Moving On

The dilemma was highlighted during a luncheon I attended in Philadelphia on Monday sponsored by the Children's Hospital. (I was there to speak on federal vs. state efforts in health reform.) At the luncheon, Gov. Jon Corzine of New Jersey said he believes Congress should "just roll over the program until we get a new president." Gov. Ed Rendell of Pennsylvania strongly disagreed: "There is too much at stake to roll the dice for the next president. What if [former New York Mayor Rudy] Giuliani were elected? What would we do then?"

Senate Majority Leader Harry Reid says he believes Congress already has compromised enough and wants to send a bill very similar to the one that already has passed the Senate (by a veto-proof majority) back to the president. Speaker Nancy Pelosi is looking for ways to tweak the bill to address the concerns of enough members to pick up 13 more votes needed to override the president's next veto.

I had a commentary in yesterday's Wall Street Journal outlining fundamental questions that members should ask in the next round: Will an expansion of the program help or hurt the children it was designed to serve? What is the quality of coverage kids will get through the program? And is SCHIP the right vehicle to start a journey toward universal coverage?

The ideal solution would be to focus on making sure there is enough money in the program to cover the core eligible children, give states better incentives to get them covered, and offer new options for parents to use their SCHIP allocation to add their children to private policies. Then, we can have the larger debate about the best way to expand coverage to millions more children and families who are left out of the current system.

The Heritage Foundation is working hard to get members to refocus on offering refundable tax credits to families above the SCHIP income threshold to help them purchase private health insurance. Here's a link to a summary of the plan, introduced by Sen. Mel Martinez.

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And speaking of tax credits, the House Budget Committee, at the urging of ranking member Rep. Paul Ryan, delved into the issue of the tax code and health insurance during a hearing on Thursday. Len Burman of the Urban Institute and I were the sole witnesses for a hearing that a surprising number of members on both sides of the aisle attended.

Rep. Ryan is a true friend of free markets and understands that tying health insurance to the workplace is leaving millions of people behind in our increasingly mobile 21st century economy.

To quote John Reichard's article about the hearing in CQ HealthBeat: "Lengthy testimony by Grace-Marie Turner of the Galen Institute and Len Burman of the Urban Institute illustrated the common ground shared on the issue by a small but growing number of Republicans and Democrats." While we agreed on the distortions caused by the current system, we disagreed over whether the right remedy is expansion of government programs or creating a new subsidy for individuals to help them purchase portable private health insurance.

It is interesting to see how the partisan lines are blurred on the issue of the tax treatment of health insurance. Just among the committee members who attended the hearing, for example:

• Democratic Rep. Brian Baird of Washington State is sponsoring legislation in the House based upon the Wyden-Bennett bill in the Senate to completely rearrange the tax treatment of health insurance. (I'll be writing more about this in a future newsletter.)
• Rep. Ryan, a Republican, is developing a bill that would create a universal tax credit.
• And Rep. Jim Cooper of Tennessee, a Democrat, has a bill that would require employers to tell their employees how much of their compensation package is going toward health insurance as a first step toward visibility of its cost. (During the hearing, Rep. Ryan asked to be listed as a co-sponsor.)

Chairman John M. Spratt said the hearing exposed the opportunities and difficulties with tax code changes and that more hearings clearly are needed. But exposing the problem is a significant step forward. The most important thing is that we are beginning to have a conversation over this important issue.

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This has been even more of a whirlwind week than usual. In addition to my congressional testimony and two other speeches, I had articles and letters on SCHIP published this week in The Wall Street Journal, the San Jose Mercury News, The Baltimore Sun, The Detroit News, Investor's Business Daily, and a number of other papers around the country.

Also, National Review Online published on Wednesday my article that looks ahead at the major policy issues in next year's health reform debate. And the Clare Boothe Luce Policy Institute published not only a lecture I gave earlier this year, but also included me in their "Great American Conservative Women Calendar," along with friends Bridgett Wagner of Heritage and Galen board member Cleta Mitchell. You can order your copy today and also support the excellent work of the Luce Institute.

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We learned late last night of the sudden death in a car accident of Mark Coyle, who had a wonderful relationship with radio producers around the country and had been very successful at arranging interviews for us. Mark was traveling in Syracuse, NY, when he was in a fatal accident that also seriously injured his 5-year-old daughter, Samantha.

He was only 42. It is just inconceivable that he is gone so suddenly. Please have Mark's spirit and his young daughter's recovery in your prayers.

Life is precious and all too fleeting. May he rest in peace.

Grace-Marie Turner

RECENT NEWS ARTICLES AND STUDIES:

State Issues

There are Better Ways to Insure Kids
Grace-Marie Turner, Galen Institute
The Wall Street Journal, 10/18/07

The debate over SCHIP is not over whether to give poor kids health care, or even whether this program should continue. Rather, it's over who should be covered and whether to extend taxpayer-funded coverage to middle-income children. Already, two-thirds of children who do not have health insurance are eligible for federal help through either SCHIP or Medicaid. Congress's first priority should be to make sure these poorer, uninsured children are enrolled. Another question voters need to ask is, What is the quality of coverage kids will get under an expansion? Parents should ask if the public program would provide them with the same access to their physicians as traditional private plans.

Truth About Bush's SCHIP Veto Doesn't Match Harsh Rhetoric
Grace-Marie Turner, Galen Institute
Baltimore Sun, 10/14/07

Is President Bush a liar who hates children? That's what some critics are now asking. Why else, they say, would he refuse to sign a bill providing health insurance to poor children? This kind of rhetoric is wrong and misleads people about the facts of this important issue.

How to Insure Kids (Once the Shouting Dies Down)
Michael Franc, The Heritage Foundation
RealClearPolitics, 10/18/07

Congress can wind up with a far better SCHIP bill than the vetoed measure, helping millions more working families get and keep the health coverage they want. Alternative legislation proposed by Sen. Mel Martinez (R-Fla.) last January brought together diverse groups like Families USA, AARP, the American Medical Association, and The Heritage Foundation. This approach would maintain the SCHIP program's historical focus on children in families at or slightly above the poverty level, and it would create a tax credit for families with income between two and three times the federal poverty level to help parents secure health coverage for their children.

Faithful Can Oppose Children's Health Plan Expansion in Good Conscience
Rev. Robert A. Sirico, Acton Institute
Detroit News, 10/16/07

There is enough wrong with SCHIP to make it possible to oppose it in good conscience. There is not a living soul who would not wish that every person, especially every child, would have access to perfect medical care. But eliminating taxes and regulations that hinder private industry will make greater strides toward universal coverage than any state program can or will. The essential condition for universal coverage is universal prosperity, and the only means available to create that is a flourishing and free economy -- a condition that programs like SCHIP help to undermine.

Market Forces in Health Care

The Tax Code and Health Insurance Coverage
Grace-Marie Turner, Galen Institute
House Committee on the Budget, 10/18/07

While the favored tax treatment of health insurance has provided a stable source of health coverage for hundreds of millions of American workers over the last half century or more, it also is clear that it had led to many of the problems that our health sector faces today. With the tax break now worth more than $200 billion a year, it seems appropriate to ask if we are getting our money's worth.

Free-Market Alternative
Grace-Marie Turner, Galen Institute
National Review Online, 10/17/07

The debate over universal coverage and the role of government in our health sector will be different this time around for several reasons: More Americans are worried today about losing their coverage so it's not just about the uninsured. More employers are looking for ways to shed the responsibility and cost of health insurance. And Americans are pilloried at home and abroad for a health sector that costs so much and yet leaves so many millions without coverage. Those who believe in free markets need to do a better job of conveying the vision of what a free market would produce. We can create a health care system that fits our 21st century economy by putting in place new policies that make subsidies fairer, that offer affordable health insurance that is portable from job-to-job, and that empower consumers with better information to seek value in their health spending.

Comparing Public and Private Health Insurance: Would a Single-Payer System Save Enough to Cover the Uninsured
Benjamin Zycher
Manhattan Institute, 10/07

In this detailed analysis, Zycher examines the claim that a single-payer system similar to Medicare would realize savings in administrative costs sufficient to extend insurance coverage to all of the uninsured. First, he analyses the actual administrative costs of public and private coverage and concludes that in the private market, 11 to 14 percent of total premiums are spent on broadly-defined administrative costs, compared to 6 percent for Medicare, which includes a reasonable allocation of other government functions that support Medicare, such as enforcement. His analysis suggests strongly that the real economic cost of delivering health insurance benefits under a single-payer system would be substantially greater -- at a minimum, roughly double -- than that under the current private system.

HillaryCare -- The Preview
Sally Pipes, Pacific Research Institute
The Wall Street Journal, 10/12/07

Hillary Clinton's American Health Choices Plan, based on mandates, more regulation, and increased taxes, is not a recipe for cost control but for disaster. For proof, you need look no further than Massachusetts. Of the 115,418 people who have enrolled in the new plans, more than 90,000 have signed up for the 100% free option -- free to the enrollee, if not to taxpayers. The plans for which people must pay close to the full freight have been about as popular as wool sweaters in August. As of Sept. 1, only 7,164 people had signed up for these new plans despite the July 1 mandate that individuals purchase coverage. That's a mere 4% of the estimated eligible uninsured population.

A Test of Bad Health
Peter Pitts, Center for Medicine in the Public Interest
The New York Times, 10/18/07

Pitts examines a provision that was in an early version of SCHIP legislation (but dropped before final passage) that would have allocated $300 million to create a Center for Comparative Effectiveness for medicines and medical treatments. Medicare would use the center's findings to decide which drugs to cover. But Pitts points out that studies like this take many years, and early findings are regularly overturned and modified by further research. Evidence from other countries shows that locking payment decisions to these studies would retard innovation and deny patients access to newer treatments.

Health Systems Abroad

Waiting Your Turn: Hospital Waiting Lists in Canada
Nadeem Esmail and Dr. Michael A. Walker
The Fraser Institute, 10/15/07

Vancouver's Fraser Institute has released its annual survey of hospital waiting times across Canada and reports that the total waiting time for patients between referral from a general practitioner and treatment rose to an all-time high of 18.3 weeks in 2007, up from 17.8 weeks in 2006. Ontario recorded the shortest waiting times overall (the wait between visiting a general practitioner and receiving treatment), at 15 weeks. Nova Scotia recorded the longest waits at 24.8 weeks. Patients across Canada also experienced significant average waiting times for CT scans (4.8 weeks) and MRIs (10.1 weeks), with Newfoundland residents waiting the longest at 20 weeks -- an average of nearly five months.

Patients Turn to DIY Dentistry as the Crisis in NHS Care Deepens
Jenny Hope
Daily Mail, 10/15/07

A shortage of state-funded dentists in the U.K.'s National Health Service (NHS) has led one in 20 British patients to resort to do-it-yourself treatment, in some cases pulling out their own teeth with pliers. A survey showed that more than two million people who want NHS dentistry are unable to get it. The NHS agreed to put more money into covering dental services, but fewer dentists are accepting patients and NHS payments are still far below private rates -- with the NHS paying dentists ?43.6 for a root canal vs. ?342 charged to private payers. The Labor Department's solution: "Anyone who can't get to see an NHS dentist should contact their local primary care trust and get on a list to see one."

UPCOMING EVENTS:

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

Independence, Influence, Transparency and Conflict of Interest at the FDA
George Washington University Department of Health Policy Seminar
Monday, October 22, 2007, Noon - 1:30 p.m.
Washington, DC

Policy Perspectives 2007
Cato Institute City Seminar
Tuesday, October 23, 2007, 11:00 a.m. - 2:00 p.m.
New York, NY

Health Care Forums Featuring Policy Advisors for the 2008 Presidential Candidates
Congressional Quarterly Event
October 23-25, 2007
Washington, DC
For more information, contact Martina Hone at 202-419-8489.

Fourth Annual Emerging Issues Forum
The Heartland Institute Event
Thursday, October 25, 2007, 7:30 a.m. - 3:30 p.m.
Chicago, IL

European Systems of Universal Health Care: A Discussion of the Role of the Private Sector in Europe
America's Health Insurance Plans Event
Wednesday, October 31, 2007, 11:30 a.m. - 1:30 p.m.
Washington, DC
For more information, contact rsvp@ahip.org.

Filling in the Cracks: Public and Private Strategies to Extend Health Insurance to Children and Families
National Institute for Health Care Management Foundation Webinar
Wednesday, October 31, 2007, 1:00 p.m. - 2:30 p.m. EDT

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 www.galen.org.

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