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A Special Edition of Health Wonk Review

American Health Care Reform:
Observations From Health Care Analysts
Edited by Brian Klepper

Here we are, with the first edition of Health Wonk Review (HWR) in a new decade. It is a pregnant moment, as reconciliation begins between the House and Senate health care reform bills, when the best health wonks are weighing in on how we arrived here and what it will probably mean to have a few key successes and some very significant failures at a time when most everyone in the country who doesn’t have power yearns for real solutions. Joe Paduda summed it up very nicely on Managed Care Matters, “…after all this, we’re going to end up with a bill that won’t work – it will not appreciably reduce health care costs today, tomorrow, ever.” Alas, the result is much more a reflection of what America has become than what health care is about.

And so, I have exercised my editor’s prerogative, and veered away from HWR’s standard format to focus this edition on the best, recent health writing I’m aware of, rather than just summarize the writings of submitters. Please indulge me as I have passed over some strong pieces in favor of a smaller, more selective number of consistently very thoughtful, insightful and meaty writers.

I’m hoping this selection will satisfy readers interested in deeply provocative discussions of the most pressing issues at hand, particularly around reform. There’s a lot to chew on here, and I’d urge each of you to curl up on a cold afternoon and read through every one of these columns.

A Face Full of All That Other Mud

Let’s begin with J. D. Kleinke’s thoughtful meditation on yesterday’s Health Care Blog, Is It 2013 (or 2014) Yet?, on the horrific compromises made in the name, not of problem solving, but of ideology. Referring to the watered down Senate bill, he notes that it

“has been so stripped of government management options and control that it is best characterized as the exact opposite of a government takeover. Rather, the bill now on trajectory to become The Plan is – paradoxically – a privatization of the public health problem of the uninsured, a corporatization rather than nationalization of health care’s rotting safety net.”

And this: “…people…have been using the health care reform stage to act out their bigger grievances, philosophical angst, and political frustrations…Something as literally critical to all of our lives as our health care system – regardless of which way an eventual bill goes (including the remote but real possibility of it just going away) – deserves better than a face full of all that other mud.”

Reform Based On The Principles of Competition

On The Health Affairs Blog (12/22/09), Alain Enthoven rebuts Atul Gawande’s New Yorker article that compares the health care bills’ pilot programs to those of the Agricultural Extension service that “sparked the agricultural revolution that so benefited the US economy in the first half of the 20th century. “

Both Enthoven and Gawande are icons, and justifiably so for their insights into how health care does and should work. Gawande’s June, 2009 piece, The Cost Conundrum, on health care profiteering in McAllen, Tx, was a sensation in DC, and became required reading for White House staffers looking forward to reforms that could impact the kinds of circumstances Gawande recounted so eloquently.

But in this piece, many of us thought his thesis was a stretch, and Dr. Enthoven lays out the case. One of his conclusions: that we need a commitment to structural reforms, rather than just more experimentation.

“If America wants 1,000 pilot projects to blossom and grow into significant improvements in health care delivery, it must reform its system based on the principles of competition and wide, responsible, informed, individual consumer choice of health plans. Experience shows that people will join if they get to keep the savings.”

The Nearly Trillion-Dollar Lake Mead of Money

In There Be Dragons, The Fiscal Risk of Premium Subsidies in Health Reform (12/14/09), Jeff Goldsmith, with unfailing attention to detail, takes us through a variety of health care principles to explain why 1) the Congressional Budget Office’s (CBO) attempts to model the impacts of subsidies on the private health coverage market are, at best, shots in the dark, and 2) its probably not wise to bet on our political system’s ability to say “no.”

He concludes, “All in all, the fiscal risks from an open-ended new entitlement to premium subsidies are likely to be significantly larger than CBO estimates. Instead of neat economic models with ten variables, we need something closer to chaos theory to explain how the nearly trillion-dollar Lake Mead of money will behave when we completely re-engineer its flow pattern…Behavioral economists would add that anxious health insurance and provider executives would behave differently, perhaps, than entirely rational actors, and act aggressively to preserve their franchises and operating margins. I wouldn’t bet the farm on moderation of present cost and rate trends. All the big risks are on the upside.”

The Medical Cost Tidal Wave

In a simple but straightforward column (12/22/09) on the health plan’s blog, Bruce Bullen, the Interim CEO at Harvard Pilgrim, explains how the structural provisions of the Senate’s final health reform bill will worsen current health care cost trends, which have been more than 4 times general inflation over the last decade.

“… expansion of eligibility and other reforms are largely delayed to 2014, but changes having the effect of increasing health insurance premiums will take effect prior to 2014. Before seeing any material benefits of reform, some will see their Medicare payroll tax rate increase, many fully insured subscribers will, beginning in 2011, see the effects of the health insurance premium tax, and everyone in the commercial market will see the cost-shifting effects of Medicare payment reductions and the tax on drug and medical device manufacturers. Medicare Advantage plan enrollees will also see sharp increases in premiums. Since there is no significant cost containment in the bill, these increases will occur on top of normal medical trend. And because the universal requirement to purchase coverage is weak, adverse selection will further increase costs starting in 2014.”

He concludes, “We can focus on insurance reform all we want, but the medical cost tidal wave continues.”

The Unintended Consequences of Hopelessly Complex and Poorly Thought-Out Laws and Regulations

At the Disease Management Care Blog (12/27/09), Jaan Siderov explicates the seemingly straightforward provision of the Senate bill that would require commercial insurers to “rebate” any excess profitability, if they have a medical loss ratio lower than 80%-85%. The rub lies in the definitions of medical costs and administrative costs, and what is contained in each. Under the Senate’s Management Amendment, the National Association of Insurance Commissioners (NAIC) would be charged with defining each term. But so far,

“the NAIC has not done well [clarifying] if the costs of wellness, prevention, care management, or patient-centered medical home support programs are costs that are assigned to the medical costs that make up the medical loss ratio or if they are administrative costs.”

It remains to be seen whether a compromise plan will correct this kind of confusion.

The Evidence In a typically pithy and to-the-point read (12/31/09), Roy Poses crystallizes what many of us have thought about the national squashing of the US Preventive Services Task Force guidelines for breast cancer screening. Here’s a quote:

“…after 30 years and 8 trials, we still have no convincing evidence that mammographic screening for 40-49 year old women saves lives (which is different from reducing deaths due to breast cancer), or reduces morbidity, improves function, or improves quality of life in the screened population.  In the absence of such evidence, how can anyone fault the USPSTF for recommending (not that women not be screened), but that decisions to screen individual people should be based on considered discussion between them and their physicians?”

Dr. Poses calls for better clinical and comparative effectiveness research, another area given short shrift in the current reform proposals.

Who’s Kidding Who

In a policy environment in which half-truths and whoppers are the coin of the realm, nobody pours on the cold water of reality better than Bob Laszewski at Health Policy and Marketplace Review A former Liberty Mutual health insurance executive, Bob’s deep health finance experience has been refined by his long standing in the DC community as a health policy advisor. Throughout the reform process, Bob has written often, and his insights are always to the point. Take, for example, this simple observation from a 12/19/09 post, Coal in Your Christmas Stocking?

“…the Democrats [will] face four health insurance renewal cycles and two elections between 2010 and 2014 when the benefits of the health care bill would finally become effective. That’s four years of new taxes and continuing big health insurance rate increases before voters see any big benefits from what looks like will be a very unpopular bill.”

As I understand it, Bob’s blog is the most widely-read source for DC health wonk types. There’s a good reason for that.

Later

In Health Reform – When Will The Next Shoe Drop (12/22/09) at Managed Care Matters, Joe Paduda lays out an enticing scenario for straightforward, important changes that can’t happen when 60 votes are required, but are eminently doable if the goal is 51. He writes:

“I’d look for a requirement that the Feds negotiate drug prices for Medicare and lower payments for Medicare Advantage plans to start…And it won’t stop there. There is a large and growing concern about the cost of entitlement programs and Part D is particularly problematic. By attacking drug costs and thereby reducing Medicare’s future liability, liberal Democrats will make it very tough for their opponents to use the ‘big spender’ attack angle in November.”

Two On What To Expect

Jane Sarasohn-Kahn, one of our most gifted, industrious and grounded health care prognosticators, has a broad-reaching summary of the certain trends – employee cost-sharing, employer ‘nudging’ of employees toward wellness, health information technology becoming more mainstream among physicians, participatory medicine/online health tools – that will remain in play in “What to Expect When You’re Expecting…Health Reform on Health Populi. She says,

“With the US still in recession, the issue of managing costs will be Job #1 in health care for institutional and business stakeholders, from health plans and employers to pharma and medical device companies.”

Matthew Holt, a Founder of Health Wonk Review as well as The Health Care Blog, and one of the most incisive, if irreverent, health care commentators writing today, suggests five major trends. He wonders how the changes brought about in policy will take shape in the market, and how changes in the political winds will affect the ability to continue reforms. He thinks that HHS’ Office of the National Coordinator for Health IT’s transformation initiatives will have a profound impact on everyone in health care – “’It’s clear that we are not going to simply see mass adoption of the mainstream EMR vendors’ products.” – and that patients are beginning to expect more access to information, especially their own. And that quality of care, especially at the end of life, is finally becoming a concrete, mainstream issue.

The Verdict

Each of these voices describes different facets of a complex process. These are some of the most experienced and prominent health care authorities working today, and they don’t hesitate to conceal their disappointment at what is passing for reform.

It is not enough to dismiss this Congressional health care reform process as just another example of sausage-making. As David Kibbe, Alain Enthoven, Bob Laszewski and I discussed here, America’s health care industry has placed the national economic security in deep peril. An important goal, a commitment to structural changes that can significantly reduce the one-third or more of health care cost that is waste, now appears to have been squandered by a system that welcomes influence over policy in exchange for special interest financial contributions.

It is unlikely that meaningful health care change will be forthcoming after this process. The forces of special interest influences are vigilant.

Nor will the problems that were on the table now disappear just because they’ve been ignored. They’ll fester and worsen until business rises up in revolt to force the issue, or necessity overwhelms the capacity of lobbying to drive public policy. Unfortunately, the process of getting to that inevitable terrible moment won’t be pretty or pleasant.

Brian Klepper is a health care analyst and commentator based in Atlantic Beach, FL.

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28 replies »

  1. MG, Rose, Peter, Margait
    MG– Yes, you’re right– tax rates for the wealthiest have fallen over the past 25 years. ( Our tax system has become more and more regressive. And here, I’ll looking at all taxes–not just income taxes.)
    Meanwhile, incomes at the top have risen sharply. To address the defict, we will need to raise taxes at the top. This will help the economy: having too much wealth consolidated at the top leads to too much money chasing too few things, and the rest is bubbles–stock market bubbles, real estate bubbles. The eocnomy was much more stable in the 50s and 60s when this was largely a middle-class country.
    Rose–I too fault Obama for believing that Republcians were interested in bi-partisan compromise. They didn’t want reform, period. They are not insterested in sharing wealth, goods and services with lower-income famlies. They are opposed even to raising taxes on the wealthiest 1%.
    And you’re right that millions of low-income people who don’t qualify for SCHIP or MEDICAID will now qualify for subsidies that put insurance within reach. (See my example below for Peter.)
    Moreover, starting immediately, insurers will no longer be able to deny coverage to children with pre-existing conditions. If you had a child suffering from a chronic disesae you can imagine what a huge relief this would be.
    A many people who don’t now qualify for Medicaid (usually because they don’t have children) will finally qualify.
    Peter– You can get the numbers on subsidies, premiums and out-of-pocket expenses quite easily online. (see below)
    Also, it’s not likely Rose’s husband has tax-free insurance from his employer. Typically employers pay 60% to 75% of premiums that run about $13,000 for a family plan.
    Under the Senate bill, a lower-middle-income family of 3 earning $45,775 would pay $3,685 annually in premiums for a family plan–about equal to what their share would be if they had very good employer-based insurance.
    Numbers are from “health Care For America Now–“Assessment of Affordability Provisions in the House”–you can Google it.
    This family’s out-of-pocket costs would be capped at $6,000 under the Seante plan, $4,000 under the House plan.
    If they had employer-based insurance they also would have co-pays and deductibles AND VERY LIKELY THERE WOULD BE NO CAP ON HOW MUCH THEY COULD OWE IN A GIVEN YEAR.
    If the family is in a car accident with two or three family member hospitalized, they could be in big trouble.
    Admittedly, in a bad year, $6,000 is a hefty sum in out of pocket expenses , but they are not going to go bankrupt and lose their house. It’s a manageaqble sum to pay off over 2 or 3 years, and doctors and hosptials are likely to let them pay it off over time because they know they can do it. (If it were $100,000 there would be no hope and hospitals would simply force them into bankruptcy. )
    Finally, if Rose’s husband sets up a consultancy and is self-employed, the entire amount (premiuims plus out of pocket expenses) is deductable on his federal income taxes. This is a huge break for the self-employed which helps to make up for fact that have to pay the employers’ share of Medicare taxes as well as the employees’ share.
    Typically, for lower-middle and middle-income people, this health care deduction for the self-employed knocks you down into a lower tax bracket.
    Finally, on Medicaid patients: the House bill raised payments to primary care providers who care for Medicaid patients to Medicare levels–and raises payments to primary care docs who care for Medicare patients so both go up.
    Even without the legislation, Medicare rates for primary care are going up, and by the time reform rolls out, I’m pretty sure CMS will have raised Medicaid rates to Medicare levels.
    Moroever, more and more docs are going to be working on salary in accountable care organizations in community clincis, as hopsitalists (the fastest-growing specialty) in large multi-specialty practices like Kaiser. In those cases, Medicare’s or Medicaid’s fee-for service schedule is not important to the individual doctor.
    The legislation also roughly doubles med school scholarships for low-income students, and experience shows that kids coming from low-income or middle-income homes are far, far more likely to choose primary care and to be willing to work in inner cities or poor rural areas.
    Right now more than 60% of all med school students come fromhouseholds in the wealthiest 20%. With the new fudnding, there will be a movement to recuit more low-income kids for med school.
    In addition, the legislaiton creates thousands of new community clinics, and Medicaid patients will be welcome there. (The legislaiton raises pay for nursing school teachers which means we’ll have more teachers and more nurses. They’ll help staff the community clinics.)
    Margait-
    I agree — all we can do is pass this, and move forward. There will be further steps, further amendments– IF we have enough liberals in Congress to pass more progressive legislation over the next 3 years.
    The best thing anyone of us can do is to make sure that we vote in all primaries and Congressional elections–and push for liberal candidates. That fact that a politician is a Democrat isn’t enough–as we have seen.
    We need liberal Democrats who will back further amendments.
    I agree, it’s not just that lobbyists were opposed to the bill. Conservatives were opposed for ideological reasons: they do not want to see government involved in health care; they do not want to see government providing goods and services to low-income and middle-income families because they fear that this means that the very rich will have to pay more taxes.

  2. “so we can buy reasonably priced long term care,”
    Rose, define please. How much will you have to spend in premiums, co-pays, and deductibles, and how much will the subsidy provide? Will your husband actually be able to start that consultant job with this bill? I’m assuming he has that tax free company insurance now which I don’t/won’t even get access to. Would you be willing to pay more taxes so that healthcare, even with this bill, won’t bankrupt the country or are you just happy with the subsidies?
    “This bill is what it is because, unlike Republicans, Democrats are not a monolithic group blindly following the party dictum.”
    No Margalit, they’re Republicans posing as Democrats.
    I’m interested to see just what kind of care the new Medicaid eligible receive (if the flood of new patients can even find a PCP) based on the amount the government will pay. Will providers be reimbursed at a private insurance rate or at a Medicaid/Medicare rate?

  3. James:
    Stop peddling your ‘Club for Growth’ garbage here. It is largely not the forum for it.
    – Your Forbes list conveniently was taken in early spring last year before the huge rebound globally in stock prices. Given that the top 10%m in the US own about 80-85% of financial securities/stocks/bonds in this country, they have seen a huge boon to their “estimated value” of wealth again. Most in the US have most of their wealth tied up in their houses and housing prices have not rebounded and only begun to stabilize.
    – The ‘death tax’ affected around a whopping 0.25% of all estates in the US according to the last year of figures available from the IRS in 2006. One of the biggest lies going around today is that this remotely effects anyone on Main Street. It affects almost exclusively the most wealthy people in the US.
    Even then, there are so many ways to manipulate and drive trucks through the loopholes in estate planning it is not even funny. My favorite that I heard recently is how a wealthy individual gave a fairly sizable donation to his local university. Not only did he get a huge tax writeoff (to cover a bunch of capital gain taxes that year) but the ingenious kicker was that as a condition of his donation, the university had to take out a sizable life insurance policy on him that goes directly to his heirs all tax-free. So basically, the individual will make more money through his tax deduction and the insurance policy than he initially had.
    – No one and I mean no one in DC is talking about the “estate tax” going back to 2001 levels. Another partisan BS lie to get people on the right riled up and angry.
    – It is generally true that great taxation rates due lead to larger avoidance but the reality is that we need to have higher tax rates but the ‘wealthy individuals move from a locale solely due to some minor difference in marginal states rates between states’ has been proven to be bunk too. It is much more nuanced than that.
    – Marginal tax rates for the really wealth (top 10%) have radically decreased the past 25 years with tax cuts across the board on the top income tax rates and capital gains and are at their lowest levels since post WW2. If the right is serious about the addressing the deficit (and they aren’t in reality from most indications), then some tax hikes have to be on the table again along with some moderation in federal spending and selective cuts.
    – About the only thing we agree on is that this bill has a huge price tag with modest increases in access at best and little/nonexistant cost controls.

  4. “And folks in the top 1% can afford the hike: From 2002 to 2006 alone, households at the very top of the economic ladder watched their incomes rise by roughly 42 percent.”
    Maggie: You keep referencing the 2002-2006 numbers during a period of high economic growth. However, what does it look like from the high point of 2008 to where we are today? I daresay that these upper-income taxpayers are not quite as flush as they were before, especially if their assets involved stocks. A number of them may even have been part of the wave of insolvencies. Your fat cats may be a bit skinny these days.
    The Forbes List from last March had these statistics to ponder:
    The richest people in the world have gotten poorer, just like the rest of us. This year the world’s billionaires have an average net worth of $3 billion, down 23% in 12 months. The world now has 793 billionaires, down from 1,125 a year ago.
    Bill Gates’ net worth dropped $18 billion in one year. Please note that this was based upon figured BEFORE the worst of the market losses occurred.
    http://www.forbes.com/2009/03/11/worlds-richest-people-billionaires-2009-billionaires_land.html
    I also note that high-income Americans are seeing multiple tax hikes come their way from things like the end of “death tax” exemptions and hikes in state and local taxes. A NYC high-end tax-payer may be seeing marginal rates (57 at the top tier) that approach robbery soon.
    http://www.nypost.com/p/news/regional/item_3AApff75KCb9ZbMkjSC8PO
    A lesson from California, New York, Michigan, and other places that depended upon income taxation is that upper-income households are subject to wild fluctuations. When the the economy catches a cold, their high-income households may get pneumonia.
    Also, to use “historic” tax rates for upper-income households is to include some of the absolutely punitive rates we saw during WWII and afterward until JFK. Is it fair to impose a 90% marginal tax rate on anyone? If the answer is “no”, then is it proper to include such punishing rates in a discussion of historic rates, knowing that doing so will distort the average?
    Finally, there is an unspoken assumption that these folks’ incomes are just waiting for us to tap with no unintended consequences to the larger economy. Coupled with this is a believe that these taxpayers will passively accept larger draws upon their stash without any sort of response to protect their assets. High tax rates provoke greater attempts to avoid taxation.
    Again, this is simply a market reality that cannot be blithely ignored. There is a marginal rate where largely voluntary compliance ceases to exist and we may find that we are getting near that rate. NYC is seeing high-income earners literally voting with their feet by moving themselves — and their taxable incomes and assets — someplace else.
    The sad fact is that this bill is a series of budgetary tricks designed to conceal its true cost. Absent meaningful and realistic cost-control measures, we can’t afford it. China is about to cut off our credit card access and our grandkids have run out of money.

  5. Well Peter, this brings me back to my original question. This bill is indeed somewhat hollow, but today, right now, are we better off passing the bill or not?
    This bill is what it is because, unlike Republicans, Democrats are not a monolithic group blindly following the party dictum. The original proposal had to be devolved to lowest acceptable denominator and while corruption and special interests played a nasty role, there were ideological differences as well. So for now this is as good as it gets.
    If we “kill the bill”, the political implications are going to be enormous and far reaching and one thing is certain, there will be no further efforts to address health care until the former middle class takes to the streets.
    If the bill passes, there is at least a faint chance that more steps will be taken, hopefully in the right direction.
    I say pass the darn thing and see where it goes.

  6. Peter,
    You need to look at eligibility criteria in only a handful of states to see that SCHIP and Medicaid only cover the poorest of the poor, with big holes left behind.
    For example, in my state (NC), SCHIP covers kids whose families fall below 200% of the federal poverty level (until they’re 6 years old) and then 100% FPL once they turn 6. Here, the FPL is about 18K for a family.
    Medicaid here is almost unattainable for even poor adults unless you’re pregnant (you get it for 6 months), you are a parent of a Medicaid eligible child AND you make less than 49% of the FPL, or you’re disabled and on SSI, making less than $6600 a year (74% of FPL for an individual).
    It’s an incredible fallacy that these programs cover ‘lots of folks.’ They don’t. Many working poor fall through the cracks. This bill will get to some more of those – not all, but definitely some more.
    As for your not having insurance – good for you. I hope you have a big nest egg in case you get bank-buster like cancer. I’m married to an otherwise healthy 42-year-old who happens to have a blood dyscrasia – no fault of his own. If he were to lose his insurance, he’d be in the state’s high risk pool (if there were space), otherwise paying upwards of 30K a year for insurance. And, yeah, we bank a considerable amount of our income in preparation for the day he has a massive cerebral bleed and we end up paying for his care. Insurance is the sole thing that keeps him from becoming a consultant.
    So, yeah, the bill’s far from perfect. But for now, I’ll take the provisions created by the CLASS act language embedded therein, so we can buy reasonably priced long term care, and the fact that my husband won’t be denied coverage because of a pre-existing condition down the road.
    What has disgusted me more than the bill itself has been the craven politicization of the process by Lieberman and Republicans. I’d say the one thing I’d fault Obama for is ever believing there was a snowball’s chance in hell the Republicans would even FAKE bipartisanship. They long ago sacrificed policy on the altar of politics.

  7. While I didn’t read every single response, my skim of respondents uncovered not a single policy “maker,” i.e. member of Congress or the administration, to say nothing of the principles in the health care legislative process. For all the complaints about members of Congress not having read “the bill,” probably more serious is that neither have they read the expert literature on the subject. Some issues–and I would include healthcare reform–are far too important and demanding to leave to Congress. Unfortunately, we seem to have no way around the body, and thus we have the disaster that is about to be legislated.
    And just for the record, I am ardently in favor of reform.

  8. “That means that in 9 years, your premiums double.”
    My premiums will still double in 9 years with this bill IF I CARRIED INSURANCE. But you see I opted out of the corrupt game a number of years ago so my pemiums are MY premiums, which I bank.
    “That leaves children suffering from pre-existing conditions without insurance.”
    SCHIP?
    “That leaves the very poor without insurance.”
    Medicaid?
    “that gives Medicare time to begin to lead the way in cutting waste in the system”
    What, and reduce incomes for the financial supporters of both parties. You’ve already admitted that’s why we got such a bad bill now. I bet no one will want to revist healthcare again until many years after this bill takes effect.

  9. Peter–
    First, I’m not a Democrat–I consider myself a “progressive” or a “liberal” to the left of most in the current Democratic party. And I have voted for Republicans– Lowell Weicker, a politician of great intergrity– and, more recently, Bloomberg.
    As for Obama, there wasn’t much he could do.
    Our legislative body has been corrupted by campaign contributions for decades. This made it impossible to pass health care reform in 1994.
    This time around, the House passed a respectable if far from perfect bill. The public option would have forced private insurers to offer more affordable, better insurance–or lose customers to the public option.
    Federal regulation of insuers could have cracked down on premium increases, etc.
    Under the House bill, Medicare would have been able to negotiate for discounts on drugs. Large insuers would have followed Medicare’s example.
    Unfortuantely, in the Senate there were too few liberals to put together the 60 votes. IN order to get the needed votes, both liberals (Jay Rockefeller, etc.) and the White House had to compromise with moderates and, worst of all, Joe Lieberman, the senator from Aetna.
    Once Lieberman appointed himself the head of the opposition neither bribes nor arm-twisting would win those votes unless liberals dropped key provisions of the bill.
    If you read my blog, you will see that I believe that health care will not be affordable for the group that a) earns too much for subisdies but b) not enough to
    afford $13,500 a year–or more–for a family plan.
    I am particularly concerned that insurers will be able to triple premiums for older Americans.
    The only answer is to reduce the underlying cost of care by reducing fees for extremely lucrative tests and treatments that provide little benefit to the patient (and expose him ot unnecessary risks) by refusing to overpay for drugs (we’ll need separate legislation sometime in the next three years that allows reimportation or lets Medicare neogitate for discounts ). We need to stop rewarding hospitals for inefficiency. (May are paid 15% so 25% more than it would cost them to care for patients if they followed the examples of more efficient hospitals that focus on pateint safety.)
    Medicare can lead the way in each of these areas. Already, Medicare has proposed cutting fees for MRIs and CT scans by a large amount (if memory serves it’s up to 30%) BEGINNING NEXT YEAR. Medicare would also cut cardiologists fees by 6%. It has announced that the next year, it plans to cut oncologists’ fees.
    Meanwhile, medicare proposes raising fees for primary care docs by 3% next year.
    Congress has until January 1 to stop the cuts–otherwise they will automatically go into effect.
    Privately, insurers have said that if Medicare provides political cover by cutting fees, they will follow suit.
    As you may have noticed the Republicans voted unanimously AGAINST reform of any kind– even a watered down bill. They made NO useful suggestions that would lead to the structural reforms that we need.
    The problem is that the current Republican party was “purged” of moderates by Karl Rove. The Republicans left in the Senate are virtually all hard-line conservatives.
    And there just weren’t enough liberal Democratis and Independents in the Senate to put together the 60 votes. .
    If the administratoin took the bill to conference, the very fragile 60-vote coalition would have fallen apart.
    The alternative: give up and pass no bill.
    That leaves children suffering from pre-existing conditions without insurance. That leaves the very poor without insurance.
    And it means that YOUR insurance premiums are almost certain to continue to rise by an average of 8% a year.
    (as they have for the past 10 years–even though many suffering from pre-existing condtioins were not covered.)
    That means that in 9 years, your premiums double.
    The status quo is unacceptable. All the Democrats could do is settle for a bill that helps some– while pledging to continue to fight.
    We have 4 years until reform begins (I wish it were 3);
    that gives Medicare time to begin to lead the way in cutting waste in the system, and it gives Congress an opportunity to pass ammendments and new legislation that will strengthen reform.
    It’s conceivable that we’ll get campaign finance reform–but I suspect that will take a long time.

  10. Maggie, at whose expense (other than the top 1%) will insurance companies exact a painful toll to pay for dropping prepexisting and other hurtful policies? I won’t qualify for Medicaid, Medicare or a subsidy, and I won’t get any less costly treatment from providers. My group will be the profit center that nothing in this bill protects from all the gougers that lobbied to have this legislation protect their incomes, while the governenment enforces my participation in assuring health stocks stay robust.
    Unlike you I don’t view this as a must win to protect Democrats and Obama. Their actions during the passing of this bill deserve NO protections from voters. This was a disgraceful display of reform slight of hand as the process played out and Obama’s “Yes we can” became “No we won’t”. My family will not vote Democrat in the next election as we did in the last as unlike you we vote performance not party. If that means Republicans gain power then I’ll just respond with, “Be careful what you wish for.”

  11. Thanks Brian for a complex (it would have to be) but enlightening take on what is to come. It actually makes me want to go back to retirement! But that would not make this go away so might as well hang in.

  12. I regret that I missed and so failed to include Maggie Mahar’s excellent piece on the potential achievements of the Senate bill. I reviewed it this morning after Joe Paduda pointed it out.
    I learned, among other things, about the amendment introduced by Joe Lieberman, Jay Rockefeller and Sheldon Whitehouse that “would strengthen the [Independent Medicare] Commission and let it [immediately] use financial carrots and sticks to insist that hospitals begin providing better value for Medicare dollars.” This is a vitally important move that would turn an impotent, for-show only provision into one that would profoundly benefit the system and possibly foster meaningful change.
    And in her comment above, Maggie has listed other advances of the bill. For all the bills’ faults, which are very great, there is no denying that these provisions would be tremendous improvements over what exists now.
    I do not begrudge the current bills extension of access or, for that matter, the additional cost it will incur. It is one of this nation’s great disgraces that we tie access to health care to financial means. If we can pour more than $800 billion each year on products and services that provide no benefit, I don’t see why its a big deal to pay something more to make sure that all our people have proper health care.
    But it is also critically important to understand that the health care crisis is not simply about those at the margins of society. The excessive cost of health care has now eroded access for the mainstream of Americans. Virtually everyone who suffers a major health event now is also at peril of financial ruin.
    Over the last 4 years, by my count at least, some 27 million Americans have lost coverage for the first time, finally priced out of the market. The brokers I talk with tell me they’ve just delivered premium increases often north of 40%, so we can expect a new flood of health coverage exiles.
    It isn’t as though we don’t understand the structural underpinnings of health care excess. For years, many of us have worked on these issues both in writings and talks, and more concretely in our work in the marketplace.
    The great shame of this reform process will be that, in the face of a national crisis, our legislators ignored all that knowledge, but responded responded instead to those who were arguing on behalf of their revenues, income and stock prices rather than to the public good.
    So there’s nothing wrong with Maggie’s view that the bills achieve significant new benefits. It’s just that, at a larger public policy level that impacts everyone in America, the house is on fire and Congress is busy oiling the squeeky screen door.

  13. Joe & Margait
    Joe–Thanks for the mention. And let me mention a few other bloggers: Merrill Goozner, Bob Wacther, Gary Schwtizer, Ezra Klein, Paul Starr and Jon Cohn. And that’s just a short list. I also like the folks Brian covered.
    Btw, for those interested in that sort of thing, Ezra Klein and Jon Cohn are the most-read bloggers among policy wonks and policy-makers in D.C.
    On the legislation,let me clarify my position:
    I saw the glass as “half empty/half full” when there was still hope that more of the House bill would be included in the final legislation.
    I’m disappointed with the Senate bill, Margait,
    but don’t agree with those who would “kill the bill.”
    That would give the conservatives the ammunition they so desperately want to say “Obama can’t govern.” (Many who oppose the legislation are primarily concerned with “breaking Obama.”)
    If the Republicans re-take Congress and Obama loses re-election, we won’t see real health care reform again for a long, long time.
    Finally the Senate bill is an important first step. It says that we, as a society, believe that eveyone desesrves access to comprehensive care.
    Moreover, the Senate bill will change the lives of many people including:
    –people suffering from preexisting conditions (particuarlly children who will be immediately covered)
    –millions of low-income and lower-middle-income families who will receive subsidies.
    (Though subsidies for some may have to be raised. This is doable if we raise taxes on the top 1% who are now paying what are historically very low rates. That tiny tax hike raises far more than the tax on “cadillac plans” –$540 billion vs $150 billion. And folks in the top 1% can afford the hike: From 2002 to 2006 alone, households at the very top of the economic ladder watched their incomes rise by roughly 42 percent.
    –the many households that won’t go bankrupt (The sliding scale caps on out-of-pocket spending are sufficient; no one will lose their home
    –poor Americans who have been unfairly excluded from Medicaid in many states
    — med students from low-income households who will see substantial increaes in scholarships and loan-forgiveness, particularly if they are going into primary care.
    –those who will benefit form new communitiy clinics in 10,000 communities over the next five years
    –all citizens who benefit from significant new funding for public health and public health education
    –primary care doctors who receive raises and bonsues from Medicare
    As Metthew H. has said, reform had two major goals:
    coverage and reducing costs.
    This bill takes a major step toward accomplishing the first goal. And I agree with Matthew that, if we have to choose, this is the most important goal, though as I have long argued, we also most rein in inflation or we won’t be able to afford the universal coverage.
    But we have three years to begin doing that.
    The legislation doesn’t guarantee cost reduction–the corporate lobbyists who have so much influence over Congress wouldn’t let that happen. Thus, the Republicans stood firmly against reform just as they stood solidly in favor of the Medicare Modernization Act, corporate welfare for Pharma and for-profit insuerers. .
    But as White House Budget Director Peter Orszag said recently, “not everything has to be in the legislation.”
    There are things that the administration can do, that Medicare can do, and that health care reformers on the ground can do to reduce waste and rein in inflation over the next three years.
    Already, doctors and hospitals in some communities are doing it. See Doctors Don Berwick , Eliot Fisher and Atul Gawande on “How Did They Do That?”
    See my post yesterday on the VA reducing hospital infectoins, saving $$$ and lives. Why hasn’t market competition led U.S. hospitals in the private sector to do this? Because market competition does not lift quality or reduce costs. We’ve had 40 or 50 years to figure this out.
    If we’re really interested in people suffering for lack of healthcare– rather than winning a political contest– we should drop the recriminations and move forward.

  14. True, this soon to be final bill is a far cry from what we, on the left I guess, wanted and expected.
    There is only one question remaining now.
    Considering the future of health care, and the non health care related political implications, would we prefer this bill, or shadow of a bill, to pass or do we think that passing no bill at all is better for the nation?

  15. Also let me add. Productivity gains by health improvement hasn’t figured in one study. Not on conservative side and not on liberal side. That’s not part of any equation. It’s hard to estimate but shouldn’t be the reason for it to be ignored.

  16. As the bill doesn’t do a a lot of things some sort of minimum measure of success has to be established. In my opinion that minimum has to be following:
    1. Insurance and coverage for 94% of population.
    2. Greater consumption of PCP and preventive services and reduction in consumption of specialist and hospital services including the EMR. I am challenged in putting a number to these but considering Hospital bills are $1 trillion a year I would like to see 10% reduction so that the bill breaks even.
    Underlying this frenzy is the assumption that all utilization is bad and will not reduce the cost.
    I mentioned this on Bruce Bullen’s blog as well. You do not take your squeaky car for maintenance for two years and then when you finally have to get your transmissions, axles, steering etc changed then you complain about cost of repair. There is definitely merit to the arguement about reducing car repair prices. Yet, it is simplistic argument and does not do complete justice to the issue of price to society.

  17. Thanks Brian for pointing to Roy Poses’ critique on the US Preventive Services Task Force “guidelines” for breast cancer screening. It’s very insightful.

  18. This reform must be appropriate because many families depend on it, the health system a long time that is weak and patients suffering from cancer, chronic fibromyalgia, rheumatoid arthritis, Parkinson’s, diabetes, chronic pain, chronic anxiety among many other diseases, Need proper medical attention, according to the measure should be findrxonline for 80% of patients with these diseases.

  19. Well done, Brian. Now that I’m retired, I’m seeing much more of the financial and social effects of our very broken health care system than I ever saw while an executive. Keep shining your light on reality.

  20. A Wonk Definition Review
    As always, I admire and appreciate Brian’s insights, particularly this ceep insight, which he shares with other wonks,
    “America’s health care industry has placed the nation’s economic security in deep peril. An important goal, a commitment to structural change that can significantly reduce the one-third or more of health cost that is waste, now appears to have been squandered by a system that welcomes influence over policy in exchange for special interest financial contributions.”
    Brian’s wonk review has caused me to review these definitions of “wonk.”
    Free Online Dictionary, “One who studies an issue thoroughly or excessively.”
    Merriam-Webster Online Dictionary, “ A person preoccupied with arcane details or procedures in a specialized field.”
    MSN Encarta , “A policy expert: an expert in matters of policy, especially in government, the economy, or policy.”
    Your Dictionary.com, “A student who studies very hard; grind. A very serious hardworking person, specifically, one preoccupied with a particular subject or field.”
    Wordnet Dictionary, “An insignificant student who is ridiculed as being affected or studying excessively. Related words – assimilator, dweeb, grind, learner, nerd, scholar, swot.”
    I applaud Brian’s piece. We need wonks. We need to study what wonks have to say. It is too bad politicians don’t listen to wonks more closely, Politicans should incorporate wonk wisdom into their reform bills.

  21. Maybe rather than arriving at the catharsis predicted in “The Verdict”, we’ll simply see healthcare input prices be held down by the law of supply and demand. Contrary to popular belief, demand for healthcare is not entirely inelastic. The current “debate” has done much to strengthen the myth that one cannot do without western medicine. There’s a market price at which people will realize that there are alternatives, such as taking decent care of one’s self; we just haven’t gotten to that price yet. But we will, and then the problem will fix itself. Oh, but then there would be no need for all these wonks if it were that simple, I suppose.

  22. Thanks, Brian, for bringing together the critique of so many thoughtful health policy leaders. It’s a remarkable compilation. As many suggest, what we will receive (with passage) will fall short of what was promised. But more important I believe is that what was promised was a vision (especially when one considers the compounding forces of complexity, connectivity and consumerism) that was sufficiently under-powered if the goals are customized and personalized strategic health planning and optimizing full human potential. http://www.intel.com/technology/itj/2009/v13i3/ITJ9.3.0-Healthcare-Visions.htm
    Thanks, Mike

  23. Excellent article Brian. I have been reading Laszewski for a while, and now I am adding the health care blog to my required reading list.

  24. Brian:
    Thanks for this excellent review of the best recent writing on Health Reform.
    America’s health reform “debate” and the rule-making soon to be derived from it show how a political system that is deeply riven by partisan politics can fall prey to special interests.
    I think it’s instructive to compare this fiasco with the elegant piece of legislation recently promulgated by ONC, which outlines the criteria to be used in certifying EHRs as capable of supporting Meaningful Use and thus bonus payments from Medicare.
    The ONC document sets forth a very clear and aggressive path which will enable the HIT space to mature quickly. Better still, it creates a fair and open marketplace in which the legacy vendors can survive AND the innovators can thrive.
    In contrast to the health reform “debate,” the work of ONC is an example of the great potential of our political system’s ability to produce constructive, forward-thinking legislation…assuming it is NOT beholden to partisanship and special interests.
    Thank you,
    Glenn Laffel, MD, PhD
    Sr. Vice President Clinical Affairs
    <a href=”Practice”>http://www.practicefusion.com”>Practice Fusion
    http://www.practicefusion.com
    Free, Web-based EHR

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