Excerpt

HEALTH CARE REFORM NOW!:
A Prescription for Change

by George C. Halvorson

INTRODUCTION TO THE EXCERPT

In HEALTH CARE REFORM NOW!: A Prescription for Change, Kaiser CEO George Halvorson offers a nonpartisan proposal for universal health care he says won't cost taxpayers a dime.

In the book, Halvorson lays out a plan that both Republicans and Democrats will love. A management guru, Halvorson shows how the same principles Wal-Mart and Target use to lower consumer costs can be applied to health care. He shows how the same devotion to quality that Toyota and Boeing use to reach 99% error-free manufacturing can bring us nearly error-free medicine. And he proves beyond doubt that the savings resulting from a uniform (and universal) medical database will more than pay for the cost of providing basic medical care to every single American.

Halvorson is Chairman and CEO of Kaiser Foundation Health Plans and Hospitals. With more than 8.4 million members, Kaiser Permanente is the largest integrated health plan in the United States. A genius in business management, Halvorson has applied his skills worldwide, having helped establish health care systems in Jamaica and Africa. He's also familiar with the other side of the stethoscope; Halvorson discusses his own coronary bypass surgery as an example of the "1% of patients who consume 35% of health care expenditures."

The excerpt below explains why the author believes the United States is in prime position for true reform of our health care system.

More information about author George C. Halvorson and his new book, HEALTH CARE REFORM NOW!, follows the excerpt. You can also find more information, including a longer "sneak peek," at the book's website: http://www.healthcarereformnow.org.

Eight Developments That Make Health Care Reform Possible

by George C. Halvorson

Major health care reform is achievable right now in the United States to a degree that literally was not possible until now.

Why do I say that? Because there are eight recent developments in American health care that have combined to give us, for the first time ever, a very real opportunity to systematically improve both care delivery and reduce the costs of care on a large scale in a relatively short time frame.

Those eight developments are creating what might be a "perfect storm" in favor of health care reform.

1) Common Provider Number

The first new health care reform key ingredient is the common provider number. All health care providers in America will soon have, by law, a single identification number that clearly identifies each individual provider for all payers and all care. That new single ID requirement is a huge step forward for health care data use.

The common provider number is an extremely important new tool. It changes access to care data in a critically important way. Until now, it has been functionally impossible to track individual provider performance using available electronic databases about care. The only electronic databases that exist have been created and held by the various payers of claims -- the health plans, insurers, third party administrators, and public program payment shops. Each of these private and public payers has used their own unique, proprietary provider-coding system, so there has been no way to link data from the various payers' claims-payment databases in ways that could create either overall provider accountability or performance measurement.

If we really believe that data is the essential first step for any continuous improvement process or model, then the importance of having a single, unique longitudinal numerical code for each provider becomes glaringly obvious. Health care reform becomes possible when we have real performance data about care.

2) Computerized Databases

Today, with HIPAA regulations making the electronic data flow from providers to payers a standardized, more efficient, confidentially-protected process, the databases for the payers are pretty much all electronic. The new HIPAA and industry standards for electronic data transmission are also set up to create a more uniform data flow.  As a result, the old, relatively inaccurate and inefficient paper claim is being replaced very rapidly by far more accurate electronic claims submissions.

3) Electronic Claims Data Portability

The value of a claims-payment based electronic data reporting tool is being further enhanced by the new willingness of the health care payer industry to commit as an entire industry to both data portability and data interoperability. The industry set itself a major new and almost revolutionary goal in 2006 to achieve a functional ability on the part of all insurers and payers to electronically move data between payers in ways that closely resemble comparable data flows in the banking industry.

That is a data bonanza for health care. We are going from all data being held exclusively in inert and inaccessible separate paper medical records or in a myriad of fragmented electronic claims payment files that have different data standards and unusable provider ID codes to a new world of interchangeable electronic data and consistent, national provider ID codes. From a data perspective, that is revolutionary. It's a huge change.

4) Governmental Transparency About Payment Data

A fourth major new element that enables and encourages reform is the unprecedented recent willingness of the government to create much greater levels of transparency about provider performance data using information from current Medicare and Medicaid databases.

That is another revolutionary development. Medicare is the largest single purchaser of care in America. To make that massive Medicare database about provider performance transparent is a huge step toward real market reform.

5) Universal Awareness of the Quality Issues

The fifth major development that is making health care reform possible now is the emergence, finally, of a widespread awareness across policy makers, politicians, buyers, care providers, and patients that our current health care infrastructure is badly flawed, perversely incented, inadequately coordinated, incredibly inconsistent, strategically unfocused, and too often dangerously dysfunctional. The powerful and persuasive Institute of Medicine studies combined with John Wennberg's work at Dartmouth and Beth McGlynn's work at RAND have shown beyond any doubt that our health care delivery infrastructure non-system leaves a lot to be desired.

Timing is everything. People are losing faith in the old quality agenda for care right at the point when a new agenda is possible.

6) Buyers Are Ready For A Change

The sixth major factor that will accelerate the agenda for change is that the primary buyers of health care -- the employers and government bodies who already purchase large quantities of health care -- are now ready for a change. It's hard to find a happy buyer.

Vendors will, I expect, rise to the occasion. That's how markets work.

7) Internet Functionality Used for Care

The seventh major factor that is currently strongly enabling an environment of change in health care is the Internet. The Internet has already had a huge impact on other areas of the economy. Purchasing, banking, investing, and education are all areas where the Internet has made massive inroads into how we do business.

Health care is poised to follow. Health and medical websites receive the highest number of visits from search engines. As an evolving health care economy learns to use the Internet more effectively, we will soon see more doctor/patient e-connections. E-scheduling, e-visits, e-follow-ups and reports, and e-reminders which are already taking place in various instances.

The new market model for health care will rely heavily on the Internet, as patients both choose real life caregivers based on e-data and then get quick and convenient electronic advice about their care from e-consultants. Only the computer can facilitate those levels of choices in any workable way. A paper-based, data rich health care marketplace would be logistically crippled. We need the web to reform care.

The best care systems will offer e-connectivity to their patients in ways not even dreamed of today. E-visits will be an expectation, a basic level of patient/provider interaction that will allow for whole new levels of care convenience and care growth. Health care will be an e-industry relatively soon.

State legislative budgets are being destroyed by the increasing costs of care. Emergency rooms are closing, and inner city hospitals are imperiled. The number of uninsured Americans continues to grow, and the number of under-insured Americans may be growing even faster as high-deductible health plans increase in number.

An increasing number of states are now quickly aiming at some kind of health care reform, usually targeted at the twin goals of increasing the number of insured people while cutting costs.

~ AN OPTIMAL HEALTH CARE MARKET ~

What do we want to see in our care delivery system?

• Consumers should have complete and easy electronic access to their own health information. A patient should be able to find which medications they have been prescribed, which doctors they have seen recently, and which procedures they have had done over their lifetimes. It's amazing, but consumers don't have an easy way to access this information now.

Ideally, consumers should be empowered and educated, supported and encouraged in receiving the best care and in making the lifestyle choices that support their own best possible personal health.

Consumers should be able to have confidence that their own caregivers are current relative to medical science and best care standards and obsessively conscientious about the follow-up needed for their care.