Reform is hard and Econ 101 doesn’t work

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An article published today in the New England Journal of Medicine highlights the challenges in health reform and why the usual, simple fixes aren’t working.  The article by Richard Bohmer, The Hard Work of Health Care Transformation, explains why changing financial incentives or governance structures aren’t sufficient to effect change. The status quo is very strong. It’s great to see of the fact that the usual payment reform tactics miss the point. Shifts in incentives or structures are not the goal, they can support reform but alone they are usually irrelevant distractions and, at worst, counter-productive. Change is about consistent, small changes made over time, institutionalized within organizations that build internal capacity. Payment and governance shifts should follow and support reforms — not the other way around. There is plenty of evidence that simply changing who is at financial risk or organizational/governmental structures and counting on an invisible hand doesn’t work for health care reform.

“The short­ term investments that are required can be surprisingly small, because most organizations already have many of the requisite human as­ssets. The most substantial hurdle, it seems, is the change in mindset.”