We are about to have a health care summit, says the President. And the director of OMB, Peter Orszag, says that fiscal responsibility and reform run right through health care.  He's right. 

Now, folks, if you will refer back to an earlier post, part of my presidential platform (the post for February 15, to be specific), you will see what I think this effort has to achieve to be worthwhile. 

As I noted, and as I will repeat now in brief, there are many reasons for the sharp rise in health care costs.  Some are structural, having to do with technology and the vast new range of diagnostics and treatment we did not before have, and with an aging population. But some are contingent, having to do with dysfunctional governance structures of several types. These dysfunctions are nearly all caused by a series of perverse incentives, and most of these exist because a genuinely free market in health care does not exist.  That said, we don't want a fully free market in health care, because that would mean that many people would not be able to get minimally acceptable health services from some combination of fee-for-service and insurance. Not everything in society is or should be exposed to the forces of the market. (This is obvious when one thinks about it, but people rarely think about it. We don't allow child labor and mugging people to steal their organs, do we? We don't sell justice to the highest bidder either, and so on and so forth -- like duh.)

So the problem is how to streamline and free the market to create efficiencies in the areas in which we do want it to work, because it is impossible and very expensive to "command" all dimensions of a healthcare system, and decide those areas in which we don't want the market to dominate decisions and outcomes.  Very hard problem. 

We also need to remember, as I said in my February 15 post, that there is no simple technical fix for the problem, because it is at base about moral choices. We cannot afford, and actually need not afford, to make all medical services available to all people. By definition we need some kind of general triage. And it is the toughest issue of all in any society to determine who gets to make those decisions.

As for me, I will consider a health care reform successful if it does three things, and unsuccessful if it doesn't. 

First, we have to rationalize the distribution of technology and services and eliminate the expensive duplication of effort we see now. To do this we have to identify those regional systems that outperform the average, model them and scale them up to apply to the rest of the country. 

Second, we have to refocus efforts on prevention, and on the most basic aspects of human health: diet, exercise, sleep and mental well-being. This is partly an educational issue, but also partly a function of medical practice and training. We waste an enormous among of resources fixing illnesses that never should have happened in the first place and, of course, we over- and mis-medicate ourselves as a result. 

Third, we have got to separate the insurance pools so that the extraordinary expenditures that go into care for those in the last 12-18 months of their lives (as much as 40% of all costs)--people who we know will never get better and have productive or happy lives anymore--do not make insurance prohibitively expensive for so many others. We can't easily stop people these days from making foolish decisions about such care, what with our secular focus and all these damned lawyers everywhere. But we have to segregate its effects on the rest of the system. 

Of course, we also have to reform the insane HIPPA legislation and do a thousand other things. But these three are the keys. If we are more rationale on a national level about how we use expensive resources, if we get back to basics, and if we control for extreme pressures on the insurance market, we will at least have a chance to get our arms around the problem.  If we don't, we won't.  Mark my words.