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Originally published Sunday, August 2, 2009 at 12:00 AM

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Guest columnist

The solution for GM and Chrysler might be good medicine for U.S. health care system

What was the solution for GM and Chrysler could be the solution for American's health-care system, writes Scott Barnhart, a professor of Medicine and Public Health, University of Washington. Make system stakeholders enter the equivalent of bankruptcy and tackle cost control.

Special to The Times

AN epidemic of cold feet is about to lay low efforts to achieve health-care reform.

Why? Because real reform of health care — reform that includes cost control — is unacceptable to health-care stakeholders who earn profits and income from the current system. Should President Obama roll the dice and declare the current system of medical care bankrupt? He holds the power to so do if he chooses.

He forced GM and Chrysler into bankruptcy when attempts to bring the stakeholders to the table failed as the parties held out for better deals. Bankruptcy offered the crucible and incubator for GM and Chrysler to remake themselves and emerge viable. A similar crucible is needed now for health-care reform.

The federal government directly or indirectly pays for nearly 50 percent of all medical care. Of course none of the medical-care stakeholders would have to participate in the equivalency of a bankruptcy proceeding, but the sheer size of government purchasing and regulatory power leaves stakeholders no real choice.

Is medical care at a place where reform must be forced? Yes. Like GM's and Chrysler's cars, only worse. Current health care is 50 to 100 percent more expensive than in other industrialized countries. This represents $600 million to $1.2 trillion expended annually above what our global health-care competitors spend.

Viewed in another way, medical care is too expensive by $2,000 to $4,000 per year, per person. Like GM and Chrysler, the quality of U.S. health care is fair to good. Like GM and Chrysler, the design features that consumers want are lagging compared to other health systems.

Just try and find a primary-care doctor? They can hardly be found, without purchasing an "upgrade package" such as medical concierge services. Truth be told, we don't have a health system driven to improve health outcomes. We do have a medical-care free market where competition is directed at economic growth, not improved health outcomes.

What about the stakeholders — patients, doctors, hospitals and drug, medical device and insurance companies? Patients, insured and uninsured, are going bankrupt if they get sick. For doctors, hospitals, drug, medical device and insurance companies, this is the golden age except for those who take care of the uninsured and underinsured or who provide primary care. Other than patients, stakeholders have little to gain and everything to lose by coming to the table.

Medical-care bankruptcy linked to a plan to emerge as a functional, efficient, effective health-care system is really the only approach that can force change, that favors patients. How might this work?

First, President Obama must control costs and use this lever to force change. He should mandate stakeholders enter the crucible of a medical-care equivalent of bankruptcy court. He can do this simply by stating he will veto all federal appropriations for health care after Jan. 1, 2010, that fail to meet these three criteria:

• Total payments for medical care in calendar years 2011-2015 are capped at a level no greater than expended in 2008 or $2.4 trillion;

• Universal access will be provided to all residents so long as patients seeking to benefit from any direct or indirect federal funding (including tax-deferred employer-sponsored benefits) join an integrated delivery system.

• Integrated delivery systems must provide a minimum set of benefits, must meet progress toward quality targets and must provide these services for a fixed actuarially risk-adjusted per-capita rate.

Capping expenditures for five years with no hope of inflation will create formidable pressure for medical-delivery stakeholders to restructure. A five-year cap will realign service delivery and cost structures to be more globally competitive.

Universal access doesn't require more funding, as proposed by the president. Controlling costs opens the door to addressing funding mechanisms in a sustainable manner. There already exists $2,000 to $ 4,000 of excess funding per person to support redesign and more equitable access to high-quality care. Medical care won't fall off a cliff with that cushion!

Why choose integrated delivery systems (IDS)? For a cap on expenditures to work we must all be in the same lifeboat with a governance system to provide for evidence-based, rational, fair apportionment of resources.

IDS organizations such as Kaiser Permanente and Group Health Cooperative, insurance plans that deliver care, and the Veterans Health Administration, a government-based single payer, are efficient, fair and above average in patient satisfaction and quality when compared with other models.

Yes, well-insured patients would lose unfettered access, but best evidence is health outcomes and satisfaction would improve.

Trading off access for a diminishing few is equitable, however, as this access is largely paid for by public funds through Medicare or tax-deferred dollars. An IDS, unlike a menagerie of providers, can be held accountable to advance quality and manage costs. Linking IDS targets to public-health goals also provides a path forward to improve population health.

Medical bankruptcy isn't failure. It is an opportunity to implement a deliberate strategy that puts patients first and prevents the further breakdown of the medical-care system. The choice is who goes bankrupt — patients or the medical-care system? Medical bankruptcy is a path to turn medical care truly into health care.

Scott Barnhart, M.D., MPH, is a professor of Medicine and Public Health, University of Washington, and former medical director of Harborview Medical Center, a safety-net hospital in Seattle.

Copyright © 2009 The Seattle Times Company

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