The paper contains a summary of an article from the Journal of Clinical Investigation delving on the health care problem faced by the United States. It also includes a personal reaction and analysis on the topic and how the issues were presented and answered in the summarized article.
The Journal of Clinical Investigation reviewed the book, Who killed Health Care?: American’s $2 trillion medical problem–and the consumer given cure by Regina Herzlinger. The author, a respected health care analyst discussed in her book that the death of America’s health care problems arise from various sources such as insurers, hospitals, the government, employers and academicians (Mwachofi, 2008). These societal groups killed the free market competition and have excluded the consumers in decision making that’s why problems in the health field have sprouted like mushrooms.
According to Herzlinger, general hospitals have become “empire builders” and have become inefficient, putting the patients at risk due to the large number of patients that they cater to. She also said that employers are indicted for using pre-tax earnings to buy health insurance that do not satisfy the health needs of the consumers. Their cost-cutting policies do not redound to the consumer’s advantage at all in fact, it even restricts the choices of the consumers. She also said that the Congress and the executive branch are also chargeable for allowing the suppression of free market competition and the academicians for blaming health care failure to greedy doctors who increase their incomes by providing unneeded services. They also undermine the intelligence of the consumer, telling that they cannot make the best choice for their health needs because they cannot comprehend complex related information.
Herzlinger proposes that a consumer driven health care should be developed to solve the health care problems that the country is facing. Through this consumer driven health care, the choice and purchasing power shifts to the consumer forcing the insurers and providers to be more responsive to the needs of the consumers and provide greater benefit for the seriously illed than those who are healthy.
This kind of health care can be developed with the creation of health care focused factories, a system of consumer based medical records—providing a single sum of information for both patients and providers, publicly accessible information on health care prices and the preference of the providers as well as the insurers, and a medical technology personalized to the needs of individual patients.
Herzlinger, however, claimed that consumer driven type of health care will not automatically enhance the efficiency of America’s health care. There will only be an improvement in the quality of health care if the patient knows the level of satisfaction expected from a certain product or service and the patient has sufficient of information to make good choices, among others.
She also said that it is dangerous to downplay the need for proper information in making choices concerning health care because it might lead to worse health outcomes than those thar are already felt with the current system.
The reviewer of the book, however, poses several questions on the feasibility of the proposed solutionof Herzlinger. The author also opines that the consumers should also be blamed for the health care problem of the US because they tolerated its decline. The reviewer believe that citizens have the choice to change the health care system by making their voice matter during elections.
Personal Reaction and Analysis
Through this article, I was able to learn that the government is not the sole culprit with the regard to the health care problem. The crisis that America is facing now is a multi-dimensional problem—everyone plays a share in the decline of the health services and each must also contribute to help solve it or lift it to higher standards.
I think that the first solution to the problem is to have a personal awareness of the issue, its causes and how one can contribute to alleviate the negative effects that it brings. The second step I believe is to make every consumer’s voice on the matter mark in the upcoming elections. Despite the problem being multi-dimensional, I believe that the government plays a great role in finding solutions to it. The health policies as well as the priorities of the candidates can serve as basis in knowing the future of American’s health care.
I think that the information provided in the article carefully addresses the issue because not only one side was taken but all the aspects of society were viewed to be playing a vital role in the rise of the problem.
In addressing an issue, it is important not to look only at one side but to review all parts of it and have a better picture. Although there are questions of the feasibility of the solutions proposed I think it is interesting that a solution to the problem was provided and how these would materialize.
Who killed health care?: America’s $2 trillion medical problem — and the consumer-driven cure
Reviewed by Ari Mwachofi
In Who killed health care? America’s $2 trillion medical problem — and the consumer-driven cure, Harvard Business School professor and respected health care analyst Regina Herzlinger raises fundamental questions about the structure and performance of the U.S. health care system and indicts insurers, hospitals, the government, employers, and academics for “killing” health care.
Herzlinger argues that health care is dead because free market competition has been suppressed and consumers, who should be central to decision-making about their health, are excluded. The solution, proposed by Herzlinger, is “consumer-driven health care” that would serve consumer needs and preferences at lower costs.
The author criticizes health insurers for “just saying no” to provider payments, specialist referrals, and to hospital admissions, without consideration for patient welfare. General hospitals are characterized as “empire builders” that solidify their position through considerable political contributions and suppression of market competition via mergers. Due to their large size and scope, they are inefficient and put patients at risk. Employers are targeted for using employee pre-tax earnings to buy health insurance that does not satisfy consumer needs or preferences and for cost-cutting through restricting consumer choice. Congress and the executive branch are indicted for facilitating suppression of market competition. Academics are criticized for blaming health care failure on “greedy doctors” who increase their incomes by providing unneeded services. Academics are also blamed for underestimating consumer intelligence, claiming that consumers cannot interpret complex health-related information necessary for making the best health care choices. Due to positions taken by these five protagonists, inefficiencies abound in health care, making it a killer.
Herzlinger outlines how consumer-driven health care would transfer choice and purchasing power to consumers, placing them at the center of their health care decision-making. Insurers and providers would be more responsive to consumer needs and preferences; thus demand would change supply. Suggested changes to health care supply include development of health care–focused “factories” that bring specialists and generalists into integrated “stop and shop” systems of care; a system of consumer-based medical records that acts as a single source of information access for both patients and providers; publicly accessible information about health care prices and performance of providers and insurers; risk adjustments that provide insurers and providers greater payment for serving the very sick than for serving the relatively healthy; and medical technology personalized to the needs of individual patients.
Herzlinger presents the problems well, although this reader believes that doctors and American citizens should also be held responsible for tolerating the decline of health care. In a democracy, citizens should exercise their voting rights to protect and improve vital institutions such as health care.
Although consumer choice is central to consumer-driven health care, the author glosses over the fact that health care does not meet the conditions necessary for efficient consumer choice. Economic theory demonstrates that consumer choice enhances efficiency only if (a) individuals know with certainty the level of satisfaction they will obtain from a product or service, (b) they are rational, (c) they have sufficient information to make good choices (i.e., they know what choices are available and the opportunity costs of each choice); and (d) they are the best judges of their own welfare. Health care is fraught with uncertainty. There are uncertainties about incidence of disease, efficacy of treatment, care outcomes, and other variables. Furthermore, health care decisions are often made under pain, fear, and serious time constraints. Health care consumers often do not have sufficient information, and when available it is often too complex for the consumer to decipher sufficiently to make the best choices. More information would not necessarily overcome uncertainty. It is dangerous to downplay the need for proper information in making health care choices because this can lead to worse health outcomes than those observed under the current system.
Some changes suggested by the author raise serious questions. For example, as health care–focused factories scale up, what will keep them from standardization (leading to less responsiveness to every individual consumer need and preference) and from integrating to a degree where they start to resemble current general hospitals? The author suggests that the factories be of a modest scale. What is the size of that modest scale that will exploit economies of size and scope while focusing on the needs of every individual consumer? Will the suggested risk adjustments not create disincentives for well-care and disease prevention?
Despite the many questions raised about the suggested “cure” for the current health care system, this is an interesting and important book. It is a must read for anyone who is interested in improvements in efficiency, quality, and outcomes in the U.S. health care industry. At the very least, it should provoke serious thought and necessary debate on what direction U.S. health care should take.
Mwachofi, A. (2008). Who killed health care?: America’s $2 trillion medical problem — and the consumer-driven cure. The Journal of Clinical Investigation. Retrieved April 9, 2008 from http://www.pubmedcentral.nih.gov/articlerender.fcgi?artid=2171171.