Progressive Solutions to America's Health-Care Crisis

I have proposed a Federal Health Board, which could address health care problems and would resemble our current Federal Reserve Board for the banking industry.
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News Update, 11-19-08:

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Read Tom Daschle's post from March 3, 2008, on solutions to America's health care crisis, below:

Pressure has mounted to fix our broken health-care system. Costs are climbing and coverage crumbling. Democratic presidential hopefuls, and Republicans to a lesser degree, have put forward plans for solving this crisis. Yet, health-care policy remains complicated, personal, and encrusted with special interests. Support and solid plans alone will not yield success.

There are three fundamental problems plaguing our health-care system today: skyrocketing costs, lack of access, and disparity of quality care.

Today, 47 million Americans lack health-care coverage. Just as troubling is the fact that medical bills have become the leading cause of bankruptcies in the United States. It is projected that the U.S. will spend nearly $2.4 trillion on health care this year. That is almost $7,500 per person. Premiums have increased [PDF] nearly 98% since 2000. Most troubling is that this increase is nearly four times faster than the growth of wages during the same period.

For individuals that do have health care coverage, the quality of health care they receive is often inadequate. For instance, the U.S. lags behind other industrialized countries in basic health measures such as life expectancy and infant mortality. Moreover, we have less same-day access to primary-care physicians as individuals in other countries. And, it is estimated that 98,000 Americans die annually from medical errors, caused by bad physician handwriting, incomplete charts, or other "low-tech" problems.

The time is now for us to take this challenge head-on. What we need is a change in approach. In my book, Critical: What We Can Do About the American Health-Care Crisis, I have proposed a Federal Health Board that would be a foundation from which we could address all three problems. In many ways, the Federal Health Board would resemble our current Federal Reserve Board for the banking industry. Just as the Federal Reserve ensures certain standards, transparency and performance for our banking industry, the Fed Health would ensure harmonization across public programs of health-care protocols, benefits, and transparency. Ultimately, the Fed Health would offer a public framework within which a private health-care system could operate more effectively and efficiently.

The Fed Health could help reduce administrative costs. Roughly 30 cents of every dollar in health care is spent on administration rather than health benefits. Our administrative costs, on a per capita basis, are seven times higher than that of our peer nations. Each state has their own system for Medicaid and insurance regulation. We have different health-care systems for active duty military members versus veterans. And private insurers spend billions trying to enroll the healthy and avoid the sick. A Federal Health Board that sets evidence-based standards for benefits and quality for federal programs and insurance will lower this complexity and thus costs.

The Fed Health could also promote quality and save money by making the health-care system more transparent. Today, the lack of transparency in the system makes it virtually impossible for people to grasp what they are paying for and who provides them with the best care. This shroud of secrecy allows for wildly different prices for similar quality care. For example, a Pennsylvania report on heart surgery found hospitals with similar outcomes charge from $20,000 to $100,000. The Board, by ensuring transparency, would increase competition based on price and quality rather than cream skimming and cost sharing.

Additionally, the Fed Health could set standards for quality and coverage, promoting best practices and identifying the trade-offs on services. It would use information on the comparative clinical and cost effectiveness of different treatment options to set standards for Federal programs. The Congressional Budget Office recently credited this idea with the potential to produce substantial system-wide savings.

But the Federal Health Board is just one element of comprehensive reform that would drive down the cost of the system. Cost shifting, preventable illness, and uncontrolled chronic disease add to our health care costs - and will be reduced by insuring all Americans.

The decisions made by the Federal Health Board would be tough. But this model undoubtedly beats the alternative. Imagine what would happen if Congress revoked the Federal Reserve's power to set interest rates and decided to legislate new interests rates instead. It would be a disaster - no less so than the results of mismanagement of our health-care system.

The time has come for creative ideas and workable solutions to solving our health-care crisis. I submit that the creation of a Fed Health Board would be a bold step in the right direction.

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