If fee-for-service medicine is a failure and managed care a flop, there is opportunity for healthcare thinkers and doers to create a big splash. Or at least, a second wave.
Futurist Ian Morrison talks about capitalizing on a second wave based on technology, consumerism and globalization. Despite second-wave trappings, managed care is little more than an offshoot of healthcare's "first wave," which was dominated by major medical centers and physician specialists. The powerhouse combination helped stamp out killer diseases and stretch life expectancies for most Americans. But success came at a staggering cost. Not only was fee-for-service a budget-buster, it proved unwieldy, disorganized and fragmented.
The resulting chaos paved the way for Paul Ellwood, M.D., who was to become a healthcare legend by advocating prepaid medicine delivered by organized panels of caregivers. His theories spawned the HMO movement and much of what has evolved into managed care. While it focuses on prevention and prudent spending, managed care has been forced to operate within the same old framework. The result is an outpouring of patient frustration and physician discontent over choice, options and control.
If a better mousetrap does exist, now is a perfect time to set it. To catch on, the theory must be bold in concept but incremental in design. Here are a few suggestions on how to get started:
The system must be reinvented to focus on the patient, rather than the physician, the hospital, the government or the payer. Services, staffing and access have to focus on the end user. Choice, convenience and communication must underscore the relationship between provider and patient. When it comes to convenience, comfort and guarantee, healthcare should at least match the service level provided by airlines, hotels and telecommunications companies.
It's time that payers, especially the government, steer more business to providers that outperform competitors from a quality standpoint. President Clinton's plan to expand "centers of excellence" demonstration projects should be encouraged. The idea is to reward high-volume, high-quality providers of specific procedures with bundled Medicare payments.
Ultimately, procedure-specific quality measurements should be used to reduce the number of qualified providers. Medicare's prospective pricing system does little to reward high performance, even though many local healthcare markets are choking on an oversupply of hospital beds and physician specialists.
Although quality-based selection is less complicated under a single-payer system, government control over the setting of healthcare prices could create some serious problems. Before haggling over financing, all sides of the healthcare system need to embrace core sets of performance measures and how they are reported.
Healthcare needs of aging baby boomers, coupled with continuing advances in medical technology, will dominate the U.S. economy for the next 30 years. Balancing unlimited demand with finite resources requires measuring the value the nation receives from investing in healthcare.
To help rationalize the debate, Harvard economists David Cutler and Elizabeth Richardson have introduced an accounting framework that seeks to measure health output and capital. This may be the stuff of Ivy League eggheads, but their work at least provides an economic model for estimating the return on medical spending. That's something designers of healthcare's second wave must contend with if patients are to receive proper treatment at a proper price.