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Robert S. Galvin
Consumerism And Controversy: A Conversation With Regina Herzlinger
Health Affairs, September/October 2007; 26(5): w552-w559. [Abstract] [Full Text] [PDF] [Reprints & Permissions]

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[Read Comment] A Panacea For Whom?
Hank Kearney   ( 24 July 2007 )
[Read Comment] Fixing The Health Care Problem: What Exactly Is The Root Cause?
Alexandra Jung   ( 24 July 2007 )
[Read Comment] Every Dream Needs A Deadline
Eric Wilson   ( 24 July 2007 )
[Read Comment] HSA Growth Not Evidence Of Consumerism
John A. Grima   ( 24 July 2007 )
[Read Comment] Quality of Care
Paul Shank   ( 27 July 2007 )
[Read Comment] Challenging the Establishment
Greg Scandlen   ( 3 August 2007 )

A Panacea For Whom? 24 July 2007
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Hank Kearney,
CEO
PHM International, Inc.

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Re: A Panacea For Whom?

hankk{at}phmintl.com Hank Kearney

Robert Galvin’s long-running conversation with Regina Herzlinger does bring many ideas to the ongoing discussions on health care and innovation in the US.

In one exchange, Galvin asks: "But, on the whole, wouldn't you say the jury is still out on whether a single-payer system can control quality better?"

Herzlinger’s response: "Fundamentally, single payer controls costs by rationing care to the sick, while consumer-driven health care controls costs through innovations in the care of the sick." She continues: "If the U.K. and Canadian systems are so great, why do the rich and powerful there get better care than others? But in consumer-driven markets, you do not have to be connected to get best in class."

This reply brought back memories of a conversation I had last year with a physician in Macedonia. We were talking about the changes in the region pre and post fall of Yugoslavia and the communist model. Specifically, I asked about the level of health care and access.

He replied, "In the communist days there were people with money, many without. In the free-market state of today, there are people with money, many without."

Herzlinger’s passionate ideals of an efficient, innovative health care market are not much different from those supporting the status quo or single payer. In Herzlinger’s ideal, one doesn’t "have to be connected to get best in class." True, but any other currency helps.

Fixing The Health Care Problem: What Exactly Is The Root Cause? 24 July 2007
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Alexandra Jung,
Senior Vice President
Aon Consulting

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Re: Fixing The Health Care Problem: What Exactly Is The Root Cause?

alex_jung{at}aon.com Alexandra Jung

I have worked in health care for over twenty years, and perhaps I am not understanding the issues, but before we can fix a problem, don't we need to agree on its root cause? I have yet to hear a coherent argument on what exactly is wrong with our current model of health care beyond the same rhetoric around millions of uninsured and fear of government-run programs. I would like to know what Regina Herzlinger thinks the root causes are, because the opinions I hear as a health care consultant range from equity (not everyone has health care) to quality (some care is better than others) to supply/demand (not enough doctors/hospitals) to societal behavior (lifestyle is what drives illness). Can we really be that different in the U.S. than Europe? I'm confused. Why is everyone so afraid of competition? We're a capitalist society, for crying out loud....

Every Dream Needs A Deadline 24 July 2007
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Eric Wilson,
Principal Consultant
Healthcare Technical Management

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Re: Every Dream Needs A Deadline

research{at}healthtech.co.za Eric Wilson

I was surprised by Regina Herzlinger’s abrasive response to Bob Galvin’s questioning and certainly her retreat into the sexism defense. Ideology disseminated through conflict seldom results in lasting peace.

The concept of a focused factory is most compelling in print and debate, but not very practical in its implementation. For example, to say that a physician who doesn’t have sufficient reliable data shouldn’t be treating a particular disease is to imply that no physician(s) can break away from the existing model and establish a new model, new practice, or new focused factory.

Part of the impediment in understanding this debate is that the conceptual framework is in Herzlinger's mind, fully developed at inception. Consumer demand drives innovation; access to and return on capital initiates and sustains the cycle. In the absence of tangibility of return for consumers and entrepreneurs, ideas fail to take root.

There are some contemporary examples of consumer demand (communities, individuals, or proxies) driving the focus –- HIV/AIDS clinics and renal care and psychiatric facilities are examples. However, the model gets easily blurred at the margins. By extending the vertical integration as the target segments demand widen, the model begins to approximate a private (for-profit) hospital. Most importantly, the capital structure underlying the model begins to look like a hospital, too. M&A activity inevitably draws most of these new facilities back into the capital mainstream.

Until there is sufficient critical mass for a focused-factory enterprise to raise and sustain its capital commitments, a regression to the mean of the medical establishment production process seems inevitable.

HSA Growth Not Evidence Of Consumerism 24 July 2007
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John A. Grima,
Health System Planner

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Re: HSA Growth Not Evidence Of Consumerism

j.grima{at}comcast.net John A. Grima

Regina Herzlinger is mistaken if she thinks that the growth in HSA enrollment is a welcoming response on the part of consumers to insurance innovation. Experience in the market watching organizations decide to buy and offer such plans suggests something quite different. The shift to HSAs is simply a mildly less catastrophic manifestation of the uninsuring of the U.S. workforce. HSAs are a means through which employers buffer the impact of switching to high-deductible plans for previously fully insured staff. In purchasing decisions, it is clear that they are primarily a cost avoidance strategy. For employees, those who actually have some probability of needing health services, HSAs are generally perceived as a disappointing, risk-transferring erosion of the health benefit, acceptable only because they are better than high deductibles without HSAs and better than nothing.

Quality of Care 27 July 2007
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Paul Shank,
Director
Harris County Hospital District

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Re: Quality of Care

pkshank{at}pkshank.com Paul Shank

The comparison of health care quality between countries is difficult, but no other developed country has 45 million uninsured. That is a quality indicator that rarely seems to make it into the analysis.

Our health center in Houston sees 350 patients a day, 70% of whom have no insurance of any kind. Most of these people work and contribute to the economy. Except for the services we provide, they would receive no health care at all.

Please remember that health care in this country IS rationed. It is rationed by ability to pay. For those of us fortunate enough to have insurance, Regina Herzlinger is correct: we have the best health care in the world. But if you are one of the 45 million without insurance, it doesn't matter if you have focused factories or Marcus Welby, MD. If you can't afford the price of an office visit and the full retail price for medications, it doesn't matter how health care is delivered. It's simply not available.

Challenging the Establishment 3 August 2007
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Greg Scandlen,
President
Consumers for Health Care Choices

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Re: Challenging the Establishment

greg{at}chcchoices.org Greg Scandlen

Regina Herzlinger is interviewed in Health Affairs by Robert Galvin, director of global health care at General Electric. It is always fun to plunge into Regi’s fertile mind, and this interview does that. But overall the piece is more an exposé of Galvin and the thinking within the corporate elite than it is of the innovative ideas of Herzlinger. For instance, he blatantly cherry-picks the information he bases his questions on and pumps up that selected information by referring to it all as “recent studies” or “some of the data.” Here are some examples:

“Some of the data [on consumer-driven health care] . . . show that many consumers . . . are not changing the way they buy health care.”

“Recent studies have shown a lot of dissatisfaction with these [consumer-driven] plans.”

“Some of the evidence on specialty hospitals does show that they tend to attract healthier people.”

“Data from the OECD shows that quality . . . is generally far better in the Western European countries than it is here, and this holds for single-payer systems.” When Herzlinger cites specifics that counter this claim, Galvin retreats to, “Wouldn’t you say the jury is still out on whether a single-payer system can control quality better?”

This is not an interview, but an interrogation, and even when Galvin is shown to be wrong, he weasels into a defensive posture. This is the fat and happy health care establishment, folks, and thank God Regina Herzlinger exists to challenge it.

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