Kathleen Sebelius and Healthcare's Newspeak/reducetheincrease

It's good time to revisit Orwell's 1984 as the Obama presidency begins 'healthcare overhaul'

Many of us have seen Apple's memorable '1984' Super Bowl ad and it resonates because it was probably on some required reading list during our formative years. Now that we have more years under our belts, we have a sense of unease that George Orwell's 1949 classic dystopian novel 1984 is hitting a bit too close to home.

The novel (whose original title page is shown), became famous for its portrayal of pervasive government and control, and government's increasing encroachment on the rights of the individual. Newspeak was the fictional language in 1984.

As the Obama administration begins to take another obligatory whack at 'healthcare reform,' commentators such as Peggy Noonan observe that the deliberate obscurity of official language is intensifying our underlying fear of government.

In the May 16, 2009 WSJ she observes that the language surrounding the healthcare rhetoric of Ms. Sebelius..."accessing affordable quality health care, "single payer plan vis-à-vis private multiparty insurers" and "key component of quality improvement" was little more the "New Class gobbledygook."

This newspeak gobbledygook, which is more prevalent than ever, is also more destructive than ever...because government itself is doing more than ever. There are two major fears among thinking Americans right now, and the deliberate obscurity of official language is only intensifying them.

The first is that Mr. Obama's government, in all its flurry of activism, may kill the goose that laid the golden egg. This is as dreadful and obvious a cliché as they come, but too bad, it's what people fear. They see the spending plans and tax plans, the regulation and reform hunger, the energy proposals and health-care ambitions, and they—we—wonder if the men and women doing all this, working in their separate and discrete areas, are being overseen by anyone.

The second great fear is that the balance between those who pay taxes and those who need benefits will be left, after the great flurry, all out of whack. When this balance is deeply disturbed or distorted, when the number of those who need to take from the system truly overwhelms those who work to provide America's wealth, a tipping point occurs.

Do members of the administration speak obscurely because they can't help themselves, or do they speak the way they speak because they really aren't all that keen to have people understand them?

Wonder what newspeak term Big Brother would have for euro-style socialized medicine?

plusgoodhealthjoy

...now don't we feel better...

If Mount Olympus Was Subject to Medicare DRG Reimbursement, Would Zeus Have Been So Innovative With Eternal Damnation?

Part Seven/The Deck is Stacked Against Organizational Innovators in the US...there is simply no way to get paid for the innovation.

Sisyphus was a clever fellow, and he thought himself as clever as the gods. Zeus, however, was a god, and displayed his own cleverness by binding Sisyphus to an eternity of frustration. Today, pointless or interminable activities are often described as Sisyphean.

Few tasks can be more interminably frustrating then trying to get a hospital paid for a service. Rather than receiving a payment appropriate for a given service and the costs associated with it, the diagnosis-related group (DRG) payment system forces innovators to find an appropriate rate from an existing DRG.

The shackling of innovation by the DRG system has several consequences for the US hospital innovator:

• The DRG system restrains price competition by sustaining overly compensated but inefficient incumbents and dilutes any cost advantage brought by innovation.
• The lengthy and cumbersome procedures to establish new DRGs can discourage innovators with new business from entry because they will not be provided with appropriate reimbursement.
• US hospitals cannot price flexibly, as Indian hospitals do, and have no incentive to find price points that are appropriate for different market segments.
• There is no means to negotiate with the Centers for Medicare and Medicaid Services (CMS) to secure reimbursement for innovative procedures or business models.

Private insurance reimbursement also impedes price competition, because the insurers have difficulty negotiating with the large hospitals that have market power. Insurance networks are forced to include all of the clustered services that a hospital chain offers...including those services that would normally be targeted by a more efficient entrant.

It comes as no surprise that with all this insurance comes an enormous administrative burden. While the US patient sees Case Managers whose primary focus is to arrange for insurance reimbursement and getting them out of the hospital as fast as possible, the Indian patient is being attended to by support personnel from the nation's hospitality industry...who are dedicated to improving the patients comfort and satisfaction.

Abandon All Hope Ye Who Believe that Indian-Style Innovation Can Easily Be Adopted in the US

Part Six/Specialty hospitals in the US do not appear to compete on either price or quality

It is almost as if Dante and Gustave Dore were divinely inspired to provide generations of US healthcare commentators with a rich source of visual illustrations to supplement the topic at hand.

Just as with the boat ride with Charon across the river Styx, the American patient must pay to navigate the complex healthcare system. But unlike Charon who seemed quite reliable, patients sometimes have no idea of what they are really paying for.

The only reasonable comparison between a US and Indian hospital is perhaps India's new specialty heart hospitals and US specialty hospitals.

In the US, specialty hospitals promised to deliver a higher quality healthcare at a lower cost than local general hospitals by specializing in specific offerings and capabilities, producing a higher volume of service and reducing costs.

The actual achievements of these US specialty hospitals is mixed, and an assessment of their operations reveals the basis upon which hospitals really compete in the US. First, the quality of care is in dispute. The higher margins and lower costs were essentially driven by "cream-skimmed" patients who offered the most lucrative procedures and fewest complications. The Medicare Payment Advisory Commission (MedPAC) found that 94% of these specialty hospitals were located in states without certificate of need requirements. The financial success was not as result of efficiency, but exploiting hospital reimbursement policies.

Since payment to hospitals in the US is not based on quality or clinical outcomes, the US specialty hospital's business models seems to be not much more than careful patient selection. In fact, MedPAC and the US Department of Health and Human Services (HHS) concluded that there is little evidence that an efficiency-based business model was ever developed.

So, it appears that US specialty hospitals evolved to take advantage of financial loopholes within the payment system, rather than to exploit an opportunity for high quality and lower cost. It seems that the US regulatory environment has had the effect of actually discouraging value-based competition and throttled the organizational innovation that is now shaping the Indian market.

Reverse Engineering Jobs to Lower Costs Yet Maintain Quality

Part Five/US Hospitals can't easily reduce their personnel costs...Indian hospitals already have

There are literally hundreds of healthcare professional societies in the US. There are hospital associations and societies for every imaginable job type. They all have various certifications and annual meetings and accreditations which seem to become inexorably woven into the human resource job descriptions over time.

When you diligently work at creating standards that require the most expensive human resource cost inputs for a given task...under the wildly waving banner of quality care ...you end up with some very expensive procedures. In the US, these costs are passed on year after year as reasonable and customary.

In India, where there is negligible market penetration by insurance carriers, patients are payers are better able to shop for medical procedures by comparing prices. In this true healthcare market, there is a continuous drive for maintaining quality and lower costs. To this end, hospitals have adopted the strategy of "de-skilling."

De-skilling is the mirror image of the US healthcare labor strategy. Every procedural function is reverse engineered, to determine the lowest level of training needed for a given task. De-skilling not only cuts costs by substituting lower-cost labor when possible, but it also addresses local labor shortages in skilled and trained personnel.

This is yet another cost saving strategy that would be nearly impossible to adopt in the US, as any gains realized would be wiped out with the very first law suit alleging failure to provide the prevailing standard of personnel for a task.