The Master and I agree on the goals

The Master and I agree on the goals

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Writing in his blog in the NY Times, Uwe Reinhardt sets out three overarching goals of health reform

1. Financial barriers should not stand between Americans and preventive or acute health care that they sincerely believe will address concerns over a troubling medical condition, in a timely manner, before that condition grows into a critically serious illness.

2. Having received needed health care, no American family should be so financially devastated by medical bills that it cannot meet routine daily living expenses — for example, make utility or mortgage payments on time or finance the education of the family’s children.

3. The future growth in national health spending should be constrained to fall significantly below currently projected spending growth, which has the United States devoting about 40 percent of its G.D.P. to health care by mid-century.

All other goals are subordinate to these three overarching goals, as are the means to reach them.

Last week I posted a very similar Two rules by which to judge a health reform bill.

Rule 1 A health care reform bill needs to guarantee that no one should find themselves unable to get care simply because they cannot afford it. Neither should anyone find themselves financially compromised (or worse) because they have received care.

Rule 2 A health care reform bill needs to limit the amount of GDP that is going to health care to its current level, with an overall aim of reducing the share of health care going to GDP.

Uwe is a touch more eloquent in his goals 1 and 2 which split apart my Rule 1, and he’s a touch less aggressive in his goal 3, which is my Rule 2. But other than that these are the same.

Unfortunately in his column of the previous week Uwe created a list of 8 (but it could have been 20) completely contradictory statements about the completely “confused state” of what Americans seem to demand from health reform.

And right now the confusion seems to be winning.

Will we get nothing out of reform? I spotted something very sensible from Len Nichols over at New America Foundation’s relatively new “The New Health Dialogue’s Blog”. (Incidentally how long before Len and friends are sued for trademark violation by Health Dialogue? )

Here’s what Len says about the public option, and this is the likely compromise—if the insurance industry is really prepared to take it.

To be clear, I support a public plan operating on a level playing field because it provides Americans who distrust private insurance another choice and establishes a benchmark competitor much needed in some markets that lack any true competition. However, I also believe that properly reformed markets, generous subsidies, and a credible threat of a public plan if premiums are unsatisfactory in the first year could make insurance markets work very well for all Americans. This option is far superior than doing nothing. The debate over a public health insurance plan should not stand in the way of reform.

Which tells you that the major backers of the public option will trade it for the correct set of insurance regulations. So we could get to a real compromise, albeit on comparatively minor reforms, as I’ve said before.

But if the crazies at the Town Halls and the continued inability of the Democrats to explain how what they’re proposing is going to work continues, then I suspect Uwe’s “confused” rules will overcome his laudable overarching goals.

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32 Comments on "The Master and I agree on the goals"


Guest
Aug 8, 2009

The only person in a position to calm the waters and lead this discussion in a constructive direction is the president himself. This is what I put together this morning:
Dear Mr. President:
Your vision of health care and insurance reform, a centerpiece of not only your campaign platform but of the other candidates as well, has gone into the Congressional sausage grinder and is being torn to pieces. You and the other candidates didn’t talk a lot about the idea during the campaign except in the most general of terms. It was an accepted reality that health care reform would be on the to-do list of any new president.
All the smart people know that the system we now have is unaffordably expensive, inequitable and filled with loopholes and old agreements with special interests that if not corrected will lead to an economic train wreck no one wants to imagine. Even the loudest voices yelling their opposition to H.R.3200 know that what we have been doing isn’t working and is in serious need of repair.
The last few weeks have seen a level of fear and frustration spread among us faster than a flu pandemic. A natural fear of the unknown and a well-founded mistrust of elected representatives are being exploited by well-funded efforts on the part of many groups, each fighting in its own way for status quo.
Left unchecked fear of this unknown leads to anger, rage and the mob behavior we are now witnessing. This frustration is real. The anger is not counterfeit. And the cause cannot be explained simply by pointing a finger at any one group. It is the consequence of many different interests converging in a perfect storm, a tipping point resulting in public conflict that has not been seen for many years.
Mr. President we need your leadership now more than at any moment since you were elected. This is not the time to delegate. This is a time for you to take the stage — the bully pulpit, if you will — and call upon your considerable gifts, not to calm, not to stop worrying, not to cool our passions, but to redirect this energy in a different direction.
Fear is the emotion of the day. We fear the unknown. We fear that what might happen may be even worse than what we know. With good reason we do not trust our elected representatives. And at some level we really know that powerful interests are exploiting a critical moment in our national development. It is easier to live with the evil we know than perhaps confront one we have not yet met.
Rage is good. Anger is justified. Frustration is in order. But as the president, you must now find a way to aim this negative energy in a positive direction. It is now time to reveal and explain the many conflicting developments that have brought us to a political impasse. We need you to put on your teaching hat and become our Professor in Chief.
You have about four weeks to conduct a seminar of unprecedented size. We need a syllabus, a schedule and a goal. It needs to be in writing and it needs to be simple enough that even the most illiterate among us can understand. We need feedback and interaction, one of your strongest attributes. This piece of the seminar must be delegated. Others will have to discover what is most critical. This is not the only item on your desk. But make no mistake about it. You are the one who must drive home the hard truths we now must face and explain how conflicting interests — all with the best of good intentions — cannot be reconciled without making compromises.
Conflict resolution is one of the most important parts of your job description. And fortunately for us, it is an outstanding gift in your skill set.
We are waiting for your next move. We don’t want empty words that sound like “Ya’ll need too calm down.” We want to hear you say “I know you’re mad as hell and won’t take it any more. I know you are scared of what might happen. I know some of you think I have a hidden agenda and want to turn our country into a top-heavy bureaucratic monster that will eat you all for breakfast.”
You must accept and validate this public rage and find a way to redirect it toward the real villains in our midst, the well-funded organized groups now spending millions of dollars on a war of television commercials, viral emails, social networks, scripted rage at public meetings and old-fashioned gossip that distort the realities of the status quo and what will surely come to pass if we fail to take action.
We don’t need to “kill the bill” as so many are chanting. We need to fix the bill. And of all who can redirect public outrrage in a more constructive direction it is you, Mr. Pressident, who is best qualified.
This is not the playoffs. We are only part way through the game. This is “time out” an the ball has bounced in your direction. It came prematurely from the Legislative Branch to the Executive Branch and if you don’t do something with it others will. Our two best competing teams in the House, Democrats and Republicans, have only succeded in making us afraid and angry. The playoff is the next game which happens in the Senate. It’s not supposed to happen this way but the results of the playoff depends a lot on what you do with this out of bounds ball over the next four weeks.
We are waiting for your next move.
Concerned American
The ticking clock is a wasting asset. This is a mammoth undertaking so the president’s window of opportunity may be less than a week. I hope someone whispers in his ear in time to make a difference.

Guest
Angel68
Aug 8, 2009

I am against the “public option” because it kills babies and old people; by that I mean the way it will be administered is not what we really want it to be. The only thing really wrong with health care now is the size of the premiums. There need to be some regulations imposed and an individual should be able to cross state lines in order to buy better insurance. An individual does not have to accept insurance from his employer, he is FREE to choose his own. If we look to the government to give us insurance as the bill is written from the house, they will be able to say who gets care and who doesn’t. Ya’ll need to wake up. You might be young now but just wait until one of your parents or yourself gets a catastrophy(?) illness to see how long it takes to get help or if you even get help.

Guest
Nate
Aug 8, 2009

Uwe sounds like a politician. It’s easy to want an outcome if you ignore all the messy details required to get there.
#2 how much of a mortgage and education does he allow for? As current ills show, many Americans bought homes well above their means leaving no capacity to pay even minor healthcare bills. You can’t design a sustainable system that only requires contribution when the benefit exceeds the cost.
Can anyone that supports a public plan that competes on a level playing field please explain how that is guaranteed? Medicare by law was to reimburse providers a fair rate, when that law become a problem they just took that part out. The same thing will happen with any public plan, it will only be a matter of time until congress taxes private insurance to fund the public plan till they drive all of the private plans out of business. We have seen this with Medicare, VA, and Medicaid, why would anyone honestly expect this public plan to be any different?

Guest
Aug 8, 2009

This second comment fairly sparkles with ignorance, underscoring better than anything I might add the urgent need for decisive action on the president’s part. There are not enough individual voices to overcome the avalanche of wrong information that has been dumped on the country by the various special interests.
The tragedy is that many people truly believe such nonsense. The rage is not fake. It derives from fear that something terrible might happen if we fail to make it stop. Rage and indignation are justified, but should be directed at those who make reasonable discussions impossible.

Guest
Barry Carol
Aug 9, 2009

I completely agree with Nate on the public plan. I think the private companies could compete quite satisfactorily on a true level playing field basis including negotiated, not dictated, prices paid to providers, maintenance of reserves, covering all costs, including those performed for the plan by other government agencies, out of premium revenue with no help from general federal revenue, and allowing providers to decline to participate while still accepting Medicare patients if they want to. The bottom line, however, is that government simply cannot be trusted to sustain level playing field competition even if it were there at the start. Its past record, as Nate points out, is all you need to know. If unfair and non-level playing field competition evolved and the insurers were ultimately driven out of business, the public would soon regret the absence of insurance choices beyond the liberal dream of the government’s single payer. I don’t think providers will be happy with their dictated payment rates either. A single payer system would also likely result in a slowing of innovation but that’s a whole separate discussion.

Guest
bev M.D.
Aug 9, 2009

It is unfortunate that the entire health care discussion has been subverted to for-and-against the public plan, rather than the true systemic reforms so badly needed. It is my judgment that, because of this subversion, any meaningful bill will fail; and we will be right back at square one for another decade or more. (An outcome once predicted by Kibbe and others well before the election). This is a tragedy for all of us, no matter one’s political views.

Guest
bev M.D.
Aug 9, 2009

Correction to my previous comment: I meant Brian Klepper, not David Kibbe. Seven more years and my Alzheimer’s will be paid for by the taxpayers……

Guest
Aug 9, 2009

Nate, according to a Business Week article the public option is essentially off the table and the insurance big shots are standing down. Enough elected representatives have been bought an paid for that they are apparently comfortable moving on to other matters.
http://www.businessweek.com/magazine/content/09_33/b4143034820260.htm?campaign_id=magazine_related
That may turn out to be inaccurate, but Business Week isn’t the National Inquirer.
Maggie Mahar put up a snapshot of the arrangement you will love:
“Insurers are more enthusiastic about reform than most in the healthcare industry. This is hardly surprising. Universal coverage—with a mandate that everyone buy insurance–will bring them as many as 47 million new customers, government subsidies in hand.
“What’s not to like?”
http://www.healthbeatblog.com/2009/08/truth-squad-the-insurance-industry-spreads-misinformation-about-what-a-public-sector-plan-would-mean.html
Who cares where the money comes from as long as it keeps flowing, right? Never mind if those Medicaid beneficiaries are paying private insurance premiums with tax dollars.
And THIS arrangement is supposed to be cost effective and lead to lower costs and a reduction in health care inflation? This is a level playing field?
Gimme a break. Looks to me like the field is tilted to drain even more tax dollars into insurance coffers than are already flowing. Remember, the Medicare tax revenue stream, like that of Social Security, comes not from some big annuity distribution laid up years ago. It comes from payroll taxes levied on today’s working population.
I guess when the turnip dries up it will stop bleeding altogether and we’ll be forced to find a better way.

Guest
Barry Carol
Aug 9, 2009

Bev – You’re right. It is unfortunate that the controversy surrounding the public option is obscuring much of the rest of the healthcare and health insurance reform debate. Lots of people, including me, support most of the other proposed reforms including: (1) community or modified community rating, (2) guaranteed issue coupled with mandatory participation, (3) subsidies to help lower income people buy insurance assuming robust income verification requirements and stiff penalties for hiding income to qualify for a subsidy, (4) employer pay or play with an exemption for very small businesses, (5) comparative effectiveness and cost-effectiveness research which should be incorporated into determining coverage and payment policy, and (6) payment reform, led by MedPAC or a similar group of experts modeled after the Federal Reserve Board and as insulated from the political process as possible, that would reward value instead of volume.
Personally, I would also like to see tort reform that would protect doctors from lawsuits based on a failure to diagnose a disease or condition a long as they followed evidence based protocols. Other medical disputes should be resolved by special health courts instead of juries. More aggressive efforts to encourage people, especially the elderly, to execute living wills or advance medical directives to indicate what care they want and don’t want at the end of life would also be helpful.

Guest
Aug 9, 2009

Bob Laszewski (http://healthpolicyandmarket.blogspot.com/2009/08/health-insurance-reform-or-health-care.html) points out that there are two reforms needed. The first is insurance reform and the second is “health care reform” which I would call medical care reform. It’s impossible to discuss health care reform without understanding and observing the distinction between the two. President Obama seems to be addressing insurance reform and only giving a wave to reform in medical care. He may be a genius in this approach in that it could allow him to divide to conquer. If he can get the universal coverage he desires, then he can take on the cost bugaboo.
I vote for the genius of President Obama. While there is no evidence that the administration actually understands the predicates for our health care cost problems, I pretty sure they will figure it out.
The public plan is simply insurance reform, not medical care reform. I find myself agreeing with Nate that there is no medical cost benefit to a public plan. But then perhaps it is intended only to expand insurance coverage, not control medical costs.
Barry, you need to apply Bob’s distinction regarding the type of reform. A single payer plan does not necessarily imply a single insurer. In my view, single payer refers to exactly what it says. Health care providers are paid by a single payer. That moves single payer from insurance reform to medical care reform. In order to address the problems in the cost of medical care, provider behavior, fees, over-utilization, and malpractice we need a medical care solution. I think you are close to seeing the solution but you don’t quite have the mechanism yet. Take the elements you mention “payment reform”, “cost effectiveness research”, and ask yourself how to implement these in a consistent national health care program. How will you implement payment reform uniformly? How do you get research and apply the results nationally across all health plans? My suggestion is that you look at an independent agency staffed by the medical community who sets forth basic rules for care and utilization using best practices, lean medical care guidelines, and evidence-based protocols developed from the research. This agency could negotiate medical payments and fees with providers. In order to be effective, the agency could also pay the providers while in turn being paid by the insurers.

Guest
Nate
Aug 9, 2009

John why are Democrats such hypocrites and why do they hate small business so much? You seem to forget it is the Democrats who want to force everyone into a handful of federally regulated super carriers; see Ted Kennedy and his love of HMOs. We don’t need insurance reform we need Democrats to stop regulating everyone else out of the business.
15 years ago we tried to pass legislation that would allow small employers to group together like unions do to cut the cost of insurance and make the pricing more stable, Dems stopped it EVERY year. Now they are proposing co-ops which are the exact same thing except they have control over them.
Insurance companies are too big, have to large of market share, and don’t suffer competition. This all happened by government design. I could rattle off pages of regulation that serve no public good but drastically increases cost and limits our ability to compete with insurance companies.
I don’t bother fact checking Maggie any more so I’ll skip that part of your comment.
I care where the money comes from and my clients care where the money comes from because it is their money. The government on the other hand doesn’t care where it comes from as long as they get it.
Your point about Medicare and SS is right, they where designed with catastrophic flaws that anyone with minimal education should have seen. Both where contingent on perpetual growth and that rate of growth never declining. How clueless does a politician need to be to think our growth would never slow or regress? That is why government can’t be trust with programs like this.

Guest
MarioS
Aug 9, 2009

I’m a Brazilian citizen, born in Brazil and have been living here since then, so the health reform won’t affect me in any way.
Even so there is something I’d like to share with you.
Here we have a large experience on government “taking care” of us and that’s exactly why I can tell: YOU DON’T WANT IT!
Bureaucrats aren’t competent enough to deal with health issues and to be fair they shouldn’t be. If you are under fire you’ll want a soldier or a lawyer to take care of the problem? Some people are trained to act, others to postpone and bureaucrats are PhD on the latter.

Guest
Barry Carol
Aug 9, 2009

Peter Nesbitt,
Most insurance company CEO’s will tell you that, for better or worse, that Medicare drives coverage and payment policy for everyone else. Insurers believe, correctly I think, that they don’t have the moral authority to refuse to cover anything that Medicare will pay for. If Medicare, through MedPAC or a similar group, moves first to narrow coverage based on cost-effectiveness, however, the insurers will be happy to follow. Indeed, they have been asking for this for some time. I don’t see how the equivalent of a medical TPA could negotiate payment rates with providers on behalf of insurers on a national basis or even for a large geographic region. It might be able to do it on a small scale. If it could be done more broadly, why hasn’t it happened?
For providers, at least in theory, it should be easier to deal with a few or a handful of payers than many payers. The problem has been that a single insurer may have as many as 10 or more different plans all with different payment rates for the same procedure performed by the same provider. This is nuts and needs to be simplified. I can understand one (lower) payment rate for a narrow network (HMO) provider who expects additional volume in exchange for the lower payment and a higher rate for the broad network provider. Beyond that, if an insurer has ten different plans that all cover heart bypass surgery or a hip replacement, it should pay a narrow network or a broad network rate to a given provider, not ten different rates.
I think the trend toward increased consolidation in the health insurance industry will continue. Part of the reason is the growing importance of technology and scale. If we move toward paying providers based on performance and tracking how much healthcare utilization each provider drives, the insurance industry will become even more technology intensive. It will take significant capital to develop and support that infrastructure, especially for a national platform or a few large regional platforms. If two or three insurers plus Medicare and Medicaid come to control over 90% of the market in most counties, I think competition will still be adequate. This will be especially true if we’ve moved to community or modified community rating, guaranteed issue and mandatory participation subject to financial hardship exemptions.

Guest
Aug 9, 2009

Barry, good points all.
It has happened, albeit on a relatively small scale. Single payer management of care, fees, and utilization won’t come from the insurers because of competative pressures. The management of care and payment must be removed from insurers in order to gain the cost control advantages we seek.
To anyone suggesting we keep the status quo I only ask, “So how are we doing?” The answer is obvious.
I think that most, but not all, of the writers in this blog come from the insurance, insurance consulting, or medical community and bring their biases with them. We all wish to protect what we have. I don’t think, however, that this kind of thinking is going to solve our health care problem, inadequate coverage and out of control medical costs. As someone writing as an outsider, a patient only, I have nothing to protect.
It is time for the medical community to butch up and take a stand. Get the control of medical care away from the insurance industry and set up a quasi public non profit agency to ensure appropriate care, reasonable fees, and the elimination of waste.

Guest
Aug 9, 2009

Nate, I can’t speak for all Democrats and I learned years ago not go near the word “hypocrisy” lest it bite me. But as an individual I have specific opinions about many subjects.
I am in a small minority advocating uncoupling employment from health insurance altogether. With employee-sponsored group insurance firmly embedded in the American economy, embraced by management and organized labor alike, I see no chance it will ever be separated in my lifetime.
Prior to the Thirties it never existed but with the advent of Blue Cross (hospital expenses only) and Blue Shield (charges for professional services) group insurance became part of the fabric of the economy.
When Medicare came in the Sixties it developed into two parts. Part A (hospital expenses) and Part B (professional charges). Sound familiar? It should because the Blues were the grandparents. Part A is paid for with a payroll tax, and Part B has a premium (rather modest I might add) sucked out almost involuntarily from the beneficiary’s Social Security check. My, my! What do we have here? Is this a single payer system???? Surely not! Not in America! That’s Socialism!
And I didn’t even get to the VA and Armed Forces medical services. So much for hypocrisy.
======================
Life has been good over the years, but the last few decades have seen a kind of “benefits creep” by which workers enjoy ever better insurance packages if they happen to work for the right big companies. But in a global economy it is getting more difficult to compete with foreign outfits without that economic burden. The joke was that General Motors was a health care system that also sold cars. Starbucks pays more for health insurance than for coffee. You see the challenge.
I discovered an excellent proposal for a remedy in, of all places, George Bush’s agenda. It never saw the light of day, but buried way back in the stacks was a proposal to remove the advantages for group health insurance. This would have the effect of pushing the premiums in the direction of employees, over time giving them the whole ball of wax.
That idea was consistent, incidentally, with pushing employee retirement plans in the same direction: away from the company and toward the employee, as in various IRA, Roth, 401-k and similar tax-advantaged arrangements. The concept is described in detail in an AIE paper from 2005 I came across recently.
http://www.aei.org/outlook/21921
Accusing anyone of hating small business is not only counterproductive but insulting. Anyone wanting to bring about meaningful improvements is advised to avoid such rhetorical flourishes. It is in the same vein as calling someone a hypocrite.
As for managed care, I think as Monday-morning quarterbacks we can all see it to have been a spectacular failure no matter who advanced OR WENT ALONG WITH the notion.
I can understand why someone with your point of view would no longer be able to read Maggie Mahar. I have the same challenge with Fox News and talk radio, but I force myself to stay in the loop just to stay informed. I suppose in this case the best way to avoid the content was to criticize the source.
►”Insurance companies are too big, have to large of market share, and don’t suffer competition. This all happened by government design. I could rattle off pages of regulation that serve no public good but drastically increases cost and limits our ability to compete with insurance companies.”◄
SPOT ON!
We have found common ground. And as I read it H.R.3200 may be big, but it is split into two parts. DIVISION A addresses that very problem head on. The proposed changes in insurance rules will for the first time federalize a crazy system wherein every state was its own little country, making whatever insurance regulations fit the politics of the landscape. Here in Georgia our former state insurance commissioner is now starting a run for governor. Hopefully, should it survive, the notion of “exchanges” will make a dent in that problem. As you know almost all small states and rural areas are essentially little insurance monopolies, with the country divided up like various profit centers of organized crime were divided in The Godfather.
If the rest of the bill has to crash and burn for another day, let’s try as friendly rivals to protect this part from further destruction. Portability, ending recision because of costs, eliminating denial for pre-existing conditions, and all the rest are worth a helluva lot.