A Review of a Health Care Plan

I just finished reading the book by Harold Luft proposing another health care plan, entitled, Total Cure (Harvard University Press, Cambridge, 2008). I was drawn to this book by a review in the New England Journal of Medicine (360: 5 pp547-549, March 2009) which somewhat praised the book.

However upon reading it one sees a rambling style of pedantic text that leads nowhere. Let me clarify:

1. The author structures the book about what he calls his SecureChoice. The Plan basically takes health care and breaks it into two types: (i) major acute and major chronic and (ii) everything else.

2. The author states that universal care is essential as a given and that his proposed plan is the way to achieve it.

3. The author proposes amongst others that a Federal Reserve type structure be established to provide for the distribution of the universal essential services.

4. The author suggests the restructuring of the payments into a fee for intervention for the major acute and major chronic issues and a fee for service for most others.

5. The fee for intervention assumes that there are medical teams which group together and do, say cardiac catheterization under the rubric of a hospital. He in effect places the hospital as the arbiter. He also in effect removes from the patient the choice of the team elements. You get what the hospital has contracted with.

6. His proposal would require a massive restructuring of all health care as we know it today.

Now let me look at some details that are missing:

1. The book is based upon a de minimis number of facts. It reads like an op-ed piece but it drones on forever. It is often quite difficult to see where the author is going.

2. The author is purportedly an economist and he seems to neglect the economics of the problem. As most economists strangely do, the modulation of demand is never considered in the analysis of health care. They all assume that the demand for healthcare is inelastic. That is, the health care services are truly price independent to the consumer, the patient or future patient. We know that to be blatantly false.

For example, as we increased taxes on cigarettes we have seen almost a 50% reduction in lung cancer among men. Thus there can be a market effect which can be useful in reducing demand. This can be extended to Type 2 Diabetes if one does as Gov Patterson of New York suggests and tax carbs. Obesity is the major cause of all Type 2 Diabetes and reducing the Body Mass Index below 22.5 eliminates the disease in over 90% of the cases. No drugs, no secondary diseases, no treatment, the reduction of BMI takes away the overload on blood sugar. This alone would save 10% of the current expenditures in health care in the US.

Then there are remediable diseases which by screening can also see their costs dropped by 50%. Screening for colon, breast, prostate, and similar cancers, means that we can, including screening costs, reduce the total cost burden for treatment of that specific disease from the current 12% of health care costs to 6%. Then we can address the cost equation or the supply curve; namely improving billing, using EMR, managing nosocomial infections, reducing diagnosis errors and the like. Treat the health care delivery as a process as one would do in any production or manufacturing industry, drive out costs and improve quality.

Imagine if semiconductors were managed like health care; costly, unreliable, and the list would go on. The author totally disregards these issues as he invents his plan.

3. The Hillary Health Care Plan of the early 1990s was also a centralized control plan and we saw where that went.

Now let me deal with several specifics:

1. On p 48 he begins with assumptions. Again one must ask what the basis for these assumptions is. Are they observations, anecdotal, or is there substantial basis as to where they are coming from.

2. Page 55 then goes into design principles which suffer from the same things as the assumptions.

3. On p 61 he states that once someone has diabetes or cancer they always will. That is factually incorrect. This type of factual error pops up from time to time.

4. Throughout the book, say from pp 81 onwards, the acronyms he invents as neologisms become highly distracting. There is the UCP, PI, PCP, CDT, DRG, CIM, and on and on. Some are well understood terms of art such as DRG but the others overpower the reader. The best one is MOOP on p. 123 which is money out of pocket, instead of out of pocket payments.

5. On p 92 he commences his discussion of the role of the hospital as the linchpin in delivering the care to major events. There are many issues here and as one looks at hospital managements they are anything but sterling.

6. Finally on p. 155 he establishes ex-cathedra that health care is a right and that some form of taxation should be the way to provide it. As we discussed above this we know is rant with issues.

Finally one may ask why all of the proposers of these plans like Luft make several what I would consider fatal flaws in assumptions. They are:

1. The past is prologue to the future and in fact the future is a direct continuation of the past. This may very well not be the case here. With the explosion of genetic screening, diagnosis, staging, treatment, and prevention one would see the role of the physician as the genetic controller of disease as becoming paramount and one would hope the position of the hospital is for those which we have not yet understood. The problem with most of the health care proposals is that they delimit the future and plan as if nothing will change.

2. The development of a change architecture depends upon one's world view and this per Kuhn is contingent upon the paradigms which create our understandings. The Luft paradigms are in middle 20th Century medicine and are thus directed at how one pays for "it" and never questions what "it" may be evolving to, and even more so, how can we get "it" to evolve better.

Thus Luft sits between Porter's recent restatement of Strategy, Redefining Health Care, and Cutler's, Your Money or Your Life, which in ways appears as a paean on Hillary Health.

As we have been arguing, the first step is to understand how to control demand, for it can truly be done, and then how to control costs, since we have one of the last medieval guilds around, and then figure out how to pay for it. We always seem to want to do it backwards, perhaps out of just plain lack of any real world experience on the part of the promoters.