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Book Review: Healthcare, Guaranteed

Over the last decade we have filled our libraries with treatises written on reforming health care.  Yet, our health care system remains largely unchanged.  Many of these volumes are overly complex or duplicative, quoting the same figures about the shocking percentage of GDP spent on healthcare (close to 17%) and the poor results achieved (well behind almost all industrialized countries). In this sea of undifferentiated policy work, Ezekiel Emanuel’s book Healthcare, Guaranteed: A Simple, Secure Solution for America stands out for its clarity of approach. If we were President for a day (or maybe even Ezekiel’s brother, who is Obama’s Chief of Staff, Rahm Emanuel), we would mandate that Healthcare, Guaranteed be required reading for all members of Congress.

In Healthcare, Guaranteed, National Institute of Health Bioethics Department Chair Emanuel explains why it’s not sufficient to address “who” pays for healthcare (whether financing is through employers, government (via taxation), or individuals and families). Equally important questions are whether we are paying for the right care, how we address health care cost inflation, and how we change the health care delivery system from a fragmented one to a system is based on integration and coordination of care. However, just having answers to these issues isn’t enough–we still need the right “forces for change” in place.

Emanuel sets out seven goals for reform: Guaranteed Coverage, Effective Cost Controls, High Quality/ Coordinated Care, Choice, Fair Funding, Reasonable Dispute Resolution, and Economic Revitalization. For each goal, Emanuel asks whether our current system or an alternative system best advances that goal. For example, under the goal of Guaranteed Coverage he concludes that with 46 million uninsured Americans, our current employment-based system fails to meet this goal. Nor does today’s system, according to Emanuel, meet any of the other six goals.

Emanuel finds Medicaid and Medicare to be equally flawed with cost increases that exceed funding. Emanuel notes that while Medicare is praised for its low administrative costs, it doesn’t score high on value and is prone to fraud, paying for low- or no-benefit services, and subject to unbalanced geographic variations in care and payments that are not explained by cost-of-living differences. President Obama echoes Emanuel in his criticisms of government healthcare programs; he stated in his recent health care forum that Medicare costs are consuming our federal budget and Medicaid is overwhelming state budgets.

Emanuel makes a strong case that we can cover 100% of our citizens by eliminating employer-sponsored healthcare coverage and imposing a dedicated Value-Added-Tax (VAT) to which all Americans contribute. Under the so-called “Guaranteed Access Plan,” Americans would have access to a standard set of benefits (and the option to purchase additional benefits), regional boards would require outcome reporting by health plans, and a technology assessment entity would research what treatments, procedures, and technologies are medically and cost effective and share that information. Emanuel makes the case that this knowledge will result in drug and device companies focusing research in areas that show the highest value. Since federal health programs would be eliminated, the administrative costs and bureaucracies necessary to run Medicare, Medicaid, and S-CHIP would all be eliminated.

In addition to spelling out the Guaranteed Access plan, Emanuel succinctly describes the major proposals (with examples) that are under discussion today: incremental reforms, mandates, and single-payer. He compares each to his seven goals for reform and grids the results for ease of comparison. (It’s no surprise that his plan comes out on top.) For example, while a centralized government “single payer” health plan has administrative simplicity (and hence low administrative costs) and allows a choice of doctor, it does little to monitor effectiveness of care or reduce increases in spending, at least without limiting supply, as happens in some countries with a government-run system. Similarly, while mandate approaches with income-linked subsidies like the one underway in Massachusetts provide broad coverage, they still fail to achieve 100% coverage or slow the increase of healthcare expense, since they are based on the current fragmented fee-for-service payment system.

One of the most interesting aspects of the book is Emanuel’s description of the forces that need to coalesce for a major policy change like health care reform to occur, and the challenges, both psychological and real, that rear up to oppose change. Emanuel quotes University of Michigan political scientist John Kingdon’s theory that a major policy change happens when, “the public recognizes a serious problem, the right policy emerges as a solution, a strong champion supports the policy, and a transformative event opens the policy window.”

Health care has risen to the level of a widely acknowledged crisis in the U.S. We are in the midst of a transformative event—an economic crisis—and the Obama Administration has identified healthcare reform as a fiscal imperative that must be addressed as part of a solution to the economic crisis.

Emanuel shows some humor in quoting rules that illustrate the psychological factors weighing against reform, such as “Machiavelli’s Rule of Reform,” and the “Rule of Second Best.” Machiavelli’s Rule states that every major reform will create winners and losers. The losers know what they are losing whereas winners can’t know exactly what they’ve gained. The Rule of Second Best means that everyone’s favorite proposal is different but they all have the same second favorite - do nothing and maintain the status quo. These rules are powerful forces against change.

President Obama’s March health reform forum was a good start on a national platform for change. Key policymakers today are stating boldly that things are different than they were in the 1993 - 94 health reform debates. Nancy-Ann DeParle, the newly appointed Director of the White House Office for Health Reform, noted in a March 11, 2009 Boston Globe editorial that “15 years ago, many felt if they couldn’t have exactly the change they wanted, their second choice was no change at all.” She added “It doesn’t feel like that now.”

So if we have an open window, what is the right policy that the right champions will agree on and move through it? What’s missing from Emanuel’s book is the compelling case to Americans that the Guaranteed Access Plan is this right policy. Let’s be honest, the concept of a VAT is not understood by many Americans, and the erosion of the economy since Emanuel published the book makes passage of a VAT to fund the plan less likely.

Which champion or champions will support the policy once we have it? We’ve watched health care musical chairs in D.C. as Senator Daschle, Governor Sebelius and now Director Perle take turns on stage, with Senators Kennedy, Baucus, and others working on the sidelines. President Obama has proposed $624 billion as a “down payment” on health care. The President has widely promoted EMRs (electronic medical records) and prevention. Emanuel demonstrates why these elements alone are insufficient to make a difference unless we address the underlying larger problems.

Will we have a different outcome in 2009 or 2010? It may be a good time to test any proposals that emerge from D.C. against Emanuel’s goals. Reading  Healthcare, Guaranteed  will educate policymakers and citizens to better understand the trade-offs among proposals, the tools that need to be part of any proposal, such as increased health information technology in the form of EMRs, and the importance of recognizing the forces at play to allow transformation to occur.
Margaret Lane is an attorney and health care consultant, and was a Fulbright Scholar with Peter Singer at the Center for Bioethics at Monash University and the Victorian Law Reform Commission in Melbourne, Australia. 
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