The New Health Dialogue

New America's health policy program had its first post-passage panel discussion on Monday, "A First Look at Implementing Health Reform: The Delivery System Challenge." We'll have a few posts today, but I'll start us off. You can also see the webcast here.

Julie Barnes, the program's acting director, opened yesterday's event by noting that while much of the attention went to coverage expansion, most of the legislation actually pertains to delivery system reform and health care quality. On the second panel, which is what I'm writing about here, we learned about the challenges facing those who will actually do the implementation: health care providers and U.S. state governments.

The first speaker was Dr. Ed Murphy, President and CEO of the Carilion Clinic, an integrated system of hospitals, clinics and medical centers in and around Roanoke, VA. Carilion has been at the forefront of integrating care in the ways that the federal reform seeks to stimulate and expand. Dr. Murphy stressed, however, that there are many challenges to implementation beyond the technical realignment of payments and organizations envisioned in the bill. He addressed the importance of changing the medical culture, perhaps most of all by encouraging cooperation and collaboration among doctors and other health professionals. He warned that such collaboration works, in many ways, against the fiercely independent orientation of many doctors. 

Dr. Murphy also emphasized the challenges associated with enrolling health plans in the effort. Some insurers will be very helpful.  And some emphatically are not. (He joked that he was tempted to publicly name the insurers who have embraced change -- but that it would then be too easy to identify those who see their own economic interests protected by the status quo.) He explained, and this was a particularly useful insight, that when doctors and hospitals use new models of integration to deliver highly efficient, high quality care, it could change the business model of insurance. If they become simple financiers of these transactions, whose services can then be commoditized, their future may be threatened.

Anne Gauthier, a senior fellow at the National Academy for State Health Policy, offered a detailed and comprehensive view of the implementation challenges facing state governments. Her presentation, which should be a touchstone for anyone involved in these efforts, can be found on our website. Her conclusion was that the states' huge responsibility for health reform implementation will stretch the creativity and resourcefulness of all public officials and stakeholders. She emphasized that ongoing federal-state dialogue will be essential, and that continuous learning will be the order of the day for some time to come. Some states, like Minnesota, have already laid the foundations for some of this learning. Minnesota in 2008 took several steps forward, including the bundled payment pilots that both Medicaid and Medicare will test under national health reform.

The third speaker was Claudine Swartz, assistant vice president of policy at the National Association of Public Hospitals and Health Systems.  She emphasized that many people think of public hospitals as the safety net for the uninsured and Medicaid patients. That's true -- but that's not all they are. They are also first responders in times of community or national crisis as well as the only level one trauma centers in most metropolitan areas. Swartz too was enthusiastic about the general direction of health care reform but concerned about elements of implementation. She pointed out that federal reformers did end up acknowledging that certain DSH (disproportionate share) payments had to be preserved, although possibly reallocated. And she noted that federal reform did not address the cost of caring for millions of undocumented immigrants that will still end up in public hospitals.

Then it was my turn.As senior research fellow in the California Program of the New America Foundation, I have spent a lot of my time looking at the state's unique challenges in carrying out reform. During the last year, I along with Leif Wellington Haase who moderated the panel and runs the California Program, have directed The California Task Force on Affordable Care. We brought together various stakeholders -- leaders of hospital systems, physician associations, insurers and consumer groups -- in a collaborative effort to develop strategies to get the state vastly better value for its considerable medical spending. 

The assumption throughout our task force's work was that federal health care reform would pass in roughly the same form in which it was proposed. Luckily, it was a good assumption. If national reform had failed, the stakeholders had agreed to convene again to figure out what California could do on its own, despite its immense fiscal pressures. This would have been an extraordinarily challenging task. For reasons that run the gamut from difficulties in paying for public programs to ERISA restrictions on regulating health plans of major employers, states are relatively hamstrung in the task of creating new, better-functioning markets that promote the delivery of the highest quality health care at the lowest possible cost. It isn't easy to do it with federal reform. But it would be neigh on impossible to do it in the absence of federal reform. 

I noted that while California has been a laboratory for developing many models of high value integrated health care, these models have been eroding in the past ten years. Federal health care reform, properly implemented, could shore up the parts of the medical delivery system that work best in California and around the nation. I closed with an analogy to Benjamin Franklin's response when asked what the Founders had created when they wrote the Constitution. Franklin's response was "A republic ... if you can keep it." When people ask me what we have created through federal health care reform, I tell them, "A uniquely American health care delivery system ... if we can build it."