The media are abuzz with some radical—and scary—ideas from David Goldhill, a new voice in healthcare who believes his solutions can stifle our out-of-control spending and quality woes.
You may have seen his name on a New York Times opinion piece last Sunday, and a week ago, he even scored a six-minute segment on The Colbert Report.
Goldhill says he's figured out what's wrong with our healthcare system and what is needed to fix it after watching a hospital botch his late father's care with a hospital-acquired infection. He's written it all up in a book: Catastrophic Care: How American Health Care Killed My Father.
Goldhill is not a doctor, a politician, or think tank policy wonk. Rather he is president and CEO of GSN, a cable game show entertainment network delivered to 80 million households, which pays health premiums for 300 employees.
We talked and sometimes argued by phone for an hour last week.
I can't disagree with his passionate assessment of all that's wrong in the healthcare system: Yes, prices are out of control, yes, we waste money with unnecessary care that causes harm, and yes, federal and private payer bureaucracies are inefficient and obfuscatory, and of course, today's fee for service systems have done a lousy job motivating hospitals and doctors to improve quality and safety.
But his solution would spell downright chaos, especially for measuring and reporting on quality processes and outcomes.
Goldhill's remedy for the country's ills comes in two parts. For catastrophic care, what he defines as "crises that are major, rare, and unpredictable," there would be government-run universal coverage, much like homeowner's insurance that pays when your house catches on fire.
For everything else, non-emergent care, preventive health and elective procedures, each person in the country, including seniors or their designated decision makers, might receive a sum of money to spend, say $5,000, or $8,000, like an accumulating health savings account, based on what would ordinarily be spent on healthcare a year anyway.
Or maybe we'd just eliminate the billions in premiums paid by employers and employees from their paychecks, or the Medicare payroll taxes that revert to Uncle Sam. In other words, he wants to take insurance companies, Medicare and Medicaid largely out of the picture.
The idea that Medicare or Medicaid can force higher quality from its qualified providers because it pays them, or that health plans select providers who perform better is lunacy, Goldhill says.
"I would argue that anyone relying on their insurer to pick the right hospital for their specific treatment, is kidding themselves," he says.
In Goldhill's new world, each person would get to spend their thousands the way they wanted directly each year, or save it until they needed it, for services by the providers they wanted. No "surrogates" or middlemen would dictate networks of care to get in the way, Goldhill says.
Only then, when consumers become direct payers for their healthcare, can they have the market force they need to demand accountability and transparency in the quality of the services they receive, he argues. Today, when someone else is paying the bill, consumers don't impose the same level of scrutiny, saying in effect, "if it's paid for, I must need it."
"How do you introduce the type of dynamic accountability and discipline we have in everything else?' he asks. "You do it by forcing providers to chase customers, like they do in every other industry," Goldhill says. "And you take the functions that we now give insurers and Medicare and you give them to people who are actually putting up the money and receiving the service," Goldhill says.
For anyone, especially frail, cognitively impaired seniors who might be perplexed by sales pitches from doctors and hospitals trying to influence their choice of care, and for the confused hoi polloi who aren't even sure what sorts of services they really need, Goldhill explains, "organizations will develop," under a variety of payment models.
"They might say, 'We'll take care of all your care for an annual membership fee,' and there'll be discount clubs and pre-pay clubs. There will be the type of variety of care and payment that we've come to expect in everything else in our lives."
I told him I consider that scenario impossibly confusing, not just for older people with complex health issues and limited thinking skills, but for me as well.
I also think it would be ripe for charlatans who'd take advantage of the gullible and frail. Human nature being what it is, we'd need another entire layer of watchdog bureaucracy to make sure the people who sold these services were qualified to do so. And another layer of enforcement power to stop them from hurting people, hopefully before they've already done harm.
Goldhill argues that "third-party service" report cards would spring up, such as the safety scores produced by the Leapfrog Group, whose board he has joined, to "actually distill information in a form that's of use to consumers" to guide their choice of hospitals and doctors.
But Goldhill forgets that much of this information used by the Leapfrog Group, and most of it used by many other third party companies like U.S. News & World Report or Truven Health Analytics, comes from Medicare claims data, and other hospital reports, and much of it is posted on Hospital Compare.
I noted that the Patient Protection and Affordable Care Act requires that hospitals be penalized for poor outcomes, such as mortality and readmissions, and hospital-acquired conditions like falls, and hospital-acquired infections.
The movement is accelerating, with some 90 measures now posted on the government site, from seven new measures of emergency room speed to whether the hospital overused potentially harmful imaging services.
If Medicare is no longer in the picture paying claims, how will it have the same clout to collect such important information for every hospital across the country so these third party services can use it? Likewise what it learns from quality reporting initiatives about doctors.
But government regulations and Hospital Compare data apparently don't impress Goldhill, who would rather let hospital and physician marketing campaigns, and referrals from satisfied friends and relatives, guide choices.
Providers will not be tamed by accountable care organizations and bundled payments, but will figure schemes to get around them, and prices will continue to soar, he says.
"Let's stop saying, 'let's do it better and smarter and cleverer with a new type of regulation, and here's a new rule that will fix everything,'" he says. "Let's stop kidding ourselves. It's a fundamental structural issue about the incentives in the system. And the incentives in the system are very clear. Like anybody else, providers in healthcare serve their customers. And their customers are the insurance companies and CMS."
He continues, "Only in healthcare do you get away with this high priest nonsense that unaccountable institutions dominated by insiders (which he identifies as CMS and the insurance companies) doing the best for the outsiders (patients) somehow can continually drive improvement. It's absurd. It's disproved by any sort of institution we have doing anything."
I wanted to mention that with a market force like he seems to advocate, we might not hear from the unhappy customers, the ones who might not have done so well or perhaps not even survived, the care they received.
I'm no apologist for Medicare or health plans and have had some coverage battles with private plans myself over the years. But I fear that Goldhill is catching a ride on national momentum of anger and frustration. He's right that the systems need to change. But I don't think his solution is the way to go about it.
Rather, it would make the system far more difficult for patients who may be baffled by myriad claims about necessity, quality and effectiveness, with nowhere to find data to back it up.