Sen. Frist in The New York Times: How the G.O.P. Can Fix Health Care

In a bid to reopen the debate over health care reform, President Obama has arranged a televised bipartisan meeting this Thursday. Republican leaders in Congress have been invited to bring their best ideas for slowing the growth of health care expenditures and expanding the number of insured Americans. The Op-Ed editors asked five conservative thinkers to outline what they believe those ideas should be.

President Obama, Harry Reid and Nancy Pelosi have failed at health care reform. They have failed because they fundamentally don’t believe in markets, incentives and the power of hundreds of millions of people to make smart choices about their health. It’s just not in the Democratic leaders’ DNA.

Transforming health care to slow the growth of spending requires a radical restructuring of how health services are paid for. The most powerful way to reduce costs (and make room to expand coverage) is to shift away from “volume-based” reimbursement (the more you do, the more money you make) to “value-based” reimbursement.

Others will appropriately and wisely make the case for preventive care, chronic disease management, shopping for insurance across state lines, malpractice reform and the elimination of pre-existing conditions as exclusionary criteria for health insurance — all steps that I favor and that together would strengthen the health care system. But they won’t transform it. The only way to do that is to align the incentives of doctors, hospitals, pharmaceutical makers and other health care providers through value-based purchasing.

The Congressional plan to squeeze reimbursement to nurses, doctors and hospitals by imposing top-down budgeting in Washington won’t work. It won’t change anyone’s behavior, and it will eventually lead to rationing, which undercuts innovation and medical research.

This is not rocket science. You simply need to pay people to do a good job, demand measurable outcomes and adopt proven standards of practice and information technology. Reward value, not volume.

Medicare and private insurance companies should reimburse providers not for each discrete service they provide but for managing a patient’s condition over an entire episode of care. In my own field, transplantation, for example, a payer should not separately reimburse 56 different nurses, doctors, pharmacies, imaging centers and hospitals. Instead, it should pay a heart transplant team a fixed sum (adjusted for risk) based on the diagnosis of “heart failure requiring transplantation.” The disbursement of that payment would then be made at the local level, where value can be most accurately determined, and waste most likely eliminated.

Health care providers could then compete on the basis of efficiency and success. Markets work. We should use them to drive behavior toward the goals of sustainable value in medical treatment and affordable health care for all Americans.

– BILL FRIST, surgeon and former United States senator from Tennessee

To read the entire op-ed in The New York Times, please click on the following link: