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A Three-Way Fix For Health Reform That Saves Money

A Three-Way Fix For Health Reform That Saves Money

By Mort Kondracke - April 3, 2009

Before President Barack Obama and Congress overhaul the U.S. health care system at great expense - and, as things look now, without a cost-control mechanism - they ought to consider an alternative conceptual framework.

It comes from Tom Cigarran, founder of Healthways Inc., the nation's largest disease-management company, who says that - despite politicians' denials - some sort of health care rationing is inevitable and needs to be done rationally and fairly.

In an interview, he said health reform should be divided into three parts.

First, the government should guarantee that everyone receives "basic" health care, including quality primary care, preventive services and treatment for injury and disease.

But, second, "quality of life" treatment should be means-tested, with richer people paying more than poorer people for services such as joint replacements, plastic surgery, some drugs and in vitro fertilization.

And third, he said, the country needs to move toward more humane and less expensive "end of life" care, making greater use of hospices instead of "heroic" hospital treatment.

Cigarran, who retired as CEO but still is chairman of Nashville, Tenn.-based Healthways, a company that serves 30 million patients worldwide, told me that "the country owes a basic level of care to its citizens, but not everything-for-everyone Cadillac coverage."

Democrats and the Obama administration are contemplating extending Medicare-style or federal employee-level coverage to the nation's 45 million uninsured.

They estimate it will cost $150 billion a year, but Cigarran thinks it will end up costing much more - and said it's more than the country can or should provide. And, when the government discovers it can't afford full coverage for everyone, it will ration care, he said.

Cigarran has traveled extensively, inspecting various countries' health systems. He said all of them ration in some way - including the United States, though we don't like to admit it.

It's well-known that the United States spends vastly more of its gross domestic product on health care than any other country - 17 percent last year - while we rank 50th in life expectancy, according to the latest CIA World Factbook.

In 2004, according to the Organization for Economic Cooperation and Development, Japan and France spent 10.4 percent and 8 percent of their GDP on health, respectively, while the U.S. spent 15.2 percent. Japan and France rank third and ninth in life expectancy.

"What makes a successful health care system anywhere," Cigarran said, "is that it provides universal coverage - especially good quality, convenient and affordable primary care - and the people like the system.

"But they all compromise somewhere to contain costs. They ration. There are waiting times for specialty treatment or, in some cases, they don't provide it. And most people don't have access to the very latest in technology."

The United States rations, too, he said, by income. Around 45 million people don't have health insurance - mostly, because they can't afford it - and as a result, they don't get regular health exams and they see a doctor or go to an emergency room only when they get sick.

According to a new study by the National Academy of Sciences' Institute of Medicine, among working-age uninsured people, 40 percent have chronic illnesses and are two to four times more likely than insured people to have received no medical attention in the past year.

Politicians considering health reform, Cigarran said, are indulging Americans' "unrealistic expectations" that they can have it all - the highest quality medical care and the latest technology, all conveniently supplied and delivered perfectly. And, paid for by someone else.

"Our politicians have never had the guts to say, 'you can't have it all' - or, 'shut up and pay for it,'" he said.

Cigarran agrees with key parts of the Obama agenda: electronic medical records, pay-for-performance medicine and emphasis on disease prevention and chronic disease management.

But he doesn't think the government can or should afford to guarantee that everyone will have automatic access to the latest technology or specialty services.

Of course, some entity will have to decide where the line is drawn between "basic" health services and "quality of life" and how means-testing will work.

As an example, he said, "if you shatter your knee in an accident, a knee replacement is basic. But if your knee hurts, maybe a poor person should pay 10 percent for the replacement, but a wealthy person, 90 percent."

In the meantime, there should be no question that government and insurance companies should encourage better - cheaper - "end of life" services.

"The way we treat most people is not just expensive. It's inhumane," he said. "Anyone who has experience with hospice care knows the difference between dying at home with family and friends around, as opposed to being kept alive with 'heroic' hospital interventions.

"It requires an education process for both doctors and citizens. Sending granny to an intensive care unit is not the best thing for granny, as opposed to dying at home. You can't force it, but you can encourage it by subsidizing hospice care 100 percent," he said.

Cigarran's three-level proposal is the best idea that I've heard on health reform in years. Before Congress enacts a plan that tries to offer everything-for-everyone coverage that the nation can't afford, it ought to consider his plan.

And if Democrats can't bring themselves to adopt it, Republicans should. They don't have a health plan. And his makes eminent sense.

Mort Kondracke is the Executive Editor of Roll Call, the newspaper of Capitol Hill since 1955. © 2007 Roll Call, Inc.

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