Q&A With Grace-Marie Turner
Healthcare Technology: Why did you found the Galen Institute?
Grace-Marie Turner: Health policy is something that I think is tremendously important to every one of us. I was a consultant in the early 1990s, writing policy papers and doing research for individuals and companies on a number of issues. I increasingly wanted to focus on health policy and wanted to have my own voice. To make a long story short, I founded the Galen Institute so I could continue my work in developing and communicating health policy ideas.
HCT: Have the organization’s goals changed since 1995?
GMT: They really haven’t.We were founded to create a positive conversation over free-market ideas for health reform, and that is still very much our focus. Most of the policy ideas we developed early on to give consumers greater freedom of choice with a more competitive marketplace for both healthcare and health insurance are still relevant – even more relevant – today than when we were founded 10 years ago.
HCT: Grace-Marie, in researching this interview, I found an impassioned plea you wrote to a healthcare-related blog. You said that we are on a “sprint” to save the private healthcare sector. What did you mean? How can technology contribute to saving private healthcare?
GMT: About 47 percent of the more than $2 trillion that the U.S. spends on healthcare is financed through public sector programs. The rest is financed through the private sector, primarily through employment- based health insurance, but also through individual out-of-pocket payments for premiums and services.We’re really at a tipping point. Are we going to go toward more and more government control over the health sector? Even though about half of the health sector is auspiciously in the private domain, it is heavily regulated by the government. State governments, for example, dictate what health insurance policies must cover and what insurers can charge, as well to whom and under what circumstances polices will be sold. I think we’re at the point where either we’re going to show that an energized, competitive marketplace in the health sector can truly meet people’s needs – or we’re going to default into more and more government control that will suffocate the private marketplace.
I think that the Information Revolution is the absolute linchpin to saving the private healthcare marketplace. Actually, I think it’s the reason we’re having such a vibrant debate right now. Our health is the thing that matters most. We realize that every time we get sick. We drop everything else when there is a serious injury or illness in our family. But too often, people feel they have too little control over their healthcare decisions because financial decisions are made by third-party payers. At the same time, people have more and more information about treatments that are available. We’ve got to make changes that connect public policy to people’s demands for more control over decisions involving their healthcare. We believe that means giving people more control over their health spending.
The Internet provides a significant new opportunity for people to research the treatment options that are available and to use that information to make smarter decisions about their healthcare choices. In many cases, people can and want to make decisions about these options, in consultation with their doctors. More and more, we see people looking for the best value in healthcare, which means seeking quality care at prices they can afford. This is one way to inject consumerism into our healthcare system. If we don’t get control of healthcare costs, we’ll never be able to solve the other problems in the health sector. If we don’t approach healthcare like other sectors of the economy, where consumers shop for value and seek services that are faster, better and cheaper, we’re doomed to default into a government-run healthcare system.
HCT: Medicare and Medicaid are obviously giant players in all of this. How do they need to change to function more effectively?
GMT: Actually, I’m a member of the federally appointed Medicaid Commission, and we are holding a series of meetings to discuss the future of Medicaid so it can be there to help those with low incomes and the disabled in the generations ahead. I don’t want to sound like a broken record, but I believe the solution is to bring more private competition and more consumer choice into this program.We’ve already seen with the Medicare Part D Prescription Drug Benefit that when private companies compete with each other and compete for the business of seniors, not only do seniors have more attractive choices, but they will force prices down. Drug plan premiums are about 30 percent lower than they were expected to be in the Part D Program, and that’s mostly because of the strong, vibrant competition among the drug plans. Seniors aren’t out there themselves negotiating the price of drugs, but they’re joining plans that negotiate fiercely to keep prices down. That’s what both Medicare and Medicaid need – a focus on consumers and the motivation for the private sector to compete to offer better choices at lower prices.
Consumerism is working.We see a lot of new energy in the healthcare industry to provide more attractive, affordable options to consumers. For example, insurance companies that have been major players for a long time in the individual and small group markets, like Assurant Health (formerly Fortis Health), have moved rapidly to offer new financing products such as health savings accounts and health reimbursement arrangements. Even established companies, like Aetna, which has been in business for 150 years, are moving rapidly into offering new sorts of financing arrangements, but also assisting patients with new tools to offer transparent prices and help people make decisions about provider quality.
When I go to conferences to speak, I see an incredible number of new companies that are being created to help facilitate transactions and to help consumers get more and better information. Companies are moving quickly into new areas that will provide healthcare consumers with better options, more information and more affordable prices.
HCT: Which current legislation will most dramatically affect consumerdriven healthcare?
GMT: We work hard to work with members of Congress and the administration to develop and advance policy proposals that give people the tools they need to move into this new era of consumerism in the health sector. The most important policy change is to allow people to purchase health insurance on their own and get the same tax preference they would if their employer were to purchase the policy for them. There’s no reason that you should get a deduction for your mortgage and not get a deduction for your health insurance if you buy it on your own.We believe that tax deductions for people who buy their own health insurance, coupled with tax credits targeted for lowerincome people, will help millions more people to get health insurance and to have policies that they own and can keep as they move from one job to another.
So leveling the playing field for the purchase of health insurance is first. Then there are other policy changes that are needed to move our health sector into the 21st century. One is to provide an opportunity for people to buy health insurance in new ways to take advantage of group prices. That could be through affinity groups, such as churches, unions or professional associations, so people can purchase health insurance that is portable – insurance that they don’t lose if they lose or change jobs. People also should be able to purchase health insurance from states other than where they live, as Rep. John Shadegg from Arizona has recommended.
And finally, we need to get states to acknowledge that they have been a big contributor to problems of high healthcare costs and, consequently, the high numbers of uninsured. States have mandated that so many health services and providers must be covered by health insurance policies that legislators have designed the equivalent of Cadillac policies for people who may only have a Kia budget. These officials need to see that when they mandate coverage and write so many rules governing health insurance that they are driving millions of people out of the market because these policies are just too expensive for them. These state rules and mandates drive up the cost of insurance and also keep it from being true insurance where everybody is sharing the risk of having a major, unexpected medical event. Not everyone can afford the comprehensive health insurance that major companies offer, and state rules and regulations often keep people from having the option of buying a scaled-down but more affordable policy.
Many people could afford to pay more out of pocket for routine health services if they had lower-priced, catastrophic health insurance policies. And some new businesses, like MinuteClinics and RediClinics, are giving consumers new options for routine care. These clinics, usually based in Target and Wal-Mart stores, provide a limited range of services that people would usually get from their internist, like getting treatment for strep throat, poison ivy or an ear infection. These are just a few of the types of entrepreneurial businesses that are coming along to give people more options at lower prices.
HCT: So if everything works out per your vision, what will healthcare be like in the U.S.?
GMT: Healthcare will be much more individualized, and people will have the type of health insurance that suits them and their budget. There will be many different ways to access medical care, and different ways of obtaining financial protection to pay for large medical expenses. Most importantly, I think you’ll find a much more consumer-focused system.
One of the things people are so frustrated about in this country is that every other sector of the economy caters to consumers – but not healthcare, which has always catered to big, third-party payers (both companies and governments) that are paying the bills. Consumers have been shuttled aside. And this is even more true in government-run health systems. A British Medical Association leader was recently quoted about the rise of consumerism in the U.K. and how bad that would be. He said that even the notion that physicians are basically running a service industry would be quite hard for doctors to adjust to. That’s exactly the problem. So our challenge is to make changes that allow doctors to focus on patients rather than being driven by third-party payers. Doctors and patients, not paperwork and bureaucracies, must be the heart of our healthcare system.
Ultimately, we need a system that encourages patients to be better-informed consumers of healthcare services. They need to have the information and incentives to take better care of themselves and to make wise choices. This is vital. And the only way it will happen is if consumers have more control over their healthcare destiny by having more control over their choices.
