Doctors and public authorities: the trend toward collaboration.

Insuring a population and managing its money require a comprehensive health care financing system. Many issues must be resolved, particularly the roles of the medical profession and its relationship with organizations of laymen in insurance carriers and in government. The spread of society-wide, third-party reimbursement produced conflicts with doctors over admission to practice, work rules, and pay in all countries. Eventually new arrangements were made to settle conflicts of interest and to ensure the harmonious operation of health care services. Policymakers and financial managers came to realize that the medical profession as a whole must be motivated to ensure the success of the system. Recently countries with statutory health insurance and direct public financing created new systems for negotiation and for joint decision making. Even some governments now agree to collaborate with doctors as virtual peers rather than to dictate rules and finance. The only exception is the United States, which will continue to have periodic conflicts until it crafts a joint decision-making system. The evidence comes from the author's first-hand field research over thirty years in the principal developed countries in Europe and North America. He interviewed informants, collected reports, and observed events for these topics primarily in Germany, France, the Netherlands, Great Britain, Canada, and the United States.

The United States needs a health system like other countries.

Every developed country except the United States has a comprehensive health system for coverage, service provision, and finance. Social policy in the United States once was guided by thinkers who realized this, and the Social Security system--complete except for health insurance--resulted. The climate of thinking changed, and health policy for some time has been dominated by classical economists who argue that free competitive markets will solve all problems. They justify their arguments by claiming that the only alternative is full government takeovers of service and financing, as in Canada. While this debate has dragged along, problems in the United States have become grave. Instead of reviving the institutional economics and social policies that once served the United States well, the Clinton administration has turned policy over to devotees of managed competition. But the problem is how to organize the country, and national health insurance--easily observed in other countries--is superior to the current chaos and free-market utopias in the United States. Important aims would be achieved, such as expanding coverage, obtaining stable revenue, and containing costs. Important political barriers can be overcome, such as resistance by small business. Such a health system includes machinery for setting goals and implementing results, involving collaboration among providers, payers, and government.

The competition vogue and its outcomes.

Social security and comprehensive health care financing were developed to protect all citizens and to redistribute money to cover costs. Their inspiration was social solidarity rather than pecuniary self-interest. The United States differed from other countries by continuing a private market in health, with many self-centred and competing providers and insurers; and its prevailing school of health economics deplored the national health insurance and national health services that were universal in other countries and recommended devices that would eliminate "market failure" in health. When health economics grew in Europe during the 1970s and 1980s, the reformers' first presumption was that the voluminous American market-oriented literature must offer answers; but much of it proved superfluous, since European health care systems still had much competition and consumer choice, and they worked better than the reality in the United States. The United States itself has paid a heavy price for turning over health financing policy to the devotees of microeconomics and free markets, and today its serious problems in health are unsolved. So powerful is the pro-competitive ideology that it has now been adopted by the Democratic Clinton Administration, contradicting the heritage of Roosevelt, Truman, and Johnson.

Universal health insurance that really works: foreign lessons for the United States.

The United States has serious and worsening problems in the delivery and financing of health. The debate about reform has inspired many schemes that are persuasive in their presentation, but they are unrealistic: some cannot be enacted by Congress, others would not improve existing arrangements, most are imaginary inventions with uncertain outcomes. The most politically prudent and the most effective course is to emulate the methods used successfully and available for full analysis in other developed countries. America created its successful social security system in this fashion, and statutory health insurance should be added now. All or most groups would be required to join. Financing would come from social security payroll taxes, supplemented by government subsidies. Basic acute care services would be equally available to all. The existing insurance companies would remain as fiscal intermediaries. Doctors and hospitals would continue to work much as they do now. They would prosper from more utilization, few bad debts, and less administrative trouble. The payment and work of doctors would be governed by collective negotiations between the insurance carriers and the medical associations. The payment and work of hospitals would be governed by a mixture of government regulations and negotiations with the carriers. Costs would be controlled by coordinated decision making by the payers, the providers, and government. The system would not turn over services and financing to government.

How expenditure caps and expenditure targets really work.

Every organized payment system must contain its costs in order to keep within revenue without denying benefits. Fixed expenditure caps requiring the provider to operate within its annual financial grant can be imposed on organizations like hospitals, but are fiercely resisted by the medical profession. All financial arrangements with doctors are negotiated, including systems of fixed expenditure caps and more flexible expenditure targets. If the doctors accept the principle of caps and cooperate in achieving them, they do so only as part of a negotiated settlement to avoid a worse outcome. Government's power is minimized, even when government is the payer. Caps on the physicians' sector are unusual. Instead, we see the spread of flexible targeting systems, wherein cost overruns are compensated for by lower expenditure targets the following year. Medical associations in all countries resisted even these restraints for years, but eventually accepted them, provided that target setting, judgments of overruns, utilization control, and all other features are part of a joint negotiating system. Targeting systems are often complicated because they preserve the semiprivate character of statutory health insurance and they are the result of negotiated compromises. To succeed in controlling costs, they require the cooperation of the medical association and of the rank-and-file doctors--but they can succeed. The United States has enacted a small-scale targeting system for Medicare physician payments alone. It cannot become the method for universal health insurance, which must heed lessons from abroad. Only an all-payer system can cover an entire population and contain the costs of the system. A few government officials cannot dictate and implement expenditure goals, but a system of consultation is required for setting and carrying out targets. Impartial officials can regulate hospitals according to the guidelines produced by the consultations, but the record of the medical profession in the countries reviewed here is that they insist on negotiating the final rules and rates. Americans have become bewitched by the mirage of econometric formulas automatically governing a sector, but the real problem is to devise and operate a harmonious decision-making system.

Paying the hospital: American problems and foreign solutions.

Hospital financing in the United States suffers from many problems. Many persons lack access because they lack third-party coverage. Among those covered, benefits vary, and persons receive unequal services. Costs are high and are uncontrolled. The hospital is burdened by complicated relations with many payers. In order to cover their costs and earn extra cash, hospitals overcharge the more generous third parties, and recriminations result. All other developed countries have either statutory health insurance, national health services, or full public financing of privately managed hospitals. Whatever the financing method, all countries avoid the problems prevailing in the United States. All citizens are covered, all have access, and hospitals reject no one for financial reasons. All citizens have equal benefits and receive the same basic services. Regulation by government and negotiations with health insurance carriers guarantee the hospital's operating costs to service its catchment area adequately, but also prevent the hospital from installing excessive equipment and excessive staff. Each hospital is paid by all-payer standard rates, administration of reimbursement is simple, and shifting of costs among payers is both unnecessary and administratively impossible. Costs are contained by the total management of the system, not by fragmented efforts by separate insurance carriers. Considerable strategic thinking by government, the providers, and other interest groups sets guidelines for spending levels every year to meet the country's clinical needs but also to stay within its fiscal capacity. Capital investment for new treatments depends on government grants and evaluation of needs.

Designing fee schedules by formulae, politics, and negotiations.

Fee-for-service cannot be used successfully by organized health insurance without a fee schedule. America first tried to pay doctors under Medicare by an involved formula system without a fee schedule, but the effort has failed. The United States has now commissioned a research project to design a unique fee schedule that will precisely reflect physicians' effort and practice costs and that will represent the prices produced by a perfectly competitively market. The primary goal is the same as that pursued recently by reformers in all countries: viz., narrow the spread in fees and income between surgical and cognitive fields. There are serious technical limitations on this effort, despite the talent of the research team. An additional difficulty lies in the nature of the subject: paying the doctor involves conflicts of interest between payers and all doctors as well as among the medical specialties, and the conflicts cannot be resolved by any formulae calculated by any single research team. Methodological and political compromises will be necessary, in order to adopt a reform. The new method may be just as politically driven, complicated, and disputed as the old one, despite America's pretenses that it prefers free markets and opposes excessive government.

Wibangbe: the making of a documentary about the training and supervision of traditional birth attendants in Zaire.

PIP: During the 1980's in Karawa, Northwestern Zaire, a motion picture was produced which showed the interaction of the modern and traditional systems. The maternity center of the Karawa hospital was central to this effort. Traditional birth attendants (TBAs) became leading participants. Locally trained midwives were key trainers. The training and supervision programs had been ongoing for 2 years when Karawa was chosen as the movie site in 1986. The script was written by a midwife who had trained trainers of TBAs and TBAs themselves. All the steps in the selection, training, supervision, and supplying of TBAs in Karawa and its neighboring villages are included in the script. A Zairian team shot the script. The 5-member crew were employees of the Office Zairois de la Radio-Television (OZRT), the country's official television, radio, and film service. "Wibange" has separate sound tracks in French and English. Costs of the movie were met by contributions from both the US Agency for International Development and from Zaire. "Wibange--Traditional Birth Attendants: Their Training and Supervision" was developed in New York City. There are 2 final productions, a French and an English version. Running time is 23 minutes.^ieng

Foreign experiences relevant to Medicare.

The method of paying doctors under Medicare has never been workable; it creates disputes and confusion for physicians and everyone else and will soon be replaced. The problem is the need to develop a simple and predictable method that will avoid both government dictation and financial bankruptcy. Every other developed country has had structured methods of paying doctors; the United States can use these methods as the starting point for reform. A fundamental feature is standing negotiation machinery between the medical profession and the payers.

Juggling multiple payers: American problems and foreign solutions.

The number and diverse methods of payers are among the principal causes of disarray in American hospital finance. Hospital managers are preoccupied with an intricate and deceptive shifting of costs among payers to maximize their revenues. In all other developed countries third parties cooperate, either voluntarily or by regulation, rather than try to shift costs to each other. In some countries third parties merge and hospital budgets are spread across all payers by standard calculations. In some countries with multiple payers, a common financial office administers all transactions with hospitals. The trend is to concentrate payment in a single source. Hospitals abroad are more stable than those in the United States. With stability, however, come inhibitions against risk, innovation, and failure.

Hospital rate regulation: American and foreign comparisons.

Rate regulation in the United States usually is inspired by widespread indignant pressures to protect the public against venal exploitation. Rate regulation of American hospitals does not ride such a wave of outrage but is motivated by the need to restrain Medicaid spending and insurance premium increases in some states. Hospital rate regulation in America lacks strong political support, makes many politically prudent concessions to hospitals, and is often threatened by repeal. Since Americans distrust regulators and since individual scrutiny of so many hospitals is burdensome and contentious, they often seek automatic formulae that will produce equitable results by rational calculation. In contrast, rate regulation in Europe is a method of refereeing between hospitals and alert third parties. Hospitals' prospective budgets are always scrutinized by regulators. Guidelines are transmitted by government to link public policy to hospital payment, and the regulators apply the guidelines to each hospital's individual situation. The system results in less contention and more stability in European than in American regulation. Certain features of European hospital practice have kept hospital costs high, but the regulators are now reducing annual increases in costs below America's. In order to reduce cost increases further, Europe is moving toward global budgeting and public grants of hospitals' operating costs, instead of regulation of unit rates. However, regulators may still be essential to scrutinize hospital prospective budgets and to investigate the merits of the claims by individual establishments.

Lessons from Germany: some reflections occasioned by Schulenburg's "report".

Germany created the first national health insurance scheme, and its turbulent history has carried many lessons for all other countries. Health care financing--like all social security financing--redistributes wealth and inevitably is caught up in class politics. Cost-sharing by patients is not a neutral device in social engineering to improve efficiency, but it is a gambit in distributive politics. Health care involves the wealth and power of the doctors, and they become militant and successful forces in social politics. The forces for higher spending are stronger than the forces for restraint. Only exceptional political will be government can control costs.

Paying the hospital: foreign lessons for the United States.

This special report synthesizes the findings of a Health Care Financing Administration grant which allowed the author to analyze hospital finance in six foreign countries and in the United States. The author identified the principal problems facing hospital owners, carriers, and governments in the United States, and he conducted lengthy field work abroad to learn how each country dealt with the same problems. One set of the author's conclusions makes more clear issues that are debated in the United States, such as the meaning of "cost-based reimbursement" and "prospective reimbursement". Some of the author's findings show the difficulty of implementing policies often proposed in the United States, such as incentive reimbursement schemes. Other findings of the author show the conditions necessary for cost containment, such as strong representation of consumers and firm political will by government.