Updating (But Not Changing) My Forecast for Health Reform

I’ve been at odds with other commentators ever since the battle over health reform was launched early this year.  In contrast to conventional wisdom that reform was a “sure thing,” I have consistently estimated a 30% chance for a major legislative overhaul.  My crystal ball has always indicated that the forces against meaningful reform were slightly more than twice as strong as the forces that could make it happen.  (I really do have a crystal ball on my desk.) 

My approach to forecasting the prospects for health reform over the past year reflects my original training as a weatherman.  (I really was a meteorologist back in the 1960s.)   Forecasters learn to estimate the probabilities of possibilities by evaluating the relative strength of forces that could lead to different outcomes.  I have consistently perceived that the serious economic downturn, competing national priorities, deep divisions within the Democratic Party, and absence of a shared vision of reform would be very tough obstacles to overcome. 

Now that the Senate has passed its reform bill, I have received a few calls to see if my forecast has changed.  It has not, for three reasons.

·        The Senate and House bills are very different on polarizing issues that matter a lot to key members of both chambers.  Forging an acceptable compromise between divergent wings of the Democratic Party will be very difficult (but, admittedly, not impossible).

·        Approving the Senate bill required last-minute compromises and special arrangements that challenge the interests of key stakeholders.  Their lobbyists will be out in force, trying to undo the tenuous coalition created to get 60 votes. 

·        Neither chamber’s bill reflects a realistic plan for actually improving health care in the United States.  A merged version of the two bills could expand the number of Americans eligible for health insurance, but it would be very unlikely to reduce costs or improve quality of medical services.      

Being a strong advocate for improving our health care delivery system, I’m not happy with my contrarian forecast.  However, I learned in my meteorology days to base my forecast on the likely outcomes of the forces at play, which was not always the weather I wanted.  I also learned that people love to make their own forecasts.  So, step out on a limb with me and share your forecast.  What do you think is most likely to happen, and why?   

What are the foundations of meaningful reform?

The push for health reform has changed course substantially since the new Congress and administration took office in January. Originally envisioned as an industrial-strength effort to make medical care less-expensive and consistently good, the reform movement has shifted its aim to the much narrower target of insurance overhaul. The goal seems to have shifted from improving the medical marketplace to requiring Americans to purchase insurance, without forcing long-overdue changes in delivery or payment.

A few remnants of the original push to improve the system—a very different goal than expanding the number of Americans with insurance—may survive as demonstration programs (thus allowing elected officials to claim that cost and quality reforms are included in a reform law if one passes). Prospects for any fundamental changes in the delivery system have all but disappeared as the legislative year ends, although creating an expert commission to address cost issues still has some significant support at both ends of Pennsylvania Avenue.

Some writers for the trade press apparently sense reform’s loss of momentum and purpose. Journalists who interview me on a regular basis have shifted their line of questioning from the likelihood of reform now to what needs to be done in the future. Just last Friday, one magazine writer asked me to identify the three top goals that should be addressed next time because meaningful reform is not going to be accomplished this year.

In my opinion, real reform must be built on three foundations:

• All delivery organizations must use pervasive performance improvement processes, based on state-of-the art information technologies that ensure medical care is done right all the time, as inexpensively as possible.
• Health systems and health professionals must operate on the same balance sheet, eliminating the waste created when hospitals and doctors work for different economic units.
• Fee-for-service reimbursement must be replaced with a payment mechanism that rewards quality and value, not volume, of goods and services provided.

I believe that we’re wasting valuable time if reform does not focus on making all three fundamental changes. We should be figuring out how to do these things together, as quickly as possible. Several successful health care organizations give us good models for building a world-class medical marketplace. Simply forcing more Americans to buy insurance is not social or economic progress if health care is still overpriced and unreliable. What would you do to move us in the right direction?

If reform passes this year, will it matter?

All year long, people have asked me to write and speak about the prospects for health care overhaul in 2009. I’ve consistently forecast the prospects for reform at 30% or less, which has put me at odds with the near-universal view that the Democrats had the power to make it happen this year.

The political events of the past few days reinforce the main reason why I am a reform skeptic—something quite different from a reform opponent. (I firmly believe that reforms are desperately needed. The status quo is unsustainable.) Health reform has not been a “sure thing” because the ruling party is not unified on key issues. Democrats in Congress are deeply divided, and the White House has not provided clear or consistent leadership on what needs to be done or how to do it.

Consequently, the political price to be paid for passing a law in the next few weeks is incorporating pet projects (a.k.a. pork) and eliminating controversial provisions. Any final product is certain to be unfocused and inconsistent. It is also likely to be very expensive, which is why the current reform proposals impose cuts in existing programs and create new revenues almost immediately while delaying the actual reforms for several years.

If a reform law passes under these circumstances, people will discover that they are being expected to pay for reform long before the reforms are implemented. It’s a set-up for repealing any 2009 reform law before the 2010 mid-term elections. Sound impossible? It happened with the catastrophic insurance law twenty years ago, and I believe it would happen again. Even if a reform law passes in the next few weeks, its chances of surviving the next session of Congress are slim.

Reform in Washington is a red herring in my view, but the problems that compel reform are getting more serious by the day. Some key Democratic leaders say that we should pass something now and deal with its defects later. I disagree. Providers, payers, purchasers, and consumers should start working together to find solutions in their local markets. They should study our country’s health systems that have become excellent without waiting for national reform and work as partners to build on their successes.

We’ve always believed that health reform is ultimately local. Why shouldn’t reform be local, especially when the current political system seems to be incapable of solving problems nationally? What do you think?

Critical Issues. Constructive Debate.

The goal of this blog is to provide a forum for constructive discussion of critical issues about the future of healthcare—specifically to build consensus around realistic solutions to problems affecting:

• providers
• purchasers
• payers
• patients

All parties are welcome at this virtual table. We value your insight as we explore results-oriented partnerships in local healthcare marketplaces as essential alternatives to the polarizing reforms advocated by special interest groups in Washington.