Be Not Afraid

Len M. Nichols, Ph.D.
New England Journal of Medicine

Voters are angry and distrustful of Washington. Democrats have lost their nerve. Republicans, sensing weakness, are closing in for the kill. We have seen this health care reform horror movie before.

Our leaders in Congress and the White House face a fateful fork in the road. They can follow the public's fear and confusion down the path of perpetual inaction. Or they can lead. They can let the confusion fester or they can leverage the support of health care innovators who can explain the benefits of reform to all. This movie can have a happier ending, one that is good for our health, for our health care system, and for freeing our economy from the debt legacy of the past decade. An ending that might even help restore voters' faith in our ability to govern ourselves.

Aside from the stunningly effective misinformation campaign, the substantive issue that has stalled health care reform is economic: Can we afford this new promise to ourselves, now? The objective truth is that we cannot begin to get our fiscal house in order until we control the growth of costs in Medicare, Medicaid, and the entire health care system. We cannot achieve this without government action. Not a government takeover, but government action. Only government can rewrite the rules of private insurance markets so that insurers thrive by helping enrollees find high-value care, not by excluding the sick. Government must initiate payment reform and develop comparative performance databases that the private sector can use and improve. Government is the only buyer strong enough to lead locally dominant providers through payment reform.1 And payment reform that rewards quality over volume is the key to using market forces to align incentives for patients, providers, and payers while reducing cost growth for taxpayers.

Fiscal hawks will still ask why we can't contain cost growth first and expand coverage later. This is a fair question — although the Congressional Budget Office has determined that both the House and Senate health care bills reduce the deficit, and a choice that forces the growing number of uninsured to wait another decade would, in my view, be immoral.2 Nevertheless, the simple answer to the hawks' question is that it is not feasible to tackle costs without tackling coverage. Our delivery system could not withstand the stress. Two thirds of hospitals lose money on Medicare now.3 Virtually all lose money because of Medicaid underpayment. To impose serious delivery reform and incentive realignment while leaving hospitals on the hook for the mounting billions of dollars in uncompensated care would bankrupt many and strain most to the breaking point. With expanded coverage, we'll get absolutely essential hospital cooperation. Without expanded coverage, hospitals will have to protect themselves from change, and their local communities will want them to.

(More here.)