Health-care costs are strangling our country. Medical care now absorbs eighteen per cent of every dollar we earn. Between 1999 and 2009, the average annual premium for employer-sponsored family insurance coverage rose from $5,800 to $13,400, and the average cost per Medicare beneficiary went from $5,500 to $11,900. The costs of our dysfunctional health-care system have already helped sink our auto industry, are draining state and federal coffers, and could ultimately imperil our ability to sustain universal coverage.
...So what does the reform package do about it? Turn to page 621 of the Senate version, the section entitled “Transforming the Health Care Delivery System,” and start reading. Does the bill end medicine’s destructive piecemeal payment system? Does it replace paying for quantity with paying for quality? Does it institute nationwide structural changes that curb costs and raise quality? It does not. Instead, what it offers is . . . pilot programs.
This has provided a soft target for critics. ... The strategy seems hopelessly inadequate to solve a problem of this magnitude. And yet—here’s the interesting thing—history suggests otherwise.
At the start of the twentieth century, another indispensable but unmanageably costly sector was strangling the country: agriculture. In 1900, more than forty per cent of a family’s income went to paying for food. At the same time, farming was hugely labor-intensive, tying up almost half the American workforce. We were, partly as a result, still a poor nation. Only by improving the productivity of farming could we raise our standard of living and emerge as an industrial power. We had to reduce food costs, so that families could spend money on other goods, and resources could flow to other economic sectors. And we had to make farming less labor-dependent, so that more of the population could enter non-farming occupations and support economic growth and development.
...You might think that the invisible hand of market competition would have solved these problems, that the prospect of higher income from improved practices would have encouraged change. But laissez-faire had not worked.
...The United States did not seek a grand solution. Private farms remained, along with the considerable advantages of individual initiative. Still, government was enlisted to help millions of farmers change the way they worked. The approach succeeded almost shockingly well. The resulting abundance of goods in our grocery stores and the leaps in our standard of living became the greatest argument for America around the world. And, as the agricultural historian Roy V. Scott recounted, four decades ago, in his remarkable study “The Reluctant Farmer,” it all started with a pilot program.
In February, 1903, Seaman Knapp arrived in the East Texas town of Terrell to talk to the local farmers. He was what we’d today deride as a government bureaucrat; he worked for the United States Department of Agriculture. Earlier in his life, he had been a farmer himself and a professor of agriculture at Iowa State College. He had also been a pastor, a bank president, and an entrepreneur, who once brought twenty-five thousand settlers to southwest Louisiana to farm for an English company that had bought a million and a half acres of land there. Then he got a position at the U.S.D.A. as an “agricultural explorer,” travelling across Asia and collecting seeds for everything from alfalfa to persimmons, not to mention a variety of rice that proved more productive than any that we’d had. The U.S.D.A. now wanted him to get farmers to farm differently. And he had an idea.
Knapp knew that the local farmers were not going to trust some outsider who told them to adopt a “better” way of doing their jobs. So he asked Terrell’s leaders to find just one farmer who would be willing to try some “scientific” methods and see what happened. The group chose Walter C. Porter, and he volunteered seventy acres of land where he had grown only cotton or corn for twenty-eight years, applied no fertilizer, and almost completely depleted the humus layer. Knapp gave him a list of simple innovations to follow—things like deeper plowing and better soil preparation, the use of only the best seed, the liberal application of fertilizer, and more thorough cultivation to remove weeds and aerate the soil around the plants. The local leaders stopped by periodically to confirm that he was able to do what he had been asked to.
The year 1903 proved to be the most disastrous for cotton in a quarter century, because of the spread of the boll weevil. Nonetheless, at the end of the season Porter reported a substantial increase in profit, clearing an extra seven hundred dollars. He announced that he would apply the lessons he had learned to his entire, eight-hundred-acre property, and many other farmers did the same. Knapp had discovered a simple but critical rule for gaining coöperation: “What a man hears he may doubt, what he sees he may possibly doubt, but what he does himself he cannot doubt.”
The following year, the U.S.D.A. got funding to ramp up his activities. Knapp appointed thirty-three “extension agents” to set up similar demonstration farms across Texas and into Louisiana. The agents provided farmers with technical assistance and information, including comparative data on what they and others were achieving. As experience accrued, Knapp revised and refined his list of recommended practices for an expanding range of crops and livestock. The approach proved just as successful on a larger scale.
The program had no shortage of critics. Southern Farm Magazine denounced it as government control of agriculture. But, in 1914, after two years of stiff opposition, Congress passed the Smith-Lever Act, establishing the U.S.D.A. Cooperative Extension Service. By 1920, there were seven thousand federal extension agents, working in almost every county in the nation, and by 1930 they had set up more than seven hundred and fifty thousand demonstration farms.
As Daniel Carpenter, a professor of government at Harvard, points out, the demonstration-farm program was just one of a hodgepodge of successful U.S.D.A. initiatives that began as pilots.
...What seemed like a hodgepodge eventually cohered into a whole. The government never took over agriculture, but the government didn’t leave it alone, either. It shaped a feedback loop of experiment and learning and encouragement for farmers across the country. The results were beyond what anyone could have imagined. Productivity went way up, outpacing that of other Western countries. Prices fell by half. By 1930, food absorbed just twenty-four per cent of family spending and twenty per cent of the workforce. Today, food accounts for just eight per cent of household income and two per cent of the labor force. It is produced on no more land than was devoted to it a century ago, and with far greater variety and abundance than ever before in history.
...Much like farming, medicine involves hundreds of thousands of local entities across the country—hospitals, clinics, pharmacies, home-health agencies, drug and device suppliers. They provide complex services for the thousands of diseases, conditions, and injuries that afflict us. They want to provide good care, but they also measure their success by the amount of revenue they take in, and, as each pursues its individual interests, the net result has been disastrous. Our fee-for-service system, doling out separate payments for everything and everyone involved in a patient’s care, has all the wrong incentives: it rewards doing more over doing right, it increases paperwork and the duplication of efforts, and it discourages clinicians from working together for the best possible results. Knowledge diffuses too slowly. Our information systems are primitive. The malpractice system is wasteful and counterproductive. And the best way to fix all this is—well, plenty of people have plenty of ideas. It’s just that nobody knows for sure.
The history of American agriculture suggests that you can have transformation without a master plan, without knowing all the answers up front. Government has a crucial role to play here—not running the system but guiding it, by looking for the best strategies and practices and finding ways to get them adopted, county by county. Transforming health care everywhere starts with transforming it somewhere. But how?
...Recently, I spoke with the agricultural extension agent for my home town, Athens, Ohio. His name is Rory Lewandowski. ... I’d caught Lewandowski in his office on a Saturday. ... Mostly, the farmers come to him—for guidance and troubleshooting. ... I asked him if he has had any victories. All the time, he said. But he had no illusions: his job will never end.
Cynicism about government can seem ingrained in the American character. It was, ironically, in a speech to the Future Farmers of America that President Ronald Reagan said, “The ten most dangerous words in the English language are ‘Hi, I’m from the government, and I’m here to help.’ ” Well, Lewandowski is from the government, and he’s here to help. And small farms in Athens County are surviving because of him. What he does involves continual improvisation and education; problems keep changing, and better methods of managing them keep emerging—as in medicine.
In fact, when I spoke with Lewandowski about farming in Athens, I was struck by how much it’s like the health-care system there. Doctors typically work in small offices, with only a few colleagues, as in most of the country. The hospital in Athens has less than a tenth the number of beds that my hospital in Boston has. The county’s clinicians could do much more to control costs and improve quality of care, and they will have to. But it will be an ongoing struggle.
...Surely we can solve such problems; the reform bill sets out to find ways that we can. And, in the next several years, as the knowledge accumulates, I suspect that we’ll need our own Seaman Knapps and Rory Lewandowskis to help spread these practices county by county.
We’ll also need data, if we’re going to know what is succeeding. Among the most important, and least noticed, provisions in the reform legislation is one in the House bill to expand our ability to collect national health statistics. The poverty of our health-care information is an embarrassment. At the end of each month, we have county-by-county data on unemployment, and we have prompt and detailed data on the price of goods and commodities; we can use these indicators to guide our economic policies. But try to look up information on your community’s medical costs and utilization—or simply try to find out how many people died from heart attacks or pneumonia or surgical complications—and you will discover that the most recent data are at least three years old, if they exist at all, and aren’t broken down to a county level that communities can learn from. It’s like driving a car with a speedometer that tells you only how fast all cars were driving, on average, three years ago. We have better information about crops and cows than we do about patients. If health-care reform is to succeed, the final legislation must do something about this.
Getting our medical communities, town by town, to improve care and control costs isn’t a task that we’ve asked government to take on before. But we have no choice. At this point, we can’t afford any illusions: the system won’t fix itself, and there’s no piece of legislation that will have all the answers, either. The task will require dedicated and talented people in government agencies and in communities who recognize that the country’s future depends on their sidestepping the ideological battles, encouraging local change, and following the results. But if we’re willing to accept an arduous, messy, and continuous process we can come to grips with a problem even of this immensity. We’ve done it before.
Wednesday, December 09, 2009