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March 2, 2010

Psilos White Paper – Healthcare Reform and Combatting Rising Healthcare Costs

Please check out a fairly recent (and pretty awesome) white paper written by Al Waxman, Lisa Suennen and Darlene Collins, three of my partners at Psilos Group, titled Cost, Quality and Alignment: A Step-Wise Plan to Reform and Transform Healthcare (published in September, 2009).

The paper was written during the heat of the debate over healthcare reform, last summer, well before either the Senate or the House passed their respective bills.  It was sent to many members of congress (many actually read it) and media editorial boards (many actually wrote about it).

The overall theme of the Waxman et al paper parallels the message I sent a couple of days ago to Senator Patty Murray (D-Washington).  It recommends an incremental approach to healthcare reform designed to achieve the following goals over the next 10 years:

1.  Reduce overall healthcare inflation to 3%

2.  Enable universal access

3.  End prior condition refusals for insurance and policy cancellation for sick people.

4.  Extend solvency of the Medicare Trust Fund beyond 2017

5.  Reduce medical errors

6.  Improve the US healthcare quality ranking from #35 in the world to #5.

7.  Stimulate investment in new healthcare technologies that improve healthcare quality and lower costs

As a practical solution the current versions of the Senate and House bills (and Obama’s slightly abridged plan) have serious problems in that we don’t know the cost effect of many of the individual provisions let alone whether as a whole either bill will rein in healthcare costs (in the state of Massachusetts, universal care seems to have had no impact on rising costs).  They (the Congress) seem to be attempting to solve all of the problems in the system with one fell legislative swoop with little or no proof that their ideas will lower medical inflation.  As I discussed in my previous post, healthcare reform is not financially viable without successfully reducing healthcare costs and inflation.

Logically, the Psilos team recommends an immediate focus on cost reduction that, if successful, would yield much of the long-term financial capital necessary for expanding access (read: health insurance for the 47 million uninsured in the US).  Note that they are not just offering ideas, but proven solutions.  Among others, they note the following areas as low hanging fruit:

1.  Management of the chronically ill, particularly those in Medicare (could yield $750 billion in savings over 10 years)


2.  Deployment of technology to eliminate hospital-based errors (recall my prior post on Atul Gawande and checklists, one such error reduction program), which could yield $7-$10 billion annually to Medicare

More advanced programs that could improve costs include:

1.  Performance-based reimbursement for providers

2.  Financial incentives for individuals to lead healthier lifestyles

3.  Deployment of Personal Health Records and individual patient information for real-time point-of-care access

Obviouisly there is much to discuss here, including the young companies that are developing the technologies and programs that make these ideas work.  In the meantime, my colleagues’ white paper, a truly non-partisan view of the healthcare crisis and reform is extremely informative as to what’s possible in the ongoing effort to control runaway healthcare costs.


February 24, 2010

Email from Senator Patty Murray – Re: Healthcare Reform

Filed under: Healthcare — Steve Krupa @ 8:53 pm
Tags: , ,

Today I received the following email (see below, abridged ever so slightly) from Patty Murray, incumbent Senator from Washington State, serving her third term:

 “Dear Stephen (note:  she calls me Stephen, since that’s the name I use on the credit card I used to contribute to President Obama’s presidential campaign):

 Tomorrow, I’ll be attending the White House bipartisan summit on health care reform hosted by President Obama.

This forum, bringing together congressional leaders from both parties, will provide an opportunity to have an open and honest dialogue about what we must do to reform our health care system — this year….

As families continue to face double-digit premium increases, lost or reduced care due to unemployment, and decreased access to care, I will continue to fight to ensure that health care reform addresses these priorities.

I’m committed to protecting health insurance where it’s good, improving it where it’s not, and ensuring quality care for the millions who don’t have it at all — while preserving your choice of doctor, treatments, and insurance plans throughout it all.

Getting health care reform passed this year is not just about compassion — it’s about economic common sense.

But I want to hear from you, too. What do you think we should do about health care reform?

Some critics say we can’t afford to tackle health care reform. I say we can’t afford not to.

That’s going to be my main message in tomorrow’s summit — but I want to make sure I take your views with me, too.

Thanks in advance for letting me know what you think.


Patty Murray
U.S. Senator

She’s sounds very committed to healthcare reform, and genuinely sincere about wanting to help.  I also noted that she is running for re-election this year, so I thought I would take her up on her offer to let her know what I think, and wrote back the following: 

 “I believe both of the bills (from the house and the senate) are too extreme and loaded with expensive and unproven ideas.  While I support the idea of universal health insurance in the long-run, I am opposed to such a sudden, massive overhaul.  I would encourage a rewrite of the current bill that started off focused on measuring and reducing cost and improving quality in the current healthcare system.  After these concepts are proven then I would support using ongoing savings in the system to subsidize expansion of health insurance.  This is the logical, pragmatic approach, particularly given the size of our national debt and budget shortfall.  We should learn how to save money now to finance expanded coverage in the years to come.”

(Btw, you too can click on this or the above link (for the time being) and let Sen. Murray know what you think too – if you do, copy me too, please.)

I wonder whether she, or any other politician for that matter, believes that it’s possible to save costs in the healthcare system.  If they do, why don’t they prove it to us first, before making such a massive financial committment?

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