Policy-Management Convergence

I've just returned from another week of lectures and sessions with the 1st Year MPH students. The sessions are all day long from Wednesday until Friday and feature a mix of both policy and management. This last week I focused on planning and evaluation for the management side and health reform for the policy part. My French (British and German) colleagues talked about health reform in Europe while I covered the recent US reform process.

It is clear that the health care systems in the US, UK, France and Germany are very different but they have become more different in the recent past than when they started. The German system essentially set the tone for a social insurance based welfare and health system in the 19th century. This was followed only partially by France and Britain and only partly by the US when Social Security was established in the 1930s.

The lecturers all agreed that World War II was a key turning point for health care systems as the European governments were forced by their electorates to respond to the sacrifices they had made during the war. There was a need to reward long-suffering populations with something tangible after either an exhausting victory, a crushing defeat or a humiliating occupation. Food, housing and a revived economy were hard to produce, but a subsidy for health care drawing on the services of physicians and nurses equally caught up in the aftermath of war was well within reach of the governments.

The US, on the other hand, had been the winner and there was no need to reward the population except to make economic recovery fueled by international commercial expansion as "efficient" as possible. The American answer was to allow a tax-exemption for health insurance benefits to propel a new health insurance industry into a major economic actor. The expansion of their market was abetted by the advances in medical science that were also a product of wartime research and innovation--they made medical care more effective and more valuable.

Europe was launched on a road to an expanded post-war welfare state while the US was resisting any form of government sponsored health care system. The economics of medical care as much as the impulse for social justice prompted the US Congress to provide subsidies for specific populations under Medicaid and Medicaid. Meanwhile Europe just absorbed higher costs and greater use into their social insurance structures bumping taxes up slightly behind the costs of these systems.

But all that rises must converge and the common pattern of inflation of medical costs has started to cause alarm on both sides of the Atlantic. The US was the first to react with technical fixes to constrain use and thereby costs. Europe belatedly shadowed the use of DRGs, RvUs and other market adjusting mechanisms when the systems were only slightly falling behind budgets.

Budgets are now under huge pressure in all 4 countries. The fiscal crisis is showing how luxurious the European welfare system is when populations are aging and the cost and value of medical care are rising more rapidly. So now all four nations are looking at each other to find the best ways to control costs. They are converging more rapidly than they fell apart after WWII. They all share a common task of restraining or curtailing costs expansion without reducing coverage.

This is both a policy and a management task because the politics of budgets can only do so much to change behavior and it is behavior that is at the heart of health care costs inflation. This is the behavior of the system, patients, and its professionals. We simply have to manage behavior better

The real convergence is in the management of systems and how we teach the managers. They are now being forced to make costs containment a priority job, putting access, even efficiency, in trailing places.

More about how that is being taught in the next post.