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A New Ally for Systemic Leverage?


This post evolved from comment #5 that I made to An Outsider’s View of What is Wrong in American Health Care, written by Paul Spiess, Co-Chair, New Hampshire Citizens Health Initiative: October 12, 2009, at

Paul, you speak the voice of truth to power.  As I’m sure you know, any US sector, even if replete with players and motives, that has captured some 16% of the US GDP, by definition wears the garb of US economic royalty.  For example, your point about a lack of real transparency for basic prices, outcomes, and choices on the provider side speaks volumes. So too does the New Yorker article this June by Atul Gawande speak volumes on specialist overutilization (see Gawande).  As an economist, I see all that as glaringly asymmetrical market power at work.

I’m on a team with thought leaders at US Adaptive Health Solutions.  We’re working to alert self-insured employers (public and private) to leverage their benefit budgets around a better approach to healthcare for employees and dependents.  This includes shifting the focus from acute care to supported self care for preventive, wellness, and chronic action.

But this is not enough.  The work also includes helping create effective employer demand for cross-silo, team-based care models with coaching and consults, results payments, and price-outcome transparency across hospitals, primary and dental care, specialists, and fully networked pharmacies.  And tort reform and subsidized medical training costs are needed for systemic fair play.

These tools, care models, and payment models also can apply to transfer payment populations.  This stems from the potential to apply targeted incentives for change in any scenario involving payment transactions.

Interestingly, this fresh perspective on getting the healthcare we want to pay for lets us see that managed care orgs (MCOs such as HMOs, PPOs, etc.) can evolve into skilled, unsheltered competitors providing network oversight and administrative support.  This importantly includes running and continually assessing patient-owned EMRs as a VistA-based, patient-centric cloud resource across US-wide employers, employees, and medical providers.  This frees MCOs from being demographic cross-subsidy engines aimed at funneling overnight cash flow into the banking system.

Why does all this activity matter?  It’s quite direct—as regions and states, and as a nation, we can’t keep paying some 16-17% of US GDP for healthcare in a world where all the other major nations get far better results at 8-10% of GDP.

And then there’s the bubble aspect  The ongoing, long-term 6-7% annual cost hike in MCO subscriptions and medical bills is a prime signature of a bubble.  Haven’t we seen enough of bubbles lately?

So I’m saying we need explicit systemic thinking inside and outside the healthcare world.  Otherwise, the effort to change simply will not deliver socially and competitively necessary results in a sustainable manner based on better outcomes leading to reduced labor and social overhead.  My point is that yes, we need fresh healthcare practices for fairness, personal affordability, and better personal health—and also for sheer competitive survival.  There’s nothing wrong in having both intrinsic and instrumental reasons for taking action.

Remember, the goal is to improve outcomes and reduce cost by creating effective demand for better allocation and use of labor benefit resources.  The immediate aim is a healthier workforce and surrounding population.  The systemic effect of improved health outcomes is to increase regional economic competitiveness by reducing labor and social overhead while increasing population wellbeing and workforce productivity.

Here’s a final thought.  I suggest it would be a good use of time to talk with regional and state economic development agencies with attraction, retention, and training budgets.  The leverage opportunity is to help them see healthcare not as a line-item cost headache they can’t touch, but as a new and powerful way to build sustainable regional and state advantage.  This is untapped territory for fresh allies.

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