The two economist titans, Uwe Reinhardt and Paul Ginsberg had an interesting point-and-counterpoint on payment reform last month that was published on the Health Affairs blog.  Reinhardt suggests shifting away from the present, price-discriminatory system of semi-arbitrary private sector pricing toward an all-payer system. He sees this as a transition to a future system based on bundled payments per episode of illness for acute care, and a new and better version of capitation for chronic care and prevention.

Ginsburg suggests that an all payer system might put pressure on doctors to contain costs in a "far less radical" manner than the public option proposed by many advocates of health reform. Ginsgurg praises the "success" of Maryland’s all-payer system. (Health Affairs will cover Maryland’s in detail in their Sept. 9 issue).

I am fond of both of these exceedingly thoughtful and smart gentlemen. But, I think both suggested methods could be scary for doctors and patients without a phase in or glidepath from where we are to any new model. As they sparred in a friendly fashion, I was reminded metaphorically of the old Godzilla and Mothra movies, where the altercations resulted in no damage to the fighters, but instead destruction of the infrastructure all around (and I supposed we would be the people running down the street screaming).

Uwe's proposal would be far simpler than competition around the present 20,000 or so itemized charges or list prices each hospital uses, or the more than 9000 list prices for doctors in the physician fee schedule. He also suggest associations (like ACC) might negotiate with insurers in a region (a state?) as is done in Germany, and make the results binding for both doctors and insurers. Doctors would then charge all insurers or patients the same price for identical procedures.  Medicare and Medicaid could be part of the arrangement he thinks. Pretty radical. Some major anti-trust relief would be needed, and there are clearly risks associated. But, hmmmm.