A Critical Conversation on the Third Rail of Healthcare Reform: Cost
A Critical Conversation on the Third Rail of Healthcare Reform: Cost | health reform, healthcare costs, healthcare legislation, deficit, healthcare innovation

Governor Phil Bredesen (l) and Congressman Jim Cooper debate the merits and costs of proposed healthcare reform options.

Getting on track

More than three-and-a-half years ago, the RAND Corporation — a non-profit institution working to improve policy and decision-making through research and analysis — "guessed" that healthcare was going to come back on the political agenda, and in 2006, began work to build the analytic ability to evaluate the myriad healthcare proposals that would come into the national spotlight.
Few decisions have been so prescient.
Healthcare leaders, high profile speakers, and innovators gathered at Nashville's Schermerhorn Symphony Center several weeks ago as the RAND Corporation hosted a summit designed as a "critical conversation" about the current and future state of healthcare in this country.
The result was a non-partisan look at the national dialogue regarding solutions for cost control and evaluating current healthcare reform proposals for their impact on cost, with a focus on innovation as an important component for cost control.
Elizabeth McGlynn, associate director of the health program at RAND, observed, "This type of unbiased analysis of current healthcare policy proposals is just what people need to better understand healthcare reform."
The program, which was sponsored by The Martin Foundation, Vanguard Health Systems and Healthtspottr, recognized healthcare innovators who have demonstrated new ways of controlling costs.
James A. Thomson, president and CEO of the RAND Corporation, introduced Tennessee Governor Phil Bredesen, as a leader "who has lived through and participated in the evolution of healthcare." Bredesen observed that "there could not be a more timely topic" as he welcomed former Comptroller General of the United States David M. Walker, now president and CEO of the Peter Peterson Foundation.
Walker warned the audience that "healthcare costs could be the one thing that could bankrupt America" and insisted that the country "must focus on costs first" in any reform plan.
"Our current system is unaffordable and untenable, with tens of billions of unfunded programs," he declared, observing that "40 years ago Congress decided how to allocate two-thirds of the Federal budget — the rest was automatically funded. We have now reached the point where every duty of government expressed in the Constitution is funded in the area of 'discretionary spending.'"
As of Sept. 30, 2008 the national debt burst the $10 trillion barrier. "We transitioned between billions and trillions very quickly and now have total liabilities of $56.4 trillion, up from $20 trillion just eight years before," he continued.
Walker noted, "The figure comes out to $184,000 per every person in the country, including babies, or $483,000 per household, adding an implicit mortgage equal to 9-10 times income."
Noting that the fastest growing element of the national debt is interest, Walker observed, "The national debt in 1789 was equal to 40 percent of GDP and now, in 2009, it is equal to 85 percent of GDP."
 "This tsunami of debt will overwhelm us. If we do not begin to reform, we will not be able to borrow from the world's largest lenders. Foreign lenders are already speaking publicly of their concern about the need to put our financial house in order."
He continued, "The single largest driver of this massive debt is out-of-control health costs … a growing challenge to our country and to American families." 
Walker declared, "We cannot allow this to continue to happen. We don't need nip and tuck — we need radical reconstructive surgery!"
Walker outlined the four pillars he believes are necessary for comprehensive healthcare reform: 
  • Universal coverage for wellness and catastrophic illness;
  • Implementation of federal budget coverage;
  • Adoption of evidence-based standards for Medicare; and
  • Incentives and consequences for increased personal responsibility and accountability.
He concluded by declaring, "You cannot reduce healthcare costs by expanding coverage," and warned that reform will not be popular and will require tough choices.
Thomson then introduced Dr. Elizabeth McGlynn, PhD, associate director of RAND Health, who pointed out healthcare spending is growing faster than we are generating wealth and may soon overtake all other discretionary government spending. "We are unlikely to find a way forward without involving price and volume — where do we start?" she asked.
She added there would be hard choices to be made, particularly in the areas of obesity, end of life care and payment reform.
McGlynn is also assistant director of RAND Health's COMPARE initiative, www.rand.compare.com, which has developed a comprehensive framework for evaluating health policy proposals being considered at the federal and state level as well as by the private sector.
While reform will not be fast or easy nor without pain, she insisted, "If we don't get started now, the options are fading."
The morning's program concluded with a panel discussion moderated by Leonard D. Schaeffer, founding chairman and CEO of WellPoint.
Panelists included Rep. Jim Cooper (TN-5th District), Julie Gerberding, MD, former Director of the CDC, Patrick Soon-Shiong, MD, chairman and CEO of Abraxis BioScience, Inc., and Gov. Bredesen.
Cooper maintained that all bills currently in Congress failed to meet the president's goal of restraining the growth of spending. He continues to maintain that the current version of the Wyatt-Bennett Bill, known as The Healthy Americans Act, has enough cost containing provisions to be valuable, is bi-partisan, and balances benefits vs. cost, which he said was "the essence of good legislation."
Bredesen said the TennCare experiment in universal care "didn't tackle the cost issue, and therefore the expenses came… but the savings didn't."
Gerberding pointed out, "There is no reward for being healthy, no penalty for bad habits such as smoking. We must be prepared to do this reform over a long time in a world that values convenience and plenty."
Soon-Shiong, who has been involved in more than 50 inventions, said the only way to empower patients is through information. Molecular medicine is advancing so fast that important information is not always available. He urged the development of a public utility that will transmit a system of data on a national scale, much like the nationwide systems of railroads, electricity and the Internet.
"The technology now exists to monitor people at home by gathering and analyzing data to alert physicians to act. Things are happening as we speak that will allow us to do the right things in the next five years."
Soon-Shiong said that there are prototypes of tools that will send brain waves and EKGs on cell phones. He pointed to the discovery that evidence of cancer in the sentinel nodes can now be determined by a blood test, eliminating the need for expensive and debilitating surgeries to determine whether the node is involved.
When the panel was asked what about the current political struggle has been most surprising, Cooper answered that he thought Obama "over-learned" from the Clinton mistakes and had shied away from delivering "tablets" of pre-conceived policies to the Congress, which resulted in more confusion.
Gergerding said she was as much surprised as "deeply disappointed" that the conversation about healthcare was not about how to be healthier, and Breseden said he was surprised at how un-ambitious the plans were at a time he felt this was the "best opportunity in my lifetime" to get real improvement.
Soon-Shiong, who said he thought this was the chance of a lifetime for transformative change, has been surprised that the debate has been about dollars instead of health. "Why have we not called upon the people who really understand healthcare and how it is delivered? There are really only two parts to this: the patient and the provider — everything else is just noise. It reminds me of the old saying that wars are too important to be fought by generals!"
Afternoon speakers included Jordan Shalin, MD, a Healthspottr Health Care Innovator, who founded Current Health, a medical practice that puts priority on the doctor-patient relations. Shalin's philosophy is to provide care that is "online, on time and on call," delivering the right message to the right patient at the right time. His practice of five physicians in the Bay Area "tweets" their patients up to five times a day with important medical bulletins.
Alexandra Drane, another Healthspottr Health Care Innovator, and president of Eliza Corporation, works directly with innovative healthcare leaders to better understand how Eliza's technology can enable and support targeted behavioral change to impact health and healthcare costs.
Charles Martin, chairman and CEO of Vanguard Healthcare Systems, called the meeting "a starting point for long-term communication," and commented that it is a "rare individual who can peer into the future and imagine the possibilities —even rarer is one who can make it happen."
Martin added, "This conversation would have made no sense before now, and it might be too late to have a year or two in the future."