I once heard an old Southern Baptist preacher begin his sermon with a powerful admonition: “We go our whole lives where we know the price of everything, but the value of nothing.” And although I had heard that Oscar Wilde refrain before, it took on new meaning. I was stirred. It led me to ponder this question: How much stronger would our national government be if its leaders not only subscribed to that thinking, they were driven by it?
We live in a country with a $3.5 trillion federal budget. That is a supremely large sum of money. Imagine if we were able to find efficiencies of just 1 percent—one penny of every dollar. Tens of billions would be recovered, possibly re-directed. And not necessarily through cuts, but rather by truly thinking about and finding smarter ways of spending that money. Now more than ever, we need a value Renaissance—a rebirth and re-dedication to doing more than just throwing more money at a problem, but rather earnestly determining what policies derive the best outcomes for the amounts spent.
Readers know of my consistent and vocal opposition to the Affordable Care Act. It robs Americans of choice and counterfeits the care they have through higher premiums and even lost coverage. The record is clear on that. Yet for all of its flaws, Obamacare can and should be given credit for ushering in a new mindset in the health care ecosystem—value over volume. Put another way, health care providers and those that pay their bills are re-thinking simply paying a fee for every service that’s ever given. Instead, they’re asking questions: Did that care have its intended effect? Did that drug do what it was meant to do? Did Medicare pay too much for that service? Did quality suffer in the process? Did the patient have a good outcome? Did she return to work? Is she productively adding to society (paying taxes) or unfortunately still drawing on additional public health dollars?
A new approach is needed that traditional fee-for-service payment models both in government and in the private sector don’t currently recognize or capture. Modern policy circles refer to these emerging approaches as value frameworks—sophisticated efforts to calculate benefits beyond just determining if the patient had a positive clinical outcome.
Let’s take medical technology as the most recent real-world example: Just last week, the industry unveiled its own assessment tool in valuing medical technologies on everything from diagnostic tests to pacemakers and other medical devices. Specifically, researchers pointed to three additional “value drivers” beyond just showing the patient improved as a result of the new device. Out-of-pocket health costs and whether the patient returned to the workforce were considered and measured. Finally, even the fact that less time was spent in an operating room (fewer costs to the hospital) was part of this new paradigm. Common sense? Maybe, but certainly not common practice among the federal bean counters in Washington. Fewer hours in an operating room may not sound like much, but when Medicare pays out hundreds of billions in reimbursement claims every year, those hours turn into millions in savings.
I love this sort of out-of-the-box thinking! Granted, the value argument has existed in various academic forms for years. But now policymakers are getting serious about it, and demanding more than just pilot programs. The private sector has caught on as well, which is necessary because so many Americans rely on them for their coverage.
As I have written in this column before, we better be thinking in these innovative ways because technology waits for no one. There’s a reason Marc Andreessen, co-founder of Mosaic and Netscape, told an audience last week that health care prices were “spiraling out of control.” It’s approaching epidemic proportions. “The problem that we have today,” said Andreessen, “is not that we have too much tech innovation. The problem overwhelmingly is that we don’t have enough.” Innovation, whether in medical devices or some other health delivery tool, is the great equalizer and can do myriad things to lower costs and increase accessibility for all patients.
My growing fear in society today is that Americans do, in fact, love big government. They just don’t want to pay for it. That’s a very dangerous place for the republic. We should all be concerned by that mindset.
We need a Renaissance of thinking on this issue, particularly on health care spending. One-seventh of our economy depends on it. Elected officials would be wise to pay more attention to these emerging schools of thought surrounding value frameworks, and commit to enacting policies that promote their advancement in an era when the term value has become virtually meaningless.
Mr. Williams is manager/sole owner of Howard Stirk Holdings I & II Broadcast Television Stations and the 2016 Multicultural Media Broadcast Owner of the year. Watch our “Right Side Forum” every Saturday live on Newschannel 8 TV 28 in D.C., 10:30 a.m. to 11 a.m. and repeated at 6:30 p.m., EST. Follow on Twitter @arightside.
