The New Health Dialogue

The Atlantic's September cover story "How American Health Care Killed My Father" by business executive David Goldhill has gotten a lot of deserved attention. Goldhill is provocative and original as he recounts his father's (and his own) tragic journey through the health care system. It reminded me in some ways of Donald Berwick's wife's journey in the seminal and legendary "Escape Fire."

So his analysis of what's wrong with health care -- particularly hospital-based acute care for older people -- is definitely worth reading. But we have significant disagreements with his proposed solutions.

Goldhill admits he is not a health care expert. He is an intelligent and thoughtful adult son, whose father was a victim of multiple hospital-borne infections that ultimately proved fatal.

Dad had just turned 83, and he had a variety of the ailments common to men of his age. But he was still working on the day he walked into the hospital with pneumonia. Within 36 hours, he had developed sepsis. Over the next five weeks in the ICU, a wave of secondary infections, also acquired in the hospital, overwhelmed his defenses. My dad became a statistic-merely one of the roughly 100,000 Americans whose deaths are caused or influenced by infections picked up in hospitals. One hundred thousand deaths: more than double the number of people killed in car crashes, five times the number killed in homicides, 20 times the total number of our armed forces killed in Iraq and Afghanistan. Another victim in a building American tragedy.

During his dad's five week ICU stay, Goldhill began to educate himself about the health care system. He is fired up, and understandably so.

As he lays out his argument, Goldhill makes some astute observations about health care and health. One is moral hazard: a person tends to spend more of someone else's money; i.e., if I have health insurance, I will use it primarily because someone else (other plan members) are paying for it. While this is true for normal goods in economics, the jury is still out when it comes to health care. Princeton Economist Uwe Reinhardt maintains that people would rather do something fun than go to the doctor or be admitted to the hospital. We usually side with Uwe on these things.

At the end of his thought-provoking article is a thought-provoking conclusion. Simply stated, Goldhill believes that we should move away from comprehensive health insurance and focus on big catastrophic costs. His vision of consumer directed health care on steroids is not without some merit. His call for increased transparency, the "right" kind of competition, and subsidies for those who cannot afford care are something that we support. But while he has a chilling grasp of what can go wrong with acute care, he doesn't really get chronic disease, which is where most of our health dollars go (not to mention hundreds of billions of uncompensated at-home care dollars provided by families). His idea of requiring all Americans to have a health savings account would not just be politically unpopular; it would also hinder many families access to care.

Catastrophic coverage starting at $50,000 isn't workable for too many families. Millions of Americans with insurance would not be able to see clinicians to manage their chronic disease; these costs are not catastrophic like a car accident, but are very expensive over time. He addresses the chronic disease issue with one vague sentence ..."Chronic conditions with expected annual costs above some lower threshold would also be covered." But meaningful coverage of chronic disease, even if it's better managed than it typically is today, is at odds with his basic concept is built on acute care and on the idea that "only a minority of us should ever be beneficiaries." Moreover he separates "predictable" end of life care from chronic diseases. Most people will die of chronic diseases or their complications. Is "end of life" for them the last 24 hours? The last six months? The last two years of gradual decline punctuated by acute crises?

The article reminded me of statements made by Mark Smith, CEO of the California Health Care Foundation. I attended a Health Affairs lunch a few years ago where he discussed how modern health insurance performed four separate functions:

(1) "What if I'm hit by a bus?"; (2) "I need to be covered for my preventive services"; (3) "I can't afford to go to the doctor, or to get my medicine"; and (4) "I've got a chronic disease, for which I can't afford to pay over time."

Dr. Smith went on to say that despite the differences of these four, all these functions are ways to access the delivery system, which we must make more affordable over time. (We agree.)

It's worth remembering that the reason Americans have a fractured relationship with their health plan, a major cause of the headaches listed above, is that they change insurers several times over the course of their lives -- usually when they change jobs. This gives insurers little incentive to invest in the health of their beneficiaries. Providers are rarely on the hook at all, hence their concentration on delivering services.

As we've written, Massachusetts appears to be moving toward Accountable Care Organizations (ACOs). This would be a real delivery system game changer, allowing providers to make money off keeping their beneficiaries well, instead of providing tons of services when they get sick. While the House bill would implement a pilot program and increase physician payments for ACO participation, we would prefer more incentives for the formation of ACOs. The Health Care CEOs for Health Reform stated it best: fee for service has to go.