Fear Factor

Highlights

I’ve never seen anything like the anxiety about health reform that is erupting in town hall meetings around the country. To say this is manufactured or organized by anybody totally misses the point of the genuine fear that people are trying to get across to their legislative representatives.

On this point alone, I agree with New York Times columnist Paul Krugman who writes today that he “can’t find any [previous] examples of congressmen shouted down, congressmen hanged in effigy, congressmen surrounded and followed by taunting crowds.” But Krugman, like many supporters of a much larger role for government in our health sector, is panicking that this may spell the end for sweeping health reform plans.

The White House has been accused and ridiculed for setting up a war room effort to track the “misinformation” that is being circulated about its health reform plans, inviting supporters to send in reports of “fishy” stories to flag@whitehouse.gov. This is discomforting to citizens who simply want to speak their minds without feeling that Big Brother is watching.

Some members of Congress are responding to the outrage by cancelling their town hall meetings and inviting one-on-one meetings in their offices instead or by holding town hall meetings by telephone where they are easier to control.

The thing to remember is this: Legislation has passed four out of five key committees in Congress that would establish a new government-run health insurance program, impose mandates on employers and individuals to get and pay for health coverage, dramatically expand Medicaid, and impose strict new federal regulation of the health insurance market. The president surely will sign anything that Congress sends him. And he wants to sign a bill this year.

People want to be heard now.

And yet columnist Steve Pearlstein still writes in The Washington Post today that “there is no credible way to look at what has been proposed . . . and conclude that these will result in a government takeover of the health-care system.”

The American people see it differently.

Unlike 15 years ago, they have direct access to information that is not filtered through the mainstream media. They are frightened of change and newly appreciative of the health system they have.

The one thing that the president missed in putting health reform at the top of his “change” agenda is that the thing people cherish most about health care is security. Change scares them, as politicians across the land are suddenly seeing.

Kim Strassel writes in The Wall Street Journal today about a Democratic congressman from Idaho, elected last year by a slim 4,000-vote margin, who is a solid Blue Dog conservative. But if Rep. Walt Minnick is forced to vote with his party on health reform, it could very well cost him his seat. That’s the dilemma that the Democrats face.

And don’t miss a column today by Charles Krauthammer who sees tort reform as an important leveraging point in the health reform debate. He recommends that Congress “Strip away current inefficiencies before remaking one-sixth of the U.S. economy. . .

“Yet today’s ruling Democrats propose to fix our extremely high-quality (but inefficient and therefore expensive) health-care system with 1,000 pages of additional curlicued complexity. . . with the promise that this massive concoction will lower costs.

“This is all quite mad. It creates a Rube Goldberg system that simply multiplies the current inefficiencies and arbitrariness, thus producing staggering deficits with less choice and lower-quality care. That’s why the administration can’t sell Obamacare.”

He offers a two-part plan to combine tort reform and real health insurance reform that fixes the tax treatment of health insurance. “This entire system is an accident of World War II wage and price controls. It’s economically senseless. It makes people stay in jobs they hate, decreasing labor mobility and therefore overall productivity. And it needlessly increases the anxiety of losing your job by raising the additional specter of going bankrupt through illness.”

There is a better way.

Another gaffe. The president is just not helping his own cause with some of his off-the-cuff remarks:

At the AARP town hall meeting last week, a woman named Mary told the president that she was concerned about the health reform legislation he is backing. “I have been told there is a clause in there that everyone that’s Medicare age will be visited and told to decide how they wish to die. This bothers me greatly and I’d like for you to promise me that this is not in this bill.”

Then the president responded: “You know, I guarantee you, first of all, we just don’t have enough government workers to send to talk to everybody, to find out how they want to die.”

Good grief! You don’t have enough government workers to do this? The president went on with a lengthy answer to recover, saying basically that the legislation allows people a consultation to help them prepare a living will. But still. . .

Coalition building: We are expanding our consensus-building efforts by creating a new coalitions division at the Galen Institute, led by Jamie Burke and ably assisted by Sterling Meyers. They will be working to build and strengthen coalitions that support increased competition and consumer choice in the health sector.

Jamie most recently served as the White House Liaison and National Outreach Officer at U.S. Department of Health and Human Services. She has 20 years of experience in senior positions inside and outside government as an organizer and communicator on behalf of positive, free market ideas. She continues to offer similar expertise to other clients through Burke Consulting Company LLC.

Sterling Meyers is coalitions coordinator at the Galen Institute and a Koch Associate with the Charles G. Koch Charitable Foundation. Sterling recently received her B.A. in Communication Studies from Cedarville University in Ohio and has worked as an intern at The Washington Times and for a non-profit organization devoted to international relief and development work.

Welcome to both. They make a great team and are a terrific addition to our coalitions and communications activities at the Galen Institute.

August plans: We’re going to skip next week’s issue of Health Policy Matters because I will be on a six-city speaking tour. I will report back from the road about what I see.

Also: I’ve joined the world of Twitter. I won’t be sending you tweets about what I had for lunch, but will keep you updated on my travels, speeches, media appearances, etc. I’d love for you to follow me at gracemarietweet. And Tara Persico regularly updates our Galen Institute account. Please follow us at galeninstitute.

And finally, look for an announcement about a new website we will launch soon called “Health Reform Hub.” It will be the one place you will want to visit for all the news in every form about the health reform debate, focusing on the terrific work of our colleagues in the free-market health policy community. Watch this space! This debate is going to go on and on, and you will definitely want to bookmark our new site.

Grace-Marie Turner

Recent News Articles and Studies

Health Care in America
Interview with Grace-Marie Turner, Galen Institute
The Prognosis for National Health Insurance
Tax Subsidies for Private Health Insurance: Who Benefits and At What Cost?
Jammed Access: Widening the Front Door to Healthcare
ObamaCare’s Real Price Tag
No Good Deed Goes Unpunished: Enforcing an Individual Health Insurance Mandate
The High Cost of Medical Malpractice
Low Life Expectancy in the United States: Is the Health Care System at Fault?
Hospitals Creaking Under the Strain as NHS Vacancies Are Left Unfilled

GALEN IN THE NEWS

Health Care in America
Grace-Marie Turner, Galen Institute
Radio America, 08/09

Grace-Marie Turner, a health policy contributor for Radio America, provides a historical perspective on the health care debate.

Interview with Grace-Marie Turner, Galen Institute
Medical Travel Today, 08/07/09

Turner offers her thoughts on how Americans could benefit from more competition and more transparency in health care, including medical travel.

HEALTH REFORM

The Prognosis for National Health Insurance
Dr. Arthur Laffer, Donna Arduin, and Dr. Wayne Winegarden
Texas Public Policy Foundation, 08/09

The health reform plans pending in Congress would cause more harm than good, Laffer et al. write. They find that legislation that provided an additional $1 trillion in federal health care spending would increase health care costs and medical price inflation, slow our national economy, and still leave 30 million Americans uninsured. Laffer emphasizes the need for patient-centered reform and urges Congress to work toward a solution that will not penalize the 70% of Americans who currently are happy with their health care arrangements, and that will not increase the federal deficit while only reducing the number of uninsured Americans by roughly one-third. Reforms need to focus on reducing costs by closing what Dr. Laffer has coined the “health care wedge” — a separation of effort and reward by which a patient understands the true costs of their health care and is therefore driven to be more efficient in his or her spending.

Tax Subsidies for Private Health Insurance: Who Benefits and At What Cost?
Len Burman, Surachai Khitatrakun, and Sarah Goodell
Robert Wood Johnson Foundation, 07/09

Federal tax subsidies for employer-sponsored insurance (ESI) will amount to more than $240 billion in 2010, Burman et al. write. Higher-income workers benefit the most from the current tax subsidies. They are in a higher tax bracket, which makes the exclusion more valuable, and are more likely to work for employers offering ESI and more likely to take up ESI than lower-income workers. Lower-income families pay the largest percent of income on insurance, but receive the smallest tax subsidy. These families spend more than a quarter of their income on health insurance coverage.

Jammed Access: Widening the Front Door to Healthcare
PricewaterhouseCoopers’ Health Research Institute, 08/09

In a recent survey of 1,000 American consumers, more than half (55%) believe that if universal health insurance coverage is passed by Congress, it would not ensure equal access to care because of capacity constraints, particularly in hospital emergency rooms, according to this PwC Health Research Institute report. Other key findings:

  • Patients covered by Medicaid use ERs at twice the rate of the uninsured.
  • More than half of people who went to an ER in the past year said they went for a reason other than an emergency.
  • Waiting time to see a doctor continues to increase. One in four consumers and one-third of Medicaid patients said it takes more than 30 days to see a doctor.

In a separate report, PwC’s Health Research Institute finds that growth in medical costs is expected to be 9%, slightly lower than in previous years; however, it will still outpace inflation and increases in worker earnings.

ObamaCare’s Real Price Tag
The Wall Street Journal, 08/06/09

The press corps has noticed the Congressional Budget Office’s estimate that the House health bill increases the deficit by $239 billion over the next decade. But the underreported news is the new spending that will continue to increase well beyond the 10-year period that CBO examines, and that this blowout will overwhelm even the House Democrats’ huge tax increases, Medicare spending cuts and other “pay fors,” The Wall Street Journal writes. ObamaCare’s deficit hole will eventually have to be filled one way or another — along with Medicare’s unfunded liability of some $37 trillion. That means either reaching ever-deeper into middle-class pockets with taxes, probably with a European-style value-added tax that will depress economic growth, or with the very restrictions on care and reimbursement that have been imposed on Medicare itself as costs exploded.

HEALTH INSURANCE

No Good Deed Goes Unpunished: Enforcing an Individual Health Insurance Mandate
William G. Schiffbauer, Esq.
Reproduced with permission from Health Plan & Provider Report, 15 HPPR 836 (Jul. 15, 2009).
Copyright 2009 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com

An individual health insurance mandate that is enforced through the individual income tax system would be complicated and its efficacy questionable, Schiffbauer writes. This is because the income tax compliance system operates retrospectively and not all of the uninsured are participants in the income tax filing system. Individuals who have health insurance may be surprised at the level of administrative burden required for those who already have health insurance to prove that they are in compliance with the mandate. Further, there will be increased costs and burdens placed on the IRS to process and verify the additional “health insurance information returns” and to match that information between individuals, employers, and insurers for compliance purposes. Most surely, there will also be an increased and more intrusive role for the IRS in the daily lives of both insured and uninsured Americans.

The High Cost of Medical Malpractice
Diana Furchtgott-Roth, Hudson Institute
RealClearMarkets, 08/06/09

About ten cents of every dollar paid for health care goes to the malpractice insurance doctors must have to protect themselves in case patients sue them, Furchtgott-Roth writes. Malpractice premiums cost doctors tens of thousands of dollars a year, not because an individual doctor has a history of making mistakes, but because in some states juries make excessively generous awards, knowing that insurance companies will pay. The 1,000-plus page health care bill under consideration in the House mentions the word “malpractice” only once, in the context of “malpractice geographic indices” for determining physician reimbursements for Medicare services. Yet crafters of the health care bill cannot find a single section to limit costs of lawsuits. Congress could give incentives to states to reduce the costs lawyers’ fees place on the health care system while still protecting patients by limiting non-economic and punitive damages; limiting lawyers’ fees; modifying “joint and several liability”; and shortening statutes of limitations.

INTERNATIONAL HEALTH SYSTEMS

Low Life Expectancy in the United States: Is the Health Care System at Fault?
Samuel H. Preston and Jessica Y. Ho
University of Pennsylvania, 07/09

By standards of OECD countries, the U.S. does well in terms of screening for cancer, survival rates from cancer, survival rates after heart attacks and strokes, and medication of individuals with high levels of blood pressure or cholesterol, Preston and Ho write. They consider in greater depth mortality from prostate cancer and breast cancer, diseases for which effective methods of identification and treatment have been developed and where behavioral factors do not play a dominant role. They show that the U.S. has had significantly faster declines in mortality from these two diseases than comparison countries.

Hospitals Creaking Under the Strain as NHS Vacancies Are Left Unfilled
David Rose
The Times, 08/07/09

Medical leaders have warned that shortages of doctors, nurses and other clinical staff are putting the NHS under unsustainable pressure as a generation of health workers enters retirement amid cutbacks in junior doctors’ working hours, The Times reports. New data from the NHS Information Centre revealed that more than one in twenty medical and dental posts were vacant at the end of March, in some cases for months at a time, while thousands of nursing and midwifery posts were also unfilled. Stephen O’Brien, the Shadow Health Minister, said: “With swine flu continuing to spread and the European Working Time Directive limiting doctors’ working hours, this is the worst time for staff vacancies across the NHS to rise.”

Upcoming Events

Expanding Access to Care: More than Just an Insurance Card?
Alliance for Health Reform Briefing
Monday, August 10, 2009, 12:15 p.m. – 2:00 p.m.
Washington, DC

Health Care Roundtable
The Heartland Institute Event
Thursday, August 13, 2009, 8:00 a.m. – 12:00 p.m.
Chicago, IL

Checkup on Federal Health Reform: Notes From Oregon Lawmakers
Oregon Health Forum Event
Tuesday, August 18, 2009, 7:00 a.m. – 9:00 a.m.
Portland, OR

Coming Together to Explain Changes in Healthcare Legislation
Herbruck Alder Event
Thursday, August 20, 2009, 8:00 a.m. – 1:30 p.m.
Westlake, OH
Grace-Marie Turner will give the keynote presentation, “What’s on the Horizon for Health Reform in the U.S.?”

The Thousand-Page Prescription: Is a Federal Take-Over the Cure for America’s Health Crisis?
Pacific Research Institute Event
Wednesday, August 26, 2009, 5:45 p.m. – 7:00 p.m.
San Francisco, CA

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.

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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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