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Tag: Robert Laszewski

The Importance of Being Charles Grassley

The extension and expansion of the State Children’s Health Insurance Program SCHIP has now passed the full House and the Senate Finance Committee and is on its way to the full Senate. After minor differences between the House and Senate are reconciled it will become law.

However, the way it is being done does not give me a good feeling.

In the Senate Finance Committee the Democrats were only able to get the support of one Republican–Maine’s Olympia Snowe–on the way to a 12-7 approval. They did not have the support of the ranking Republican, Chuck Grassley of Iowa.

Senate Finance Democrats lost the support of the Republicans when they insisted on departing from last year’s bipartisan agreement to leave existing policy on covering the children of legal immigrants
as is. As it now stands, a legal immigrant agrees not to apply for Medicaid and SCHIP
benefits for the first five years they are in the country. Under the
new rules states would have the option of covering legal immigrants.
The new bill also left out provisions from the earlier bipartisan
comprise to limit benefits for higher income families.

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The Downfall of AIG

Those of you outside of Washington, DC likely missed the Washington Post’s three-part investigation of the events leading to the downfall of AIG.

It makes for good holiday reading. I highly recommend the series to you.

Knowing the culture at AIG from many years of activity with the company and its leadership, I can tell you the story certainly has the culture right.

While this is not a health care story per se, it is a story about risk taking and understanding, and never getting cocky about, risk. AIG
execs argued for years they really had no risk in their credit default
swap business. My experience is that when someone is willing to pay you
lots of money to lay a risk off on you–in this case a whopping $80
billion of exposure–there is risk.

You can read the full report here.

Naive policy makers need not apply

Picture_1The Congressional Budget Office (CBO) has released two comprehensive papers detailing the policy and
financial options for health care reform: Key Issues in Analyzing Major Health Insurance Proposals and Budget Options, Volume I: Health Care.I can’t overestimate the importance of these documents to health care reform. I recently did a post as sort of an open letter to the CBO: To the Congressional Budget Office: Please Keep Playing it Straight!After reading these two reports, totaling more than 400 pages of some of the most valuable health policy analysis I have ever seen, I now know that I had no reason to worry that the CBO would just tell the politicians what they wanted to hear.Any Congressional health care reform proposal will need to be “scored” by the CBO and, by preempting the coming proposals with this report, the career CBO health care experts
have now made it very clear they will not be an easy touch. Reformers
are going to have to play the game on the up and up—show real savings
or find the money elsewhere. CBO Director and incoming Obama Budget Director, Peter Orszag, also deserves a lot of credit for supporting his staff and issuing this report.It is also clear that, whoever the Congressional Democratic leadership appoints to succeed Orszag, a marker is down. The CBO is
on the record about what the likely reform options will cost before
anyone had a chance to bring political pressure to bear. And, that just
might have been intentional.The work contains an inventory of about all of the health care reform options being discussed complete with a thorough cost/benefit analysis detailing their impact on federal
spending. There would certainly be impact on private spending from many
of these options but this at least gives us a relative cost index to
compare the many health care reform ideas. This is also a financial report and did not attempt to measure quality improvements.

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Slicing the health reform pie

I doubt anyone would disagree with the statement that America’s health care costs are too high, continue to grow at an unsustainable rate, and reform is critical to control costs, get everyone covered, and improve quality.

In the wake of the election, I see one positive and magnanimous press release after another coming from the health care special interests. The press is full of daily stories touting the coming health care reform efforts as different this time. The stakeholders understand things are different, know we have to do something, and are ready to cooperate, goes the reasoning. Really?

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There’s waste in the medical system–Duh!

As we begin the health care reform discussion in earnest, many are pointing out all of
the waste in the system and the need to research what works best, provide the incentives to do it, manage the big spenders’ chronic care better, make better use of heath information technology, and encourage wellness and prevention.

One of the disadvantages of being at this for more than 20 years is that I feel like I’ve seen this movie a few times before. You may recall the picture "Groundhog Day" where the guy kept living through the same thing time after time.

I am particularly taken by those that cite the statistics regarding health care waste and efficiency as if this was a new discovery they made in the last few days.

For example, the excellent groundbreaking research from Dartmouth is often cited pointing to the conclusion that as much as 30% of all medical spending does nothing to improve care.

I can’t disagree with many of these conclusions having argued much the same myself.

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Fostering an adult conversation about health reform

Zeke Emanuel and Shannon Brownlee have an op-ed in Sunday’s Washington Post that should be required reading for anyone interested in health care reform.

The title is, “5 Myths About Our Ailing Health Care System.”

They suggest the “5 Myths” are:

  1. America has the best health care in the world.
  2. Somebody else is paying for your health insurance.
  3. We would save a lot if we could cut the administrative waste of private insurance.
  4. Health-care reform is going to cost a bundle.
  5. Americans aren’t ready for a major overhaul of the health–care system.

At one level I can disagree with many of their points and at another I can agree with all of them — but they are right on all counts.

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McCain’s health plan likely going down with him

John McCain would reform the American health care system by providing big tax incentives for it to transition from being employer-based to one built on a system of individual responsibility. He would do this by eliminating the longtime personal tax exemption on employer-provided health insurance and replacing it with a $2,500 individual, and $5,000 family, tax credit for those who have health insurance.

It’s too bad this idea will likely recede from the national health policy debate whether John McCain wins or loses the presidency. Even if he wins, the Democratic majorities in Congress will be so large there is little chance we will be able to move away from the traditional employer health insurance base in the next few years. All you have to do is look at the way Obama and all of the Democratic candidates for the Senate and House have railed against McCain’s plans to "tax your health benefits" to see how Democrats have willingly painted themselves into a political corner that makes this idea a non-starter in the new Congress.

As I have said before on this blog, I have been largely disappointed in the McCain health plan. He started out with a bold new approach but never closed the loop on so many key elements in his plan. For example, he leaves those with pre-existing conditions to the fate of state-based risk pools–a place no one would ever vote themselves into.

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Let’s get real about the economy and health care

I just got a call from a reporter at one of the major news organizations to talk about the chances for health care reform.

We both commented on the almost surreal environment we are all in. I’m not sure if my friends and neighbors are in denial or just numbed by the recent cascade of events in the financial world. Up on the Hill and in the presidential campaigns it’s business as usual when it comes to extending the Bush tax cuts, spending on alternative energy, or the imperative to do health care reform.

The reality is we are now headed down an unavoidable slope into a recession. The only question is how bad. Today, Dr. Phil told his audience to stop spending money, get their credit card debt paid off, and hold cash–"Cash is king." They are and they will.

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Forcing the candidates to get real on health care change

Let’s pretend that either Senator Obama or Senator McCain will be able to implement their respective health care reform plans if elected. This exercise should be easy. We’ve been doing it for months now.

Or, we can get real and expect them to do the same.

For all the arguments both candidates are making that they are change agents, including over their competing health care reform proposals, this dirty little secret remains –– neither Senator’s health care plan has a chance of being implemented.

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Remember pensions? The big differences between Obama & McCain’s health care plans

This election is different than any other on the issue of health care because both candidates are giving us serious blueprints to reorganize America’s health care system and those blueprints are very very different.

As voters, you have a huge and critically important choice on health care.

There are dozens of details upon which they differ and for those I would point you to my comprehensive posts on the McCain Health Care Plan and the Obama Health Care Plan.

But to understand their big idea differences, I would point you to our pension system to better understand where McCain and Obama are going on health care. Back in the 1960s and 1970s, it was common for workers to have what is called a defined benefit pension plan.The worker got a promise from the employer that when retirement came he’d get a certain monthly benefit — often about 60 percent of his final average earnings. That might be $2,000 a month — every month for the rest of his life. Therefore, a defined benefit.

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