Live From MGMA: Healthcare Reform, MGMA Style

Neither of the healthcare reform plans offered by Senator Barack Obama and Senator John McCain addresses the core problems of the system, William Jessee, MD, president and CEO of the MGMA, said Tuesday.

Although both Senators have proposals—based on differing philosophies and financing methods—for expanding coverage and reshaping healthcare, both are tinkering with the current system when a more comprehensive overhaul is needed, Jessee said. "Real change is not apparent in the healthcare plans of either candidate."

He pointed to the payment system, and the perverse incentives it creates for hospitals and physicians, as the real problem. Keeping people healthy and out of hospitals under the current system reduces income, which is counterproductive, he says.

MGMA did not take a position on which of the candidates' healthcare reform proposals it favors. Instead, Jessee outlined four principles that it will advocate for in any healthcare reform efforts after the new president is elected:

1. Universal coverage is a basic human right. Jessee echoed sentiments expressed by Senator Obama in the second presidential debate, saying all Americans should have access to healthcare.

2. The way we reimburse providers must change. A new payment system must reward physicians for keeping patients healthy, rather than creating incentives for increasing the quantity and complexity of procedures.

3. We can reduce administrative wastes. In 2007, administrative costs accounted for about 30% of healthcare spending—roughly $690 billion. If that could be reduced by 30%, we could afford to purchase coverage for all of the currently uninsured.

4. Financial incentives must be aligned. We can't afford a system where one party profits only when another loses, Jessee said. Incentives must be aligned for patients, providers, and insurers.

The partisan divide and complacency in Washington make such a comprehensive overhaul difficult and unlikely. Jessee encouraged MGMA members to vote and actively lobby for change after the election, and said true reform would take political courage, the wisdom of many people, and a new way of thinking.

Elyas Bakhtiari is a managing editor with HealthLeaders Media. He can be reached at ebakhtiari@healthleadersmedia.com.