It's the system, stupid

Tags: health care reform, transformed, health care, policy

By Tom Banning
TAFP Chief Executive Officer/Executive Vice President

Health system reform—with the emphasis on the system, not the players in the system—is on the political precipice. In my previous column, I discussed how policymakers, patients, physicians and those paying for health care are so fed up with our floundering health care system that fundamental, systemic change is inevitable.

The good news is that among the policy experts who count and vote, there is a broad, evidence-based consensus that economic recovery and health care economics are inextricably linked. Every report accumulating on politicians’ desks, in their minds and perhaps in their hearts declares the restoration of primary care as fundamental to health system reform.

Inspired by the perverse convergence of political and economic variables, Congress has made a huge down payment on improving our health care infrastructure. While no firm strategy for dealing with the indefensible payment disparities between primary care and other physician services has been announced, lawmakers know solving that perplexing problem is fundamental to ensuring a vibrant primary care base and therefore having a functioning, high-quality health care system.

By focusing on a system approach to health care, reformers have been able to shift the policy debate away from the zero-sum competition that has plagued previous reform efforts. This time, the producers of the famous “Harry and Louise” commercials are singing Kumbayah on the same stage with physician and hospital organizations, organized labor, big and small business, PhRMA, and just about everybody else who had a part in unraveling HillaryCare in 1993. They may not know the words, but they are humming along so as not to be left behind.

The bad news is also the system. Even with system approaches and its health information technology underpinnings, health care generally, and primary care specifically, suffers from what economists call Baumol’s cost disease—the intrinsic handicraft nature of personal services, like medical care, education or the performing arts, that defies automation and thus contradicts the classic economic law that wages and productivity always closely track each other.

When production innovations emerge in the manufacturing sector and new machines replace labor-intensive work, prices go down with automation and productivity goes up. Health care delivery doesn’t work that way. The most compelling, high-end scientific advances in treatment are still applied by hand to one patient at a time. The classic example of Baumol’s disease is a Mozart five-piece concerto. It still takes the same amount of time and same number of musicians to perform now as in 1787, but you’re not likely to find five musicians who will perform it with 1787 wages in 2009.

Automating a service line that is delivered in the form of a cottage industry—most family physicians practice in a group of five or less—would not be easy even under ideal circumstances. Nonetheless, attempts by commercial and government payers to build the perfect medical factory and reverse the loss of productivity in primary care have been half-hearted and haphazard. Piloting efforts have garnered mixed results at best. Pay for performance and PQRI come to mind.

Now comes a huge $19-billion congressional endeavor to convert medical practices to electronic health records to streamline delivery systems and implement real-time tracking of evidence-based care. In short, Congress is betting their investment will spike productivity in terms of value of care, outcomes and practice microeconomics. While wiring up physician practices is probably long overdue, it will likely require a lot more money and time than conventional wisdom suggests; just ask any physician who has recently bit the HIT/EHR bullet.

While your Academy will continue to dance, sing or hum to the beat of health system reform that is centered on primary care, we will not and cannot wait on what will seem like five consecutive performances of Richard Wagner’s Ring Cycle.

At the national level, AAFP and TAFP are committed to finding a solution to a fair and equitable primary care payment model. In Texas, we are aggressively pursuing loan repayment legislation to entice medical students into choosing to specialize in family medicine. We are also championing legislation to require health plans to be more transparent in their insurance coverage (see the cover story).

We are partnering with TransforMED to equip our members with the tools to become medical homes; for more information, go to We have retained a top-drawer practice management consultant, Bradley Reiner, who is ready to help streamline and maximize every operational aspect of your practice. We have joined with Atlantic Health Partners to buy down the costs of vaccines. We are evaluating practice management software systems to provide you real-time claims adjudication. And we are exploring partnerships with legal teams that could recover under-payments and late-paid claims owed to your practices with little or no financial outlay.

The overture has begun and the curtain’s been raised. Health system reform is on everyone’s agenda and all eyes are on primary care. Now is not the time for a case of stage fright. It’s time to join the chorus, get involved, and help TAFP raise the voice of family medicine.

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