The health court proposal was developed in a collaboration between the Harvard School of Public Health and Common Good, which I chair, and funded by
The Robert Wood Johnson Foundation. It has been
endorsed by both Mitt Romney
Obama, and was a specific part of the proposals of
four deficit reduction commissions
So far the proposal has been stymied by...you'll never guess. The trial lawyers are so powerful that they prevented even pilot projects from
being included in the Affordable Care Act. The act specifically excluded funding of any pilot project that replaced the jury.
Health courts will not correct all of the misaligned incentives in health care, but they are a necessary condition of any coherent system. It is
impossible to align incentives while doctors go through the day listening to a little lawyer on their shoulders instead of acting on their best
PROPOSAL TWO: Replace Public Health Care with Comprehensive Providers
Medicare and Medicaid, like private health plans, are based on an insurance model. The patient goes to a doctor or hospital, which gets reimbursed
based on a byzantine bureaucratic model that drives everyone nuts and leads to constant legal bickering. This fee-for-service model misaligns
incentives towards more care.
The way to align incentives, many experts agree, is by providing care through a single provider -- known in jargon as an "accountable health care
organization" or an "integrated care provider." Instead of being paid a fee for each service, the provider is paid a fixed annual price to do
everything for the patient (with limited exceptions for catastrophic care). Instead of making more money by dialysis and amputation of limbs of
patients with diabetes, the provider now has an incentive to keep the patient healthier by nudging them towards better lifestyles. The provider hires
social workers in lieu of more surgeons.
Comprehensive providers are not a radical concept. The Kaiser health system in California works this way. The Veterans Health Administration (VA) is a
public model. Several states, including Texas and New York, are moving to integrated care providers for all Medicaid recipients.
I believe Medicare and Medicaid should be provided by an integrated care provider instead of on a fee-for-service insurance model. The care would
likely be equivalent or better, but the reason to abandon the current structure is, in my view, that the waste of public dollars today is indefensible.
Medicare and Medicaid, like the VA, are state-run social health care systems--but unlike the VA, today they are run on a fee-for-service model that Dr.
Donald Berwick, the former administrator of the Centers for Medicare and Medicaid Services, estimates wastes $150 to $250 billion on "activities that
don't have any value."