Rome 'n Schip

In Rome last week, I debated Italian politicians on national radio, tried to explain our health system to government and industry leaders, and spoke at a conference at the Vatican about the fundamental values of health care and the common good.

Some take-aways: Europeans truly believe that we have a permanent underclass in the U.S. of 47 million poor citizens who have absolutely no access to health care. They are shocked at how barbaric we are and that any civilized country would tolerate such a thing.

When I tried to explain the facts — through a translator — to an Italian senator on RAI radio, he was incensed.

He didn't want to hear that we spend nearly as much as a percentage of our GDP on public programs — to cover about one-third of our people — as many European countries spend of their GDPs in total on health care. Or that almost half of our more than $2 trillion in health expenditures are primarily through these public programs that cover the poor, the aged, the disabled, veterans, and lower-income children. Or that many of the uninsured are temporarily without coverage in a system that ties health insurance to the workplace. Or that the uninsured do get care — albeit in a far from ideal system — through hospitals, private physicians, community health centers, charity clinics, and other means. Or that Americans value private coverage with its broader access to new technologies and medicines and faster access to surgeries and treatments.

It seemed almost as if he wanted people to believe that there is nothing at all to be learned from Americans so as not to crack the veneer of socialized systems.

Our favorite free-market Italian think tank, the Istituto Bruno Leoni and its dynamic leaders, Alberto Mingardi and Carlo Stagnaro, arranged the radio interview and a luncheon with government and industry leaders to provide more detail on how the U.S. system works. Hearing the details of our complex network of private and public programs, and that the uninsured cannot be denied care at hospitals, was news to almost everyone there convinced that Michael Moore was right. Here is a copy of my remarks.

The main reason for my trip to Rome was to speak at a conference sponsored by the Acton Institute and the Pontifical Council for Pastoral Health Care at the Pontifical Gregorian University on Health, Technology, and the Common Good.

I said that the common good is achieved by a society in which individuals are responsible beings in a moral society that "embraces the truth about the transcendent origin and destiny of the human person," quoting the Action Institute's important mission statement. This responsibility extends to our families and communities.

The state purports to assume this role in providing for the common good, but interrupts the principle of subsidiarity, i.e., not to usurp the proper functions of the individual, the family, and the doctor-patient relationship.

Pope Benedict XVI wrote in his recent encyclical Deus Caritas Est, "We do not need a State which regulates and controls everything, but a State which, in accordance with the principles of subsidiarity, generously acknowledges and supports initiatives arising from the different social forces and combines spontaneity with closeness to those in need."

In a state-controlled system, individual responsibility in using health care resources most efficiently is replaced by rationing by the state.

Every country's health care system is unique and each has its own challenges in moving to a system that respects and supports the sanctity of the individual. The U.S., while it has many problems that I described, I believe is further along this path in supporting individual freedom and rights over health care decisions and destiny. But all countries have an obligation to look for solutions that move us closer to the goal that advances the common good by respecting the dignity, the freedom, and the sanctity of human life.

I am preparing a written transcript of my remarks and will send you a link in next week's newsletter. Kudos to the Acton Institute, to its president Fr. Robert Sirico, and the Rome and U.S. Acton teams for producing this important conference.


We returned to the U.S. and the debate over reauthorization of the State Children's Health Insurance Program, where the same issues over private vs. public health insurance are central.

The debate is not over whether this program will be reauthorized. President Bush has vetoed the bill that Congress sent to him because he believes that it goes too far toward expansion of state-controlled health coverage.

When SCHIP was created, the target population was children whose parents earn too much for them to qualify for Medicaid but not enough to afford private insurance. The president wants a bill that focuses on these children, whose parents today earn $41,000 a year or less for a family of four (200% of the federal poverty level, in budget-speak).

But this Congress wants to expand the program and would make $60 billion available to the states over five years to enroll millions more children, including many in higher-income families. With the added SCHIP money — plus easier enrollment and the new bonuses and contingency funds in the legislation — states would have every incentive to expand coverage to these higher income families.

Three key questions:

Would this help or hurt the poorer children the program is supposed to help? The legislation provides much more money and many new incentives for states to add children to SCHIP whose parents earn up to $62,000 a year for a family of four and even higher in New York and New Jersey. Two-thirds of uninsured children already are eligible for either SCHIP or Medicaid because their parents earn much less than that. Congress does need to make sure there is enough money in the legislation to cover them, but shouldn't these poorer, uninsured children be the primary focus of the expansion? States have struggled to get these children enrolled but they could get left behind in the stampede to add more higher-income children.

The administration wants states to demonstrate that they have enrolled 95% of eligible children under 200% of poverty before expanding the program to higher-income kids. But Congress' bill would overturn that ruling. Is this not a statement that higher-income children would be the focus? And these higher-income children are most likely to already have private insurance that would be crowded out by SCHIP.

What is the quality of coverage kids will get? In many states, private HMOs provide SCHIP coverage, and in others, SCHIP works like Medicaid with its low payment rates. Parents who drop private coverage to put their children on SCHIP to save money may want to think twice about whether this public program would provide them with the same access to their physicians as their private plans. The legislation contains language that would
allow parents to use SCHIP money to put their kids on their coverage at work. We support that but are unsure whether the bill would lift the roadblocks to make this a viable option.

Is SCHIP the right vehicle to start the journey toward universal coverage? States are trying to take the lead in this arena, and many of them will take advantage of every opportunity to use the new federal revenues to move forward. Eight states announced this week that they plan to sue the federal government for blocking their ability to add children in higher-income families to SCHIP. Further, states can add children to public coverage above $62,000 and receive federal matching dollars at their Medicaid match rate, which is still very generous. States are very aggressive in going after federal money, and this would be no exception.

The 2008 presidential election is the proper venue to have the debate over how to cover the uninsured — not just children but adults and whole families. Obscuring this debate in rhetoric and budget numbers confuses the public and does not lead to clear political decisions.

This is a tough battle that is easy to demagogue. When Congress considers whether to override the president's veto on October 18, the real question is this: Is putting millions more children on taxpayer-supported coverage, including many who already have private insurance, really the right choice for America?

Grace-Marie Turner


Microsoft Offers Free HealthVault for Patients' Records
Victoria Colliver
San Francisco Chronicle, 10/05/07

Microsoft has unveiled a free web site,, that gives consumers a single place to store and manage their medical information, one the company says is safe from data miners, hackers, and other security threats. Using the site, people can store records, lab results and prescriptions lists, and even upload data like glucose and blood pressure readings. People can determine what pieces of their records they want to share with whom and for how long.

Differences in Disease Prevalence as a Source of the U.S.-European Health Care Spending Gap
Kenneth E. Thorpe, David H. Howard, and Katya Galactionova
Health Affairs Web Exclusive, 10/02/07

Older adults who live in the United States are significantly more likely than their European peers to be diagnosed with costly chronic diseases, such as heart disease, cancer, and diabetes. They are also more likely to be treated for those diseases, adding approximately $100-$150 billion per year in U.S. health care spending. Americans are also nearly twice as likely as those who live in Europe to be obese.

Sleepwalking Toward DD-Day
George F. Will
Newsweek, 10/08/07

The SCHIP legislation passed by Congress, which would expand the dependency of middle-class children on government, is not just "about the children." The struggle over SCHIP is a proxy fight over the future of the welfare state, meaning the trajectory of government and the burdens it will place on the economy. In the perennial tension between the competing values of freedom and equality, conservatives favor freedom, which inevitably increases unequal social outcomes. Liberals' mission is the promotion of equality, understood as equal dependence of more and more people for more and more things on government.

SCHIP Plus a Tax Credit: A Compromise Health Insurance Plan for Kids
Stuart M. Butler, Ph.D., and Nina Owcharenko
The Heritage Foundation, 10/01/07

Butler and Owcharenko propose that rather than expanding SCHIP above 200% of poverty, Congress instead should create a tax credit that would provide subsidies for families between 200% and 300% of poverty to get and keep private coverage.

Biotechnology and the Patent System: Balancing Innovation and Property Rights
John E. Calfee and Claude Barfield
American Enterprise Institute, 09/05/07

Calfee and Barfield examine patent reform legislation, especially as it applies to the biotechnology pharmaceutical industry. They argue that the rapidly evolving scientific industry requires policy to evolve with it, but there are dangers in changing laws too broadly, too fast.

Reform without Reason: What's Wrong with the FDA Amendments Act of 2007
John E. Calfee
American Enterprise Institute, 09/26/07

There are many reasons to think that the drug safety provisions of the FDA Amendments Act (FDAAA) will work badly from the standpoint of drug development, new drug approvals, and ultimately, the welfare of patients. The FDAAA will increase FDA power, extend its reach beyond normal bounds, and expose FDA personnel to yet more scrutiny and criticism for safety problems no matter how unpredictable. There will be no tests or benchmarks for how well this new regime will work. In a world of ever more extensive post-approval clinical trials and database dredging, there is no reason to think drug safety data will become more reassuring or less alarming as time passes.

Aetna Launches New Resource to Take the Guesswork Out of Comparing Charges for Hospitals and Other Facilities
Aetna, 10/03/07

Aetna is launching a new web-based resource which will allow Aetna members to compare costs for health services. It will show a range for the entire cost of more than 30 common procedures — such as colonoscopies and hysterectomies — from admission through discharge. This includes facility charges, physician fees, and any supplementary charges such as anesthesia services. Available in November, the program will offer information for facilities in all or parts of 11 states and the District of Columbia.


Vaccinated: The Quest for New Vaccines Yesterday and Today
American Enterprise Institute Health Policy Discussion
Tuesday, October 9, 2007, 10:00 a.m. – 11:30 a.m.
Washington, DC

e Tax Code and Health Insurance Coverage

House Budget Committee Hearing
Thursday, October 11, 2007, 10:00 a.m.
Washington, DC
Grace-Marie Turner will testify before the House Budget Committee regarding health care and tax policy.

Health Ownership
Pacific Research Institute Event
Wednesday, October 10, 2007, 11:45 a.m. – 1:00 p.m.
Albany, NY

SPN 15th Annual Meeting
State Policy Network Event
October 10-12, 2007
Portland, ME

The Medical Arms Race and the Impact of Government Regulation and Payment Systems
National Institute of Health Policy Event
Monday, October 15, 2007, 2:00 p.m. – 3:30 p.m.
Minneapolis, MN

Changing the Culture and Improving Quality: Innovations in Long-Term Care
Alliance for Health Reform Briefing
Friday, October 19, 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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