David Harlow

As reported in the Washington Post, President Bush signed an executive order yesterday, "Promoting Quality and Efficient Health Care in Federal Government Administered or Sponsored Health Care Programs."  This is the latest in a series of administration initiatives regarding EHR interoperability, price transparency and quality transparency that are intended to promote better decisionmaking by patients in CDH plans.  (See, e.g., the CMS posting of price information for certain ASC procedures and hospital admissions.) 

One of the most immediate effects of this order on health care providers, health plans and health insurance issuers is that, to the extent they have not already been incorporated into federal health care program contracts, EHR interoperability standards (as defined by HHS) will begin to apply to all EHR systems implemented, acquired, or upgraded after January 1, 2007.

"I guess if I had to summarize how I view it, I would say there’s a choice between having the government make decisions or consumers make decisions. I stand on the side of encouraging consumers," Bush said.  ". . . Health-care policy ought to be aimed at bolstering the consumer, empowering individuals to be responsible for health-care decisions — is kind of the crux about what we’re talking about."

While it is certainly valuable to encourage federal agencies to share information on health care quality and costs, the one element lacking in this new world of transparency is a significant number of consumers who are price-sensitive.

As other developments promote the more widespread diffusion of HSAs and HDHPs, there will be more and more price-sensitive health care consumers.  Indeed, the executive order also directs federal agencies to promote "pay for performance" (which it defines as including CDH) to the extent consistent with current law. 

However, as individuals become more directly responsible for health care spending, many are likely to delay or avoid care so as to delay or avoid the expense.  Handing the reins over to individuals through various forms of CDH may be laudable in some respects; but employers, insurers and providers will lose the ability to ensure that care is obtained early and often when appropriate, thereby ensuring that the care that will be sought later in the day will be more expensive and, perhaps, futile in some instances.

This executive order is positioned by the White House as part of the administration’s health care cost reduction and quality improvement strategy, including association health plans (multistate plans to be established by small employers under legislation that has been stymied thus far by the big payors) and EHR systems (which are likely to improve quality but not reduce cost, thanks to the technological imperative).