Bold, but Desperate

Speaker Pelosi and President Obama are as bold as they are desperate in forcing the House to vote this weekend on their massive health reform plan.

The president is expected to give a full endorsement to the House bill, despite the fact that it clearly violates major campaign promises he has made to the American people about reducing health costs, not adding to the deficit, no middle class taxes, and no loss of current coverage, among other pledges.

The overwhelming thrashing that Democrats took in Virginia and the defeat of an incumbent Democratic governor in New Jersey were loud warning shots from the voters. And it's hard to see how Democrats can ignore the thousands of people who gathered outside the Capitol yesterday to oppose a massive government takeover of our health sector.

The Speaker knows that if she doesn't get members to vote before they go home for next week's Veterans Day recess, she may never get the 218 votes she needs to pass her bill.

But opposition grows by the hour. The White House is touting a few high profile endorsements, including the American Medical Association and the AARP. But both organizations are facing rebellions in their ranks for their endorsements.

And both are highly suspect: Forget everything else in the bill that would harm doctors and patients. The AMA seems to believe that the Speaker is to be trusted when she promises that the $220 billion "Doc Fix," which she cut from the health reform bill, really-truly-trust-us still will be passed.

A number of state medical societies are circulating a resolution repudiating the AMA's endorsement, and 20 physician specialty groups yesterday issued statements warning of dire consequences for patients if the House bill passes. Watch for fireworks at the AMA meeting in Houston this weekend.

And the AARP clearly has self-interested motives in purporting to represent 40 million seniors while supporting a bill that would cut Medicare by $500 billion, as I wrote in a piece picked up online in the Chicago Tribune and elsewhere yesterday.

Meanwhile, the list of organizations that oppose the measure grows by the hour: The National Federation of Independent Business, the National Association of Manufacturers, the U.S. Chamber of Commerce, the National Retail Federation, the National Association of Health Underwriters, the Mayo Clinic, plus many more associations inside and outside the health industry all have sent or signed letters to Congress opposing passage of the bill.

Moderate Democrats hold the key. Either they will listen to the voters, or they will listen to the Speaker. If they do the latter, they surely will be hearing from the former in next year's elections.

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House GOP steps up: The House Republican leadership unveiled its own health reform proposal on Tuesday, a targeted approach that contrasts dramatically with the sweeping overhaul the Democrats propose.

The price tag is only $61 billion, compared to the more than $1 trillion cost of the House package. And the GOP bill would reduce the federal deficit by $68 billion over 10 years. The Congressional Budget Office says it also will lower premiums in the small group, individual, and large group markets.

The main provisions in the GOP bill include Association Health Plans, allowing cross-state purchasing of health insurance, creating a State Innovations Program to provide incentives for states to reduce premiums and help the uninsured, increased federal funding for high-risk pools and reinsurance programs, and improvements to HSAs. The bill pays for these provisions, which cover three million more Americans, with savings from medical liability reform, administrative simplification, a pathway for follow-on biologics, and fraud prevention — without raising taxes or cutting seniors' Medicare benefits.

The bill has been criticized because it only reduces the number of uninsured by three million. But the decision to start by first getting real competition moving and removing distortions in the system will make covering the uninsured much more doable and less expensive.

The proposal is on the right track because it reflects the more targeted approach the public wants from the health reform effort and is organized around the vision we support of a patient-centered health sector that relies on true competition to make health care more affordable and accessible.

The American people know there are problems in our health sector that must be solved, but they want Congress to carefully consider changes with a step-by-step approach because the outcome is so consequential. They are frightened by Congress trying to do too much all at once in one 2,000-page bill costing $1.3 trillion.

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New team member: Andrew Palczewski joins the Galen Institute as our deputy communications director. Andrew previously worked at Levick Strategic Communications, a Washington-based corporate crisis PR agency, and has held internships in both the House of Representatives and the Senate, including an internship with the Senate Committee on Health, Education, Labor and Pensions. He earned his B.A. in political communications with a minor in journalism from The George Washington University. Welcome, Andrew.

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And please visit our Health Reform Hub, which we update constantly with the best material on the web. Some of the featured pieces are summarized below.

CLIP OF THE WEEK

We're adding a new feature in our weekly Health Policy Matters newsletter — the Clip of the Week. Each week, we'll select a video or audio clip that highlights key points regarding responsible health care reforms and the problems associated with a government-run health system.

First in the series is a short, animated video from the Independence Institute which uses the analogy of air travel to explain the perils of government-run health care. It compares a "public airplane" and its passenger service (or lack thereof) to a "private airplane" and its service.

Check back for a new clip in the newsletter next week. Until then, you can check out more interesting video and audio on free market, consumer-driven health solutions on the Health Reform Hub's Multimedia Page.

GALEN IN THE NEWS

AARP's Tacit Endorsement of Medicare Cuts Line Its Pockets, But Shortchanges Seniors

Grace-Marie Turner, Galen Institute
ChicagoTribune.com, 11/05/09

The interests of AARP and the 40 million seniors it purports to represent are not aligned in the health reform debate, Turner writes. Why else would the nation's largest lobbying organization, sworn to protect the interests of senior citizens, be silent about Congress' plans to cut Medicare spending by $400 billion or more to pay for its health reform legislation? Here's a possible explanation: Marketin
g supplementary Medicare insurance plans, called Medigap, brings in hundreds of millions of dollars in royalty revenues to the AARP every year. But nearly 11 million seniors have enrolled in new, more comprehensive Medicare Advantage plans where they don't need Medigap. The House health reform bill would drastically cut Medicare Advantage, disadvantaging the seniors who value these private plans but protecting the AARP's Medigap revenue stream. Read More »

Here's An Idea: Why Not Reform Medicaid First?

Grace-Marie Turner, Galen Institute
WashingtonExaminer.com, 11/05/09

In its efforts to expand access to health insurance, Congress is planning to add millions more people to Medicaid — already the largest health plan in the country. The government has controlled Medicaid for nearly 45 years, and the program has enormous problems with cost, quality, and access. Rather than expand Medicaid, Congress should start by reforming it. If Medicaid were a private plan that had to compete in the market, it would have been driven out of business years ago. But because it's a government program, it continues to survive on a continuous flood of more than $320 billion a year in taxpayer dollars, even as recipients are routinely denied access to quality care, including specialists, and suffer inferior health outcomes compared to people with private insurance. Medicaid is a health care ghetto where few recipients have a choice of private health plans that provide meaningful access to physicians. Today, Medicaid beneficiaries are in the one segment of the market with the fewest choices. Shouldn't this be where we begin with reform? Read More »

Biggest Loser of 'Reform': Small Biz

Grace-Marie Turner, Galen Institute
New York Post, 11/02/09

Small businesses have the highest hopes for health reform, but they'd be big losers under the bills Congress is debating, Turner writes. The 1,990-page bill the House leadership unveiled last week would impose a dizzying barrage of new regulations on employers, and force them to either provide government-specified health insurance or pay a penalty of up to 8% of their payroll. Small businesses would have to pay more for health insurance than they do now — as well as comply with hefty new record-keeping requirements and audits by federal agents. For a final blow, the bill imposes surcharges on high-income individuals that will certainly hit many business owners who pay business taxes through their personal income tax forms. This isn't the kind of change that small businesses or our economy need, Turner concludes. Read More »

Promises Made — and Broken

Grace-Marie Turner, Galen Institute
National Review Online: Critical Condition, 11/02/09

President Obama says health reform will foster choice and competition. But the 400,000-word House health reform bill would shove an absolutely astonishing level of government intrusion into the lives of every American, every business, and every health care professional — vesting power and control, not to consumers, but to the federal government, Turner writes. This legislation is going to have an impact on the economic and health care freedom of Americans for decades to come. It is beyond irresponsible for Congress to be on the verge of passing these bills with this kind of disregard for the will of the people. Read More »

MEDICARE

The Wrong Medicare Advantage Reform: Cutting Benefits, Limiting Choices, and Increasing Costs

James C. Capretta, Ethics and Public Policy Center and Robert A. Book, Ph.D., The Heritage Foundation
The Heritage Foundation, 10/30/09

Changes to Medicare contemplated in both the House and Senate would have significant adverse repercussions for Medicare beneficiaries and the future of the program, Capretta and Book write. The health care bills currently under active consideration in Congress would impose deep benefit cuts, leave seniors with many fewer options (including a choice of the popular Medicare Advantage plans), and drive up costs for seniors and taxpayers. These proposals would lead to a system with less choice, less accountability, and eventually lower-quality health care at higher costs. Read More »

HEALTH COSTS

Increasing Health Costs Facing Small Businesses

Douglas Holtz-Eakin, Manhattan Institute
U.S. Senate Committee on Health, Education, Labor and Pensions, 11/03/09

In Senate testimony this week, former CBO director Douglas Holtz-Eakin said the health reform proposals before Congress would endanger the Federal budget and risk broader economic stress. He provides a detailed assessment of how the fees, taxes, and mandates contained in health reform legislation would raise costs for the majority of Americans who have insurance. Forcing individuals to participate in a system that is already broken and will be getting more expensive is not reform, he argues. Read More »

A webcast of the hearing is available here.

PRESCRIPTION DRUGS

No Placebo for Lower Costs

Jeff Stier, American Council on Science and Health and Henry I. Miller, Hoover Institution
The Washington Times, 11/01/09

It has become fashionable at the White House and on Capitol Hill to try to cut costs at the expense of the research-intensive pharmaceutical industry, although this sector has been one of the nation's most innovative and successful, Stiers and Miller write. New drugs have helped many patients avoid costly hospitalization, for example. Another sign of progress is that, in general, new drugs are better than older ones at reducing mortality. Research-and-development costs have doubled between the early 1980s and early 1990s, but approvals have been dropping, and even after drugs are approved for marketing, only about 3 in 10 drugs recoup their development costs. The climate for new drug development has been deteriorating, and Congress is on the verge of making it significantly worse, conclude Stiers and Miller. Read More »

HEALTH REFORM

How Many Americans Could End Up on the Public Health Plan? A Look at the Estimates

Greg D'Angelo
The Heritage Foundation, 11/02/09

If lawmakers were to create a public plan as envisioned by many congressional leaders, millions of Americans could lose their current employer-sponsored insurance, end up crowded out of private coverage, and find themselves enrolled in the new public "option," D'Angelo writes. Five different organizations and offices have made predictions of how many Americans could end up enrolled in the public plan: The Lewin Group, the Congressional Budget Office, the Centers for Medicare and Medicaid Services, the Urban Institute, and Healthy Systems Innovations Network. The five estimates predict that between 6 and 103 million Americans will be enrolled in the public plan, but all the estimates show that millions of people could stand to lose their current employer-sponsored insurance. Read More »

U.S. Health Care Gets Cancer Right

Diana Furchtgott-Roth, Hudson Institute
Forbes.com, 11/05/09

American health care yields better cancer outcomes than do government-based systems elsewhere, Furtchtgott-Roth writes. Americans have higher cancer survival rates because the U.S. has more advanced equipment for early diagnosis and more routine screenings. We have the newest technology and we spend more than other countries on diagnostic tests. Once diagnosed, we use more advanced medications for treatment than they do in Europe. Many new drugs are available earlier in the U.S. than in Europe because European governments negotiate prices from pharmaceutical companies before a drug may be given to patients. As we consider moving toward a public plan, we should remember that European health care may be less costly, but it is also less effective at keeping cancer patients alive. Read More »

Profit and Fraud

Jeffrey H. Anderson, Pacific Research Institute
The Weekly Standard, 11/04/09

Both 60 Minutes and the Washington Post report that Medicare fraud now costs American taxpayers $60 billion a year, Anderson writes. Meanwhile, the massive Democratic bills before Congress would entrust an entity that can't keep an eye on $60 billion with much greater control over our entire health-care system (including creation of an entirely new government entitlement program, "the public plan"). Fortune 500 tallies show that last year's profits for the ten largest private insurance companies in America were $8 billion–combined. Even the single most profitable insurance company didn't make five percent as much as what Medicare lost to fraud. Why on earth would Americans want to entrust more of the health sector to government? Read More »

Events

The Role of Independent Commissions in Controlling Costs and Enhancing Value: International Lessons
Alliance for Health Reform Briefing
Friday, November 6, 2009
12:30pm – 2:15pm
Washington, DC

Grace-Marie Turner speaking on the Pittsburgh Now show
WPXI-TV Broadcast
Monday, November 9, 2009
10:30am
Pittsburgh, PA

Politicians, Public Options, and Patients: What the Canadian Experience Teaches Us About Political Control of Health Care
Galen Institute and Hudson Institute Event
Monday, November 16, 2009
4:00pm – 5:30pm
Washington, DC

From the Inside Out: Correctional Health Care and Public Health
Oregon Health Forum Event
Tuesday, November 17, 2009
7:00am – 9:00am
Portland, OR

Health Care and Medical Malpractice Reform: The Necessity of Reform in the Current Debate
The Heritage Foundation Event
Tuesday, November 17, 2009
2:30pm – 3:30 pm
Washington, DC

Bending the Productivity Curve: How Would Health Care "Reform" Affect Medical Innovation?
Cato Institute Policy Forum
Friday, November 20, 2009
12:00pm
Washington, DC

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