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Orange County Business Journal: Five Steps to Reform

By Jon Wampler

When Congress recessed and members returned to their districts, they mostly heard, “Keep your hands off my healthcare!”

In light of the government’s recent inability to successfully establish, operate and pay auto dealers accurately and on time in a straightforward and seemingly simple process (cash for clunkers), what can we expect from a government bureaucracy charged with operating an extremely complex healthcare system that is neither straightforward nor simple?

Both political parties continue to focus solely on the supply side of our healthcare problem. But we really need to be looking at the demand side as well. Value over volume should be everyone’s chief focus, but this will require sacrifice from everyone: physicians, patients, insurance carriers and the uninsured. We simply cannot afford to give everyone everything, no matter what the president says. The numbers just don’t add up.

It is time for all Americans to take a deep breath and revisit what could be done to make our healthcare system more accessible to all, less expensive, more available to a broader audience and able to improve the health of average Americans and still allow the companies currently providing healthcare coverage to continue to do so.

The following five broad reforms might accomplish this and much more without resorting to a governmentsponsored plan and allowing our government to work on other serious problems such as Social Security, Medicare and, of course, our huge deficit.

Adding another trillion and a half dollars on an experiment in revolutionizing our existing healthcare system just doesn’t make sense right now.

  1. First Defense

    First, President Obama is just the right person to lead our country in fighting its current number one health problem: obesity. Our young, energetic, basketball-playing president could lead our country in an effort to lose weight. Currently two-thirds of all Americans are overweight, and one-third of those are obese. Our children are in even worse shape.Obesity is directly linked to four of the top six killers of Americans: diabetes, heart disease, cancer and hypertension. The Center for Disease Control says per capita spending on obesity related healthcare accounts for 9.1% of all medical spending, or $147 billion annually. Surely our president could influence us to lose weight collectively and establish a principle of accountability for weight control for all Americans. We could be fit, less fat and begin taming those diseases that are known to be linked to obesity.

  2. Increase Family Physicians

    Secondly, we need to drastically increase the number of family physicians, general internists and general pediatricians. Our ratio of family practice physicians to specialists runs about 30-to-70. We need to reverse that percentage with family medicine restored to its traditional place of dignity and importance. Only 2% of this year’s medical students have chosen family medicine as their specialty. If you think waiting for an appointment is bad now, just add 45 million more people to the mix to find out just what the word ugly means. As baby boomers (78 million out of 330 million people) age, the need for family medicine will be more urgent than ever.If the government really wants to make an impact, let’s pay all medical school tuition for those who are willing to take up family medicine. As a further incentive, let’s reinvent reimbursement rates for these physicians and join the modern era by paying them for e-mail consultations and consulting time spent with their patients, as well as add extra incentives for preventative medicine. These important physicians should also be incentivized to practice medicine in rural and urban settings through additional compensation. We have asked family medicine to do too much, with too little, for the past 30 years. Now is the time to get creative in educating the type of physicians who will be the lynchpins in revolutionizing our current healthcare system.

  3. Patient Responsibility

    We have all seen the graphs about increasing healthcare costs, which are growing faster than gross domestic product.The reason for this is simple: the American people buy healthcare without using any of our own money. Out-of-pocket expenses for Americans now accounts for only 12% of all health spending, a percentage that has been falling for decades. We need to let consumers direct their own spending. Having additional family doctors would remedy this problem quickly.Tort reform is the next step needed in helping straighten out our healthcare system. Currently, about 10% of our total healthcare expenditures are a result of defensive medicine: testing just in case there is a lawsuit filed. This amounts to more than $210 billion annually. Sadly, our president and the Democratic Party as a whole are handcuffed by their support from trial lawyers. Tort reform will not be an easy task because Congress is made up in overwhelming numbers by attorneys, but it could be made easier if advanced by one of their own, namely the president.Patients must do their part as well. Physicians do make mistakes. But we must not punish the entire system by making physicians order every test and every procedure just to prevent unhappy and litigious patients. We need to think long and hard about limits on damages, punitive damages and the ease of lawsuits.

  4. National Risk Pool for the Insurance Industry

    Fourth, we need to create a national risk pool for the insurance industry. Right now insurance companies do as much as they possibly can to minimize risk and control just who they insure. Financial incentives demand that health insurance companies behave just like auto insurance companies: find good risks with no pre-existing conditions and attempt to mediate that risk. By establishing a national risk pool (the Federal Deposit Insurance Corp. would be an example to follow) we could make the following demands from the healthcare industry: guarantee issue to anyone, make health insurance portable (job to job, state to state), eliminate lifetime limits and lifetime maximums and eliminate pre-existing conditions. By this simple step we create an industry where all patients can be managed by the law of large numbers.

  5. Teaching Hospitals

    Finally, we need to establish our teaching and training hospitals as places where new physicians are trained in providing appropriate, cost-effective care. Patients could be assured that our very best in research and training universities are committed to the treatment of everyday patients, not just the rare o exceptional cases. This ‘cream of the crop’ mentality would guarantee treatment by the very best and brightest, who could provide, develop and create leading edge treatments to help serve the entire medical community.We need to redefine the role of public research universities to helping all Americans and all physicians find just what works and what doesn’t in the treatment of common illnesses. Let our research universities be at the forefront of establishing best practices and then let them lead by developing and implementing outcome-based medicine. Every public university that teaches and trains physicians would be called upon to look at local and regional methods of treatment and work closely with the medical community at large to find ways to be much better at prevention, provide effective treatments and realize data driven results.

These simple steps have the potential to save more than $500 billion annually on our current healthcare expenditures—a good start to funding additional care for the uninsured.

This plan requires something from everyone—not just health professionals, trial lawyers, patients, the government, but everyone. We cannot delude ourselves into thinking that by simply cutting costs on the supply side we will be successful at healthcare reform. We have to look at the demand side as well.

Americans are generally satisfied with the healthcare they receive. We should focus our time and attention on improving those parts of the system that need repair. We should not be changing what works well for most Americans. Let us strive to fix what we have by taking more accountability for our own health, creating a new physician population, reforming our tort system, reinventing how insurance can be more portable and flexible and using public universities to educate physicians using new decision making practices and exploring the possibilities of innovative treatments.

Wampler is a healthcare consultant and a former chief executive of PacifiCare California.

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