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Health Care Reform: Ideology, Self-Interest and Rhetoric

Thirty years ago, one of us asked the retiring CEO of one of the largest drug companies what was the worst mistake he had made as CEO.  Without hesitating he said, “Opposing Medicare.  We were so ideologically hostile to a big new government program that we lost sight of our own self-interest. All the major drug companies except Syntex opposed it.  Luckily we lost.  We have made billions of dollars because of Medicare.”

The White House “summit” on health care reform was a nice start but as the as the reform debate unfolds, public and congressional opinion and the positions of the powerful interests involved – pharmaceuticals, insurers, device manufacturers, physicians, large and small employers, and technology companies – will be swayed by their ideology, perceptions of self-interest and the rhetoric used in the debate.

At one level, there is a broad consensus in America that we need to reform healthcare to expand coverage, improve quality, and make healthcare affordable.  Public opinion polls show broad agreement and large majorities in favor of fundamental change.  Even among specific stakeholder groups, from employers to hospitals and doctors, there seems to be widespread agreement that healthcare needs to change. But, the combination of a deep ideological divide, self-interests that are mutually exclusive, and rhetoric that is capable of turning public opinion against change may end up creating an environment of inaction.

The ideological debate is about the roles of government and the market. Most Conservatives, Republicans and business leaders strongly oppose new government programs (especially if they involve substantial tax increases) and believe the market is the solution.  Many believe the individual insurance market, tax incentives (read targeted tax cuts), higher out-of-pocket costs (“skin in the game”) and competition can fix the system.  Most Liberals and Independents believe that only government can ensure that the healthy majority pays most of the cost of caring for the unhealthy minority and that markets cannot do this.  The left hates for-profit health care.  The right hates big government programs and mandates.  A poll by Harris Interactive and the Harvard School of Public Health shows  that two thirds of Republicans think we have the best healthcare system in the world but only one-third of Democrats do.

And what about self-interest?  Doctors and hospitals don’t want Medicare cuts or big, powerful insurers.  Pharmaceutical companies don’t want the government to negotiate their prices or to allow drug importation.  Doctors, hospitals and medical device companies would all benefit from a big expansion of coverage – if the prices are right.  Small employers hate mandates to provide health coverage to their workers. Unions hate mandates that individuals have to purchase health insurance.  Large employers hate  paying excess health insurance premiums because of the “under-payment” to providers by government programs. And so on. Policy is usually made by the sum of the self-interests, weighted by the political clout of each interest: who has the power and what do they want?
Each powerful stakeholder in healthcare has a “line in the sand” issue that they will not give on. The problem is that in a $2 trillion healthcare system there are many powerful stakeholders, there are very clear “lines in the sand”, and many of these self-interests are in conflict or are mutually exclusive.

One of the lessons from the demise of the Clintons’ proposals in 1994 is that rhetoric matters.  If people think reform means expanded coverage, better cost-containment, more value for money and increased personal security in the future, they support it.  If they believe reform means higher taxes, higher out-of-pocket costs, less choice, reduced quality, fewer jobs and rationing, they oppose it. Words and slogans have been misused and abused in health care policy for many years.  Most health maintenance organizations (HMOs) focused on cost containment, not maintaining health.  Managed care firms, it appeared, “didn’t manage and didn’t care.”  “Personal responsibility” and “empowerment” really meant “patients pay more.”  “Consumer-driven health care” was driven by insurers, employers and consultants and never by consumers.  A “preferred provider” was anybody with a white coat, a stethoscope and a pulse.  Almost any program to expand coverage was attacked as “socialized medicine” even when
the insurance and the care would be provided by the private sector.

Policies that would constrain costs were either “rationing” or would reduce “quality” or “choice.
Ideology, self-interest, and rhetoric will shape the health reform debate. A sneak preview of this process was embedded in the recent stimulus package.  $1.1 billion was added for comparative effectiveness research. Many policy wonks agree that we need better information on what works and what doesn’t in health care, but disagree on the details of what to study and how to use the information. Insurers and employers want a strong agency to study cost-effectiveness so they don’t have to pay for very expensivecare of marginal benefit. Their opponents call this rationing and were insistent that comparative effectiveness  research should not lead to any reduction in reimbursement.. Talk radio was full of assertions of “socialized medicine” and charges of “English style rationing” being sneaked in to an omnibus bill in the dead of night.
There is one other important lessons from history.  Speed is vital and a prolonged debate causes support for health reform proposals to decline as critics tear them apart.  And this debate will be about politics, not just policy.  If a major bill passes, it will increase the popularity of the president and help the Democrats in the next election.  If it goes down in flames, like the Clintons’ bill in 1994, Democrats are likely to lose many seats in 2010. If President Obama believes that the debate about health care can be conducted civilly without much partisan rancor, he is surely wrong.

The polls show that health reform is a very divisive issue with the pubic, and this polarization is even stronger in Congress.  The debate will get very nasty.  Let the battle begin.

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pdorseyBrooksSmithRoxyMohammad SHAIKHJIW. Horter Recent comment authors
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pdorsey
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pdorsey

The status quot in the health care industry is imperative to the congressional members who depend on the large campaign contributions from this segment. The status quot is imperative to the health care industry because sweeping reform would mean billions in lost revenues. Neither group gives a damn what the citizens of this country really want. We hear these politicians say over and over that the people don’t want this reform ,the people don’t want a public option, the people don’t want competition in this market. Why not ask the people what they really want. Put it on the national… Read more »

Brooks
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Brooks

The American health care “system” is a national disgrace an an international embarrassment. The Limbaugh, Hannity & Fox News induced nonsense that the world is frothing at the mouth to come to America for health care is simply not true. America has long ago decided that capitalism and health care are not mutually exclusive. No where else in the civilized world do they hold this opinion. There is enough blame to go around. Borderline criminal organizations that now front as hospitals, insurance companies that should have had their right to be in business yanked long ago, and doctors that have… Read more »

SmithRoxy
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I read & enjoyed this topic.It’s excellent.Everyone in healthcare would have to operate under that budget and hence have to find ways to cut costs, not raise charges, as those would be set.
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Peter
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Peter

“If this was the case why has it never worked for Medicare?”
Because Medicare operates within an overall broken system of healthcare where costs are just passed along -hence your contention of “cost shifting”.

Nate
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Nate

“2. Make all hospitals truly non-profit and community owned. That way they have a stake in meeting the needs of the community not their own ivory tower expectations.” Peter I hope you get your wish and enjoy a life of quiality care at King Drew or any similar fine facilities. 1. They are already regualted the hell out of. Your just ranting so I’ll leave the many factual errors on this one alone. Darn those insurance companies for ordering so many test! 3. or it leads to waiting list months long until funding opens up to pay for the service… Read more »

Nate
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Nate

Mohammad SHAIKHJI,
Why are you not on Medicare? THe resaon they most likely denied your COBRA coverage was your Medicare eligibility. Eligibility under another healthplan eliminates your COBRA rights. If for some reason you are not entitled to Medicare then you need to explain to them why and do so in writing within 60 days of receiving your COBRA notice.

Nate
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Nate

LOL Peter,
“Everyone in healthcare would have to operate under that budget and hence have to find ways to cut costs, not raise charges, as those would be set(negotiated).”
If this was the case why has it never worked for Medicare? If you have a magic wand that makes all these failed dreams come to relaity pass it around. Just becuase you want something to work a certain way you can’t ignore 40 years of history proving it doesn’t.

Mohammad SHAIKHJI
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Mohammad SHAIKHJI

Dear Sir,
I am 71 years old and was laid off last Oct 008.
Medicaid did not approve my application as I am on unemployment allowance. My previous health insurer refused to give me Cobra(which I am eligible under Economy Stimulus Package)saying that because of your age you are not eligible for Cobra cover, go for Medicaid..
Where should I go?
To Whom I complain?
Will you please guide.
Sincerely.
Mohammad Shaikhji

Peter
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Peter

Deron, with government paying the health bills (taxes) it would put the government in charge of setting expenditures – like corporations control their expenditures. Everyone in healthcare would have to operate under that budget and hence have to find ways to cut costs, not raise charges, as those would be set(negotiated). This will not work if we adopt a two tier health care industry – one for the “rich”, one for the rest. There would be no room for “chartered” healthcare here. The rich could set up their own offshore “concierge” clinics/care centers but that would not matter since they… Read more »

Deron S.
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I agree 100% with 2,4,5, and 6. I also agree with 8 and 10, but I think we need both together and cannot have one without the other. I see definite advantages with #7. I think we just need to make sure we don’t add administrative costs by converting a lot of large group contracts to individual contracts. I agree with a lot of what you say in #1 because I deal with them on a daily basis representing my docs from both the provider and employer perspectives. However, I wholeheartedly disagree that they are the root of all problems.… Read more »

Peter
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Peter

Deron, an interesting comment following my response to Nate (“I’ll resist the urge to call you an idiot” – not resisting at all)and one earlier by you that called Oberman a schumck. You forget Nate is the one who routinely calls commenters idiots. As a devote Conservative I doubt you’d like my ideas but here goes. They will seem radical, but I think that they are necessary if we are to really solve healthcare – not make it perfect, but get us out of the destructive path we are sure to end up on. We are kidding ourselves if we… Read more »

W. Horter
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W. Horter

What has to be done, is to get rid of the for profit Insurance companies. They add nothing to healthcare, but cost. Conyers HR 676 bill in Congress, is an excellant place to start. Not many even know of it’s existence. Administration costs, both of the Insurance Companies, and hospitals, Doctors, Drugstores etc., aproach a third of our healthcare dollar. There are hundreds of buraucracies and different coverages, Doctors, hospitals and drug merchants have to have staff to figure it all out. The right wing, has no answer, for them, ones benifit to society is based on the size of… Read more »

Deron S.
Guest

Peter – My view on healthcare reform is that we will have to come to some sort of compromise that pulls in the best from all stakeholder groups, ideologies, etc. There are a lot of people bringing good ideas to the table on THCB. You seem to have assumed the role of the guy who lurks in the shadows and goes on the attack when someone makes a point that you don’t like. Personally, I would be interested in hearing more of your ideas. You’ve put some good ones out there in the past, but they are few and far… Read more »

Peter
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Peter

“Examples are a small number of events or items meant to represent a larger subset, they are not all inclusive and can represent a small fraction of the total.” Breast reconstruction – mandated by 49 states Chemotherapy – mandated by 4 states Any of these not suitable for mandated coverage – care to “extrapolate”? This mandated issue is mostly an insurance industry issue where they want to plus profits by charging extra for a whole host of treatments and only want to compete on price by exclusion of coverage, not lowering of costs. “Some people are sicker then other through… Read more »

Nate
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Nate

rbar, this captcha has the incredible ability to identify good comments and lose them, the so so and bad ones always get through but the ones to truly be proud of always get killed somehow. I’m not an academic and I don’t have a study chalked full of references but in my reading and research over the years if you take the private insurance plans from the 10 lowest per capita states, adjust down for public cost shifting then back up for not covering those over 65 then compare to other industrialized nations they aren’t far apart. We have plans… Read more »