How Do We Cut America’s Healthcare Bill?

Malcolm Gladwell reviews a book that addresses that question, America’s Bitter Pill:

At the end of [the book, Steven] Brill offers his own solution to the health-care crisis. He wants the big regional health-care systems that dominate many metropolitan areas to expand their reach and to assume the function of insuring patients as well. He talks to Jeffrey Romoff, the C.E.O. of the University of Pittsburgh Medical Center, who is about to try this idea in the Pittsburgh area, and becomes convinced that the same model would work throughout the country. “The [hospital’s] insurance company would not only have every incentive to control the doctors’ and hospitals’ costs, but also the means to do so,” he writes. … A system like this, Brill estimates, based on a few back-of-the-envelope calculations, could slice twenty per cent off the private-sector health-care bill.

It’s at moments like this that Brill’s book becomes problematic. The idea he is describing is called integrated managed care. It has been around for more than half a century—most notably in the form of the Kaiser Permanente Group. Almost ten million Americans are insured through Kaiser, treated by Kaiser doctors, and admitted to Kaiser hospitals. Yet Brill has almost nothing to say about Kaiser, aside from a brief, dismissive mention. It’s as if someone were to write a book about how America really needs a high-end electric-car company that sells its products online without being the least curious about Tesla Motors.

In an interview, Brill spells out his primary complaint about Obamacare:

The basic deal that the Obama administration and the Democrats in the Senate had to make was we’ll get more coverage for people. But we’ll get more coverage for people at the same high prices that allow the drug companies to be so profitable, that allow the non-profit hospitals to be so profitable, that allow the device-makers to be so profitable — and that is the result that is Obamacare.

So the good news is this couple I interviewed in Kentucky who hadn’t had access to doctors in years suddenly had access to health care. The bad news is that you and I and all the other taxpayers are paying the same high prices for that health care that dominated and completely screwed up the system in the first place.

He continues that thought in another interview:

It is great that more people are getting health care, but we cannot continue to be a country where health care prices are 40, 50, 60 percent higher than they are in every other country where the health care results are as good, or better, than ours. It’s unsustainable.

So the only ray of hope I have is that if Obamacare will force changes in the cost structure just because there are going to be so many more people buying health care that it will just have to change the cost structure. That was sort of the implicit expectation that Gov. [Mitt] Romney had in Massachusetts, which is if we enact this plan and give more people health care, then when they have it, we’ll see that we have to do something about the cost and we’ll get the political will together to do that. The question is: Does Washington today, tomorrow, next year, in five years, even in the face of daunting health care costs — will they ever be able to summon the political will to do something about it?