There Will Not Be Health Care Reform in 2009…

…without Republican leadership.

I will suggest that there is an opportunity for the Republicans to
score a huge political and policy win. It can be done in a bipartisan
way and it can be done in a way that does not sell out the core
principles that either Republicans or Democrats believe in.It would require a new effort—a clean sheet—this time initiated by the Republicans.The
Republicans have won August. No doubt about it. But they have “won,”
not because they actually did anything to deserve the win—they pretty
much sat back and let political gravity do all of the work.Now what? Do Republicans really think they can sit back and do nothing for three or four more months and come out “winners?”At this rate, this health care debate is headed for a stalemate that will not do the country, nor either party, any good.

I don’t know any leading Republicans who don’t think this health care
system is in crisis, that we have to bring our costs under control, and
every responsible American should have health insurance.

Democrats could just be on their way to a health care reform
“Waterloo”—again. Letting them implode on their own—with a little bit
of help from the far right—is a tantalizing proposition. But it is not
a terribly patriotic one.I will also suggest that the American
people are smart enough to know the difference between a Republican
Party that reaches out to take a constructive role in turning this
around as opposed to the party of “No” that backs themselves into an
accidental “win.”For Republicans who think they can again
convert the Democrats’ health care problems into a big election victory
in 2010, there is one huge difference between this battle and 1994. In
1994 the Congressional Republicans hadn’t been in power for
decades—they had new and intriguing ideas. After the American voters’
verdict in the 2006 and 2008 elections, it is clear the American people
don’t exactly see Republicans as a new and intriguing brand.It’s
pretty clear that the Republicans have as great a need to prove
something to voters, as do the Democrats. Republican leaders just
sitting there letting the talkmeisters do their work for them isn’t
going to turn around voters’ perceptions of the Republican Party.I
will also suggest there is a pathway Republicans can be enthusiastic
about suggesting to Democrats, that there already is precedence for,
and about which Democrats should be able to become enthusiastic.I would suggest four ideas for the Republicans:1. Propose Bulletproof Health Care Security
– Lots of Americans, especially those with health insurance, are
worried health reform will hurt them. Republicans have a chance to put
those fears to bed. They can propose that the President, the Congress,
and all federal political appointees should have to get their health
care from that same health insurance exchange regular citizens would
use in the community in which their families live. Insurance
underwriting reform would be part of it.That guy we saw in a
town hall this month screaming at his Senator could be a lot more
comfortable knowing he would get exactly the same health insurance
choices his Senator—and his President—got.This approach would
send a message that everyone could be confident about because their
elected officials would be in the same boat.It is also clear
that most Democrats and Republicans can agree on leaving the
employer-based system of health insurance alone—including ERISA. This
would give individuals the right to keep the employer plan they now
have or join their elected officials in the insurance exchange. It is
the citizens’ choice—whatever leaves them wealthier and happier.With
this approach, Republicans can combine the kind of insurance networks
the conservative Heritage Foundation has argued on behalf of for years
with the kind of health insurance Ted Kennedy called for in his recent Newsweek essay.2. Medical Malpractice Reform
– None of the Democratic bills that have made it through committee even
mention it. There won’t be any compromise between Democrats and
Republicans over the old arguments about whether or not we need to cap
damages. But the thinking over malpractice has evolved greatly in
recent years—health courts, for example, designed to quickly resolve medical injury claims and promote medical error reporting toward improved quality.In
candidate Obama’s health care plan document he called for “promot[ing]
new models for addressing physician errors that improve patient
safety.” Sounds like health courts to me. Republicans should call him
out on it by putting it in their offer!3. Paying for It
– It is gratifying that both Republicans and Democrats see the need to
give families not covered by employer plans the subsidies they need to
buy health insurance. Of course, that is by far the greatest cost in
any bill.I was struck by a recent Washington Post op-ed
written by the co-sponsors of the Wyden-Bennett Healthy Americans
Act—six Democrats and one independent plus five Republicans. In it,
they said:

“The Democrats among us accepted an end
to the tax-free treatment of employer-sponsored health insurance;
instead, everyone—not just those who currently get insurance through
their employer—would get a generous standard deduction that they would
use to buy insurance—and keep the excess if they buy a less expensive
policy.“The Republicans agreed to require all individuals to
have coverage and to provide subsidies where necessary to ensure that
everyone can afford it. Most have agreed to require employers to
contribute to the system and to pay workers wages equal to the amount
the employer now contributes for health care.”

Let me
suggest that Republican Senators Bennett, Gregg, Crapo, Graham, and
Alexander are showing the way. Republicans don’t need to sign-on to the
entire Wyden-Bennett bill so much as recognize that these bipartisan
Senators have found a way to reorganize and modernize existing health
care tax incentives toward raising revenue and making the system more
efficient in a way that appeals to both parties.

And, it is
notable that these Republicans and Democrats have also compromised on
ways to reform the medical malpractice system with some unique ideas.

is a model that covers everyone and is deficit neutral in the second
year after it is enacted—and begins to bend costs down in the third

4. Tough Cost Containment – Liberals tend to believe that the best way to control costs is with the public option. I disagree with that
just like Republicans do—I see it as a means to artificially suppress
provider payments but not get at the waste in the volume of care that
is really at the crux of the cost issue.

But what I have been
gratified by are all of the liberals who say passing a health care bill
would not be health care reform—more that it would be a wasteful
exercise—without cost containment. I doubt there are any conservatives
who would disagree with that statement!

August has proven that the public plan option is not tenable—as a cost containment device or anything else.So how could both parties agree on containing costs?

I have suggested something I call the Affordability Model.
Simply, we set and phase-in affordability goals for health care a
number of years down the line. Insurance companies, doctors, hospitals,
drug makers, and everyone else in the system gets to do business in the
way they believe will improve cost and quality. Patients get to choose
any health plan available in their market—a completely free market.
Republicans ought to like that.

The networks of insurers,
doctors, hospitals, and drug companies that are right in their choices
and meet the cost containment goals would get to continue to offer
their services and products through networks as tax deductible health
plans for employers and consumers. The networks that don’t control
their costs or maintain their quality will not be attractive to
patients and employers. They will also not be tax deductible any
longer—a meaningful government enforcement mechanism. More, if there
were not any affordable networks available at the end of the period, a
government plan would be made available. Democrats ought to like the
enforceability of it all.


There are a number of other
health care proposals both Republicans and Democrats can agree on such
as greater use of health information technology, prevention, wellness,
and comparative effectiveness research.

One can see a pathway to a very meaningful reform of America’s health care system that both sides could agree to.

with the politics of health care now so polarized who is in the best
position to extend the “olive branch” and break the impasse? I believe
it is the Republicans who hold the keys to a breakthrough. A
breakthrough that would be bipartisan and therefore one the American
people could have confidence in. A Republican led bipartisan
breakthrough on health care also wouldn’t hurt anyone’s confidence in
the American political system.

Which course will most likely lead to a Republican return to power?

Sitting on their hands watching somebody else’s “Waterloo”—or demonstrating real leadership?

Robert Laszweski has been a fixture in Washington health policy
circles for the better part of three decades. He currently serves as
the president of Health Policy and Strategy Associates of Alexandria,
Virginia. Before forming HPSA in 1992, Robert served as the COO, Group
Markets, for the Liberty Mutual Insurance Company. You can read more of
his thoughtful analysis of healthcare industry trends at The Health
Policy and Marketplace Blog
, where this post first appeared.

27 replies »

  1. I was wishing I might locate an report similar to this with all the current info I desired to acquire my own term paper completed…. Many thanks.

  2. As long as the current Legislative system don’t reform, there will not be Healthcare for 2009, 2010… and forever, because these smart senators will forever battle for their rich corps and lobbies, they know the voters can only pay their $100000 salaries and full coverage Healthcare, but it is their corp supporters who buying their carreer and long term profit. So they have to trade off 40000 poor American lives annual, leaving those die off, those are dying anyway and mostly they don’t have voice, and their votes are sacrificiable, because most of cannot even stay alive voting four another four years. Why do something good for dead men walking? I understand that, most politicians understand that, their job is to make sacrificial decision, whether our young kids dying in battle field, or sick moms struggle to breath in cancer bed, as long as they are covered, and their purpose is just to make they are covered first, their career, and benefit… then all things can be wait, discussed on their golf course with their executives and advisors. The senator job is by term, not by project, because a project has deadline, if they don’t meet, they are fired, but no, not senate business. In the end, I suggestion, those poor people, who are dying or getting old, or getting sick, or those who think they have good plan or covered, well if you think you are in good shape and good plan, it is because you are healthy, until you get sick, no one, no one run away from death, age and disease, then sign up Jesus Insurance, and keep up hope or American dream, because in the end, that’s the only thing we’ve got.

  3. Dear Mr. Laszewski: Unfortunately, your comments are not at all unusual. Actually,fairly well-expressed. Problem(s): lack of basic knowledge of the “free market” and “competition”, and of basic knowledge of human nature and the history of the United States of America. So to address all the resultant twists and turns of mispresentation and ill advice,is to my consideration a tiring waste of time. Starting with the basics: learn about consumer behavior and responsibility. This will require a careful re-examination of the tenets of collectivism and accountability. Only a comprehensive resolution of the basics will permit the examination of public policy as enacted through the political system. Appeal to Republicans? For what: complicity in advancing the evils of socialism, motivated by political gain. Come on, whose side are you on (my guess, the newly-anointed St. Kennedy) John G. Mager, M.D.

  4. If you give it away, those who receive will not need to improve themselves to provide for thier family. They will sit back and let the government do that. Take enough from the producers and they will stop producing. This, I think, is what could be the straw that breaks America’s back. More receivers than producers. Receivers voting more for them to receive and to take more from producers.
    Good ideas for cost savings ! Also, it may be possible to only sell catastrophic medical insurance instead of all inclusive. Put the dollars spent back into the people who receive the services and prevent going bankrupt, that is the individual and our government. Thought the government will have to cut a whole lot more.

  5. If Republican politicians had any brains – something they seem to lack – they would do what at the time only a cold-warrior anti-Communist type such as Nixon could do: embrace China, i.e. strongly advocate the only reform measures that reduce medical service costs, yet provide universal payment (insurance) coverage for USA residents.
    1. Explain that costs for medical services in the USA are much too high
    2. Point out that individual residents collectively and ultimately pay the full cost of the vast overcharging without any control over it
    3. Specifically identify what parties gain from this vast overpayment by USA residents, then state that those payments must be reduced and can primarily be reduced only by administrative action:
    a. Advocate single payer/insurer which despite Mr. Lazweski’s doubts in its efficacy is the only means of financing that eliminates the $200 billion or so in useless administrative spending on financing now
    b. Reduce payments administratively to the input factors: gross payments to providers of all types, payments to drug manufacturers/distributors that constitute the overcharging
    4. Simply explain to the rest of business – the Republicans’ normal constituency – outside of those businesses that on are the receiving side of healthcare spending that it will benefit significantly from supporting single payer/insurer and from administrative actions to reduce medical service delivery costs.
    Honesty would take the Republicans far politically and gain them much support from those who otherwise would never support their usual counterproductive initiatives.
    Nixon did it. Some Republican politician with some brains now can do it.

  6. Appropriateness assumes that there are well defined and constantly updated rules how to diagnose the main problem and choose the most efficient treatment plan, taking into account other conditions, medications, social and family history, advance directives, etc, as well as when to resort to palliative care. As long as the rules are followed, that would provide legal protections to physicians and other medical professionals against lawsuits. I don’t think we are anywhere close to a system like that. I am not sure it is even possible, even though some pieces seem implementable.

  7. Margalit, in a rational health care system (which ours is not), the principle issue would be “appropriate” care, not “affordability”. Affordability is a secondary or tertiary concern after we have seen to it that our health care system assures appropriate care. Contained within the concept of appropriate care is your “cost effectiveness” and perhaps more importantly, optimized costs. Appropriate care is defined as the necessary and sufficient care required to bring about recovery. In a perfect health care system all care would be appropriate and costs would be optimized.

  8. I don’t know about “affordability”, Bob. Affordable to whom? Is it just another term for “cheap”, or less than a certain preset cost? My concern is that if cost is the criterion for tax benefits, there are many ways to make plans cheap, none of which is conducive to quality outcomes.
    I know you are addressing the quality issue, but it’s too vague and the quality question is the biggest one if we are serious about reform. Anybody can cut costs by denying care and cutting reimbursements to providers.
    Maybe we should replace “affordability” with “cost effectiveness”, but I don’t believe enough research is there to make those calls either.
    Also, if insurers are free to offer any plan they want, what is to stop them from creating cheap plans for the healthy, while the “basic” plan will be very expensive across all exchanges, since it will have mostly sicker people? That is, I think, where a public option with no cherry picking should come in and set the bar.

  9. “an opposition with the ability to gridlock the Senate”
    actually theorajones they don’t have the ability to gridlock the senate, that is why the 60 vote super majority was such a big deal. Democrats can pass anything they want at any time through both chambers and have it signed by the President. You and those on the left have no excuse for not passing what you believe in, no one is stopping you.
    about those lies…..

  10. If Republicans were really willing to vote for something that looked like the Wyden-Bennett bill, Democrats would support it. But, uh, even BENNETT doesn’t really support the Wyden-Bennett bill. He’s reneged on getting rid of the employer subsidy. Which is the core of the bill.
    There’s a lot of “better” ways we could have done health reform. But fundamentally, once the Republicans made the political calculation to oppose this bill and to lie their heads off about its provisions, the die was cast.
    None of these “better” approaches can be achieved against an opposition with the ability to gridlock the Senate, as well as ready access to the airwaves and the ability to virtually unchecked, tell terrifying lies day after day.
    At this point, it’s something that looks very much like this bill or nothing. That’s what’s on the table.

  11. The Health Care system needs much more than just financial considerations and availability.
    Much more needs to be done to see that the professionals providing the care are actually qualified professionals and they are using their skills to HEAL, not just line their own pockets at the expense of hurting others.
    In addition to my own bad experiences attempting to gain quality care, as well as thousands of others seen on the internet, I’ve recently been emailed a link to a new blog with a story far worse than my own, and he/she has apparently only begun to tell their tale. There was a bit in his/her tale that reminded me of several known situations, so perhaps it might spark some recognition and contribute to any venue of improvement: http://enoughdangit.blogspot.com/ .
    Something must be done.

  12. My 10 line answer.
    1. Medicare secondary payor, COBRA, and other laws that make it to risky for small employers to self fund and participate in risk.
    2. HIPAA and ADA discrimination laws and their application to benefits. We can’t effectively target high cost individuals without breaking the law.
    3. HIPAA privacy rules carriers hide behind to deny employers access to the data they need to manage their plans.
    4. Benefit mandates of questionable value.
    Look forward to your response Gregg

  13. Writing as a republican who truly cares about health care availability, my health care, and the cost of care, I tremendously appreciate Bob’s help in leading my thoughts through the health care reform morass.
    Having considered his suggestions for us republicans, I have some suggestions of my own.
    1.”They can propose that the President, the Congress, and all federal political appointees should have to get their health care from that same health insurance exchange regular citizens would use in the community in which their families live. Insurance underwriting reform would be part of it.” Oh right, that’s going to happen. I rank this up there with the second coming of Christ.
    2. “… the thinking over malpractice has evolved greatly in recent years—health courts, for example, designed to quickly resolve medical injury claims and promote medical error reporting toward improved quality.” OK, I like this although it will never get past the the trial lawyer lobby. The other problem here is that courts and law suites are exactly that. This suggestion doesn’t really change the dynamics of malpractice. I would rather see a solution that changes the dynamics and reduces the pressure for malpractice law suites. How about more doctor time with patients?
    3. “It is gratifying that both Republicans and Democrats see the need to give families not covered by employer plans the subsidies they need to buy health insurance. Of course, that is by far the greatest cost in any bill.” Lets see. The government will subsidize health care premiums but the cost of medical care continues to rise. That is going to bankrupt either me or the government. I vote for the government.
    4. “Liberals tend to believe that the best way to control costs is with the public option. I disagree with that just like Republicans do—I see it as a means to artificially suppress provider payments but not get at the waste in the volume of care that is really at the crux of the cost issue.” I completely agree. The culprit, the fox in the hen house, is over-utilization, not fees. This is an area where we can demand changes in how care is managed and paid for.
    ” I have suggested something I call the Affordability Model.” This is a non starter for any person who understands the complexities and inertia in our health care system. To suggest that our health care system will evolve into an efficient system with costs optimized due to proper incentives, tax and otherwise, borders on quixotic. To me, it simply suggests that you really lack any concrete ideas on how to contain medical costs.
    If the republicans are to be bold, we don’t need vague suggestions. We need concrete proposals that carry the weight of common sense. How can we assure appropriate medical care and optimize costs? How can we do in now?
    As one commenter noted above, the public is clueless. I’m afraid that we aren’t the only ones.

  14. Actually there will never be true reform until the health insurance industry loses their anti-trust exemption that allows them to collude and price fix. We need to repeal that exemption if we ever want them to compete against each other.

  15. Oh my! Nate, says: ‘I, and others like me, can fix most of the problems the existing systems have…’. Wow!!
    Lets see now, the problem is TPAs don’t have enough visibility? What’s holding you (collectively speaking) back? I am just really eager to hear this one!

  16. After reviewing the last 43 years of Reform to come out of Congress the best thing for America is no bill at all. I, and others like me, can fix most of the problems the existing systems have but only if Congress stops breaking it quicker then we can fix it. No Reform would be the best reform!

  17. Medicare for seniors is about to go belly-up. How can we afford Medicare for all?

  18. I can’t believe you used “Republican” and “leadership” in the same sentence. This would be the party promulgating lies about “death panels” and “government control of health care” while at the same time scaring seniors that the Demos are going to cut their Medicare? The party that produced a budget proposal with *no* numbers in it? The ‘Pubs don’t have an honest bone in their bodies, and have no interest in anything other than destroying Obama. The Demos aren’t anything great but at least they are making an honest effort at it.

  19. I agree that there are many proposals out there that both Democrats and Republicans can – and must – agree on in order to implement sustainable health reform. Cutting costs and improving care are at the heart of the changes that we need to make, and it seems that everyone should be able to agree on that. Health information technology is one area that holds immense promise to meet those goals, especially through its potential of keeping people healthy and living at home longer. But in order to implement these technologies in a way that leads to the best and most cost-efficient care, we need to fundamentally restructure how clinicians provide care. This means giving them the flexibility to provide customized care however they see fit – whether that means managing more patients through home health monitoring or otherwise. http://blogs.intel.com/policy

  20. Cindy, I agree with Robert’s assertion:
    “The Republicans have won August. No doubt about it.”
    They have infortunately succeeded in hijacking the health reform narrative, and displacing rational conversation with fear based, and in some cases, legitimate open policy questions & concerns specific to the ‘work in progress’ bills thrashing their way through both houses of Congress.
    Unfortunately, the reform of the healthcare industry, both provider and payer platforms, is ‘target rich’ for agenda based special interest advocates. Other than broad based principles of health reform, there is nothing to defend in those town hall meetings other than an ‘apple pie and motherhood’ calling to reform healthcare due to it’s current inequities and the projected financial meltdown threat it imposes on the US economy. Yes, Houston, we have a problem!
    The general public is literally clueless as to the nature of its very tender underbelly, and generally absent ‘talking point’ prompts, lack the capacity to engage ‘experts’ as to the nature of the ‘conundrum’. Few understand the complexities inherent in the system, nor the nuanced, yet interlocking ‘failed business models’ on which it depends; and even less can tolerate the level of detail required to architect it’s ‘new and improved’ successor. Other than general principles similar to those outlined by President Obama for health reform consideration, the needed re-engineering capacity is just not there.
    Yet, health reform without structural redesign of the delivery and financing platforms, is a modern day cruise on the Titanic. You may re-arrange the deck furniture anyway you like, but it won’t change the fact that the ship is going down.
    We really need a clean sheet approach to health reform and fortunately we’re starting to get religion around what works and might come next. As Atul Gawande so eloquently framed the question: who will be the anchor model in medicine “Mayo or McAllen?”
    In other words, will unbridled, cowboy mindset competitive fee-for-service sweatshop incentives continue to drive production and overcapacity, or will we finally begin to value collaborative, coordinated, and integrated delivery systems that put patient’s at the center of the healthcare exchange relationship via quality of care outcomes?

  21. Senator Grassley has been perpetuating propaganda to his constituents and the public by maintaining the death panel urban legend. Apparently, he’s backed off and passed the propaganda torch to Michael Steele, Chairman of the Republican National Committee (see Washington Post article from 08/24/09). The same Republican National Committee that recently sent “surveys” to US Republicans asking leading questions like:
    “Do you believe it is right for the government to use age and life expectancy as criteria for determining access to health care?”
    “It has been suggested that the government could use voter registration to determine a person’s political affiliation, prompting fears that GOP voters might be discriminated against for medical treatment in a Democrat-imposed health care rationing system. Does this possibility concern you?
    I am all about bipartisanship in crafting policy, but only when the policy, and conversations about it, are based on facts. The statements in “1. Propose Bulletproof Health Care Security” are not all accurate. What you are describing is what is being suggested in current reform efforts. I agree that medical malpractice reform is needed, along with other serious cost containment efforts.
    I am blown away by the arrogance of the following statement:
    “The Republicans have won August. No doubt about it.”
    How can we start over, with the “clean sheet” you described while you publicly perpetuate false information about current health care reform efforts? Any alleged “Republican victory” this month is based on continuing to claim delusion as fact.
    Please stop already.

  22. Actually, I don’t think ANY responsible American would willingly pay to support health insurance companies. The responsible thing is to put them out of business, and pay for what is needed – medical care. The only obvious exception applies to those who profit from that industry.

  23. I understand the concept, with one question. Regarding the deductibility of health plans, for private employers, I get it. What about all the governmental groups, for which deductibility is not an issue? Does that get replaced with “taxable income”?