Reform should begin in our communities - health care reform - Perspective

Business & Health, Jan, 1993 by Sean Sullivan

Some of the people watching the debates on health care reform believe that business buyers of health care should be leading the movement to reshape how medical care is delivered. After all, they are the only major players with both the incentive and collective clout to head off the kind of heavy-handed government intervention that could turn one eighth of the American economy into a public utility. This idea should be taken to heart by all purchasers and providers who do not think that health care is like electricity--and don't believe it should be regulated the same way.

Corporate health care buyers must take the lead because government is interested only in controlling its own expenditures--not in making the health care delivery system produce better results. Armed with a growing amount of useful information about the comparative performance of providers, business purchasers are already demanding greater value for their health care dollar--higher quality at a more reasonable cost.

Effective reform of health care-- reform that gets at the causes of rising costs rather than trying to put an artificial lid on them--requires more than just leadership from business purchasers, though. The model for real reform must be community-based. It should enlist the active involvement, rather than the grudging participation, of reform-minded providers who wish to avoid being put in a regulatory strait jacket.

Community health reform

This idea, called community health reform (CHR), is rounded on the simple fact that health care is quintessentially a local industry. Services are produced, used, and paid for locally. Serious reforms must start from this basis, and involve the major players--purchasers, providers, and consumers--in each community in a single-minded effort to improve the local health care delivery system. Only as the delivery of health care is made more cost effective everywhere will the nation slow the growth of costs; it cannot be done by government capping expenditures or controlling prices. CHR occurs from within the system; it is not imposed on the system from the outside.

CHR has been adopted as the mission of the National Business Coalition Forum on Health, an umbrella organization for the more than 50 employer coalitions in communities across the nation. These member coalitions are pursuing CHR on the basis of a clearly stated set of principles:

1) Acting together to buy health care services according to their value, or their quality in relation to their cost;

2) Getting providers involved in building useful information systems for measuring the quality and efficiency of health care delivery;

3) Giving providers strong incentives to improve the value of their services by rewarding them for superior performance;

4) Giving consumers equally strong incentives to choose the providers of demonstrably superior quality and efficiency; and

5) Working with providers to improve the overall health of the community.

By actively pursuing this approach for improving the delivery of health care at the local level in their own communities, the forum's member coalitions are already doing what political advocates of reform are still just talking about. Their collective activity is creating a growing movement that must be taken seriously in the political debate, a movement that is poised to play a key role in transforming the delivery of health care in America.

As employer-led coalitions bring about reform in their communities, their mission will meet with growing acceptance by forward-looldng provider organizations. Market forces already are restructuring health care delivery drastically in competitive locales such as California and Minnesota, and this wave of change will soon be sweeping though other parts of the nation. Leading-edge provider organizations are fusing the power of two dynamic ideas--system integration and continuous quality improvement-to alter the delivery of care radically, making it far more efficient and cost effective. In short, they are improving the value of health care services, to meet the demands of business purchasers.

These provider organizations and the employer coalitions that belong to the forum believe that the best quality health care is also the most cost-effective. Evidence to support this belief is accumulating rapidly, as more providers implement the principles of CQI and total quality management in establising integrated delivery systems. As this model of care meets purchaser demands for greater value, the result will be higher-quality services at a lower cost.

Managed competition

In the debate over health care reform at the national level, the advocates of managed competition have won a rhetorical victory by getting President-elect Clinton to utter these words in characterizing his own approach to reform. Now the battle is on to define what the words will mean when they emerge from the political process. Those who believe that market forces are superior to government edicts in controlling the cost of health care--or anything else-- have to make sure that the emphasis is on "competition" rather than on "managed," to avoid turning the whole idea into an oxyrnoron.