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OPINION: BEST CARE EVERYWHERE -- New America
Foundation proposes a civilian VA for the
uninsured, and maybe the rest of us.
For more about the author, Phillip Longman, use
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http://www.newamerica.
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st_care_everywhere_5941
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Best Care Everywhere
Here's an Idea: A Civilian VA for the
Uninsured, and Maybe the Rest of Us
By Phillip Longman
New America Foundation
Back in July, while trying to justify his opposition to expanding
government health care coverage for children, President Bush made a
telling comment. The uninsured, he said, "have access to health care in
America. After all, you just go to an emergency room."
That remark stuck many as blithe and callous, and in many ways it was.
The uninsured don’t receive in ERs anything like the full array of
health care they need. Indeed, one of the abiding arguments for
universal health care is that patients often wind up in the emergency
room with acute illnesses that could have been treated earlier, and more
cheaply, had they been able to afford regular doctor’s visits.
Still, there was a kernel of truth to Bush’s comment -- one that we
ought to take as a jumping-off point for rethinking how best to provide
health insurance for all. The fact is, as a nation we already have an
extensive, if ad hoc, system for providing health care to the uninsured.
A fair amount of money flows through that system. And the quality of
care it provides is far better than you might think.
According to the Kaiser Commission on Medicaid and the Uninsured,
Americans who lacked health insurance in 2004 received an average of
$1,629 per person in medical services. That’s only about 55 percent of
what fully insured Americans consumed that year, but it’s still more
than the total average per capita health care expenditure in Europe.
Some of that medical care is delivered at the suburban hospitals and
doctor’s offices where those of us with health insurance generally get
treated. But the lion’s share of health care for the uninsured is
provided by assorted "St. Elsewhere" institutions: typically big, old,
nonprofit community or teaching hospitals in poorer neighborhoods, with
additional help from smaller public clinics.
This Spartan, patchwork system is in financial trouble, due largely to
the cost of the uncompensated treatment that St. Elsewheres provide. But
it nonetheless continues to offer surprisingly good care. A recent RAND
study found that uninsured patients receive only 53.7 percent of the
care experts believe they should get. Not so hot, right? But according
to the same study, patients with private, fee-for-service insurance are
even less likely to receive appropriate, evidence-based treatment.
Indeed, among Americans receiving acute care, those who lack insurance
stand a slightly better chance of receiving proper treatment than
patients covered by Medicaid, Medicare, or any form of private
insurance.
Counterintuitive as this may seem, in health care less is often more.
The uninsured are virtually immune from receiving unnecessary surgery or
other forms of overtreatment that the system constantly encourages. Once
uninsured patients are through the door, they cost the hospital money
until its doctors make them well enough to leave. There is no incentive
to give them treatments they don’t need. Since about 20 percent to 30
percent of all health care spending in the United States goes for
overtreatment -- much of it dangerous -- this is no small advantage.
It’s also true that the nation’s public hospitals, while they may have a
Dickensian atmosphere and lack the very latest imaging machines, tend to
deliver higher-quality health care than their more prestigious
counterparts. For example, Dartmouth researchers John E. Wennberg and
Elliot S. Fisher have found that among Medicare patients who are not
terminally ill, and who share the same age, socioeconomic, and health
status, the chance of dying in the next five years is greater if they go
to a high-spending hospital than to a low-spending hospital. Whether
suffering from heart attacks, colon cancer, or hip fractures, patients
live longer if they stay away from "elite" hospitals, with their
overabundance of specialists, and choose a lower-cost St. Elsewhere.
Given this unexpected reality, it is perhaps not surprising that patient
satisfaction also declines as a hospital’s spending per patient rises.
It’s not fun to be overtreated, even if you get valet parking and the
finest in pudding.
None of this is to minimize the plight of the uninsured, who die at
higher rates than the rest of us in large part because they don’t have
access to affordable primary care. But the fact that uninsured patients
receive higher-quality acute care than do those with insurance ought to
make us think twice about all the plans being put forth by presidential
candidates to expand health insurance.
Virtually every one of those plans, Democratic and Republican alike,
rests on the assumption that the uninsured should be brought into the
health care system the rest of us use. But what if something like the
opposite is true? What if the best way to help the uninsured is to make
the health care delivery system they already use -- the St. Elsewhere
model -- better and more affordable? What if that path to 100 percent
coverage turns out to be not just better for the health of the
uninsured, but cheaper for taxpayers than any other universal health
care plan out there, and politically more viable? And what if,
eventually, the rest of us could join that system?
****
What I’m proposing is this: Take the existing, ad hoc system we use for
treating the uninsured and turn it into a real integrated system.
Specifically, mandate that everyone in America buy health insurance
(with subsidies to those who can’t afford the premiums), and then
contract with assorted St. Elsewheres to serve the resulting pool of
newly insured patients. The organizing blueprint of this new system
would come from the one truly successful national health care system we
currently have: the VA.
There’s a funny thing about the VA. Among most Americans, it still has a
reputation for mediocrity at best, and abysmal care at worst. Last
spring, when The Washington Post reported on scandalous conditions at
Walter Reed Army Medical Center, many observers mistakenly saw the news
as another black eye for the VA -- not realizing that Walter Reed is in
fact run by the Defense Department, an entirely separate cabinet agency.
As for the VA, since its technology-driven transformation in the 1990s,
those who use it love it. The VA has the highest rate of patient
satisfaction of any health care delivery system in the United States, by
far -- higher even than fee-for-service Medicare, with its limitless
choice of doctors. As readers of this magazine are likely to know (see
"Best Care Anywhere," Washington Monthly, January/February 2005), the VA
also comes out on top of virtually every study ranking the quality,
safety, efficiency, and cost-effectiveness of U.S. health care
providers.
As Harvard’s John F. Kennedy School of Government gushed when awarding
the VA a top prize in 2006 for innovation in government: "While the
costs of health care continue to soar for most Americans, the VA is
reducing costs, reducing errors, and becoming the model for what modern
health care management and delivery should look like." In studies of
health care quality, few private systems even come close to the VA.
****
So how is a supposedly sclerotic government agency with 198,000
employees from five separate unions outperforming the best the private
market has to offer? In a word: incentives. Uniquely among U.S. health
care providers, the VA has a near-lifetime relationship with its
patients. This, in turn, gives it an institutional interest in
preventing its patients from getting sick and in managing their
long-term chronic illnesses effectively. If the VA doesn’t get its
pre-diabetic patients to eat right, exercise, and control their blood
sugar, for example, it’s on the hook down the road for the cost of their
dialysis, amputations, blindness, and even possible long-term nursing
home costs. Unlike the vast majority of American health care providers,
the VA also has no incentive to perform unnecessary surgery or redundant
tests. Where other health care providers make money by treating
patients, the VA makes money by keeping them well.
The VA model is that rarest of health care beasts: one with a perfect
alignment of interest between patients and providers. This is why, for
example, the VA has emerged as the world leader in electronic medical
records -- and thus in the development of the evidence-based medicine
these records make possible. For the rest of the American health care
system, it makes little financial sense to invest in information
technology and the systematic study of what treatments and drugs work
best; precisely to the extent such investments improve the quality of
care and make or keep people well, they dry up revenue. But for the VA,
investments in quality make sense precisely because the system’s
financial interests are in sync with the health interests of its
patients.
Historically, to be sure, the VA has faced many challenges, and still
does. Unlike Medicare and Social Security, it has no trust fund to
ensure adequate and predictable funding. In building or closing
hospitals it faces intense micromanagement from Congress. Its patients
are older, poorer, and far more prone to addiction issues, traumatic
injury, and chronic illness than the population as a whole. It is
subject to intense and not always helpful scrutiny from the press,
veterans-services organizations, and other special interest groups. It
has to plan against imponderables that other health care providers can
safely ignore, such as when and for how long America will go to war and
what the physical and mental casualty rates will be. And while the VA is
not a monopoly, many of its patients have little ability to switch to
competing providers.
Yet all these factors have not been enough to prevent the VA from
emerging as the bright star of the American health care system by almost
every conceivable metric, which ought to tell you something big.
Particularly these days, when long-term chronic illnesses like diabetes
are the dominant threat to the health of the population and the national
bank account, a system of care under which the provider has a stake in
the patients’ long-term interest is the only sane way forward. If the 45
million uninsured Americans could be transitioned into a VA-style
system, they would literally be getting the best care anywhere. And as
news of that system’s low costs and impressive results spread, more and
more Americans would wonder why they, too, didn’t have access to such a
remarkable provider.
So how can we make that happen? The first step is to do what Mitt Romney
has already done in Massachusetts, and what John Edwards says he will do
nationally if he becomes president: make health insurance mandatory.
Just as it is illegal in some states to drive and not have auto
insurance, so too would it be illegal for any American not to have some
kind of health insurance. Those who can’t afford the cost would receive
subsidies. But here’s the twist: people not currently covered by private
carriers or Medicare would have the option of receiving their care
through a new network of providers that combines the best features of
the VA.
For purposes of discussion, let’s imagine that this new network took the
name Vista Health Care Network, because it has been inspired by the VA’s
best-in-class VistA electronic medical record system and the
high-quality model of care that the system makes possible. The slogan
for the Vista Heath Care Network could be "Health for Life" -- because
Vista’s prime long-term objective would be to offer Americans continuous
and integrated lifetime care similar to that enjoyed by patients in the
VA system.
Governance of the Vista network would be in the form of a board
appointed by the president, whose members would not be subject to Senate
confirmation and would serve staggered terms -- in effect, a Federal
Reserve Board of Medicine. The board’s first task would be to approach
various public and charitable hospitals around the country that face
large loads of uninsured patients, and offer them a deal: Install the
VA’s VistA health information management software, and agree to adhere
to the performance measures and protocols of evidence-based medicine
used by the VA itself. In exchange, you’ll get a contract to care for a
guaranteed pool of people -- who will be paid for. No longer will you
have to provide uncompensated care to everyone who enters your emergency
room. This pool would consist of those who can’t afford private
insurance and those on Medicaid. Reimbursement rates would be set much
higher than in Medicaid, and when combined with the efficiency in the VA
model of care, they’d be high enough to guarantee the solvency of
participating hospitals.
It wouldn’t be hard for the Vista board to find hospitals willing to
take this deal. Across the country, hospitals serving the growing ranks
of the uninsured are in financial crisis. Today, for example, Maryland’s
Prince George’s County, outside of Washington, D.C., is in danger of
losing its three hospitals largely because of their high volume of
uninsured patients. Half of New Jersey’s eighty-two hospitals run
deficits, and the state is intent on closing most of them. For the past
eight years, New York State’s hospitals as a group have lost money, and
under the terms of a special "hospital closure" commission, as many as a
quarter will soon be gone.
Let’s put ourselves in the shoes of people who manage, work for, or
depend on one of these financially imperiled hospitals. Joining the
Vista network would offer them a lifeline. Yes, the hospitals that take
Vista’s offer would have to radically change the way they do business.
They’d have to join the twenty-first century and learn to use electronic
medical records, which the vast majority of providers currently do not
rely on. They’d also have to shed acute care beds and specialists and
invest in more outpatient clinics -- in which, for example, diabetics
could learn how to manage their disease, or people with high blood
pressure could join smoking-cessation programs. Doctors who work for
these hospitals would no longer be constantly visited by pill salesmen,
because decisions on what prescription drugs to use would be made on a
scientific basis by the Vista board, and because the Vista network, like
the VA, would negotiate as an institution to obtain the best prices from
drug companies.
These and other changes would ruffle many feathers. But accepting the
Vista deal means the hospital wouldn’t have to close. Instead, the local
community could take pride in having preserved an institution that not
only serves the needy, but offers them high-quality, high-value health
care as well. As long as the hospital demonstrably adhered to the VA’s
model of care, local politicians could continue to use it as a source of
patronage, while local restaurants, stores, and real estate agents could
continue to live off the income its employees spread through the
community.
Now, let’s put ourselves in the shoes of those who would be the
customers of the new Vista system. One segment would be lower-income
people, who, for the most part, are already frequenting various St.
Elsewheres for their health care needs. For them, the transition to the
new system would be easy and, indeed, welcome. They’d be going mostly to
the same hospitals and clinics they’re used to. But they would be able
to get preventive care, like regular doctor checkups, as well as acute
care, and not be hit with impossible-to-pay bills that could force them
into bankruptcy.
A second segment of Vista customers would be people -- mostly young --
who currently lack insurance because they’re students or work for
companies that don’t offer it, and because they’re healthy enough to
feel that they don’t need it. These people might not like being forced
to buy insurance. But given that they’d have to, they’d likely see the
Vista network as an attractive option because of its low cost and its
nationwide presence, which would mean they wouldn’t have to change
health care plans when they move. Younger people, too, are more likely
than their parents and grandparents to recognize the benefits of
electronic medical records, and the evidence-based care they make
possible.
In the short term, this new Vista system would offer acceptable care to
every American who currently lacks health insurance -- a better deal
than they’re getting now. Over time, as the reforms imposed on the
participating hospitals and clinics began to take effect, the quality of
that health care would improve, and, as word spreads, Vista’s popularity
should increase even more. (Remember, the VA has the highest rate of
patient satisfaction of any health care provider in the United States.)
For all this to work, Vista would need to have what the VA already
enjoys: a lifetime relationship with the bulk of its patients, so that
its financial incentives were in line with its patients’ health needs.
This could happen with a relatively modest legal fix: any person in the
Vista system who gets a job with health insurance should be allowed to
direct his or her company to pay premiums to the Vista system if that
person wants to remain in the system. And, presuming the system worked
well, most people would want to stay in it, given its national reach and
the strong desire most of us have not to have to constantly change
doctors and health plans.
****
Finally, let’s put ourselves in the shoes of Beltway politicians.
Sometime around January 2009, they’re probably going to have to decide
which -- if any -- of the proposals for universal health care floating
around Washington they’re willing to support. The Vista plan offers
several politically comforting advantages.
First, unlike the 1993 Clinton health care plan, the Vista proposal does
not directly take on the medical/industrial complex. It would not
require any changes to the private insurance market, for instance, or
place any costly mandates on employers. At least in the short term,
Vista would be focused on customers who aren’t now part of the private
health insurance market.
Second, Vista should garner a wider array of political allies. Many
private hospitals and doctors are likely to welcome the program, because
it would relieve them of the burden of having to provide uncompensated
care to the uninsured. Doctors working within the Vista system would
also be free of the hassle of having to file claims to third-party
payers and, as in the case of VA doctors, would not bear the burden of
paying for medical malpractice insurance. Almost any universal health
care proposal could hope to attract these kinds of allies -- but Vista
would rally an additional set. Every lawmaker who has a costly or
failing public hospital in his or her district (and most do) will have a
built-in constituency of local politicians, newspapers, medical
professionals, and community activists who will see Vista as the best
way to save their local institution.
The third political advantage is price. If Vista worked like the VA, it
would almost certainly be the lowest-cost route to decent health care
for all the uninsured. High-quality health care is also low-cost health
care, especially over the long term, as the effects of prevention and
evidence-based medicine pay off. Precise costs are difficult to
calculate because of differences in the populations served, but consider
this figure: for every patient who transfers from Medicare to the VA,
taxpayers save about one-third, while the patient, on average, gets
higher-quality care.
In addition to employing the VA’s cost-control strategy, Vista would
have other means of limiting its impact on taxpayers. Much of the money
to pay for the Vista system would come from people who currently don’t
have insurance but, because of the individual mandate, would have to pay
at least something up front to defray the cost of their care. What
subsidies the Vista system would require would also be largely offset by
the forty-some billion dollars in federal, state, and local government
spending that goes to treat the uninsured under the current highly
inefficient, ad hoc system. Nor would creating a Vista Health Care
Network require the government to incur huge capital costs or long-term
debt. Though the network would have to build some of its own hospitals
and clinics in certain underserved locations, most Vista-affiliated
facilities would remain owned and operated by the private interests,
charity organizations, and local governments that currently run them.
Vista’s role in these hospitals and clinics would be analogous to that
of a franchiser: setting and enforcing standards, and achieving
economies of scale in technology, purchasing, information management,
and marketing.
By building on a system that already exists, then, the Vista plan would
be the least costly and, initially, the least disruptive way to provide
health care for the uninsured (and high-quality care, at that). But that
doesn’t mean conservatives and health care lobbyists won’t go after
Vista. They will. For while Vista would not, in the short run, pose a
challenge to the private-sector health care market, in the long run it’s
a different story.
Again, the VA experience is instructive. Thanks to quality improvements,
many veterans not currently qualified for VA health care benefits are
demanding access to VA hospitals. Among the American Legion’s top
legislative priorities this year is to allow veterans on Medicare to be
able to receive their treatment at the VA.
Similarly, imagine that Vista is put into place and works as advertised.
Over time, word gets out that the quality of treatment in Vista is
pretty good -- indeed, better than what most people with
employer-provided health care receive. Pretty soon, individuals who are
not eligible for Vista start clamoring for the right to buy into the
system. And employers, realizing that Vista is doing a better job of
controlling costs than their own private-sector health providers, start
pressuring Washington for permission to contract with Vista to provide
health care for their employees.
If this kind of competition were allowed to happen, private health care
companies would either lose customers to Vista or be forced to find ways
to curb overtreatment, reduce medical errors, and in general provide
better, more cost-efficient care. Either way, the competition would lead
to dramatic improvements in American health care. Just as the existence
of state universities puts competitive pressure on private universities
to pursue excellence, the existence of the Vista network would force the
rest of the health care system to try matching it on quality and value.
Conservatives and health care lobbyists can be expected, of course, to
denounce anyone who supports the Vista plan as advocates of "socialized
medicine." They would do the same to any serious attempt to provide
universal health care. The difference is that with Vista, it may be
harder to make that case stick in the public mind.
For one thing, the model for Vista comes not from Canada or France, but
from the U.S. military. Is the health care system we provide our troops
really "socialism"? Also, the competition that the industry is worried
about will happen -- if it happens -- down the road, only if Vista turns
out to be a big success, and only if elected officials later decide to
open up the system. The Vista program that today’s politicians would be
voting on would not alter the health care most Americans have -- and
this is a major political advantage.
In reality, "socialized medicine" is not the phrase to use when
describing the Vista system. Nor is "single payer." The plan would
expand the role of government in health care and achieve universal
access, but no one would be compelled by law to join the Vista network,
just as no one is compelled to receive treatment at the VA. In
replicating the best features of the VA, Vista might offer the best care
anywhere, but its existence would not erode our all-American right to
make bad choices in health care.
Yes, there is a solution to the health care crisis. It starts with the
comparatively limited step of creating a high-quality health care
delivery system for the uninsured, as opposed to simply throwing more
money in their direction or mounting an all-at-once overhaul of the
entire health care sector. It ends with future generations of Americans
wondering why we took so long to open our hearts and our minds and
create the Vista "Health for Life" network.
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about Phillip Longman
Schwartz Senior Fellow
Phillip Longman
longman@newamerica.net
Phillip Longman, a Schwartz Senior Fellow at the New America Foundation,
is the author of numerous articles and books on demographics, economics,
and social change. His work has appeared in such publications as The
Atlantic Monthly, Der Spiegel, The Financial Times, Foreign Affairs,
Foreign Policy, Harvard Business Review, The New Republic, The New
Statesman, The New York Times Magazine, The Wall Street Journal, and
Washington Monthly. His most recent book, The Empty Cradle: How Falling
Birthrates Threaten World Prosperity And What to Do About It, was
published by Basic Books in 2004, and reissued in paperback in 2006. It
examines how the rapid yet uneven fall in birth rates around the globe
is affecting the balance of power between nations and influencing the
global economy and culture. His forthcoming book, Best Care Anywhere,
chronicles the quality transformation of the Veterans Administration’s
health care system, and applies its lessons to a plan for reforming the
U.S. health care system as a whole.
Mr. Longman is also the author of Born to Pay: The New Politics of Aging
in America (Houghton Mifflin, 1987) and The Return of Thrift: How the
Collapse of the Middle Class Welfare State Will Reawaken Values in
America (Free Press, 1997). Formerly a senior writer and deputy
assistant managing editor at U.S. News & World Report, he has won
numerous awards for his business and financial writing, including UCLA’s
Gerald Loeb Award, and the top prize for investigative journalism from
Investigative Reporters and Editors. He is a graduate of Oberlin
College, and was also a Knight-Bagehot Fellow at Columbia University.
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Larry Scott --
