By John C. Goodman NCPA
In many ways health care is like education. In both fields we find a sea of mediocrity punctuated by islands of excellence. Further the islands of excellence appear to be randomly distributed. So how do we get everyone to practice medicine as successfull as the best? Not only do the islands of excellence appear to be randomly distributed but by and large they are not correlated with anything. This is not only true in the United States. It is true all over the world.
The two sectors have two additional common features:
- The individuals who receive the benefits of the services are separate from the entity that pays for them; and
- We have completely suppressed the marketplace. As a result there are no financial rewards for institutions to become excellent. In return for expending greater effort to improve performance they receive the same (or even less) income.
After the publication of
A Nation at Risk about a quarter of a century ago alarmed reformers decided to study the best schools to determine what they do that works and to use various carrots and sticks to try to get all other schools to do the same.
This is what I call the demand-side approach" to education reform. How well has this approach worked? Miserably.
Inner-city schools are about as bad as they ever were. So what are we doing about it today? We are continuing with the very same reforms that have failed for 25 years!
And here is a shocker: The Obama Administration is committed to the very same approach in health care that has proved so unworkable in education!
Peter Orszag and his colleagues are chomping at the bit in anticipation of using the power of the purse to get doctors everywhere to shape up. In no time at all those who are wasteful and inefficient will be practicing medicine just the way its practiced at the Mayo Clinic. At least thats the goal.
Meanwhile developments on the two sides of the market in health care are like two parallel universes. On the supply side we have the islands of excellence (Mayo Intermountain Healthcare Cleveland Clinic etc.).
On the demand side we have a whole slew of experiments with pay-for-performance and other pilot programs designed to see whether demand-side reforms can provoke supply-side behavioral improvements. And never the twain shall meet.
We cannot find a single institution providing high-quality low-cost care that was created by any demand-side buyer of care. Not CMS. Not Medicare. Not BlueCross. Not any employer. Not any payer anytime anywhere. As for the pilot programs I dont think a single pay-for-performance experiment has actually lowered health care costs.
What about other demand-side reforms: forcing/inducing/coaxing providers to adopt electronic medical records to coordinate care to integrate care to manage care to emphasize preventive care to adopt evidence-based medicine etc.?
The Congressional Budget Office (CBO) has reviewed the evidence on all these reforms and concluded that the savings will be meager if they materialize at all.
Scholarly researchers have weighed in as well.
As part of the effort to follow in the footsteps of the education reformers a research project by Atul Gawande Donald Berwick Elliott Fisher and Mark McClellan has identified 10 hospital referral regions (HRRs) as health care islands of excellence and carefully studied what makes them tick.
What did they learn from this exercise? Not very much. For example:
- Despite the conventional wisdom that ideal medicine requires salaried doctors only two follow the Mayo Clinic in this respect.
- Two others pay on a traditional fee-for-service basis; and the rest have mixed-payment schemes.
- Despite the conventional wisdom that a greater ratio of primary care physicians to specialists is essential the regions are all over the map in this regard as well.
- One is twice the national average; two are below it; and the others ranged from 14 to 52 above the national average.
So how do we get everyone else to practice medicine as successfully as these 10? As summarized by Gawande the top performers have these characteristics:
- Leadership
- Altering financial incentives
- Using measurement to provide a force for restraint
- Engaging with the community to help others see how much high costs and poor quality are harming the greater good."
So lets see. To have really top-notch medical care: First find a leader……… oh and dont forget to engage.
Not exactly the recipe you were hoping for? Sorry thats the best we have at this point.
