Why proposed healthcare legislation will be ineffective

With the Fourth of July recess, we have a momentary respite in the race to pass legislation to make some monumental changes in the way the country apportions responsibility for services given to sick people.

I resist the impulse to call this a healthcare bill, a healthcare reform bill or any other such non sequitur. The nation is held captive in a large debate about which governmental entities bear the responsibility in setting healthcare policy. It makes no use of any of the resources that could be brought to bear on making things better, such as information technology.



I could write about this endlessly, because the healthcare reform debate has been going on for years, if not decades. The most recent decade has been one of rancor, politicization, partisan grandstanding and the use of healthcare as some kind of standard around which ideologues posture their beliefs.

Healthcare providers, patients and any chance of meaningful reform are lost in this mishmash.

The economics underlying healthcare are complex, and even after spending 30 years covering the industry, I won’t pretend to understand them all. But the amount that we spend on care is profoundly large, compared with the amounts that other countries spend, approaching 20 percent of our gross domestic product. And dollars spent on healthcare can’t be spent on other important areas of the economy, such as education, infrastructure, the environment or national defense.

And the network that supports care delivery has morphed, over the years, into a vast collection of disorganized cottage industries, each responsible for its own little segment, whether that’s healthcare insurance, primary care, specialty care, acute care, post-acute care, home care and more. Recent economic forces have caused some of these discrete care units to be glommed together into larger networks, but many of these networks are only beginning the journey to integrating services.

And computer systems, oh my. The goal is to help knit all these disparate pieces together so they can at least share information on patients as they flow through the system. Well, that was the idea. It’s been slow to happen.

The economic incentives that shaped adoption of electronic health records systems are really a microcosm for what ails healthcare in general, and give a hint at what could solve much of the mess.

EHRs were implemented by providers in droves in the last decade, at a speed and earnestness that would have seemed impossible just 10 years ago. That showed the power of economic incentives put forth by the government. Those incentives, while significant, were just a fraction of the cost of the systems overall, but they were enough to get providers to act.

And now? The incentives are drying up, and much work needs to be done to wring benefits out of the foundational EHRs that are in place. It would be nice if they truly interoperated; it would be helpful if analytics could make care providers better; it would be great if artificial intelligence could be applied to make us smarter; and it’d be awesome if genomics could be incorporated in EHRs routinely to truly drive personalized care. These all will come, eventually, but it will be with individual provider organizations moving forward on their own.

Incentives drive the overall healthcare system as well, as do penalties, such as those for too many readmissions. The government thus can play a role as a convener, making determinations about what is good for the health of the country, or not.

But the current debate is about whether the government should play a lead role in setting healthcare policy—specifically payment policies—or kick that can down the road to some other entity. Current versions of health bills before Congress envision the states of the union taking on more responsibility for setting their own healthcare course, and paying their own healthcare bills. But many states are no better equipped than the federal government to take on this financial responsibility and the result will be a patchwork of good states and bad states.

Ultimately, if the states don’t take up the mantle of responsibility, the cost of the nation’s healthcare will eventually flow back to providers, who then will pass the cost on to payers, employer-purchasers, and very ultimately—you and I as consumers. Healthcare costs that no one speaks up for don’t just evaporate—they’re borne by society.

There’s no real brake on accelerating healthcare costs when care is provided in a disorganized manner to small purchasing segments and only when people are sick, especially when some interventional care could have been applied earlier on, when care could have been cheap and headed off an ICU or ER visit.

So don’t call what’s happening in Washington healthcare reform. True reform would look at system redesign to figure out a way to incent people to live healthier lives, to give providers a financial stake in optimizing people’s health and to otherwise put dollars in place that would encourage better choices in how we move forward.

Don’t get me wrong. When I or a family member is sick, I want financial mechanisms in place to cover a reasonable portion of those expenses. But down deep, don’t we really also want a system that works just as hard to keep us as healthy as possible for as long as possible? Aren’t those deferred medical expenses—because we are healthy or engaging in less destructive behavior—worth something? Say an incentive of some kind?

We all await what will come out of Washington. Whatever that final form, there will be an economic incentive buried in it. It may be perverse, and it may be counterproductive. If done poorly, people will be negatively impacted. And the healthcare industry will learn to adapt to these new incentives and survive within that matrix.

Let’s hope for some visionaries to someday take us in the direction that we need to and want to take.