Regarding a possible initial increase in costs as the system changes, e.g. through transparency: we must not fall prey to the error of the local minimum, trapped in a seeming low spot that’s actually just a vale among mountains. We need to get off the mountain entirely.

I’m not for a moment belittling the cost issue. At 58, I’m entering the high-dollar-consumption phase of life, and I tend to opt for higher-copay plans.

But yes, given how unacceptable the system is today, let’s get out the flashlights and begin the necessary (if unpleasant and sometimes stinky) work of seeing what’s going on in the basement.

Last night I wrote a long comment on the “Paul & Charlie show”. It’s not visible yet but have a look.

Good to meet you, and thanks for the fight you’re fighting. As Bob The Builder was saying long before Barack, “Yes we can.”

First, I think greater use of information technology can be potentially transformative. Once interoperable electronic medical records are in widespread use, it will be easier to develop more robust P4P approaches, more accurate risk scoring at the individual patient level, and we should have much better and higher quality information about what works and what doesn’t in healthcare. There is probably also lots of potential for home monitoring to replace care provided in doctors’ offices. As retail clinics expand and proliferate (AMA opposition notwithstanding), NP’s may displace PCP’s in providing much of our routine primary care in the future.

With respect to price and quality transparency, I think the key will be the extent to which health plans use it to restructure incentives including lower co-payments for patients who choose the most cost-effective providers and bonuses for referring doctors who steer their patients to the most cost-effective specialists, hospitals, imaging centers and labs.

Finally, I think health plans should not be afraid to move away from Medicare’s rates and practices in structuring their own payment rates and approaches. I heard a CMS official at a conference last week who made a couple of interesting points. First, he said that Medicare’s current payment system (DRG and RBRVS based) is designed to reward resource utilization and not value. Second, he said CMS will soon be starting a pilot project to reimburse certain surgical procedures on a bundled basis that would provide one payment for a full episode of care. The pilot will last for three years and then take as much as another year to evaluate to see if it should be expanded or not. By contrast, he said that private insurance companies that currently participate in the Medicare Advantage market are free to do this on their own if they can get providers to agree to it. In short, insurers have much more freedom to experiment and innovate than CMS does. They should take fuller advantage of that freedom.