Lessons from the US Health Reform that’s Already Failing

It’s not often I bother reading the numerous articles I come across everyday on US health system reform. But Atul Gawande is a man of clear thought and once again proved he understands health – though I don’t agree with him entirely.

In this article he highlights the failure of recent Democrat reforms to address rising costs and quality in health. He then goes on to say that government intervention can lower costs and improve quality just as happened in agriculture in the early 1900’s.

His argument is intriguing for a number of reasons.

Like many commentators he criticises the free-market approach in health yet fails to realize out that health is not a ‘laissez-faire’ market. Anyone with a basic understanding of markets realizes that there is a fundamental imbalance in health. This McKinsey’s report, for example, explains how most health systems lack a rigorous approach for matching clinician supply with demand for health services. This is despite the clinical workforce using around 60% of the $4bn spent on health each year. In what other industry is there a shortage of 60% of market supply?

The agricultural revolution analogy he uses is obviously a loose one. One cannot compare the complexity of health with the farming system of the early 2oth century. Gawande’s purpose is more to demonstrate that top-down reforms can cause effective change.

You might read his story and swell with sudden belief in the power of the progressive Obama administration to deliver the perfect medicine to our ailing system, from the top down. The success of government intervention in agriculture, however, is one example of top-down success against the myriad of failures well documented in change management science. Indeed, health is perhaps the best example of failure to change with every Democrat president sice Roosevelt having tried and failed.

Top-down reform will be necessary in the interim to accelerate change. But long term I firmly believe that less regulation (without completely removing oversight) is what health requires.

Let me give a small example. In the USA they are looking at a new model of primary care. It’s not unlike the superclinics our Rudd government is building. What strikes me immediately is that they are very much ‘models of the moment’. They are attempts to use existing resources and infrastructure to change health delivery. As Einstein said however, ‘you can’t solve a problem with the same thinking that created it’. Here we are trying to use the same structures, albeit in a re-jigged format, to solve the problem!

Indeed, the Rudd superclinics are already failing: see super clinic an expensive joke.