Newt’s six-point health-care reform

posted at 12:55 pm on July 27, 2009 by Ed Morrissey

Barack Obama likes to accuse his critics on health-care reform of proposing nothing in opposition to ObamaCare.  Newt Gingrich and Nancy Desmond run the Center for Health Transformation and have their own response, a six-point plan to reform health care and lower costs, without spending trillions of dollars to do it.  The CHT plan offers some similarities to ObamaCare, and some key differences:

  1. Stop Paying the Crooks. First, we must dramatically reduce healthcare fraud within our current healthcare system. Outright fraud — criminal activity — accounts for as much as 10 percent of all healthcare spending. That is more than $200 billion every year. Medicare alone could account for as much as $40 billion a year. (Read about our latest CHT Press book, Stop Paying the Crooks, edited by Jim Frogue.)
  2. Move from a Paper-based to an Electronic Health System. As it stands now, it is simply impossible to keep up with fraud in a paper-based system. An electronic system would free tens of billions of dollars to be spent on investing on the kind of modern system that will transform healthcare. In addition, it would dramatically increase our ability to eliminate costly medical errors and to accelerate the adoption of new solutions and breakthroughs.
  3. Tax Reform. The savings realized through very deliberately and very systematically eliminating fraud could be used to provide tax incentives and vouchers that would help cover those Americans who currently can’t afford coverage. In addition, we need to expand tax incentives for insurance provided by small employers and the self-employed. Finally, elimination of capital gains taxes for investments in health-solution companies can greatly impact the creation advancement of new solutions that create better health at lower cost.
  4. Create a Health-Based Health System. In essence, we must create a system that focuses on improving individual health. The best way to accomplish this is to find out what solutions are actually working today that save lives and save money and then design public policy to encourage their widespread adoption. For example, according to the Dartmouth Health Atlas, if the 6,000 hospitals in the country provided the same standard of care of the Intermountain or Mayo health clinics, Medicare alone would save 30 percent of total spending every year. We need to make best practices the minimum practice. We need the federal government and other healthcare stakeholders to consistently migrate to best practices that ensure quality, safety and better outcomes.
  5. Reform Our Health Justice System. Currently, the U.S. civil justice system is the most expensive in the world — about double the average cost in virtually every other industrialized nation. But for all of the money spent, our civil justice system neither effectively compensates persons injured from medical negligence nor encourages the elimination of medical errors. Because physicians fear malpractice suits, defensive medicine (redundant, wasteful treatment designed to avoid lawsuits, not treat the patient) has become pervasive. CHT is developing a number of bold health-justice reforms including a “safe harbor” for physicians who followed clinical best practices in the treatment of a patient. Visit CHT’s Health Justice project page to learn more.
  6. Invest in Scientific Research and Breakthroughs. We must accelerate and focus national efforts, re-engineer care delivery, and ultimately prevent diseases such as Alzheimer’s Disease and diabetes which are financially crippling our healthcare system.

Be sure to read it all, but there are a couple of points worth mentioning in this plan.  First, the “safe harbor” provision sounds as though it will take a different approach than Obama’s IMAC in imposing a best-practices policy on the health-care industry in theory, but in practice it amounts to the same thing.  It proposes an Advisory Panel that will create a standard approach to diagnosis and treatment that doctors will have to follow in order to avoid massive penalties; in ObamaCare, it would be suspension of payment, and in CHT, it would be liability to malpractice suits.  Either approach will mean that doctors have to hearken to a small cadre of elites in Washington on individual treatment of patients, a system which assumes that a one-size-fits-all treatment model would work for everyone.  If the specifics of your individual condition mean that approach won’t work, you will need to find a doctor willing to forego payment or assume a big liability risk. It would be better to pursue an overall tort reform that allows people to gain compensation for real losses while eliminating the out-of-control punitive awards that create the defensive approach that wastes so much money in American health care.

That also applies to having the federal government lead the best-practices effort.  It makes it a very small step from a “best practices” advisory group to a federal agency that imposes those decisions on providers.  Call me a skeptic, but the federal government is hardly a model for best practices anyway.  That effort belongs in the free market, which could be incentivized by tax policy.

The emphasis on electronic records as a reform seems exaggerated.  Many providers have long since gone to electronic record-keeping, especially for billing, which is what CHT proposes.  If that has resulted in massive reductions in fraud, we have seen little evidence of it.  It’s not a bad goal to pursue for efficiency, but even then the prospects for significant savings — in relation to the overall costs borne in the health-care system — seem pretty small.

Newt says that Alzheimers and diabetes are crippling our health-care system, which is not quite accurate.  It’s crippling government programs, certainly, and costing a fortune for families.  Aging, however, is the biggest cost driver for Medicare/Medicaid, which is why Alzheimers has become such a problem; the population has skewed older with the baby boomers, and we’re seeing higher rates for both diseases because of the population distribution (for diabetes, only in part).  As people get older, they require more medical care, and so this should not be a big surprise.  We already spend billions of dollars in federal research on a wide range of diseases, notably cardiology, as heart disease is still the biggest cause of death in America. Wiser spending and a better sense of discretion might do better here.

The CHT proposal is very intriguing, and Republicans could incorporate much of it into their own health-care reform offerings.  Some of this seems a little too close to ObamaCare for comfort.


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Comments

This all assumes that the Obamination’s administration and the liberal congress are interested in solutions and bettering America. How cute.

Grafted on July 27, 2009 at 2:25 PM

This all assumes that the Obamination’s administration and the liberal congress are interested in solutions and bettering America. How cute.

Grafted on July 27, 2009 at 2:25 PM

Well, be fair… they are very interested in bettering their particular corner of America.

mankai on July 27, 2009 at 2:30 PM

Newt, no one cares about yours or anybody else’s ideas on health care from the right. Good try though, Sir.

I was going to say they have us by the balls anyway, but we’ve already been castrated.

Dr. ZhivBlago on July 27, 2009 at 2:46 PM

7. Refuse to accept any reform that doesn’t put Congress and everyone in government at all levels on the same plan as the rest of America.

Riposte on July 27, 2009 at 2:47 PM

Stop Paying the Crooks. First, we must dramatically reduce healthcare fraud

Sure why not. Maybe we can make sure nobody speeds too. Fact is in any entity that generates trillions of dollars in income, there will be fraud. The fact it’s only 10% says to me fraud isn’t really a problem.

angryed on July 27, 2009 at 2:52 PM

Why doesn’t Newt just run for congress again? He is an idea man after all. Reinvigorating the lower house with this kind of renewed leadership would be a good thing right? Newt left congress disgraced to say the least but we all know that he isn’t the only one up on the hill with a sketchy past. Step up Newt and do it for your country and help us stop this train wreck named Obama.

Americannodash on July 27, 2009 at 2:53 PM

With a national electronic records system your scenario wouldn’t have happened because your address would be kept in one place and easy to verify its authenticity. You’d also be able to change it so you wouldn’t have to let all your doctors know when you move.

jonknee on July 27, 2009 at 2:01 PM

Nope. My accountant entered my SS# wrong on my tax forms one year and I didn’t catch it. The IRS did and contacted me. However, every couple of years since, I get contacted by the state or the IRS because they still have the old wrong SS# in their computerized system. I fill out the forms to correct it. I triple check my SS# for accuracy x3 before I file my taxes, and two years later, it happens again.

Blake on July 27, 2009 at 2:14 PM

Exactly. It’s not easier to rectify a mistake that’s gone national. It’s harder. How often do we hear about people being erroneously declared dead and the difficulties of correcting it?

As far as doctors preferring electronic records… That’s all well and good. They have a CHOICE in how they manage THEIR BUSINESS, a choice that will not be afforded to them under federal mandate by 2014, a choice that will not be afforded to patients either who crave privacy for the innermost workings of their body.

Murf76 on July 27, 2009 at 2:53 PM

Here’s another example of where electronic records could help – nurses in hospitals work shifts. Doctors come in infrequently. If they could use handheld computers to update your chart then the next shift will be able to see what was done – or not done – and this can drastically cut down on medical errors.

My family doctor is moving to electronic records and I am happy. On my last physical, he recorded everything on a laptop. This cuts down on transcription errors by doctors as well. It is simply bringing medical care into the 21st century.

rockmom on July 27, 2009 at 1:18 PM

As a software architect at a consulting company, I actually had the chance to work on just such a project for a smaller hospital. Here are some observations…

Works for nurses taking vitals… doesn’t work for doctors.

Nurses routinely took vitals, wrote them out on paper… then went back to the nurses station to enter them into the system. (Most hospitals already use some electronic system.) We used handhelds that uploaded the information through IR ports in the halls to the mainframe. Reports were available (and could be printed) through a small web application.

However, doctors are another story… Many work independently from their offices, and come into the hospital. Handhelds don’t work for entering data. But tablets and laptops were too bulky and data entry slow. Unless you used a battery cart, they also had serious battery-life issues… especially using wi-fi to connect. You also got into questions of… who would pay for the devices? Many doctors don’t work for the hospital. Will you require them to purchase these systems in order to practice medicine there? Will they have to have a different system for each hospital the doctor performs work at? And who maintains them? The concept just doesn’t translate well…

Also, electronic records means something different depending on who you’re talking with. While technically these are “electronic records”, they are not the type of electronic records mentioned politically. They are looking at implementing a mandatory system nationwide. This will be EXTREMELY complex and expensive… with many of the purchase, integration and support costs forced upon medical providers (doctors, nurses, hospitals, doctors offices, insurance, etc).

And why would I want my medical records online for “anybody” to see? If someone wants my records, they can ask for my history. I’ve seen enough security issues in IT to not want anything to do with some liberal medical electronic “utopia”!

dominigan on July 27, 2009 at 2:57 PM

The fact it’s only 10% says to me fraud isn’t really a problem.

angryed on July 27, 2009 at 2:52 PM

What are fraud levels like in non-government health plans? And does the health care industry as a whole have higher or lower fraud levels than other industries?

hawksruleva on July 27, 2009 at 3:00 PM

With a national electronic records system your scenario wouldn’t have happened because your address would be kept in one place and easy to verify its authenticity. You’d also be able to change it so you wouldn’t have to let all your doctors know when you move.

jonknee on July 27, 2009 at 2:01 PM

ROFL! You actually think you would be able to access and change your information???? Please list the Federal systems that allow you to do that now.

Remember, with any system implemented by the Government, the GOVERNMENT will own the data… not you.

dominigan on July 27, 2009 at 3:03 PM

The discussions of the medicare study only talks about what Medicare paid, not what was expended. Mayo is going broke as they only recover about 1/2 of what they spend. The reality that is being obscured is that private insurance and care are not being effected much by indigent care given away, but mostly by underpayment by government programs.
Programs whose payments are still being pushed down, and the costs transfered to private customers.

This is just another case of politicians cost shifting, another hidden tax. Socialized medicine will not make things better, certainly not cheaper per outcome.

I think before we do anything, we need to know what our current true costs are, not what we are paying directly. Why not try an interesting experiment, all hospitals and dcotors have to charge every customer the same amount, or free. Then we will probly see every person be able to afford insurance, but unfortunately the govt will need to raise our taxes 5-10% to cover their true costs.

wallyone on July 27, 2009 at 3:03 PM

dominigan on July 27, 2009 at 2:57 PM

When my daugher was born I was amazed at the level of IT that was implemented at the hospital. Every drug dispenses was scanned by the nurse with a handheld. Every set of vitals was directly digitally in the room by a nurse. Even the meals that were brought in were scanned.

It was an almost paperless process.

Now the question of course is where does all this info get stored? Who has access? Does the data get sold? To whom? But aside from those issues, technically speaking it was pretty damn cool.

angryed on July 27, 2009 at 3:04 PM

Also, electronic records means something different depending on who you’re talking with. While technically these are “electronic records”, they are not the type of electronic records mentioned politically. They are looking at implementing a mandatory system nationwide. This will be EXTREMELY complex and expensive… with many of the purchase, integration and support costs forced upon medical providers (doctors, nurses, hospitals, doctors offices, insurance, etc).

dominigan on July 27, 2009 at 2:57 PM

Think about the security requirements for this. I’ve spoken to a couple doctors that are already concerned that they’ll need to buy new computers and new secure network connections to meet government-mandated security protocols. I’d be alright with the government agreggating some data. It’d clearly be a useful tool for spotting trends. But databases that store my name, ssn#, address or other contact info will inevitably fall into bad hands.

hawksruleva on July 27, 2009 at 3:04 PM

Regarding #1… the best way to ELIMINATE (not just reduce) fraud in government programs is to…

…eliminate the un-Constitutional government program!

dominigan on July 27, 2009 at 3:04 PM

1. Stop looking to Federal Govt to manage EVERYTHING.
2. Stop making enforcement of existing laws and repression of fraud, contingent on a basket of other goodies.
3. Stop whining that double-checking a medical diagnosis with lots of tests, is some sort of waste that “reform” will settle.
4. Don’t guarantee entitlements to the US population with an amnesty approach to open-ended immigration.

Chris_Balsz on July 27, 2009 at 3:05 PM

What are fraud levels like in non-government health plans? And does the health care industry as a whole have higher or lower fraud levels than other industries?

hawksruleva on July 27, 2009 at 3:00 PM

Good questions. My bigger point is that “ELIMINATE FRAUD” is always thrown around as a magic cost saver. But it’s foolish and unrealistic to think you can do much about it. This applies to govt and private institutions. Sure you can save a couple of bucks here and there but if you’re losing $200B a year today, you’ll at best be losing $190B next year.

angryed on July 27, 2009 at 3:07 PM

I think before we do anything, we need to know what our current true costs are, not what we are paying directly.

wallyone on July 27, 2009 at 3:03 PM

Of course, if the government got out of the health business, we’d have a much clearer picture of true costs. As Ann Coulter’s column this week mentions, government-mandated coverage for elective treatments has spiked the cost of insurance. When in-vitro fertilization is covered, a lot more people choose it. Her car analogy is spot-on. Government healthcare should really cover basic transit (like a seat on the bus), not full-service health care (like a BMW with GPS and bluetooth).

Of course, the best government plan for health care would be to get completely out of that business.

hawksruleva on July 27, 2009 at 3:12 PM

Now the question of course is where does all this info get stored? Who has access? Does the data get sold? To whom? But aside from those issues, technically speaking it was pretty damn cool.

angryed on July 27, 2009 at 3:04 PM

Normally, the data sits at the hospital level. Staff can access the data electronically within the building. (Security is extremely strict about firewalling off the parts of the network that deals with staff or patient data!)

The data does not get sold. There is plenty of pressure right now that keeps it from happening (internally by concerned physicians, and externally by HIPAA laws).

And while HIPAA laws are vague… that can sometimes be a good thing. It tends to make the hospitals over-cautious in analyzing the risk they are exposing themselves to.

dominigan on July 27, 2009 at 3:13 PM

*crickets*

You know what, too little too late. GoP had years to do something and did not. I hear nothing but no to Obamacare from them now so I presume either A) they have nothing better or B) they are getting out of the way as Obama buries himself with this plan.

If the Republicans want to impress me come up with something good that most of them can coalesce around and support.

Dash on July 27, 2009 at 3:14 PM

If the Republicans want to impress me come up with something good that most of them can coalesce around and support.

Dash on July 27, 2009 at 3:14 PM

That “something” is leave the system alone and let the private markets work. That goes for health, autos, finance, you name it.

Only when the govt gets involved (can you say forcing banks to lend money to people who will never pay it back??) does the system fall apart.

angryed on July 27, 2009 at 3:18 PM

I don’t want a healthcare plan devised by anyone who makes global warming commercials with Nancy Pelosi. I really do feel like Newt has become somewhat dem-lite as of late, and I don’t trust him anymore.

I have the same concerns many of you do about the electronic medical records. Imagine how the dems in power could blackmail/take down conservatives if they had private things in their medical record that they would not want published. The lefties have already shown that they will abuse power to destroy anyone who opposes their agenda. Imagine if an up-and-coming conservative politician or leader had an STD from their youth or had been raped in the past(and wanted to keep that matter private) or if they had gone through some counseling during a tough time. There are just things that Big Brother doesn’t need to have at his fingertips. I do not feel secure at all that those records would not be perused by the democratic political machine in order to stop conservatives in their tracks.

I do feel that some kind of reform would be good, as it will definitely be held against us if we do not have anything to offer on this. But, I think it should be much simpler than what Newt is suggesting. Enroll the folks who qualify for govt. programs that are already in existance, and offer some sort of voucher for money toward private insurance for others. Implement some heavy duty tort reform to get rid of the frivolous law suits that drive the costs up so much… And let people be. There should not be mandates that plans have to cover a myriad of things the govt. deems necessary. There should be no mandate that poeple HAVE to have insurance. Help people a little and let them make their own choices.

And, of course, weed out the fraud.

It is ridiculous that the govt. ever got involved with healthcare to begin with, but it is involved now…. And I do think that we have to have something to offer or the dems will eventually get what they want and that would be devastating to our country. Anything we offer should be completely market-oriented (with the exception of getting qualified people on the state programs that are already in existence anyway). I think that is pretty much what the republicans are proposing, and it sounds okay to me. But, I don’t know if the tort reform is in there or not. And if it isn’t, it needs to be. That is the most important part, really.

squeek71 on July 27, 2009 at 3:27 PM

That also applies to having the federal government lead the best-practices effort. It makes it a very small step from a “best practices” advisory group to a federal agency that imposes those decisions on providers. Call me a skeptic, but the federal government is hardly a model for best practices anyway. That effort belongs in the free market, which could be incentivized by tax policy.

I also had the biggest problem with #4. I think the best solution is to have government get out of the way instead of trying to craft policy to enforce the ‘best medicine’ being practiced. We need look no further than recent legislation to ‘protect us from dangerous toys’ for an example of ‘good intentions’ having crippling consequences on an industry and how business is done. I can only imagine how bad things would get if #4 were implemented to some degree (state mandates what constitutes best practices) and the rise in doctors being sued that would come and the chilling effect this would have on doctors making the best/right decision medically instead of what statistically the state says is the way to go. It would only get even worse if there were no torte reform.

gwelf on July 27, 2009 at 3:46 PM

Newt, no one cares about yours or anybody else’s ideas on health care from the right. Good try though, Sir.

Dr. ZhivBlago on July 27, 2009 at 2:46 PM

The point is to dispute Republicans only being NO-sters. We aren’t, but we also realize the issue of unintended consequences with overhauling government/public policy. Notice how it went for Social Security Reform under GWB. Lots of talk, campaigning, bus tours, but ultimately no one wanted to dare it. Do any of us wish now we had past it?

leftnomore on July 27, 2009 at 3:47 PM

how about repeal the kennedy kassebaum bill that was the creation of this mess in the first place..

workingforpigs on July 27, 2009 at 4:06 PM

Other than legal reform, this seems like Obama by another name. Nice try Newt! Not what I want to see! Frankly I don’t want anyone in Washington telling me what to do even if it’s “for my own good,” and prefer decentralization of medical records. Just want the gubmint to STAY THE HELL OUT.

evergreen on July 27, 2009 at 4:07 PM

Fer cripes sake….just let me write off all medical expenses on my taxes.

The goobermint can fight it out with doctors and insurance companies on working to lower costs. In the meantime, I get coverage under a company and plan of my choosing without going bankrupt.

And the goobermint is free to audit me anytime as I could easily account for every penny.

My monthly insurance rate just went up another hundred dollars to $709 (single person) and I simply cannot afford to take another hit like that.

In fairness to my insurance company…I have no complaints about my plan coverage.

Their service has been top-notch thus far.

The Ugly American on July 27, 2009 at 4:13 PM

Dash on July 27, 2009 at 3:14 PM

Republicans are talking about ideas of how to reform health care. Sen. Tom Coburn, one of hosts of “The Senate Doctors Show” has his Patients’ Choice Act which would be a lot better than anything being talked about by the Democrats.

seanhackbarth on July 27, 2009 at 4:26 PM

And why would I want my medical records online for “anybody” to see?

Yeah… just ask Joe the Plumber how careful government entities are with protecting your personal records…

jana on July 27, 2009 at 4:50 PM

By allowing businesses to write-off part of the cost of health insurance it is subsidized. And it is possible to write-off part of it on the individual side as I found out at H&R block some years ago… thus I am subsidized for the cost of my health care.

What is the lesson of subsidies?

They cause uneconomical use of whatever is subsidized.

What happens when ‘everyone’ has health care and can effectively have someone else pay for the majority of it?

The Tragedy of the Commons.

Encouraging uneconomical behavior should not be a role of government. It sucked like an electrolux for housing by encouraging NINJA (No Income No Job or Asset) individuals to actually seek and GET government backed mortgages they couldn’t pay off. Likewise putting lots of money into failing companies and not allowing bankruptcy law to force them to re-organize along economical lines means the companies have no need to behave in an economical fashion.

Tort reform to limit payments to damages incurred and fixing a problem would be an excellent way to end the malpractice lottery of ‘pain and suffering’ awards that insurance companies pay and then raise the rates of doctors across the board due to such high payouts.

Eliminating the tax incentives to health care will then return it to its previous status of a hard earned ‘perk’ with a company and require individuals to actually take better care of themselves and not expect others to pay for their health or lack thereof. Encouraging charitable giving by the tax code for health concerns of the community incurs no disincentives via subsidies or the tragedy of the commons as it allows individuals to control just which charities they would give to so as to get affordable health care for the poor.

If you think the sytem is out of whack now, just wait for government to ‘help it’.

ajacksonian on July 27, 2009 at 6:41 PM

The report I heard from my cousin who works for medicare fraud is prvate companies average around.9%. The private companies are looking for profit while the goverment cares if all the proper forms are filled out.
Newt has a point on Medicare fraud.

Gracelynn on July 28, 2009 at 3:39 AM

Unless I am mistaken one way we could “disincentivize” health research is to tax the high insurance rate policies. They are expensive because they pay for the best and often experimental care for patients possible. When I was much younger open heart surgery was the prerogative only of the very rich with such policies. They were the guinea pigs for the rest of us. It’s now a fairly well understood and life saving technique thanks to the high rate policies out there.

{^_^}

herself on July 28, 2009 at 5:04 AM