Gerry Musgrave was the co-author of our book, Patient Power. From him I learned the importance of:
Musgrave’s Law: Economizing must benefit the economizer.
We are reminded of this by perusing a list of suggestions from our friends John Rother, Joel White and David Kendall in Health Affairs. It includes five ways the private sector is supposed to become more efficient so that the government can have more money to spend (in this case to solve the SGR problem). Contrast this with nine suggestions Tom Saving and made (also in Health Affairs) on how to liberate the private sector and allow providers to benefit by doing things that will save taxpayers money in the process.
There is one item that is common to both lists: bundling. That’s paying one fee for a group of services rather than having every service line itemed. But who should do it and for what reason? Rother et al. would apparently have government select the bundles. That’s what is happening in the pilot programs and it isn’t saving any money. Tom and I would let the providers select the bundles. As Michael Porter and Elizabeth Teisberg pointed out some time back, the key to efficiency is allowing providers to repackage and re-price their services.