The absence of real reform policy for soaring health care costs stymies the Republican Party and the chances for star candidates like Mitt Romney and Tommy Thompson.
Romney tackled access with his RomneyCare, much in the manner of President Obama, but health costs continue to rage out of control in Massachusetts, more so than in most other states.
Thompson also increased access while governor through BadgerCare, flirted with and skirted around support for ObamaCare, which is essentially access and insurance reform, but did little to advance management of medical hyperinflation.
Republicans in general know what they don’t like – ObamaCare and it greater involvement of the federal government in the health care industry.
And give the Grand Old Party credit for creating health savings accounts (HSAs) early in the Bush Administration nearly a decade ago. That has been essential for creating the emerging semblance of a marketplace.
An estimated 40 million Americans now have personal health accounts in one form or another, making them real consumers of health care vs. passive, entitled recipients.
But there has been no movement since, leaving the Republicans barren, with no health care agenda of note except for saying “no” to ObamaCare.
There is monumental dysfunction in that solution-less posture. Republicans like to portray themselves as the champions of the business world, but they pay almost no attention to what is going on in that world. Private payers, especially large employers, are racing ahead with ground-level reforms that are working to bend downwards the out-of-control health cost trajectory.
More than half of the large employers now offer consumer-driven health plans that include higher deductible, higher co-insurance and off-setting health accounts. Health coverage stays the same or gets better. That trend includes most large health insurers (Humana pioneered the implementation of HSAs) and most large provider corporations.
If it works for them, why not for state and federal employees? In Wisconsin, for instance, the state employee plan under the Employee Trust Fund (ETF) operates at costs of more than two times best practice in the private sector.
Why doesn’t ETF self-insure? Why doesn’t it go to a consumer-driven plan? Why don’t the Republicans who control state politics insist on the savings that would follow such a reform? Four national studies put the savings at 20% to 30%.
Gov. Walker and the Republican-controlled legislature shifted costs to state and local employees by raising their contributions for health care. That saved some money for the state, but does nothing to change the underlying dynamics of cost hyperinflation.
When the incentives and disincentives embedded in consumer-driven plans get employee wallets and minds into the game, behaviors change and costs plummet.
As a byproduct, ETF could publish its net prices for medical procedures, and the state would have its first comprehensive transparency model. It would not apply to all health care purchases, but it would be an excellent frame of reference across the state. Could that be done by executive order of Gov. Walker?
Large employers are also in a stampede to take back the front end of the health care supply chain. They are installing their own on-site primary care clinics, giving them the keys to the front door of medicine. The payers’ doctors order tests, order specialists — only when needed — and order admits to hospitals.
It also enables payer companies to install proactive primary care – six sigma care — for chronic diseases. Those conditions, like diabetes, the source of 80% of U.S. health costs. When managed intelligently and aggressively, such proactive primary care on-site can cut costs by one-third. That’s not theory; it’s a proven, audited track record.
This reform constitutes destructive innovation. This emerging model replaces the reactive medicine that is the general practice in America today. You know, the six to eight minute visits to fix you when you’re broke.
Public payers could deploy similar on-site clinics and do their employees and taxpayers a big favor.
The Republicans should also introduce themselves to John Toussaint. He is leading the charge for bringing lean disciplines to health care. The lean movement transformed manufacturing, and it can transform health care in the same manner.
Toussaint has made Theda Care in Appleton the leading pilot in the world for reducing waste and errors in medicine. He hosted 34 health care CEOs in Appleton last week to show them the way forward. He has 40 health care providers in his lean network, including renowned institutions like Gunderson Health in LaCrosse, Wisconsin and the Cleveland Clinic.
Republicans should insist all 6000 hospitals in the United States get aboard the lean train. It will take a reformed payment system to push these change-resistant organizations to where Toussaint and Theda Care have already gone.
Toussaint, a doctor and former CEO, fervently believes that 30% to 50% of U.S. Medical spending is wasted.
Why isn’t he a national and Wisconsin hero? Why isn’t he testifying in front of key Congressional and legislative committees? He offers a market-based reform, and few are listening, including Republican leaders. They just don’t get it.
Republican Gov. Mitch Daniels has proved that fundamental reforms can be transferred from the private sector to the public sector. He has done just that with Indiana state employees, who are now enrolled in a consumer-driven plan.
Too bad he didn’t run for president; he is one Republican who has created an market-based reform that goes after the number one problem, the runaway costs.