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Health care experience trumps Medal of Freedom

by Lola Butcher

I had promised to attend the press conference at which former Secretary of State George P. Schultz released his new book, “Putting Our House in Order: A Guide to Social Security and Health Care Reform.” But when I realized I would have to miss a presentation, “A Practical Model to Achieve Health Reform,” by George C. Halvorson, chairman and CEO, Kaiser Foundation Health Plans and Hospitals, it became clear that I value decades of health care management experience more than Schultz’s long government career and his Medal of Freedom.

My decision permitted me to hear a rare truth-teller in health care today.

Halvorson said what everybody knows but most hand-wringers refuse to acknowledge: “Smart people do not kill the geese who lay lots of golden eggs.”

  • Health care delivery is the fastest growing and most profitable segment of the whole US economy.
  • Health care is winning. It is taking everyone’s money with an amazing low level of accountability.
  • The people who depend on a cash flow of fees to stay in business will not walk away from those fees voluntarily.

This is why health care reform has not happened and will not happen voluntarily.

Health care reform, Halvorson said, needs to be a “product” that is purchased and paid for by high leverage buyers. He challenged purchasers to take advantage of an evolving market.

While buyers think they have a relatively small amount of leverage, Halvorson pointed out they actually hold the power in today’s marketplace because of several converging factors:

  • Because of consolidation, there are only a few major plans left.
  • Buyers are doing total replacements.
  • Total market is shrinking.
  • Most plans are for profit and need growth to fuel stock value.

He calls for financing reform and care delivery reform, working together. Read more about this here later.

In the meantime, think about this question: Can health care providers be trusted to lead health care reform?

Halvorson offers a clue: “In today’s world, more efficient and effective caregivers simply deprive themselves of income.”