I was invited to attend a breakfast on Wednesday morning with Newt Gingrich, hosted by Allscripts. They’re an important innovator in health care connectivity, and work closely with Gingrich’s Center for Health Transformation (CHT).

Gingrich has become an evangelist for the role that information technology can play in improving health care quality and efficiency. His organization’s CHT Press recently published Paper Kills, a book that highlights the impact of IT in health care.
“We are in the early stage of how we’re going to deal with the health system” in the U.S., which Gingrich believes is in or nearing crisis-mode.

He observed that incentives aren’t aligned in the health system: that different parties “do,” “finance,” and “receive” health care. He pointed to a scenario from the American Medical Group Association (AMGA), in which 50 doctors closely studied the business processes at Toyota. The doctors incorporated their learnings from the Japanese automaker so well, they went broke. Why? Because they took all the transaction costs out of the system, which represented revenue to the physicians.

This is a key theme of the U.S. health system: that one stakeholder’s costs are another’s revenue. Without understanding that, we cannot have a constructive conversation about changing the health system because there will be dislocations (especially economic ones) across stakeholder groups.

Gingrich opined, “This is an intellectual problem first. We don’t have the models” yet to solve the health care cost and quality problem.

Gingrich is currently preparing a talk about U.S. health care describing health system reform dynamics in 2009. It struck him that, in 1993, we were on the verge of, as he put it, “getting government-controlled health care.” The left would not accept compromise, he reminisced. Senator Dole, et. al., were “willing to pass ‘Hillarycare minus.'” The problem was that 2 of the 3 leaders involved in that debate are still in key positions in health care on Capitol Hill: Pete Stark and John Dingell, whom Gingrich pointed out is part of the longest serving family in Congress (Dingell’s father served as far back as 1936, and worked on health issues lo those many years ago). The third leader, Dan Rostenkowski, is long gone from the Hill.

“It’s Groundhog Day!” Gingrich warns. These are very senior members who are very old, he says. They are also in key health positions in the legislature. Unless reformers are very careful in legislative designs on health care next year, “we could repeat the same mistakes,” he anticipates.

Gingrich is encouraged by some of the younger representatives on the Hill, naming Tim Murphy as someone to watch who thinks out of the box — not like a Democrat, not like a Republican, but a new-new type of political thinking.

Gingrich is most encouraged by consumerism, not just on the financing side, but in light of the 360 degree consumer experience. He notes that younger people are used to, “stunning variety, stunning speed, and stunning choice.” He believes that the health care system will have to meet consumers in terms of their health care experience, where the consumer will ask: “Do I feel better about the health system?” This speaks to the kind of convenience some consumers find when easily parking outside of a Minute Clinic in a strip mall, Gingrich observed.

But he warns, “Our system is now on automatic pilot.” By that, he means that the entrenched interests in the health system — bureaucracies and all stakeholders jealously guarding budgets and revenues — won’t easily move off the proverbial dime.

I asked him about what sort of disruption might happen to get us ‘there,’ to a better health system, before we hit 20% of the GDP going to health care in 2017. I cited the CMS data I blogged about yesterday, that more health costs will be borne in the public than private sector within 10 years.

Gingrich replied, “Governments steal….governments are really stupid.” He believes the system will rapidly change because there’s “just so much stupid” Americans will tolerate.

He also believes that wealthy people — a term which he believes covers “95% of Americans” — should be willing to pay for medical miracles. “There is an attitude,” Gingrich observes, “that a miracle can be done in my name but I’m not willing to pay for it.” Yet people are more than willing to pay their country club dues.

Health Populi’s Hot Points: Gingrich is an engaging speaker who has studied health care and has many talking points that illustrate his points of view. One area I’d like to chat more with him about is how we define “health care.” He quipped about women and how much they like going to beauty salons, implying their (er, our) willingness-to-pay for services at salons makes us feel better. Health care, by definition, should make us feel better and, logically speaking, we should be willing to pay for it.

Gingrich has a strong faith in the invisible hand, in Rational Economic Man who responds to “carrots” more than “sticks.” He believes that “people will start changing” in the forecast period (now to 2017), critiquing the CMS data because countervailing forces will undoubtedly come into play that could slow the growth rate
of health costs in the next decade. But Gingrich doesn’t seem to mind the projection that 20% of the GDP could be allocated to health care. “It doesn’t matter if it (health spending) reaches 50% of GDP,” Gingrich argued. If we live to 300, in good health, he said, then 50% of GDP is worth the price of admission.