You just have to pay it, Steve," Sam Thier, the likable but combative former chief executive of Partners HealthCare, the 800-pound gorilla of the Boston hospital world, used to tell me when I'd ask, as I often did, about the exploding cost of healthcare.
"Of course, you have to pay," says Regina Herzlinger. "The question is how much?"
It is a question that Reggie Herzlinger has been asking for nearly three decades, and with increasing bluntness as the price of health insurance continues to rise at double-digit rates year after year. She comes well armed for what she calls the approaching dogfight over costs. Herzlinger is the nation's leading advocate for consumer-driven healthcare reform - the belief that what we need is not more money in the system but consumers who have more power, more information, and more choice.
Herzlinger has many firsts attached to her name, including being the first woman to achieve tenure and hold a chair at Harvard Business School. She is an author, a bomb-thrower, but at heart an accountant, driven by the numbers.
I went to see her now because of where we find ourselves: a national model for universal health insurance. It is whether we can control costs, not our political will, that will determine the fate of the bold Massachusetts experiment. The state's powerful medical-industrial complex knows well Herzlinger's prescription for what ails us; that is not to say they agree with it.
Herzlinger lays out her case for another way in her provocative book, "Who Killed Health Care?" which is nothing short of an all-out attack on the "villains" of the current system, including the hospitals, the insurers, and Congress. But read the book or listen to Herzlinger just a few minutes and it is clear whom she sees as first among the villains when it comes to driving costs.
"If you pare out how much did drugs go up, how much did hospitals go up? It is always the hospitals," Herzlinger says. "By and large, and because good people are on the boards of these institutions, they think they are doing God's work. 'Here I am at St. Elizabeth's. I am at Beth Israel. I am doing God's work.' Somehow they park their brains at the door. Is this behaving like a saintly institution, or is this behaving like the good old-fashioned trusts that Teddy Roosevelt tried to break up?"
The Harvard Business School professor is no fan of the kind of mergers that combined two Harvard-affiliated hospitals, Massachusetts General Hospital with Brigham and Women's, into Partners HealthCare and Beth Israel with the Deaconess. The mergers, she says, have accomplished their goals: limiting competition and raising prices. Hospitals now hold leverage over the insurers.
Says Herzlinger of the Boston hospital market: "Whenever there is oligopoly in any industry, it is no good. It cannot be good."
What consumers need, she says, is greater transparency. "The premise is that they are wonderful," she says of the hospitals. "Maybe they are. I would like to see some data that shows just how wonderful different hospitals are all across the United States. I would like to know how good is the Mass. General? How good is Brigham and Women's? How good is the Baptist? How many people get an infection? How long does it take to regain mobility after an operation? Dumb as I am, I could look at those data and understand them."
America spends $2.1 trillion a year on healthcare, about the size of the Chinese economy. This week the federal government projected that number will double to $4 trillion in a decade. Hospital spending, representing roughly 30 percent of all healthcare spending, was again the fastest-growing sector. Massachusetts leads the nation in per-capita spending; we are also number one in per capita hospital spending, $2,620 versus $1,931 nationally, according to the Kaiser Family Foundation.
To quote Mike Leavitt, the US secretary of Human Services, "Medicare, on its current course, is not sustainable." Jon Kingsdale, who heads the Commonwealth Connector, told me much the same thing earlier this month about universal health insurance here: "This is not sustainable if we don't deal with affordability."
Another way to think about it is in competitive terms: America spends about 16 percent of its gross domestic product on healthcare; Japan spends about half that. That difference explains, in part, why Toyota is crushing General Motors.
Of course, we have to pay. The question is how much?
Steve Bailey is a Globe columnist. He can be reached at bailey@globe.com or at 617-929-2902.
