HealthLawProf Blog

Editor: Katharine Van Tassel
Akron Univ. School of Law

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Sunday, March 13, 2005

New Health Reform Concept?

The New York Times Magazine today has an article by Roger Lowenstein ("The Quality Cure?") that looks at the health care reform proposals of Harvard economist and dean David Cutler.  In a nutshell, Cutler argues that - the high price tag for health care to the contrary notwithstanding - the U.S. should be focusing on improving quality, not reducing costs.  Cost reduction, he says, fails at the political and cultural level (American don't like to lose their health care freedom of choice) and ignores an often ignored reality: much of health care spending is effective and could be more so if economic incentives were designed to encourage better results.  We could even save money along the way.

Cutler is the author of last year's well received Your Money or Your Life (Oxford Univ. Press) and was a principal architect in the Ira Magaziner shop that produced the still-born Clinton health plan in 1993.  He has a number of health-related papers on his web page.

Although not mentioned in Lowenstein's article, an article in the June 2004 Harvard Business Review also made the case for increased focus on competition in quality.  Harvard's Michael E. Porter is the Bishop William Lawrence University Professor, and his article (co-authored with Elizabeth Olmstead Teisberg at the University of Virginia's Darden School of Business Administration), "Redefining Competition in Health Care" (excerpt), turned a lot of heads at the time, partly because it represented his first foray into the realm of health policy.  In it, the authors argue that "zero-sum competition" in health has resulted in the wrong level of competition, the wrong objective, the wrong forms of competition, the wrong geographic market, the wrong strategies and structure, the wrong information, the wrong incentives for payers, and the wrong incentives for providers.  The article goes on to describe the kinds of changes that would be needed to turn the system around.  A book-length version of their article is scheduled for publication by the Harvard B-School Press on June 2. (For the record, Porter is one of about 15 University Professors at Harvard and is literally a rocket scientist (B.S.E. from Princeton in aerospace and mechanical engineering).)  [tm]

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