It's Not Over Yet

Highlights

Dance with me: Senate Finance Committee Chairman Max Baucus spent much of the summer dancing with the Congressional Budget Office (CBO) to figure out how to squeeze his health reform bill into its scoring framework and get a positive outcome.

Surprise, surprise, he succeeded! The CBO said on Wednesday that the Baucus bill will lead to a "net reduction in the federal budget deficit of $49 billion" over the next 10 years and that 94% of Americans will have health insurance.

But then we get into those devilish details. . .

The revenues and savings are fictitious and only will come about if you take the American people for chumps.

For example, the bill requires individuals to buy health insurance and fines them up to $3,800 a year for a family if they don't comply. The CBO assumes that people will continue to pay the fine year after year, estimating $20 billion in penalties over six years. (The mandate doesn't trigger until 2013. And here's an odd coincidence: That's just after the next presidential election.)

And they assume that employers will get increasingly stupid, paying more and more in "free-rider penalties" every year, adding up to $27 billion in fines by 2019.

And here's the biggest revenue raiser: The CBO assumes that people will not change their behavior but will continue to buy Cadillac health insurance and that the government will collect $215 billion from excise taxes on the expensive policies by 2019.

I thought this USA Today story from yesterday pretty much summed up the onerous individual mandate, employer fines, and new taxes.

And don't get me started on whether or not they really, truly, will be able to wring more than $500 billion in savings and "efficiencies" out of Medicare, Medicaid, and other federal programs.

There's so much more. We will have plenty of time to get into more details. The CBO's letter to Sen. Baucus contains a concise five-page summary of the plan here if you don't want to wade through hundreds of pages of text.

A congressional leader was overheard earlier this month saying that they just need to get members away from their constituents so they can pass health reform.

Word is that they have cancelled the traditional Columbus Day recess in October to keep them from going home to hold any more of those dreaded town hall meetings. They don't want members mingling with actual voters, or they might not get this thing passed!

Don't hold your breath.

 

***

Dissent is brewing: We are hearing that some conservative Democrats are approaching Republicans to see if they might be open to working on an alternative health reform bill. At least that's the word from Rep. Bill Cassidy (R-La.), a physician who represents Baton Rouge in Congress.

Many conservative Democrats are in a terribly difficult spot. After the fiery town hall meetings back home in August, they know their seats could be at risk if they support the 1,000-page, $1.5 trillion, big-government health reform bill their leadership is pushing through the House. But they also know, as do Republicans, that they must be FOR something. Let's hope that Speaker Pelosi doesn't hear about this. Heaven forbid that we might have a sensible bipartisan compromise brewing among the people's representatives.

 

***

A concise summary: The New York Times, of all places, published on Wednesday a letter to the editor I submitted that offers a concise summary of steps we could take toward real health reform.

I wrote in response to a column by Nicholas D. Kristof entitled "The Body Count at Home" about a young woman who died unnecessarily from complications of lupus after losing her job and her health insurance. Her story shows, I believe, why we must reform the way people get health insurance in the United States. I wrote:

 

Nikki White, who died of lupus at 32, clearly needed health insurance, but that doesn't mean we need the government-controlled health system that Mr. Kristof seems to admire.

Tying health insurance to the workplace isn't working for tens of millions of people in our highly mobile work force, and it tragically failed Ms. White. She could have received the care that she needed if she had insurance that was stable and portable and that was not dependent upon her job.

We need to provide subsidies directly to people so they can purchase the health coverage of their choice. We need to give people more options in how they purchase insurance that are not necessarily reliant on the workplace, so they can get affordable, portable coverage.

Once people have insurance, they should be guaranteed they can renew it. We need a stronger safety net at the local and state levels to provide extra help to people with expensive and chronic medical needs.

If we would start by making these sensible reforms, which could gain bipartisan support, we could help millions like Ms. White without the divisiveness that we see in today's health reform debate.

 

***

Galen Highlights: We have a new publication produced by our special projects director, Jena Persico. Jena has compiled a book, which you can access here, that highlights our activities at the Galen Institute for the first six months of this year in educating the debate about health reform. This 194 page book summarizes the media interviews we've conducted, meetings and conferences we have held, and articles we've had published that have reached more than 200 million readers.

A note of thanks to the terrific team here at the Galen Institute and to our many supporters who make all of this possible. But we have much more to do if we are to stop the expansion of government control over our health sector. I hope that you will consider making a special gift at this time to help us continue to get our message out to millions of Americans. The Galen Institute is a non-profit, non-partisan, 501(c)(3) organization so your gift is tax-deductible. Thank you for your commitment and support.

Grace-Marie Turner

Recent News Articles and Studies

Innovation, Not I
ntervention

Employer Health Benefits 2009 Annual Survey
The Politics and Principles of Real Health Care Reform
How a New 'Public Plan' Could Affect Hospitals' Finances and Private Insurance Premiums
Don't Forget
State Issues
How What We Think We Know about the Uninsured Really Adds Up
How to Build a Pharmaceutical Industry: Quebec's Story
The Menu of Malpractice Reforms
Study Gives High Marks to Retailers' Clinics

GALEN IN THE NEWS

Innovation, Not Intervention
Grace-Marie Turner, Galen Institute
Forbes.com, 09/18/09

The Utah Health Insurance Exchange demonstrates why state-level policy innovation — and not top-down, federal planning — is the key to improving America's health sector, Turner writes. Run by just two Utah officials, with almost no new taxpayer money, the Exchange provides an online portal where employees of small businesses can combine contributions from their employers with their own pre-tax dollars to purchase the policy of their choice. There are currently 72 plans offered by five private insurance companies, with individual premiums as low as $35 a month (and family premiums as low as $135). The Exchange being contemplated in Washington is very different: It would put Congress in charge of determining what constitutes acceptable insurance coverage with limited options of costly, impersonal, one-size-fits-all programs.

HEALTH INSURANCE

Employer Health Benefits 2009 Annual Survey
Kaiser Family Foundation and the Health Research & Educational Trust, 09/15/09

Premiums for employer-sponsored health insurance rose to $13,375 annually for family coverage this year, with family premiums rising by 5 percent. Total premiums were lowest for those in consumer-directed plans — an average of $11,083 for a family. The percentage of firms with 1,000 or more workers offering a consumer-directed plan increased from 22% in 2008 to 28% in 2009.

HEALTH REFORM

The Politics and Principles of Real Health Care Reform
Joseph Antos
American Enterprise Institute, 09/09

The health care system is ready for change, but the highly regulated reforms President Obama and Congress are currently discussing are unlikely to reduce costs or improve outcomes, Antos writes. While purely market-based reform will not be a panacea for the problems in the American health system, market discipline is necessary for reforms to be successful. We should strengthen effective competition that rewards initiative, and foster a system that does not protect poor business decisions with unearned taxpayer dollars. We should provide help where it is most needed, and give consumers (and their doctors) the tools to make good decisions about their insurance and their medical care. We should lay the foundation for a new understanding of the rights and responsibilities of individuals, and we should take steps to ensure that the reforms enacted this year are sustainable over the long term, Antos concludes.

How a New 'Public Plan' Could Affect Hospitals' Finances and Private Insurance Premiums
Allen Dobson, Joan E. DaVanzo, Audrey M. El-Gamil, and Gregory Berger, Dobson DaVanzo and Associates LLC
Health Affairs Web Exclusive, 09/15/09

A new government-run plan could sharply increase private insurance premiums if the plan were aggressively implemented to include large numbers of those who currently have private health insurance, write Dobson et al. of the health care consulting firm Dobson Davanzo and Associates LLC. Because public programs often pay less than costs, many hospitals are not otherwise able to cover their costs, modernize, and stay current with emerging technology. To remedy this condition, hospitals may attempt to shift costs to the privately insured to offset other payers' payment shortfalls relative to costs.

Don't Forget
Steve Chapman
Chicago Tribune, 09/14/09

Republicans fault President Obama for plans that would greatly expand federal outlays on health care, enlarge the federal role in the provision of medicine, doom private insurance, and wrestle Aunt Sally into the grave. But while they're heaping blame on Obama, they need to save a share for someone else: themselves, Chapman writes. The truth is Republicans just can't muster an interest in health care reform until a Democratic president comes along and offers legislation, which is their cue to wake up and scream in horror. They solemnly agree the existing system has a host of serious flaws. But they can never get excited about fixing them — only about making sure the Democrats don't get to.

STATE ISSUES

  • Massachusetts' major health insurers plan to raise premiums by about 10% next year, prompting many employers to reduce benefits and shift additional costs to workers, The Boston Globe writes. Increases will range from 7 to 12%, capping a decade of consecutive double-digit premium increases, according to a Globe survey of the state's top health insurers.

     

  • Seven physician specialties in Massachusetts are operating under severe labor market conditions and the situation in primary care continues to weaken, according to the Massachusetts Medical Society's eighth annual Physician Workforce Study. The study also finds that the percentage of primary care practices closed to new patients is the highest it's ever been, as recorded by the Medical Society.

     

  • There is a hidden aspect of Massachusetts' Commonwealth Care program that may drive future costs far higher than originally projected, writes Craig Richardson, professor of economics at Winston-Salem State University. Embedded within the heavily subsidized program are several perverse incentives affecting firms and individuals. The program unintentionally gives incentives for smaller firms to discontinue health insurance so that their employees can sign up for cheaper state-subsidized care. Further, it gives incentives for employed individuals to earn less in order to qualify for higher benefits.

 

THE UNINSURED

How What We Think We Know about the Uninsured Really Adds Up
Thomas P. Miller, American Enterprise Institute
Joint Economic Committee, 09/10/09

Although it is convenient to assign a single number to describe the uninsured, a more robust analysis helps uncover the varied experiences and characteristics of this population. Miller's testimony fo
cuses on what we know, more broadly, about the uninsured; some of the limitations in trying to measure the scope and dimension of the problems of the uninsured; and several often-neglected considerations in assessing the broader issue of how to improve health outcomes at lower overall costs. Miller points out that attributing increased private insurance premiums to any greater uncompensated care costs in treating the uninsured (so-called cost shifting) is a misperception. He adds that the last federal survey to ask the nonelderly about being denied coverage for medical reasons found that only 0.8 percent of them had been denied coverage at any time in the past (accounting for just 1.3 percent of those uninsured in the survey year).

INTERNATIONAL HEALTH SYSTEMS

How to Build a Pharmaceutical Industry: Quebec's Story
David Griller and Daniel Denis
SECOR, 09/09

Montreal attracts almost half of Canada's multinational pharmaceutical investments, and, by most metrics, is a worthy international competitor to any other city renowned for its pharmaceutical industry. Griller and Denis, of the international strategic management consulting firm SECOR, explain how Quebec's far-sighted public policies encouraged investment by multinational firms and spawned a thriving biopharmaceutical cluster.

MALPRACTICE REFORM

The Menu of Malpractice Reforms
Philip K. Howard
The Atlantic, 09/13/09

Philip Howard offers a list of malpractice reforms that could be offered during the health reform debate, including special health courts, caps on damages, medical screening panels, safe harbors for allowing practice guidelines, early offer programs, and apology statutes. All of these reforms have significant merit, but special health courts are by far the most important in reducing defensive medicine, Howard writes.

PATIENT-CENTERED HEALTH CARE

Study Gives High Marks to Retailers' Clinics
Margaret Shapiro
The Washington Post, 09/15/09

Walk-in medical clinics run by CVS, Wal-Mart and other retailers provide care for routine illnesses that is as good as, and costs less than, similar care offered in doctors' offices, hospital emergency rooms and urgent care centers, according to a new Rand Corp. study, The Washington Post reports. The cost savings over emergency rooms, in particular, was quite dramatic. "The costs of care in retail clinics were 30 to 40% lower than in physician offices and urgent care centers and 80% lower than in emergency departments" of hospitals, according to the study. As for quality, the study evaluated care based on 14 indicators, including tests given, whether antibiotics were prescribed and whether follow-up treatment occurred. In general, the researchers found that the "scores of retail clinics were equal to or higher than those of other care settings."

Upcoming Events

The Uninsured: What Do the New Numbers Mean for Health Reform?
Alliance for Health Reform Briefing
Friday, September 18, 2009, 12:15 p.m. – 2:00 p.m.
Washington, DC

Great Expectations: What Lawmakers Must Do to Reform U.S. Health Care
National Press Club Newsmakers Luncheon
Friday, September 18, 2009, 12:30 p.m. – 2:00 p.m.
Washington, DC
For more information, please contact Nora O'Sullivan.

Values Voter Summit
September 18 – 20, 2009
Washington, DC
Grace-Marie Turner will participate in a panel on "ObamaCare: Rationing Your Life Away" at 3:15 p.m. on September 19.

Universal Health Care: Are the People Ready for It?
Woodrow Wilson International Center for Scholars Event
Monday, September 21, 2009, 3:00 p.m. – 5:00 p.m.
Washington, DC

Understanding the Rise of Technological Medicine: Why It's Critical for Health Care Reform
George Washington University School of Public Health and Health Services Brownbag Lunch Seminar
Tuesday, September 22, 2009, 12:00 p.m. – 1:00 p.m.
Washington, DC

Harlingen Healthcare Reform Dialog Meeting
Texas Health Institute Event
Thursday, September 23, 2009
Harlingen, TX

The Economic Consequences of Chairman Rangel's Health Care Tax Increases
The Heritage Foundation Event
Wednesday, September 23, 2009, 12:00 p.m. – 1:00 p.m.
Washington, DC

5th Annual Consumer Health Care Congress
September 30 – October 2, 2009
Alexandria, VA
Grace-Marie Turner will participate in a panel on "Promoting Personal Accountability for Healthy Lifestyle Behaviors and Health Status" at 9:20 a.m. on October 1.

 

***

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.

SHARE THIS ARTICLE

About the author