ObamaCare Allows Easy Wrong To Trump Harder Right

President Obama wants to eliminate health care waste by expanding the present cause of waste through a public option: squeezing provider payments. He calls this taking the “harder right over the easier wrong.” Reform is supposed to improve or correct what is corrupt or defective which is government’s squeezing provider payment system. Described by the Executive Office of the President Council of Economic Advisers (CEA) as not rewarding higher quality and value, but does reward poor quality. In other words, government underpays excellence and uses the savings to pay for failure. A fifth grader would call this the “easier wrong” and reverse the incentives. But somehow a common sense solution is lost on the Democrats that divert blame to market failures and provider inefficiencies as the cause of the nation’s health care crisis.

Squeezing has been in place since 1983 when the Center for Medicare and Medicaid Services (CMS) introduced diagnosis related groups (DRGs) hoping revenue pain wou ld encourage efficiency gains. Even with the addition of the Medicare Payment Advisory Commission (MedPAC) pain-for-efficiency-gain strategies are failing evidenced by Medicare’s projected bankruptcy in 2019. Not deterred by these failures, the federal government wants more control over individual health care not unlike the long term care industry.

The long term care industry is the second most regulated of all industries. For decades, government injected “best practice” and preventive care mandates, squeezed provider payments, imprisonment and fines legislation, annual and unannounced inspections, hot lines for patient abuse, web sites for provider comparison etc. to control costs and quality. Even daily sleeping, eating, smoking, drinking, weight, medication, recreation, etc patterns are regulated. In theory, it is the political left’s utopia presently driving health care reform. In reality it has been a regulated failure because providers are driven to be compliant with mediocrity rather than inspired to pursue excellence.

The “harder right” is to understand how squeezing has corrupted operational efficiencies and then how to inspire the constant pursuit of excellence in operational efficiencies, the rails quality travels to excellence in patient and financial outcomes. Squeezing is never efficient because it limits the costs of inputs without evaluating the processes that impact patient outcomes which adds preventable costs. Whereas pursuing excellence in operational efficiencies eliminates waste in inputs while continuously evaluating processes to assure outcomes are not compromised adding wasteful costs.

When CMS placed a value on squeezing payments with no equal value on outcomes, most providers adopted the same perverse value system. The focus was surviving the squeeze by cutting inputs including patient care staffs. This created conditions for preventable medical errors cited as inefficiencies in the CEA June 2009 report and major contributors to the quality chasm identified by the Institute of Medicine in 1999.

On May 3, 2001, Janet M. Corrigan of the National Quality Forum before a U.S. Senate committee stated, “I want to emphasize that errors are seldom due to carelessness or lack of trying hard enough on the part of health care professionals. More commonly, errors are caused by faulty systems, processes, and conditions that lead people to make mistakes.” Ms. Corrigan describes the organized chaos caused by government squeezing. Few transcend this perverse value system the “hard right” way and there lays the problem and the solution.

Intermountain Healthcare in Utah in 2003 made news for being punished by Medicare $700 per patient when pursuing excellence while being nicely rewarded for failing. Intermountain’s res ponse reflects what all health systems do to survive the punishment of squeezed payments: inflate charges paid by private insurers. What each does with the recouped funds separates efficient from inefficient behavior cited by the CEA.

Enlightened leadership, like Intermountain, takes the less traveled path of investing subsidies into the constant pursuit of operational efficiencies resulting in costs 33% less than national averages while achieving a quality driven culture. Mayo Clinic also takes the enlightened path saving 25% while being the second most quality driven health care system in the U.S. Yet, Mayo has cautioned the “easy wrong” way of universal squeezing would eliminate private insurer subsidies and the nation’s best providers. Is anyone listening with the courage to act?

Unenlightened leadership uses subsidies to reward the status quo’s insatiable cost of operational inefficiencies which is never sufficient making new revenue sources a constant pursuit. These sources can be high cost, low-value treatments or care in the least cost-effective manner cited by the CEA as inefficient. By diverting blame on these symptoms of squeezing, the CEA allows the president to hail squeezing as the solution.

Unfortunately, the inefficient status quo quickly shrinks these margins forcing leadership to be on the continuous pursuit for new high margin services rather than operational efficiencies. The CEA calls this “a strong financial incentive to compete on the basis of technology adoption rather than price.” When in reality, it is not competition that always benefits the community, but rather a perverted twist to competition where providers race to be first with a new high margin service to cover their costs of inefficiencies and squeezing losses.

If CMS had focused on patient outcomes in 1983, it would have implemented a payment system that paid for excellence and never preventable medical errors while utilizing best practices in operational efficiencies as a basis to developing payment schedules. This would have given providers the financial resources and incentive to be innovative in the constant pursuit of operational efficiencies leading to a quality driven culture with minimal waste.
If reform inspired providers rather than making it harder to pursue the operational efficiencies levels of Intermountain and Mayo, the nation would save $625-$825 billion of the $2.5 trillion spent annually allowing health care reform to be measurable, sustainable, universal, and self-funding with no new taxes or rationing.

In 2006, North Carolina Medicaid reversed its perverse payment system and paid all physicians more for excell ence and inspired health care professionals saved the state 11% over 2005 when physician payments were squeezed. The American Academy of Family Physicians reported that this pay-now-save-immediately policy gave physicians the financial resources to better manage and coordinate patient care on an ongoing basis resulting in fewer ER visits and hospitalizations reducing unnecessary medical costs. Immediate savings, inspired physicians, improved patient access; are not these reform goals?

Adam Smith, moral philosopher and free market theorist, hypothesized that the “invisible hand” of “self-interest promotes the interest of society only when the producer responds to the needs of the customer.” When Mayo and Intermountain’s act of “self-interest” is to serve society with excellent care and government squeezing makes it financially destructive jeopardizing the needs of the patient; then government is perverting the “invisible hand” theory and is responsible for a failed health care market. Not the providers who are forced to accept squeezing and “competing” private insurers that are forced to accept provider losses from government squeezing that the Democrats w hat us to believe.

The “easier wrong” is a public option universally squeezing payments the primary cause of an inefficient, quality challenged health care delivery system. The “hard right” is to increase best providers by paying health care professionals for excellence and never preventable failure so they have the resources and incentives to be in the constant pursuit of the most efficient, delivery of quality, universal, integrated care. The “harder right” inspires providers to sacrifice waste to pay the way and the “easier wrong” sacrifices patient care and provider freedom while increasing taxes. Which will Congress choose?