But, how can we change people’s minds?

I am a person who loves logic and numbers. Therefore, my tendency is to assume that the best way to convince people to make improvements to care processes is to clearly explain the logic supporting the change and to use rigorous, transparent and evidence-based quantitative projections of the outcomes that can be achieved by making the improvements.

But, experience teaches that solid logic and analysis does not always compel action. Often, it fails even to capture attention.

In the blog of Kevin Fickenscher, the incoming CEO of the American Medical Informatics Association, he included a link to an excellent TED talk by Simon Sinek, the author of the book “Start With Why.”  Sinek argues that ineffective people first explain what they are proposing, then they explain how it can be done, and finally they explain why the change should be made.  Sinek explains that effective people structure their communications in the exact opposite order.  They first explain the why — their consistent mission or objective.  Then, they explain how they carry out that mission.  Finally, they explain what is a specific example that people can select if they identify with that mission.  Sinek believes that people will decide to “buy” a particular change if they see it as a way to define themselves as someone who is part of a compelling, attractive mission.  That last point is totally consistent with my experience: if you hire people who are mission-driven and you allow them to focus their professional attention on that mission, they will be far more productive and effective.  And, they will inspire others to do the same.

Sinek is a talented lecturer, as are almost all the people invited to give TED talks.  Although he sometimes seems a bit too sure of himself for a topic as subjective as human behavior, he nevertheless provides excellent food for thought for mission-driven people involved in health care improvement.

http://www.ted.com/talks/lang/en/simon_sinek_how_great_leaders_inspire_action.html

I recently worked with a client from Texas, and they were fond of this adage. They said it with the most excellent drawl, giving it extra credibility, as if they may have actually learned it the hard way on their own ranches.

In the IT context, I interpret the adage to mean:

When designing an information technology solution for a business area, don’t just learn how they did the process manually and then create a software application to transfer that same process to computers. Rather, try to understand the underlying problem that the business process is trying to solve and the value that the business process is intended to create, and then take the opportunity to design a different process, one that is rendered feasible with enabling information technology and that delivers greater value.

When designing a new process to replace an old one, the starting point is re-conceptualization. The process designer must shed some of the terminology used to describe the old process when that terminology is too strongly tied to the details of the old process. Rather, the designer must dig down to the more essential concepts, and choose labels that are simpler and purer, seeking fresh metaphors to provide cleaner terminology. Then, the new process and the associated data structures can be re-constructed on top of a conceptual foundation that is easier to talk about, simpler to manage, and more stable.

Once we have a strong conceptual foundation, we can then flesh out the details of how the process can be made leaner and more effective, enabled by information technologies. Obviously, the proposed new process design influences the selection and configuration of enabling technologies. But, awareness of the capabilities of various technologies can also help generate ideas about candidate process designs that will be rendered feasible by the technologies. Therefore, this process is inherently iterative. The old-school philosophy of getting sign-off on detailed system requirements before considering the technology solution was a response to a valid concern that people will fall in love with a technology and then inappropriately constrain their process design accordingly. But, applying that philosophy too rigorously causes the opposite problem. If process designers don’t know what’s possible, they naturally stick with their old conceptualization, which also serves to inappropriately constrain their process design. As with most hard things, effectiveness requires finding the right balance between two undesirable extremes.

An example: the case of “registries.”  

A “registry” is a list of patients. The list includes the evidence-based services they need and whether or not they have received them. It is like a tickler file to help members of the clinical team remember what preventive services and chronic condition management services need to be done, so the team can improve their performance on quality of care metrics and provide better care to their patients.

But, if you dig down, the more fundamental purpose of the registry can be conceptualized as enabling care relationship management and care planning processes. Conceptually, health care providers need to know which patients they are taking care of. That’s care relationship management. It involves integrating different sources of information about care relationships, including derived care relationshpis based on claims data (also called “attribution”) and declared care relationships from health plans, patients and physicians. Part of the function a registry is to clarify and make explicit those care relationships. This simple function can be considered  radical to clinicians who have become accustomed to an environment where such care relationships have been ambiguous and implicit.

If a physician has a care relationship with a patient, then, conceptually, he or she has a professional responsibility to make and execute a plan of care for that patient. Care planning is the process of determining which problems the patient has and what services are needed to address those problems. Conceptually, a good care planning process also includes provisions for multi-disciplinary input by members of the clinical team.  And, a good care planning process also includes decision support, including alerts for necessary things missing from the care plan, and critique of things that have been put on the care plan.  Such critique can be based on clinical grounds, such as drug-drug interactions, drug allergies and drug dosing appropriateness. Or, they can be based on evidence-based medicine or health economic grounds, such as in utilization management processes.

The name “registry” is tied historically to the word “register” which is a type of paper book used for keeping lists of things. In the health care context, “registries” were used by public health officials to track births, outbreaks of infectious diseases and cancer tumors. So, when people think about chronic disease registries, their mental model of keeping a paper list is a barrier to their willingness to re-conceptualize the underlying function differently.  But, more fundamentally, a “registry” is just one type of tool to facilitate care relationship management and care planning — a tool designed to be used for a narrowly defined list of problems and services, rather than being designed for more general use.

Today, there is no single care plan for most patients.  The function of keeping track of the problems that need to be addressed is either not done or it is done in a haphazard way, peppered across various structured and unstructured encounter notes, scribbled on problem lists, auto-generated in clinical summaries based on diagnosis codes on billing records, checked off on health risk appraisals, etc.   The function of figuring out which services are necessary to address each problem is peppered across numerous clinical notes, requisition forms, e-prescribing systems, order entry systems, care management “action “lists” and in the fields of registry systems.  The function of facilitating interdisciplinary input to a patient’s care occurs informally in hallway conversations, morning rounds, tumor board meetings, or, most commonly, not at all.  These are all care planning functions, but most clinicians have no familiarity with the concept of linking these diverse bits of data and process in a cleaner, simpler notion of managing a single care plan to be used and updated over time by the entire care team.  As far as they are concerned, such a notion is probably infeasible and unrealistic.  They’ve never seen a technology that can enable it to become reality.

Choosing the right leap distance.

Of course, when re-conceptualizing processes, it is possible to go too far.  Old habits, mental models, terminology, and processes die hard.  If your re-conceptualization is a great leap to a distant future state of elegantly conceptualized processes, it might end up being too difficult to convince people to take the leap with you.  Other adages come to mind:  “Don’t get in front of your headlights.” Then there is President Obama’s version: Don’t get “out over your skis.”  And my favorite, often quoted by Tom Durel, my old boss at Oceania, “Never confuse a clear vision for a short distance.”

The optimal “leap distance” is a function of motivation to change.  If people start to experience great pain in their current state and begin to fear the consequences of sticking to their old ways, change happens.  As we move forward to a world where providers are taking more economic risk and facing more severe consequences for failing to improve quality of care, we will be able to pursue bolder innovation and leap greater distances in our process and technology improvements.

Reading the transcript of the testimony to the Supreme Court, and reading some of the news coverage of that testimony, I focused on what appeared to be the main issue: whether the mandate that people buy health insurance represented a violation of the constitutional limits on the enumerated powers of the federal government to regulate interstate commerce.

That focus is grounded on the assumption that this mandate is a type of a penalty, rather than a tax.  This seemed obvious to me for a number of reasons.  First, on the face of it, it seems that its primary purpose is to change behavior, rather than to generate revenue.  Second, the law itself uses the word “penalty” rather than the word “tax.”  Third, President Obama, himself a constitutional law professor and someone who wants his signature achievement to be upheld, repeatedly and explicitly said it was not a tax.  And, finally, all those smart lawyers on both sides of the Supreme Court bench seemed to be taking it for granted that it was not a tax.

But, this week I read an interesting commentary in the Atlantic by another constitutional law professor, Jack Balkin, from Yale.  He argues that the mandate is a tax, and therefore the health care reform law is constitutional.  He joined others making the same argument in one of the zillions of amicus briefs filed in the case.

Balkin argued that, even if the primary purpose of a tax is to regulate behavior, it can still be considered to be a tax.  He pointed out that taxes on polluters are in that category.  In 1950, the Court ruled on this issue in the context of a law taxing marijuana.  That law was designed to keep people from buying or selling the drug. The Court explained that “a tax does not cease to be valid merely because it regulates, discourages, or even definitely deters the activities taxed. The principle applies even though the revenue obtained is obviously negligible . . . or the revenue purpose of the tax may be secondary.”

So, why would all those smart lawyers not focus on the tax argument?

Balkin provided a number of answers.  First, the political optics.  Democrats may have been OK with the idea of taxing rich people to pay for decent health insurance for all.  But, Democrats are getting hammered by Republicans for high taxes and large deficits.  Democrats knew they could not pass health care reform if they admitted it would increase taxes.  So, they took the low road that both Democrats and Republicans seem to prefer.  They purposely designed the law to avoid having to admit they raised taxes.  And, once the health care reform law passed, the Republican opponents of the law did not want to argue it was a tax because that would be admitting that the law was constitutional.

Secondly, the Democrats wanted a quick ruling by the Supreme Court.  The Obama administration was worried that states would delay their preparations for implementation of the law until the constitutional questions were settled.  But, if the mandate was considered to be a tax, then the Tax Anti-Injunction Act would apply.  That Act says that people cannot ask the courts for an injunction against taxes, but must instead pay the tax and then sue the government for a refund.  The law is designed to protect the federal government from being starved of revenue while lots of court cases are pending.  So, if the mandate was a tax, the Supreme court may not be able to take up the case until 2014, when the mandate kicks in. Balkin argues that the Court could assert that the Tax Anti-Injunction Act is merely a protection, but should not be considered as a bar to their jurisdiction.

Balkin seemed to be selling the Supreme Court justices on the idea that upholding the reform law on the grounds that it is a tax would be a good way to avoid the appearance of politicizing the Court through a party-line decision to strike down the law.  And, upholding the law as a tax would also avoid setting a precedent for expanded government powers under the commerce clause.  And, ironically, it could even establish a precedent that Congress would be forced to admit when things are really taxes and face the consequences with voters, thereby serving the interest of limiting the size of government.

An interesting scenario.  We’ll know within a couple of months whether it plays out that way.

Trinity Health is the third health system to sign similar agreements with BCBSM, after St. John Providence Health System and Beaumont Health System.    By the end of 2012, BCBSM intends to reach agreements with additional hospitals so that 50% of its hospital spending will be subject to value-based reimbursement agreements.

More details are available in Crain’s Detroit Business.

In a New York Times op-ed this week, David Brooks describes the “tsumani” of change coming to the field of higher education, as web-based distance-learning approaches are embraced by top tier universities and threaten to disrupt the traditional campus-centric approach. Although some of the respondents defended the humanism of face-to-face education, most acknowledged the need for change, and embraced the concept of leveraging the internet to enable a more effective system. I think this trend is long overdue.

I am grateful for the education that I received from the University of Notre Dame and the University of Chicago.  As years have passed, I have come to appreciate the value of that education more, not less.  But, to be honest, there is a lot of room for improvement.  Far too much of the traditional college education process takes place in large lecture halls in which a fraction of the enrolled students attend lectures and take notes for many others who don’t find it sufficiently valuable to show up.  At the front of the lecture hall is a person who was selected and promoted for his or her ability to pump out research papers to be published in journals that often have little editorial rigor, a small actual readership and questionable impact.   Too often, the lecturer was not selected or promoted for being a talented lecturer.  And, since true talent at lecturing is rare, even good local lecturers are unlikely to be as good as the top lecturers around the world.  Because many classes are large, the tests often are quite mechanical, thereby creating a system of incentives in which the students focus on mechanical learning — regurgitating a fact base, rather than developing latent talents, honing skills and acquiring insights.  Then, students participate in labs or discussion seminars led by graduate students that were not selected for their ability to lead discussions.  Furthermore, as shown in the graph below prepared by Mark Perry,  our system of higher education has been growing more and more expensive, putting it out of reach for more people.

I don’t think the problem is with the educators.  As with doctors, educators do heroic, creative things to achieve the best outcomes they can. Rather, the problem is with the system.  As taught by one of my health care heroes, Don Berwick, “every system is designed perfectly to achieve exactly the results it gets.”

I am hopeful that web-based education will disrupt this old system, driving up effectiveness and driving cost way down, thereby increasing access.   I am encouraged by the high quality level of such resources as Khan Academy, an absolutely fantastic collection of interesting free lectures taught by amazingly talented lecturers.  Schools use these lectures to turn the classroom “upside down,” pushing the lecture portion of their teaching to homework hours, leaving the in-school time for students to work together and receive individual and small group coaching from the teachers to address any remaining confusion about the subject material and provide experiences that deepen learning.

But, I think the transformation will go beyond just shifting classes from physical to virtual classrooms.  I think it might lead to a system in which many more people get involved in teaching, mentoring, and coaching, and in which people can continue their education and development throughout their lives.  Our traditional process for higher education ends quite abruptly at graduation, with ongoing contact between educational institutions and their alumni focused more on fund-raising than continuing education.  And, our approach to human resource development in the workplace tends to go through periods of fad and famine.  The fads sometimes seem to be initiated by new leaders who want to demonstrate something about their leadership style, rather than a sincere and persistent effort to develop people over time.

But, when I was  in medical school going through a general surgery rotation, the department chair repeatedly implored his students to subscribe to a few medical journals to begin to build their own libraries and get familiar with the community of people that contribute to those journals.  He wanted us to become engaged in lifelong learning and to become members of those communities.  Of course, we looked at him like he had three heads — as if we could afford to spend hundreds of dollars on journal subscriptions and spend time reading them when we had tests to study for.  But, he was right in ways I did not appreciate for years.  In my professional life, when I have had the opportunity to mentor others, I have always found it rewarding and beneficial to my own learning.  When I have had the opportunity to be mentored and coached by others, I have always valued the experience.  And, when I have taken the time to read and write about advancing the field, I have felt a satisfying sense of belonging and camaraderie within our professional community.

I look forward to an educational system that blurs the boundaries between the campus experience, professional continuing education, human resource development and professional networking.  Imagine a pre-graduation higher education process that places far more emphasis on establishing ingrained habits for lifelong learning and creating durable learning networks that can morph over time as the learner moves through different industries and grows to higher levels of responsibility and leadership. Imagine university faculty continuing to check in on their students over many years.  Imagine social networking tools that go beyond just connecting people with similar interests to creating a vehicle for mentoring and teaching, perhaps with capabilities for testing and assessment, educational and career goal setting, and  financial or non-financial rewards for faculty.

Forward looking health care organizations are already pursuing some of these changes. For example, the Henry Ford Medical Group has established new processes and web-based tools to integrate continuing education, assessment and evaluation, credentialing, and professional networking for residents, fellows and senior staff physicians, facilitating and incentivizing lifelong learning and professional development.  These developments make me hopeful that our educational system is about to dramatically improve, and that the benefits will spill over into our health care system.

Kaufman noted that inpatient hospital utilization by Medicare patients dropped 8% from 2006 to 2010 — patients that are presumably retired and therefore not affected by recessionary unemployment.  He also noted that states with a larger drop in Medicare utilization were the ones with the smallest drop in employment rates, the opposite of what one would expect if the recession was the driver of the drop.  From these observations, Kaufman proposes that we should look for other factors at play.  He suggests an initial list of five other factors:

1. As doctors move from entrepreneurial self-employment to employment by hospitals and large groups, they come under the influence of care protocols, disease management and other clinical programs that attempt to drive down avoidable utilization
2. As hospitals’ revenue growth slowed, they changed from an “all things to all people” philosophy to a policy of eliminating unprofitable programs
3. New “care models,” including new approaches to physician incentives and reimbursement, are starting to have an effect
4. Dramatic shift from brand name to generic drugs
5. Health care utilization may have reached the point of “diminishing marginal utility,” where people’s appetite for more is diminished and other alternatives for resource allocation are relatively more appealing than more health care

As we (hopefully) continue to recover from the recession, everyone expects health care trends to creep back upward.  But, perhaps they won’t creep all the way back up to the teens due to these forces keeping cost growth in check.

I found five things interesting about the list:

1. 93% were unwilling to accept downside risk.  In the original proposed rule for the MSSP, ACOs would have been forced to accept downside risk.  Presumably, CMS thought that “skin in the game” would be an important motivator for real transformative change, and they wanted to increase the chances that the federal government would be able to achieve a net cost reduction.  But, in response to fierce backlash from providers saying they did not want to accept downside risk, CMS relented and introduced an option allowing providers to avoid taking downside risk in exchange for a smaller upside reward.   When it came time to lay chips on the table, 93% took the safe bet.
2. Only 18% requested up-front payment.  One of the complaints from the provider community during the design phase of the MSSP was that providers lacked access to the capital needed to create the infrastructure to successfully improve care processes and manage risk — things like healthcare information technology, analytics and care management.  In response, CMS offered an option where ACO applicants could receive some up-front payments that would be repaid out of subsequent rewards.  CMS was offering to finance the investment, but it would be a loan, not a grant.  Only 18% of the first batch of ACOs selected this option.  I suspect this was due to the same risk aversion that led them to accept smaller rewards to avoid downside risk.
3. 33% used payer-based infrastructure.  If physician organizations are to remain locally-focused, it makes more sense to share infrastructure with others to achieve economies of scale, rather than taking on the cost of creating their own infrastructure.   As I described in a prior post, this can be accomplished through a franchise arrangement.  It can also be accomplished through a management services organization (MSO), as is commonly done by PPOs and medical groups in mature managed care markets.  Or, it can be done by partnering with payers who already have such infrastructure.  Any of these approaches could potentially work, but I’m least enthusiastic about using payers’ infrastructure.  Nevertheless, nine of the 27 new MSSP ACOs are organized as partnerships between local health care providers and Collaborative Health Systems (CHS), a division of Universal American, a publicly-traded for-profit health insurance company that offers a variety of plans including Medicare Advantage plans.  For these 9 ACOs, Collaborative Health Systems will provide a range of care coordination, analytics and reporting, technology and other administrative services.  This is a popular option not only because of the economies of scale, but also because it allows the providers to avoid having to take out a loan, either from CMS or from traditional sources of capital such as banks or the equity markets.
4. 44% did not note the number of physicians in their press-release blurb.  I hate to read too much into such a factoid.  But, for ACOs to work, the physicians must really be involved.  What does it tell you if the organizers of an ACO, when drafting their little blurb for the CMS press release announcing their selection as one of the first batch of MSSP ACOs, did not think to state the number of physicians involved?
5. Average beneficiaries per physician is 107.  Of the 13 ACOs that did think to include the number of physicians in their press release blurb, 4 of them had between 100 and 400 beneficiaries per physician, 7 of them had between 31 and 60 beneficiaries per physician, and 2 of them had less then 10 beneficiaries per physician.  If ACOs are to really work, they don’t just need infrastructure, they need “mind share.”  If 5% of your patients are involved in some new program, and if you have not agreed to any downside risk in terms of taking on debts or being on the hook for possible negative rewards, and if the rewards are relatively small even for that 5% of your patients, are you really going to be motivated to radically transform your care processes and change your habitual clinical decision-making practices?

Here’s this list, including the beneficiaries per physician calculations.

He argued that it was clearly unconstitutional, and reminded me of high school civics lessons about federalism.  The federal government is constitutionally designed to have clearly enumerated, limited powers.  Those powers include the ability to levy taxes.  And, they include the power to regulate inter-state commerce.  But, explained my brother-in-law, they don’t include the power to compel commerce.   So, they can’t make people buy health insurance.   All other powers are retained by the states and by the people.  According to this view, the constitution would allow a state to pass a law mandating that people buy health insurance, as was done in Massachusetts.  And, Congress could have passed a law that created a government-run health program and levied taxes to pay for it, as was done with Medicare.    And, Congress could have passed a law that levied taxes to pay for subsidies for insurance companies to compensate for the losses they would experience from being forced to issue insurance to everyone, regardless of prior medical conditions.  But, the authors of the health care reform legislation apparently felt that increasing taxes was politically infeasible, particularly given growing concerns about unsustainable government deficit spending.

The Supreme Court held three days of oral arguments for the case this week.  The meat of the issue was discussed on day 2, Tuesday, March 22nd.  One hundred and eleven double-spaced pages of discussion that was an interesting read.  Justice Kennedy, the one thought to be the likely swing vote needed to join the more liberal justices in upholding the health care reform law, described the government as being “dishonest” in doing something that required the use of its power to levy taxes without admitting that it was a tax or framing it as a tax.  Kennedy found the health care reform law to be “disturbing” in that it “required the individual to do an affirmative act” in purchasing insurance and entering the market for health care insurance.  He noted that this is against our longstanding legal principles, and pointed out that the law does not even obligate people to save a blind person that they see walking in front of a car (unless they have certain types of relationships with the blind person).  Kennedy argued that the law “changes the relationship of the Federal Government to the individual in a very fundamental way,” and therefore the government should have a “heavy burden of justification.”  Not exactly inspiring confidence that Justice Kennedy intends to be that cross-over vote to uphold the law.

The government’s defense of the reform law was delivered by Solicitor General Donald Verrilli, who delivered amazingly incoherent testimony.  The Justices were grilling Verrilli to explain a “limiting principle” — some concept that applies to this law, but not to other situations so as to prevent this law from establishing a precedent that broadly expands federal government power.  Verrilli argued that, although the law is about health care insurance, insurance only serves the purpose of “financing” health care itself.  So, receiving health care and purchasing health care insurance are tied together.  The government argued that everyone is likely to require health care at some point.  Somehow, from those two points, the government argues that everyone is already in the health insurance market, even before they buy health insurance. So, the law is therefore not compelling someone to enter the health insurance market.  Verrilli argued that the health care market (the one that is inextricably tied to the health insurance market) is distinguished from all other markets in that “people cannot generally control when they enter that market or what they need when they enter that market.”  One after another, the Justices questioned this reasoning and offered many examples of other markets that have the same characteristics, such as the market for burial services.

The liberal Justices tried to come to Verrilli’s rescue.  Justice Ginsberg coached Verrilli that his main argument for the uniqueness of health care was that it is a market where, “even though you have every intent in the world to self-insure, to save for it, when disaster strikes, you may not have the money.  Then, when you need health care, you have no choice whether or not to buy the product.”  Other’s emphasized that the longstanding tradition in our culture is that health care services are delivered without regard to the ability of the sick person to pay. Therefore, one person’s decision to not buy health insurance affects other people.  However, the Justices pointed out that this was true in virtually all markets — if I decide to not buy a car, that affects the economic well-being of the people that work for car companies.

I went into the week confident that the constitutional challenge to the health care reform law was just a bump in the road.  Just a desperate Hail Mary pass by those against health care reform.  But, I’m taking a dollar bill out of my wallet and setting it aside, ready to pay my brother-in-law in case he wins the bet.

Why are Michigan doctors twice as interested in medical homes and accountable care?

Steven Newman, M.D., president of the Michigan State Medical Society, attributed it to the fact that Michigan physician organizations have been working on this for a long time. I was proud to see that he called out Blue Cross Blue Shield of Michigan as being one of the drivers. BCBSM’s Patient Centered Medical Home designation program has been going on for 4 years.  Its Physician Group Incentive Program (PGIP) has been going on for 8 years.   Its Collaborative Quality Intiatives (CQIs) have been going on for more than a decade.

Unfortunately, these things take time.  Fortunately, in Michigan, we started a long time ago.

My former boss, Tom Simmer, MD, CMO of BCBSM, has consistently emphasized the importance of using time as a lever of change.  And, he insisted on staying positive and respectful, focusing on building energy that can “catalyze” change by physicians and other health care professionals.  It seems to have paid off in terms of physician interest in medical home and accountable care transformation.  Although it is difficult to measure “energy,” a physician’s willingness to recommend a career in health care is as good a metric as any.  According to the physician survey, only 11% of physicians nationally would recommend a career in health care.  In Michigan, that number is 53%.  That’s huge.

We still have a lot more work to do before we can say that this long slog has resulted in substantial, measurable improvements in the overall quality of care, and overall reductions in per capita health care spending.  But, at least we have solid indicators that hearts and minds are optimistic and energized among those who will drive those improvements.

Supreme Court Decision on Health Care Reform

In the first article, Adam Liptak discusses the upcoming Supreme Court decision regarding the health care reform law, describing it as a career-defining decision for Chief Justice Roberts.  Conservative political leaders are against the law.  Many such leaders have argued against the constitutionality of the law on the grounds that the mandate that people purchase health care insurance extends the power of the federal government to regulate interstate commerce beyond the intentions of the framers of the constitution.  This debate is interesting in that it cuts across different facets of conservative thought: the libertarians, the free-marketers and the “haves.”  The libertarian-leaning side of conservative thought focuses on maximizing personal liberty by minimizing government power.  The argument against the health care reform law’s expansion of federal commerce powers is completely consistent with this aspect of conservatism.  This argument is also aligned with the interests of the “haves” (recently re-labeled the “1%” by those at the opposite end of the political spectrum).  Except perhaps for Warren Buffet, who argued in a NY Times Op Ed that tax rates should be increased for anyone with annual income over $1 million, wealthy Americans are usually not eager to foot the bill for social benefits for others, particularly not for expensive and rapidly escalating health care benefits.

But, the free-marketers seem to be taking a back seat on this issue.  Free marketers are skeptical that a monopoly provider of health care insurance services will be efficient and maximize value.  For this reason, free marketers loathe the notion of a federal government-run single payer system.  They prefer a market with multiple competing private health insurance providers, with just enough government regulation to ensure that competition is real and that consumers are properly informed and protected.   Such a competitive private market has worked well for property and casualty insurance, where the risk of loss can be assessed by the insurer almost as well as by the insured.  But, in health insurance, the insured have superior knowledge of their own health status.  Therefore, it is a widely held belief by health economists that if insurers are to be forced to offer insurance to everyone, it is necessary to have a mandate for people to purchase insurance to make a private health insurance system work.  Without such a mandate, health economists fear that too many people will wait until they know they are sick to buy insurance, forcing insurers to raise rates.  This dynamic is described as “adverse selection” and is thought to eventually lead to a death spiral where private insurers fail. According to this view, if you don’t mandate the purchase of private health insurance, you are implicitly sabotaging a free, competitive market for health insurance that can support near-universal coverage.  The only alternatives are a government monopoly, paid for with mandatory taxes, or a continuation of a broken system that fails to insure tens of millions of Americans.

It seems to me that a coalition of the libertarians and “haves” within the conservative community have overpowered the free-marketers.  Republican presidential candidates are being forced to reject the mandate as a condition of being worthy of being a “true conservative” (despite the fact that both Gingrich and Romney have supported such mandates in the past!).

Milton Friedman

Remember Milton Friedman, the Nobel laureate economist from the University of Chicago?  He used to be considered a conservative.  He was a free market conservative.  He advocated for universal tax-funded high deductible health insurance, administered by the government or through vouchers that could be used to purchase such insurance from private insurance companies.  He advocated for the elimination of Medicare and Medicaid, the elimination of tax exemption for employer-provided health insurance benefits, and for the adoption of medical savings accounts.  All of these proposals were aimed at having consumers bear the costs of non-catastrophic medical care so that free market mechanisms apply, as they already do for other necessities of life such as food and shelter.  If Dr. Friedman were alive today, he would probably not pass the current test of being a “true conservative.”   I call for the free-marketers to speak up.

America Stealing Doctors from Third World

In another New York Times article served up by Dr. Rutt, Matt McAllester describes the “brain drain” of physicians from third world countries who seek training in the U.S. and then stay in the US.  Such physicians stay because they will have access to the latest technology and they can make ten times the salary they would earn in their native countries.  The article portrays this as unethical behavior by the US that harms the third world countries.  The article does not advocate for any particular remedy.

In my opinion, it is necessary to take a broader view.  This medical brain drain problem is an undesirable side effect of a larger trend that has greatly benefited the third world.  As described in a compelling and entertaining way by Hans Rosling, the last century has been characterized by dissemination of scientific and economic innovations throughout the world which has lifted up third world countries in terms of health and economic advancement.   The free flow of capital, goods, labor and ideas across the world has been the driver of this broad advancement.  This amazing global success (with some tragic exceptions such as with the AIDS epidemic holding down Sub-Saharan Africa), has been underappreciated by those who fight against “globalization.”

In this context, should we try to protect third world countries from brain drain by constraining the existing freedom of the world market for physician services and therefore constrain opportunities for physicians from those countries?  I don’t think so.