Setting the Eagle Free

Jack Kemp was a visionary leader with an enduring passion for liberty and an unfailing love for the American dream, and the airwaves have been filled this week with testimonials about him and his transformative ideas.

I first met Jack Kemp in the 1970s, when he still was a relatively unknown member of Congress and I was a Washington correspondent for the San Diego Union.

Jack had played football for the San Diego Chargers before being traded to the Buffalo Bills in 1962. San Diegans were interested in this man they knew as a star quarterback and who now was a congressman from Buffalo talking about cutting taxes to spur economic growth.

Cutting taxes was an idea that resonated in California. A tax revolt was brewing that led to a statewide voter initiative to cap property taxes and ultimately helped sweep President Reagan into office in 1980. The Kemp-Roth bill was enacted in 1981 with major across-the-board income tax cuts that led to a decade of economic prosperity.

I wrote the first newspaper article about Jack Kemp and his economic ideas in 1978 for the San Diego Union — the first such article, I think, published by any newspaper outside of Buffalo.

My interest in the Laffer curve and supply-side economics led to a 30-year friendship with Jack: After leaving journalism, I was a volunteer speech writer for his presidential campaign in 1988 and served in 1995-96 as executive director of the National Commission on Economic Growth and Tax Reform, which Jack chaired alongside Heritage President Ed Feulner.

The Kemp Commission, as it was widely known, produced visionary recommendations to reform our impossibly complex Internal Revenue Code. The report, Unleashing America's Potential: A pro-growth, pro-family tax system for the twenty-first century, is still very much worth reading, probably more now than ever.

Jack's introduction was entitled "Setting the Eagle Free" — a summation of the vision that guided all of his works, as congressman, as secretary of Housing and Urban Development, as a vice-presidential candidate, and much more.

"The eagle, the symbol of our nation, represents the creative spirit, talents, and aspirations of the American people," he wrote. "We want a tax code and an overall economy that will liberate the American dream and remove the barriers to upward social and economic mobility."

"The charge of this commission and the intent of our recommendations," he concluded, "is to open the door and help set that eagle in all of us free."

He had an unshakable belief in the potential of every single person and spent his career advancing ideas to give everyone a chance to achieve his or her potential.

One of the most touching of the many tributes exchanged on e-mail this week was from "the leadership and families in public housing, affordable housing and Section Eight." Secretary Kemp "understood what it meant to serve the poor," and he "transformed our communities resulting in the saving of lives," they wrote. "We are eternally grateful. . .most importantly to be able to call him friend."

Jack died much too soon at age 73 last Saturday, but his legacy will live on through the thousands of people whose lives and careers he influenced and helped guide, but none more than his beloved children and grandchildren. Our thoughts and prayers will go out to them, and especially to his wonderful, devoted, and loving wife, Joanne, during today's memorial service at National Cathedral and in the years ahead as Jack's legacy lives on.

Grace-Marie Turner

Recent News Articles and Studies

Senate Finance Committee Proposals for Delivery System Reform: Analysis of Comparative Effectiveness Review Options
Why a New Public Plan Will Not Improve American Health Care
Canadian Care: So Many Lessons, So Little Time
GE Launches 'Healthymagination'; Will Commit $6 Billion to Enable Better Health Focusing on Cost, Access and Quality
Swine-Flu Hysteria: Who Dunnit
Big Pharma Can Save Us
U.S. Market for Vaccines: Characteristics, Case Studies, and Controversies
Catch Me If You Can: Solutions to STOP Medicare and Medicaid Fraud

GALEN IN THE NEWS

Senate Finance Committee Proposals for Delivery System Reform: Analysis of Comparative Effectiveness Review Options
Grace-Marie Turner
Galen Institute, 05/07/09

The Senate Finance Committee is considering options to establish a "long-term or permanent framework to set national priorities for comparative clinical effectiveness research" (CER). Options include funding existing government entities through annual appropriations, but, as the committee points out, this "discretionary funding can be inconsistent and unstable. Also, the research agenda could be unduly influenced through the political process." Unfortunately, the other options presented by the committee lend themselves to the same problems or create new ones. The Finance Committee considers establishing a new "private, non-profit corporation that would generate and synthesize evidence on what works in health care". This independent institute would be governed by a board of "clinicians, patients, manufacturers, as well as researchers, scientists and private and public payers," and its work would be reviewed by the GAO. That would mean an outside group without any direct accountability to taxpayers would be directing spending of tens of billions of taxpayer dollars in research and impact treatment available to virtually all Americans. The difficulty the Finance Committee clearly has in even establishing an accountable CER process is a harbinger of the complexities to come if this initiative were to be expanded, institutionalized, and centralized in the federal government, concludes Turner.

HEALTH REFORM

Why a New Public Plan Will Not Improve American Health Care
Walton J. Francis
The Heritage Foundation, 05/05/09

Walt Francis, an expert on the Federal Employees Health Benefits Program, questions the government's ability to run the public health insurance plan congressional leaders are advocating. No government entity has ever run a real full-featured health insurance plan directly, and real-world experience in both state and federal governments in running public health plans is limited. Original Medicare is not a true insurance plan, nor is the FEHBP. The FEHBP is an employee compensation program that contracts with private health plans to compete for enrollees through a voucher-like premium subsidy. States that do offer health plans for their employees operate the plan through a private insurance firm such as Blue Cross. Few would call this
a "public" plan. More fundamentally, states sponsoring such plans typically offer only one PPO plan and a handful of HMO options. This is hardly robust market competition, and the state-sponsored plans would be unlikely to survive in a truly competitive market. A proposed government-run plan would likely fail rapidly as it attempted to be as nimble as private plans in providing the kinds of coverage and services desired by potential enrollees in a dynamic competitive market, concludes Francis.

Others also have weighed in this week on the public plan:

  • The simple fact is that if the government is sponsoring a competition within an exchange and if it is also the owner of one of the plans, there can be little doubt that the rules and regulations promulgated by Washington will favor the government-sponsored plan, writes The Heritage Foundation's Stuart Butler. A "competing" public plan as a choice will inevitably become a public plan for all.
  • Although the public plan will be touted as just one choice among many at the beginning, expect many employers to dump their employees into the public plan, writes Merrill Matthews of the Council for Affordable Health Insurance. Why should they pay the extra dollars for private insurance if there's a less expensive alternative? The stakeholders in the health care system recognize the negative impact of the public plan. It's the closest we've been to creating a "Medicare for all" plan, and it's just around the corner.
  • A federal government insurance company, with its subsidies, will attract more and more people from private plans, writes Steve Forbes. Instead of overtly running providers such as Aetna and UnitedHealth out of business, the federal government will take them over through mandating what they can and cannot do, as well as "reinsuring" private carriers for costs above certain levels. In other words, non-government insurance companies will become vassals and virtual subsidiaries of the Washington-run system.

 

INTERNATIONAL HEALTH SYSTEMS

Canadian Care: So Many Lessons, So Little Time
Brian Lee Crowley, Atlantic Institute for Market Studies and Galen Institute
Testimony before the Pennsylvania House Republican Policy Committee, 05/06/09

Brian Lee Crowley testified before Pennsylvania legislators this week, on behalf of AIMS and the Galen Institute, to describe the minefield ahead in further politicizing health care. Crowley uses a mix of in-depth research and personal experience to show the faults within Canadian health care and the lessons Americans can draw from its experience. As politicians are drawn into ever more responsibility for health care decisions and outcomes, he says, it creates a dynamic in which the politicians must demand ever more control over the system. Yet at the same time, politicians are never willing to impose the ruinous taxes that would be necessary to fund a system in which people make their own decisions about their health care but governments pick up the tab. Rationing is the inevitable outcome. The experience has been similar in many countries where governments have set up public insurance schemes in competition with private schemes. Almost universally, conditions are created where private insurers cannot make money, or where they form a government-sponsored cartel and essentially cease to compete with one another in any serious way on price or quality. When private providers face circumstances where they can only fail, government becomes de facto the monopoly supplier.

INNOVATION

GE Launches 'Healthymagination'; Will Commit $6 Billion to Enable Better Health Focusing on Cost, Access and Quality
GE, 05/07/09

General Electric has launched a "healthymagination" initiative to reduce health care costs, improve quality, and expand access for millions of people. CE says it will invest $3 billion in research and development by 2015 to launch at least 100 innovations that lower cost, increase access to coverage and care, and measurably improve quality. GE will focus on four critical needs: accelerating health care information technology; targeting high-tech products to more affordable price points; broadening access to the underserved; and supporting consumer-driven health. The company also is expanding its employee health efforts by creating new wellness and healthy worksite programs and providing personal health records to employees to identify health risks and track behaviors.

PRESCRIPTION DRUGS

Swine-Flu Hysteria: Who Dunnit
Henry I. Miller, Hoover Institution
New York Post, 05/07/09

The swine flu outbreak could serve as a valuable wake-up call, making us think critically about who'll be entrusted with public health decisions, writes Miller. Pronouncements from the World Health Organization (WHO) were disappointing, and most flu and public health experts consider the WHO's decision last week to raise the pandemic flu threat to Level 5 to have been alarmist and unwarranted. Flawed decision-making is typical of the WHO, a scientifically mediocre, unaccountable and self-serving organization whose leadership is based on a kind of international affirmation action, writes Miller. The WHO may be well-equipped to perform and report worldwide surveillance, but its policy role should be limited. Worst of all, the WHO made a huge misstep in putting vaccine companies on notice that it was likely to request that some commercial-flu-vaccine production be directed at H1N1 swine flu. Even if we did begin to formulate and manufacture a vaccine immediately, it would arrive far too late to attenuate the first wave of infections.

The Galen Institute's Grace-Marie Turner discussed the swine flu threat on Washington D.C.'s Fox 5. Click here to watch the interview.

Big Pharma Can Save Us
Paul Howard, Manhattan Institute
Forbes.com, 04/30/09

It's ironic that the specter of a swine-flu pandemic coincides with the health care reform debate in the U.S., writes Howard. President Obama and his party want to win the war against swine flu, cancer and Alzheimer's — but they also want price controls on the products devised by drug-company scientists. Novartis, Sanofi-Aventis and GlaxoSmithKline (and their investors) have a vested interest in helping us decode and treat new plagues. As long as we keep the industry that makes the cures hale and hearty — abjuring price controls, ruinous lawsuits and unnecessary red tape, the policy equivalent of
leeches on innovation — pandemics may emerge, but they need not ravage whole nations. Pharmaceutical companies now have the tools to map the genomes of new viruses and bacteria in hours and days, pinpointing the genes responsible for illness and death and priming antibiotics and vaccines to target the enemy.

Over the last five years, the vaccine market has re-emerged as a key industry and a growing business for the large drug firms, which have invested heavily in better ways to make these products, writes AEI's Scott Gottlieb. But our improved preparedness is not a sure thing, nor are continued advances in vaccines that can reduce risks. We need to strike a careful balance between policies that enable better access to today's medicines and incentives that invest in tomorrow's innovations. As the biology of threats like swine flu grow more complex, there is no guarantee our medical industry will be robust enough to keep pace with it.

U.S. Market for Vaccines: Characteristics, Case Studies, and Controversies
Ernst R. Berndt, Rena N. Denoncourt, and Anjil C. Warner
American Enterprise Institute, 05/09

There is intense interest among scholars and the public about the risks, benefits, and pricing of pharmaceuticals — but relatively little attention has been devoted to vaccine markets and the political, economic, and regulatory factors that influence their development. In this study, Berndt, Denoncourt, and Warner investigate the key business drivers and challenges of vaccine markets, the complex interactions among their important stakeholders, and the emerging opportunities for growth.

MEDICARE AND MEDICAID

Catch Me If You Can: Solutions to STOP Medicare and Medicaid Fraud
James Frogue, Center for Health Transformation
Testimony before U.S. Senate Special Committee on Aging, 05/06/09

The Medicare and Medicaid systems we have in place today, in particular the fee-for-service portions which account for the majority of enrollees and dollars, beg for fraud, waste, and abuse, writes Frogue. They cheat taxpayers, honest doctors, and hospitals, and most importantly tens of millions of poor and elderly Americans who depend on these vital programs as their only lifelines to medical care. A GAO study in January of 2009 estimated that a full 10% of paid Medicaid claims in 2007 were improper — that is a total of $32.7 billion. Frogue describes several recommendations for reform: 1) putting all Medicare and Medicaid claims and patient encounter data online for public access; 2) changing Medicaid from the open-ended federal match system to one in which the federal financial contribution is fully transparent upfront and based on the number of people in poverty in that state; 3) requiring more timely updates from states on Medicaid enrollment data; and 4) moving Medicare and Medicaid beneficiaries into account-based plans where each individual has direct and immediate financial incentives to engage in behaviors that improve health status.

Click here for ABC's World News story on Medicare fraud.

Upcoming Events

You Can't Even Talk About It
ABC News 20/20 Special
Friday, May 8, 2009
Check your local listings for channel and show time.

Health Insurance Exchanges: See How They Run
Alliance for Health Reform Briefing
Monday, May 11, 2009, 12:15 p.m. – 2:15 p.m.
Washington, DC

Conservative Principles of Health Care Reform: The Road Ahead
The Heritage Foundation Event
Tuesday, May 12, 2009, 12:00 p.m.
Washington, DC

Medicare under Pressure: The 2009 Medicare Trustees' Report
American Enterprise Institute Event
Wednesday, May 13, 2009, 9:15 a.m. – 11:00 a.m.
Washington, DC

Medicare and Health Care: Prospects for Reform
National Center for Policy Analysis Congressional Briefing
Wednesday, May 13, 2009, 9:30 a.m.
Washington, DC
For more information, contact Charlie Sauer at 202-220-3082 or Charlie.Sauer@ncpa.org.

The Economic Stimulus Package and Healthcare Technology: How will the stimulus money flow, and how can you prepare?
TAG Health, GHIE, and Georgia HIMSS Event
Thursday, May 14, 2009, 7:30 a.m. – 12:00 p.m.
Atlanta, GA

Medical Innovation: The 21st Century Solution for 21st Century Health Care
Center for Medicine in the Public Interest Event
Thursday, May 14, 2009, 9:30 a.m. – 10:30 a.m.
Washington, DC

The Welfare State We're In
Cato Institute Book Forum
Monday, May 18, 2009, 12:00 p.m.
Washington, DC

The Public Option
Coalition for Affordable Health Coverage Briefing
Monday, May 18, 2009, 2:00 p.m. – 3:45 p.m.
Washington, DC
For more information, contact Rick Dudley at rick.dudley@cahc.net.

Second Annual Hospital CEO Roundtable
Oregon Health Forum Event
Tuesday, May 19, 2009, 7:00 a.m. – 9:00 a.m.
Portland, OR

Building a Federal Health Board: Impact on Texas
Texas Health Institute Event
Friday, May 22, 2009, 8:00 a.m. – 12:00 p.m.
Houston, TX

 

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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. F
or more information about the newsletter and our organization, please visit our website at www.galen.org.

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