Best Care Everywhere

BEST CARE EVERYWHERE….As regular readers may know, Phil Longman thinks the VA model of healthcare is the best around. In the October issue of the Monthly, he takes his admiration to another level, suggesting that the best way to provide healthcare to the 45 million uninsured in America is via — what? I guess you’d call it a franchised version of the VA. Basically, the federal government would offer struggling municipal hospitals a trade: if you adopt the VA’s management guidelines, the government will pay you to care for all those uninsured folks currently jamming up your emergency rooms and driving you bankrupt. Deal?

It’s an interesting idea, but I have some questions. Let’s take this passage first:

How is a supposedly sclerotic government agency with 198,000 employees from five separate unions outperforming the best the private market has to offer? In a word: incentives. Uniquely among U.S. health care providers, the VA has a near-lifetime relationship with its patients. This, in turn, gives it an institutional interest in preventing its patients from getting sick and in managing their long-term chronic illnesses effectively. If the VA doesn’t get its pre-diabetic patients to eat right, exercise, and control their blood sugar, for example, it’s on the hook down the road for the cost of their dialysis, amputations, blindness, and even possible long-term nursing home costs….The VA model is that rarest of health care beasts: one with a perfect alignment of interest between patients and providers.

OK, but the VA has always had these incentives, and until a few years ago the VA sucked. So why didn’t those incentives work in 70s and 80s? International comparisons also call these incentives into question. Britain has a VA-like system, for example, while France and Sweden (and most other countries) have more traditional models like Medicare, in which the state funds healthcare but doesn’t employ everyone directly. But Britain, with the same incentives as the VA, doesn’t do any better than France and Sweden, and in some areas does worse.

So if it’s not the VA’s incentives that really make it tick, what does? Answer: “Since its technology-driven transformation in the 1990s…the VA has emerged as the world leader in electronic medical records — and thus in the development of the evidence-based medicine these records make possible.” Hospitals that joined Longman’s “Vista network” (his name for the VA-like franchise he proposes) would have to install the VA’s electronic medical record software and would “also have to shed acute care beds and specialists and invest in more outpatient clinics.” By doing this they’d provide better care than any current private network and do it at a lower cost.

Wow! But I think I’d want to see some more evidence for this. Everyone from Newt Gingrich to Hillary Clinton sings the praises of electronic medical records, but is their payoff really that big?

In any case, you may be wondering what the point of all this is. Basically it’s the camel’s nose. Longman believes that setting up his Vista network would be relative cheap and relatively nonthreatening (it doesn’t take business away from current insurers since it only covers the currently uninsured), which makes it politically doable. It would be partially funded by the money we currently spend on the poor, and partly by a mandate that everyone be insured. That means lots of young, healthy people without insurance would have to buy into the system. They’d be pissed, Longman acknowledges, but that’s tough. They’d come to like it before long.

In fact, that’s the whole plan: over time, the Vista network would prove itself to be so great that everyone would want in. Employers would clamor to be allowed to join. Private insurers would either shape up or go out of business. Healthcare in America would get both better and cheaper for everyone. And all because the federal government imposed a specific set of regulations on hospitals that serve the poor.

I have to admit that it sounds too good to be true. Would a federal program for the poor ever get funded well enough to become a model for the rest of the industry? Are electronic medical records really that great? Can we ever save serious money as long as the private health insurance industry has us all in its grip?

I don’t know. What I can say is that I’ve been skeptical about some of Longman’s ideas in the past and eventually come around. Maybe I will this time too. Read the whole piece and decide for yourself.