Newt Gingrich: Trust American Ingenuity to Fix Our Troubling Healthcare Issues

Trust American Ingenuity to Fix Our Troubling Healthcare Issues


Op-ed originally published by Investor’s Business Daily (October 4, 2006), republished with the author's permission and permission of

We are on the cusp of enormous change in healthcare. As the momentum builds for healthcare consumerism, chronic-care management tools and the adoption of health-information technology, the future of health care is becoming clearer:

• 100% of Americans will have insurance coverage.
• Consumers will be empowered.
• Quality and price information will be readily available.
• Early detection and prevention will create a culture of health.
• Physician payment will be driven by outcomes.
• The use of health-information technology will be ubiquitous.
• Health and healthcare will become one of our country's greatest sources of economic growth and job creation.

However, if Americans are to enjoy all the benefits of an ideal health system, we must all be willing to invest a genuine, concerted effort into its design and implementation. We must build what we at the Center for Health Transformation call a 21st Century Intelligent Health System. Such a system will save lives and save money for every American — and is absolutely vital to ensuring our nation's long-term prosperity.

How urgent is the need for a comprehensive transformation of our health system? Consider the American manufacturing sector, particularly the pain of the automakers, where they spend more dollars per car in healthcare than they do in steel.

Can't Wait

The automakers are not alone. According to McKinsey & Co., by 2008 the average Fortune 500 company may spend as much on health benefits as it earns in profit.

The outlook for the federal government is no better. Health care consumes 26% of all federal spending, and that figure is growing, dwarfing every other priority. With the looming retirement of baby boomers and their entrance into Medicare, we will pay a severe price if we do not transform the current system.

We must act today to ensure our prosperity tomorrow. And we must be bold.

First, we need a new model of paying for health care.

Our current payment system pays doctors and providers for simply delivering care, regardless of the outcome. Doctors, hospitals and other providers that deliver better care are for the most part paid at the same rate as those who provide poorer care. That's like paying the same amount for a Cadillac as you would for a Yugo.

Like any other rational market, we need a reimbursement model that takes into account the quality of the care that is delivered, not simply that it was delivered.

As the world's largest purchaser of healthcare services, the federal government must take the lead. If the federal government were to pay more for quality outcomes and less for poorer outcomes, particularly through Medicare and the Federal Employee Health Benefits Program, the private market would follow.

Second, we must uphold and deliver consumers' right to know cost and quality information before they seek care.

Outside of healthcare, we live in the world of Expedia, eBay and Consumer Reports. Within minutes, any citizen can find price, cost and performance data on an infinite number of products and services.
Turn to health care and try finding how much a routine physician exam will cost. Try finding concrete data on which individual surgeon has a better performance record.

Private insurers are beginning to release this information to their members, but the best data for this purpose can be found in the Medicare claims history. Medicare has detailed information on nearly every doctor and hospital in the country. These data can inform the public regarding who are the better performers and who are not without compromising patient privacy.

Unfortunately, the Health and Human Services Department will not release the data, despite the fact that they are paid for by the taxpayers. Americans have a right to know how their doctors and hospitals perform, and the public must continue to demand it.

Third, we must bring health care into the 21st century through the rapid adoption of health-information technology.

Right Medicine

Many components of the health system are still stuck in a 1950s paper-based model, even though there exist today electronic health records, remote monitoring, decision support systems and other technologies proved to save lives and money.

Health IT can dramatically improve the quality of care. A recent study by the Institute of Medicine titled "Preventing Medication Errors" concluded that patients average one medication error for every day they are hospitalized, amounting to more than 1.5 million errors every year (over 7,000 of which are fatal).

Electronic prescribing and having real-time patient information can virtually eliminate these errors. One example is Piedmont Hospital in Georgia. After implementing a computerized physician order entry system, its medication errors dropped from more than seven per 10,000 to less than one per 10,000 — more than an 80% documented drop.

There are countless other examples of technology saving lives and money.

Our 20th century health care system, weighed down by the chains of overregulation and antiquated bureaucracy, is collapsing quite spectacularly before our own eyes. We, as a country, are left with no choice but transformation or decay.

We must demand of our leaders nothing less than a comprehensive plan to build an electronic, consumer-centered healthcare system that will improve individual health, reduce costs and build a brighter future for all Americans.

Change of such magnitude is never easy, but America has a proud history of taking on great challenges and emerging triumphant. We believe that this one will be no different — and that health transformation will become yet another example of American ingenuity turning a monumental challenge into a shining opportunity.

Gingrich, former House speaker, is founder of the Center for Health Transformation.