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Better Reform Ideas

By January 4, 2010Commentary

We could rightly be criticized for flailing away at Congress’ feeble health care reform efforts without pointing to good alternatives.  Alain Enthoven has been examining the health system for many, many years and again in a Health Affairs blog articulates some ideas which could help control costs more rapidly.  (Enthoven Blog) Enthoven has primarily been a proponent of more competition and more consumer responsibility for understanding and managing the costs of health care.   He believes that the current bills do nothing to change the structural incentives prevalent in America’s health system and thus will not limit increases in spending.

The primary incentive in medicine today is to do more to get paid more.  Patients feed into this by usually wanting everything to be done that can be done; and they often have limited financial responsibility for the cost.  Enthoven points to several attempts to change payment methods that have failed, usually because they resulted in loss of revenue to providers or suppliers.   There are more efficient and less costly providers of care, usually larger, more integrated systems; but the nature of private insurance and the reimbursements of public payers don’t tend to reward them for their efficiency.  Enthoven believes that if we would restructure health plan offerings so that all employees and individuals have multiple choices and that any employer or governmental payments for the health plans were flat dollar amounts, at or below the cheapest plan;  people would choose lower cost plans, plans and providers would compete and overall spending would be lower.  Legislative initiatives along these lines have been proposed, including the Wyden-Bennett Act in this round of reform, but have generally been ignored.  That is unfortunate, as these proposals are more likely to correct the flawed structural nature of American health care that has led to our current cost problems.

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