Beltway Hothouse


Let's hope this is the darkness before the dawn because the feeling in Washington right now is gloomy among those who believe in freedom, markets, and individual control over health care decisions.

Congress is plowing ahead to get health reform done this year, no matter what the American people may think about it. Both the Senate and House have cancelled a Columbus Day recess this month to keep members in the Beltway hothouse and give them less of a chance to go home and meet with their constituents.

The Senate Finance Committee finished its debate over amendments at about 2:15 a.m. today and has asked the Congressional Budget Office to price the final package. This means that all of the five committees with jurisdiction over health reform have completed work on comprehensive bills. The two bills in the Senate will be merged, with more amendments and a big debate before the full Senate, and a floor vote possible this month. The House will follow the same process in merging its three committee bills before sending one bill to the floor.

An infinite number of parliamentary maneuvers are possible and there are still a great number of unresolved issues, but the bottom line is that members need to hear their constituents' views about the approach this Congress is taking to health reform. Winning a few votes to turn down a "public plan" before the Senate Finance Committee is not a final victory.



Doctors weigh in: The White House has invited scores of doctors to join the president on Monday for a very visible push for health reform. But his plan is just not selling in the rest of the country. Most doctors do understand that turning so much power and control over health care to Washington will mean they have even less authority than they do now to make the best decisions about their patients' medical care.

Two of the nation's top docs weighed in this week:


  • Denis Cortese, chief executive of the Mayo Clinic, told The New York Times it is "heartbreaking to watch" the current machinations in Washington over how to overhaul the nation's health care system.

    According to the Times: Dr. Cortese argues that Congress has become too enmeshed in the details — discussing what the benefit package in a health plan should look like, for example.

    In his view, Congress already micromanages the Medicare program and has proven itself unable to withstand the political pressure and blandishments of lobbyists. "All of us are paying for it," he said, noting the spiraling costs of the Medicare program and its lack of emphasis on high quality care. Because Dr. Cortese contends that Medicare has had such a poor track record, he has not been shy in opposing a government-run health care plan, or public option, which many liberal Democrats favor. Instead, he would urge Congress to create a national package of health insurance options modeled after the Federal Employees Health Benefits plan.


  • Delos "Toby" Cosgrove, chief executive and president of the Cleveland Clinic, said health costs will continue to escalate unless Congress goes beyond the reform measures it is considering now, CBS News reports. At a conference in Washington, D.C., Cosgrove explained that insurance and payment reform are not enough. "It is essential, he said to also implement changes to the delivery of care, as well as to decrease the burden of disease in the United States."

    The number of elderly people in the U.S. is increasing, while the number of sophisticated treatments available increases as well — both bringing costs up. "Add to that the situation where we maybe bring another 40 million people under coverage, you're going to see a continuing escalation of health care we're not going to be able to sustain at the present time," Cosgrove said. "We've got to figure out a way to do it more efficiently — that's going to require doctors to be integrated with hospitals, and hospitals to be integrated with hospitals."



A new poll out by Kaiser this week showed that "57% of Americans now believe that tackling health care reform is more important than ever — up from 53 percent in August." Despite the top-line numbers, the poll still shows there is considerable concern among the American people about health reform.

For example, 51% of those surveyed say they will be worse off or that reform will make no difference to them, compared to only 42% who think they will be better off if it passes. Importantly, 61% of seniors think that they will be worse off or that reform will make no difference to them personally, and only 31% think they will be better off. A two-to-one negative rating among seniors should give legislators pause.

It's not surprising, then, that those polled were nearly evenly split on whether Congress should press on with reform; 47% said they should stop or pursue a more limited reform agenda vs. 50% who said they should continue. By a 47 to 42% margin, those polled still say they want the reform bill to be bi-partisan. That would suggest that pressing on with reconciliation would have a backlash of its own.

Finally, supporters of an individual mandate should be very worried about this poll. It received support of 68% of those surveyed in the initial question, but only 29% of them would continue to support a mandate if it meant that some people would be required to buy health insurance that they find too expensive or did not want. That should be a real warning sign since the individual mandate is central to the structure of all of the health reform bills making their ways through committees in Congress.



O Canada: The Independence Institute, led by the inimitable Jon Caldara, has an amazing ability to come up with bold initiatives to educate the policy debate. Earlier this week, Jon led about a dozen members of the media to Vancouver to get a closer look at the Canadian health care system.

"We talked to six Canadians who were denied treatment under their 'public option,' and who shared their stories with us," he reports. "We also met with a medical broker who helps Canadians escape south to the states to get the care they need — in time — so they can live. The overall theme of the trip was, 'Don't do what we did, then we won't have any place to escape to.'"

Here is some of the media coverage of the trip, including an excellent article from the Los Angeles Times about Canada moving towards more private health care options, with some of the same stories the group heard in Vancouver. The Washington Times wrote an article on the medical brokers necessary to help keep average Canadians alive. And Gateway Pundit live-blogged the event here.

Kudos to Jon, a fearless fighter for freedo



Galen news: Watch this space for an announcement about an exciting new website we will be launching this month called the Health Reform Hub. It will provide all of the latest information about health reform in one stop on the web. It will be a central access point for insights and analysis from all of our colleagues in the market-based policy community, especially leaders from the Health Policy Consensus Group, as well as commentaries from others that we think move the debate. It will also have Ning capability to give everyone a voice in the policy debate.

And we are updating the template for Health Policy Matters. We will have an all new, even more modern look, next week. But as with all new technologies, there could be glitches. If the newsletter stops coming, then please let us know and we will find a work-around. We don't want to lose you or any other of our nearly 8,000 subscribers!

Grace-Marie Turner

Recent News Articles and Studies

Why the Rush?
Health Co-Ops Aren't the Answer
Health 'Reform' Is Income Redistribution
How American Health Care Killed My Father
Health Care Reform on the Hill: Where We've Been and Where We're Going
Putting U.S. Health Care on the Right Track
Rhetorical Tax Evasion
Why Obama Bombed on Health Care
Comparative Effectiveness Research May Not Lead to Lower Health Costs or Improve Health
Medicare's New Critics
In Canada, A Move Toward a Private Healthcare Option
Health Care in Massachusetts: A Warning for America


Why the Rush?
Grace-Marie Turner
National Review Online: Critical Condition, 09/28/09

Congressional leaders and the White House are pushing forward with their aggressive agenda to remake our health sector as though they are oblivious to the fear and outrage outside the Beltway and the pleas of the American people to apply the brakes. An issue that is just beginning to hit the radar screen is the requirement that all Americans must have health insurance, defined by government, with fines and penalties for not complying. The individual mandate would lead to a cascade of government intrusions and losses of freedom.

Turner discussed the effects of the individual mandate this week with radio host and Baltimore Sun columnist Ron Smith.


Health Co-Ops Aren't the Answer
William Winkenwerder, The Winkenwerder Company
The Wall Street Journal, 09/28/09

Health care co-operatives aren't likely to drive down costs or compete with private insurers on a level playing field, Dr. Winkenwerder writes. Health co-ops represent only about 1% of the health insurance market, and it won't be easy to raise that number quickly. Any effort to create a new health care co-operative for five, 10, or 50 million Americans would be an extraordinary undertaking. It took decades and billions of investment dollars, with some of the most sophisticated business minds, to build today's major health insurance companies. Further, the main way co-operatives could be cost-competitive with existing private plans would be because of the billions of taxpayer subsidies envisioned by co-op proponents and by paying doctors and hospitals at Medicare rates, which often do not even cover costs. A "public option" by any other name — including a health-care co-op — just won't fly.

Health 'Reform' Is Income Redistribution
Michael O. Leavitt, Al Hubbard and Keith Hennessey
The Wall Street Journal, 09/27/09

While many Americans are upset by ObamaCare's $1 trillion price tag, Congress is contemplating other changes with little analysis or debate, Sec. Leavitt, Hubbard, and Hennessey write. These changes would create a massively unfair form of income redistribution and create incentives for many not to buy health insurance at all. The combination of a guaranteed issue, community rating, and an individual mandate means that younger, healthier, low-income earners would be forced to subsidize older, sicker, higher-income workers. And because these subsidies are buried within health insurance premiums, the massive income redistribution is hidden from public view and not debated.

How American Health Care Killed My Father
David Goldhill
The Atlantic, 09/09

After the needless death of his father, Goldhill, a business executive, began a personal exploration of a health care industry that for years has delivered poor service and irregular quality at astonishingly high cost. It is a system, he argues, that is not worth preserving in anything like its current form. And the health care reform now being contemplated will not fix it. The most important single step we can take toward truly reforming our system is to move away from comprehensive health insurance as the single model for financing care, Goldhill writes. A guiding principle of any reform should be to put the consumer, not the insurer or the government, at the center of the system. If the government took on the goal of better supporting consumers — by bringing greater transparency and competition to the health care industry, and by directly subsidizing those who can't afford care — we'd find that consumers could buy much more of their care directly than we might initially think, and that over time we'd see better care and better service, at a lower cost, as a result.

Health Care Reform on the Hill: Where We've Been and Where We're Going
Thomas P. Miller, American Enterprise Institute
Blue Skies and Brickwork Summit, 09/23/09

Miller provides an overview of this year's efforts at national health reform. We may be in a temporary bubble of legislative optimism, but the ugly process of putting actual bill language under real scrutiny will, once again, begin to unravel and spin apart a host of interconnected provisions that discomfort and anger enough real people, let alone organized interests, to make the whole even less than the sum of its parts. The advocates of this year's initial version of comprehensive health reform misread the public mood and sentiment, and they could not jam it through the political process fast enough, Miller writes. We have unresolved conflicts and contradictions in our mix of political sentiments. This version was too much, too fast, and not put together in a way that was sustainable. But all of us, hopefully somewhat more chastened and humbler, will be back to consider health reform in a different context. Just not this year, Miller writes.

Putting U.S. Health Care on the Right Track
Denis A. Cortese, M.D., and Jeffrey O. Korsmo, M.S.
New England Journal of Medicine, 09/23/09

There is a clear path to higher-quality, more affordable health care, if we are willing to veer from the familiar route, according to Mayo Clinic executives. In general, a key way of spreading high-value health care is to pay for it. Indeed, paying for value is a fundamental requirement for effective health care reform. Unfortunately, much of the financing in proposed health care reform bills comes from continued across-the-board reductions in Medicare's price-controlled fee-for-service payments. That won't work, they write. We must define value, publicly display understandable value scores, and pay for value. If tools and incentives are aligned to support this goal, we'll be on the right track to transform U.S. health care.

Rhetorical Tax Evasion
The Wall Street Journal, 09/29/09

President Obama's effort to deny that his mandate to buy insurance is a tax has taken another thumping, this time from fellow Democrats in the Senate Finance Committee, The Wall Street Journal writes. Chairman Max Baucus's bill includes the so-called individual mandate, along with what he calls a $1,900 "excise tax" if you don't buy health insurance. And, lo, it turns out that if you don't pay that tax, the IRS could punish you with a $25,000 fine or up to a year in jail, or both. Tom Barthold, the chief of staff of the Joint Committee on Taxation, admitted last week that the individual mandate would become a part of the Internal Revenue Code and that failing to comply "could be criminal, yes, if it were considered an attempt to defraud." So failure to pay the mandate would be enforced like tax evasion, but Mr. Obama still claims it isn't a tax. Too bad Mr. Obama's rhetorical tax evasion can't be punished by the IRS.

Editor's Note: The Senate Finance Committee voted late Thursday night to trim the penalty for not buying insurance to $1,500 and to eliminate the extra fines and jail time.

Why Obama Bombed on Health Care
Holman W. Jenkins, Jr.
The Wall Street Journal, 09/29/09

Mr. Obama's health care thinking always lacked the bite of real "reform," Jenkins writes. He might have honestly sold the Democratic dream of a single-payer system, forthrightly explaining how resources would be allocated. He might have spoken of putting the price tags back on health care so consumers could decide instead. He did neither — and has botched an opportunity for real progress.


Comparative Effectiveness Research May Not Lead to Lower Health Costs or Improve Health
RAND Corporation, 09/08/09

While there are benefits to having better information for doctors and patients about what works best in treating different health problems, it is uncertain that the research will lead to reductions in spending and waste or improvements in patient health, RAND reports. Under some circumstances comparative effectiveness research (CER) might reduce spending for certain diseases, but there is no clear evidence that a large new undertaking in this area would result in overall savings to the U.S. health care system. RAND researchers concluded that at least in the near term, any reduction in spending created from CER would be offset by the up-front costs associated with generating, coordinating and disseminating the research findings.


Medicare's New Critics
Fred Barnes
The Weekly Standard, 10/05/09

President Obama claims that Medicare Advantage will give $177 billion in "overpayments" to insurance companies over the next 10 years and wants to cut that amount from the program. But the $177 billion he wants to cut is neither "a 14% premium" for insurance companies nor a subsidy for them, Barnes writes. Most of the 14% goes to provide seniors with additional Medicare benefits or cost reductions. Medicare Advantage allows seniors to buy private insurance that gives them better and more comprehensive care than traditional fee-for-service Medicare. Insurers compete on price and the attractiveness of their product. It is the crown jewel of government health care programs.


In Canada, A Move Toward a Private Healthcare Option
Kim Murphy
Los Angeles Times, 09/27/09

Hoping to capitalize on patients who might otherwise go to the U.S. for speedier care, a network of technically illegal private clinics and surgical centers has sprung up in British Columbia, echoing a trend in Quebec, Murphy writes. More than 70 private health providers in British Columbia now schedule simple surgeries and tests such as MRIs with waits as short as a week or two, compared with the months it takes for a public surgical suite to become available for nonessential operations. In October, the courts will be asked to decide whether the budding system should be sanctioned.


Health Care in Massachusetts: A Warning for America
Paul Hsieh, Freedom and Individual Rights in Medicine (FIRM)
The Christian Science Monitor, 09/30/09

The Massachusetts health plan has resulted in skyrocketing costs, worsened access, and lower quality care, Hsieh writes. Massachusetts residents are forced to purchase benefits they may neither need nor want, such as in vitro fertilization, chiropractor services, and autism treatment — raising insurance costs for everyone to reward a few with sufficient political "pull." The Massachusetts plan thus violates the individual's right to spend his own money according to his best judgment or for his own benefit. Instead, individuals are forced to choose from a limited set of insurance plans on terms set by lobbyists and bureaucrats, rather than those based on a rational assessment of individual needs.

Upcoming Events

MCRA 2009 Annual Conference
Managed Care Risk Association Event
October 5-7, 2009
Nashville, TN
Grace-Marie Turner will speak about "What is on the Horizon for Health Reform?" on Wednesday, October 7.

The Hidden Impact of Health Reform: What Reform Means for Academic Health Centers and the Communities They Serve
Association of Academic Health Centers Event
Tuesday, October 6, 2009, 11:00 a.m. – 12:00 p.m.
Washington, DC
For more information, please contact

Health Cooperatives: A Viable Alternative to a Public Plan?
Hudson Institute Event
Tuesday, October 6, 2009, 12:00 p.m. – 2:00 p.m.
Washington, DC

America's Health Care Solutions: Real Reform or Government Takeover?
Society for the Education of Physicians and Patients Event
Tuesday, October 13, 2009, 7:00 p.m. – 9:00 p.m.
Pittsburgh, PA

Policy Boot Camp
Institute for Policy Innovation Event
Saturday, October 17, 2009, 9:00 a.m. – 12:00 p.m.
Dallas, TX



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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