By Matthew Holt

Just for Friday, no Health 2.0 stuff. Instead two speeches, one by Oregon Senator Ron Wyden (D) last week to AHIP. The other from me to the Western Blues meeting late last year. This is Wyden’s

In less than a year, America will watch a new president be sworn into office, and exactly one year from now that new president will be on day 44 of his/her first 100 days – their so-called “honeymoon” with the public.  I don’t think that I have to tell you, that for the cause of health care reform, those 100 day will be very important. I believe, however, that the success of health care reform hinges to a great extent on how your profession responds to the efforts of a new president and a new Congress.

If your profession decides – as it did in 1993 and 1994 – to go out and spend millions of dollars fighting to preserve the status quo, you may delay reform for awhile but you will increase the likelihood of a government run health system with no role for the private sector.

So, this morning, I’m going to make the case for your taking a different approach.  I’m going to make the case why a fundamentally different private health insurance market would be good not only for the American people but also for the many responsible persons who work in the private health insurance industry.  Many of whom are in this room today.

I don’t have to remind you what the public opinion is of the private health insurance industry.  It’s not just “Sicko,” Denzel Washington movies and Los Angeles Times investigative reports.   Lots of presidential candidates can tell you that the easiest way to win applause is to “go negative” on private health insurance.

Here’s the reality as I see it:  Many of you are trying to emphasize
disease management, quality of care and improved coordination of care.
Yet the fact is that in today’s broken health system – without everyone
covered – to be successful, you have to be good at shedding risk.  If
you don’t excel at shedding risk, you are going to enroll too many
people who need too much care.  Enrolling too many people who need too
much care means that your costs are going to go through the roof.  When
your costs soar this way, the healthy people that you do business with
are going to start looking for another insurer whose costs aren’t going
through the stratosphere.  In other words they’re going to look for
another insurer who does a better job of shedding risk.

Does this sound perverse?  As the kids say: “Hello?”  Any insurer
who’s really good at handling lots of people – who greatly need
intensive health care – gets shellacked and their shareholders or
fiduciaries start going frantic fast.

On top of this, you and everyone else is being shackled by the
employer/employee relationship in health care which isn’t much
different in 2008 from what it was in 1948.  But economic challenges
for business and workers are very different then they were in 1948.  60
years ago employers weren’t operating in a global marketplace and
employees who went to work at twenty stuck around long enough to get a
gold watch and a steak dinner for retirement.  Employers need
cost-containment and workers need quality health care within a system
that is portable – where they can truly take their insurance from job
to job.

My sense is that many of you would prefer to operate in a market
where there was a level playing field for all health plans and where
every American would have a health insurance policy.  And my sense is,
part of the reason your industry has resisted certain insurance market
reforms in the past is because you felt that it was unfair to have to
take all comers if people could wait and buy coverage until when they
were sick.  Fair enough.

But I would like to challenge you –in a context where all Americans
would have coverage—to move away from some of the old practices of
denying coverage and spending buckets of time scouring people’s health
history.  Certainly this can’t be the most rewarding part of your job
and I am certain you will go home at the end of the day happier if you
spend more of your time managing care and promoting prevention.

I’d like to suggest a different model.  In this alternative system,
everyone who’s not in the military or on Medicare, has a basic private
health insurance policy.  Private insurance companies are on the same
footing – each must take all comers.

Competition is based on price, benefit and quality.

There are substantial subsidies for those who may have difficulty
purchasing private coverage; which are specifically paid for with tax
reform, administrative savings and real marketplace competition.  I’m
sure you are shocked to hear that the model I have described is the
Healthy Americans Act, which now has the bipartisan support of 12 U.S.
Senators – six Democrats and six Republicans

Trying for a moment to put myself in your shoes, here is what I would see are the advantages of such a new system:

There would be lots of new subscribers, lots of potential revenue
and lots of administrative simplicity such as a private insurance sign
up process that has been described as no more complicated than checking
a box on a tax return. 

47 million uninsured would all get signed up for private insurance.
In addition, the folks on Medicaid, SCHIP and other state programs
would also get private insurance – that’s another 34 or more million
people.  The bottom line is health insurance companies would be able to
sell a lot more policies.  But they would sell a different type of
policy.

No competitive disadvantage for insurers doing the right thing.  The
incentives would reward insurers that sell the policies that are best
for consumers in price, benefits and quality.  And there would be risk
adjustment mechanisms built in to compensate companies that take on
more risks and costs than there competitors.  And if this approach
sounds like a radical way to do business, I would point out that it’s
very similar to what many of your companies do when they participate in
the Federal Employees Health Benefit Program. 

Comparative effectiveness analysis is getting better, so insurers
will be able to get better information on which treatments and services
– and providers who deliver them – offer the most value.  I aim to beef
up this portion of the bill in order to support increased information
and transparency in the health care marketplace and would welcome your
thoughts on this. 

• You sell a product people want more of: good health and
  prevention.  And by keeping folks healthy you keep their business and
  you keep it longer. 
• You aren’t the political football any longer; trial lawyers,
  providers, businesses and others will also be asked to step up.
  Everybody has to give something – yet everyone gets something in
  return. 
   
• Attention can shift to problems we all agree are serious: like reducing needless medical errors. 
   

Lots of reasons to be optimistic about health reform in 2009.

Bipartisanship. Twelve U.S. Senators – six Democrats and six
Republicans – I asked CTS to look at the history of this issue and as
far as they can tell this is the first comprehensive health care reform
bill that has enjoyed this level of bipartisan support in the Senate.
The effort I and my fellow cosponsors are engaged in demonstrates the
potential for D’s and R’s to work together on such a longstanding
vexing challenge to the health, welfare and economic security of our
citizens. As I meet with fellow Senators I have met NO ONE, on either
side, who questioned the need for serious and systemic action to
address the failings of our system.  There is real interest, for
example, in modernizing the employer-employee relationship.

Ideological truce between Democrats and Republicans.  I do believe
we have reached a point where both parties have conceded that the other
one has had a point in the debate. The Republicans are saying more and
more that everyone needs to be covered from both a moral perspective
and an economic one—or the cost shifting and inefficiencies will
continue—in other words, the D’s have had it right on this point. And
the Democrats are willing to recognize that there is a role for the
private sector in reforming our system. That we should build on the
strengths of, rather than scrap, our health care system.

If California and state efforts of the last year have taught us
anything it is that that the states can’t do it alone. It’s not that
they haven’t put forth good ideas and made important strides—it is just
that they don’t have the bandwidth to address the challenges—many of
which involve federal laws or programs such as the tax code, ERISA and
Medicare and Medicaid.

All around, including many of your members, new alliances are
emerging where “strange bedfellows” are standing together calling for
reform: Labor and business (Stern and Burd.). Small and large business,
physicians, providers, consumers, you name it and many have spoken—and
spoken loudly—that as a nation, we cannot continue on the current
course.

So I stand here before a very influential group of players in our
health care system to ask you to become part of the Senate’s bipartisan
effort to fix American health care.  Don’t launch another campaign like
you did in 1993 and 1994.  Americans don’t need a replay of that dismal
failure.  Americans deserve better and so do the many responsible
people who work in your profession.  Both Democrats and Republicans in
the Senate want to work with you to get it right this time.  Work with
us for a real system that benefits the American people and your
profession.