Teeing Up for Real Reform

A new conversation will begin in Washington next week as House Republicans offer their plan to start getting our nation’s fiscal house in order.

The plan, developed under the leadership of Budget Chairman Paul Ryan, will lay out a new vision for federal spending in the upcoming fiscal year. It’s designed to get us off the path we are on that will bankrupt the country with out-of-control entitlement spending and to offer reforms designed to strengthen the economy with tax reform and spending restraint.

Be prepared for a huge blowback to the plan from, ironically, people resisting “change.” But ask yourself if we really have the option to stick our heads in the sand and pretend we can avoid the fiscal entitlement calamity that is coming. We can choose rationing, higher taxes, and more deficit spending or these 21st century reforms. There will be a choice.

One of the ideas that likely will be offered to transform the Medicare program of the future into one that will give seniors more choices of benefits in a competitive private market is called “premium support.”

Joe Antos of AEI took the lead in developing a letter to congressional leaders endorsing this concept that was signed by many colleagues in the policy community.

The key message: “The budget resolution that will soon be adopted by the House of Representatives is likely to include a call for Medicare reform. The key to that reform is premium support, which can restore fiscal health to the program by promoting more efficient and effective health care for America’s seniors.”

Expect the House plan to also include a call for the federal share of Medicaid to be converted into a block grant to the states. Governors have been clamoring for this and The Wall Street Journal had a terrific editorial this week explaining how Rhode Island has forged the path on this important reform that moves power closer to states and hopefully ultimately to patients.

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Here come the ACOs. HHS released this week the much-awaited regulations for Accountable Care Organizations. ACOs are supposed to be the innovative new idea that will move our health sector toward better coordinated and more efficient care in Medicare.

Lord knows that’s what we need. Traditional Medicare relies on an antiquated design of entitlements to thousands of government-approved medical products and services under a system of government-established price controls. It’s a program full of gaps, inefficiency, and waste, and it desperately needs to be modernized.

This week, the six pages of legislative text in the health law creating ACOs exploded into 429 pages of regulations about how they must work.

What can possibly go wrong here?

For starters, patients in traditional Medicare will be assigned to ACOs, rather than picking them by choice. And the ACOs will have a strong incentive to “economize” on their care. That will mean selecting doctors for the ACO networks who are more willing to implicitly ration care. How do you think seniors are going to react when they figure this out? Seniors can still visit any doctor they please, but they are less likely to have the recommendation of their ACO physician.

We absolutely must move away from a system with an open-ended entitlement to care, but it’s crucially important to make seniors partners in the process, as the Medicare prescription drug benefit design does. In Part D, private plans compete and seniors select plans based upon benefit structures and cost. The same thing could work for all of Medicare.

Second, ACOs can be a vehicle for big players, especially hospitals, to further consolidate their market power and drive out competition that is needed to keep costs under control.

Third, we know that government is a terrible business partner. Yet it will be setting the rules about how ACOs share in any cost savings — or face penalties if they don’t meet the tests. How would you like to be in a game where your opponent is also the umpire?

We write a lot about ACOs in our book, Why ObamaCare Is Wrong for America. If you don’t have your copy yet, you are missing out. Here’s a link to ordering information.

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Defund it. The House Energy and Commerce Committee also is hard at work in defunding ObamaCare. The health overhaul law included mandatory spending for programs that would normally be part of congressional appropriations. This weakens congressional oversight by going around the process in which Congress appropriates money by weighing the relative value of spending on these or other programs.

For example, the health law contains a provision that allows “unlimited mandatory spending” for grants to states to set up exchanges. House members wisely are working to put the brakes on this and other provisions.

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Physician forum. Please join us on Thursday, April 7 at 2 pm in Washington, DC, for a forum featuring Rep. Tom Price, MD. At this event, Jason Fodeman, MD, a visiting fellow at the Galen Institute, will present a new paper on the impact on patients of the new health law: Bad for Doctors, Awful for Patients. Also giving remarks and participating in a panel discussion will be the President and CEO of Docs4PatientCare, Hal Scherz, MD, as well as Richard Armstrong, MD, chief operating officer of Docs4PatientCare. Please email sterling@galen.org to register.

CLIP OF THE WEEK

Ask the Experts: If you could change one thing about the health law, what would it be?

In this video, the American Action Forum asks Grace-Marie to discuss the most onerous element of the health law. See their “Ask the Experts” series on YouTube for three more short videos with Grace-Marie.
Watch now >>

 

Watch more “Ask the Experts” videos >>

GALEN IN THE NEWS

Romney Still Doesn’t Get It

Grace-Marie Turner
National Review Online: Critical Condition, March 29, 2011

Former Massachusetts governor Mitt Romney recently posted a comment on NRO about how he would undo ObamaCare — a comment that shows he is still a very long way away from understanding where he needs to be on this issue. First, Romney says he would begin to undo ObamaCare with an executive order giving states broad waivers, but he has to know he can’t use an executive order to wipe out two massive new entitlement programs, $550 billion in new and higher taxes, vast Medicaid expansion, and mandates on individuals, businesses, and the states. Then he says the waivers are needed because repealing ObamaCare will take time. The Republican House passed a repeal bill within a few weeks of taking power. If there were a majority in the Senate supporting repeal, then a new president could have a bill to sign on his desk within a month or two of taking office. Why on earth would you want to send states on a wild chase to start implementing ObamaCare in a different way?

Read More »

HEALTH REFORM

Bankrupt: Entitlements and the Federal Budget
Michael D. Tanner, Cato Institute, 03/28/11

Letter to Congressional Leadership on Premium Support
03/31/11

Letter from 64+ Experts to the President and Congressional Leadership on Debt and Deficit
03/31/11

We Do Well, With Fair Reporting, on Infant Mortality
Robert A. Book, The Wall Street Journal, 03/30/11

Behind the Veil: The AARP America Doesn’t Know
Reps Wally Herger (R-CA) and Dave Reichert (R-WA), 03/11

ObamaCare’s Campaign of Misinformation
Merrill Matthews, Forbes: Right Directions, 03/28/11

The Ulterior Motive Behind Rising ObamaCare Premiums
Sally Pipes, Forbes.com, 03/28/11

How to Insure Americans with Pre-Existing Conditions
Brian T. Schwartz, Pajamas Media, 02/24/11

PRESCRIPTION DRUGS

A Little Too Enterprising
Peter Pitts, DrugWonks, 03/30/11

Medicare moves to pay for prostate cancer drug Provenge
Rob Stein, The Washington Post, 03/30/11

MEDICAID

Medicaid Block Grants May Save Money, Add Flexibility
David Hogberg, Investor’s Business Daily, 03/29/11

Rhode Island’s Medicaid Lesson
The Wall Street Journal, 03/28/11

INTERNATIONAL HEALTH SYSTEMS

Former NHS Director Dies After Operation Is Cancelled Four Times at Her Own Hospital
Daily Mail, 03/31/11

A Cross-Country Comparative Study of Physician Autonomy
MedLib/Consensus Research Group, Inc., 10/14/10

RECOMMENDED READING

Markets and Morality
J.R. Clark and Dwight R. Lee, Cato Journal, Winter 2011

Events

The New Health Law: Bad for Doctors, Awful for Patients
Galen Institute Physician Forum
Thursday, April 7, 2011
2:00pm – 3:30pm
Washington, DC
Galen Institute Visiting Fellow Jason Fodeman, MD, will present a new paper on the impact on patients of the new health law: Bad for Doctors, Awful for Patients.

Launching Insurance Exchanges: What Are States Doing?
AARP Event
Monday, April 4, 2011
9:00am ? 11:00am
Washington, DC

The State of Children’s Health, Care and Coverage
Alliance for Health Reform Briefing
Monday, April 4, 2011
12:15pm – 2:00pm
Washington, DC

11th Annual International IHPM Health & Productivity Conference
Institute for Health and Productivity Management Event
April 4-6, 2011
Orlando, FL
Grace-Marie Turner will speak about health reform changes at 5:30pm on Monday, April 4.

Grace-Marie Turner on The KYCA PM Show
KYCA-AM
Wednesday, April 6, 2011
4:00pm
Phoenix, AZ

Health Care Forum 2011
The Atlantic Event
Thursday, April 7, 2011
8:00am ? 2:30pm
Washington, DC

“Big Ideas” Health Care Reform Conference
The Heartland Institute Event
Thursday, April 7, 2011
8:30am – 12:15pm
Washington, DC
Grace-Marie Turner will speak about the health overhaul law and new reform ideas for Congress.

Working towards a Healthier Generation: The Implementation of Health Reform
Metropolitan Washington Public Health Association Event
Tuesday, April 12, 2011
8:30am – 4:30pm
Washington, DC

ObamaCare: What a Difference a Year Makes
Cato Institute Event
Wednesday, April 13, 2011
12:00pm – 2:00pm
Naples, FL

ObamaCare: What a Difference a Year Makes
Cato Institute Event
Thursday, April 14, 2011
12:00pm – 2:00pm
Palm Beach, FL

Healthcare Reform at Year One: Will More Policy Mean Less Technology?
Institute for Health Technology Studies Event
Thursday, April 14, 2011
Washington, DC

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