Effiency expert weighs in on healthcare

The New England Journal of Medicine article at this link http://content.nejm.org/cgi/co… discusses more fully the points listed below.

I believe these stipulations have been generally agreed to by those who post health care essays. I have beat the drums for universal single payer but that conflicts with item 2 which keeps the employer in the system. That seems like a good idea as the employer can declare no smoking zones (give me a break smokers, I been there and done that), provide incentives such as paying for sick days not taken, etc.

Before I get accused of over copying, let me admit it. The way I see it now is not the time for niceties. I don’t think there is a penalty for copying a copy so cut and paste anything you find useful. Comments, corrections and additions welcome.  

A Strategy for Health Care Reform – Toward a Value-Based System

Michael E. Porter, Ph.D.

BOSTON, Massachusetts — Michael Porter, the well-known efficiency expert at Harvard Business School, has been thinking about health care reform for many years.

In a New England Journal of Medicine article, Porter talks about what he thinks is needed to do meaningful reform.

“True reform will require both moving toward universal insurance coverage and restructuring the care delivery system,” Porter writes

Here’s how we get there:

1.Change the nature of health care competition. Insurers — both private and public — should succeed only if they improve subscribers’ health. Today, health plans compete by choosing healthier participants, denying services, negotiating deeper discounts and shifting more cost to subscribers, Porter said. Instead, we need regulations that end coverage and price discrimination, based on health risks. Insurers should measure and report their subscribers’ health outcomes. These reports could help consumers choose the most valuable insurance plans for staying healthy.

2.Keep employers in the insurance system. Employers have a vested interest in their employees’ health. Employers can create value by encouraging healthy living habits in the workplace and direct employees to high-value providers. Employers also can foster more competition in the health care system, Porter said. To keep employers in the system: Reduce the higher insurance premiums they now pay to cover the uninsured and to subsidize government programs. Create a level playing field by penalizing employers that don’t offer health insurance. (Porter calls these employers “free riders.”)

3.Address the unfair burden of people who have no access to employer-based coverage. These people face higher premiums and find it more difficult to get coverage. “This means first equalizing the tax deductibility of insurance purchased by individuals and through employers,” Porter writes.

4.Make individual insurance affordable. We need large statewide or multi-state insurance pools that offer premiums as affordable as large employer plans, Porter said. Competition among insurers for these pools would foster value, he said. We also need reinsurance that fairly spreads the cost of insuring Americans who have expensive medical conditions across regional and employer insurance pools.

5.Income-based subsidies will be needed to help lower-income people buy insurance. These subsidies could be offset by employers that do not offer health insurance but whose employees require public assistance.

6.Everyone must buy insurance. The young and healthy must opt in to the system. This would generate new revenue for the health care system, lowering premiums for everyone and reducing the need for subsidies, Porter said.