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More RXes Needed for Nation’s Ailing Health Care System

Health care reform is moving rapidly toward action, with both chambers of Congress deeply engaged and a substantial amount of interaction within and across committees, and with President Barack Obama becoming much more directly involved. The main focus, and the controversies, have centered on the insurance system — how to cover everybody, how to pay for covering everybody, whether there is a public plan to compete with private plans, and so on.

[IMGCAP(1)]These are huge and important problems. But they are not the only questions to address in the health care arena. Below are a few thoughts coming from a nonspecialist who has watched the health system for a long time.

• Delivering Services Is as Important as Providing Coverage. Imagine you are a single mother working as a waitress. All of a sudden, thanks to reform, you get insurance for your child when she comes down with an ear infection. But you still have to take the kid to the pediatrician, and probably spend half a day waiting for her to be seen and treated. That half day probably means your pay will be docked — or even that you lose your job.

When my kids were young, my wife or I did the pediatrician duty at ear infection or checkup time; as professionals, we could arrange our schedules to make it work. That is simply not possible for a lot of working poor people.

What to do? We need serious innovation on the health care delivery front. A sharp expansion of community health centers will help. But what we really need is things like mobile vans delivering basic health services in poorer areas, more use of walk-in clinics, and an expansion of the number and role of school nurses. A reform bill needs to address these issues, and the broader questions of how to make the delivery of health care accessible to people and more affordable to the system. That of course includes the kind of preventive care that the uninsured (and many insured) do not get now.

• Integrating Patient Care Is a Key to Better Health and Lower Costs. Among the advantages one sees in impressive places like Kaiser Permanente is the integration of care among primary care physicians, specialists and other care providers (like physical therapists, for example).

As I watched my in-laws get older, seeing that their doctors were each separate planets in an unconnected solar system — none knowing what the other physicians were seeing and doing, a requirement of Herculean effort to get information about their ailments and treatments available to all treating them — opened my eyes to the costs to the patient and the system of this atomization. That separate diseases or ailments might be interrelated, and the diagnoses or treatments adjusted accordingly, was either not considered or if it was, nearly impossible to do.

Eventually, health information technology might be able to solve, or at least ameliorate, many aspects of this problem. Some individual insurers or plans, like Mayo, do this. But it should not be left to the individual insurers; incentives to provide integration of care should be built into the system. The savings might not come immediately, as Medicare pilot projects suggest, but they will come.

• There Are Innovative Ways to Change Incentives and to Cut Costs. For the past year, I have been on the board of a mid-size biopharmaceutical company based in Belgium that specializes in treating horrible diseases like epilepsy and Crohn’s. This is my first experience in this area, and I have learned a few things from being on the inside.

One is the crazy and counterproductive way the patent system operates in the drug area. A new drug has a fixed period of exclusivity before others can enter the market with generics. That is sensible — except for the way the system actually operates. Once the clock starts ticking for a new drug, it keeps ticking no matter what. So if there is a question raised by the Food and Drug Administration about a drug’s efficacy, or about anything else, the drug may be delayed coming to market or withdrawn for a period of time.

Of course, questions should be answered before putting or keeping drugs on the market. But each delay, whether caused by serious issues, a small question in trials, a production issue, or the whim of a regulator, costs the manufacturer precious time off the limited period of exclusivity. The delays can often be many months or even years, with huge revenue implications for the drugmakers. This means real uncertainty for drug companies, and that uncertainty is factored into the pricing of all drugs.

So why not a simple new bargain between the government and the pharmaceutical companies? Stop the clock for a timeout when a drug is delayed from market or withdrawn until questions are answered. Give the manufacturers a certainty about the actual period when they can sell their drugs under patent — it may not be a continuous period, but it will be for X years. And in return get a guarantee of lower prices, with concrete steps taken to implement the price reductions. I am not a patent expert, nor, even with a limited period on a board, a pharma expert. But this sure seems to me like a win-win.

Here is another idea. Some pharma companies have worked out arrangements with insurers that are outcomes-based. If your drug brings the efficacy promised with our patients, we will reward you with easy access among our population for your drug, and maybe with a financial reward. But if the outcomes don’t meet the pledges or projections, you have to pay for a portion of the treatment — say, paying to fix broken bones if an osteoporosis drug doesn’t work as promised. How can we move this kind of system from one applied intermittently to one that is routinized?

I have written about some other ideas before, including a thorough scrubbing of Medicare rules that often have bizarre or twisted logic and end up costing a bundle long-term (in places like the coverage of kidney transplant recipients as opposed to those on dialysis). There are many more ways of taking best practices and innovations and applying them or incentivizing them across the board that need to be built into reform. Solving the insurance problem is the biggest key to making reform work, but it is far from the only one.

Norman Ornstein is a resident scholar at the American Enterprise Institute.

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