Learn from Detroit's mistakes to fix health care
Reforming the health-care industry, which employs one in eight U.S. workers, is a key to the nation's economic recovery. Guest columnist Eric B. Larson writes that means a fundamental reform in delivery of care and financing.
Special to The Times
NEWS that General Motors may soon file for bankruptcy reminds me of our nation's history with health reform. We had chances for comprehensive reform during the Truman, Nixon and Clinton administrations. But each time, opportunity slipped away.
Why? Health care has consistently failed to control costs.
Now, a coalition of health-industry groups has given President Obama a plan to tackle the cost issue. While this is a positive development, many doubt the changes proposed can truly reduce spending on health-care delivery. And without significant changes in payment to providers, health care could go the way of Detroit.
Consider the history. American automakers have known since the 1973 oil embargo that they needed to retool for fuel efficiency. But as long as gas-guzzlers proved profitable, the industry didn't change its business model. The long-term result: insolvency for Chrysler and GM, soaring unemployment in Michigan, and the city of Detroit in financial ruin.
As for health care, we had opportunities in the Nixon and Clinton years that might have changed financial incentives and curbed unlimited costs. But the political system chose the status quo. And like Detroit's intransigence, resistance to change the health-care system is hurting our economy.
Some economists believe recovery hinges on reforming health care, which now consumes more than 18 percent of the nation's gross domestic product — up from 14 percent in 1994. The United States spends more per person on health care than any other nation, while our actual health lags behind.
Employer-based insurance is less affordable to business, leaving 47 million uninsured. Those covered are paying higher premiums, co-pays and deductibles. And the recession worsens the problem as more lose their jobs and benefits.
With the Obama administration and Democratic majorities in both houses of Congress, we have a new chance for comprehensive reform. Obama knows that expanding coverage to all is just part of the solution. We need fundamental reform in delivery and financing. His program emphasizes a robust primary-care-based system and coordinated management of chronic illness. Payment and finance reforms to reduce inflationary market forces are also key.
There are many obstacles to cost-cutting proposals. Health care now employs one in eight Americans — up from one in 100 a half-century ago. That's a major part of the nation's financial engine. For some health-care workers, it's hard to think about the nation spending less, not more, on health care. What if reform makes our jobs (and paychecks) look worse five years from now?
As Yale's Theodore Marmor writes in the April 7 Annals of Internal Medicine: "Serious attempts at cost control produce a battle with stakeholders who have resources, political clout, and strong incentives to oppose measures that reduce the rate of medical spending growth and their income."
Still, if Obama's response to Detroit is any indication, he seems up to the task. Facing a choice between continued bailouts for U.S. car companies and the country's general economic welfare, he said: "We cannot make the survival of our auto industry dependent on an unending flow of taxpayer dollars." If he takes a similar stance with health care, he won't bow to sectors that would resist reform from their own self-interest.
This will mean some controls on new technology — medications and devices — the main driver of rising health-care costs. It also means an honest examination of how the system is structured and financed — including how providers are reimbursed.
Those of us who work in health care may have to look past our fear of change to accept needed reform for the entire country's good. We can be among those who promote positive changes, not those who resist them. If we do so, health care can avoid going the way of Detroit. We can be part of the solution to our nation's broken economy. And we can help the many people who are left out of the health-care system.Eric B. Larson is executive director of the Group Health Center for Health Studies.
Copyright © 2009 The Seattle Times Company
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