Renewed Optimism at AHIP Institute 2010

Regular readers will remember that I was once excited about the discussions surrounding health reform. Only a year ago, the key stakeholders in Washington agreed on a common goal—curbing incessant increases in medical spending by sharing the pains of significantly restructuring the health care delivery system. Decision-makers were actually discussing tough choices and exploring trade-offs that need to be made. A medical economist’s dream fulfilled, at last…


Consensus sadly succumbed to politics during the summer recess. Democratic leaders shifted the discussion from comprehensive health reform to a single issue, insurance overhaul, when Congress got back to work in September. I was disheartened by the ensuing legislative scramble to put together any combination of ideas that could get 216 votes in the House. The two laws finally enacted this spring were colossal disappointments to me because they did not provide a solid foundation for building a really good health care system. In the unlikely event that the laws are implemented as enacted, more Americans will have access to a system that is still inefficient and ineffective.

My spirits were lifted last week when I attended the 2010 Institute of America’s Health Insurance Plans (AHIP), an organization vilified by the political architects of insurance overhaul. Speakers in every session were talking about reasonable actions that could be taken to reduce medical expenditures, such as sophisticated health promotion programs and improved data analytics to identify waste in the delivery system. They focused on getting more value for health care dollars through better management of existing resources, the solution that politics forgot.

Presentations at last week’s AHIP meeting did not change my longstanding view that payers need to improve business practices just as much as providers and purchasers (including the federal government) need to change theirs. However, the AHIP sessions did renew my economist’s belief in the power of creative destruction in the medical marketplace—progressive transformation through radical innovation. I heard insurance executives and other industry experts talking about moving forward with promising new solutions to old problems. They were discussing real health reform, from my perspective.

Their explorations of ways to improve health and cut costs were a refreshing contrast with the final months of legislative maneuvers focused almost exclusively on passing a bill, not improving medical care. I found health plans that are working with purchasers and patients to put a lid on health care spending. Of course, there’s lots of work to be done and many major changes to be made in the business of health insurance. Do you share my belief that mandating insurance is not a solution to the serious problems of cost and quality? Where do you think progressive health plans should focus their initial efforts to do what Congress would not?