Healthcare reform: consumers lead the way: HFMA's employee health insurance costs jumped more than 20 percent in 2004 from the 2003 level. As HFMA's CEO, I had to make difficult decisions regarding benefits, employee cost sharing, and insurance carriers

Healthcare Financial Management, March, 2004 by Richard L. Clarke

I don't like being put into that position--attempting to balance what is best for HFMA's 80 employees versus what is best for HFMA the organization.

And I'm not alone. I recently attended a lunch with Henry Clay Ford, Jr., chairman and CEO of Ford Motor Company. He said the most important challenge facing Ford's leadership is not Toyota or GM or DaimlerChrysler, but the cost of health insurance. I am sure Ford would rather focus on competition than on health benefits.

So what is the answer? Should Americans embrace the notion of government-controlled health delivery and financing such as in the United Kingdom, or a single payer system such as that in Canada? Should government dictate benefits, eligibility, and services to be offered? Given our experience with and distrust of government-run programs, it is unlikely Americans would support such a response.

The solution may rest with all of us. Regina Herzlinger writes in her article "Consumer-Driven Health Care: Freeing Providers to Innovate" in this issue of hfm:

   Under CDHC [consumer-driven health
   care], providers can freely create and price
   their services and consumers can freely
   choose them. CDHC not only enables suppliers
   to innovate but also enables consumers
   to choose the services that best
   meet their needs.

Herzlinger notes that the original Henry Ford would not have innovated the production of inexpensive cars if government dictated the price to be paid, options to be offered, and methods of distribution. She identifies the lessons learned from the failed policies of government-controlled markets in the former USSB and China, and she argues that innovation and value are created when providers have the freedom and incentives to satisfy the needs of their customers and patients.

In 2000, I co-authored a book called Beyond Managed Care: How Consumer and Technology Are Changing the Future of Health Care. That book came to the same conclusion advocated by Dr. Herzlinger: key health decisions, including coverage and cost, are best left to those affected the most by them--the consumer.

Of course, a certain level of regulation is necessary to ensure that information on cost, services available, and quality is reliable and available to consumers. And the system must accommodate a fair distribution of risk, and coverage for those without insurance. But fundamentally, I believe that HFMA's employees are better equipped and motivated to make decisions for themselves than I am. After all, as the CEO of HFMA, what right do I have to dictate to HFMA employees which doctor they can see, or the types of care they can receive? I suspect Henry Clay Ford, Jr., and his great grandfather would agree.