On April 21, the Senate Finance Committee held the first of three planned hearings on health care reform. The focus was on improving the efficiency of health care "delivery systems"—i.e., hospitals and doctors. It's an important issue, but not one that's likely to be the primary focus of the health care reform bill, which will probably have more to do with reforming health insurance. For this reason, the hearing didn't get much press coverage, and what few stories there were groped around for an angle. I groped a little myself before deciding not to write anything. A day later, though, I changed my mind and decided that the hearing had generated a kind of Zen-riddle news—not about the witnesses who appeared, but rather about a witness who, on reflection, seemed conspicuous for his absence.
The hearing was, I suspect, a sop to Sen. Charles Grassley, R-Iowa, the committee's ranking member. Grassley spoke with greater urgency than Sen. Max Baucus D-Mont., the committee chairman, about reforming delivery systems. (Click here for Grassley's opening statement and here for Baucus'.) "How do we make sure that we're really tackling delivery reform?" Grassley asked. There was a lot of talk about the need to reform or eliminate the "fee-for-service" model, which pays doctors and hospitals based on the number of procedures performed rather than on outcomes; about the need to collect information on best practices and to alter treatments accordingly; and, especially, about the need to increase computerization of medical records (this last should be greatly accelerated by the stimulus bill's allocation of $21 billion to hospitals and doctors for information technology).
The 13 witnesses (click here for a list) were chosen for their expertise on these topics. Particular deference was granted to Glenn Steele, president and chief executive officer of Geisinger Health System, which employs about 800 doctors in rural Pennsylvania. Geisinger is seen as an innovator in streamlining health care. The company imposes a single charge for treating particular illnesses, integrating physician and hospital fees into what it terms a "warranty." It has standardized treatments for the most common chronic diseases according to "consensus-based best practices," and it invested early and aggressively in computerized patient records. Also present was Paul Diaz, president and chief executive officer of Kindred Healthcare, the largest provider of long-term health care in the country, who is a strong advocate for shifting more medical care into home settings. There were representatives from the American Hospital Association, the American College of Physicians, and (representing patients) the National Partnership for Women and Families. Mark McClellan, who ran the Medicare and Medicaid programs under President George W. Bush, was there. So was Glenn Hackbarth, chairman of the Medicare Payment Advisory Commission, an agency that advises Congress about the Medicare program.
Who wasn't there? Eric Shinseki. *
Shinseki was the Army chief of staff who effectively ended his career when, prior to the Iraq war, he testified before the Senate Armed Services Committee that the postwar occupation would require several hundred thousand troops. This estimate, which proved accurate, was deemed scandalously disloyal at the time by Defense Secretary Donald Rumsfeld and Deputy Defense Secretary Paul Wolfowitz, who were lowballing the official estimate at 100,000. What does all this have to do with health care reform? Absolutely nothing. But President Obama rewarded Shinseki's truth-telling by appointing him secretary of veterans affairs, and the Senate confirmed him on Obama's first day in office. If you still don't know what this has to do with health care reform, then I urge you to read Best Care Anywhere, Phillip Longman's indispensable 2007 account of how the Veterans Administration turned itself into the country's pre-eminent health care delivery system. (Full disclosure: I wrote the book's forward. I received no money for doing so, and will receive none if you purchase a copy.) Or you can read the 2005 Washington Monthly article on which the book was based or the column I wrote when Longman's article first appeared, or The Next Progressive Era, a book Longman just published (with Ray Boshara) that includes a summary of the arguments put forth in Best Care Anywhere.
Phil and I have publicized this story repeatedly because no one else seems willing to—no one, that is, except for experts on medical economics, to whom the VA's superiority to other health care delivery systems is boringly old news. The general public doesn't know about it because nonexperts harbor a deep resistance to believing it. This stems in part from confusion over the well-publicized scandals involving Walter Reed Army Medical Center, which even many Washington policy jocks think (mistakenly) is part of the VA hospital system. (It isn't. As the name implies, Walter Reed is run by the Army.) It also stems from a conviction that has seeped deep into the political culture that anything run by the federal government must be inferior to market-based alternatives. The Obama administration and Congress are utterly terrified that in crafting health care reform they will run afoul of this infantile prejudice. They will therefore move heaven and earth to avoid acknowledging the VA's pioneering use of computerized medical records, its avoidance of the justly lamented fee-for-service model (VA physicians are salaried), and the efficiencies it realizes by treating patients over the long term. The implications of this success are too terrifyingly pinko. The VA is, after all, a system in which the role of insurer, physician, and hospital are all assumed by the U.S. government. The Bush administration did its patriotic best to diminish the VA's record of success by withholding necessary funding and vastly expanding its use of private contractors, an experiment that, according to a recent article by Tara McKelvey in TheNation, is off to an unpromising start. But the VA's own doctors and hospitals continue to provide a distressingly positive model for health care reform.
Baucus and his staff recently met privately with experts from the VA to learn about these achievements, but he isn't about to put any of these folks in front of a TV camera. The rationale for excluding the VA from the hearing was that because it is run separately from the rest of the health care system, the VA probably won't be affected by any delivery-system reforms Congress enacts. But that's absurd. The hearing was an attempt to seek out models for reform. The VA hospitals represent the most successful large-scale reform in the delivery of health care that this country has seen in decades. But—shhhhh!—let's keep that between you and me. I've probably said too much already.
Correction, April 23, 2009: An earlier version of this column misspelled Shinseki's first name. It's Eric, not Erik. (Return to the corrected sentence.)