Regina Herzlinger “There are two powerful, well-respected and highly accomplished women who are driving the health care reform debate in the United States. One is Secretary of State, Hillary Clinton, whose first attempt at dramatically reforming the U.S. health care system turned into a political disaster. The other is Harvard Business School economist Regina Herzlinger, one of the country’s most knowledgeable and articulate experts on the U.S. health care system, who has been pointing the way toward a ‘consumer-driven’ system for years.” – Merrill Matthews.

Regina Herzlinger, one of the leading forces in the health care reform debate, had just returned from meetings with key members of the current administration in Washington when she addressed the Harvard Kennedy School Women’s Leadership Board at its spring meeting. Herzlinger, the first women to become a tenured professor at the Harvard Business School, and the author of “Who Killed Health Care?” has been called the "Godmother” of “consumer-driven health care,” and is credited with coining the term “consumer-driven healthcare.”  It is no wonder that the President is listening to her ideas.     In her comments at the Harvard Kennedy School, Herzlinger stressed that we need a new system of health care for many reasons. “Most treatment today is palliative, not curative,” she said. Health care reform is not only an issue of justice or fairness. It is also a bottom-line imperative. “The problem is that we get bad value for our money. We spend 3.2 trillion a year on health care. That is the same size as the GDP of Germany.” “Our healthcare system is hurting our global competitiveness. Each car produced by GM has $1600 tacked onto its price thanks to our bad-value health care system. Each car produced by Toyota carries $100 in health care costs because the Japanese people pay a lot of taxes for healthcare. About half of our health care is paid by corporations, who are taking it out of the salaries of their employees." “Why would we think that our employers would be smarter about our health care than we are?” (Would you want or trust your employer to buy your car or your house for you?) In addition, having employers control healthcare choices, results in “job-lock.” People cannot afford to leave a big company that provides health care to work for a small company or start their own business.  “Our current system in which employers provide/control health insurance results in hospital monopoly, and suppression of MD’s service innovations.  Insurance locks us into certain hospitals and doctors, and we end up with uneven quality and high costs.” “Forty million are uninsured and millions more are under-insured.” She asked the members of the Women’s Leadership Board, "How many of you know what your life-time maximum health care benefit is?" Only a few knew for sure. “Go home and read your policy,” Herzlinger suggested. A serious medical condition could max out the benefits even for someone with good health insurance. This is not a point that is lost on most Americans: “94% believe that health care costs are a threat to their personal financial security.” “We are going to universal coverage,” Herzlinger said. “We will put 50 million more people into the system.”   So what does she think health care reform will look like going forward? The reforms will give us three options.  1. People who are happy with the insurance they currently have can keep it. Even though Herzlinger says that it's bad value for the money, people will not be forced out of their current plans. 2. People can also choose to opt into a single-payer system. The rationale behind a universal single-payer system, like Medicare, is that the government controls the entire health care system and squeezes the costs.  But no matter how you look at it, we can’t pay for everyone to be in a single-payer system: “Medicare already is $34 trillion in the hole.”  3. The third option is that consumers can buy their own health insurance, and health care will be forced to adapt to demand. “What if we provided excellent consumer information about price and quality of insurance plans the same way we do about computers or Blackberries® or mobile phones?” Herzlinger asked.  It would work this way: “People could buy long-term care, or get financial rewards for lifestyles. Smokers could pay a 30% premium. With consumers driving health care options, we might see concierge medical practices springing up.” Look what happened when Walmart offered a low flat rate for generic medications. Consumers voted with their feet and their wallets, and pharmacies across the country were forced to match Walmart’s price.  Tell us what do you think about these ideas?   About the Author: Regina Herzlinger is the Nancy R. McPherson Professor of Business Administration Chair at the Harvard Business School. She was the first woman to be tenured and chaired at Harvard Business School and the first to serve on a number of corporate boards. She is widely recognized for her innovative research in health care, including her early predictions of the unraveling of managed care and the rise of consumer-driven health care and health care focused factories, two terms that she coined. Money has dubbed her the “Godmother” of consumer-driven health care.   She was profiled by BusinessWeek in “If Health Care Were Run Like Retail”. All her health-care books have been best sellers in their categories. Her newest book, “Who Killed Health Care?”(NY: McGraw-Hill, 2007), was selected by the U.S. Chamber of Commerce as one of the ten books that changed the debate in 2008.  Noted Merrill Matthews; “There are two powerful, well-respected and highly accomplished women who are driving the health care reform debate in the United States. One is Secretary of State, Hillary Clinton, whose first attempt at dramatically reforming the U.S. health care system turned into a political disaster. The other is Harvard Business School economist Regina Herzlinger, one of the country’s most knowledgeable and articulate experts on the U.S. health care system, who has been pointing the way toward a “consumer-driven” system for years.”   Her prior book, "Consumer-Driven Health Care: Implications for Providers, Payers, and Policymakers" (San Francisco: Jossey-Bass 2004) received the 2004 American Journal of Nursing Book of the Year award for History and Public Policy. Earlier research results were profiled by The Wall Street Journal (November 2002) and Managed Health Care Executive (June 2003, cover) Her July 2002 Harvard Business Review articles, “Let’s Put Consumers in Charge of Health Care,” was an Amazon eBooks best seller.  She has won the Consumers’ for Health Care Choices Pioneer in Health Economics award, the American College of Healthcare Executives’ Hamilton Book of the Year award twice, the Healthcare Financial Management Association’s Board of Directors award, and Management College of Physician Executive. Modern Healthcare’s readers regularly selected her as among the “100 Most Powerful People in Healthcare” and Managed Healthcare named her one of health care’s top ten thinkers. Professor Herzlinger has served on the Scientific Advisory Group to the U.S. Secretary of the Air Force and as a board member of many private and publicly traded firms, mostly in the consumer-driven health care space, often as chair of the Governance and Audit subcommittees.  Regina Herzlinger received her Bachelor’s Degree from MIT and her Doctorate from the Harvard Business School.  She has been married to Dr. George Herzlinger, her MIT classmate, for 43 years. Both of their children graduated from Harvard College. Her daughter is a Fellow in Endocrinology; her son, an Infantry Captain in the U.S. Army who served two tours in Iraq, has safely returned to the U.S.