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Rx for Health Care Reform

Ken Terry

Publication Year: 2007

In this readable and well-researched book, Ken Terry analyzes the current state of health care reform and finds it wanting. Instead of tackling the core problems in our failing system, he argues, politicians, insurance executives, and health care leaders have embraced ideologically driven initiatives that pursue impractical objectives or will take too long to bear fruit. Among these are such widely hailed trends as disease management, pay for performance, cost and price ìtransparency,î consumer-directed care, and health information technology, none of which will reverse the rising tide of health spending. What is creating this nightmare scenario, according to Terry, is the sheer profitability of the health care industry. Insurers, physicians, hospitals, pharmaceutical companies, and device manufacturers are all striving to maximize their profits, and there is no effective competition or regulation to restrain them. Only a complete overhaul of our system for financing and delivering health care can get us out of this mess, the author maintains. In the second half of his book, he presents a bold vision of how to do this: First, he says, all primary care physicians should join group practices that are large enough to take financial responsibility for professional services. And second, competition among those physician groups, based on cost and quality, should replace competition among health plans. There should be only one government-regulated insurer per region, he says, and it should have no role in managing care.

Published by: Vanderbilt University Press

Title Page/Copyright/Dedication

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pp. vii-viii

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pp. ix-x

It is impossible to acknowledge the contributions of everyone who made this book possible. But I would like to thank Marianne Mattera, the former editor of Medical Economics Magazine, for giving me the time and space to pursue my dream. ...

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pp. xi-xii

The shortcomings of U.S health care—high costs, uneven quality, and inadequate access for many Americans—are well known to health-policy experts and researchers. The reasons for these shortcomings are also well known. Our health system is fragmented, making coordination of increasingly complex care extremely difficult. ...

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pp. xiii-xx

What would happen if we all had to buy our own health insurance? My friend Bill found out when he was laid off from his editorial job at a national magazine. The federal COBRA law required his former employer to maintain his group coverage for eighteen months after termination, but Bill had to pay 100 percent of the premium. ...

Part I: Whither Health Care Reform?

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1. How We Got Into This Mess

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pp. 3-15

Since the nineteenth century, Americans have been divided between those who believe that the purpose of government is to protect individual liberties and those who believe that government should also serve the interests of society at large.1 This not a simple conflict between advocates of free enterprise and advocates of regulation, ...

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2. ’Round and ’Round on the Reform Carousel

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pp. 16-32

Karen, a pleasant, middle-aged woman, cleans houses for a living. She’s in good health, but her husband, Jack, recently died of bladder cancer. Jack, a Vietnam War veteran, drove trucks until he was laid off. For eighteen months, he was able to extend his former employer’s group coverage through COBRA insurance that cost about $800 a month. ...

Part II: The Emperor’s New Clothes

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3. The Two Faces of Disease Management

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pp. 35-45

Chronic diseases account for about three-quarters of all health care spending. Nearly half of the U.S. population has at least one chronic disease, and half of those have more than one.1 The number is growing as boomers age and as more and more people—including children— begin to suffer from obesity.2 ...

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4. Paying for Performance

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pp. 46-60

The past few years have seen a vast upwelling of support for pay-for-performance (P4P) programs that reward physicians and hospitals for meeting specific goals in the domains of quality, efficiency, and information technology. ...

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5. EHRs: Necessary But Not Sufficient

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pp. 61-77

Midwest Heart Specialists, a fifty-five-doctor cardiovascular group in the Chicago area, has had an electronic health record (EHR) system since 1997. A couple of years ago, the group decided to imbed national performance measures for coronary artery disease, heart failure, and hypertension into its EHR. ...

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6. Can Consumers Direct Their Own Care?

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pp. 78-94

Caryn Tinn, a forty-one-year-old homemaker in Bridgewater, New Jersey, discovered a lump in her breast in 2003. Six months earlier, her obstetrician/gynecologist had given her a clean bill of health, but she hadn’t had a mammogram in nearly five years. When she noticed the lump, she went back to the physician, ...

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7. The Limits of Evidence

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pp. 95-106

Consumer-driven care is not just about giving consumers incentives to use health care services more judiciously. Its proponents also seek to create a market in which consumer choices will force physicians to change how they practice. ...

Part III: The Money Machine

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8. Supply-Induced Demand

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pp. 109-120

Three years after having cardiac bypass surgery, Richard Knauer, a fifty-three-year-old computer services executive from Glen Rock, New Jersey, went to see his cardiologist because his blood pressure seemed unusually high. The cardiologist did the usual tests and told him his heart was fine. ...

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9. Physicians Go for the Gold

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pp. 121-131

In recent years, medical imaging services have been growing rapidly. The total cost of CT, MRI, and PET scans, X-rays, ultrasound, and other imaging tests was roughly $100 billion in 2005, compared with about $75 billion in 2000.1 Between 1999 and 2002, the use of CT and MRI tests by Medicare patients increased 15 to 20 percent a year, ...

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10. Hospitals Flex Their Muscles

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pp. 132-141

Spending on hospitals is rising much faster than the number of patients they take care of. The number of beds and the length of stay in community hospitals dropped slightly from 1999 to 2003, and the annual number of admissions rose a modest 8.2 percent over those four years. ...

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11. Why Do Drugs Cost So Much?

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pp. 142-158

Have insomnia, restless leg syndrome, adult attention deficit disorder, heartburn, arthritis pain, or erectile dysfunction? There’s a prescription drug for your condition, and you’ve probably seen it advertised on television or in a magazine. Of course, the medication usually has a host of potential side effects, ...

Part IV: Rx for Health Care Reform

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12. This Market Needs Regulation

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pp. 161-163

Supporters of the current paradigm of health care reform argue that more competition and less regulation will reduce costs. But as explained in Part III, greater competition in health care does not lead to lower prices or less use of services. The more doctors there are, the more work they create for themselves; ...

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13. Putting Doctors Together

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pp. 164-173

In his book From Chaos to Care, David Lawrence, MD, a pediatrician and chairman emeritus of Kaiser Permanente, describes the odyssey of a fictional asthma patient named Rebecca.1 Between the ages of two and six, Rebecca was a regular visitor to the emergency room (ER), ...

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14. Why Groups Should Take Financial Risk

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pp. 174-184

Sarah, a resident of Oklahoma City, was eighty-seven when she suffered a stroke in 2002. The stroke paralyzed her on one side and affected her speech. Until then, she’d been living at home and taking care of herself with some help from her family. She was mentally sharp and physically healthy for someone of her age. ...

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15. A Real-World Model for Reform

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pp. 185-196

On January 1, 2005, a grand social experiment ended in Minneapolis. On that day Medica, one of the city’s three dominant health plans, incorporated Patient Choice—which it had purchased in 2004—into its line of insurance products.1 ...

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16. The End of Insurance as We Know It

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pp. 197-208

How do we transform health insurance? It cannot be done gradually, because the insurance industry would find ways to counter any measure that merely changed how it did business. The only way to ensure radical transformation—short of a government takeover—is to take rapid steps that fundamentally redefine the insurance companies. ...

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17. Getting Down to Nuts and Bolts

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pp. 209-224

“Doctors do not come together well,” says Gary Matthews, a veteran health care consultant in Atlanta who has done a lot of physician-practice mergers. “They all want to practice medicine in their own individual way. And even if they’re in a group, they don’t want to be told how to practice.” ...

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18. Universal Health Care

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pp. 225-239

Some well-meaning people have suggested that universal coverage would be a major step forward, even if the insurance covered only catastrophic care or only primary care. Why comprehensive insurance is needed—and why anything less would keep driving costs up for all of us—becomes clear when one considers who the uninsured are. ...

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19. Toward Uniform Hospital Pricing

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pp. 240-248

In our reform model, utility insurers are not allowed to negotiate hospital prices. So hospitals would have every incentive to charge as much as they could get away with politically. Publishing their charges and quality ratings, as many politicians and employers now advocate, would have relatively little impact on prices. ...

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20. Let “Hospitalists” Take Charge

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pp. 249-259

On a balmy spring morning, internist Charles Meidt is making his rounds at Bryn Mawr Hospital in Bryn Mawr, Pennsylvania. One of his patients, Roger Johnson, a very pale, eighty-three-year-old man who came here from a nursing home the day before, has blood clots in his legs. ...

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21. Health Planning and the CON

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pp. 260-270

If variations in medical utilization are correlated with the number of hospital beds in a market, and if variations in surgical procedures are correlated with the availability of diagnostic equipment, an excess of either will inevitably lead to inefficient use of health care resources. ...

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22. What Works Best in Practice?

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pp. 271-281

Reducing the duplication of facilities and service lines would certainly cut the amount of unnecessary and inappropriate care delivered. But, as discussed in Chapter 7, there are many areas of medicine where it’s not clear how much care or what kind of care is appropriate. ...

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23. Must Technology Break the Bank?

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pp. 282-295

In every advanced country, regardless of what kind of health care system it has, the cost of care has been relentlessly advancing for many years. The growth in global affluence accounts for much of this increased spending, but costs are rising faster than wealth everywhere. ...

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24. Toward a Rational System of Rationing

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pp. 296-304

As many observers have pointed out, the United States rations care by ability to pay. Therefore, Americans believe it’s ethical to deny some technologies to certain people, Arthur Caplan of the University of Pennsylvania notes. “If you want to get a liver transplant at Cedars-Sinai or the Mayo Clinic, ...


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pp. 305-354


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pp. 355-364

E-ISBN-13: 9780826592323
Print-ISBN-13: 9780826515704

Page Count: 344
Publication Year: 2007