Business school professor Alain Enthoven, a.k.a. the father of managed care, worked with the Carter administration and, briefly, with the Clinton administration to try to provide universal, affordable health care in the United States. At a time when more than 40 million Americans are uninsured and premiums are expected to rise 12 percent to 24 percent in the coming year, Enthoven, ’52, has some new ideas. With Stanford colleagues Alan Garber, MD ’83, and Sara Singer, MBA ’93, he spells out his latest plan in a chapter of Covering America: Real Remedies for the Uninsured (Economic and Social Research Institute, 2001). The authors call for a system of public, private and employer-based “insurance exchanges” that would offer competing healthcare plans—like those available to Stanford employees, who receive credits to help pay for the coverage of their choice.
Stanford: What’s your diagnosis of the nation’s healthcare system today?
We have very large problems. Costs are high and rising very rapidly. When HMO premiums are $6,000 per family per year, that’s a lot of money for a lot of people of moderate means.
What about the quality of the care provided?
Well, poor quality has high costs, because if somebody acquires an infection in the hospital, he might have to stay three times longer. Studies have found that tens of thousands of people die unnecessarily and prematurely in hospitals every year because of errors—one study said 44,000, another said 98,000—and the healthcare system for the most part does not have built into it the kind of quality management or quality improvement processes that you would find in the airlines or at General Electric or Honda or Hewlett-Packard.
Will the patients’ bill of rights address that lack of quality, if it ever gets out of the House-Senate conference committee?
Congress has responded to healthcare problems by working on a different problem, which is apparently that trial lawyers are not making enough money. Congress wants to give people the unlimited right to sue their HMOs and to appeal anything, with no caps on damages. But a litigious environment is one of the barriers to quality improvement, because the way you improve quality is to look for and analyze mistakes and identify them as mistakes.
You’re proposing a new federal agency, the Insurance Exchange Commission, that would review medical technologies and determine which procedures would be covered by insurance. What would the agency tackle first?
Well, the great majority of healthcare money today is spent on the people who are very sick. In any given year, 85 percent of the money is spent on the 15 percent of people with the highest bills. Another thing that has to happen is that the insurance companies will have to roll back and people will have to pay 25 percent of the cost of whatever [treatment] they want.
