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Editor's
Note: Newt Gingrich, former U.S. Speaker of the House and
CEO of the Center for Health Transformation,
advocates the "transformation" of the
United States health care system by harnessing
technology and market forces to improve quality and
reduce costs. He will present his analysis at The
Emerging Technologies and Healthcare Innovations
Congress later this month.
Bacon's
Rebellion asked Gingrich to explain what Virginians
can do at a state and local level to contribute to
the overhaul of the nation's ailing healthcare
system.
Bacon's
Rebellion: You argue in your book, Saving Lives
& Saving Money that transparency in the
healthcare system is a necessary condition for
providers to identify root causes of medical errors.
What can Virginia do to promote transparency within
its borders? Tort reform presumably would be at the
top of the list.
Gingrich:
The Institute
of Medicine report “To Err is Human” documented
that medical error is the third leading cause of
death in the United States, with as many as 98,000
people dying each year from medical error. There is
no reason to believe that the
Commonwealth
of Virginia is any different from the rest of the country with
respect to this problem.
You
are right. The emphasis on fault of the current tort
liability system is a significant obstacle to
improving the quality of healthcare. A Department
of Health and Human Services report notes that
“according to many experts, the No. 1 barrier to
more effective quality improvement systems in health
care organizations is fear of creating new avenues
of liability by conducting earnest analyses of how
healthcare can be improved.”
The
current tort liability system is also ineffective at
compensating those injured by medical error, and the
rise in defensive medicine that it engenders raises
health care costs for everyone.
One
proposed solution that we believe merits serious
consideration has been under review by the
Wyoming
state legislature. Its aim is to deal with medical
error the way that the National Transportation
Safety Board deals with aircraft crashes – find
the cause and fix the system so it does not happen
again.
The
basis of the Wyoming draft plan is the creation of a Commission on Health
Care Errors. The primary focus of this commission
would be to identify errors, identify their causes,
and fix the causes to prevent future errors. The
secondary purpose of the commission is to compensate
those people injured by errors.
The
commission has the compensation function because
fear of the current tort liability system now
prevents people from the honest and vigorous
identification, reporting, and analysis of errors
that is necessary to accurately identify and prevent
them. With compensation addressed by this
commission, it will correct two of the major
problems with the current system – compensation
for injured patients is too erratic and too little
of the money goes to injured patients and too much
to those who run the system. An additional outcome
is a reduction of healthcare costs incurred due to
medical error and the need to practice defensive
medicine.
The
effect of such a system would be to abolish the
current tort liability system as it relates to
healthcare. There are many details as to how the
Wyoming model would operate, but it certainly the
commission would be empowered with procuring data
from patient records as well as testimony by
relevant professionals who treated a patient.
In
this system, the courts would retain a role.
Individuals would have a right to appeal a
commission judgment to the courts. This judicial
review would not involve a new trial in front of a
judge. Instead, the court would consider if there
were any failure to apply the law properly or if
there were any abuse of discretion by the
commission.
Bacon's
Rebellion: In your analysis, the health care
industry is characterized by a cultural resistance
to change, in particular, a reluctance to adopt new
information technologies. What can the Virginia
Hospital & Health Care Association, the Medical
Society of Virginia and other industry/professional
groups do to bring about cultural change? And what
kind of change should they be promoting?
Gingrich: One
place to start is medical schools. Currently
medical students spend a lot of money to cram as
much knowledge and gain as much experience as
possible in school and residency so they,
ostensibly, can treat any condition a patient may
present. Doctors are trained to be confident,
directive, unwavering, and to question all
assertions. Patients historically have perpetuated
this culture by passively relying on doctors to
manage their health. What is the result of
this model? According to the 2004 RAND National
Report Card on Quality, adults receive the recommended
care only abut 55 percent of the time.
Medical
schools should encourage students to use health
information technology resources, such as decision
support systems that can filter
through the most current medical journals,
delivering the situation appropriate medical
information at the point of care. Decision support
systems can help us eliminate the shocking 17-year
average chasm between discovery of a new medical
breakthrough and common practice.
The
debate over the usefulness of health information
technology (HIT) has been won. Those who do not
agree are denying the obvious — similar to
debating the theory of aviation while planes fly
over their head. The question that remains is
how fast can health information be responsibly
adopted?
Virginia
health
societies and associations can contribute to HIT
advancement by helping create pay-for-performance
projects like Bridges to Excellence, where
employers, doctors, and payers are piloting three
separate rewards programs in metropolitan areas such
as
Boston,
Cincinnati, and Louisville. Bridges is incentivizing physicians with bonuses
for providing high quality care for diabetic and
cardiovascular patients. The third Bridges program
is paying $50 per patient/per year for implementing
specific information technology solutions that are
proven to reduce errors and increase quality.
Virginia’s medical associations also should be involved in
the creation of Regional Health Information
Organizations, known as RHIOs. The concept of RHIOs
was outlined in Secretary Thompson and National
Health Information Technology Coordinator, Dr David
Brailer’s report, The
Health IT Strategic Framework. RHIOs
would provide the local leadership, oversight,
fiduciary responsibility, and governance necessary
to electronically connect medical information in
communities. ARHQ recently awarded grants to
organizations in five states -- Indiana,
Colorado,
Utah, Rhode Island, and Tennessee
-- $5 million a piece to advance this concept.
Bacon's
Rebellion: How should the Commonwealth
transform/dismantle its regulatory apparatus such as
insurance mandates?
Gingrich:
Over the last several weeks, I have become
convinced that another major strategy to making
insurance more affordable is to create a national
insurance market, allowing individuals to purchase
any healthcare insurance policy available in the United
States, regardless of their state of
residence.
Currently,
insurance is regulated primarily by the states.
Every time a state institutes a new mandate, such as
requiring that insurance cover certain treatments,
the bottom-line cost of health insurance for
residents in that state increases. No matter how
well-intentioned these mandates are, the reality is
that they are increasing the cost of healthcare
insurance, making it harder for individuals to
afford the most basic healthcare coverage.
Creating a national
insurance market could make a difference for
Virginians who currently cannot afford insurance. On
October 12, eHealthInsurance,
the nation’s largest source of health insurance
for individuals and families, released data from its
semi-annual Cost and Benefits of Individual Health
Insurance report that showed that Iowa, at $1,236
for an average age of 35, has the lowest average
annual health insurance premiums for single policies
of any of the 43 states in which eHealthInsurance
sells insurance. Virginia
was $1,848, an increase of $612. This 33 percent
decrease in cost could mean the difference in
whether or not an individual can afford health
insurance.
The idea of buying
health insurance across state lines is
extraordinarily popular with the American people. A
recent Zogby
poll for the Council
for Affordable Health Insurance showed that 72
percent of the American people support allowing
someone living in one state to purchase health
insurance from another state if the insurance is
state-regulated and approved. In addition, 82
percent said they would be likely to purchase a
policy across state lines if they were paying very
high rates and needed access to more affordable
health insurance policies.
Bacon's
Rebellion: What can the Commonwealth do to
"transform" Medicaid?
In
the traditional Medicaid program, healthcare is
provided to the poor, elderly, and disabled in a
“fee-for-service” manner where a provider
delivers a service to a beneficiary and subsequently
bills Medicaid for payment. Under this traditional
method, beneficiaries and providers are isolated
from the basic economic forces that drive most
markets. We believe this approach contributes to a
significant disconnect between recipients and those
delivering and paying for their care. And, while not
the only factor, it is certainly a major contributor
to the rise in Medicaid costs.
In
order for Medicaid beneficiaries to become prudent
buyers of health care services, we need to bring
marketplace principles into Medicaid programs. The
Medicaid beneficiary, just like other Americans,
needs to be vested as a purchaser of health care.
Individuals
in the private marketplace with health insurance
often have a menu of plans from which they can
choose. The plans vary in both cost and benefits,
usually including indemnity and managed care
offerings. Options range from low premiums with high
deductibles to high premiums with full services. The
new health saving account allows individuals to
deposit their own money or some combination of their
own money and an employer’s into
an account that the individual controls. The
beneficiary pays from this account to cover medical
costs. Funds not expended on medical care accrue to the
benefit of the beneficiary. This may be combined
with a catastrophic medical policy that covers
medical cost after a high level of defined
deductible. States should offer Medicaid
beneficiaries, more than just the tradition
fee-for-service insurance, but the same options
available in the private marketplace, including HSAs.
In
this environment, Medicaid beneficiaries would be
able to make market place decisions regarding the
plan that is most advantageous to them. In doing so,
they would have the incentive to control their
medical costs, maintain their health and, thus,
reduce their out-of-pocket expenses. The beneficiary
has the incentive to consider the value in the use
of the health care system, just as they do with all
other purchases they make. The provider has an
incentive to provide quality care in order to
attract the customer.
True
Medicaid reform must therefore free individuals and
providers to operate in a more open market. This
could be the direction that Virginia
takes.
--
November 15, 2004
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