Friday, March 7, 2008 - Obabama Healthcare Fails The Physical

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speaks eloquently of change. Nowhere is change more needed than in healthcare. By 2017, one dollar out of every five spent in America will go toward healthcare costs according to a report in Health Affairs.

For this high cost, surely Americans are getting excellent quality, are they not? Sadly, the answer is no.  By any one of many measures of quality, the US healthcare system is not performing well. A recent study from the Commonwealth Foundation found,


"The US healthcare system ranks last or next-to-last on five dimensions of a high performance health system: quality, access, efficiency, equity, and healthy lives."


This wildly expanding cost is unsustainable. Likewise, it is an international embarrassment to spend so much and yet perform so poorly on basic health scores. Everyone agrees that something has to be done but the real question is what?


One wonders what Barack Obama might do to meet this crisis. He claims that his plan will increase quality; provide coverage for everyone, and save money. Sounds like a classic case of having your cake and eating it, too. Looking closer, maybe he has uncovered some previously overlooked principles that might be used to untie this Gordian knot. So what specifically is he proposing to do?


Unfortunately, his healthcare plan is strong on vision but light on specific details. The best that can be discerned is a general outline that offers much promise but does not deal with any prickly details that might offend voters.  By connecting the dots we can start to see what Obama is likely to do for healthcare. Looking at the different components of his plan, we can postulate an answer to the feasibility of his plan.


The one element of Obama's plan that is crystal clear is his call for major expansion of the government's role in controlling healthcare. The central proposition he makes is that the government can intervene to improve the quality of healthcare provided in the US. Clearly, quality improvement should be a major goal for healthcare reform. Obama's plan does not disappoint on this promise. He claims that he will improve patient care by requiring doctors and hospitals to prove they provide quality care. His plan would link payment with reported quality. This implies that poor quality must be the provider's fault.


To implement this plan, an army of new bureaucrats must be hired by the government to keep a watchful eye on the doctors and hospitals to ensure quality. Healthcare providers will have to hire larger staffs to collect and report this data adding more cost to the system.  As these new structures evolve, the law of averages will prevail and the actual care will migrate to a median level of quality. The net result will be little improvement in care, and significant increase in the cost. High administrative overhead already is a major problem in our current system. A New England Journal of Medicine article stated that U.S. healthcare administrative overhead is twice that of the Canadian system. These researchers found that 31% of health care expenditures in the US went for administrative costs. Obama advocates that we increase this overhead further with no clear indication that quality will improve.


Obama's plan also calls for a ten billion dollar federal investment in healthcare information technology over five years. He purports this will improve quality and save money. Will it? The data suggests otherwise. A study published in The Archives of Internal Medicine showed information technology did not make a quality difference. Comparing practices that used an electronic medical record with those that did not, investigators found no difference in 14 quality measures, improvement in 2 outcome measures, and a worse outcome on 1 measure. This is hardly a sweeping endorsement. Incorporating such expensive and unproven methods within his plan is flippant.  It demonstrates a lack of understanding of the issue at hand.


The Obama healthcare plan also calls for expansion of the number of American people with health insurance coverage. While certainly a laudable goal, he does not explain how to pay for this.  He also claims to offer solutions to the broken health insurance industry by limiting catastrophic losses and lowering insurance costs through competition. To quote Obama's website:


"His plan will force insurers to pay out a reasonable share of their premiums for patient care instead of keeping exorbitant amounts for profits and administration. His new National Health Exchange will help increase competition by insurers."


To sum up this part of Obama's plan, he intends to create another bureaucracy to regulate the health insurance industry. The language used here is particularly interesting. He will force insurance companies to use more premiums for patient care. How will a for-profit corporation respond to such heavy-handed coercion from the federal government? 


Barack Obama talks a lot about change in his campaign. Healthcare reform offers him the chance to put that rhetoric into action. Unfortunately, all his plan does is offer empty talk and shallow ideas.  Senator Obama, are you serious about change? If so, please show us some substance in your healthcare plan

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