William M Sage is Vice Provost for Health Affairs and James R. Dougherty Chair for Faculty Excellence at the University of Texas School of Law.
Lester Feder: What do you think are the most interesting aspects of the health reform legislation that we’re still trying to make sense of?
William Sage: Where should one start? I worked in the Clinton White House in early 1993, and can’t help but think about this reform effort in light of that one. I began teaching law a couple of years later, so my academic career tracks the intervening period of health policy, especially the rise and fall of managed care.
I think the legislation is very good about asserting its priorities. The law’s table of contents provides a nice road map: Title I says we’re going to reform private health insurance markets so that almost everyone is insurable at a reasonable price. Title II says we’re going to extend public programs for people who still can’t afford coverage, largely though Medicaid. Title III says we need to reform health care delivery, Title IV says we need to keep people healthier through public health and prevention, and Title V—which I think is absolutely essential—is about the workforce that will assure access, reduce the cost of services, and improve health. That’s a very good set of priorities that I completely agree with.
But tensions are also apparent. If you’re going to make almost everybody insurable, you’re going to have to include almost everybody in the system. I don’t think the legislation is clear enough about social solidarity, which is essential if we are going to put ourselves into what is essentially one giant insurance pool, or about the mechanics of risk-pooling in state-based exchanges, which are tentative because proponents were nervous about federalism and about suggesting that people might have to change existing coverage. To me, the insurance exchanges are insufficiently specified, and I worry about implementation.
Lester Feder: Implementation can now be done well or not well. What are you hoping to see from the administration as it writes the rules?
William Sage: I am very encouraged by how much effort the administration seems to be putting into the insurance exchanges, both in its outreach to the states and in creating a useable web interface for people to compare insurance options.
However, I keep coming back to the lack of solidarity that seems to exist around the collective importance of health reform—this worries me. I don’t feel that individual shopping tools convey a message that health reform was a national decision and we now have to think of ourselves as committed to a national project.
I also find myself thinking about the old joke where the English are the cooks and the Germans are the lovers: I worry that we’re taking some expertise that has resided at the state level and trying to recreate it quickly at the federal level. We may not be matching skills to tasks as well as we could.
Lester Feder: I’m interested in what you say about “social solidarity.” Are you saying that while there may be a market infrastructure in place, as individuals see premiums go up or become concerned about the quality of their individual care, that bigger question about whether some people are subsidizing others have not been adequately settled through the political process and could return to undermine the system?
William Sage: I think solidarity operates at a lot of levels and connects the discussion of insurance reform to the discussion of delivery system reform. We’re still engaging the health reform problem as, “What is care going to look like between me and my doctor. What is financing going to look like between me and my insurance exchange or my employer?” There’s a very big gap between making the health care system work for those individual transactions and making it work for society as a whole.
Lester Feder: How could that have been done differently and how can that be dealt with by during implementation?
William Sage: Keep your eye on your ball. Policymakers understand that the fiscal calculation of front-loaded costs and back-loaded benefits makes the reform politically vulnerable. People need some immediate relief, which the law provides through high-risk pools and reductions in medical underwriting. But they also need patriotic reasons to wait until 2014 for the full upsides.
At several junctures in history we have succeeded in creating collective mobilization connected to health, Medicare for the elderly generations that brought us through two World Wars and the Great Depressions being an example. But I don’t think we’ve taken that on here because we’ve been afraid of the politics of “government takeovers,” “socialized medicine,” and “death panels.” These concerns have also made the delivery system reforms much more tentative than I think they should be.
One lesson is not to take the insurance exchanges for granted. Plunge into getting them up and running as soon as possible because there are lots of unsettled issues. The law could have specified many of them, which would have made the new system much more centralized and therefore much more politically contentious. Laying out clearly what will happen and who will be running it would have given me a lot more confidence. I hope some things can be resolved with regulations.
Lester Feder: Are you concerned that the same political caution that led to those kinds of ambiguities in the legislation might carry through the regulatory process?
William Sage: That’s a fair way to put it.
Lester Feder: As somebody who has done a lot of work on malpractice reform, what do you think of the malpractice policies that are in the law?
William Sage: There are two reasons for including malpractice in the legislation. One is as a bipartisan olive branch, and I regret that that doesn’t seem to have been successful. The tort reformers on the Republican side are not just malpractice reformers. They’re a general business tort reform community. Finding common ground between them and traditional Democratic constituencies is very difficult.
The second point is that the malpractice risks are extremely important to physicians, and the extent to which malpractice liability constrains practice innovation is therefore important to take on in legislation. Personally, if I could get a credible commitment from the American medical profession that it would dramatically alter the health care delivery system and adopt a much more cost-effective and effective mode of practice, I’d be willing to abolish the current liability system.
Delivery system reform is what really matters. Making patients safer, improving the quality of care, having services be more accessible and more affordable. Apart from that, malpractice reform is just symbolic.
There are many good ideas for delivery system reform in the Obama administration’s health reform law: medical homes, accountable care organizations, expansions of the primary care workforce. There is even plenty of money thrown at them. This is refreshingly different from the 1993-94 health reform debate, when efforts to convey the importance of delivery system reform were met with puzzlement or hostility. But very little is mandatory and there is no clear vision in the law about how we get the delivery system from where we are to where we want to be.
There are a lot of worried lobbyists out there, whose clients have strong interests in protecting parts of the existing delivery system. I think Americans might have rejected their anti-rationing rhetoric about things like comparative effectiveness research if it hadn’t been for the death panel debate last summer and fall. I was both saddened and amused to read the provision in the Senate bill that said, almost verbatim: “We will have no death panels.” That confirmed for me how hesitant Congress would be about engaging delivery system reform, which was certainly the case in the final law. Again, building social solidarity is important.
Lester Feder: On that thought, are there a few things you’d like to see policy makers do now?
William Sage: I think most experts agree that we need a dramatic effort at Medicare payment reform that continues what happened with prospective payment for hospitals in the 1980s. DRGs were implemented quietly, but reshaped acute care and altered how hospitals relate to physicians. We need another payment revolution, with bundled payment and measurable outcomes finally getting physicians, hospitals, and other providers to work together efficiently.
Finally, I think investing in a broad community-based health workforce is the key to long-term improvement, especially nurses, health educators, and public health workers. There is more than enough money in a $2.5 trillion system to employ these people to keep us healthy and provide our basic care.