Citizens Healthcare Working Group Consumer Survey

Reforming Our Health Care System Is a Huge Challenge That Requires New Thinking and Creative Solutions:

Many of you may know from first-hand experience what we have been talking about — a health care system troubled by sharply rising costs, unreliable quality, and, for some people, poor access to care. Many people either have no health insurance, or they do not have enough insurance coverage. These problems are complicated and they affect each other.

Lots of new ideas are being explored by governments, businesses, and others. Examples include:

• Creating new state and local programs that expand insurance coverage and at the same time control costs and improve quality and access to care.
• Having employers and employees work together to expand access by holding costs down and getting the right care at a good price.
• Using new health information technology. The goal is to provide more information to providers and patients, improve quality, reduce medical errors, and reduce waste.
• Encouraging people to use less expensive, yet equally effective health care options. For example, people can often use generic drugs instead of more expensive brand-name medications.
• Providing more information to doctors, nurses, hospitals, insurance companies, employers, and consumers about higher quality, more efficient care. One way is to use a type of “report card” to rate the care provided by different types of health plans, hospitals, nursing homes, etc.
• Adjusting payments to doctors, hospitals, or other health care providers based on the quality of care they provide.
• Improving people’s access to care and insurance coverage through a more effective use of current public programs, such as Medicaid, or new programs that will allow more employers to offer coverage.

While some of these ideas may appear promising, not all are being used widely. Some need careful evaluation. Few of them have been easy to do. Some will prove themselves, but others just won’t pan out in our complex health care system. We need lots of ideas. We still have some hard work cut out for ourselves.

Now it’s time to hear from you. You can help shape our health care system in the future — and, hopefully, allow us to create one that works for all Americans.

We need to know about your concerns. We also need your ideas about where we go from here. Let us know what you think.

• What concerns you most about the health care system in America today?
• Our current way of paying for health care includes payments by individuals, employers, and government. Are there any changes you think should be made to this system?
• What trade-offs should the American public be willing to make in either benefits or financing to ensure access to affordable, high-quality health care coverage and services?
• What is your single most important recommendation to make to improve health care for all Americans?
• What health care benefits and services should be provided?
• How should health care be delivered? How should it be paid for?
• What have you seen in America’s health care system that works well?

These are just some of the questions that we need to answer. We’ll be formulating others as we grapple with problems and solutions.

So here’s what to do next:

• Find out more about health care. Keep this booklet handy, so you can refer back to the key facts and issues. Learn more from the free information – a detailed report and slideshow – available online at http://www.citizenshealthcare.gov/.
• Tell us what you think about what works and what does not.

RESPONSES OF BOB COLI, MD TO THE ONLINE CONSUMER SURVEY BY CITIZENSHEALTHCARE.ORG: 1/14/06

What concerns you most about health care in America today?

The government’s long-standing failure to ensure the creation and maintenance of a truly competitive (i.e. “free”)* healthcare marketplace in each state and nationwide.

A slim new book, "Healthy, Wealthy & Wise," by former Bush advisers R. Glenn Hubbard and John F. Cogan, along with Daniel Kessler of the Hoover Institution, argues that "the unintended consequences of a handful of public policies" -- including tax and health-insurance rules -- "are in large part responsible for the problems of the health-care system" because they hinder "the proper functioning of markets." (see next post above)

*A truly competitive or free market is a business governed by the laws of supply and demand, not restrained by government interference, regulation or subsidy. It is a market in which supply and demand is unregulated except by the country's competition policy, and rights in physical and intellectual property are upheld.

A free market economy is one where scarcities are resolved through changes in relative prices rather than through regulation. If a commodity is in short supply relative to the number of people who want to buy it, its price will rise, producers and sellers will make higher profits and production will tend to rise to meet the excess demand.

If the available supply of a commodity is in a glut situation, the price will tend to fall, thereby attracting additional buyers and discouraging producers and sellers from entering the market. In a free market, buyers and sellers come together voluntarily to decide on what products to produce and sell and buy, and how resources such as labor and capital should be used.

A free market can be contrasted with a controlled market, where prices are determined by a regulatory or administrative authority and do not respond flexibly in the face of varying demand and supply conditions. Controlled markets are characterized by rationing, if production falls short of demand, or a buildup of unsold stocks if production exceeds demand.

Our current way of paying for health care includes payments by individuals, employers, and government. Are there any changes you think should be made to this system?

The solution for the escalating cost and quality dilemma for all 297 million Americans, including the approximately 46 million currently without any health insurance coverage, is clearly NOT replacing the current “employment-based and insurance-funded,” health coverage system in the U.S. with universal health coverage based on “single-payer reimbursement and tax-based funding.”

Until someone can convince me that the coercive power of government has or can ever allocate resources better than well-informed individuals with multiple choices using reliable information in a competitive market, I will continue to believe that our intractable uncontrolled costs and variable quality of care are based on a combination of flawed incentives and monopolies ⁽¹⁾, oligopolies ⁽²⁾ and monopsonies ⁽³⁾ doing what they do best---wielding their anti-consumer economic power.

This conclusion is not just based on economic theory. It is solidly based on my personal experiences as a provider of professional healthcare services. Over the last four decades, the evolution of the healthcare industry in Rhode Island has irrefutably demonstrated the substantial value, in terms of cost, quality and access of well-informed consumer choices and lively competition between vendors of both products and services and the adverse effects of their absence.

(1) Exclusive control by one group of the means of producing or selling a commodity or service: “Monopoly frequently … arises from government support or from collusive agreements among individuals” (Milton Friedman).

(2) A market condition in which sellers are so few that the actions of any one of them will materially affect price and have a measurable impact on competitors.

(3) A market situation in which the product or service of several sellers is sought by only one buyer.

What trade-offs do you think the American public is willing to make in either benefits or financing to ensure access to affordable, high quality health care?

If the problem was clearly framed in the mass media as market failure that is based primarily on government's chronic (and bi-partisan) failure to create and maintain a competitive market for all healthcare goods and services, the American public would embrace market-oriented, consumer-driven healthcare reform as much as the do sub-$500 PCs and competing online bids for their auto insurance and mortgage business.

What is your single most important recommendation to make to improve health care for all Americans?

From my perspective as a former physician in private, office-based practice since 1967, the root cause of the escalating prices and quality problems in the $2 trillion United States healthcare industry is the government’s implicit (not readily apparent) failure to create a truly competitive marketplace for healthcare services and products.

A truly competitive market can be hard to achieve in the real world and is non-existent to date in the $2 trillion American healthcare industry because such a market must be based on three specific characteristics:

(1) Consumers of its services and products must have immediate access to perfect information on prices and quality,

(2) No provider of services or products should have enough market share to be able to dictate prices, and

(3) There must be no barriers to market entry or exit.

The core problem with actually achieving this economic textbook definition is that only the federal and state governments can ensure that these characteristics exist and are maintained. And until now, government has failed to do its job, locally, regionally and nationally.

In spite of our extremely dysfunctional healthcare market nationally and in Rhode Island, recent market-oriented reforms at the national level that are being adopted in all of the states could start disrupting the intransigent status quo.

Despite skepticism about “consumer-directed” health benefit plans in some quarters, I believe the infrastructure or “scaffolding” on which a much more competitive healthcare market can be built and maintained is feasible if three important new trends that began in 2003 take hold and achieve widespread long-term success. These are:

(1) Health Savings Account (HSA) consumer-driven health plans (Enacted by Congress in December, 2004. See: http://www.hsainsider.com)

(2) Widespread creation, diffusion and use of Integrated EMRs/PMSs, EHRs/PHRs, interoperable HIEs and ultimately the NHIN (A transferable electronic medical record for every American was first established as a national goal by President Bush’s Director of HHS in July, 2003).

(3) Leveraging physician office and hospital-equipped EMRs/EHRs to transform reimbursement now based primarily on volume with enlightened P4P (Pay-For-Performance) methods.

Fortunately for Rhode Island’s one million citizens, as evidenced by his healthcare reform plans recently published in the Providence Journal and on his Web site, I believe our Governor Don Carcieri supports this market-oriented approach and not the “heavy foot of government solution” to this chronic economic problem that affects all of us sooner or later.