Lori Sturdevant: Expanding a broken system?

According to one health care expert, any health care reform must include addressing productivity.

By LORI STURDEVANT, Star Tribune
Last update: July 19, 2009 - 9:22 AM

For some years, whenever this column pried opened the health care can of worms, an e-mail from Tor Dahl would generally follow.

The productivity guru of White Bear Lake would advise that I'd failed -- again -- to hammer home the only reasonable remedy for the dilemma of costs that are too high, medical outcomes too poor, and uninsured people too numerous. His fix: improve the productivity of the health care delivery system. That will rein in costs, and that will allow for insurance coverage and effective treatment of more people.

I'd introduce Dahl with a quip about a prophet without honor in his own country, but for the inconvenient detail that Dahl's country isn't the United States. It's Norway -- and he's been knighted there.

Dahl came to study economics at the University of Minnesota in 1962 and stayed, becoming an associate professor and an international consultant helping health care providers, businesses and governments increase their ratios of measurable outputs to inputs of people, material and money. He still carries a Norwegian passport, and uses it often.

One of Dahl's recent e-missives was accompanied by an invitation: Visit his office in beautiful downtown White Bear Lake, and he'd elaborate on his point about health care productivity. He'd even provide coffee and Scandinavian cookies.

That sounded good last week -- especially given that 1,100 miles away, in Washington, D.C., lawmakers were beginning to act as if they are serious about changing America's health care system this year.

The bills that started to move in both the House and Senate last week would do a lot to extend the benefits of health insurance to more people. But would they save money through productivity improvement in clinics and hospitals? That's less evident.

And that's where the health care reform effort in Washington is going wrong, Dahl said.

"If you expand health insurance without addressing the system itself, you are financing an even worse system than what you set out to correct," he said.

"Get everybody insured, and what's the first thing that will happen? Will you get more and better care? No, you'll get less care. It takes a long time to educate any new health care professionals, and the ones we have now are working all out. They are going to get 50 million more Americans to work on? That means you're going to pay more for it, and you're going to get less of it. That's not going to make anybody happy."

But those health care professionals are not working in a system in which the results Americans most desire -- long life expectancy, low infant mortality, control of chronic diseases -- are clearly rewarded. Doctors and hospitals are most often paid for the number of patients they see and procedures they perform, not for keeping people healthy.

"The only thing that systemically can cure the health care system's problems is if [providers] became as productive as they could be. The perverse incentives in the system must be reversed," Dahl said.

That's what the best health care reformers at the State Capitol -- of both parties -- have been saying for some time. They speak in terms of payment reform, not productivity, but the idea is much the same: Reward doctors for improving the health of their patients.

Simple enough. But the legislators who tried to enact legislation to pull it off in 2008 ran into fierce opposition. As Dahl explained, "Every cost item in this system is income for somebody else." Those who receive all those fees for unnecessary services won't easily let them go.

But Dahl's a Norwegian who belies ethnic stereotype. He's an optimist. He believes that a change in incentives in favor of health care productivity is coming soon. The reason: No other remedy for what ails American health care will be workable and affordable.

Just after my visit with Dahl, I heard an echo of that prediction from an unexpected source. On Wednesday afternoon, Gov. Tim Pawlenty and former U.S. House Speaker Newt Gingrich held forth on the same topic at the University of Minnesota, under the banner of the Center for Health Transformation, which Gingrich founded in 2003.

They shared Dahl's disappointment in the health care legislation that has emerged to date from Washington. Gingrich predicted that the Democratic-sponsored plans to insure all Americans will falter because of their high cost.

But, he said, the health care system is about to experience great pressure to become more productive. Competition from low-cost, rapidly improving systems in China and India, cost-saving medical breakthroughs, and consumer demand for better service will force that change, Gingrich said.

I'm taking President Obama's words last week to heart. I won't bet against the Democrats' health bills. But I will bet that if they pass, the next big thing in health care reform will be a productivity surge -- with Minnesota in the lead.

Lori Sturdevant is a Star Tribune editorial writer and columnist. She is at lsturdevant@startribune.com.

Minneapolis Star Tribune. Sunday, July 19, 2009.  Opinion (OP) pages 1& 4.