Health Care Reform Fails If Public Won’t Stay the Course

Princeton University economist Uwe Reinhardt, PhD, says that American businesses have the habit of reinventing old institutions and giving them new names. “The famed Massachusetts Connector was once known as Health Insurance Purchasing Cooperatives (HPICs), then Health Alliances by the Clintons, then something else again by Republicans, and so on. Always the same,” says Reinhardt.

Concerning the accountable care organization, the subject of our cover story, Reinhardt says that it is a good idea, though not really a new one. “It may be claimed that these differ from Kaiser because they can go across institutions. But that is not new either. In the 1990s we called such organizations virtual HMOs.”

The problem, as Reinhardt sees it, is that the public has little staying power for any of these efforts. “The minute it involves reducing someone’s revenues below expectations, providers will trigger a backlash and tell their patients quality will suffer and then you get a populist backlash,” says Reinhardt. “The argument is that this is not about cost containment. But it is! The Clintons, too, argued that the managed care-managed competition framework they advocated would do both — constrain the growth in health spending and enhance quality — by forcing HMOs and the providers behind them to compete on both cost and premiums. I still have the slides from those years.”

Health care has always been a political issue. It is even more so in this season when the word reform trips so readily off everybody’s lips. Of course, now the talk is about health insurance reform. Concessions are going to have to be made by some or all of health care’s players at some point. Demographics demand as much. Though, as Reinhardt says, that might not settle things.

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