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 / Spring 2007 / Issue 46(originally published by Booz & Company)


Does Health Care Have a Future?

Eight books about the health-care system diagnose its problems and offer solutions.

Photograph by Opto
It is no secret that health care in the U.S. is in crisis. Americans share a sense of impending catastrophe, and for good reason. Health care in the United States consumes some $2 trillion per year — 16 percent of the GDP, and four times the expenditure for national defense. Yet U.S. health care’s performance is ranked 15th globally by the World Health Organization;  American life expectancy ranks 22nd in the world, and infant mortality ranks 39th. The U.S. spends more on health-care insurance than any other nation, yet 46 million Americans do without — a number that increases every year. The out-of-pocket costs of those who have insurance have nearly tripled in the last six years, as health-care premiums continue to rise at nearly three times the general inflation rate. Unpaid and unpayable health-care bills account for the majority of all personal bankruptcies in the country.

This can’t go on. We cannot continue to have rising costs, uneven quality, and shrinking access to care. The appalling realities of the  chaos we call health care (don’t bother calling it a system) have spawned a cottage industry of pundits, consultants, critics, and professional headscratchers. And this industry has spawned an ever-growing library of books hawking solutions, ranging roughly from the “manna from heaven” vision to the “let them eat Vioxx” point of view. But has anyone come up with a real solution?

To know a real answer when we see it, we must define the question clearly. On the basis of our research, our experience, and a broad review of the literature, we believe that a true health-care solution would meet eight criteria.

1. Consistent High Quality. A large and growing body of evidence suggests that health care in the United States could be far more effective than it is now. One data point to consider: In December 2004, the not-for-profit Institute for Healthcare Improvement, based in Cambridge, Mass., launched the “100,000 Lives Campaign”; its goal was to save those lives in U.S. hospitals through improved care. By June 2006 it had already exceeded that goal by 20 percent. That this campaign succeeded so quickly is impressive, but the very swiftness of that achievement also shows how pervasive care of uneven quality is, and how little attention it has received until recently.

2. Lower Cost. In many cases, this point follows from the first. Higher-quality care is often inherently less expensive; providers improve their quality by honing their organizational processes to become more efficient and effective, to avoid error, and to do things right the first time. We’ve seen this happen in branches of the health industry that compete directly for the consumer dollar, such as plastic surgery and laser vision correction, where a proliferation of products and providers over the past 15 years has been accompanied by provably higher quality and dropping prices. Such examples make it clear that health care could not only slow its inflation rate but actually drop its costs substantially.

3. Available to All. For ethical, political, systemic, and business reasons, health care must be universal: available to everyone. There are many ways to enable this — for example, by extending Medicare universally, establishing government-funded medical savings accounts and catastrophic health plans for the working uninsured, creating combinations of tax credits and vouchers, or some other approach. And universal coverage need not mean a single-payer system or more government control.

4. Single Model. For many of the same reasons, it will not work to have one system for the well-off while everyone else gets what health-care futurist Ian Morrison calls “the Department of Motor Vehicles with stethoscopes.” The market can be segmented, as most markets are, but one way or another, every provider in the system must compete to offer the best product at the best price.

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Health-Care Resources
Works mentioned in this review.

  1. Donald L. Barlett and James B. Steele, Critical Condition: How Health Care in America Became Big Business and Bad Medicine (2004; Broadway, 2005), 286 pages, $14.95
  2. Susan Starr Sered and Rushika Fernandopulle, Uninsured in America: Life and Death in the Land of Opportunity (University of California Press, 2005), 272 pages, $15.95
  3. The Institute of Medicine, Insuring America’s Health: Principles and Recommendations (National Academies Press, 2004), 222 pages, $26.10, or download PDF for $22.50 at Click here.
  4. Charles R. Morris, Apart at the Seams: The Collapse of Private Pension and Health Care Protections (Century Foundation Press, 2006), 86 pages, $14.95
  5. Jill S. Quadagno, One Nation, Uninsured: Why the U.S. Has No National Health Insurance (Oxford University Press, 2005), 286 pages, $28
  6. Arnold S. Kling, Crisis of Abundance: Rethinking How We Pay for Health Care (Cato Institute, 2006), 120 pages, $16.95
  7. Regina E. Herzlinger, editor, Consumer-Driven Healthcare: Implications for Providers, Payers, and Policymakers (Jossey-Bass, 2004), 926 pages, $55
  8. Michael E. Porter and Elizabeth Olmsted Teisberg, Redefining Health Care: Creating Value-Based Competition on Results (Harvard Business School Press, 2006), 524 pages, $35
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