Health Care Policy: Reform Issues, Affordability, Universal, Technology

Health Care Reform

Harnessing Openness to Transform American Health Care

Report

Summary

Press Release

Peter Jerram, CEO, Public Library of Science

Video of Peter Jerram's Remarks

Friday, February 8, 2008 - CED, in partnership with the Bay Area Council, hosted a release event and forum on the Digital Connections Council’s latest report, “Harnessing Openness to Transform American Health Care.” The report explored how American health care can be greatly improved by embracing “openness” throughout the health care industry.

More than 80 senior business, education and civic leaders convened for the event, featuring keynote speakers Peter Jerram, CEO of the Public Library of Sciences and Elliot Maxwell, Digital Connections Council Project Director and Communications Program Fellow at Johns Hopkins University. Panelists included Lloyd Dean, CEO, Catholic Healthcare West; Jamie Ferguson, Executive Director of Health Information Technology; Strategy & Policy, Kaiser Permanente; Donald Holmquest, CEO, California Regional Health Information Organization (CalRHIO); and Benjamin R. Williams, Senior Vice President & Chief Information Officer, Catholic Healthcare West.

Several of the speakers lamented the lack of national leadership on standardization and broad consensus building on proprietary regulations that slow the speed of helpful forms of “openness.” Panelists concurred greater openness would lead to improved outcomes in cost, speed and quality of treatment as well as enriching health data available to doctors and scientists. However, basic computing advances that have allowed other industries to add incredible efficiency to their organizational structures have not made comparable gains in the field of health care delivery systems. Speakers suggested a number of possible reforms, namely, the development of a broad national coalition to work with government to establish guidelines for increased openness and standards to dictate forms of interoperability.

Elliot Maxwell, Digital Connections Council Project Director and Communications Program Fellow at Johns Hopkins University

Video of Elliot Maxwell's Remarks

Several studies noted in the CED report have found that it takes 13-17 years for 14 percent of research findings to get into general medical practice. Harnessing Openness to Transform American Healthcare recommends greater openness through making information available under far less restrictive conditions and increasing the ability of others to contribute to it, so that, for example, research findings are more actively disseminated, become part of medical best practices, and improve patient outcomes.

For this report, the DCC decided to look at how “openness” was being or might usefully be employed throughout the healthcare arena. This area, which now constitutes approximately 16-17 percent of GDP, has long frustrated policymakers, practitioners, and patients. Bringing greater openness in different parts of the health care production chain can lead to substantial benefits by facilitating collaboration, speeding research, stimulating innovation, lowering costs, reducing errors, and closing the gap between discovery and treatment delivery.

The report focuses in part on biomedical research and the disclosure of research findings, the processes for evaluating drugs and devices, the emergence of electronic health records, the development and implementation of treatment regimes by caregivers and patients, and the interdependence of the global public health system. Areas covered include (topic in bold):

Biomedical Research is being transformed by the success of the Human Genome Project (HGP). The HGP demonstrated the possibilities of mass collaboration and the beneficial results of allowing data to be accessed immediately and manipulated by researchers around the world. Other research projects have adopted this open model and are flourishing by encouraging collaboration, and sharing data, applications, and even network resources. The DCC recommends that the federal research agencies push further by enunciating clear policies favoring openness, funding further work on standards for protocols, formats, terminology and nomenclature that allow the sharing and manipulation of data, and supporting experiments with differing levels of openness to determine the optimal level of openness for research under various scenarios.

Benjamin Williams, Senior Vice President & Chief Information Officer, Catholic Healthcare West; Donald Holmquest, CEO, CalRHIO; Jamie Ferguson, Executive Director of Health Information Technology; Strategy & Policy, Kaiser Permanente; Lloyd Dean, CEO Catholic Healthcare West

Video of the Panel Discussion

In Clinical Trials, questions about the openness of clinical trials have been raised vigorously over the last decade. Although the Food and Drug Administration (FDA) had long required the registration of clinical trials involving life-threatening interventions, there have been disputes as to the completeness of these registrations—and about the lack of registration of other clinical trials. Advocates of greater openness here and around the world have been concerned not only about registrations, but also about access to trial results and, perhaps more important, to the data that underlie the results—and whether the data will be available in a computable form. The report calls for greater availability of data from trials in electronic form to speed research and detect possible safety problems.

The use of Electronic Health Records (EHRs) raises new openness issues. Utilizing such records, caregivers at any location would have access to a patient’s medical history. Results of tests and treatments could be added easily as they become available, thereby improving treatment, preventing duplicative testing, and reducing medical errors. Eventually, EHRs could be constructed including family medical histories, genomic and pharmacogenomic data, environmental exposures, lifestyle and other information, easing the way toward the “personalization” of treatment. The aggregation of such records and others could then facilitate the achievement of a genuine “evidence-based” medical system. Such records provide far richer data than clinical trials, and could serve as the basis for predictive models similar to those used in other scientific domains. Harnessing Openness to Transform American Health Care stresses these benefits but recognizes the need to protect patient privacy and data security if the potential gains from EHR’s are to be realized.

The DCC believes that greater openness in software-controlled Medical Devices creates new opportunities and challenges. The history of practitioner innovation in scientific instruments and the malleability of software suggest the potential for a dramatic increase in practitioner-driven customization. The report recommends that the FDA begin an examination of how to benefit from the user-driven innovation while maintaining appropriate oversight for safety and efficacy.

“The United States has long been a leader in medical innovation and treatment. Health care continues to grow as a percentage of our economy. Future economic growth will benefit by greater openness in the field. The recommendations in Harnessing Openness to Transform American Health Care provide a way to greater access to information by more people, and more possibilities for them to contribute based on their own expertise and energy. It shows us a path to improve health care without great additional expense,” said Charles Kolb, CED President.

CED Releases Quality, Affordable Health Care For All: Beyond The Employer-based Health-insurance System

Report

Summary

Press Release

The U.S. employer-based health care system is failing. With health care costs rising faster than wages, quality of care low, and access to coverage deteriorating, fundamental restructuring of the current health care system is necessary. The new CED report was the center of discussion at a Washington, D.C. luncheon on November 7, 2007 [agenda]. U.S. Senators Ron Wyden (D-OR) [audio] and Robert Bennett (R-UT) [audio] joined Congressman Jim Cooper (D-TN) [audio] and a group of business and policy leaders in at a forum focused on health care reform. The new CED report was released at a business luncheon forum in San Francisco on October 15, 2007, and examines the causes of that failure, and recommends a universal, market-based health-insurance system. Senator Wyden, Senator Bennett, and Congressman Cooper each stressed that the U.S. health care system needs reform and now is the time for action. All three have introduced health care reform legislation in the Congress.

Senator Ron Wyden (D-OR)

Listen to Senator Wyden's Remarks

Robert Chess, Chairman, Nektar Therapeutics

Listen to Mr. Chess' Remarks

“If you were running a business and your cost structure was 60% higher than your competitors, the quality of your product was no better, you couldn’t serve 15% of your customers, you would probably fire the management, bring in a turnaround team and undertake an evaluation on the fundamental approach to the way the company is run.”

Senator Robert Bennett (R-UT)

Listen to Senator Bennet's Remarks

Dr. Alain Enthoven, Marriner S. Eccles Professor of Public and Private Management, Stanford University

Listen to Dr. Enthoven's Remarks

“We need a market system with cost-conscious informed consumer choice. One in which new competitors can enter and leading to aligned incentives for providers and consumers to seek high-quality affordable care.”

Congressman Jim Cooper (D-TN)

Listen to Congressman's Coopers Remarks

George C. Halvorson, CEO, Kaiser Foundation Health Plans

Listen to Mr. Halvorson' Remarks

“We have an inefficient, unfocused, uncoordinated, unlinked, perversely incented care system for both acute and chronic care. We reward incidents of care, not outcomes of care and the system is built around the incentives that are built for it. We have this massively growing system that is growing at random because of financial incentives-- not in response to the care needs of the patient.”

Findings of the CED report were first presented at a forum in San Francisco on October 15, 2007 [agenda] by CED Trustee, co-chair of the CED Health-Care Subcommittee, and Chairman of Nektar Therapeutics, Robert Chess [audio]; and Dr. Alain C. Enthoven [audio], Marriner S. Eccles Professor of Public and Private Management, Emeritus, and Faculty Member at the Stanford University Center for Health Policy. “There are successful models for consumer choice of insurance plans, including the federal employees plan,” said Mr. Chess. “The CED proposal builds on the best of those ideas and adds some new ones to achieve affordable, sustainable, quality coverage for all Americans.” Dr. Enthoven and CED Trustee William Lewis [audio] presented the findings and recommendations of the CED report at the Washington, D.C. forum, held at the Hyatt Regency Capitol Hill Hotel.

In San Francisco, George C. Halvorson Kaiser Foundation Health Plans CEO and author of “Health Care Reform Now!” delivered keynote remarks [audio]. The panel, moderated by Pacific Business Group on Health CEO Peter V. Lee included, Dr. Anmol S. Mahal, President, California Medical Association; Sally Covington, Executive Director, California Health Care Coalition; Jeffrey Mains, Assistant Vice President, Health Plans, AT&T; and Dr. Harold S. Luft, Professor of Health Policy and Health Economics at the Institute for Health Policy Studies, University of California, San Francisco.

“Employer insurance is failing because of rapid cost increases and the inability to provide high-value care. CED’s report explains that quality, affordable universal coverage is neither achievable nor sustainable unless we transform the delivery model. Health delivery systems need an independent but transparent regulatory process to achieve productivity and innovation. The CED plan is not Medicare for all, and it is not markets for all,” said Dr. Jerome Grossman, Senior Fellow, John F. Kennedy School of Government and Director of the Harvard/Kennedy School Health Care Delivery Policy Program. Dr. Grossman is a CED Trustee and co-chair of the CED Health-Care Subcommittee that produced the report after two years of research and discussion by CED’s Trustees and health care experts.

Key Findings of Quality, Affordable Health Care for All:

The U.S. employer-based health insurance system is failing. The cost of insurance is rising unsustainably – faster than wages. More employers are dropping or curtailing coverage than expanding coverage. U.S. businesses’ insurance costs make them less competitive globally and depress cash wages. The quality of care is unacceptably low. Authoritative studies document numerous prescription and treatment errors that cause unnecessary suffering, illness, injury and cost. Patients get only an estimated 55 percent of necessary and appropriate care. And access to care is deteriorating: 47 million Americans lack health insurance, and that number is rising.
The root causes of these problems lie deep within the structure of our health-care system. No one currently has an incentive to seek, or provide, quality, cost-efficient health care; our employer-based health insurance system lacks meaningful competition. Without controlling costs, we will never achieve affordable universal coverage.

Employees usually have no choice. Insurers demand all of an employer’s business – to reduce per-employee overhead costs and avoid enrolling only the sickest workers. So employees have no choice of a plan (if they are offered health care at all). But employees, understandably, want to choose their doctors. Thus, to satisfy both employees and insurers, employers can offer only one plan that provides access to most doctors. The only way to reimburse any doctor an employee might choose is on a fee-for-service basis – a system with the worst incentives to drive up costs: the more services, the more fees.

Recommendations

The nation must replace employer-provided health insurance. Past employer efforts to provide affordable, quality health benefits have failed. The market is flawed, leaving those most in need without coverage and driving costs ever higher. A government-run, command-and-control system will not succeed; and devolving complex medical decisions from doctors to patients will not yield affordable care either. Instead, we must restructure the health-insurance market (and through it the health-delivery system) so that all Americans can afford and obtain quality coverage when the incentives for employers, employees, and providers all encourage quality, affordable care.
Individuals, not employers, must have choices among insurance options that meet their needs; no one should be forced into any one plan. People should be able to keep their coverage when they change employers. And importantly, people should be able to realize the savings – dollar for dollar – if they choose a less-costly plan, using clear information on quality and cost. This new competition would drive providers to minimize costs and improve quality.

The nation can establish such a market for quality, affordable universal health care through two key steps:

First, the federal government should establish independent regional “exchanges” as points of entry for people to choose among competing private health-care plans. This system improves on the Federal Employees Health Benefits Plan, which also covers members of Congress. Everyone would be guaranteed any one of a range of private insurance plans. The plans could not charge more based on age or preexisting conditions (unlike the current individual insurance market). System standards would ensure quality and comprehensive coverage and protect consumers through standardized “fine print.” Plan comparisons and an annual open season would help people to change plans – introducing competition into the health marketplace. Each exchange would “risk-adjust” premium revenue to insurers – paying more to insurers that cover more people with expensive conditions – to give insurers a greater incentive to cover, rather than shun, sick people. The exchanges would be supervised by a “Health Fed,” modeled on the independence and structure of the Federal Reserve.
Next, every household would receive a fixed-dollar credit sufficient to purchase the low-priced quality health plan in its region. Every individual, therefore, could buy quality health insurance at no out-of-pocket cost. Anyone could purchase a more-expensive plan by paying only the extra cost. People could keep the kind of health insurance and doctor that they now have and prefer. Such fixed-dollar contributions have been successful for employees of Hewlett Packard, Wells Fargo, the University of California, Stanford University, and the states of Washington, Wisconsin, and California. The fixed-dollar credit would be financed by eliminating the current tax exclusion for employer-paid insurance, and by broadly based tax revenues, for example a payroll, value-added, or environmental tax. Every individual would in effect contribute toward the health-insurance program, so every individual would be entitled to insurance – without costly “mandates” or means-testing.

With every individual assured of quality coverage, and able to save by choosing a low-priced plan, insurers and providers would then have a new incentive to offer quality, affordable care that people – not their employers – want. There would be competition in the health marketplace, driven by fair rules to reward quality and cost-effectiveness, rather than denying care and selecting risks. Rules-based competition has driven progress in every other industry in our economy and around the world, and competition has the greatest promise to move health care from its current path of unsustainable cost growth, mediocre quality, deteriorating health, and declining coverage.

(l to r) Charles Kolb, President, CED; Dr. Anmol S. Mahal, President, California Medical Association; Sally Covington, Executive Director, California Health Care Coalition; Jeffrey Mains, Assistant Vice President, Health Plans, AT&T; Dr. Harold S. Luft, Professor of Health Policy and Health Economics, Institute for Health Policy Studies, University of California, San Francisco

“This approach provides the working-age population and their dependents with quality, affordable health coverage. Expanded coverage minus cost control is unaffordable. Cost control absent a health-care market with effective competition is unacceptable. We hope that this plan will stimulate constructive debate and ultimately lead to a market-based system that focuses on the standards for effective competition where both government and the private sector can play their most productive roles,” said Charles Kolb, CED President.

Report | Summary | Press Release

CED JOINS HEALTH CARE REFORM COALITION WITH AIM TOWARDS CREATING A NEW AMERICAN HEALTH CARE SYSTEM BY 2012

CED President Charles Kolb took part in closed-door morning strategy sessions as coalition members discussed how to achieve the goal of a new national health system by 2012. CED Trustee and Health Care Subcommittee Co-Chair Jerome Grossman also joined the working sessions.

more photos

On May 8, 2007, the members of the “Better Health Care Together” coalition held a strategy summit in New York City. CED is a founding member of the coalition, which was announced on February 7, 2007 at a Washington, DC press conference. The New York summit featured a luncheon forum focused on health care reform efforts underway in California and Pennsylvania. During lunch, Governor Edward G. Rendell of Pennsylvania and Governor Arnold Schwarzenegger of California (live via satellite) addressed the coalition and guests. Both governors addressed the need for broad-based health care reform and what kind of leadership commitment it will take to achieve it.

In February in Washington, D.C., a set of four common sense principles for “achieving a new American health care system by 2012” were announced. The announcement event featured the remarks of CED President Charles Kolb (view video), as well as other remarks from leaders from business, organized labor union, and public policy groups. In addition to CED, founding members include AT&T, the Howard H. Baker, Jr. Center for Public Policy, the Center for American Progress, the Communications Workers of America, Intel, Kelly Services, the Service Employees International Union (SEIU) and Wal-Mart. The campaign founders pledged to convene a national summit by the end of May and recruit additional business, labor, government and nonprofit leaders to sign on to the principles and form a wide-ranging coalition. CED has also released a new health care reform report.

CED RELEASES HEALTH CARE REPORT

A new report on the health care crisis in the U.S., The Employer-based Health-Insurance System (EBI) Is At Risk: What We Must Do About It, is now available from CED. This report presents the first two parts of CED's research and covers the scope of the crisis in health care and the options we have for fixing the system. A third part, offering CED's recommendations, will be available in October 2007.

CED JOINS HEALTH CARE REFORM COALITION WITH AIM TOWARDS CREATING A NEW AMERICAN HEALTH CARE SYSTEM BY 2012

CED President Charles Kolb speaks at the Washington, D.C. press conference announcing the formation of the new health care coalition.

more photos

CED HOSTS HEALTH CARE REFORM FORUM IN SAN FRANCISCO

Northern California business leaders discuss healthcare reforms at the CED sponsored forum, San Francisco, January 25, 2007.

On January 25, 2007, CED hosted a California luncheon discussion on health care reform. More than twenty business leaders, as well as representatives of leading health care providers, attended the forum which was led by CED President Charles Kolb and Lenny Mendonca, CED Trustee, and Chairman of the McKinsey Global Institute. The discussion was held at the McKinsey Global Institute office in downtown San Francisco and centered on reform plans already proposed for California and Massachusetts, as well as ways that the employer-based insurance system needs overhaul. Dr. Jerome Grossman, Chair of the CED Health Care Subcommittee, and Chairman, Lion Gate Corporation, and the CED Health Care Project Director Dr. Alain Enthoven of Stanford University, also took leading roles in the discussion.

Health care reform is a priority for CED. In 2002, CED released a detailed statement on healthcare entitled, A New Vision for Health Care: A Leadership Role for Business. In February of this year, CED will release a two-part statement on the crisis in employer-based insurance. This statement will focus on the scope of the problem and the reform options available that policymakers and business leaders will consider in making health care available and affordable for all Americans. Later this year CED will release part three of our health care statement which will offer recommendations for reform.

A NEW VISION FOR HEALTH CARE

The United States' employer-based health care system is in serious trouble. Health care costs are again exploding at double-digit rates, the number of employees without health insurance continues to grow, and many health care services suffer from misuse, underuse, and overuse.

In CED's statement we urge employers, along with government, not only to stay the course but to actively lead in implementing specific changes in private and public policies that could produce a health care system that works for all Americans.

Press Release | Executive Summary | Full Report | Order ($15)

This policy paper was released in Washington, D.C. on May 1, 2002. Jerome Grossman, Chairman and CEO of Lion Gate Management Corporation, and Director of the Health Care Delivery Program at the Kennedy School, Harvard University; Peter Benoliel, Chairman, Quaker Chemical Corporation; and Steve Palko, Vice Chairman & President, XTO Energy Inc. co-chaired the project.