Healthcare Reform’s Most Important Issue: How to Make it a High-Value System

In his July 22nd press conference, President Obama said something that, I contend, is the single most important issue about reforming our healthcare system. He said: "…here's what I'm confident about. If doctors and patients have the best information about what works and what doesn't, then they're going to want to pay for what works. If there's a blue pill and a red pill, and the blue pill is half the price of the red pill and works just as well, why not pay half price for the thing that's going to make you well?"

I'd add a logical extension to the President's statement by including this sentence: "And if there's a white pill that works even better than the blue and red pills, while costing the same or less, then why not pay for the more cost-effective white pill."

By expanding the word "pill" to mean "any health-related treatment, approach, method, or procedure," I read the President's message (and the logical extension) to mean that curing the healthcare crisis in a sustainable way requires that we focus on knowing ever-more about answering these three questions:

• What are the most cost-effective (high-value) ways to prevent, manage, and treat problems with people's physical health and psychological wellbeing?
• How can such high-value care (including prevention, self-maintenance, and sick-care treatment) be implemented safely, effectively, and reliably by all persons involved?
• How do we put into action an incentive program that makes it increasingly likely the high-value this will implemented successfully by everyone?

While it is certainly necessary to have a deep, rational debate about universal insurance versus single payer systems, it is equally (if not more) important to address the core issue, i.e., dramatically increasing cost-effectiveness (value to the consumer).

Why? Because the only sustainable strategy for giving everyone access to affordable quality care requires (a) knowing what constitutes high quality and (b) assuring such quality care is delivered efficiently.

Why? Because making informed healthcare decisions and taking competent/responsible action requires that we know the personalized methods of self-care and professional treatment most likely to get the best outcomes (results) for each particular person. These evidence-based outcomes include illness avoidance, symptom reduction, disease control or elimination, complication prevention, quality of life improvement, etc.

Lacking such crucial scientific knowledge means there will continue to be plenty of over-treatment (errors of commission), under-treatment (errors of omission), ineffective (unproductive) treatment, and inefficient (inappropriate, wasteful) treatment, which all result in overly costly, poor quality care. This, in turn, means healthcare expenditures will continue to rise for reasons such as these:

• Instead of doing things right the first time, errors, ineffectiveness, and inefficiencies will prolong a "fix it and pay again when it breaks" process resulting in excessive care, which may then result in even worse outcomes and greater expenditures (e.g., due to increased risk of medication side-effects, drug-drug interactions, and complications).
• Unless we know the most cost-effective approaches to care, there is a good chance that the more expensive/profitable methods of care will be chosen over the lower-cost alternatives.
• If clinicians don't have the scientific evidence need to guide them in making informed, justifiable decisions, this lack of certainty can cause them to feel pressured into doing unnecessary tests and treatments because (a) they want to avoid malpractice suits and (b) there are economic pressures to use available resources when guidelines for determining their appropriate use are inadequate (such as use of medical scans).
• Waste and fraud will not be adequately controlled unless we know when something is wasteful (excessive, unnecessary, inefficient) and fraudulent (e.g., purposely doing something for monetary gain that knowingly harms or disadvantages a person); such controls require valid, reliable, targeted guidelines and incentives for following those guidelines.

Replacing our ignorance about what works best for least cost requires doing two basic things:

• We have to learn, through valid scientific research, how to answer questions about what health-related treatment, approach, method, or procedure has the best clinical outcomes for the best price for particular types of people with particular types of problems. These answers would identify the most cost-effective kinds of self-care and treatment that give consumers/patients the greatest value ("bang-for-the-buck").
• Whenever such knowledge exists, any healthcare program that is government run or supported should only pay for the most cost-effective (high-value) approaches to care. Of course, special arrangements should be made for sound research studies and experimental treatments. In any case, people who want to waste their money by paying out of pocket for less cost-effective care should be informed about it, but not be prevented.

Implementing this rational forward thinking healthcare reform strategy presents daunting challenges and requires some radical changes to our current system. The challenges include the following:

• It is well documented that the current fee-for-service model penalizes healthcare providers for rendering high-value care because doing more means greater income/revenue than doing better; they are thus punished for providing high quality services efficiently.
• The healthcare industry knows very little about cost-effectiveness because there has been great resistance in doing the necessary research.
• There are too many ways to "play the system" for personal financial gain that adversely impact one's health and wellbeing.
• Doing the necessary research is costly, complex, time-consuming, and requires large-scale collaboration between clinicians, researchers, and consumers across the globe.

What are the options?

• Doing little or nothing. Simply giving into the pressure and deceptive politics of special interest groups who currently gain financially from our current broken healthcare system means maintaining the status quo. This solution is supported by people who: (a) lack of empathy for those who currently suffer [see a series of posts starting at this link], (b) refuse to accept that the current system is so dysfunctional that it is unsustainable and threatens our entire society [see this link], and/or (c) fear they have too much to lose financially from significant changes to the current system.
• Focus on payment strategies to provide some sort of insurance coverage for just about everyone (i.e., universal access), without adequate acknowledging and embracing the cost-effectiveness issue. This half-backed approach would lead to ever-increasing costs and poorer care quality since:
  
  
  • Inefficiency and ineffectiveness remains unconstrained because knowledge of what works best for least is lacking, which means there is pressure to do what pays the most, or to purchase what costs the least without knowing if its of lesser quality.
  • Simply paying healthcare providers less will result in worse care as clinicians cut back on the time they spend with each patient (which is often too brief already) in order to maintain their current standard of living by adding more patients to their already over-demanding case loads. This is already having a negative impact on care quality.
  • Even if there are pay-for-performance incentives, lacking adequate knowledge of what works best for least means that such rewards will be based on inadequate performance guidelines. In other words, clinicians will be paid more if they follow certain procedures, even though it is uncertain if those procedures will actually help, harm, or have no meaningful affect on a particular patient.
  
  
• Implement strategies based on a Patient-Centered Life-Cycle (PCLC) Value Chain. As I discussed two years ago in a series of posts starting at this link, the PCLC Value Chain focuses on rapid and radical (profound) transformation, so that people are aware of cost-effective approaches to care and are rewarded for implementing such cost-effective care in a high-value, patient-centered healthcare system.

I welcome all comments.
Related links:

• Healthcare Reform Models Focusing on Value to Consumers - Part 1
• Healthcare Reform Models Focusing on Value to Consumers – Part 2
• What is the Most Sensible way to Diagnose, Treat and Prevent Health Problems?
• Four Interlocking Issues about Fixing American Healthcare
• Low-Cost, High-Quality Care In America: A Reply
• How to Reform Healthcare Sensibly: Focus on Two Clear Goals
• Empathy, Taxes, Personal Responsibility, and Healthcare Reform
• Empathy, Taxes, Personal Responsibility, and Healthcare Reform – A Timely Debate (part 1)
• Empathy, Taxes, Personal Responsibility, and Healthcare Reform – A Timely Debate (part 2)
• Healthcare Reform: Where to Focus?