Healthy Insights

Dr. Denis Cortese, president and chief executive officer of the Mayo Clinic, offered Washington a healthy dose of insight about the crucial importance of patient-focused care during a speech at the National Press Club on Good Friday.

Mayo is renowned worldwide for its expertise in medical diagnosis, and Dr. Cortese drew on these capabilities to help policymakers think differently and more strategically about health reform. Here are a few key points he made:

  • The U.S. doesn't have a health care "system." There was no conscious effort and no engineers were involved in getting us where we are today. Therefore, it is a fallacy to say that "our system is broken" and to try to "fix it" with a particular set of policies.
  • Change, instead, must focus on putting the needs of the patient first. Patients want personal, high-value health care, and the concept of teamwork is essential to delivering care that focuses on what patients most want and need: prevention, early diagnosis, control of chronic illnesses, enhancing their quality of life, wellness — and staying out of the hospital. And to know we are delivering quality care, we must measure outcomes. Was the procedure safe, timely, coordinated, compassionate, and affordable? All of these are important to patients.
  • The most important thing we can do to improve patient care is to create learning organizations. They can be real brick and mortar facilities or virtual networks where information is exchanged rapidly and where everyone is learning how to produce high quality care with the best outcomes, deliver safe care, and create the best value for patients. This is where systems engineers could help, in figuring out how to locate the sources of errors and create learning organizations.
  • Payments need to reward providers and patients for results, not for process. Right now, Medicare is spending money it doesn't need to spend by paying for the worst service, the worst outcomes, and the most expensive care. And Medicare's inefficiency drives inefficiency everywhere else. Getting rid of Medicare price controls is essential to paying for quality.

Having 90,000 avoidable hospital deaths a year is the equivalent of a major airliner crashing every two and a half days, Dr. Cortese said. That is unacceptable, but the lack of information is driving these mistakes. People get the right medical advice only about half the time. We need to exchange information in real time to improve, and we need transparency of outcomes, safety, and costs. We need teamwork to integrate care from diagnosis through treatment. And that care must be individually focused. Physicians need to think of themselves as team leaders and coordinators of the medical team.

And Dr. Cortese concluded with some guidance for the new president, offering questions he or she should ask the new administration's health policy team every day:

  • Are we establishing a learning organization in the health sector?
  • Is the quality of care improving? Are people still dying because of errors?
  • Is care affordable?
  • Are we paying for value?
  • Does everyone have access to care?

It is not a coincidence that Minnesota, the Mayo Clinic's home state, ranked first in the nation in overall health care quality this year, based upon a report just issued by the Agency for Healthcare Research and Quality. Mayo offers valuable lessons for all of us interested in improvements in our health sector.

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Two experts writing in the Los Angeles Times offer some legal advice about current proposals to require everyone in America to obtain health insurance: They're probably unconstitutional.

Karl Manheim, a law professor at Loyola Law School in Los Angeles, and Jamie Court of the Santa Monica-based Consumer Watchdog explain that a government mandate requiring people to purchase private insurance is either a constitutionally forbidden "taking" (of money) or a violation of constitutionally protected due process.

They say a mandate would mean that the federal government would be requiring people to buy a good (health insurance) offered by private businesses, implicitly delegating taxing power to private business. The Constitution explicitly delegates taxing authority to the Congress (Article 1, Sec. 8).

Yes, states can and do require people to buy automobile insurance or install fire sprinklers in a house. "But in such cases, the 'mandate' is discretionary — you don't have to drive a car or build a house," they write.

The same is true with requiring vaccinations for children enrolling in public schools: Parents have the option of sending their children to private schools or to home school them.

But a health insurance mandate would not, by definition, be optional. "A health insurance mandate is essentially a forced contract."

If government were instituting new taxing powers requiring everyone to enroll in a government program, that would actually pose less of a constitutional problem, they say.

But that's not politically popular. In fact, Sen. Hillary Clinton would mandate insurance but would give people the "choice" of buying highly-regulated private coverage.

It actually is this choice of private coverage that could trip up her plan with the court, as Manheim and Court explain.

So is Massachusetts' individual mandate unconstitutional? Probably. "These 'unfunded mandates' are unlike any form of government regulation we've seen," they write.

But someone has to take it to court first, and I'm not aware of any court challenges, at least yet.

So here's an interesting prospect: Do we want to spend the next 10 years battling in the courts over the constitutionality of an individual mandate for health insurance? Or do we want to actually spend that time trying to give people more options of more affordable, private coverage?

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And the Harvard School of Public Health has a new poll out that underscores the huge partisan divide over health reform.

More than twice as many Republicans (68%) as Democrats (32%) believe that the U.S. health system is "the best in the world." Further, more than half of Democrats (56%) say they would be more likely to vote for a candidate who advocates moving toward a system more like Canada's, France's, or Great Britain's. In contrast, only a fifth (19%) of Republicans say they would be more likely to vote for a candidate that advocates moving toward such systems.

Interestingly, even though many people want to import other countries' health systems, they don't know much about them: 53% of all of those responding to the survey, for example, say that they aren't sure how our system compares to France's, for example.

So it shows that people do think that the grass is greener. But maybe they need to learn a bit more about what it's really like living under those systems before they throw out the one health care system that is driving innovation in new medicines, new treatments, and new medical technologies, and that many people think is the best in the world.

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And we're going to help with that education: We welcome Brian Lee Crowley to the Galen Institute as our newest visiting senior fellow. Brian is the president of the Atlantic Institute for Market Studies in Nova Scotia, where he will continue working while he also helps us educate the debate over market-based solutions to problems in the health sector — including a clearer picture of the challenges of Canada's health care system.

Grace-Marie Turner

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Recent News Articles and Studies

Loose Political Lips Can Sink Our Economy
Checking into Bumrungrad Hospital
Who Really Pays for Health Care?
2008 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds
The Hazards of Harassing Doctors: Regulation and Reaction in Trans-Atlantic Healthcare
Five Myths of Health Care
Why McCain Has the Best Health-Care Plan
A Round-up of State Issues

Loose Political Lips Can Sink Our Economy
Grace-Marie Turner, Galen Institute
The Wall Street Journal, 03/28/08

It would take much more than a weak dollar and the sub-prime mortgage collapse to shake confidence in an economy as strong as the United States is. Unfortunately, other forces are at play that could lead to just such a crisis, including: 1) Continual talk by Sens. Hillary Clinton and Barack Obama about huge future tax increases, including the expiration of President Bush's income and capital gains tax cuts; 2) The anti-immigration sentiment that could severely constrain the future labor pool; and 3) The erosion of our leadership in the investment world because of the insidious impact of Sarbanes-Oxley. Investors do look to the future, and taken together, these and other bad policy decisions could indeed undermine even the strongest economy in the world. It's time for political leaders to wake up and understand the damage caused by these anti-growth policies.

Checking into Bumrungrad Hospital
Bruce Einhorn
BusinessWeek, 03/17/08


Bumrungrad Hospital, Bangkok, Thailand. Photo: Business Week

This photo from a BusinessWeek report on the growing trend of medical tourism tells the story about how big this industry is becoming. Last year, 65,000 Americans went to Bumrungrad Hospital in Bangkok for in-patient or outpatient treatment, up from just 10,000 in 2001. Many of the patients from the U.S. were uninsured, taking advantage of medical costs that are a fraction of those in American hospitals. Last month, Bumrungrad announced an alliance with Blue Cross & Blue Shield of South Carolina, with the American insurer agreeing to cover expenses for members who travel from the U.S. to the Thai hospital. Other hospitals, including some in Singapore and India, have also teamed up with the South Carolina insurer, which is betting that some members would be willing to travel abroad rather than pay thousands more for operations in American hospitals. Bumrungrad's revenue from foreign patients rose 14% last year, and non-Thais now account for 55% of Bumrungrad's business.

Who Really Pays for Health Care?
Ezekiel J. Emanuel, National Institutes of Health, and Victor R. Fuchs, Stanford University
Chicago Tribune, 03/27/08

Employers like to say — and often believe — that they pay for health care, write Emanuel and Fuchs. And union leaders want members to think that health benefits are a bonus on top of wages. But wages and fringe benefits, such as health insurance, are simply components of overall worker compensation. This cost-wage trade-off is usually well hidden from employers and workers, but it is nonetheless a painful reality for average Americans. The increasing cost of health care has resulted in American workers receiving relatively flat wages for 30 years, they write. The reality is that individuals bear the full cost of health care through lower wages and higher taxes.

2008 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds
The Boards of Trustees, Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 03/25/08

The financial outlook for the Medicare program continues to raise serious concerns, and a "Medicare funding warning" is triggered again by the findings of this report. Total Medicare expenditures were $432 billion in 2007 and are expected to increase in future years at a faster pace than either workers' earnings or the economy overall. The HI trust fund will be exhausted by 2019. As a percentage of Gross Domestic Product, expenditures are projected to increase from 3.2% in 2007 to 10.8% by 2082. Growth of this magnitude, if realized, would substantially increase the strain on the nation's workers, Medicare beneficiaries, and the federal budget.

The American Enterprise Institute hosted a briefing this week to discuss the Medicare Trustees' report and the policy challenges facing the program.

The Hazards of Harassing Doctors: Regulation and Reaction in Trans-Atlantic Healthcare
Alphonse Crespo, M.D. and Marc Siegel, M.D.
Center for Medicine in the Public Interest, 03/08

Beyond its impact on the quality of care and on the invisible costs of illness, government tampering with doctor autonomy and patient choice raises crucial questions related to h
uman liberty, writes Alphonse Crespo, a Swiss physician. Doctors have yet to make their voice heard in the battle of ideas between the guardians of obsolescent socialized medicine and proponents of a free society. But this is changing as bureaucratic interference with medical practice has reached a threshold that now pushes doctors to engage in protest movements in various parts of Europe. Enlightened health-policy makers can minimize the transition costs of change by deregulation of health insurance services, gradual privatization of public healthcare infrastructures, and fiscal incentives for medical savings accounts and health banking capital.

In a separate essay, American physician Marc Siegel cautions that medicine is moving further in the direction of shrinking reimbursements and insurance company-controlled strategies which put a stranglehold on a doctor's decision-making.

Five Myths of Health Care
Sally Pipes, Pacific Research Institute
The Washington Times, 03/21/08

Sally Pipes debunks the five most prominent health-care myths: forty-seven million Americans do not have health insurance; universal health-care coverage can be achieved through an individual mandate; expensive prescription drugs are a big reason health-care costs increase; drug importation will save patients a fortune; and the state-run health-care systems in Europe and Canada are better and cheaper than America's.

In a separate op-ed, Pipes writes that Thailand's misuse of compulsory licensing to obtain patented prescription drugs allowed corrupt officials to steal millions. Sick Thai citizens have yet to see any benefits and the move has set a dangerous precedent that will stifle innovation and endanger the health of millions. The newly elected Thai government is wisely examining this issue and appears more interested in pursuing a thoughtful, long-term policy of economic development that will serve its citizens far better than quick-fix political schemes that result in Thailand becoming a hero to anti-capitalist activists, but a pariah to the world economic community.

Why McCain Has the Best Health-Care Plan
Shawn Tully
Fortune Magazine, 03/11/08

Sen. John McCain's health care plan is the only one of the candidate proposals that has a chance of getting medical costs under control, writes Fortune Magazine. McCain's plan would eliminate the employer exclusion for health care and allow people to buy insurance plans on their own, including across state lines. In essence, he wants to create a kind of national insurance market that puts more decision-making power into the hands of consumers. John McCain's health care plan would create a world where health care is treated as the precious resource that it is, rather than a costless entitlement, and where nationwide competition pushes down prices and consumers focus their attention and spending on what's really crucial to their health. The price of health care is never going to get under control until patients get what they deserve: the right to be customers too.

McCain bemoans the high cost of pharmaceuticals and, with a heavy dose of anti-corporate rhetoric, he champions the idea of drug reimportation. But McCain would be better served by abandoning this idea and speaking out instead in favor of reforms that will help Americans pay a fair price for prescription drugs, writes the Manhattan Institute's Dr. David Gratzer. McCain should offer Americans a way forward to lower drug prices, without endangering the innovation that has sparked the pharmaceutical revolution.

A Round-up of State Issues

  • Massachusetts' new subsudized health program will cost "significantly" more than the $869 million Governor Deval Patrick proposed in his 2009 budget just two months ago, reports The Boston Globe.
  • Lawmakers in New Jersey have unveiled plans to bring universal health care to the state within three years by requiring 1.3 million uninsured residents to buy coverage and using state funds to provide reduced-cost policies, reports The Star-Ledger. The Manhattan Institute's Dr. David Gratzer writes that New Jersey's health insurance market should be deregulated and small business owners should be allowed to join together to purchase health insurance for their employees — not only within the Garden State but throughout the region.
  • The Providence Journal reports on an innovative program in Rhode Island that allows people without health insurance to buy access to a doctor for less than most people's monthly cable bill. Under HealthAccessRI, doctors offer "memberships" of $25 or $30 a month for easy access to their services for about six years. Members receive yearly physicals, visits when they are sick, and 24-hour phone access.

Upcoming Events

Taking Back Our Fiscal Future
The Brookings Institution and The Heritage Foundation Event
Monday, March 31, 2008, 10:30 a.m. – 12:00 p.m.
Washington, DC

H.R. 5613, Protecting the Medicaid Safety Net Act of 2008
Subcommittee on Health Hearing
Thursday, April 3, 2008, 10:00 a.m.
Washington, DC
Grace-Marie will testify before the House Committee on Energy and Commerce Subcommittee on Health.

Can Tax Credits Be a Linchpin for Health Reform? Lessons from the Factory Floor
Urban Institute Event
Friday, April 4, 2008, Noon – 1:30 p.m.
Washington, DC

Enhancing Quality Performance Measurement: A New Paradigm for Health Care Accountability Has Arrived
ABQAURP and PHII Event
Saturday, April 5, 2008, 7:45 a.m. – 5:00 p.m.
Chicago, IL

Is Free Trade Good for Your Health?
American Enterprise Institute Event
Thursda
y, April 10, 2008, 10:00 a.m. – 12:00 p.m.
Washington, DC

Can We Repair What's Wrong with our Health Care System through Christian Principles?
Acton Institute Event
Thursday, April 10, 2008, 12:00 p.m. – 1:30 p.m.
Grand Rapids, MI
Grace-Marie Turner will discuss how free-market solutions can create a health care system that supports individual freedom over health care decisions.

Whose Healthcare is it Anyway? Understanding the Patient as a Consumer
Yale University Healthcare 2008 Conference
Friday, April 11, 2008, 8:00 a.m. – 6:30 p.m. (Breakfast and lunch included)
New Haven, CT

Cracking Down on Killer Drugs: Dora Akunyili and the Nigerian Success Story
American Enterprise Institute Event
Monday, April 14, 2008, 9:30 a.m. – 11:00 a.m.
Washington, DC

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Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features a commentary by Grace-Marie Turner on the major developments and issues of the week as well as summaries of writings by participants in the Health Policy Consensus Group and other articles of interest from the health policy world, plus 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 www.galen.org.

If you wish to subscribe to this free weekly newsletter, update your address, or be removed from our list, please send an e-mail message to galen@galen.org.

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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