On his way out the door, Don Berwick, the academic who headed Medicare and Medicaid for 17 months under President Obama before bowing out in the face of Republican opposition, said there is still 20% to 30% waste in then U.S. health care system. It was tantamount to admitting that he hadn’t moved the needle on costs.
No one could question Berwick’s zeal for reform. The man cares. Here is the his sayonara quote: “Health care is broken. We have set up a delivery system that is fragmented, unsafe, not patient-centered, full of waste and unreliable. Despite the best efforts of the work force, we built it wrong. It isn’t built for modern times.”
The issue for Berwick is that he was looking in the wrong places for a new business model for the delivery of health care. It seldom comes from the public sector, where innovation is viewed as a threat to established interests and therefore usually gets stalemated.
Top-down solutions often make matters worse. His promotion of “accountable care organizations,” whatever they are, is an example of his myopia.
Berwick should have been looking to innovators in the private sector, where real reform is racing ahead. Close to a majority of large employers now offer or require consumer-driven plans with built-incentives and disincentives for staying healthy and buying right.
Each month, 25 CEOs of large healthy provider systems are flocking to Appleton, Wisconsin to learn how to actually drive waste and errors out of health care at Theda Care, how to get to zero infections in operating rooms. The secret sauce is the lean disciplines that have transformed global manufacturing. Theda Care has run out of teaching resources, so its lean education programs are spreading out to other campuses.
The growth of on-site clinics for proactive primary care that homes in on costly chronic diseases is rampant.
Transparency is coming to pass in the private sector to display quality and price.
Now, if it’s true that the private sector can inject disruptive innovation into American health care, why are CEOs waiting around for the bureaucrats to reform the convoluted pricing system in medicine?
Everyone who has the faintest understanding of pricing knows that the payment by procedure fostered by the federal government is a disaster. Pay for procedures, and what do you get? Volume – lots of procedures.
Everyone knows that bundled pricing is the answer. Pay for value over an episode of care. That’s the way to go.
Further, some providers are offering bundled prices when asked. We pay about $35,000 at Serigraph, all-in, for a bypass. It can be done.
What’s needed is for large payers in the private sector to demand that the procedure payments be scrapped. Their middlemen, the insurers, need to be instructed to deliver bundled prices.
He who has the gold rules, and the employers/payers write the checks.
Getting bundled prices would by another major platform for real reform. We can’t wait for the Berwicks of the world to get it done.
No one could question Berwick’s zeal for reform. The man cares.
It’s just that he was looking in the wrong places for real reform. It seldom comes from the public sector, where innovation is viewed as a threat to established interests and therefore usually gets stalemated.
Top-down mandates seldom work.
Berwick should have been looking to innovators in the private sector, where real reform is racing ahead. Close to a majority of large employers now offer or require consumer-driven plans with built-incentives and disincentives for staying healthy and buying right.
Each month, 25 CEOs of large healthy provider systems are flocking to Appleton, Wisconsin to learn how to actually drive waste and errors out of health care at Theda Care, how to get to zero infections in operating rooms. The secret sauce is the lean disciplines that have transformed global manufacturing. Theda Care has run out of teaching resources, so its lean education programs are spreading out to other campuses.
The growth of on-site clinics for proactive primary care that homes in on costly chronic diseases is rampant.
Transparency is coming to pass in the private sector to display quality and price.
Now, if it’s true that the private sector can inject disruptive innovation into American health care, why are CEOs waiting around for the bureaucrats to reform the convoluted pricing system in medicine?
Everyone who has the faintest understanding of pricing knows that the payment by procedure fostered by the federal government is a disaster. Pay for procedures, and what do you get? Volume – lots of procedures.
Everyone knows that bundled pricing is the answer. Pay for value over an episode of care. That’s the way to go.
Further, some providers are offering bundled prices when asked. We pay about $35,000 at Serigraph, all-in, for a bypass. It can be done.
What’s needed is for large payers in the private sector to demand that the procedure payments be scrapped. Their middlemen, the insurers, need to be instructed to deliver bundled prices.
He who has the gold rules, and the employers/payers write the checks.
Getting bundled prices would by another major platform for real reform. We can’t wait for the Berwicks of the world to get it done.
