Healthcare and Politics-What's Ahead for the Healthcare Supply Chain?
Insights into the HHS Designee
Now that President Elect Obama has named Tom Daschle as his nominee for Secretary of Health and Human Services, many in the industry have reported on his proposals for health care reform. At the center of his program is the formation of a so-called Federal Health Board, a government based independent oversight body potentially similar to the Federal Reserve relative to finance.
NML has revisited some of the Senator's writings, including Critical: What We Can Do about the Health-Care Crisis. Here are summary reflections on how NML believes the Senator will approach his new appointment. Not only is it important to understand what the Senator aims to accomplish during his tenure, it is dually important to understand how he will strategically go about achieving it.
While reading Senator Daschle, it is clear that he is a student of history. Not only does he dissect the health care reform game plan used by the Clinton Administration in the 1990s, he reaches back to the Truman, Johnson and Reagan years to project what he believes are the variables for advancing a likely Obama Administration shift in policy.
While Daschle's recipe is made up of many ingredients, NML believes that the following 6 theme's will be a focus of Daschle's approach in the new administration:
Take nothing for granted. Presidents Clinton and Truman took office with a Democratic House and a Democratic Senate, yet neither was able to get his program passed.
Keep it simple. Health care is already an enormously complex field. Legislation attempting to reform it should attempt to reduce that complexity, not add to it. Keep documents short. Avoid the use of lots of technical specifics. Limit the number of moving parts. The Clinton program was over 1,300 pages in length with terms and concepts the public had trouble understanding.
Communicate clearly and with precision. Develop clarity of thought and convert that to a simple message that you deliver consistently over and over again. Daschle asserts that while Clinton was considered a gifted communicator, he lost his way because he let the program develop over time, instead of having a clear vision for what he wanted to do.
Work timing. Health care seems to elevate in importance with the public in difficult times. When unemployment is high and the economy is soft, people worry more about it on a personal level. In that regard, our current economic situation presents a psychological opportunity.
Stay lean. Keep the team small. Aim for advisors that the industry respects and acknowledges as experts. Concurrently, tap strategically aligned players within the system to leverage their camps and build consensus. The Clinton task force had over 600 members, limiting their ability to get anything done and diluting the small number of powerbrokers involved.
Never underestimate the opposition (supporting less regulation). Every time health care reform has been introduced in the last 80 years, opposition from interest groups and free market proponents has been well organized, vocal and tenacious. The battle for the public's opinion on the subject is often fought on the airwaves - including now their computers. Fear drives emotion, which has an uncanny track record for driving policy.
Prepare Now
Based on the above it's clear the healthcare system will soon see new scrutiny, with political fodder flying from all camps. NML will not speculate on the outcome. However, regarding the healthcare supply chain, one outcome appears very clear to us: expect significant increases in cost pressures in the immediate future, while simultaneously preparing to service more end users.
When more people are granted more access to healthcare, it is obvious to us that more supplies will be consumed in the process. It is also equally certain that increasing cost-to-serve activity is not an option. NML firmly believes the net result will be significantly enhanced cost pressures on all goods and services in the healthcare supply chain, especially those standing between the most direct and cost efficient manufacturer-to-provider service model.
Solutions do exist, and the sky is not falling. Stay abreast of options for cost reduction and efficiency enhancement in this volatile environment in NML's 1st Quarter 2009 monthly newsletters. Together we can lead the charge for an optimal healthcare supply chain.
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