BEREA, Ohio

Much of today’s health-care debate explores the appropriate roles for government and the private sector in a reformed health-care system. Medicare is frequently identified as the “poster child” for advocates of a one-payer system or public plan. However, a closer look at Medicare reveals that the program has many blemishes, and is the major contributor to the high health-care costs and inconsistent quality that exists today. Fixing Medicare would be a logical first step in reforming health care.

Our health-care system is shaped by how we pay for services and what we pay for. Medicare, by far, is the biggest payer of health services, and as a result of this financial leverage is the largest influence on the current health-care system. In fact, the individual private-sector managed-care organizations (MCOs) have mostly followed Medicare’s lead, particularly regarding reimbursement methodologies, since they lack the financial leverage to effectively influence provider behavior on their own.

Instead of having a payment system that would give incentives to prevention, wellness, chronic-care management, efficiencies, better quality and collaboration, Medicare has a payment system that rewards overuse. This system does not factor in quality of services provided, is fragmented and does not pay for prevention and wellness services in a meaningful and comprehensive way. Medicare payment policies are also the major factor why we do not have a true primary-care system.

It is important to consider the initiative that has created the most heated debate in Congress: the establishment of a public plan to compete with the private plans in an insurance exchange. This initiative is not a good use of the government’s resources, time and political capital.

The government, on the federal and state levels, is already responsible for almost 50 percent of U.S. health-care-related expenditures. The government should focus its attention on fixing Medicare and Medicaid. This would not only have a positive impact on the solvency of those two programs, it would also have a positive impact on cost and quality throughout our health-care system.

The various health-care reform legislative proposals being discussed in Washington have language that call for Medicare-payment reform. Many policy makers realize that the problems relating to Medicare payment policies have been known for decades, but Congress has never been able to address these politically sensitive issues. It will be no easy task for the government to “reform” Medicare, which makes it all the more important to focus its attention in this arena, and not on the development of a public-plan option.

All of this does not mean that managed-care organizations or health-care providers receive a free ride. If MCOs collectively and health-care providers individually try to abuse the system, there needs to be recognition that sometime the government could add a public plan to the insurance exchange.

The best role for government is that of a facilitator. The government has the resources, clout, regulatory and tax ability to develop a framework of a health-care system guided by the principles of cost efficiencies, quality and access to care. The government would, in effect, set the rules of the game to ensure efficiencies, quality and equity/access to care. But, once the rules are set, the private sector should be allowed to maximize profits in providing value in the marketplace.

Two of the national reform initiatives being discussed by lawmakers are underwriting reforms for individual and small-group markets and the establishment of an insurance exchange. Both of these initiatives are examples of the government playing a facilitating role. The end result of these initiatives is to shift the market for health insurance from competition based on risk to competition based on price.

There are a number of health-care initiatives for which the government can play a lead role that would control health-care costs, and improve quality and access to care. They include: advancement of electronic medical records; clinical effectiveness research; malpractice reform; strengthening our public health system; and paying for end-of-life counseling.

Finally, as health-care reform initiatives are proposed to reduce health-care costs, we also need to be sensitive to the potentially negative impact on health-care industry jobs. Employment in the health-care industry is one of the few bright spots in our national economy--and passing new legislation that would put tens of thousands of Americans out of work would not reflect smart policies at a time when enlightened thinking is desperately needed.

Thomas Campanella is an associate professor, and director of the Health Care MBA program, at Baldwin-Wallace College, in Berea, Ohio. He is a former vice president of health-care finance and care management at Blue Cross & Blue Shield of Ohio/Medical Mutual of Ohio.