several value-based care initiatives, but one of the most striking success stories we've had occurred under the previous Republican administration.
In 2008, the Centers for Medicare & Medicaid (CMS) announced it would no longer pay for so-called never events — preventable incidents like hospital falls or objects left in patients after surgery that should never happen in modern health-care delivery organizations.
This first meaningful connection between payment and outcomes led directly to a 17 percent decline in hospital-acquired conditions from 2012 to 2013. Notably, it took financial incentives/consequences before this happened.
Unfortunately, there are worrisome signs that the incoming Trump administration is less committed to the idea of value-based care. It will be important to differentiate between the baby (payment reform) and the bathwater (onerous regulations and reporting requirements) if we're ever going to get to true value in health care.
A second key goal for reform is more in keeping with Trump's campaign messages. Unwinding the existing incentives for consolidation would help preserve the competitiveness of many local markets, and thereby protect working-class families. The Affordable Care Act (ACA) established a bureaucratic labyrinth of new organizational structures, regulations and incentives.
Rather than focusing on the capabilities and culture needed to move toward better outcomes at lower cost, providers and payers have been compelled to invest in new staff and technologies to comply with all these new regulations.
On the provider side, this effort spawned a flood of consolidation, with health-care delivery systems buying or affiliating with other systems, and physicians seeking refuge in employment from proliferating bureaucracy. A grave danger we face as a nation is that all these systems become too big to fail — and, more importantly, too big to care.
Finally, it is past time to require transparency of cost and outcomes, so consumers can make informed choices about their care. Having awareness that not every hospital is performing equally well allows consumers to make judicious decisions, an important first step toward a true market-based health-care system.
Health care is an issue that affects all Americans. It costs too much, it is piecemeal, there is little accountability for outcomes, and it is not consumer-centered.
In virtually every other industry, consumer demand drives service providers and product manufacturers to improve quality and compete on price. In contrast, the approach in health care has always been to try to reduce costs by manipulating organizational structures — as with HMOs or Accountable Care Organizations — while leaving in place the original sin of fee-for-service provider reimbursement.
This will always incentivize volume-driven care decisions, not a focus on outcomes.
If we are serious about reform, we need to move beyond the current obsession with coverage to a real debate about accountability, transparency, cost and quality.
Commentary by Rita Numerof, PhD, president of Numerof & Associates, a firm that helps businesses across the health-care sector define and implement strategies for winning in dynamic markets.
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