Is the VA System a Panacea?
Is the Veterans Administration system a panacea and model for the US health care system? In a September 4, 2006 NY Times op-end piece, Paul Krugman labels this system a "stunning success."
The key to this success, Krugman says, "is its long-term relationship with its clients: veterans, once in the V.A. system, normally stay in it for life." He points out that such long-term relationships "save money by investing heavily in preventive medicine."
Krugman claims that preventive medicine is an area in which "the private sector, which makes money by treating the sick, not by keeping people healthy, has shown little interest."
Citing specifically the Vererans Administration's health care information system, he points out that this technology "can easily keep track of a patient's medical history, allowing it to make much better use of information technology than other health care providers. Unlike all but a few doctors in the private sector, V.A. doctors have instant access to patients' medical records via a systemwide network, which reduces both costs and medical errors. "
An alternative interpretation is that the interest in the private sector is very high, but the alignment of incentives and the means of establishing continuity of care through interoperability are not attainableinble at present in America's real health care system. An alternative interpretation would suggest that even acknowledging the strengths of the Veteran's Administration's health information technology and care infrastructure, a rapid transition from where we are to where we as a nation must be is not possible. To create a V.A. model, entire segments of the economy must transition from fee-based reimbursement to alternative models. The key insight to Krugman's argument (an argument often made) is that the very foundations for reimbursement and care are different in the V.A. system and it is these foundations that are critical to an evolution of our delivery system and the technologies required to support it.
In a letter published in the March/April 2006 issue of Health Affairs, Stanford Economist Alain Enthoven states that "health spending has doubled its share of gross domestic product (GDP) in the past twenty-five years. Absent some quite fundamental change, this will double again in the next twenty-five, seriously straining public finances." He claims that "a fundamental change in financial incentives for consumers (making a cost-conscious choice of a full health plan instead of selecting a low-priced doctor) and providers (replacing fee-for-service with per capita prepayment and salaries). Perhaps when things get bad enough, such fundamental change will become politically feasible."
Are things getting bad enough? Fuchs and Emanuel argue in the Nov/Dec issue of Health Affairs that such a change will take place only in the event of a "a major war, a depression, or large-scale civil unrest" or a "national health care crisis, such as a flu pandemic." (Health Affairs, 24, no. 6 (2005): 1399-1414 )
Henry Simmons of the National Coalition on Health Care presents an alternative scenario driven by widespread employer frustration with the "trajectory" of health care costs, the states' Medicaid crises, and the looming Medicare cost burden. He argues that pressure to reform is growing among pension funds, health care providers, unions, and religious groups. (Health Affairs, 25, no. 2 (2006): 566)
No matter what position one takes on these issues, the need to address fundamental informatics and health information technology issues must be addressed now.
The key to this success, Krugman says, "is its long-term relationship with its clients: veterans, once in the V.A. system, normally stay in it for life." He points out that such long-term relationships "save money by investing heavily in preventive medicine."
Krugman claims that preventive medicine is an area in which "the private sector, which makes money by treating the sick, not by keeping people healthy, has shown little interest."
Citing specifically the Vererans Administration's health care information system, he points out that this technology "can easily keep track of a patient's medical history, allowing it to make much better use of information technology than other health care providers. Unlike all but a few doctors in the private sector, V.A. doctors have instant access to patients' medical records via a systemwide network, which reduces both costs and medical errors. "
An alternative interpretation is that the interest in the private sector is very high, but the alignment of incentives and the means of establishing continuity of care through interoperability are not attainableinble at present in America's real health care system. An alternative interpretation would suggest that even acknowledging the strengths of the Veteran's Administration's health information technology and care infrastructure, a rapid transition from where we are to where we as a nation must be is not possible. To create a V.A. model, entire segments of the economy must transition from fee-based reimbursement to alternative models. The key insight to Krugman's argument (an argument often made) is that the very foundations for reimbursement and care are different in the V.A. system and it is these foundations that are critical to an evolution of our delivery system and the technologies required to support it.
In a letter published in the March/April 2006 issue of Health Affairs, Stanford Economist Alain Enthoven states that "health spending has doubled its share of gross domestic product (GDP) in the past twenty-five years. Absent some quite fundamental change, this will double again in the next twenty-five, seriously straining public finances." He claims that "a fundamental change in financial incentives for consumers (making a cost-conscious choice of a full health plan instead of selecting a low-priced doctor) and providers (replacing fee-for-service with per capita prepayment and salaries). Perhaps when things get bad enough, such fundamental change will become politically feasible."
Are things getting bad enough? Fuchs and Emanuel argue in the Nov/Dec issue of Health Affairs that such a change will take place only in the event of a "a major war, a depression, or large-scale civil unrest" or a "national health care crisis, such as a flu pandemic." (Health Affairs, 24, no. 6 (2005): 1399-1414 )
Henry Simmons of the National Coalition on Health Care presents an alternative scenario driven by widespread employer frustration with the "trajectory" of health care costs, the states' Medicaid crises, and the looming Medicare cost burden. He argues that pressure to reform is growing among pension funds, health care providers, unions, and religious groups. (Health Affairs, 25, no. 2 (2006): 566)
No matter what position one takes on these issues, the need to address fundamental informatics and health information technology issues must be addressed now.
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