Richard Hanson, Grafton, N.D., letter: VA’s change shows way to affordable care

GRAFTON, N.D. — The Supreme Court has ruled: All Americans must have health insurance or pay a penalty.

This controversial issue highlights what the health reform debate has been mostly about: insurance. Must we have it? Should individuals, employers or government pay for it?

But the big problem — the one that soon will bankrupt Medicare — is a billing system called fee-for-service. Health care providers who charge a fee for every service often overtreat their patients, driving up costs.

President Barack Obama’s Affordable Care Act addresses the fee-for-service problem, but too feebly to save Medicare. Therefore, lawmakers will need to revisit health reform soon.

When that time comes, many Republicans will suggest we end Medicare and give all Americans vouchers to help them buy their own insurance. This plan is tantalizingly simple but ignores the fee-for-service problem. It’s not the answer.

Then, what is?

Here’s an idea. We can reform Obamacare the same way the Veterans Health Administration reformed itself in the 1990s.

Faced with censure and threat of dissolution, the U.S. Department of Veterans Affairs responded with striking changes that earned widespread praise. By 2004, a RAND corporation study implied that VA care had become America’s best.

How? Phillip Longman tells how in his book, “Best Care Anywhere.”

According to Longman, the VA operates like a nonprofit HMO. It operates within a fixed budget rather than getting fees for services — a constraint that discourages costly overtreatment.

On the other hand, as a nonprofit, the VA is not accountable to shareholders to make money. Therefore, it has no incentive to undertreat.

The heart and soul of the VA is a computerized recordkeeping system called VistA. VistA saves money by cutting errors and unnecessary treatments. It helps doctors practice evidence-based medicine.

That, in essence, is the VA model. Sound promising? If so, the key question is this: What changes should we make in the Affordable Care Act to convert America’s system to the VA model?

Longman believes we should start with Medicare. To be covered under Medicare, future patients would join the VA or any large organization willing to adopt the VA model—which probably would include such notables as the Cleveland Clinic, the Mayo Clinic and Geisinger Health System.

If a senior joins such an organization, the government would pay the senior’s annual premium.

But why limit Medicare to seniors? Medicare can provide partial premium support for younger Americans, too.

Such an incentive would entice millions of Americans away from the fee-for-service system into Medicare-approved managed care organizations. This would spur positive changes throughout the health care industry.

Care would improve, premiums would fall, and the specter of medical debt would fade from our lives.

Richard Hanson

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