A must-read on health care reform

All the folks on all sides of the health care reform debate should pause and read an article in the September issue of The Atlantic magazine. With the provocative title of "How American Health Care Killed My Father," the article by David Goldhill examines the wrong-headed economic incentives and disincentives built into our current system of health insurance. It also explains why past efforts to reform this system have failed and why current efforts before Congress will also fail to control costs and improve patient care.

Warning: It's a long and complicated article. But it is shorter than the 1,000-page health care bill Congress has been considering.

Goldhill's father went into the hospital with a case of pneumonia, but it was not pneumonia that killed him. It was a sepsis infection contracted in the hospital that proved fatal. Similar hospital-borne infections kill 100,000 people a year, even though some simple precautions could prevent most of these deaths. But, as Goldhill explains, our health insurance system does not emphasize quality of care or punish easily preventable errors. In the case of Goldhill's father, the hospital that caused the infection actually made more money treating him for sepsis in the five weeks before he died than it would have made if it had simply cured his pneumonia and sent him home.

Goldhill rebuts treasured beliefs of both liberals and conservatives in the health-care debate. Single-payer governmental health care should simplify payments and save money in efficiency, but statistics show state-run medical plans in Europe also are plagued by out-of-control costs. And the current system of imposing insurers between doctors and patients is wrong and inefficient in several ways, and market-based reforms have failed.

Whatever reform is implemented will be costly, he says: "For fun, let's imagine confiscating all the profits of all the famously greedy health-insurance companies. That would pay for four days of health care for all Americans. Let's add in the profits of the 10 biggest rapacious U.S. drug companies. Another 7 days. Indeed, confiscating all the profits of all American companies, in every industry, wouldn't cover even five months of our health-care expenses."

Fortunately, Goldhill says, the money is already there in the form of health-insurance premiums and co-pays being paid by employers and employees. A typical young worker will invest $1.77 million in health care costs (some paid by his employer) over his lifetime. Redirecting that money into a system that focuses on patient care could actually improve quality of care, prevent unnecessary deaths and reduce costs.

Goldhill's article is getting some attention, such as in this NPR broadcast. It deserves more attention. President Obama, his advisers and all members of Congress should read it. Goldhill agrees that health care reform is badly needed, but the path Congress is taking, he says, will not fix the inherent problems and could make them worse.

"... until we demand the same price and quality accountability in health care that we demand in everything else, each new health-care reform will cost us more and serve us less," he writes.

His counter-proposal: Replace the current system of comprehensive health care with a consumer (patient)-driven system of catastrophic insurance to cover unpredictable chronic or major illnesses or injuries and a modified Health Savings Account to cover routine medical care. The government would subsidize HSAs and catastrophic insurance premiums for low-income residents at a cost far below current Medicaid expenses. HSA contributions would be tax-deductible and inheritable. This system would put patients in charge and would generate price competition among health care providers.

There's a lot more to Goldhill's article than I can explain here. Read it, and encourage others who want to hold forth on health care reform to do the same.