The Iron Triangle Revisited
A few days ago I commented about an on-line JAMA opinion piece (http://www.utahhealthcareinitiative.com/blog/iron-triangle-health-care-d...) about the so-called "Iron" Triangle of cost, quality, and access in health care. Here is another perspective about the Iron Triangle:
October 5, 2012
Universal health care and the Iron Triangle myth of U.S. policy makers
By Donald Light
In my comparative studies of universal health care systems, I find their cost/quality profiles vary quite a bit between each other, and over time for the following reasons. The more such systems pay by fee, the more providers drive up costs in the name of "quality" from which they profit, such as Germany from after World War II up to the 1980s. The Canadian system has been suffering from this seeming trade-off for decades. Access stays universal but there seems to be "an iron trade-off" between cost and quality, until systems start moving towards bundled payments and then population-based capitation or salary within a national health service and an ethos of shared responsibility to improve quality within a fixed budget. (Notice the so-called "iron triangle" has faded from view.)
Thus it's holding costs constant while maintaining universal access that is key to improving quality, not only by eliminating care that is detrimental but also unnecessary or avoidable care, by rethinking clinical strategies. Ironically, some of the models of shared access and budgets increasing quality are in the United States. Few, if any national systems, can match the steady improvements in quality and value of Kaiser Permanente, Intermountain, Marshfield, or the reformed VHA (Veterans Health Administration). For example, the English NHS has been learning from them for years.
The transformation of the VHA from a single-payer, fee-based, poor-quality set of hospital-centered services, to a single-payer system based on area population budgets centered on primary care, with coordinated, community-based specialty back-up and hospitals as a last resort offers inspiring lessons. Quality improved and costs sharply dropped, so that 30 percent more veterans could be treated within the same, fixed budget.
Reforms in Germany in the 1990s through today have also improved quality while lowering relative costs and expanding access from about 94 percent to 99 percent. Germany's multi-insurer base has been made single payer-like by the government creating a single channel where all insurers' premiums are risk-adjusted so all insurers operate on the same risk-adjusted budgetary basis. The Dutch reforms since 2006 operate in a similar way, with some distinct differences.
In sum, I would say the key is not single-payer per se but population-based budgeting together with universal access, and a shared ethos to improve quality within budgetary frames that give the lie to the so-called iron triangle.
The Iron Triangle is an American myth for lazy and unobservant policy leaders.
Donald W. Light, Ph.D.
Visiting Researcher, Center for Migration & Development, Princeton University
Resident Fellow, Edmond J. Safra Center for Ethics, Harvard University
Senior Fellow, Center for Bioethics, University of Pennsylvania
A population based budget means that we must eliminate the health insurance business model because it divides the population as the insurers try to avoid accepting those with higher potential for health problems. In other words, the 'Iron' Triangle is an artifact of health insurance. We can not solve a problem caused by health insurance by mandating that we all buy health insurance.
It is time to look for alternative ways to finance health care in the United States.
Dr. Joe Jarvis