Editor's Note: Jonathan Ater has practiced law in Portland, Oregon, ever since driving West in a Volkswagen bus in 1965 with a pregnant wife and a two-year-old. Over the years, he has been appointed by various Oregon governors to the State Board of Higher Education, as chair of the Oregon Commission on Children and Families, as co-chair of the 2004 Mental Health Task Force, and as vice-chair of the Oregon Health Policy Commission. In 2007, the Medical Society of Metropolitan Portland presented Jonathan with a Presidential Citation for his work on health care reform. Jonathan and Deanne have been married since before our senior year at Yale. They shared a house in Washington D.C. just after graduation with your Corresponding Secretary, Peter Bell and Chris Cory, while we all were interning in the Nation's Capitol. The Aters have seven adult children — four of whom are adopted — and eleven grandchildren. Jonathan still has a remnant of hair on his head. You can e-mail comments about this article or anything else to Jonathan at jaa@aterwynne.com or post your thoughts on our "My Two Cents" Message Board.

"Fixing Health Care"

by Jonathan Ater
Portland, OR
May 23, 2007

For several years, I have had the privilege of participating with leaders of Oregon's business, labor, health care, and political communities in serious discussions about how we can work together to provide high quality and affordable health care to our population. These issues are critically important to every member of society, but perhaps of special interest to those of us who are now on Medicare and who increasingly confront the perils of aging. (If you have not already done so, I urge you to read a seminal article in the April 30, 2007 New Yorker, entitled "The Way We Age Now", which you can find online by clicking on the article name above.)

Skyline of Portland, OR. My office is in the red brick tower
with the pointed top.

I have served as vice-chair of the Oregon Health Policy Commission since early 2004. In the last three years, health policy has re-entered the national political debate, but with most of the action taking place at the state level. In California, Massachusetts, Oregon and other states, there are now serious initiatives underway to hasten and manage change. In this paper, I want to suggest some specific issues that must be addressed if we are to seriously improve the quality and cost of health care in this country.

There is a growing consensus that health care in the US is failing for at least two key reasons: first, the way in which we deliver health care is fragmented, inefficient, expensive, error-prone, and fails to achieve quality outcomes for our population as a whole. Second, the way we pay for health care is Byzantine, inequitable, expensive, and provides incentives for bad decisions by both patients and providers. We have to address both of these issues, as well as three other key issues which I describe below. Because these issues are intertwined, we have to address them more or less simultaneously.

I wrote an essay on Yale62.org in February 2005, in which I suggested that the potential solvency of our social security system was dwarfed by the issues surrounding the cost and availability of health care in America. Among other things, if we don't fix health care, the premium cost for Medicare Part B and D benefits will in short order equal or exceed the amounts payable as Social Security benefits. I said in 2005:

The health care problem is not limited to Medicare. Indeed, the costs of Medicare simply reflect the costs of a health care system that is poorly organized, too expensive, and random in its performance, and which fails to achieve acceptable outcomes for our population as a whole. The health care system is broken, not only for retirees. Fixing it is critical to the overall economic health of our society, as well as to the physical and mental health of all of us.

The statement of the problem is the same today, more than two years later. What is beginning to happen is that Americans are now seriously exploring ways to change health care, rather than simply wringing our collective hands.

One important reason for this shift in momentum is that many business and labor leaders now recognize that the US health care system — as we now think of it — is absolutely unsustainable going forward and is a major impediment to both collective and individual economic prosperity. For example, on May 7, 2007, a coalition of 18 Fortune 500 companies, a number of other companies, several labor unions, and even some insurance companies announced their support for universal health care in the United States. The new coalition, led by the CEO of Safeway, joins a growing list of similar coalitions whose members have accepted the urgent need to change our health care system.

A recent aerial photo of Oregon Health & Sciences University

The emergence of large business and labor coalitions creates the political dynamic for change. It also suggests the possibility that change can occur at the national level over time. But, based on my experience and observations, the most likely evolution will be that some states — including Oregon — will take significant steps first, becoming — if you will — demonstration projects that show what can be done. And, it is not enough to simply call for universal health care. One has to think carefully about what needs to happen if we are to create a truly effective, high quality, affordable health care system in the United States.

As I have talked about health care with business leaders, I have asked them to consider the following:

Suppose your business depended on getting your products delivered timely, reliably and cheaply to your customers. Suppose your current delivery company (a) misdelivered 45% of your packages, (b) couldn't tell you in advance how much any delivery would cost, (c) charged you twice for its mistakes, (d) broke 100,000 of your products every year, (e) required your employees to spend lots of non-productive time trying to deal with all of this, and (f) each year consumed 16% or more of your cash flow. Without doubt, any business leader worth her salt would find a new delivery service.

For Americans, that is where we are with health care! Our system — or more accurately, non-system — fails to get it right almost half the time, makes lots of mistakes, kills and harms tens of thousands of people unnecessarily, wastes everyone's time, and costs too much. Moreover, as the New Yorker article points out, we are not training a workforce which could continue the present delivery system even if it were working well. And, we have no plans at all to provide life-enhancing care to our increasingly aging population, including all of us in our Yale class, our families, and our peers.

For all of the wonderful, talented individuals who provide health care, for all of the "miracle" results, and for all of the gee-whiz technology and drugs that we use, health care in America does not work. We spend far more than any other country in the world, and our health outcomes on average are worse than even in some third-world countries.

The problem we have in American health care is NOT simply finding a way to insure the uninsured, although that is something we must do. As former Oregon governor Dr. John Kitzhaber has often said: "That is just buying deck chairs on the Titanic."

Fundamentally, we Americans do not have a health care system or culture that keeps us healthy or takes good care of us when we are sick. On top of that, we eat too much of the wrong foods, smoke too much, and exercise too little. And, because our system doesn't work and we don't take care of ourselves, health care — by which most people mean medical care — is far too expensive.

We aren't getting value for money! And — that means that we have to make change happen.

To fix American health care, we have to deal with five problems simultaneously:

First, we have to get a financing system that allows everyone to get the health care service they need when they need it and that insures both individuals from the costs of serious medical care by sharing that risk over the entire population. We fail miserably in this today.

Nationally, more than 46 million Americans have no health insurance, not even Medicaid But, most of the rest of us are underinsured for two reasons: (a) deductibles and co-pays are too expensive for many individuals, especially those with newly popular "high-deductible" insurance plans, and (b) almost all medical insurance coverage has lifetime caps, typically less than $2 million, which is far less than the costs of treating many catastrophic and chronic conditions. In 2003 and 2004, more than 50% of all personal bankruptcies in the US were related to medical cost of individuals with medical insurance.

In short, what we presently call medical insurance is not insurance at all for most people. We need to move to a system that provides "access to health care" not "insurance", even if insurance companies are the brokers of that access. Part of any reasonable solution is a new financing model which does not expose people to financial ruin — or even skipping lunch — when they get sick or injured.

In Oregon and several other states, we are seriously discussing a change to the current insurance system by which all or a large percentage of folks would obtain health "insurance" through a large purchasing collective or exchange. The opportunities here are to share risk sensibly, standardize benefits and payments, and — perhaps most importantly — create a purchasing entity which reflects the common interests of all of us and helps the service providers change the delivery system for our common benefit, which is an essential part of a better health care system.

Second, we have to substantially change the way we think about and deliver health care services. This means embracing a different vision of health care than our current practice of short encounters with people in white coats when we are sick. We are just beginning to take this challenge seriously. And, one of the great problems we have in moving forward in this way is that many of the players in the current system are making substantial profits from the built-in inefficiencies of the current system.

In economic sectors other than health care — for example, electronics and transportation — innovation is typically driven by producers, who compete on both price and quality. While there is constant innovation in the technology of health care, there has not been much innovation by producers — meaning hospitals, physicians, and insurance companies — in creating a new model of health care. One of the mysteries to this observer is why no major player has yet offered society a new and different health care product, one that promises to keep people healthier at lower cost, by rethinking the process engineering and deliverables.

Health care is not about selling pills and procedures, after all. It is about getting well and staying well. We do know, from serious small scale innovators in this country and more important from most other countries, that there are ways to provide health care services which work better than what we typically do today. Doing things differently can and should mean doing things better — and also cheaper.

Third, we need to integrate financing and care systems for mental and physical illnesses. This is a key building block to a sensible, effective, and affordable health care system. Most health care dollars are spent providing care to chronically ill individuals, many of whom have both physical and mental health issues. Many of these people also need various social supports, as well as the services of traditional medical or mental health practitioners. But, for most people most of the time, there is little or no insurance coverage for mental illness. There is no coverage at all for the kind of social work and case management support that can keep people healthy, without incurring the high costs of acute medical or mental health services. And, more often than not, there is little or no coordination of services or accountability for the health of the whole person.

Today, however, there are primary care practices that are beginning to integrate behavioral health care and social support systems, and these "system of care" approaches are showing great potential in keeping people healthier and reducing the need for costly medical intervention. We urgently need to move to this model of care — nationwide. To do so requires leadership and major cultural change. It means that what we now think of as "medical care" will increasingly be provided by a team of people with a variety of skills, but sharing a commitment to each patient as a whole person. It means that we must pay for these services, recognizing that that have value to us as a society and because they save money compared to what we do today.

Fourth, we have to use modern information and diagnostic technology to take better care of people and help them take better care of themselves. Technology should be used to reduce costs and improve outcomes, not as a profit center for health care providers. For example, there is no doubt that diagnostic imaging technology helps doctors pinpoint and target specific conditions. Used correctly, this should lower the cost of health care, because it reduces the guesswork and leads to improved outcomes. But, in our current financial model, providers don't get paid for the better outcomes resulting from the judicious use of technology. They get paid for each use of the equipment, whether productive or not.

Fifth, as individuals and as a society, we need to commit to making our lives healthier in every sense of that word. In many ways, this is the most difficult challenge. No system, doctor, or government agency can mandate that we change our individual or collective lifestyles. But, there are things we can do in a shared way to reduce tobacco usage, change our eating and shopping habits, and improve dental health. In many communities, we are beginning to see important initiatives in these areas, such as better school nutrition and limitations on second-hand smoke.

Jonathan and grandson Eli enjoying one of the lighter moments of life

Changing health care in America is a big order, but it is not an impossible task. If we view fixing health care as a shared responsibility, we can fix these problems, one step and one day at a time. But, we have to envision dramatic change, each step we take has to move towards a dramatically new health care system, and we don't have a lot of time to fool around.

We don't have to spend more money to support a broken system — in fact, it would be counterproductive to do so. In our economy, we already spend more on health care than it should reasonably cost to provide high quality, effective, and accessible health care to everyone. Throughout history, innovation is driven by investing in improved quality and lower costs, not by subsidizing an outdated or broken model. Thus, we need to make targeted investments which drive change, such as creating new models of primary care and building information systems which improve health care for all of us. We should not let ourselves get trapped into believing that accessible, quality health care is too expensive. Done right, it should cost less and produce more than we have today.

Right now, in Oregon and throughout America, good people are working together to find ways to improve health care and the health of everyone in our society. It takes all of us: business, labor, doctors, hospitals, insurers, political leaders — but most of all, ordinary folks like you and me. All of us in the Class of 1962 have been privileged with the gifts of a great education, a long life, and reasonable economic prosperity. We can be part of the solution.

Jonathan and Deanne with a fisherman and his cormorants, China.

(Jonathan's email address is jaa@aterwynne.com.)