Building Blocks for Fundamental Reform Harold S. Luft, Ph.D.
A proposal for comprehensive and fundamental reform of the health care delivery system is outlined in my book, Total Cure: The Antidote to the Health Care Crisis (Harvard University Press, 2008). It addresses a wide range of components in the current health care system to make it more effective, efficient, continually improving, and sustainable. Changing everything all at once, however desirable, is not the only possible path. Aspects of the system can be addressed while maintaining an overall vision. Several of these partial steps on an overall path are listed below. Each can be discussed in more detail.
Create incentives for physicians whose work primarily occurs in inpatient settings to form new entities (Care Delivery Teams, or CDTs) in partnership with hospitals to accept bundled payments from Medicare and other payers. Payments to CDTs should be based on the resources used by those achieving high quality outcomes. CDTs would be responsible for complications and readmissions. Some reasonable modifications to current Stark and related laws may be necessary.
Medical school affiliated medical centers are especially attractive settings for such CDTs because of existing linkages between faculty physicians and the medical center. They can be given incentives to form CDTs because bundled payment can reduce the reporting and other costly compliance requirements for documentation of work by housestaff and faculty.
Short of full bundling, outlier payments Medicare outlier payments should be replaced with equivalent funds allocated on a DRG basis for hospitals to purchase private reinsurance. This will create stronger incentives for reducing complications, especially if the payment covers readmissions within 30 days.
Medicare claims data can help in understanding and improving quality and efficiency, but an Appeals Court recently struck down a FOIA request for these data. Irresponsible use of such data is problematic, but responsible use can actually be quite beneficial to many physicians, especially those in primary care. An effective way to address these data issues can be crafted with legislation.
Primary care professional associations could begin a similar data consolidation effort with private sector claims and might be combined with new Health Information Technology initiatives. Speeding such private sector efforts would be facilitated by legislative clarification of antitrust and other issues.
Federal funding for graduate medical education should be overhauled to help train the mix of practitioners needed in the next decades. A shift away from hospital-linked subsidies to a mixture of direct grants to training programs and forgivable loans should be explored.
Innovation in health care delivery involves multiple federal and state laws. Case-by-case review of the legality of new structures and incentives often precludes innovation because potential benefits are long-delayed, but investment and legal expenses are immediate. Legislation could establish one-stop or coordinated reviews by the appropriate agencies to speed and facilitate change.
A more comprehensive change would be a Federal program guaranteeing access to coverage for hospitalization and chronic illness. This would function somewhat like a reinsurance pool, but focusing on categories of expenditure (inpatient care and chronic illness) that are typically expensive, but with access to the pool based on the medical problem, not the magnitude of the expenditure. This will create incentives for efficient use of resources. An individual mandate for such inpatient and chronic illness coverage either through the pool or their own private plan or Medicaid, coupled with income-based subsidies to assure affordability, would eliminate uninsurance. Private plans could offer more benefits and coverage while receiving fixed payments from the pool that largely offset the risk selection problems inherent with voluntary enrollment.
April 25, 2009 Alert me when this is updated