Photo From Stanfords Center For Health Policy

Alain Enthoven believes a government-chartered system allowing employers and individuals to buy health coverage from private insurers would create choice, competition and incentives to bring down costs.

When Alain Enthoven speaks about health care, people stop and listen.

Enthoven, the “father of managed competition,” is professor emeritus at the Center for Health Policy at Stanford University and a national authority on the dynamics of health-care operations. He presented an overview of health-care reform options during an open-to-the-public June 24 meeting of the South Peninsula Area Republican Coalition (SPARC) at Main Street Cafe & Books in Los Altos.

Enthoven said there are two meanings of health reform: leave in place “our present, dysfunctional, inflationary, increasingly unaffordable health-care system and raise money to pay the way of the uninsured into it” or “fundamental reform of the financing and delivery system so that providers are organized and motivated to improve quality and affordability.”

He said there were 45.7 million uninsured people in the United States in 2007, many of whom lacked primary care and disease prevention. Their medical costs are passed on to the insured.

According to Enthoven, fee-for service “punishes cost-reducing innovation, rewards bad quality” and “lacks capability for system improvement in coordination, economy and safety.”

He added that employers have been unable to create a market in which “efficient, integrated systems can compete” and that “fewer than 10 percent of Fortune 500 employees have a choice of carrier and fixed-dollar contribution. Smaller employers are worse.” He added that most plans “depress (employee) wages.”

Bottom-line problems include cost or unsustainable expenditure growth, poor quality, a lack of innovation and access.

“They are interrelated,” Enthoven said. “We can’t solve access without effective cost containment.”

His key point was the United States’ need for a more competitive system of health-care delivery, in which the patient decides what coverage he or she wants. The patient should have a choice, similar to plans provided by the Palo Alto Medical Foundation, Stanford and Kaiser Permanente, for example.

In a recent New York Times op-ed piece with colleague David Reimer, Enthoven wrote: “A better public plan would not be a new government-run insurer at all, but rather a government-chartered mechanism that would let employers and individuals buy health coverage from private insurers in a manner that uses the three most essential market forces: choice, competition and incentives to reduce the price and improve care.”

Enthoven was one of the founders of the Jackson Hole Group, a national think tank on health-care policy.

Duffy Price contributed to this report. For more information on SPARC, visit www.sparcgop.org.

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