Health & Human Services

A National Health Care Prescription

We have just selected a president who is concerned about health care in this country. But the economic downturn has made President-elect Barack Obama's challenge...

We have just selected a president who is concerned about health care in this country. But the economic downturn has made President-elect Barack Obama's challenge of "rolling that stone up the Hill" -- of working with Congress to imagine, design and implement true national health reform -- even more difficult.

American presidents have tried and failed six times in the past century to change the health care system, mostly in financial conditions that were much more favorable than the current one. Remember the budget surpluses under President Bill Clinton? Yet even then, in what arguably became the "best of economic times," health care reform failed. So what is different now? Can the "worst of times" create the urgency that fosters a national conversation about the entrenched problems in the U.S. health care system?

What may actually get our country's attention this time is the understanding that rising health costs affect everything in our lives: where we choose to work (and if we can change jobs), whether we can afford to insure our children, and even if we can afford our medicines. Simply stated, the rising price of health care affects the health of the whole economy -- both personally, as we are forced to choose to forego care relative to other necessities, and nationally, as escalating employee medical costs reduce our industrial competitiveness globally. As a country, we might accept this tradeoff if the health of the population saw the benefits of the disproportionate expenditure on medical care, but it does not. Between 1985 and 2006, health care spending increased by an average of 7.7 percent per year, consistently outpacing growth in GDP by at least two percentage points, and yet the quality of care has improved by less than 2 percent -- not a great investment.

And yet this president can succeed where others have failed, if he rallies the support of Congress and the American people and takes a measured, multi-step approach. A dual line of attack is needed.

State Leadership

First, start with the states. In the absence of federal action in recent years, states have taken the lead in addressing many of the challenges facing our current health system. They have listened to the concerns of their citizens -- families, workers, health care practitioners and businesses -- and they have taken specific actions to promote greater access to coverage, reduce costs, and improve the quality of care. The states have been an "end" to cover the rising number of uninsured quickly, but they also offer a "means" to understanding which programs work and could be applied nationally, and which do not work and should be avoided. Individual states have responded in different ways:

  • Massachusetts, in the most sweeping reform, has cut its uninsured by half by combining mandates and subsidies to expand health coverage;
  • Iowa has improved enrollment and retention of children in public programs;
  • Minnesota passed landmark legislation to establish a coordinated statewide system of quality-based incentive payments;
  • Wisconsin increased coverage to low-income children and their parents by expanding access through Medicaid and the State Children's Health Insurance Program (SCHIP);
  • Pennsylvania launched a program to reduce medical errors;
  • and Arkansas has received national attention for its efforts to reduce childhood obesity.

These and other examples of state leadership have demonstrated ways to rapidly provide health coverage, improve quality, and reduce costs, and can provide models for other states too. But the governors and state legislators cannot do it alone, particularly now, when many areas are experiencing budget shortfalls as a result of the weakening economy. States need a federal partner and a national framework to achieve long-standing health reforms.

Federal partnership can take many forms and operate on many levels. For example, the next Congress should reauthorize SCHIP, but, at the same time, the president and Congress can also stimulate experimentation through targeted grants that encourage state-level innovation in improving coverage (private and public), cost, quality, and health information technology. Indeed, legislation suggesting just that type of innovative federal-state partnership was introduced last year. The Health Partnership Act, sponsored by Sen. Jeff Bingaman, D-N.M., and Rep. Tammy Baldwin, D-Wis., has wide bipartisan support.

On the other hand, we do not want 50 separate health plans, but rather variations within a larger national strategy that articulates shared principles and desired outcomes. Therefore, the challenge, and promise, for the new administration and the next Congress is to formulate a flexible and uniquely American framework that is national in scope but still able to accommodate state variation and needs. That's why the second line of attack must be to plan a national system that can be implemented over the next few years.

Federal Leadership

The health care plan put forth by President-elect Obama is bold and, if supported in Congress, will eventually cover every one. However, for his plan to work, expanded coverage and improvements in quality must be matched by serious cost savings. Although this sounds contradictory (saving dollars while spending dollars), it is possible to enact new federal legislation that will harness some of the $700 Billion we waste on health care every year. (Yes, coincidentally, the same huge number just approved for the bail out).

The money is there but every sector must be involved in recouping wasted dollars as we forge the larger solution by providing better information to help patients manage their health and helping physicians understand what tests and treatments work best. If we move toward a system that pays only for those services that are cost effective and based on evidence, and if we then reward physicians for using this information to provide the best care, we can achieve both system efficiencies and improved patient care. The accomplishment of these twin goals will require a national commitment to the use of electronic medical records by everyone, which will result in administrative simplification and improved quality. Significant savings from these initiatives are unlikely to come within the new president's first term. However, once the investment is made to develop a modern, information-based system and it is in place, savings will accrue within five to 10 years. In the meantime, there will be some early savings as payment reform and technology assessment initiatives address the current problems of too many tests and procedures.

Soon we will have a president and a Congress who can deal with health care in this country, but who also must balance this concern with other pressing national challenges, from the economy to the environment to national security. But we can roll the stone up the hill. In fact, the legislation is already in place if Congress chooses to act upon it. Doing so can bring about a smarter, fairer, value-based health care system, beginning with targeted state innovations in health care financing and delivery and ending with a more comprehensive national program that can be funded in the long term by saving even 20 percent of what we waste.

We can get there, and we can start now.

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