It's a time-tested tradition: When health costs go up, the excess gets paid by patients and purchasers. Thanks to this tradition, purchasers can expect to be first in line to cover for any mistakes legislators make when and if healthcare reform legislation is passed.
Make it health quality reform
Overemphasizing changes in health insurance market won't get the job done
That's why the stakes are too high for purchasers to sit out the healthcare reform debate. Without tough accountability for outcomes and affordability, reform will cost our nation more than anyone can afford. Purchasers may be unprepared and unwilling to shoulder more cost burdens, but unless and until they make their voices heard through business organizations such as the Leapfrog Group and others addressing healthcare reform, they will suffer the consequences in lost profits and frustrated employees.
One telling detail purchasers should watch: Why has Washington transformed healthcare reform into health insurance reform?
Perhaps policymakers believe that improved health insurance will solve some of our most pressing healthcare problems. Yet health insurance has little or nothing to do with some of the most serious and costly problems in healthcare—problems that are killing and harming our families.
Some 7,000 people die each year from adverse drug events resulting from the more than 1 million serious medication errors made in hospitals, with some estimates as high as one in 10 inpatients suffering a serious adverse drug event. Two million people who obtain care in U.S. hospitals contract an infection and 90,000 of those people die from them. According to the latest Leapfrog survey, hundreds of hospitals post excess mortality for procedures like cardiac bypass and pancreatectomy, with thousands of lives unnecessarily lost.
Maybe policymakers believe properly regulated health plans can solve some of these problems with safety and affordability. But that's unlikely. Employers and other large purchasers of care have learned through long experience that health plans cannot single-handedly solve tough cost and quality problems.
Health plans have a business interest in pleasing both purchasers and providers—and when purchasers demand fundamental change and providers balk, health plans are caught in the middle and not helpful to either side. They have never forced the tough conversations that purchasers—and taxpayers—can and must have with the providers entrusted with American lives.
Perhaps policymakers focus on health insurance for political reasons. Indeed, we can see the calculus: Many powerful lobbyists will go along with health insurance reform but wage war against the actions needed for providers to change. Yet the success of healthcare reform hinges on a notion of “bending the cost curve”—reducing the growth in healthcare spending over time. Without some difficult and unpopular actions to reform the way healthcare is delivered, the cost curve will not bend on its own.
For instance, we need to start with real transparency about quality data—it remains true today that consumers have far more information about the decision of which car to buy than which hospital or doctor to pick. We need to pay providers for the outcomes we desire and pay little or nothing for sloppy science or poor performance. While many providers will agree to these concepts in principle, when the details emerge in legislation their lobbyists emerge as opponents.
Addressing fundamental problems in the delivery of care is controversial because it changes rules of the game, and the winners of the game don't like that. Because of those rules, we as a country have become accustomed to a reality we would never tolerate in other businesses: the cost of health services has nothing to do with the quality of those services.
In large part this is because consumers have little information about cost and quality. Imagine if other industries functioned that way. Try shopping in a department store where some items cost 10 times what other similar items cost, but there are no price tags and no way to rate product quality or safety.
Ridiculous as that sounds, healthcare plays by exactly those rules, and hundreds of thousands of ruined American lives attest to the results. Americans do not get the quality of care we are paying for. And in most cases they don't even know what we're paying, so how can we possibly expect to bend the cost curve?
Purchasers formed Leapfrog back in 1998 to identify which hospitals are the highest performers in the country, providing top-quality care without wasting resources. The good news is we found some superb hospitals throughout the country. The bad news: We found hundreds of hospitals that have considerable room for improvement. Because Leapfrog's work is exclusively at the behest of our purchaser members, we do not compromise in publicly reporting our findings, even when those findings are a troubling indictment of the quality of care in the U.S.
Successful healthcare reform depends on policymakers being just as bold—and regulating health insurance won't do the job.
Leah Binder is CEO of the Leapfrog Group, Washington.
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