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Perspectives

PERSPECTIVE

Legislating Delivery System Reform: A 30,000-Foot View Of The 800-Pound Gorilla

Abstract

 
Between 1993 and today, health policy experts have reached consensus that quality assurance, cost discipline, and equitable access depend on delivering health care at times, in places, and in ways much different from those to which we are accustomed. The challenge for the next generation of health reformers is to improve coverage by improving care. This can happen only if reform legislation has a theory for success, collective social meaning, and political champions.

Delivery system reform needs a theory. Reform legislation needs a theory of delivery system improvement. In 1993 the structure of the Health Security Act, which relied on "managed competition" to induce investment by insurers and providers in disease prevention and cost-effective care, directly contradicted reform czar Ira Magaziner’s expressed desire to fund universal coverage by reducing administrative costs and eliminating "checkers checking checkers." Magaziner’s concept (right or wrong) better fit a Canadian-style single-payer system, which has very low administrative costs but accepts the delivery system as currently configured.

Theoretical objectives have since emerged: reducing irrationalities in processes and costs revealed by small-area variations studies, and in outcomes exposed by the medical error and quality literature. Today’s trends, however, remain ambiguous in terms of the structural changes they require. Pay-for-performance (P4P) and transparency initiatives, for example, vacillate in their economics between individual consumerism and financing public goods, and their proponents hesitate to set goals that only a reorganized delivery system can achieve. The cleanest theory has attached to "consumer-directed care"—that moral hazard will be reduced if people spend their own money—but it is a theory of insurance, not health care delivery.

An explicit delivery system focus for federal legislation avoids the problem of uneven need that often stymies insurance-based reform, but it still must contend with Lake Wobegon. Most people consider their personal health care to be above average, and "value for money"—poor as it is—remains a hard sell politically. A positive sign is that defenders of tradition increasingly seem out of touch with the lives of ordinary people. One physician’s recent diatribe against retail medical clinics reads without a hint of irony: "The American public cannot have it both ways. They must decide what is more important—money and time—or comprehensive, appropriate care."¹

Delivery system reform needs collective meaning. Legitimizing the collective interest is another precondition to delivery system reform. There are hints of collective meaning in the post-9/11 resurgence of American public health law, whether for disaster preparedness or to combat "epidemic" obesity and chronic disease, but these issues are not yet at the heart of the legislative agenda. American health policy still emphasizes maintaining a supply of goods and services to be purchased individually from or through individual providers, in contrast to European systems that give primacy to universal accessibility and social solidarity.²

Judging every proposed change by its potential effects on the supposed best interests of one patient being cared for by one physician—the "identified life"—makes delivery system reform nearly impossible. The editor-in-chief of the New England Journal of Medicine wrote recently: "Physicians...want oversight and open discussion...to occur among informed and knowledgeable people who are acting in the best interests of a specific patient. Government regulation has no place in this process."³ This dyadic approach to health care delivery has many sources, including the habit in American law of extrapolating public duties from private obligations based on contract or tort, the preoccupation of American bioethics with patient autonomy, the insistence among American consumers on immediate gratification, and the tendency of American politicians to view aggregate interests only in fiscal terms.

Health care’s dominance of government budgets can be either a barrier to or an opportunity for reform. Political pressure for fiscal discipline led the Clinton administration to endorse a fantasy whereby, without delivery system change, coverage would be universalized but short-term costs would supposedly decrease. Two principal elements of that plan (nominally private "health alliances" and global limits on premiums) existed mainly to persuade the Congressional Budget Office to confer a favorable "score."⁴ Oregon’s controversial Medicaid rationing plan similarly left the delivery system untouched, relying on managed care to provide comprehensive services notwithstanding apparent statutory limits, and loosening the purse strings by holding politicians accountable for votes denying access to specified treatments.⁵ To make a fiscal case for restructuring health care, researchers must learn to model the financial effects of clinical reforms, and budgetary accounting rules must be revised to measure collective social benefits generated by investments in health care (and to accommodate, with appropriate discounting and sensitivity analysis, the longer time horizons necessary to realize them).

Delivery system reform needs champions. Who will champion delivery system re-design in the political arena? The interest groups again lining up around national health reform, such as large employers and labor unions, are primarily concerned with financial obligations, not processes of care. Delivery system legislation is more often reactionary, reflecting the fact that existing provider constituencies have more to lose than new ones have to gain, are already organized, and have experience moving the levers of government. True innovators tend not to form interest groups, unless their core purpose is to avail themselves of government largesse.

Resistance to change also suits government bureaucracies, which thrive on obscurity. Permitting new practices that could be criticized in hindsight is more likely to provoke a visible, destabilizing scandal than prohibiting them, as demonstrated by recent efforts to tighten postmarketing surveillance of adverse drug events by the Food and Drug Administration (FDA) after an unusual period of rapid product approval.⁶

Legislation in the 1990s followed this pattern. The Health Security Act was tarred by association with managed care, although the act contained no explicit endorsement of it.⁷ Small changes to delivery included in the bill were fiercely resisted. The possibility of expanding scope of practice for master’s degree–trained nurses, for example, provoked the American Medical Association (AMA) into a factually incorrect and visually crude campaign against "quackery" (now being renewed against retail clinics), while nursing expended more effort shielding its hospital-based membership against competition from below than seeking broader gains. The decade’s crowning legislative achievement was so-called patient protection, which deterred managed care from grappling with delivery system change and drove health plans’ cost-control practices further underground.⁸

American medicine remains the world’s most expensive cottage industry, resisting all efforts to achieve efficient scale and scope if they suggest government or corporate control. At the AMA’s 2007 summer meeting, calls to restrain retail clinics were widely reported in the press: " ‘If the AMA does nothing,’ said one delegate, ‘in five years, the chairs [at the AMA meeting] will be filled with representatives from Walgreens, Wal-Mart’ and other retail outlets."⁹ Virtually identical concerns were aired in the 1990s, except that the named threats were CIGNA, Aetna, and other large insurers. There is no easy compromise between professional tradition and industrial efficiency, which makes it important for other grassroots constituencies to be heard, such as schoolteachers and social workers, and for health professions educators to design a more team-oriented, interdisciplinary curriculum for the future.

Finding a metaphor. Can policymakers assert the importance of delivery system change and keep the health reform debate from devolving once again into a fight over financing? Mantra we may have, but metaphor we still lack—as the mixed one that titles this Perspective suggests. The metaphor for the health system during the 1993–94 reform debate was automotive: whether Americans should be guaranteed "Cadillac" coverage or merely a "Chevy." (Did anyone wonder if the superiority of American medicine might be as contestable as the superiority of American cars?) The more recent metaphor is aviation, introduced by the Institute of Medicine in its landmark report on medical error.

Patient safety has greater salience with the public than general quality of care—witness the sustained interest in "report card" rankings of acute mortality rates and the growing support for nurse-staffing ratios as a safeguard against error. But air travel, with its many hassles, does not embody customer service beyond protection from life-threatening events. Brand-name reliability at competitive prices attracts patients to retail clinics, a delivery model that may be more palatable than managed care because it avoids the adversarial relationship inherent in insurance. However, public policy that supports "convenient care" of this type does little to improve preventive care, manage complex chronic disease, or enhance the modal quality of medicine.

What metaphor might draw us together as a society and persuade us to change a large and entrenched system of care? Sadly for those who prefer the moral high road of compassion and human rights, fear and greed remain the likely sources of inspiration. In my opinion, synergies among health, education, and economic productivity offer the most optimistic metaphor for changing the delivery system. In the short term, however, fear may dominate: What medical error seems to have begun, pandemic flu, natural disaster, and bioterrorism may continue.

Editor's Notes

 
Bill Sage (wsage{at}law.utexas.edu) is vice provost for health affairs and the James R. Dougherty Chair for Faculty Excellence in Law at the University of Texas at Austin. He served with the President’s Task Force on Health Care Reform in 1993.

NOTES

Top NOTES

 

1. D. Schell, "Medicine Is Not Fast Food" (letter), USA Today, 30 August 2006.
2. L. Jacobs, "Politics of America’s Supply State: Health Reform and Technology," Health Affairs 14, no. 2 (1995): 143–157[Medline]; and C. Havighurst and B. Richman, "Distributive Injustice(s) in American Health Care," Law and Contemporary Problems 69, no. 4 (2006): 7–82.[Medline]
3. J. Drazen, "Government in Medicine," New England Journal of Medicine 356, no. 21 (2007): 2195.[Free Full Text]
4. Robert Reischauer, director, Congressional Budget Office, testimony before the House Energy and Commerce Subcommittee on Health and the Environment, regarding the Clinton Health Plan, 10 February 1994. For a policy-minded explanation, see P. Starr and W. Zelman, "A Bridge to Compromise: Competition under a Budget," Health Affairs 12 Supp. (1993): 7–23.[Abstract]
5. L. Jacobs, T. Marmor, and J. Oberlander, "The Oregon Health Plan and the Political Paradox of Rationing: What Advocates and Critics Have Claimed and What Oregon Did," Journal of Health Politics, Policy and Law 24, no. 1 (1999): 161–180.[ISI][Medline]
6. D. Carpenter, "The Political Economy of FDA Drug Review: Processing, Politics, and Lessons for Policy," Health Affairs 23, no. 1 (2004): 52–63.[Abstract/Free Full Text]
7. E. McCaughey, "No Exit: What the Clinton Plan Will Do for You," New Republic 210, no. 6 (1994): 21–25.
8. D. Hyman, "What Lessons Should We Learn from Drive-Through Deliveries?" Pediatrics 107, no. 2 (2001): 406–407[Free Full Text]; and D. Hyman, "Managed Care at the Millennium: Scenes from a Maul," Journal of Health Politics, Policy and Law 24, no. 5 (1999): 1061–1070.[ISI][Medline]
9. B. Japsen, "AMA Takes on Retail Clinics: Doctors Groups Say Patients in Danger," Chicago Tribune, 25 June 2007.

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