About two weeks ago I found myself browsing the stacks of our local public library (instead of the shelves of a bookstore) and ended up checking out two books: Walt Disney: Hollywood's Dark Prince and Who Killed Health Care?. If you'd like to read my thoughts on the first book, wander on over to my Disney blog, the link to which is over there on the left of the screen.

The second book is by Regina Herzlinger, a professor at Harvard Business School and a fellow at the Manhattan Institute. In it she details who she sees as responsible for the mess that is our health care system today (pre-health care reform legislation; this book was written in 2007) and how she would propose to fix it with "consumer-based" health care reforms.

Herzlinger starts the book by devoting a chapter to each of the five main culprits for health care's demise, including the health insurers, the big hospitals, the employers (who choose our insurance plans for us), the government, especially Congress, and finally, the academics, who assume that consumers aren't smart enough to make the sorts of choices that might end up saving money.

She goes on to suggest some reforms, and one of her biggies is the promotion/creation of "focused care facilities", small specialty hospitals who, rather than being all things to all patients, focus on one disease and treat it expertly. Savings would come from focusing the facilities on the equipment needed for treating whatever it is they are treating, be it kidney disease, diabetes, or heart disease. These would be hospitals, capable of keeping patients in-house if necessary, and with professional staff who are extremely knowledgeable about the particular area they are dealing with.

Next she says that instead of paying providers for every little procedure and service, that care be "bundled" on a yearly basis. For example, if the average cost of providing treatment to a kidney patient is 40 thousand a year, the author advocates giving this money directly to the patient (tax free) and allowing him/her to select the provider based on which one seems the best fit for their care. How will the patient know anything about this? Data. Outcome data would be readily available in such a reform.

Next she suggests that individuals get the same breaks that businesses get when buying health insurance, and that this money be given to the patients directly to buy health insurance themselves. Then she suggests that providers be paid more for treating those who are sick than for treating those who are well, a process known as "risk adjustment". Risk adjustment can be done by insurers or by some other interested body.

Another important reform, she feels, is the creation of a consumer-based medical record which will follow the patient from one provider of care to the next. These records are fragmented today; often the left hand doesn't know what the right hand is doing. Prescriptions are given not knowing the status of other drugs the patient might be taking, or even all the diagnoses that they may have had. This is costly, and can create serious health problems.

Herzlinger also suggests multiyear insurance policies that will "motivate insurers to provide support that enables enrollees to comply with daunting self-care regimens over the long term." Too often now, insurers' greatest incentive is to promote patients' postponing treatment since who knows who will be insuring them next year? Insurance plans change year to year and so do enrollees. Policies should do a lot of things, including offering access to doctors with new and innovative ways of providing care instead of basically just driving those doctors out of business.

Right now, Herzlinger states, we have a system of hospitals, many of which are not-for-profit, which are interested more in making big money, paying their CEO's huge salaries, and building up hugh cash reserves which then get used for building projects. They are protected in their existence by laws which prevent entrepreneurs (in many states) from trying innovative new ways to deliver care and which prevent other big hospitals from encroaching on their "territory". They justify these laws by stating that if they aren't around, who will care for the poor population who can't pay for their care. Then they turn around and chase these particular patients with bill collectors, driving many of them into bankruptcy. They aren't even trying to appear to be living up to their missions. We need to reverse this, and encourage entrepreneurial spirit among providers of medical care.

She states that "Entrepreneurs avoid the health care industry because the government has usurped and constrained so many business functions." Our government even tries to practice medicine, telling doctors how to best treat their patients, instead of allowing the doctors to tailor the care of each patient individually. I don't know if I see this; certainly no one is telling me HOW to treat my patients in dentistry, though the insurance companies influence the patients' choices of care through their policies on reimbursing for certain procedures and not for others. Herzlinger wants the government to regulate, to provide information, and to enact laws that promote, not inhibit, entrepreneurial spirit.

She also wants a sort of health care "SEC" to provide analysis and information and to lay out penalties when someone does something illegal or negligent. Some of the information that would be provided is information on outcomes and information on fees and on drug prices.

The last thing she mentions is that the best consumer driven health care system would require that everyone be insured, with subsidies for those who cannot afford it. This insurance would be bought with tax sheltered income.

The interesting thing is that many of these consumer, market based reforms are similar to things that are actually in this health care reform legislation. It provides for experimental types of reimbursement like bundling of care and for these focused facilities that would be so important to providing better health care at lower prices. It provides for increased choice in purchasing health care insurance plans. It maintains the popular, employer based way of purchasing health insurance but it also allows for consumers to band together and buy health insurance in large purchasing groups. It has some items in it that aren't particularly consumer based, but for the most part, the Republicans were successful in keeping the health care reform legislation more market based.

It seems to me that at this point, they just don't want to admit it. For example, I heard Mitt Romney on tv the other night, and when he was asked how it was different when his state (Massachusetts) required everyone to purchase health insurance versus when the federal government did so, the best he could come up with was "well, it's at the state level instead of at the national level." Duh. What does that mean? Romney had a lot of good things in that Massachusetts legislation. It would be nice if someone, anyone, other than the President, could put aside politics and work for something that would benefit the people of this country for a change!