Health Care Reform: The Real Story DAVID M. CUTLER FEBRUARY 2010
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1 Health Care Reform: The Real Story DAVID M. CUTLER FEBRUARY 2010
2 What You Hear About Health Care Reform The public option 2 Death (panels) and taxes (on the rich, on your insurance plan, on ) Should health care cover abortion?
3 What You Don t Hear About Health Care Reform One of the following is not true. Which one? 3 The Senate proposes to spend $10 billion trying out new chronic care models and disseminating successes throughout Medicare. Congress is on the verge of ending its micromanagement of Medicare. The Yankees are inherently better than the Red Sox.
4 What is the real story on health care reform? 4
5 Fundamental Challenges The role of government in the economy 5 I ll be damned if I want the government messing in my medical care I ll be damned if I want some private insurance company messing in my medical care Money Can we afford to cover everyone, make it balance in the short term, and save money in the longer term?
6 Competing Views of US Health Care 6 Michael Moore. All rights reserved. This content is excluded from our Creative Commons license. For more information, see
7 Fundamental Issues 1. Getting everyone covered 7 2. Improving the value of care 3. Addressing the US fiscal situation
8 Affordability and accessibility are the keys to coverage 8 People buy insurance when the price is low and there is a place to buy it E.g., MA Connector Subsidies are expensive The modified rule
9 Improving the value of care Premise: Medical care is inefficiently provided, and this both lowers quality and drives up cost. 9 Therefore, we should be able to improve quality and save money by modernizing the health system.
10 Examples of inefficient care 1. Administrative expenses are too high Wasted time, wasted people 10
11 Examples of inefficient care 2. People use too much and too expensive acute care 11 Image courtesy U.S. Department of Veterans Affairs.
12 What Is Health System Modernization? The idea that health care can be made a normal industry in terms of productivity growth 12 The Hallmark of Productive Industries
13 Productivity Growth by Industry,
14 Four Steps to Health Care Modernization 1. Better Information 14 Wiring the medical industry and using the results at the patient and system level 2. Compensation arrangements Pay-for-value instead of pay-for-volume It starts with Medicare 3. Insurance reform Competition over quality, not competition over risk avoidance 4. Worker empowerment Scope of practice rules, medical training, specialty mix
15 Information technology Digitize health care Use the information well Ù Patient encounters Ù Cost-effectiveness analysis Ù Learning which providers are better and worse Better Information 15 Photo of doctor using handheld tablet PC removed due to copyright restrictions.
16 Compensation changes Compensation Changes Bundle payment wherever possible Ù Hospital + Ù Patient as a whole Stress prevention Ù Value-based insurance design Ù Medical homes, transitional care etc. Pay-for-performance 16
17 Organizational changes Worker Empowerment Flat organizations do better than hierarchical ones. A truly paperless organization 17
18 Impact of doing better Improve health and cut growth of medical spending 18
19 Productivity Growth in US Industry 19
20 CBO s Favorite Chart 20 Public domain image from the U.S. Congressional Budget Office. For complete report, see U.S. Congress. Congressional Budget Office. The Long-Term Budget Outlook. December 2007.
21 David Cutler s Favorite Chart 21
22 How Do The Bills Stack Up? Pretty well, actually 22 Commitment to payment change, with flexibility to adjust midcourse and lots of experimentation Follows on heels of stimulus bill & IT investment Somewhat weaker on non-payment issues Workforce issues Sin taxes (esp. directed towards obesity)
23 This is a path, not a leap Implementation will be key Qualifications 23 Provider support is essential We can spend the next decade fighting, or changing
24 MIT OpenCourseWare HST.934J / STS.449J Introduction to Global Medicine: Bioscience, Technologies, Disparities, Strategies Spring 2010 For information about citing these materials or our Terms of Use, visit:
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