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The Narrative September 3, 2009

Highlights

Your money or your life: One of the things that happens in the American political conversation is that a narrative takes hold with the electorate. The health reform debate has become a nationwide campaign and, after seeing and participating in many town hall meetings this August, here is what I think the narrative has become:

 

The expansion of government control over our economy in the last year is frightening. The shocking debt we are accumulating is threatening our future and the future of the country we love. It doesn’t make any sense to spend another $1 trillion to try to save money on health care. Making massive changes to our health care system scares us and inevitably will lead to the government rationing our health care. We don’t trust the government with our money or our lives.

 

The health reform debate has touched core values in this country and that is why hundreds of thousands of people have taken time off from their jobs and families to show up at town hall meetings to tell their representatives in Congress (those who have been brave enough to hold town hall meetings) that they are frightened about the expansion of government control.

How is President Obama going to change that with a speech before Congress next week? I don’t have any idea because his problems with health care are interwoven with the fears the American people have about the overall direction of the economy and his administration.

If he thinks that he can put their fears to rest by giving voters more details about his plan, as reports indicate, it will do absolutely nothing to change the debate.

And what major policy changes could he make that are going to be dramatically different? The pillars of all of the major bills that have passed four of five key committees in Congress are based upon key health policy proposals that candidate Barack Obama offered in the 2008 presidential campaign — a public plan, an employer mandate, expansion of Medicaid, and a purchasing exchange that would give significant new powers to the federal government to regulate private health insurance.

All of this involves more and bigger government, which is exactly what the American people are saying, as loudly as they know how, that they Do. Not. Want.

The president has backed himself into a very difficult corner and even a soaring speech cannot get him out of it. Two examples:

 

  • Support for his health reform agenda among liberal activists largely depends upon his backing the “public plan.” They see that as a doorway to government health programs for all. But the public plan is the deal-breaker in the Senate. White House advisors are saying that the president may offer to put the public plan on hold and create it only if private health insurance doesn’t meet certain goals. That may get him the vote of Republican Sen. Olympia Snowe, but it will not appease either supporters or opponents of his plan.
  • Also, the president’s goal of achieving universal coverage by the end of his first term inevitably means imposing mandates on individuals to purchase health insurance. He avoided supporting this during the campaign but now says a federal requirement that everyone purchase health insurance is a prerequisite for universal coverage. That is a new level of government intrusion that hasn’t even reached the first tier of the debate. It will not fly.

Stay tuned.

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Virginia debate: Jim Capretta, Tom Miller, and I had an opportunity to speak at a public meeting in Fairfax, VA, on Tuesday night, called by Keith Fimian, a candidate for Congress in the 11th Congressional district. Keith invited us to talk in detail about the health reform proposals before Congress — their structure, cost, and likely impact.

The 350-seat auditorium was nearly filled, and, like virtually every other meeting I’ve attended where people have been bused in, sentiment in the audience was at least 80 percent against the reform proposals.

Here is what is different in this debate from 15 years ago: The American people are much better informed this time about the details of the reform plans because they have so many sources of information through the Internet, talk radio, and cable news. They are not going to be swayed by rhetoric. They want to know the facts. And the more they learn, the more the narrative takes hold. They don’t trust government with their money or their lives, and they want Washington to take out a clean sheet of paper and start over.

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Galen’s reach: Jena Persico, Special Projects Director at the Galen Institute, has produced an extraordinary 194-page summary of our activities at the Galen Institute during the first half of this year. We are mailing out a few copies, but you can see the whole report online.

It shows the huge impact our messages are having. We have been invited to be on more than 100 radio and television programs and reached 200 million people with our writings because our message of free markets and free people is resonating with the American people.

The debate begins anew when members of Congress return next week from their August recess. Many will be shell shocked from their meetings with constituents and may be ready to start over. There are many problems to be solved in our health sector, and we’re ready to help.

Grace-Marie Turner

Recent News Articles and Studies

Health Insurers Set Up Shop in Malls
Employer Health Care Mandate Would Make a Terrible System Worse
President Obama’s Plan for Reform
Eliminating the Public Option Is Not Enough
Economics of Play-or-Pay Mandates in Health Care Reform Bills
Targeted Intervention Is Best
Sorting Fact From Fiction on Health Care
HSAs: Real Reform
A Better Model for Health Care
Experience Under the Healthy Indiana Plan: The Short-Term Cost Challenges of Expanding Coverage to the Uninsured
Consumers’ Experience in Massachusetts: Lessons for National Health Reform

GALEN IN THE NEWS

Health Insurers Set Up Shop in Malls
Grace-Marie Turner, Galen Institute
CNBC's "Squawk on the Street”, 09/03/09

Grace-Marie Turner discusses insurers opening offices in shopping malls to offer health insurance on CNBC's "Squawk on the Street”.

Employer Health Care Mandate Would Make a Terrible System Worse
Grace-Marie Turner, Galen Institute
New York Daily News, 09/03/09

The fight over the "public option" has obscured debate on an element of congressional health reform plans that would be equally consequential and equally threatening to many Americans: the "pay-or-play" mandate, Turner writes. Rather than changing one of the worst features of American health care — the fact that insurance is almost always tied to employment — it would carve that fact in stone. If that weren't bad enough, it would threaten to drag down wages and kill jobs in the process by driving up costs for employers. Instead of doubling down on the historical accident of employer-provided health insurance, lawmakers should work to make coverage more personal and portable — empowering people to purchase policies that they could own and move from job to job.

President Obama’s Plan for Reform
Grace-Marie Turner, Galen Institute
Medical Progress Today, 08/24/09

President Obama continues to offer promises and rhetoric to try to sell his health reform plan, but the American people want concrete answers to very real concerns about what the changes would mean for them, Turner writes. They want to know how his plan would reduce costs, as he promises, in face of independent analyses from the Congressional Budget Office and others that the reform plans making their way through Congress would significantly increase costs. They want to know how they will be able to keep their doctors and health plans, as he promises, when economists at The Lewin Group say at least 88 million people would lose their private health insurance, many involuntarily, if the Obama plan were implemented. They want to know how he would increase the quality of care, as he promises, when the Mayo Clinic and other leading high-performing health systems say the Obama plan would put them out of business.

The health reform legislation making its way through Congress is rigid and aggressively liberal, without any evidence of bipartisanship, and it is rightly facing a firestorm of opposition, Turner writes in National Review Online’s Critical Condition blog.

Eliminating the Public Option Is Not Enough
John S. Hoff, Galen Institute
The American, 09/01/09

Even if the public option is excised, the health care bill under consideration by Congress would still impose a heavy blanket of federal regulation on every aspect of insurance and health care itself, Hoff writes. The health care system would be governed by Congress and the administration, with their attendant commissions, panels, boards, and collaborating experts. Instead of focusing on meeting consumer needs, insurers and providers would hire more lobbyists. When the president belittles and dismisses those who warn that his proposals would result in federal control of health care, he is being either cynically misleading or naively delusional, Hoff concludes.

HEALTH REFORM

Economics of Play-or-Pay Mandates in Health Care Reform Bills
D. Mark Wilson
The Heritage Foundation, 08/28/09

The mandate that all employers must provide health coverage for their workers or pay a new tax would impact 95.4 million to 104.6 million workers, and 509,000 to 1.4 million employers, writes Wilson, former Deputy Assistant Secretary at the Department of Labor. The mandates will cost businesses at least $49.4 billion to $52.7 billion per year, and result in up to 382,000 low-wage unskilled workers losing their jobs. All told, 5.2 million low-wage workers will be at risk of losing their jobs or having their hours of work reduced, and they will likely have fewer job opportunities in the future. Another 10.2 million workers are at risk of slower wage growth and cuts in other benefits, and some of the cost of any play-or-pay mandate will be passed on to Americans in higher prices for the goods and services they buy — an indirect tax on savers and those on fixed incomes.

Targeted Intervention Is Best
Earl L. Grinols, Baylor University
Galen Institute, 09/02/09

Grinols describes three fundamentals that Congress needs to get right to extend insurance coverage to all without damaging those portions of Americans’ health care that are the best in the world. First, lack of earnings is not a health care problem; it is an income problem. Second, studies show that 25% of the uninsured already qualify for Medicare or SCHIP. Third, let the insurance market work as it should. Congress should have figured out by now that the only known, reliable, self-enforcing mechanism to keep costs low is robust competition, Grinols concludes.

Sorting Fact From Fiction on Health Care
Drs. Jerome Groopman and Pamela Hartzband, Beth Israel Deaconess Medical Center and Harvard Medical School
The Wall Street Journal, 08/31/09

Drs. Groopman and Hartzband describe the myths and mantras of the current debate on health reform. It is fact that more than 40 million Americans lack coverage and spiraling costs are a burden on individuals, families and our economy. There is broad consensus that these problems must be addressed. But the public is skeptical that their current clinical care is substandard and that no government bureaucrat will come between them and their doctor. Americans have good reason for their doubts — key assertions about gaps in care are flawed and reform proposals to oversee care could sharply shift decisions away from patients and their physicians to government bureacrats.

PATIENT-CENTERED HEALTH CARE

HSAs: Real Reform
Investors’ Business Daily, 08/25/09

ObamaCare would almost surely kill off consumer-driven plans that reward patients for smart shopping. That’s a pity, because there are signs that the plans may actually be starting to cut costs, Investor’s Business Daily writes. With health savings accounts (HSAs), patients get a little richer by choosing generics over brand-name drugs and staying alert to overbilling. Where there’s rationing — in the sense of deciding whether this procedure or that drug is worth the cost — it’s the patients themselves who make that call. This is true reform because it fundamentally changes the way people pay for health care. The role of the third-party payer shrinks, and medicine starts returning to what it once was: a two-way relationship between patients and providers.

STATE ISSUES

A Better Model for Health Care
Gary D. Ahlquist, Minoo Javanmardian, and Sanjay B. Saxena
strategy+business, Autumn 2009

An innovative experiment in Florida shows the potential for more systemic collaboration as the catalyst for lower costs and improved quality, Ahlquist et al write. The Healthcare of the Future (HOF) model addresses health care reform from the ground up and engages plans, providers, and consumers. What sets HOF apart — and may provide a model for federal initiatives — are the structural innovations and incentives that involve plans and patients in new relationships with health care providers. Products and services, for example, are priced to be all-inclusive. A single fee encompasses everything from diagnosis to rehabilitation to final disposition. Although it has started modestly with three initial services (involving cardiac care, lung cancer treatment, and hip and knee surgery), the program is expected to expand to as many as 25 offerings, covering the great majority of services and costs.

Experience Under the Healthy Indiana Plan: The Short-Term Cost Challenges of Expanding Coverage to the Uninsured
Rob Damler, FSA, MAAA
Milliman Inc., 08/26/09

The Healthy Indiana Plan, a relatively new Medicaid expansion program, is now offering experience data that is meaningful in the context of health care reform, this new Milliman report shows. The first year of this voluntary program revealed certain behavior by uninsured populations as they acquired coverage. Utilization levels for these populations were higher than average, and in many cases early adopters were also among the sickest and most costly, with healthier and less costly individuals joining later. The year of experience reveals various aspects of antiselection and pent-up demand. These results offer lessons for nationwide attempts to cover the uninsured, especially for any attempts that pursue such ends on a voluntary basis. Voluntary programs for covering the uninsured may exhibit similar results. These results have important cost implications.

Consumers’ Experience in Massachusetts: Lessons for National Health Reform
Carol Pryor and Andrew Cohen, The Access Project
The Kaiser Family Foundation, 09/09

In partnership with the Kaiser Family Foundation, researchers from The Access Project conducted in-depth interviews with fifteen Massachusetts consumers, as well as with several key participants in the health reform effort, to better understand the impact of the Massachusetts health system reform on consumers. Key findings:

  • Public programs have increased access and provided affordable insurance coverage options for low-income individuals.
  • However, some people are still struggling to afford coverage and care.
  • People with chronic conditions still face greater cost barriers to care.
  • System complexities can lead to gaps in coverage.
  • Fear of incurring unaffordable medical bills and medical debt remains a barrier to accessing needed health care.

A separate report, based on focus groups with adults in a variety of circumstances, highlights the experiences of Massachusetts residents in obtaining health coverage, accessing health care services and managing out-of-pocket costs in the wake of the state’s 2006 health reform law.

Upcoming Events

Grace-Marie Turner speaking on MyTechnologyLawyer
MyTechnologyLawyer Radio Broadcast
Thursday, September 3, 2009, 4:00 p.m. EDT
Grace-Marie Turner will speak with hosts Scott Draughon and Anyck Turgeon about health care reform. Listen to this interview online.

Understanding Health Care Co-ops
Cato Institute Capitol Hill Briefing
Wednesday, September 9, 2009, 12:00 p.m.
Washington, DC

Money-Driven Medicine: A Reel Progress Screening
Center for American Progress Event
Thursday, September 10, 2009, 7:00 p.m. – 9:00 p.m.
Washington, DC

Health Reform Then and Now: What Do We Need to Know?
American Enterprise Institute Event
Friday, September 11, 2009, 9:15 a.m. – 11:15 a.m.
Washington, DC

Harlingen Healthcare Reform Dialog Meeting
Texas Health Institute Event
Thursday, September 17, 2009
Harlingen, TX

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

 

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

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