Consumer-based reform

David Goldhill’s article on health care reform in the current issue of the Atlantic bears the provocative title, “How American Health Care Killed My Father.” It opens with the story of his father, who died at 83 from an infection he picked up at a hospital, as he says “one of the roughly 100,000 Americans whose deaths are caused or influenced by infections picked up in hospitals.”

He has a litany of complaints against hospitals:

“How can a facility featuring state-of-the-art diagnostic equipment use less-sophisticated information technology than my local sushi bar? How can the ICU stress the importance of sterility when its trash is picked up once daily, and only after flowing onto the floor of a patient’s room? Considering the importance of a patient’s frame of mind to recovery, why are the rooms so cheerless and uncomfortable? In whose interest is the bizarre scheduling of hospital shifts, so that a five-week stay brings an endless string of new personnel assigned to a patient’s care? Why, in other words, has this technologically advanced hospital missed out on the revolution in quality control and customer service that has swept all other consumer-facing industries in the past two generations?”

But he rejects the search for villains. His father’s doctor’s were smart and hard-working, the nurses compassionate. Everyone he’s met in his research in the two years since his father’s death wantss “to serve patients well.”

The problem is with the incentives built into the system: “Accidentally, but relentlessly, America has built a health-care system with incentives that inexorably generate terrible and perverse results. Incentives that emphasize health care over any other aspect of health and well-being. That emphasize treatment over prevention. That disguise true costs. That favor complexity, and discourage transparent competition based on price or quality. That result in a generational pyramid scheme rather than sustainable financing. And that—most important—remove consumers from our irreplaceable role as the ultimate ensurer of value.”

The solution is not the kind of reform on the table in DC; insisting on universal insurance is only dealing out more of the problem in Goldhill’s view. Rather, the solution is to return the consumer to the center of the system: “To achieve maximum coverage at acceptable cost with acceptable quality, health care will need to become subject to the same forces that have boosted efficiency and value throughout the economy. We will need to reduce, rather than expand, the role of insurance; focus the government’s role exclusively on things that only government can do (protect the poor, cover us against true catastrophe, enforce safety standards, and ensure provider competition); overcome our addiction to Ponzi-scheme financing, hidden subsidies, manipulated prices, and undisclosed results; and rely more on ourselves, the consumers, as the ultimate guarantors of good service, reasonable prices, and sensible trade-offs between health-care spending and spending on all the other good things money can buy.”