STRONG MEDICINE

Crisp, clear analysis of health care—from the perspective of a businessman who applies a systems approach and focuses on the financial incentives that drive the system. Halvorson's credentials are impressive—president of a billion-dollar health-care organization (which remains unnamed here); developer of two HMOs; a former senior executive of Blue Cross—and his approach is direct and businesslike. As he sees it, perverse market incentives inadvertently have been built into our present system. We reward medical providers for volume and complexity and our insurers for risk avoidance; consequently, health care in America is wasteful, expensive, complex, and leaves millions without coverage. Halvorson believes that the solution lies in simple common sense and economic reality. If we change the incentives, he says, we can create a high-quality, highly efficient, and continually improving system. He analyzes how the key elements of the present health-care delivery and financing system work, discussing in turn doctors, hospitals, technology, drugs, insurers, HMOs, and—last but not least—the government. Halvorson also examines some of the options currently being proposed, assessing their strengths and weaknesses. Finally, he proposes 12 objectives for America's medical system (including a truly competitive marketplace, prepayment for care, quality standards for caregivers, and universal coverage), and explains in some detail how each objective can be met by changing the incentives that drive the system. One key to success, he contends, is enlightened medical leadership, with doctors being trained in political science and management—especially in the Deming approach to quality improvement, used so successfully by Japanese industry. Persuasive, straightforward, and worthy of attention in the ongoing national debate.