Try and Try Again

The Senate this week tried, and failed, to pass two no-cost health reform measures – malpractice reform and the Small Business Health Plan bill, sponsored by Sen. Mike Enzi.

Enzi was unable to overcome criticism from the right and the left and came five votes short of the 60 votes needed for passage.

  • Cancer and other disease groups which have lobbied for years in state capitols for laws mandating coverage took out full-page ads around the country warning of the terrible consequences of passing the legislation: Women wouldn’t get mammograms, diabetics wouldn’t get supplies, and basically health insurance would stop covering anything worthwhile.

    In fact, insurance would have covered the services that people believed were worthwhile, not those dictated by politicians. Obviously, that just can’t be allowed.

  • And even supporters of free-market reform balked at some of the compromises that Enzi made to try to get enough votes to pass his bill. They couldn’t seem to see that making some progress on freeing up the market is a worthwhile goal in itself, and the bugs would have been worked out later.

That’s probably the end of efforts this year to create a more open marketplace for health insurance. New purchasing options are an important part of moving toward a market where consumers have more control and freedom to purchase health insurance, and Chairman Enzi worked as hard as any senator ever has to get this legislation passed.

The forces protecting the status quo prevailed, and small businesses seeking more affordable insurance will have to await another day.

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And speaking of consumer control? I spent the week in San Francisco co-hosting the exciting and dynamic Consumer Directed Health Care Conference. The list of topics and presenters was dazzling, and each one of these conferences is better than the last.

About 1,200 people were registered, and many of them were from outside the health sector – from the information technology world, from financial services, and entrepreneurs offering a dazzling array of new products and services.

Harvard Professor and Manhattan Institute senior fellow Regina Herzlinger gave the keynote address, explaining why the health sector is so out of sync with the rest of the economy and making a solid case for the inevitability of CDHC.

I either moderated or spoke at six sessions, and so many things were going on that it’s impossible to give you a full report. But here are two nuggets that really stuck with me:

Attendees especially liked our panel with major company benefit managers reporting on their innovations in health benefits, including Dr. John T. Kelly of Union Pacific and Fred Williams of Quest Diagnostics. Susan Chambers, Executive VP of Wal-Mart, had been scheduled to speak, but she was trapped in Washington by the Senate debate, so she asked Linda Dillman, the new executive VP for benefits, to stand in. Linda was giving her first speech in this new position after serving for years as Wal-Mart’s transformational chief information officer.

Linda has been asked to handle one of the biggest challenges the company is facing, and she clearly is up to the job. She described the company’s new health offering for employees, and also reported that:

  • Wal-Mart is going to try to give both its employees and its customers added incentives to get healthy, with discounts on fruits and vegetables, for example. But focus group testing shows this is a particular challenge because many people think a ?healthy lifestyle? is something that only the rich can afford, with personal trainers and expensive food. An important insight and clearly, a challenge to be overcome.

  • And she plans to bring her extensive IT experience into her new job managing health benefits. How much do we need that?!

Make plans to join us for the next CDHC conference this winter. You won’t be disappointed.

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And we want to congratulate our colleagues in Canada for creating a Canadian Health Care Consensus Group and releasing this week their ?Call to Action on Health Care Reform.?

Modeled after our US Health Policy Consensus Group and a similar group in the United Kingdom, this new statement offers a penetrating analysis of the problems with the Canadian health care system and a vision for reform. A few excerpts:

  • ?most important decisions (including spending) are negotiated behind closed doors between government officials and powerful provider groups.?

  • ?users of the system have relatively few choices and there are few incentives for them to economize on their use of health services.?

  • ?the virtual exclusion of the private sector from Canada’s health care system has deprived Canadians of innovation, investment, best practices, choices and competitive benchmarks.?

Canadian citizens ?are, at most, bystanders in the health care system [which] operates as the almost exclusive domain of governments, health care providers and professionals, and the leaders of health regions and hospitals.?

The statement calls for a greater role for consumer choice and competition, and for eliminating the monopolistic control by government. It is signed by 15 leaders in the policy and medical communities, and was facilitated by Brian Lee Crowley’s Atlantic Institute for Market Studies in Halifax.

Building a consensus statement is a heroic effort, and I look forward to congratulating Brian in person on Monday when I travel to Nova Scotia to speak to a conference he is hosting there.

The Canadian Consensus Group statement sets out an important vision that will be a cornerstone in the transformation of the health care system to better serve patients and taxpayers. Kudos!

Grace-Marie Turner

RECENT NEWS ARTICLES AND STUDIES:

  • Health Savings Accounts: January 2005 – December 2005
  • In a dentist shortage, British (ouch) do it themselves
  • The next generation of health information tools for consumers
  • A seismic shift: How Canada’s Supreme Court sparked a patients’ rights revolution
  • The Health Partnership Act
  • Operational and clinical changes largely unaffected by presence of competing specialty hospitals

HEALTH SAVINGS ACCOUNTS: JANUARY 2005 – DECEMBER 2005
Source: eHealthInsurance, 05/10/06

eHealthInsurance, the largest online health insurance broker in the U.S., issued a new study this week comparing HSA purchases in 2005 to consumers who bought similar plans in 2004. Highlights:

  • Premiums for HSA-eligible plans went down 17%, with individuals paying $114 in 2005 compared with $138 in 2004.
  • More than 40% of HSA-eligible plan purchasers were previously uninsured.
  • HSA plans continue to be comprehensive, with most policies covering 100% of the costs of hospitalization, lab tests, emergency room visits, prescription drugs, and doctors’ visits after the deductible is met.
  • More than 60% of HSA plan purchasers have been moving toward higher annual deductibles compared with 50% in 2004.
  • Almost 50% of plan purchasers in 2005 earned $50,000 or less annually and 42% are 40 years old or older.

Full text (pdf): image.ehealthinsurance.com

IN A DENTIST SHORTAGE, BRITISH (OUCH) DO IT THEMSELVES
Author: Sarah Lyall
Source: The New York Times, 05/07/06

The New York Times reports that the sad state of dental health in England ??is due in large part to the deficiencies in Britain’s state-financed dental service, which, stretched beyond its limit, no longer serves everyone and no longer even pretends to try.? A lack of public dentists and long lines at emergency clinics are leading Britons to take matters into their own hands, with some even extracting their own teeth. Drugstores in Britain sell do-it-yourself dental supplies, and a recent article in the Guardian newspaper said that ?the previous week British drugstores had sold 6,000 jars of the filling replacement, and 6,000 of the crown-and-cap replacement,? reports the Times.
Full text: www.nytimes.com

THE NEXT GENERATION OF HEALTH INFORMATION TOOLS FOR CONSUMERS
Source: Joint Economic Committee, 05/10/06

The JEC investigated in a hearing this week the extent to which relevant and usable health care information is available to consumers to help them evaluate ?value? — the mix of cost, price, quality, treatment outcomes, and overall health improvement.

  • Carolyn Clancy of the Agency for Healthcare Research and Quality said, ?For many health care consumers, the problem is not a lack of information. It is?a need for better information: information that is pulled together so that alternatives can be easily compared, easily understood, and easily acted upon.”
  • Walt Francis, author of CHECKBOOK’s Guide to Health Plans for Federal Employees, testified that access to ?price and value information on health care is the most important budgetary and economic issue facing America. It is vital to Medicare reform, to avoid the train wreck of impending insolvency of that program, but more broadly vital to reducing the unsustainable and crippling problem that rising health care costs impose on all Americans in all income classes.?

A full list of testimonies, as well as the webcast, is available online.
Full text: jec.senate.gov

A SEISMIC SHIFT: HOW CANADA’S SUPREME COURT SPARKED A PATIENTS’ RIGHTS REVOLUTION
Author: Jacques Chaoulli
Source: Cato Institute, 05/08/06

Dr. Chaoulli describes his successful challenge to Canada’s ban on private health insurance coverage for services covered under medicare, the country’s socialized health care system. ?The ruling also provides a basis for challenging other government activities in health care and could have a significant impact on the U.S. Medicare program, compulsory health care programs in other nations, and certain forms of health care regulation,? writes Chaoulli. He argues that every individual should have the right to opt out of a government-run health insurance program, including the Medicare program in the U.S. ?For example, elderly and disabled citizens enrolled in the U.S. Medicare program are effectively prohibited from purchasing Medicare-covered services from their doctors with their own funds,? he writes. ?They are thus effectively prohibited from opting out of the program for particular services.? He sees the Canadian Supreme Court’s decision as ?a first step toward a worldwide revolution in patients’ rights.?
Full text: www.cato.org

THE HEALTH PARTNERSHIP ACT
Source: Senators Voinovich and Bingaman, 05/06

Senators Voinovich (R-OH) and Bingaman (D-NM) this week introduced The Health Partnership Act (S.2772) to authorize grants to states to experiment with ?strategies to increase health care coverage, ensure patients receive high quality appropriate care, improve the efficiency of health spending, and use information technology to improve infrastructure.” Senator Bingaman explained: ?This bill doesn’t prescribe a one-size-fits all solution to our nation’s uninsured problem. Rather, it provides federal funding and the leeway states need to determine how best to provide health care coverage to those who currently can’t afford it.? The bill would create a State Health Innovation Commission at HHS to approve a variety of reform options and review state applications.
Press release: voinovich.senate.gov
Full text of bill: thomas.loc.gov

OPERATIONAL AND CLINICAL CHANGES LARGELY UNAFFECTED BY PRESENCE OF COMPETING SPECIALTY HOSPITALS
Source: Government Accountability Office, 04/06

A GAO survey finds that “with few exceptions, general hospitals did not report implementing a substantially different number of changes or different types of changes just because there was a specialty hospital in their market.” A large proportion of survey respondents “reported making operational and clinical service changes ? in what they viewed as increasingly competitive healthcare markets; however, there was little evidence to suggest that general hospitals [changed if] competition came from a specialty hospital.” Instead, the majority of respondents reported increased competition from limited service facilities, like ambulatory surgical centers, imaging centers, and urgent care centers, which “far outnumber the relatively few specialty hospitals in existence or under development. The predominance of other types of competitors may help explain the lack of a uniquely competitive response of the general hospitals in [this] study to the existence of specialty hospitals.”
Full text of GAO report (pdf): www.gao.gov

The Centers for Medicare & Medicaid Services (CMS) also released a report this week which describes the steps the agency is taking to “get more accurate information about the role specialty hospitals play in health care delivery, and the steps we are taking to promote effective care in specialty hospitals.” Initial research conducted by CMS “found that many specialty hospitals provide efficient and high quality services?[but] there are real concerns about whether payments in excess of costs inappropriately influence investments and care in these hospitals.”
Full text of CMS report: www.cms.hhs.gov

UPCOMING EVENTS:

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.

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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