Health Care Week

Health care hit the first tier in the presidential election campaigns this week, with charges and counter-charges flying on the campaign trail and in the media. The stack of new papers and articles on my desk out just this week on the health reform debate is an inch thick. Here are some highlights of reports that offer actual facts and new insights:


  • Galen Institute: Amy Menefee and I offer an analysis of the two presidential candidates' health reform proposals to asses which offers American families greater choice and control over their health care and spending decisions. That is a central issue that will determine acceptance of proposals by the American people, as Harry and Louise taught us 15 years ago. We conclude that Sen. Obama's plan would put much more power and control in the hands of government, while Sen. McCain would offer more choices in a competitive market reshaped to cater to consumers.


  • The Wall Street Journal hit a home run with its editorial "Obama and Health-Care Equity," explaining clearly the flow of funds in the McCain plan and countering Sen. Obama's charge that McCain would tax "your health-care benefits for the first time in history." They explain that the McCain plan would make new and more generous tax benefits available to everyone, not just those getting health insurance at work.


    "On choice, portability, quality and especially equity, the McCain health plan is far superior to Mr. Obama's. The Democrat is merely offering Canada on the installment plan," they conclude.


  • The New York Times was more critical in a news story entitled, "Business Cool toward McCain's Health Coverage Plan." The article actually got the description of current and proposed tax policy right and didn't repeat the error we hear so often that employers are going to lose their tax benefit for health insurance. "Mr. McCain would not change the ability of companies to deduct health benefits as a business expense on their corporate income taxes," reporter Kevin Sack wrote, clearly having done his homework.


    (Imagine being a reporter: You not only have to cover the presidential election but also the intricacies of the health reform debate, and layer tax policy on top of that. And all on deadline!)


    The article quoted officials with major business organizations who say they fear the McCain plan would erode employer benefits.


  • Business: But the Business Roundtable, made up of CEOs of leading companies, issued a news release critical of the coverage: "Recent media assertions that Business Roundtable has concluded that John McCain's plan would 'cause employers to drop people from the health insurance they have now,' raise health care costs and do little to reduce the number of uninsured are an unfortunate mis-characterization of our position.


    "Our members are committed to continuing to offer health benefits to employees and to ensuring that all Americans have access to health care coverage they can afford. We believe that providing all consumers with a tax credit, as Senator McCain has proposed, is an important step toward this goal," the BRT concluded.


  • Journalists: An editorial from National Review Online and a column by Ruth Marcus in The Washington Post also get high marks for cutting through the rhetoric to explain the policy. Marcus explains, "McCain's plan is not the ill-intentioned monstrosity of Obama's ominous portrayal" and explains that even Sen. Obama's top policy advisor, Jason Furman, has praised in past writings the tax credit approach to equalizing the tax treatment of health insurance, as Sen. McCain is proposing.


  • New studies: Roger Feldman et al from HSI Network released a detailed econometric analysis of the McCain plan. They concluded that it would reduce the number of uninsured by 27.5 million at an annual cost of $287 billion. Using the same model, they said in a report released in August that the Obama plan would reduce the number of uninsured by 25.5 million at an annual cost exceeding $452 billion.


    Feldman finds the McCain plan would help those with lower incomes, with a three-fold increase in coverage among the lower half of wage earners. And the combination of McCain's tax credit and the Guaranteed Access Plan would provide significant help to those with lower incomes and chronic illnesses, leading to a five-fold increase in health insurance coverage among vulnerable populations.


  • Sheils: The big news everyone was awaiting this week was release of the analysis of the two candidates' plans by John Sheils and his colleagues at The Lewin Group. They find that the McCain plan would provide insurance to 21.1 million of the uninsured, compared to 26.6 million for Obama, and that the McCain plan would cost almost twice as much ($2 trillion for McCain compared to $1.2 trillion for Obama over 10 years).


    Sheils finds that more people will lose private insurance under the Obama plan than under McCain's and that the number of people with taxpayer-funded coverage would increase by 48 million under Obama. (Having this many more people in price-controlled programs like Medicaid, SCHIP, and the new public insurance program are one reason for the lower projected cost of the Obama plan. But they don't calculate the human costs of limited access and lower quality.)

So what do we make of this? The good news is that journalists are being forced to study this issue and the best ones want to make sure they understand the policy, not just the rhetoric.

But it is very, very difficult to do modeling of both of these plans with the limited detail available from the campaigns.

Further, both candidates have acknowledged that the financial crisis will mean rethinking the mix of all of their policy proposals, so what is most crucial is the vision and the structure upon which they would build changes.

All of these reports make it clear that Sen. McCain envisions a health care system designed to boost the private market to provide a wider range of more affordable choices for health insurance. Sen. Obama
envisions a health sector in which the government plays a much bigger role, not only in stricter regulation of private health insurance, but also in expanding the number of people on public health programs.

The differences in vision are clear.

Grace-Marie Turner

Recent News Articles and Studies

Your Health, Your Vote
Pharmaceutical Communication to Consumers
Belgian Customs Seize Record Haul of Fake Pills from India
Biologics: How to Regulate the Science Frontier
2008 Voters' Guide to Affordable Health Insurance
Waiting Your Turn: Hospital Waiting Lists in Canada
Costly ER Still Draws Many Now Insured


Your Health, Your Vote
Grace-Marie Turner and Amy Menefee
Galen Institute, 10/06/08

Before the next president makes any wholesale changes to the U.S. health system, it is imperative that he — and we, the consumers — understand how his proposals would work. That requires cutting through the campaign rhetoric and paying attention to the actual policies. This new paper published by the Galen Institute analyzes the health reform plans of the two leading presidential candidates and takes an in-depth look at the main features of both plans to assess which offers consumers greater choice and control over their health care and spending decisions. We conclude that Sen. Obama's plan would shrink consumer options. In contrast, McCain would open up access and competition, creating more options for consumers.


Pharmaceutical Communication to Consumers
Scott Gottlieb, M.D., American Enterprise Institute
Debate at the Oxford Union Society, 09/25/08

Not only are current restrictions on the communication between pharmaceutical companies and patients poorly crafted, but they belie a larger professional prejudice on the part of physicians to inappropriately try to control and shape the release of medical information. Dr. Gottlieb debunks the erroneous facts and false assumptions on which he believes these misdirected impulses, on the part of the profession and legislators alike, are predicated.

Belgian Customs Seize Record Haul of Fake Pills from India
Agence France-Presse, 10/03/08

The biggest seizure ever of counterfeit medical pills in Europe occurred in Belgium last week, reports Agence France-Presse. Customs authorities at the Brussels airport seized more than two million counterfeit medical pills from India which were bound for Africa. Blister packs of the fake medication — copies of a strong analgesic made by a German company, and a Swiss-made anti-malarial treatment — were discovered in large bags, the customs service said. They were sent in three shipments by a company based in Mumbai and were bound for two companies in a western African country. Customs officers' suspicions were aroused first because the pills were not transported in boxes, and then by spelling mistakes on the packaging.

Biologics: How to Regulate the Science Frontier
Merrill Matthews, Institute for Policy Innovation
Shreveport Times, 10/08/08

Legislation regarding "biologics," pharmaceutical drugs derived from living organisms, should include strong data exclusivity, writes Matthews. A clear, robust legal framework for the industry will keep the investment dollars flowing and preserve the financial incentives that entice firms to develop new treatments. According to Duke University economist Henry Grabowski, it takes between 12.9 to 16.2 years of market exclusivity for a biologic to break even — that is, not to make a profit, but just to cover the research and development costs. But legislation being debated in Congress provides only 12 years of data exclusivity. That all but guarantees that most biologics will be losing investments. If these firms don't get the legal protections they need, they'll close down and patients will lose out on an untold number of future cures, writes Matthews.


2008 Voters' Guide to Affordable Health Insurance
Merrill Matthews, Ph.D. and Angela M. Hunter
Council for Affordable Health Insurance, 10/08

CAHI has released this guide to provide information on how elected officials voted on key health insurance issues. The votes chosen for the guide, six from the House of Representatives and another five from the Senate, were included because they would either: impose more government regulations and controls on health care, therefore increasing health insurance costs and reducing access and should be opposed; or, reduce regulations, increase options, expand health savings accounts and promote high-risk pools as a safety net for the uninsurable and so should be supported.


Waiting Your Turn: Hospital Waiting Lists in Canada
Michael Walker, Nadeem Esmail, Maureen Hazel
Fraser Institute, 10/07/08

The median wait time for Canadians seeking surgical or other therapeutic treatment dropped to 17.3 weeks in 2008 from 18.3 weeks in 2007, according to a new study from the Vancouver-based Fraser Institute. The fall in waiting time between 2007 and 2008 results from a decrease both in the first wait — the wait between visiting a general practitioner and attending a consultation with a specialist — and in the second wait — from the time that a specialist decides that treatment is required to treatment. Among the provinces, Ontario achieved the shortest total wait in 2008, 13.3 weeks, with British Columbia (17.0 weeks), and Manitoba (17.2 weeks), next shortest. Saskatchewan exhibited the longest total wait at 28.8 weeks; the next longest waits were found in Nova Scotia (27.6 weeks) and Newfoundland & Labrador (24.4 weeks).


Costly ER Still Draws Many Now Insured
Kay Lazar
The Boston Globe, 10/06/08

Thousands of newly insured Massachusetts residents are relying on emergency rooms for routine medical care, an expensive habit that drives up health care costs and thwarts a major goal of the state's first-in-the-nation health insurance law, reports The Boston Globe. A sizable number of patients who obtained state-subsidized insurance have continued to use the ER — at a rate 14% higher than Massachusetts residents overall, according to state data compiled at the Globe's request. Those state-subsidized patients with the lowest incomes, who former
ly received free care in emergency rooms and now pay a nominal fee, are using ERs at a rate 27% higher than the state average. Routine care in ERs is considerably more expensive than at a doctor's office or community health center. The average charge for treating a non-emergency illness in the ER is $976, while it costs between $84 and $164 to treat a typical ailment in a primary care doctor's office. Doctors and counselors working the front lines of emergency care say a major reason patients still flock to their doors for routine care is that there are too few primary care physicians in Massachusetts. Some newly insured patients are waiting months for their first visits.

Upcoming Events

Grace-Marie Turner speaking on The Mornings Show
SIRIUS Radio Channel 161 Broadcast
Monday, October 13, 2008, 8:20 a.m. Eastern

Grace-Marie Turner speaking on The Thom Hartmann Show
Nationally Syndicated and Satellite Radio Broadcast
Monday, October 13, 2008, 12:00 p.m. Eastern

Implications of Medicare Part D
American Enterprise Institute Event
Tuesday, October 14, 2008, 9:00 a.m. – 12:00 p.m.
Washington, DC

Physician Disempowerment: A Transatlantic Malaise
Center for Medicine in the Public Interest Event
Tuesday, October 14, 2008, 9:00 a.m. – 1:00 p.m.
Washington, DC

Presidential Health and Economic Policy Discussion
Research!America Event
Tuesday, October 14, 2008, 10:30 a.m. – 11:30 a.m.
Washington, DC

Differing Approaches to a National Crisis: Presidential Candidates' Health Care Plans Debated
Oregon Health Forum Events
October 14-15, 2008
Medford, OR and Eugene, OR

Friends of the Galen Institute Conference Call with Rep. Michael Burgess, M.D. (R-Texas)
Wednesday, October 15, 2008, 12:00 p.m. Eastern
Become a member of our Consumers' Circle to join this exclusive conversation with Dr. Burgess.

Grace-Marie Turner speaking on The Weekday Show
KUOW-AM Radio Broadcast
Wednesday, October 15, 2008, 10:20 a.m. Pacific
Seattle, WA

Eighth Annual International Conference
Institute for Health and Productivity Management Event
October 15-17, 2008
Scottsdale, AZ
Grace-Marie will speak about "Prospects for Health Care Reform Post Election" on Wednesday, October 15.

Nowhere to Turn: How the Individual Health Insurance Market Fails Women
National Women's Law Center Webinar
Thursday, Oct. 16, 2008, 1:00 p.m. – 2:00 p.m. Eastern

Grace-Marie Turner speaking on the Small Business Advocate show
Nationally Syndicated Radio Broadcast
Friday, October 17, 2008, 7:30 a.m. Eastern

National Consumer Driven Healthcare Summit
October 19-21, 2008
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 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

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The views expressed in this newsletter are the opinions of the authors and do not necessarily reflect the views of the Galen Institute or its directors.