Code Red: Two Economists Examine the U.S. Healthcare System

January 11, 2011

A Health Reform Christmas Carol

Filed under: Health Reform — David Dranove and Craig Garthwaite (from Oct 11, 2013) @ 9:38 am

I have not blogged for several weeks, mainly because I have been making sense of the curious events that transpired over the Christmas holiday. If you a regular reader of my blog, you know that I have had some harsh things to say about health reform. To criticize a law that brings joy to so many people, it must make me seem like a scrooge. But I really thought that most of the legislation was humbug. And then, in the days leading up to Christmas, I had a series of strange dreams that changed everything. I must tell you about them.

In my first dream, I was visited by a shriveled up old man who seemed to have already passed through death’s door.

I shuddered to see him. “Who are you? What do you want with me?” There was no response. He came closer and closer. I tried to move away but I was paralyzed with fear. Suddenly, he reached out and took me by his cold, clammy hand. As he held me tight we seemed to fly through space and time. Just as suddenly I seemed to be back in the real world. Only I wasn’t in my bedroom; instead I found myself in a conference room in a dreary office building. There was one window and if you craned your neck you could just make out the U.S. Capitol. Everyone attending the meeting wore the same uniform – gray dress slacks and powder blue dress shirts. But what I noticed most of all about their attire was that they all had pocket protectors filled with mechanical pens and pencils.

Then it occurred to me that I recognized a lot of those in attendance. I had seen them at healthcare conferences talking about the latest government initiatives to hold down healthcare spending. And here they were, hard at work. I listened closely and could hear them going on and on about diagnostic codes and relative values, and making exceptions for this drug and that hospital. They talked for hour after hour; it was becoming so excruciatingly boring that I begged my guide to leave. I wanted to go home. He refused and insisted that I listen carefully, for there were lessons to be learned. “Who are you,” I asked my guide again. “Why am I here?”

“I am the ghost of health reform past,” he replied. You are here to see what happens when technocrats try to fix the healthcare system. “CON, PSROs, DRGs, RBRVS – these are the legacies of decades of health reform.”

“But none of these worked,” I replied. I explained that micromanaging one piece of the health system just led to greater inefficiencies elsewhere, and once regulation was politicized, as with Certificate of Need, all hope was lost.

“Stay, listen and learn,” he replied.

But I couldn’t just listen. I spoke to the bureaucrats, “I know that you have good intentions but can’t you see that you are only making things worse?” No one heard me, so I shouted, “You are giving false hope to those who want to truly reform the healthcare system and even worse, you are postponing the inevitable day of reckoning.” I pleaded with them to stop what they were doing but to no avail. The rule making went on and on. As my despair mounted, I once again begged my guide to take me home.

Once again we flew through space. Now I was in a small town, just outside a little cottage. My guide took me up to a window where I could see a family with three small children. One of them had a terrible deformity. I listened through the window and heard the mother and father talking. It seemed that the father had lost his job and, with it, their health insurance. They would have to sell the house to pay for little Timmy’s medical bills.

I started sobbing uncontrollably. Those bureaucrats were worrying about outlier payments and billing code exceptions, and this poor family was losing everything. “Please ghost, can’t we find a way to fix our system?” But the ghost again fell silent. “Please,” I cried, “please!”

The next thing I knew I was lying in a pool of sweat in my own bed. It was only a dream, I told myself, only a dream…

…to be continued.

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