WHO KILLED HEALTH CARE? 

Book Review by Greg Scandlen
President and CEO, Consumers for Health Care Choices 

Who Killed Health Care?
By Regina Herzlinger, Harvard Business School
McGraw-Hill, 304 pages

Regina Herzlinger has hit a home run with her new book, "Who Killed Health Care?"  Her reputation as a scholar, communicator, and original thinker is already well established. The new volume adds a whole new element to her formidable resume - that of a take-no-prisoners street fighter.

She starts right out by declaring war on the health care establishment - the managed care companies, hospital systems, large employers, and elitist academics who think only they are smart enough to decide what care consumers should receive. She is explicit - "You and I are the victims of untrammeled vanity, greed, and self-interest of those meant to protect us." She goes on, "The real issue here is power: the less you and I know about the facts, the greater the power of those in the know - the hospitals, the insurers, and the health policy researchers."

Managed Care

She begins by focusing on "the momentous failure of the California-based Kaiser HMO kidney transplant program in 2005 and 2006" through which 112 patients needlessly died. She returns time and again to kidney care to illustrate a number of grievous flaws in the current system.

Another example she provides is Aetna's disastrous purchase (for $9 billion) of U.S. Healthcare, which nearly destroyed both companies while enriching the managers who made it happen.

She points out that there is nothing wrong with managing health care, but insurers are precisely the wrong people to do it. She notes that, "GEICO may be a wonderful automobile insurance firm, but its executives would probably quickly admit they do not know how to make cars. Health insurance executives and their academics groupies, however, lack this kind of self-awareness and humility."

Hospitals

Her next target is the hospital industry. She is particularly concerned about the low quality and high costs of most American hospitals and argues that "their sheer size and massive scope surely contribute to their quality problems (because) it is virtually impossible for one organization to effectively manage such a large range of sizable activities."

She says “Hospitals have actively squashed the innovative competitors that threaten them."  She makes a powerful argument that it is precisely this squelching of competition that has insulated hospitals from managerial innovation and kept the hospital industry inefficient, unaccountable, and unresponsive to consumers. 

Employers

Herzlinger thinks the idea of employers buying our health insurance makes as much sense as employers buying our clothes, cars, or houses, and she doesn't think very highly of the "paternalistic and bureaucratic" HR staff that is usually put in charge of these benefits.

Academics
 
One of Herzlinger’s big breakthroughs in this book is her commentary on the role of academia as self-interested apologists for the fat cats. She says as a group they favor more control by fewer people.  They have "dismissive disdain for the competence of clinical physicians," and the idea that the average citizen would have anything useful to say about the health care they receive is completely alien.
She accuses academics of using "misplaced analyses, shallow theories, and reckless generalizations." 

It is unheard of for an established member of the academic world to challenge her colleagues at all, let alone by name.  She points out that a year ago she lectured at the Harvard School of Public Health and the students there told her "it was the first time they had heard of any 'reform' other than single-payer." 

She has tuned over a very big rock and discovered all kinds of squirmy little critters underneath.

Solutions

With the exception of her continued affection for mandatory coverage, her policy recommendations are pretty much right.  Mostly what is right is her overview of the transformation that can happen once the creative energy of entrepreneurs is unleashed. And for that, we don't need new laws, we need government to stop getting in the way.

"Who Killed Health Care?" is more than just another addition to a growing body of literature around consumer empowerment in health care. It is a direct attack on the health care establishment that has grown fat and happy by pretending that people are stupid. People are not stupid, and they are beginning to figure out who is responsible for the mess the establishment has made. Regina Herzlinger has helped us identify the culprits.

-- Greg Scandlen