Citizens' Report

In late 2003, Congress created a quasi-commission “to bring the views of everyday Americans to the job of creating a better health care system.” After dozens of hearings and community meetings in 30 states, attended by thousands of people, the 14 members of the “Citizens’ Health Care Working Group” has published its interim recommendations.

The report basically offers a wish list for a utopian health care system. For example:

  • “It should be public policy, established in law, that all Americans have affordable health care coverage.”

  • “Access to care means that everyone should be able to get the right care at the right time and at the right place.”

  • “A defined set of benefits is guaranteed, by law, for all, across their lifespan, in a simple and seamless manner.”

  • “The federal government will?use the resources of its public programs?to improve quality and efficiency while controlling costs across the entire health care system.”

Now there’s an ambitious agenda.

In meeting after meeting, there was strong support for a national health plan, financed by taxpayers. Granted, many of those who showed up were encouraged to attend by groups that have a vested interest in government-funded programs or came to tell of their own awful struggles with health insurance.

But it is important to listen to these sentiments from people who are fed up with the health care system. There was a strong feeling that, if the profit motive in the health sector just could be eliminated, all of these goals could be achieved without any other trade-offs.

The group’s recommendation calling for a “core benefits package” seems to have set off some of the loudest alarms among our colleagues. The package would encompass “wellness, preventive services, primary care, acute care, prescription drugs, patient education and treatment and management of health problems provided across a full range of inpatient and outpatient settings.”

The group stipulates that a decision about the benefits would be made by “an independent non-partisan private-public group” that will use a “fair, transparent and scientific process.”

One clue about how it would actually work: When citizens were trying to create their own core benefits package, they couldn’t even eliminate plastic surgery because someone might need it.

Core benefits packages quickly turn into requirements that everything be covered, inevitably making the coverage prohibitively expensive.

To pay for all of this? More taxes, of course: “?enrollee contributions, income taxes or surcharges, ‘sin taxes,’ business or payroll taxes, or value-added taxes?”

There are several recommendations that would move in the right direction, such as recognizing that everyone needs at least major medical protection. They also were very clear that everyone has a responsibility to contribute to their coverage. And there was a call, in meeting after meeting, for simplicity in the health care system. (In fact, the cry for simplicity seems to underlie the call for a national health plan.)

Are these recommendations going anywhere? Not anytime soon. You will find few new ideas here about how to get from the wish list to actual policy.

But, as frustrations with the complexities of the health care system grow, as people feel they have less and less control over medical decisions, and as costs continue to rise, we need to pay attention to what people are saying.

It’s more useful to look at this as putting a finger on the pulse of Americans who are fed-up with the health care system (after, of course, being fed a steady diet by political and policy leaders day after day about how awful our system is compared to other more “civilized” nations).

The results of the hearings, in which people voted on handheld remotes, are available here. This is instructive for anyone wanting an early read on sentiment leading up to the 2008 presidential elections from those who are likely to be the most vocal in that debate.

This commission was created by Sens. Hatch (R-UT) and Wyden (D-OR), and the members were appointed by the Comptroller General. These are just interim recommendations, and the group will be accepting comments for the next 90 days before it issues a final report.

If there is a change in leadership in Congress this fall, the recommendations may get more attention. Media coverage so far has been limited but when the formal report is issued, probably just before the mid-term elections, it could get a louder hearing then, too.

The audiences in the community meetings of the working group did not represent a cross-section of America, and you have a chance to make your own comments at www.citizenshealthcare.gov/speak_out/comment.php to offer more balance.

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It does seem that there is a new mood in the country about shared responsibility for health costs. Massachusetts has now passed an individual mandate, and many other states are considering the idea.

The American Medical Association holds its annual meeting next week in Chicago and will be debating a resolution, presented by the California Medical Association, to support a “requirement to purchase a minimum of catastrophic and preventive health insurance coverage for individuals and families earning greater than 500% of the federal poverty level, with substantial tax penalties for noncompliance.”

That means that the AMA would begin by calling for a mandate on the 11% of people with incomes over $50,000 a year ($100,000 for families) who don’t have health insurance. We’ll report on the outcome next week, but two points worth mentioning now:

  1. It reminds me of the passage of the income tax and more recently the alternative minimum tax: They were targeted first to only a few wealthy individuals and eventually swept through the economy to capture millions and millions of Americans. The same will be true of an individual mandate.

  2. And it seems reckless for political leaders to consider an individual mandate until they undo the mess they have created in the health insurance marketplace to drive up prices with mountains of mandates and ridiculously expensive regulations governing insurance policies.

The first priority of political leaders must be to make insurance affordable before they force people to buy it. That was the mistake that Massachusetts made, and I believe it will be the Achilles’ Heel of the plan.

Grace-Marie Turner

RECENT NEWS ARTICLES AND STUDIES:

  • The drug benefit: A report card
  • Predicting the future by looking at the past: A failed and dangerous model
  • Health insurance doesn’t have to hurt
  • No miracle in Massachusetts: Why Governor Romney’s Health Care Reform Won’t Work
  • Needs of patients outpace doctors
  • The persistence in the level of health expenditures over time: Estimates for the U.S. Population, 2002-2003

THE DRUG BENEFIT: A REPORT CARD
Source: The New York Times, 06/05/06

The new Medicare prescription drug benefit receives a passing grade in this New York Times editorial. The Times finds that “the administration seems to have resolved most of the bureaucratic and computer problems ?Complaints at pharmacies have dropped precipitously, and callers who once found it impossible to get through to congested help lines now typically wait only a few minutes when trying to reach either Medicare or most individual health plans.” Further, “competition has helped keep average monthly premiums much lower than originally forecast – only $25 a month, compared with a projected $37 a month.” The Times writes that the program could have done more to target those who previously had little or no coverage and that it is not yet clear “how successful the plans have been at negotiating low drug prices with the manufacturers?or how many people are better off with the program than they were without it.”
Full text: www.nytimes.com

A related article in The Weekly Standard agrees that the prescription drug program has been a success, largely because the “plan emphasizes a major role for the private sector and includes market-oriented principles like choice and competition.”
Full text: www.weeklystandard.com

PREDICTING THE FUTURE BY LOOKING AT THE PAST: A FAILED AND DANGEROUS MODEL
Author: Peter Pitts
Source: The RPM Report, 06/06

The “one-size-fits-all solution to health costs” offered by Evidence Based Medicine “is broken and outdated,” writes Peter Pitts of the Center for Medicine in the Public Interest. EBM’s “effort to develop predictive approaches to health care using retrospective evaluation of population-based studies is outdated – and dangerously outdated – in an era of combination products and the integration of complex biology into both the screening of patients and the development of medicines,” writes Pitts. A new approach could achieve better patient-centric and cost-efficient results if it includes a partnership of states, health systems, hospitals and health plans and if it values medical innovation and patient-based outcomes.
Full text (pdf): www.cmpi.org

The latest Health Affairs Web Exclusive highlights the debate surrounding the Drug Effectiveness Review Project (DERP), a collaboration of two private organizations and 15 states that “apply principles of evidence based medicine (EBM) to inform drug formulary decisions.”
Full text: content.healthaffairs.org

HEALTH INSURANCE DOESN’T HAVE TO HURT
Author: Laura Vanderkam
Source: USA Today, 06/06/06

USA Today contributor Laura Vanderkam provides a younger person’s perspective on why health insurance is expensive and why one-third of 21-24 year olds in America go without health insurance. “Well-meaning but misguided states such as New Jersey and Massachusetts have priced young people out of the market by keeping laws on the books that force plans to cover everything, take all comers or treat young and old, healthy and sick, roughly the same,” writes Vanderkam. She believes that the “answer is to get government out of the way.” She writes that one example of a better model is Blue Cross’ TONIK, with plans “aimed specifically at twentysomethings who want coverage for catastrophes but don’t need a lot of other care.”
Full text: www.usatoday.com

The Council for Affordable Health Insurance has updated its report, “Trends in State Mandated Benefits,” for 2006 and estimates that “depending on where one lives, mandates can increase the cost of a policy between 20 and 45 percent.”
Full text: www.cahi.org

NO MIRACLE IN MASSACHUSETTS: WHY GOVERNOR ROMNEY’S HEALTH CARE REFORM WON’T WORK
Author: Michael Tanner
Source: Cato Institute, 06/06/06

“The Massachusetts reform takes us in the wrong direction,” writes Michael Tanner of the Cato Institute. “The individual mandate opens the door to widespread regulation of the health care industry and political interference in personal health care decisions.” Tanner also argues that the subsidies in the plan are overly generous, expanding welfare programs to the middle class, and that the Connector is a type of managed competition which could limit consumer choice. Tanner recommends that other states considering similar legislation should wait to see how the Massachusetts experiment turns out before taking any action.
Full text: www.cato.org

NEEDS OF PATIENTS OUTPACE DOCTORS
Author: Lisa Girion
Source: Los Angeles Times, 06/04/06

“A looming doctor shortage threatens to create a national healthcare crisis by further limiting access to physicians, jeopardizing quality and accelerating cost increases,” reports the Los Angeles Times. The number of medical school graduates has remained virtually flat for 25 years out of concern that the nation was producing too many doctors. “But demand has exploded?Over the next 15 years, aging baby boomers will push urologists, geriatricians and other physicians into overdrive,” according to the Times. Yet, “By 2020, physicians are expected to hang up their stethoscopes at a rate of 22,000 a year, up from 9,000 in 2000.”
Full text: www.latimes.com

THE PERSISTENCE IN THE LEVEL OF HEALTH EXPENDITURES OVER TIME: ESTIMATES FOR THE U.S. POPULATION, 2002-2003
Source: Agency for Healthcare Research and Quality, 05/06

Using data from the Medical Expenditure Panel Survey, the Agency for Healthcare Research and Quality finds that chronic disease is one of the biggest factors likely to drive health care spending. “In 2002, 1% of the population accounted for 22% of total health expenditures, and the lower 50% of the population ranked by their expenditures accounted for only 3% of the total,” according to the AHRQ study. Additionally, “Health status was a particularly salient factor that distinguished those individuals who remained in the top docile of spenders?of those individuals who remained [in the top], 21.7% were in poor health and another 27.4% were in fair health.”
Full text: www.meps.ahrq.gov

UPCOMING EVENTS:

Helping the Medicare Savings Programs Get Savings to Seniors
Alliance for Health Reform Briefing
Monday, June 12, 12:15 p.m. – 2 p.m. (Lunch available at noon)
Washington, D.C.

For additional details and registration information, go to: www.allhealth.org.

Buy or Die: Market Mechanisms to Reduce the National Organ Shortage
American Enterprise Institute Event
Monday, June 12, 2006, 10:00 a.m. – 12:30 p.m.
Washington, D.C.

For additional details and registration information, go to: www.aei.org.

11th Annual Wall Street Comes to Washington Conference
Center for Studying Health System Change
Wednesday, June 21, 2006, 9:00 a.m. – 12 p.m.
Washington, D.C.

For additional details and registration information, go to: www.hschange.org.

360 Degree View of HRAs in Consumer Driven Healthcare
Lighthouse1 Live Webcast
Wednesday, June 21, 2006, 1:00 p.m. – 2:30 p.m. CST

For additional details and registration information, go to: www.lighthouse1.com.

Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features research and writings by participants in the Health Policy Consensus Group, articles of interest from the health policy world, and announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at http://www.galen.org/.

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The views expressed in this newsletter are the opinions of the authors and do not necessarily reflect the views of the Galen Institute or its directors.

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