Letter to the Massachusetts Legislature

Dear Massachusetts Legislators -

This fall you will be considering whether to put the Payment Reform Commission's recommendations for moving health care to a system of global budgets into law. (See my post from July 17 for the story.) This is an opportunity we should seize. If we do, we'll rescue our own health care reform process and we'll help the national reform dialogue get real about controlling runaway costs. Here are some of the key reasons for supporting the Commission's recommendations:

1. Cost control. President Obama has told the U.S. public that containing runaway health costs is a moral imperative. We're starting to understand that health care costs are strangling the economy and way out of line with what other countries spend for equal or better results. Cost containment will not happen without true budgets for health care. There is simply no other way.

2. Mature discipline. Learning to live within our means is a key element of becoming a responsible adult. The recession we're in is teaching us a lesson we should have learned in growing up - no matter how many credit cards we have, there's no free lunch! Budgets for health care reward us (patients, the public and the medical community) for using our brainpower to live within the means that society decides to allocate to health care.

3. Reduced waste. Over the years I've asked colleagues I respect most in every medical discipline how much could be saved without loss of quality if they were in charge of their area of medicine. No one ever said less than 25% and a good number said 50%. Research supports the idea that we can remove at least 30% of what we spend on medical care without impairing outcomes.

4. Improved quality. Our fee-for-service system was exactly right in the horse and buggy era, when health care consisted of solo physicians prescribing nostrums for their patients. But it's ideally unsuited to an era that requires coordination among individuals and institutions. Fee-for-service payment penalizes physicians for spending time communicating with colleagues, families, and social agencies. Global budgets encourage these activities. Wider communication and better coordination = improved quality.

When you take up the Payment Reform Commission's recommendations you will hear from genuinely concerned constituents and self-interested fear mongers. Here are some suggestions on how to respond.

1. "This means rationing!" Of course you understand that rationing happens now and, in the sense of allocating our limited funds wisely to multiple good uses, is an ethical requirement, not an abomination. But it will take presidential leadership and time to move public understanding. Given that for now the "R" word is a debate-stopper, you should say that global budgeting is the best way to avoid the necessity of rationing. Cost containment should start by (a) eliminating interventions that are not needed but can cause harm (as by side effects) and (b) substituting equally effective but less costly interventions, such as generics for branded drugs, or prudent watchful waiting for doing a costly test today. The more we do (a) and (b) the less we'll need to do (c) ration - in the sense of deliberately choosing not to provide an intervention likely to be beneficial.

2. "Doctors will earn more by withholding care!" This fear could be real if physicians are allowed to keep large amounts of unspent funds as income. It's OK to point out that fee-for-service payment rewards us for how much we do, even if it's not the right thing. But arguing "fee-for-service is just as bad as capitation" isn't the way to go. You should build into the legislation that unspent funds should primarily be used for innovation and practice enhancement. The public will trust variation in income that's driven by solid quality and patient satisfaction measures, but not variation that tracks with budget alone.

3. "Global budgets let doctors decide everything - what about the idea that patients should be consumers?" Patients should be central to shaping their health care. The key pathway to achieving this is strong partnerships with their clinicians. Collaboration with patients is mainstream medical ethics in the U.S. now - fee-for-service payment isn't required to bring it about. And, legislation can require the accountable medical organizations that it calls for to include patients at the level of the organizations' boards or in advisory committees.

4. "Global budgets will stifle research and innovation!" Global budgets will encourage health care providers to be more hard nosed about the claims of new products. That won't stifle good research. It will, and should, discourage the rampant development of "me too" products that we see today - such as tweaked "new and improved" molecules that miraculously appear just as the parent drug is going off patent. Encouraging our drug and device industry to to invest in products that will achieve the best results at the lowest cost is all to the good.

Massachusetts can take pride in our superb health care assets - schools, hospitals, clinicians, medical groups, researchers, policy mavens, and entrepreneurs. You and the governor have a once in a lifetime chance to draw on our tremendous strengths to catalyze a transformation of our health system. Seize the opportunity!