Access, Quality and Cost in the Era of Consumerism

California Medical Association
8th Annual Leadership Academy
Acceleration: Access, Quality and Cost in the Era of Consumerism.
La Quinta, California
November 18-21, 2004

Keynote Presentation

Can a "Consumer-Driven" Health Care System Succeed?

Uwe E. Reinhardt, Ph.D., Professor of Political Economy, Princeton University:

"What should be the goal of a health system? It should improve health status. It should protect families from financial ruin over illness. It should leave people satisfied with the care they got. But it should also make them feel good about a sense of fairness in their society, as Canadians fiercely feel proud of the sense of fairness in their system, whatever problems they have. And the Germans and the Swiss are fiercely proud of the social contract of solidarity.

"Intermediate goals are access to timely care, that feeds into health status and that. See, these are not goals, they're just instruments to reach these goals: efficiency and fairness, fairness in financing health care...

"We don't talk enough about financial protection, about people who have cancer also going broke, and the insult and hurt that that represents.

But, you know, 'It wasn't my fault that I got cancer, now I have to sell my house.' That's an insulting thing for a Canadian and German like me to think about. And it happens. Many, many American families go broke over health care.

"We don't ever talk enough about fairness and equity, not at all about the social ethic. We talk about the Judeo-Christian ethic as if it were something else. It should really be ours, and, incidentally, there is a confusion in all kinds of other ethics. But they all ask for the same.

"In the present instance, I think we should ask how these goals are affected relative to the status quo and relative to alternative policy options that we might consider, like traditional, comprehensive coverage with managed care, single payer system, and so on. And I think we need to have some debate; which of these approaches actually gets us closer to those goals...

"A major problem in the U.S. is we never discuss ethics; that's somehow a taboo topic, because here we get ideological and then we get political. And I say, 'Bullshine.'That is at the core of health care. That is the foundation that should surround health care, because that's how physicians,among others, are trained.

"So, to me, we can't really judge whether this will succeed. Some people will say, 'It succeeds.' It's like beauty and honor, the evaluation of consumer-directed health care will be driven much more by ideology than by data. And that's where we are right now. And I wish it were more driven by two things: data, to tell us what this thing really does, and, secondly, what would we like to be like as a people.

"Do we want to be the kind of people that treats soldiers the way we do ($8000/year pension after losing a limb)? Do we want to be the kind of people that leaves a mother, who raises three children for America, sitting there without health insurance or (with only) the policy that she can find on (leaving her with $20,000 out of pocket on $26,000/year income)? Is that what we're about as a people? I'm just an immigrant here. I can't tell you. This is your problem, not mine. I'm well to do; I buy out of this. But I urge you to reflect on those aspects of it before we get into the technique.

"We can do this. When you tell me the ethics; we can implement it, or the people who spoke yesterday (see comment). We know how to do this. But ethics first. And I think we put ethics last."

For tape or CD recordings of the Leadership Academy:

Comment: The first day of the plenary sessions began with speakers well known to those of us who have studied consumer-driven health care (CDHC). John Goodman of the National Center for Policy Analysis and Grace-Marie Turner and Greg Scandlen of The Galen Institute explained consumer-driven health care, especially health savings accounts and high-deductible health coverage. They did not present any new information on CDHC.

The plenary sessions closed with Uwe Reinhardt's presentation. Mentioned here are only a few of his many important points. He questioned whether patients could be empowered decision makers since current information systems are too primitive to allow individuals to make truly informed decisions about their health care. He provided considerable data to demonstrate that current high-deductible policies leave low income individuals exposed to the potential of insurmountable medical debt. He demonstrated how health savings accounts reward higher income individuals with progressive tax benefits to the detriment of lower income individuals. He showed that those in the lower one-third of income levels will bear
the financial brunt of the CDHC model. Then he ended his presentation with the message transcribed above.

The majority of those attending represented the leadership of medical associations and health care providers. I would describe their response to the presentations on CDHC as mixed, at best. Yes, some passionate supporters were in the audience.

But there is great news. With this audience of physician leaders, Uwe Reinhardt was the only speaker to receive a standing ovation!

There is hope for the future of our health care system.