Clinton vs. Obama

A heated debate is taking place in the Democratic presidential primary between Sens. Hillary Clinton and Barack Obama over whether the government should mandate health coverage.

If the Democrats are having trouble agreeing on whether to impose a mandate requiring individuals to obtain health insurance, that strongly suggests this would be a very heavy lift for the next president. None of the Republican presidential candidates is advocating a mandate, so a bi-partisan deal would be difficult indeed.

In arguing for her plan, Mrs. Clinton told an Iowa audience this week, "If we don't have universal healthcare, we will be betraying the Democratic Party's principles."

Sen. Obama shot back before a different Iowa audience: "Until she clarifies what exactly she intends to do to enforce this mandate?this is more of a political point that she's trying to make than a real point."

The Illinois senator would require that children be insured, but not adults because he says that costs are the real issue. "The reason Americans don't have health insurance isn't because they don't want it, it's because they can't afford it."

Former Sen. John Edwards deserves credit for being up front about his plan: He would require proof of insurance when income taxes are paid and/or when medical treatment is provided, and he would assign families that don't have insurance to a coverage plan. The government would withhold tax refunds or use collection agencies and garnish wages to go after people who could afford to pay premiums but refused.

At least he is honest.

You know that this issue hits the jugular when liberal columnist Paul Krugman weighs in. He points out that under the Obama plan, ?healthy people could choose not to buy insurance — then sign up for it if they developed health problems later. Insurance companies couldn?t turn them away, because Mr. Obama?s plan, like those of his rivals, requires that insurers offer the same policy to everyone.?

Krugman accuses Obama of ?attacking his Democratic opponents from the right — and in so doing giving aid and comfort to the enemies of reform.?


So how is the Massachusetts experiment with an individual mandate going? The New York Times carried a major article on Sunday that could be entitled "not so well."

Not surprisingly, the free or nearly-free health insurance available to people making less than $30,000 a year ($60,000 for a family of four) is going like hot cakes. It is so popular, in fact, that the program may exceed its budget by $150 million. The Massachusetts website shows that 133,000 of the estimated 207,000 people eligible for the heavily subsidized coverage have enrolled so far.

But it's not going so well for those who aren't eligible for the state subsidies. The great majority of them either remain uninsured or are asking for waivers that would exempt them from the mandate. So far, only about 10,000 of the more than 215,000 uninsured Massachusetts residents who aren't eligible for subsidies have signed up for coverage with the Commonwealth Connector.

Further, insurers expect to raise rates 10% to 12% next year — twice the national average. And people who have signed up for coverage are complaining that they are having trouble finding physicians who will see them.

"The state's experience should be instructive to the presidential campaigns, and to officials in California, where Gov. Arnold Schwarzenegger, a Republican, has proposed a similar plan," the Times reports.

We couldn't have said it better?


Gallup recently released results of its annual survey of Americans' opinion of health care. It reconfirms that "Americans are much more concerned about the healthcare problems 'out there' than about the healthcare issues they face in their personal lives," Gallup concludes.

Some highlights:


  • 71% of Americans say their personal health coverage is excellent or good. (Only 23% describe it as fair or poor.)
  • But when asked how they would rate "healthcare coverage in the country," only 27% say it is excellent or good, while 72% describe it as fair or poor, a complete reversal.

The same conflict is true with costs:

  • 81% of Americans say they are dissatisfied with the total cost of healthcare in the United States.
  • But 57% say they are satisfied with the total cost that they pay for their healthcare.

Additionally, the vast majority of Americans are positive about the quality of the healthcare they receive. One-third say it is excellent, and an additional 50% rate it as good. Only 15% call their care "only fair" or "poor."

So what's the bottom line: "[M]ost Americans believe the current system is providing good quality healthcare, and they are satisfied with their own healthcare situations," Gallup concludes. Americans appear to believe that the system is in crisis and needs to be fixed to help others. The result: Any attempt at major health reform that would disrupt the coverage that Americans have now will fail. That was the lesson of Harry and Louise 14 years ago, and it would be the lesson again today.

One thing that Gallup did reveal, however, is the growing concern over the cost of health care, which leads to growing anxiety in the middle class about losing coverage. When Sen. Obama talks about cost, he shows that he recognizes that this is the key issue.

** Thanks to our good friend and economist par-excellence Jim Carter for alerting us to this Gallup survey.


The New York Times editorial page offered a thoughtful, reasoned perspective on the difficulties of controlling health costs. In a major editorial on Sunday entitled "The High Cost of Health Care," the paper acknowledges that the causes are "varied and deep-rooted."

"If citizens of an extremely wealthy nation like the United States want to spend more on health care and less on a third car, a new computer or a vacation home, what's wrong with that? By some measures, Americans are getting good value," the paper says.

Then the editors look at various solutions, and their complexities — differences in regional spending and practice patterns, and the challenges of implementing information technologies, prevention, and disease management. The paper says it advocates allowing Medicare to "negotiate" with manufacturers on drug prices and allow price-controlled drug imports. But amazingly, the Times concludes, "The prospect for big savings is dubious."

They take a predictable shot at "consumer-directed health care" and say that "deep in the
ir hearts, many liberals yearn for a single-payer system, sometimes called Medicare-for-all?But a single-payer system is no panacea for the cost problem — witness Medicare's own cost troubles — and the approach has limited political support."

The conclusion: "By now it should be clear that this is no silver bullet to restrain soaring health care costs."

And there is no silver bullet reform for our health system, including an individual mandate.

Grace-Marie Turner



Is Your Medicare Drug Plan Naughty or Nice?
Grace-Marie Turner, Galen Institute
South Florida Sun-Sentinel, 11/27/07

Seniors should seize the opportunity during Medicare's open enrollment period, which runs through the end of the year, to review their prescription drug coverage and choose the best plan for their needs, writes Grace-Marie Turner. Seniors may want to consider a Medicare Advantage program, offered by private insurance companies that often combine medical and drug coverage. Turner encourages seniors to take advantage of the choice and flexibility that comes from private plans competing to offer them the best value.

The Media on Drugs
Sidney Taurel, Eli Lilly and Company
The Wall Street Journal, 11/27/07

Sidney Taurel, chairman and CEO of Eli Lilly and Company, takes the media to task for how it responded to Lilly's suspension of two clinical trials for the drug prasugrel, a possible new therapy for heart attack patients. Lilly halted the trials to more carefully analyze data, but the media speculated that prasugrel must have failed its major trial, driving Eli Lilly's market capitalization down by $6 billion. The speculation was unfounded and false, Taurel says. A major clinical trial for the drug showed a 19% reduction in relative risk for cardiovascular death, and Lilly is reassured that the FDA will rely on actual data rather than frenzied news reports in making approval decisions. Taurel warns the media: Don't trade in leaks and rumors where scientific data are concerned. Wait for real numbers, and take the time to explain statistics and benefit-risk analysis, which cannot be conveyed in sound bites alone. For the pharmaceutical industry, Taurel says that preserving the integrity of scientific data and protecting the safety of patients are always the right choices.

For New Cancer Drugs, Finding the Right Patients May Work Better Than Finding the Right Prices
Health Affairs Web Exclusive, 11/27/07

Health Affairs interviews three oncologists to discuss the revolution in treating cancer. Genomic research has revolutionized understanding of cancer and has yielded promising new treatments targeted at molecules produced in particular tumors. These "targeted biologics" could extend lives while avoiding some of the debilitating side effects of chemotherapy and other traditional cancer drugs, but they also carry costs that are far higher than usual. The researchers suggest personalized approaches to care to reconcile innovation and affordability: Utilize and devise tests that can direct each new drug only to those patients whose tumors contain the specific molecules likely to make them amenable to the treatment and design carefully-tailored combinations of therapies that target specific tumors.

Consumer-Driven Health Care

A Survey of Preventive Benefits in Health Savings Account (HSA) Plans, July 2007
America's Health Insurance Plans, 11/07

An AHIP survey of health insurers finds that 84% of HSA-qualifying health plans offer first-dollar coverage for preventive care. Virtually all policies purchased in the large-group market (99%) and small-group market (96%) provide this coverage, which includes adult and child immunizations, well-baby and well-child care, mammograms, Pap tests, and annual physicals and screenings. About half of all HSA/HDHP policies that cover preventive benefits do not place any annual dollar limits on those services and three-quarters do not require any cost-sharing for such care. The survey suggests that more work needs to be done to allow health insurance plans offering HSA coverage to determine which prescription drugs would be appropriately preventive, clearing up regulatory ambiguity on this issue.

State Issues

It's Official: Medicaid Managed Care Does Not Save Money
Linda Gorman
Independence Institute, 10/24/07

The reform plan drawn up by Colorado's Blue Ribbon Commission on Health Care Reform plans, which would enroll 50% of Medicaid recipients in managed care, is a bad recommendation, writes Linda Gorman. After years of testing, the state has found that Medicaid HMO plans are at least as costly as traditional fee-for-service and may even cost more. Meanwhile, the Consumer Directed Attendant Support program, Colorado's innovative experiment with consumer directed care, frees clients from Medicaid centralization, giving them a budget and letting them keep 50% of any money they save. In turn, their ingenuity saves the state about 20% a year.

Health Systems Abroad

Foreign Health Affairs
Regina E. Herzlinger, Harvard Business School and the Manhattan Institute
The Wall Street Journal, 11/19/07

America, a nation prone to love at first sight with seductive health-care fixes, is now falling for the systems of the Netherlands and Switzerland, writes Regina Herzlinger. There are things to be learned from each, though neither presents a complete model the U.S. should emulate. The consumer-driven health care of these two nations is clearly the better model for implementing universal coverage. But their governments' micromanagement of the prices of insurers and providers should be avoided, not emulated. Instead, government should help lower-income people, enforce transparency, prosecute fraud and abuse — but otherwise get out of the way.

Cost Burden of Prescription Drug Spending in Canada and the United States
Brett J. Skinner and Mark Rovere
The Fraser Institute, 11/26/07

Government policies around the pricing and reimbursement of prescription drugs in Canada do not produce lower costs for Canadians compared to Americans, according to a study from the Vancouver-based Fraser Institute. Key findings:


  • Consumers in Canada and the United State
    s spend roughly the same proportion of their per capita gross incomes on prescription drugs (1.5% in Canada; 1.6% in US).
  • As a percentage of per capita after-tax income, the cost burden of prescription drug spending is slightly higher in Canada (2.5% in Canada; 2.2% in US).
  • The number of prescriptions dispensed per capita in both countries is roughly equal (13.0 in Canada; 12.3 in US).
  • Brand name drugs in Canada are about 51% less expensive on average than in the United States, but generic drugs in Canada are about 115% more expensive on average than the same generic drugs in the United States.


High prices for generic drugs in Canada are due to Canadian government policies that shield retail pharmacies and generic drug manufacturers from competitive market forces that would put downward pressure on the prices of generic drugs.


SIMPD 4th Annual Conference
Society for Innovative Medical Practice Design Event
December 2-4, 2007
Arlington, VA
Grace-Marie Turner will participate in a panel discussion about "Direct Practices and HSA's/HRA's/FSA's" at 10:00 a.m. on Tuesday, December 4.

The National Conference On Healthcare Consumerism
(formerly the Consumer Directed Health Care Conference)
Transmarx LLC Event
December 3-5, 2007
Arlington, VA
Grace-Marie Turner will participate in a roundtable discussion on "The Impact of Legislative Reform: HSAs and CDHC" at 3:20 p.m. on Monday, December 3.

Health Care Briefing: Professionalism in Medicine
Burness Communications Event
Monday, December 3, 2007, 9:00 a.m. – 11:00 a.m.
Washington, DC

Opportunity 08: Better Direction on Main Street
The Brookings Institution Event
Monday, December 3, 2007, 10:15 a.m. – 12:00 p.m.
Washington, DC

Healthy Aging: Europe's Economic Trump Card?
American Enterprise Institute Book Forum
Monday, December 3, 2007, 5:30 p.m. – 7:00 p.m.
Washington, DC

2007 States & Nation Policy Summit
American Legislative Exchange Council Event
December 5-8, 2007
Washington, DC
Grace-Marie Turner will speak about the State Children's Health Insurance Program at 11:15 a.m. on Thursday, December 6.

Physician Payment Reform: Code Blue or Status Quo?
Oregon Health Forum Event
Thursday, December 6, 2007, 7:30 a.m. – 9:00 a.m.
Portland, OR

Communicating Risk/Safety Information: How FDA is Meeting the Challenge
Food and Drug Law Institute Event
Thursday, December 6, 2007, 1:00 p.m. – 5:00 p.m.
Washington, DC
Grace-Marie Turner is a panelist on public perspectives and communication.

Nursing Home Reforms: Twenty Years after OBRA '87
Alliance for Health Reform Briefing
Friday, December 7, 2007, 12:15 p.m. – 2:00 p.m. (Lunch included)
Washington, DC

Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features research and writings by participants in the Health Policy Consensus Group, articles of interest from the health policy world, and 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

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