What would actually work? Driving down the cost of health care


If competition actually drives the cost of health care up rather than down, what would bring lower costs?

What provisions in a “health reform act” would actually drop costs in health care? Let’s leave aside for the moment all the myriad other arguments – some might be seen as too much government intrusion, some would destroy the health plan industry, some would be cripplingly difficult for providers, and so on – and just focus on cost. Given the real structure of health care markets in the United States at this moment, what could be written into federal law and regulation that would actually reduce cost?me of these changes are massive, some would be invisible to those outside the industry, but all could be legislated or regulated, and all would “bend the curve” toward lower costs. Choose any you like, though some are “and” choices, others are “or” choices:

  1. Single payer: Eliminates insurance company overhead, increases medical loss ratio (the percentage of dollars put in returned as medical resources) to perhaps 95%, and gives the government (probably some rate-setting commission) the power to dictate prices and availability, like Medicare on steroids.
  2. “Robust” public option: All providers must take its payments as full payment, rates tied to Medicare rates (perhaps plus a percentage), Medicare rates decided by an independent rate-setting commission.
  3. Limiting medical loss ratios: Many European countries dictate that health plans must return 85% or 90% or 92.5% of the premium paid in as medical services paid out.  U.S. health plans, in contrast, compete on (and brag to Wall Street analysts about) how low their medical loss ratio is. Some are as low as 60%.

Obama’s Medicare Half-Truth


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Obama was called a liar during his recent address to a joint session of Congress. Actually, he was not fully truthful about the implications of cuts to Medicare. Obama repeated that his health reform plan includes payment cuts for private Medicare Advantage (MA) health plans:

The only thing this plan would eliminate is the
hundreds of billions of dollars in waste and fraud, as well as
unwarranted subsidies in Medicare that go to insurance companies —
subsidies that do everything to pad their profits and nothing to
improve your care. … So don’t pay attention to those scary stories
about how your benefits will be cut… That will never happen on my
watch. I will protect Medicare.

Obama’s claim that the cuts will trim insurer profits but not Medicare benefits was meant to calm nervous seniors. As I and others have pointed out the proposed cuts will in fact reduce benefits to some degree, contrary to the President’s assertion. But seniors, in general, should not be concerned. First, only about 23% of Medicare beneficiaries are enrolled in an MA plan.

Balancing Consistency and Innovation in Healthcare


Our healthcare system is now facing a problem that has plagued business leaders for years: how do you  balance consistency and innovation?

The drive for consistency in healthcare is based upon the fundamental observation that physicians across the country treat similar medical conditions in dramatically different fashions.  Sometimes, these different approaches are costly, such as using a more expensive treatment when a less expensive approach might be as effective.  In other cases, these practice variations are dangerous – failing to provide patients with treatment the evidence suggests is best.

Standardizing the delivery of care — identifying “best practices,” and then insisting physicians follow these guidelines – could, in theory, save money while improving quality, and is the basis of Obama’s healthcare proposal.

Health Care Outlook Not Improving

Sen. Max Baucus (D-Mon) released his much-anticipated healthcare proposal Wednesday morning.
Sen. Max Baucus (D-Mon) released his much-anticipated healthcare proposal Wednesday.


The next big test for a health care bill in 2009 (notice that I did not call it health care reform) will come in Senate Finance. The final vote in that committee will tell us a lot about whether the Democrats have any chance for 60 votes in the full Senate. So far, it does not look good.

I have the greatest respect for Senators Baucus and Grassley and their good faith efforts to find a bipartisan health care solution. But I also think their efforts were fatally flawed from the beginning.

No Alternative: An Analysis of the GOP Plan


Congressional Republicans have been blasting away all summer at the Democrats’ health reform legislation. But they might face heavy blowback if more Americans took a close look at two ambitious health reform bills sponsored by GOP lawmakers.

While the GOP plans include some worthy ideas, they have fatal policy flaws at their heart, largely related to insurance risk selection. Plus, they’re vulnerable to many of the same big-government political attacks leveled against the Democratic proposals. That may be the reason Republican lawmakers aren’t talking up their plans at the stormy health care town hall meetings they’re hosting across the country.

The two bills – the Patients’ Choice Act (PCA), sponsored by Oklahoma Sen. Tom Coburn and several House Republicans, and the Health Care Freedom Act of 2009 (HCFA), sponsored by South Carolina Sen. Jim DeMint – have a fair amount in common, though DeMint’s bill is the more conservative and deregulatory of the two.

More surprisingly, each bill shares some features with the Democratic proposals – including health insurance exchanges, subsidies for the uninsured to buy coverage, insurance market reforms, accountable health organizations, and a national rulemaking commission. The sad part of the nasty, mendacious political debate this summer is how little Republicans and Democrats have focused on those big areas of agreement.

The Right to Live


After generations in denial, doctors and lawmakers are paying attention to
the importance of allowing sick people a dignified death, and to the value of
helping patients and their families let go and say good-bye. Aggressive medical
intervention in terminal cases is increasingly considered an avoidable cruelty,
inflicted on a suffering patient by someone — occasionally a doctor, but more
often a family member — unable to acknowledge the inevitable.

As an intern, I see this almost every day, and I’m grateful that most
physicians now go out of their way to emphasize to patients and their families
the limitations of medical technology. Medical students attend lectures on
caring for dying patients, and medical journals remind doctors of the importance
of letting patients die with respect and, as far as possible, without pain.

But as an experience in my own family made clear, this newfound concern for a
good death can be taken too far during a patient’s final days.

Health Panels are a NICE Way of Improving Care and Controlling Costs



One of the proposals for health care reform is to have a panel of medical experts oversee Medicare, in order to improve quality and reduce cost. Butfalse accusations permeating the debate have scared people into thinking that would mean a government bureaucrat deciding what treatments you should or shouldn’t have, and would ultimately deny your grandma her vital drugs. Like any debate involving the future, fear of the unknown is going to be used by those who want to maintain the status quo for their own self interest. But health panels are not unknown. They have been used in Britain for ten years, and have proven to work.

Health panels are a simple enough idea: experts look at the evidence out there and make sure it’s the best that is available. They then make recommendations based on analysing hundreds of studies and consulting numerous stakeholders. The recommendations suggest the best form of treatment and care for a particular condition, or advise on areas your doctor may be unsure about.

Separating Fact from Fiction and Health from Health Care



James S. Marks In an editorial on Wednesday, The New York Times debunks the often-cited claim that America has the best health care system in the world.  For the politicians who routinely use this as a plank in their efforts to stifle reform, the Urban Institute study (disclosure: this study was funded by the Robert Wood Johnson Foundation) is an objective rebuke. The U.S. health care system is not the best – far from it.  And Americans, with a life expectancy that still trails many other countries, are not the healthiest people in the world.

Clearly, this country desperately needs health reform.  But the study, the editorial, and the entire current discourse around health care neglect an important truth about reform: fixing the health care system alone will not significantly improve Americans’ health.

For example: medical spending consumes 16 percent of the U.S. GDP and is projected to reach a staggering one dollar for every five earned by 2018.  And yet, only 10-15 percent of preventable mortality is linked to health care.  This and our terribly poor international rankings in length of life are telling signs that our tremendous investment does not do enough to address the factors that make us sick in the first place.

Our current national debate must look beyond health care – the so-called repair shop of our health system – and focus on our health.  Fixing health care will require insurance reform, cost containment and sound economic policy.  Fixing health will require us to look at our neighborhoods, our schools and our workplaces.  From our earliest years of life, these are the places that determine how long and how well we live in America.  The recommendations of the Robert Wood Johnson Foundation Commission to Build a Healthier America, which identify pockets of success where programs are making a real difference in people’s health, provide a useful place to start.

In schools, where obesity threatens the current generation of children with sicker and shorter lives than those of their parents, solutions are critically needed.  By guaranteeing daily physical activity in schools – which fewer than 3.8 percent of elementary schools provide – and linking federal funds for school meals to their nutritional value, we can reverse the epidemic and help our children grow up healthy.

In our neighborhoods and communities, we must consider the health impact of investments and development to ensure that they help promote physical activity, make healthy foods more readily available and lay a foundation for prosperity.  With public-private partnerships, we can bring grocery stores and nutritious food into underserved neighborhoods and help both the stores and the neighborhoods thrive.  By incorporating bike lanes, sidewalks and trails into our transportation planning, we can help make the daily lives of Americans more physically active.

All of this amounts to a change in the way we think about health in this country.  Health care reform, while critically important, will not avert the crisis of poor health that we’re facing.  The Times editorial and Urban Institute study shine an important light on the dubious claim that we have the best health care system in the world, but they don’t go far enough.  It’s time that we debunk the larger myth, that Americans are the healthiest people in the world, so all of us – from the halls of Congress to the family dinner table – can start working to improve the health of the country we love.

Dr. James S. Marks, M.D., M.P.H., senior vice president at the Robert Wood Johnson Foundation and director of the Foundation’s Health Group.  Dr. Marks oversees all of the Foundation’s work in childhood obesity, public health and vulnerable populations.  Prior to RWJF, Dr. Marks was an assistant surgeon general and director of CDC’s National Center for Chronic Disease Prevention and Health Promotion.

Science Is Leading Us to More Answers, but It’s Also Misleading Us


Be careful what you wish for. That is the unexpected lesson of the past decade of biomedical research, which has been characterized by an overwhelming abundance of interesting things to study and powerful ways to study them. A pioneer of this era, MIT geneticist Eric Lander, speaks eloquently of the “global view of biology,” meaning that scientists now have extraordinary tools to study not only individual genes, but also multiple genes at the same time. Rather than immediately investing all their resources in a few favorite genes (the traditional approach), modern researchers first can survey thousands of initial candidates, then identify and ultimately direct their attention to the most important players and pivotal networks.But we are increasingly discovering that this global perspective comes at an unexpectedly steep price: We’re making a lot more mistakes. Or, at least, we seem to be having a lot of trouble picking out the rare, meaningful signal from the deafening noise in the background.

Health Care Reform: What do People Really Want?


Humphrey Taylor is Chairman of The Harris Poll.  Prior to joining Harris, Taylor worked in Britain where he conducted all of the private political polling for the Conservative Party and was a close adviser to Prime Minister Edward Heath in the 1970 campaign and subsequently to Margaret Thatcher.

What do people really think about health care reform?  When political issues are difficult and complicated, published polls sometimes confuse rather than enlighten the debate.   And health care reform is fiendishly complicated, with many different issues and many different proposals for addressing them.  No wonder that the debate is generating more heat than light.  This is surely one of the times when political leaders should lead rather than follow public opinion.  As Winston Churchill once said, “The problem with politicians who keep their ear too close to the ground is that it is difficult to look up to them in that ungainly posture.”

While policy makers have to address the details of the proposed policies, most people do not.  They know what they want, or don’t want, but have only a very limited understanding of which policies will actually achieve their aims.  They are often strongly influenced by political rhetoric that varies from the accurate to the simplistic to the completely false. Many different words and phrases are used to describe different policies.  It is unreasonable to expect the public to understand the details of the proposed reforms or how they work in practice.

However, if you study all the polls, as opposed to cherry picking them as many politicians do, a  clear picture of public opinion emerges: