This Will Not Stand

A key reason that many conservative Democrats were convinced to vote for the health overhaul legislation in March was because the president and other leaders said it would reduce the deficit and put us on a path to long-term entitlement reform.

But any number of independent studies have proven that promise to be false, and nowhere is the case made more forcefully and accurately than in a new paper written for the Galen Institute by budget expert Jim Capretta.

We released the paper, “Why the Obama Health Plan is Not Entitlement Reform,” at a Capitol Hill briefing yesterday, with Rep. Paul Ryan leading off the discussion.

ObamaCare “will collapse under its own weight” Ryan said, adding the legislation does not control costs, does not reduce deficits, and instead adds massive new health care entitlements at a time when we have no idea how to pay for the entitlements we already have.

He argued that allowing the legislation to be implemented unchanged would take us down the path toward a European welfare state “that is not the culture or the spirit of America.”

This “will not stand,” he declared.

“Instead of solving our entitlement crisis, it makes matters worse,” Capretta said. Entitlement spending growth will accelerate, and it will be exacerbated as more than 70 million baby boomers hit age 65.

Capretta argued that “for many years, most Democrats believed Medicare was an innocent bystander to the problem, something like a rail car hooked onto a runaway freight train. But now many Democrats realize that Medicare is the engine pulling the health care train down the track at an accelerating and dangerous pace.”

Medicare must be modernized, he insisted, but he gave example after example of how ObamaCare fails there as well, explaining that government programs designed to increase productivity and lower costs fail as politicians and regulators cave to political pressures.

The way out? Rep. Ryan’s Roadmap. Instead of a top-down, government-directed program rife with price controls and rationing, the Roadmap is a visionary, 21st-century program that empowers consumers to force market reform and improve quality and lower costs.

One component of the Roadmap would give Medicare beneficiaries, starting in 2020, a fixed-dollar contribution they could use to pick the health plan they wanted to join, with private plans competing for their business. This approach has worked with the Medicare prescription drug benefit by bringing the cost of the program down 35 to 40 percent from original estimates.

Gene Steuerle of the Urban Institute was a discussant at the briefing, saying that the Roadmap helps us “think beyond the current debate” and added that the key issue is how to institute “budget restraint” — by individuals making choices that will restrain spending or through constraints imposed by government.

It really matters which direction we choose to restrain spending, Capretta insisted. “Giving Medicare beneficiaries a voucher delivers much more favorable results, with higher quality and lower prices driven by productivity.” Otherwise, he said, we face a dark future of government price controls, rationing, diminished quality, and restricted access to care.

Doug Holtz-Eakin, president of the American Action Forum, insisted that the health overhaul law is hideous with the enormous debt it piles on to an already unsustainable system, which will load the next generation with crushing taxes to pay for growing debt. “I’ll use a technical term here to describe the future for the young people in this room,” he said. “You are toast.”

The whole briefing will be available on webcast starting next week here, and Jim’s paper is a must read and has gotten good news coverage. Kudos to all.

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Prevention: The administration continues to roll out more regulations and new entitlements every week. The budget-buster this week was the long, long list of preventive services health plans must begin providing at no cost to consumers starting in September (unless they can temporarily avoid them by “grandfathering” their health plans).

One headline said: “White House Unveils Free Preventive Services.”

Ah … Another free gift from the government!

Yes, preventive services are good and valuable. Immunizations are included, and they are genuine preventive care. And of course it’s better for many, many reasons for people to get early treatment.

But “free”?

You and I will pay. Look at this list that includes both services and screening, including treatment for alcohol abuse, smoking, drug use, diet and obesity counseling, and screening for a long list of sexually transmitted diseases. I count more than 65 new mandates for “free” covered services which Health Secretary Kathleen Sebelius says will add less than 2 percent to the cost of health insurance.

We’ll be watching this carefully.

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Berwick: We sent you my commentary last week on National Review Online about the White House’s audacious recess appointment of Dr. Don Berwick to head the Centers for Medicare and Medicaid Services.

We expected a firestorm, but not this! The reaction is surely much worse than the White House expected, as it is even taking hits from Democrats like Senate Finance Chairman Max Baucus for going around the constitutionally required confirmation process.

The politics of this are terrible. Here you have a man who has professed his love for Britain’s socialized health system who will be in charge of implementing mountains of ObamaCare regulations — plus his agency’s $800-billion annual budget.

Berwick’s statements about rationing play into the greatest fears of seniors about cuts to the Medicare program. And his hostility to the use of expensive technologies, particularly at the end of life, will come back to haunt him.

“Most people who have serious pain do not need advanced methods; they just need the morphine and counseling that have been available for centuries,” he wrote in the Annals of Internal Medicine.

Why would the White House do this? Berwick’s life is going to be miserable at CMS, and when he does inevitably have to testify before Congress, he will face hostility and even tougher questions.

He has, in one stroke, become the poster-person for everything that people will come to fear and dislike about ObamaCare. Not a good start.

Featured Articles

GALEN IN THE NEWS

 

CONSUMER CHOICE MATTERS

 

HEALTH REFORM

 

STATE ISSUES

 

INTERNATIONAL HEALTH SYSTEMS

 

CLIP OF THE WEEK

Grace-Marie Turner Discusses Capretta Paper, Capitol Hill Briefing

In this week’s “Clip of the Week,” Grace-Marie Turner gives an overview of yesterday’s Galen briefing on Capitol Hill and why both Jim Capretta’s paper and Rep. Paul Ryan’s Roadmap are critical parts of the fight against ObamaCare. Look for video from the event in the coming week on www.galen.org and HealthReformHub.org.
Watch now >>

GALEN IN THE NEWS

Doctors Will Flee Medicare’s Low Payments, Onerous Rules

Grace-Marie Turner, Galen Institute
The Sacramento Bee (online), 07/15/10

The exodus of doctors from Medicare and likely from private practice altogether is accelerating, Turner writes. The signs are undeniable: A 2008 poll by an independent Medicare commission found that 28% of seniors had trouble finding a primary care doctor, up from 24% the year before. Doctors are on the front lines of ObamaCare’s changes, with cuts in Medicare payments and huge new reporting requirements that will add to their paperwork burden. The solution? Congress must restructure Medicare to allow seniors more choice and control over their health spending, including allowing them to continue to join private plans with incentives for doctors to provide more efficient care and to get paid enough to continue seeing patients.

Read More »

CONSUMER CHOICE MATTERS

2010 Consumer Benchmark Report

HSA Bank, 06/21/10

Individuals with consumer-directed health plans and those with traditional insurance share many characteristics: Nearly three out of five are age 45 or older, and more than nine out of ten in both types of plans consider themselves in good health. The differences show in individual responsibility: More people with HSA-compatible health plans were likely to seek less costly treatment, and they were slightly more likely to get preventive care. These findings were according to a benchmark survey released by HSA Bank, one of the nation’s HSA administrators.
Read More »

Medical Tourism Expands as Alternative to Obamacare

Sarah McIntosh
Health Care News, 07/11/10

Costa Rica’s rising medical tourism industry could serve as a test case as providers prepare to benefit from the impact of the new health overhaul law, McIntosh writes. Vicki Morales, owner of Costa Rican Medical Care, maintains there is a positive cultural difference in Costa Rica’s competitive health care marketplace, with doctors offering a wide range of services for cash and credit card payments. In the U.S., a nuclear stress test with a cardiologist and radiologist fees can run close to $7,500, whereas in Costa Rica the same test costs less than $1,000, including consultations. “In the United States, we’ve gotten way off track ? We don’t look at real, personal care and the needs of the individual patient,” said Morales. “It’s important for [providers in Costa Rica] that the patient has a good result. It’s kind of like the caring we had in health care in the U.S. twenty or thirty years ago.”

Read More »

HEALTH REFORM

Bad Medicine: A Guide to the Real Costs and Consequences of the New Health Care Law

Michael D. Tanner
Cato Institute, 07/12/10

The length and complexity of the health overhaul law, combined with a debate that often generated more heat than light, has led to massive confusion about the law’s likely impact. Tanner’s paper analyzes what is and is not in it and what it likely will and will not do. Highlights:

  • The legislation will cost far more than advertised, more than $2.7 trillion over 10 years of full implementation, and will add $352 billion to the national debt over that period.
  • Most American workers and businesses will see little or no change in their skyrocketing insurance costs, while millions of others, including younger and healthier workers and those who buy insurance on their own through the non-group market will actually see their premiums go up faster as a result of this legislation.
  • The new law will increase taxes by more than $669 billion between now and 2019, and the burdens it places on business will significantly reduce economic growth and employment.
  • While the law contains few direct provisions for rationing care, it nonetheless sets the stage for government rationing and interference with how doctors practice medicine.
  • Millions of Americans who are happy with their current health insurance will not be able to keep it.

Read More »

 

In a separate paper, Deloitte examines employer-sponsored health plans and the implications of health care reform for retailers.

Bad Medicine: A Check-Up on the New Federal Health Law

Senator Tom Coburn, M.D. and Senator John Barrasso, M.D.
U.S. Senate, 07/10

The health overhaul law is a lost historic opportunity that fails to address the top health care concerns of the American people, write U.S. Senators and doctors Tom Coburn and John Barrasso in a report that examines implementation of the health overhaul law nearly 100 days after its passage. The report cites data showing jobs already being lost; the immediate prospect of rising health costs as a result of the legislation’s higher taxes and mandates; federal spending and the deficit will increase; rising taxes on the middle class; the loss of coverage that people have now; and the burden on already stressed state budgets.

Read More »

Why the Health Reform Wars Have Only Just Begun

Stuart M. Butler, Ph.D.
The Heritage Foundation, 07/06/10

If the health overhaul law is implemented fully and on schedule, public attention will turn to features of the legislation that were perhaps less obvious during the debate, Butler writes. For example, a struggle will ensue over who ultimately controls the new health exchanges — the states or the federal government. How that is resolved could determine the nature of health insurance in this country. The so-called OPM alternative to the seemingly dead public option will soon be seen to be an end-run for that option. If that remains on the statute book, we could see a far stronger public option than anyone thought possible. Employers and employees will wake up to the fact — indeed, many are already doing so — that the legislation will speed up the erosion of employer-based insurance. And rosy projections that health spending will most likely quickly prove to be an illusion. If — and however — Congress responds to all this, it will mean big changes in access to services and control over the system. The health reform battle is far from over.

Read More »

Think Big: Republicans Should Embrace Paul Ryan’s Road Map

Fred Barnes
The Weekly Standard, 07/19/10

For Republicans, the Road Map authored by congressman Paul Ryan of Wisconsin is the most important proposal in domestic policy since Ronald Reagan embraced supply side economics in the 1980 presidential campaign, Barnes writes. It’s not only the freshest, boldest, and most comprehensive Republican thinking, it’s also the most relevant and perfectly timed to deal with the crises of the moment: economic stagnation, uncontrolled spending, the deficit and long-term debt, soaring tax rates, health care, the housing problem, Social Security, Medicare, and Medicaid. The CBO concluded Ryan’s plan would “make the Social Security and Medicare programs permanently solvent [and] lift the growing debt burden on future generations, and hold federal taxes to no higher than 19% of GDP.”

Read More »

Donald Berwick’s Five-Year Plan v. the iPhone

Paul Howard and David Gratzer, Manhattan Institute
RealClearMarkets, 07/10/10

Dr. Donald Berwick’s prescription for reform — a bolder, more determined bureaucracy — is the wrong strategy for an industry that has labored under increasing government control for the past 50 years, Howard and Gratzer write. Dr. Berwick thinks that the secret to improving American health care is having experts in Washington dictate prices and force process reforms on thousands of hospitals, hundreds of thousands of physicians, and tens of millions of patients, by sheer dint of ambition and will. Alas, he has fallen victim to the Harvard Disease: the idea that having experts peer through reams of data will lead to system wide improvements. Instead, health care is in desperate need of more consumer-driven innovations.

Read More »

Barack Obama’s incredible “recess appointment” of Dr. Donald Berwick to head the Centers for Medicare and Medicaid Services is probably the most significant domestic policy personnel decision in a generation, Daniel Henninger writes in The Wall Street Journal. If the American people want the world Dr. Berwick wishes to give them, that’s their choice. But they must be given that choice with full, televised confirmation hearings.

STATE ISSUES

Costs Soaring After Bay State Health Change

Sally C. Pipes, Pacific Research Institute
Investor’s Business Daily, 06/30/10

Anyone wanting a preview of ObamaCare need just focus on Massachusetts, the state that provided the blueprint for Obama’s plan, Pipes writes. A new study by professors John Cogan, Glenn Hubbard, and Dan Kessler finds that prices in Massachusetts are increasing at rates greater than national trend lines and greater than rates in the Bay State prior to reform. Prices in Massachusetts are increasing 5.7% more than in other states, and in Boston, prices for employer-provided family plans are increasing 8.2% faster than in other large metropolitan areas. Post-reform, health care prices are out of control and emergency rooms are overcrowded, writes Pipes. Among former Gov. Romney’s favorite arguments for reform was that it would shift dollars from inefficient emergency room care to the more efficient venue of the primary care doctor. But The Boston Globe reports that the number of people visiting hospital emergency rooms has risen by 9% from 2004 to 2008, as newly insured residents entered the health care system and could not find a primary care doctor or get a last-minute appointment with their physician.

Read More »

INTERNATIONAL HEALTH SYSTEMS

U.K. Will Revamp Its Health Service

Jeanne Whalen
The Wall Street Journal, 07/13/10

The U.K.’s new coalition government, grappling with weak public finances and rising health care costs, announced an overhaul of the state-funded National Health Service (NHS) that it said would put more power in the hands of doctors and save as much as £20 billion ($30.12 billion) by 2014, Whalen writes. The revamp essentially involves cutting huge swaths of bureaucracy and reinvesting the savings in urgent health care services. In one of the biggest changes, the government said it plans to eliminate a layer of financial managers and ask doctors instead to decide how the bulk of the NHS’s £105 billion annual budget should be spent. A central committee will allocate budgets to groups of general practitioners in each region, who will decide how the money is spent on the local population.

Read More »

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Events

Replacing Obamacare with Real Health Reform
American Enterprise Institute and National Affairs Capitol Hill Event
Monday, July 19, 2010
12:00pm – 1:30pm
Washington, DC
RSVP to Jon Flugstad at jon.flugstad@aei.org or 202-862-4878.

Grace-Marie Turner speaking on A Touch of Grey
Focus Communications Radio Broadcast
Monday, July 19, 2010
10:20am Eastern

Biosimilars: Moving Forward Under PPACA
Congressional Health Care Caucus Policy Forum and Webcast
Monday, July 19, 2010
3:00pm – 4:00pm
Washington, DC

Grace-Marie Turner speaking on Small Business Advocate
Nationally Syndicated Radio Broadcast
Tuesday, July 20, 2010
7:20am Eastern

Innovations in Medicine: Harnessing the Power of Science to Improve Healthcare
Medco Health Solutions Forumm
Thursday, July 22, 2010
7:30am – 9:00am
Washington, DC
RSVP to innovation@gpgdc.com or 202-741-5586.

The $174 Billion Question: How to Reduce Diabetes and Obesity
Alliance for Health Reform Briefing
Friday, July 23, 2010
12:15pm – 2:00pm
Washington, DC

The Meaningful Use Rule and How It Affects the Safety Net Community and HRSA Grantees
Health Resources and Services Administration Webinar
Friday, July 23, 2010
2:00pm – 3:30pm Eastern

 

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