Matthew Holt

Matthew Holt
Matthew Holt is the founder and publisher of The Health Care Blog and still writes regularly for the site. He is also the co-founder of the Health 2.0 Conference, as well as a Founding Principal of the associated consulting firm Health 2.0 Advisors.

In which I play Obama, answering Michael Cannon

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6a00d8341c909d53ef0105371fd47b970b-320wi Last night I was busy spending two hours of my and my business partner’s time buying health insurance for our massive 4 person company. That means doing a multi-factorial equation between premiums, co-pays, deductibles, out of pocket maximums, & in & out of network costs. It’s no wonder that no one understands their health insurance, especially when eHealthinsurance.com still doesn’t bother putting half of the important variables on its front page. But no matter, it will be my pleasure to make Wellpoint or Aetna better off—they’re not having such great years and they can use the money.

But then I noticed from the tweets that Obama was doing a primetime townhall about health care. So having failed to find it on my TV (cos I’m on the west coast and we’re not alive at the same time as you east coasters), I looked on the ABC web site. There I didn’t find the TV version , but I did find what I thought was a most amusing article….and as I went all the way through I noticed that it was by my buddy Michael Cannon…the thinking man’s health care libertarian from Cato.

Obama’s too busy talking mush with the townhall to answer…but I thought I might.

So here’s Michael’s questions, and in italics are my answers

Health Care Reform: Questions for the President

Will Health Care Reform Improve Our Health?

OPINION by MICHAEL CANNON

June 24, 2009—

“Health care reform is on life support,” says Rep. Jim Cooper of Tennessee. And he’s a Democrat.

MH: Not really!  Or at least not in a sane country unless he has the word “Christian” in front of his party label

President Obama has spent months building momentum for health care reform. But when the Congressional Budget Office put the price tag near $2 trillion, it stopped reform dead in its tracks.

What Senate Finance Committee chairman Max Baucus, D-Mont., once called “nearly inevitable” now seems much less so — and that’s before supporters have confronted the really tough questions.

Before this debate is over, Obama should answer a few questions about his plans for reform, including:

Mr. President, in your inaugural address and elsewhere, you said you are not interested in ideology, only what works. Economists Helen Levy of the University of Michigan and David Meltzer of the University of Chicago, where you used to teach, have researched what works. They conclude there is “no evidence” that universal health insurance coverage is the best way to improve public health. Before enacting universal coverage, shouldn’t you spend at least some of the $1 billion you dedicated to comparative-effectiveness research to determine whether universal coverage is comparatively effective? Absent such evidence, isn’t pursuing universal coverage by definition an ideological crusade?

MH: Sadly Michael, universal coverage is not about improving public health. If you want to do that, go teach some kids age 1–5 and build some sewage systems. Universal care is about making sure that the costs of health care are fairly distributed. Under the systems you prefer and the one we now have they’re distributed to the poor and sick from the healthy and wealthy—many of whom we both know work in the health care system. But apparently there was NOT ONE MENTION from a questioner of the uninsured or sick people bankrupted by the system in the whole hour. (Update Fri: and the only time the moderator Charlie Gibson mentioned it was when he wondered how rich people like him would get access to a doctor with all these newly insured people wanting care–he spent the whole evening appearing to be a selfish git)

A draft congressional report said that comparative-effectiveness research would “yield significant payoffs” because some treatments “will no longer be prescribed.” Who will decide which treatments will get the axe? Since government pays for half of all treatments, is it plausible to suggest that government will not insert itself into medical decisions? Or is it reasonable for patients to fear that government will deny them care?

MH: Why should patients fear it? We know that less intensive care is better, and cheaper primary care is better than more extensive specialty care. As the taxpayer pays for training doctors and funds most medical facilities why shouldn’t they demand that the resources are better spent?

You recently said the United States spends “almost 50 percent more per person than the next most costly nation. And yet … the quality of our care is often lower, and we aren’t any healthier.” Achieving universal coverage could require us to spend an additional $2 trillion over the next 10 years. If America already spends too much on health care, why are you asking Americans to spend even more?

MH: Ah we agree. All the money should come from the current system, even if it means reducing the incomes of pundits, bloggers and those who sponsor them, and a few people in the system. Sadly the politics of the US means that apparently Obama can’t say that

You have said, “Making health care affordable for all Americans will cost somewhere on the order of $1 trillion.” Precise dollar figures aside, isn’t that a contradiction in terms?

MH: Well for a start it’s not $1 trillion, it’s $100 billion a year which these days will barely buy you 6 months invasion of a small country. Which we do without debate on a regular basis it seems. And if we take the money from somewhere else we’re spending the money in health care, it shouldn’t cost more. Ah ha, cant be done because well see last answer

Last year, you told a competitiveness summit that rising health care costs are “a major anchor on the ability of American business to compete.” In May, you wrote, “Getting spiraling health care costs under control is essential to … making our businesses more competitive.” The head of your Council of Economic Advisors says such claims are “schlocky.” Who is right: you or your top economist?

MH: Obama is. I just spent 2 hours figuring out a mess of health insurance decisions that not one of my international competitors has to do. Multiply that out by every business in America, and don’t bother adding the fact that what we actually pay for health care is more than double per head what everyone else does. We’re both political scientists so we know that economists don’t know squat.

You recently told an audience, “No matter how we reform health care, we will keep this promise to the American people. … If you like your health care plan, you’ll be able to keep your health care plan, period. No one will take it away, no matter what.” The Associated Press subsequently reported, “White House officials suggest the president’s rhetoric shouldn’t be taken literally.” You then clarified, “What I’m saying is the government is not going to make you change plans under health reform.” Would your reforms encourage employers to drop their health plans?

MH: So? If employers do drop coverage as there are only 3 or 4 health plans in most markets, it would still be the same plan that the citizen would get to buy if they wanted to keep it and the costs would be subsidized for the poor. But don’t worry too much Michael. Americans hate their health plans. For some strange reason though they apparently like their doctors. Of course the AMA tells them they do

You found $600 billion worth of inefficiencies that you want to cut from Medicare and Medicaid. If government health programs generate that much waste, why do you want to create another?

MH: You’re saying all government programs are the same? That means the US Marine Corps and the Iraqi volunteer EDF (or whatever it’s called) are the same. I could start a government program that saved $600b very easily in Medicare & Medicaid. I might make a few enemies

You and your advisors argue that Medicare creates misaligned financial incentives that discourage preventive care, comparative-effectiveness research, electronic medical records, and efforts to reduce medical errors. Medicare’s payment system is the product of the political process. What gives you faith that the political process can devise less-perverse financial incentives this time?

MH: See my above answer, oh and abolish the Senate

You claim a new government program would create “a better range of choices, make the health care market more competitive, and keep insurance companies honest.” Since when is having the government enter a market the remedy for insufficient competition? Should the government have launched its own software company to compete with Microsoft? Are there better ways to create more choices and more competition?

MH: Hmm…the government did launch its own software “company”, which was way better & cheaper than the private sector competition, and made the government agency that used it provide the “best care anywhere”—demonstrably superior to privately provided care.  And it was so good that the monopolists at Microsoft stole its name and never paid compensation! Or did you miss Vista in your health care system and software market analysis?

When government entered the markets for workers compensation insurance, crop and flood insurance, and disaster insurance, it often completely crowded out private options. Do you expect a new government health insurance program would do the same?

MH: I hope so because the current private options are lousy at keeping down health care costs, or satisfying their customers. Oops, Obama can’t say that, can he.

You have said there are “legitimate concerns” that the government might give its new health plan an unfair advantage through taxpayer subsidies or by “printing money.” How do you propose to prevent this Congress and future Congresses from creating any unfair advantages?

MH: I don’t know but I’ll make a deal. I’ll promise my health plan wont have use an unfair advantage if you promise that AHIP’s members will stop lobbying Congress to rip-off the taxpayer. This wonderful chart shows that the likelihood of being against the public plan is directly proportional to the bribes paid to Senators by insurance companies.

President Obama needs to address questions these directly. The health of millions depends on his answers.

MH: No it doesn’t. The health of Americans depends on a bunch of stuff. The wealth of a few millions who get royally screwed by the current system does depend on reform. The current system is aided and abetted by its defenders like Cato and others who advocate “solutions” that are not only unworkable but also politically un-feasible. Their only role is to be spoilers to keep the status quo in place.

Michael F. Cannon is director of health policy studies at the libertarian Cato Institute and coauthor of Healthy Competition: What’s Holding Back Health Care and How to Free It.

Matthew Holt is a vicious blogger who wouldn’t mind being President for a day or two but not without the ability to break Congress to his will in the first ten minutes.

Interview with Fred Goldstein, US Preventive Medicine

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Last year US Preventive  Medicine (USPM) caused a little splash with some full page ads in the Wall Street Journal proclaiming itself the future of preventative care. Since then the company, which has raised a significant chunk of private capital, has been diversifying into various aspects of prevention–including what looks more like disease management.

About a year ago USPM acquired Fred Goldstein’s company Specialty Disease Management Services. And since then it’s been marketing The Prevention Plan to employers–including a recent deal with AON–and also putting out a very neat online service that was shown at Health 2.0 in October.

Prevention is getting some lofty rhetoric, including Prez2Be Obama suggesting that it’s a major key to cutting health care costs. But many people in health care think that it doesn’t have an ROI. Fred disagrees and told me why in a wide-ranging conversation about the company, the concept of prevention and whether it’s really the wave of the future. Click here to listen

Navigating Cancer

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Gena Cook is the CEO of Navigating Cancer, a new Health 2.0 company aiming at getting cancer patients online with their care providers. Gena tracked me down in a Starbucks in Seattle (oxymoron I know) when I was up there last week, and she told me about the new company. Here’s the (short) interview

23andme gets unwanted publicity

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Sergey Brin, Google co-founder and husband of 23andme co-founder Anne Wojcicki, has announced that he has the gene for Parkinson’s disease and that his mother carries it to. She already has the disease, as did her aunt. Sergey has written about this on his new blog Too and it was picked up by the NY Times. Unlike the issues around Steve Jobs and his cancer, there’ll be no impact on Google’s business. If—and it’s only an “if”—Brin develops Parkinson’s it’ll be many many years from now. However, Parkinson’s is a very serious condition which people are right to dread—the father of one of my best friends has it, and his life is extremely grim.

Coincidentally I was doing my “spit” for 23andme just a few minutes ago when this story went on the NY Times site. So I can’t tell you about my results from them yet. I have though had my genome sequenced by Navigenics. Thus far none of the results have been compelling enough to make me actually do anything.

That of course is also Brin’s problem. At the moment there’s nothing he can actually do. In Genomics diagnosis is now running far far ahead of capacity for treatment.

But the hope of services like 23andme, Navigenics, DeCodeMe, and others aimed at promoting cures and treatments like CollabRx and Cure Together, is that the body of knowledge from both genomics and overall patient experiences will advance fast enough that the current situation of “more diagnosis with less ability to change the outcome” will slowly change to one where knowing your likely health future will help you avert some of the worse consequences.

Let’s hope so for Sergey’s sake and all of ours.

UPDATE: Just to clarify the headline, I don’t mean that 23andme does not warrant or deserve this publicity, or that they have done anything at all bad here. When I say "unwanted" I mean they are getting publicity for their service because of a situation that no one would want to happen to them (or to Sergey Brin). But of course that’s true for many many great health care services of all stripes.

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Connecting the dots–Uninsured people are poor!

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A bunch of random articles all hit at once on Wednesday morning. And they win the John Madden award for stating the bleedingly obvious. This is kind of  a companion piece to my rant about Friday’s NY Times article on the health industry and its political allies and adversaries sitting down to come to consensus.

Inquiry featured a worthy study. It tried to suggest that high costs “crowd out” health insurance spending.

To get the MU money, just a test

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When ONC lunched the meaningful use program paying doctors up to $44,000 or more to adopt electronic medical records, I wondered–“how would they know?” Then I was told there would be a test. But I misheard, it’s not a test. Instead providers get to attest. For those of you like me with poor English skills, that means you get to self-report, which sounds much easier. Go to this page, follow the instructions and the money will magically arrive. Of course you have to be a qualified entity (doctor, hospital, etc) and you have to be getting funds from Medicare or Medicaid. And of course there’s never been any fraud or false reporting in those programs, so we’re completely assured that our tax-dollars (or the loan from the Chinese) are being well spent. Actually there will be audits and checks, and next year the bar for not only the use of the EMR but also the burden of proof will be raised. But for now, this looks like a way to spend that ARRA money fast and you can’t believe that this opportunity will happen for America’s providers again.

Getting to Pareto Optimality from Sermo–The Dan Palestrant interview

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Daniel Palestrant was one of the first big stars of the early Health 2.0 movement, and he was often at Health 2.0 conferences and on THCB. He founded the biggest (US based) online doctor network Sermo in 2005, rode it like a rocketship, and then left with little explanation in late 2011. Rumors swirled about the company, then it was bought by WorldOne, while Palestrant (and colleague Adam Sharp) was seen in a series of photos with a cutout of an obscure economist. He then seemingly vanished. Now he’s back, and the company named for that economist, Par8o, just announced a funding round of $10.5m and a series of impressive clients.

But what happened at Sermo? And how did that get him to Par8o? I met Dan for a in-depth reminiscence. But briefly in his words; all the investors (including him) in Sermo were happy with the WorldOne buyout; what he learned from the ACA was the inspiration for Par8o; and, he’s now building the underpinning health care operating system. We’ll have more later this week, but watch our catch up.

Bespoke Limbs and Real Mass Customization

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There’s a new world emerging of customizable materials and it’s being led in health care by designers like my old friend Scott Summit. Scott designed products like an early prototype of the Palm V (yes, there was a life before the iPhone!) and servers for Apple and Silicon Graphics, but in the last five or so years he’s got very interested in the human body—particularly artificial limbs.


Artificial limbs are an interesting challenge for an industrial designer both because mass production doesn’t do a good job at addressing it and because most of them are interested in form as well as function. Scott started doing his first prototypes on real people three years ago when it became possible to use 3D printing relatively affordably to create bespoke parts customized for individual human needs.

A little ain’t enough, or is it?

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I've been so buried in the run up to Health 2.0 that I haven’t had a chance to add to the deluge of electrons about the bills in Congress, Obama’s speech, the several hundred amendments to Baucus’ bill in mark-up, etc, etc. And my colleagues on THCB and elsewhere are taking good care of you in the details.

But I thought that I’d quickly respond to today’s WaPo article in which Erza Klein connects two themes that matter, while leaving out two that matter more. The first of the two he identifies is that most Americans don’t see the cost of health care. If we made them all write a check for $13,000 a year, and they’d seen that number go from $8,000 a decade ago and realized that it will be $25,000 in another decade, then the cost problem would be much more real. It would also get associated with the access problem as people realize that as the cost goes up, they (and their employer) can afford less. At the moment those problems are disconnected.

The ignorance here remains palpable. An HR exec I know did an exit
interview last week with an employee who was astonished to find out
that now he was on his own he could buy family health insurance in
California for under $500 a month which was less than his contribution
to the company plan. The concepts of risk pooling, risk selection,
varying benefit levels et al were clearly foreign to him. And of course
had his family had a pre-existing condition that policy might have cost $3,000 a month or more.

Expect to hear a whole lot about this…

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Seniors care about death panels (apparently) but they usually really care about drug prices and costs. Part of the political rationale for the Republicans passing Medicare drug coverage in 2003 was to deny the Democrats the ability to bundle seniors’ desire for drug coverage with a universal coverage bill. So far the Republicans have to say the least muddied the waters as to whether universal coverage is a good thing for Medicare recipients—or at least the ones that don’t care about their kids or grand-kids.

But there’s one minor trick. The deal with big Pharma that’s part of HR 3200 cuts the donut hole in half. That’s real money for seniors.

And when the cuts to Medicare Advantage become apparent, that donut hole is going to affect many more seniors who now are getting good benefits from Medicare Advantage and are pretty unaware about what’s about to happen to those benefits, according to this recent Silverlink/Suffolk University poll. (Hint, many Advantage plans will get much less generous).

In that case, knowing that there is something in the bill that helps them might change some seniors’ minds. Right now the Silverlink/Suffolk poll does not make happy reading for the Administration:

The survey also polled Medicare recipients on healthcare reform. Despite high levels of satisfaction and relatively strong amounts of optimism, nearly half of Medicare recipients polled (48%) say they do not believe the Obama administration is looking out for their best interests when it comes to healthcare reform. The remaining are split, with 28% believing the administration is looking out for them and 24% unsure.