Short Takes

Highlights

• Public plan: Rep. Paul Ryan spoke at a day-long conference at the American Enterprise Institute yesterday, warning that a public plan option is becoming the linchpin in the health reform debate. He said that a health reform bill creating a new government health insurance plan will be approved by the House "no two ways about that" and that the provision likely will be included in the Senate bill as well.
  
  "So the way we look at this, we in the minority who want freedom in this country, think that the goal is to defeat the public plan option at all costs" because it will bring about a single-payer system, said Ryan, the top member of the GOP on the Budget Committee as well as a senior member of the Ways and Means Committee.

   

• Consensus Group: Our Health Policy Consensus Group held a briefing on Capitol Hill on Monday, organized by Nina Owcharenko and Heritage and jointly sponsored by Galen, to highlight our concerns about key health reform proposals currently under consideration in Congress.
  
  Our presentations were organized around the statement we distributed earlier this spring, warning against creation of a government health plan, mandates on employers and individuals, and federal regulation of health insurance.
  
  About 50 Hill staffers attended, with excellent questions about whether small businesses would support the public plan option (they might, but at their longer-term peril), how to address pre-existing conditions (adequate subsidies and state-based safety nets), and the risks of a two-tier health system. We also discussed our long history of statements offering positive reform ideas, including making sure tax policy changes get the incentives right.

   

• Individual mandate: Before President Obama and the entire White House press corps left for the Middle East this week, the president sent a letter to Sens. Kennedy and Baucus outlining his latest views on health reform. It opens the door to accepting an individual mandate, which he vehemently opposed during the campaign.
  
  President Obama said during the 2008 campaign, "I believe that the problem is not that people don't want health care. It is that they can't afford it." His reasoning was correct in opposing a mandate that individuals must purchase health insurance. (I wrote a short piece about this for The New York Times today called "We Need a Market, Not Mandates.")
  
  It is quite clear that the legislation being drafted by the key committees in Congress will include mandates on individuals and employers, a new government health insurance plan, strict federal regulation of all private health insurance, and an expensive federally-mandated benefits package.

   

• Cost: The biggest problem that the White House and congressional leaders are facing now is how to pay for all of this. The Congressional Budget Office is overwhelmed by the task of putting a price tag on as many as 1,000 different options, and early reports say that the numbers are eye-popping.
  
  There is no evidence that Congress will significantly cut the growth of spending in Medicare or Medicaid, as Mr. Obama proposes, nor will more spending on information technologies, disease management and prevention produce the needed savings. New ideas involve a kind of base-closure commission for health care, with an unelected board -- the Medicare Payment Advisory Commission -- getting new powers to set health care prices. White House officials also have opened the door to limiting how much health insurance high income workers can shield from taxes.
  
  Ironically, Mr. Obama said in his letter that "pouring more money into a broken system only perpetuates its inefficiencies," and he adds, "Health care reform must not add to our deficits over the next 10 years." Let's hold him to that.
  
  Congress may find ways to do fancy budgeting to obscure the cost, but the true price tag may force members to back away from an aggressive reform agenda. Recall that California and a number of other states dropped their plans when they saw the cost. But then, states actually must have balanced budgets and can't run trillions of dollars in deficits like Washington can. . .

   

• Quote of the week: "It's a game of dominoes," Ron Pollack, executive director of Families USA, told reporters this week. "If you don't get the financing, you don't get the mandate. If you don't get the mandate, you don't get the subsidies. And if you don't get the subsidies, you don't get health insurance reform."

   

• The winners! We announced on Monday the winners of the Galen Institute's Do No Harm video contest. They are short and terrific and you can view all of them here.
  
  First place went to Don Brookins for "Universal Car Care" (Contest PKG). The video depicts a customer with government auto-repair insurance who is seeking a brake job for his 1993 automobile, offering an analogy to the challenges consumers would face in a government-run health insurance system. Mr. Brookins is a retired news photographer and now an independent video photographer from Broomfield, Colorado.
  
  Second place went to David Knight for vividly illustrating the facts about challenges and restrictions that patients in government-controlled health systems face in other countries in accessing medical care for serious illnesses. Mr. Knight owns a video production company in Pittsboro, North Carolina.
  
  And third place went to "Free Market Boyz," produced by Jarrett Skorup, which uses rap to make the point that markets offer patients the best options for quality medical care. Mr. Skorup works as a researcher for the Mackinac Center for Public Policy in Midland, Michigan.

   

• A new news source: The Kaiser Family Foundation this week launched Kaiser Health News with a star-studded team of journalists specializing in health policy, led by Executive Editors Laurie McGinley, formerly of The Wall Street Journal, and Peggy Girshman, previously of Congressional Quarterly and NPR.
  
  Today's issue features an article with an interview with me and others engaged in the debate about "The big question: Where will the opposition come from and how intense will it be?"

   

• A clarification: In our last newsletter, we wrote about the Patients' Choice Act introduced in May by Reps. Paul Ryan and Devin Nunes and Sens. Tom Coburn and Richard Burr.
  
  In my opening commentary, I wrote about an exchange of letters that Grover Norquist of Americans for Tax Reform had with several of the bill's authors. To be clear, I should have said that Grover has accepted the claims of the sponsors that this bill cuts taxes at least as much as it raises them and that the authors have assured him that if future scoring shows that not to be the case, the sponsors will fix it.
  
  Here is a post by Ryan Ellis, tax policy director for ATR, with more details on his position.

   

• More on the mandate question: Rep. Ryan's team has put together a short memo explaining how his Patients' Choice Act would expand health insurance without the mandate that leads to so many other government intrusions in health care.

Grace-Marie Turner

Recent News Articles and Studies

Just Don't Try to Go the European Way
Who Will Save Us From Swine Flu?
Battle Will Set Health Policy for Decades
What You Don't Know Can Hurt You
Why the Health Care Rush?
Health Insurance Mandates in the States 2009
State Employee Health Care as a "Public Plan"
2009 Survey of Physician Appointment Wait Times
The Cost Conundrum
The End of Medical Miracles?

GALEN IN THE NEWS

Just Don't Try to Go the European Way
Grace-Marie Turner, Galen Institute
Richmond Times-Dispatch, 05/24/09

Although many U.S. reformers praise the health systems of Britain, France, Switzerland, and other European nations, these systems are fraught with problems, writes Turner. They are burdened by cost overruns, and yet they still deny patients the latest care and the choices we take for granted. In France, for example, the government now dictates which doctors and specialists a patient can see. Strict reimbursement schedules in government-controlled systems penalize doctors for performing costly procedures, even when those procedures are clinically determined to be best for the patient. Consequently, many doctors refuse to treat patients with certain illnesses. Maintaining high-quality health care while keeping costs low is no easy task, writes Turner. But the lessons from Europe are clear: When government tries to reduce costs, health care quality and access suffer.

Who Will Save Us From Swine Flu?
Grace-Marie Turner, Galen Institute
Home News Tribune, 06/02/09

The swine flu outbreak was a vivid reminder of how far we've come in dealing with the threat of viral pandemics, writes Turner. Health authorities responded in record time, limiting the spread of the virus and the loss of life, at least so far. For most people, the availability of antiviral drugs like Tamiflu and Relenza have proven immensely effective in treating the illness, calming fears about the spread of the virus. Researchers are also working hard to develop a vaccine that they hope to have available by this fall. It seems a paradox then that the pharmaceutical industry, which we rely on to develop these medicines, is generally scorned by politicians and even by many citizens. This attitude isn't just disingenuous. . . it's dangerous, writes Turner. The government cannot develop and deliver the drugs we need. In fact, government research makes a significant contribution to the creation of only one in 10 new drugs. Continued progress in medical innovation requires continued investment in new research by private industry.

Antivirals can save thousands or even millions of lives in the event of a truly lethal swine flu epidemic, writes Jack Calfee of the American Enterprise Institute. The pharmaceutical industry's ability to develop these essential drugs shows it plays an important role in advancing public health.

Battle Will Set Health Policy for Decades
Grace-Marie Turner, Galen Institute
Rome News-Tribune, 05/16/09

The main battle in the health reform debate in Washington is being fought over whether the federal government will set up its own health insurance plan to compete with private companies, writes Turner. Both sides understand that this is the pivot point over how our health sector develops over the next several decades. While there may be initial assurances that the public plan option would operate on a level playing field with private insurance, the government inevitably will use its regulatory, pricing and taxing authority to favor its plan. Government will ration care and services, driving out innovation, competition, and patient-centered quality. There are serious problems of cost, value and access in our health sector, and it is vital to address them. But any health reform proposal to change what needs fixing also must preserve the freedom, innovation, and quality of American medical care that people value.

What You Don't Know Can Hurt You
Thomas P. Miller, American Enterprise Institute
The American, 05/27/09

There is a strong association between educational attainment and health. That's one more reason to empower Americans, not Washington, with greater ownership of their healthcare, writes Miller. We are in the midst of another "historic" healthcare reform debate that again remains prone to focus more narrowly on the objectives of expanding more comprehensive insurance coverage to all Americans, and finding (or at least pretending to find) sufficient additional resources to finance the delivery of even more healthcare services to them. One still hears much more about Washington-determined rules, mandates, spending, and taxes to come than about how individual Americans might be empowered and assisted in taking more ownership of their personal healthcare decisions, such as through improved education, more actionable information resources, shared decision-making tools, and better-targeted incentives. Can we avoid another painfully frustrating lesson in the limits of insurance-coverage expansions and more bloated public budgets alone? A quick trip back to reform school for health policymakers might teach them the value of refocusing on a broader portfolio of private and public investments in the education-related determinants of better lifetime health. Because what we don't know really can hurt us, concludes Miller.

Why the Health Care Rush?
The Wall Street Journal, 06/03/09

Democrats are trying to rush the largest entitlement expansion since LBJ into law with a truncated debate and as little public scrutiny as possible, writes The Wall Street Journal. It's not hard to see why Democrats are trying to hew this full-speed-ahead timetable. Their health overhaul will run up a 13-figure price tag at a time when spending and deficits are already at epic levels and hook up the middle class to an intravenous drip of government health subsidies for generations to come. These are not realities that Democrats want the American people to mull over for very long. Better to grab what they will portray as a major domestic achievement while President Obama is at the height of his popularity and before anyone understands what it will mean in practice.

Health Insurance Mandates in the States 2009
Victoria Craig Bunce and JP Wieske
Council for Affordable Health Insurance, 06/09

The number of state mandated health benefits continues to grow -- to 2,133 nationwide, up from 1,961 last year, according to CAHI's annual list of health insurance mandates in each state. The report contains a chart of the mandates with information broken down by state into three categories: types of mandated benefits, providers, and covered populations. Mandated benefits currently increase the cost of coverage from a little less than 20% to perhaps 50%, depending on the state and the specific legislative language. Rhode Island leads the states with 70 mandates, while Idaho has the fewest at 13. Fortunately, there is evidence that some legislators are getting CAHI's message. At least 30 states now require that a mandate's costs be assessed before it is implemented, and at least 10 states provide for mandate-light policies, which allow some individuals to purchase a policy with fewer mandates more tailored to their needs and financial situation.

State Employee Health Care as a "Public Plan"
Robert E. Moffit, Ph.D.
The Heritage Foundation, 05/28/09

Some analysts have suggested that the experience of state governments in fielding a "public plan" for employees that competes with private health plans for the premium dollars of state employees is the proof that public plans can compete fairly and effectively. But the experience of the states provides a good example of a "public plan" only if one is willing to stretch the meaning of a public plan well beyond all recognition, writes Moffit. State employee health plans are really private health plans under contract with state government, and the simple fact that they are self-insured (like many private plans) does not make them public entities. If Congress creates a public plan, it is likely to be too big to fail, as is the case with so many other enterprises, thereby guaranteeing even greater burdens on taxpayers who are already faced with the seemingly insurmountable debt imposed by Social Security, Medicare, and Medicaid.

2009 Survey of Physician Appointment Wait Times
Merritt Hawkins & Associates, 05/09

This survey offers a snapshot of physician availability in 15 large metropolitan markets with some of the highest physician-to-population ratios in the country. Despite having a high number of physicians per capita, many of these markets are experiencing appointment wait times of 14 days or longer. Boston experiences by far the longest average wait times of any of the 15 metropolitan markets (49.6 days). Long wait times in Boston may be driven in part by the health care reform initiative that was put in place in Massachusetts in 2006. The initiative succeeded in covering many of the state's uninsured patients. However, it has been reported that many patients in Massachusetts are experiencing difficulty in accessing physicians. Survey results support these reports. Long appointment wait times in Boston also may signal what could happen nationally in the event that access to health care is expanded through health care reform.

The Cost Conundrum
Atul Gawande, M.D.
The New Yorker, 06/01/09

Gawande uses McAllen, Texas, to provide a compelling account of the forces that are driving up health spending in the United States. McAllen has the lowest per-capita income in the country ($12,000) and the highest per-capita Medicare expenditures ($15,000). And yet there's no evidence that the treatments and technologies available in McAllen are better than those found elsewhere in the country. When you look at the differences in the costs of care you come to realize that we are witnessing a battle for the soul of American medicine, writes Gawande. Somewhere in the United States at this moment, a patient with chest pain, or a tumor, or a cough is seeing a doctor. And the damning question we have to ask is whether the doctor is set up to meet the needs of the patients, first and foremost, or to maximize revenue.

Gawande's description of the symptoms -- high spending, low value -- is compelling, but just don't look to him for a cure, writes Joe Antos of the American Enterprise Institute. Gawande recommends "accountable-care organizations" for doctors and hospitals that would promote collaboration, higher quality, and more prevention, while discouraging overtreatment, undertreatment, and "sheer profiteering." But, despite the enthusiasm of experts, ACOs do not exist and it is not clear how they would accomplish what has been promised. What Gawande doesn't say is that we cannot solve our health system problems by top-down solutions that focus solely on the suppliers of health care, writes Antos. If a reformed health system is to succeed, it will have to engage patients to take more responsibility for their health spending decisions. And it will have to respond nimbly to the demands of its customers -- something that is sorely missing today.

The End of Medical Miracles?
Tevi Troy, Hudson Institute
Commentary, 06/09

Americans have, at best, a love-hate relationship with the life-sciences industry, writes Troy, former deputy secretary of Health and Human Services. These days, the mere mention of a pharmaceutical manufacturer seems to elicit gut-level hostility. At the same time, Americans are adamant about the need for access to the newest cures and therapies and expect them to emerge for their every ailment -- all of which result from work done primarily by these same companies whose profits make possible the research that allows for such breakthroughs. Attempts to universalize our system and pay for it with cost controls that could stifle innovation contradict their own goal, which is, presumably, better health, writes Troy. One of the greatest threats to our health and continued welfare is that Americans in the present day, and particularly their leaders, are taking for granted the power, potency, and progress flowing from life-saving medical innovations. And in so doing, they may unknowingly prevent the kind of advance that could contribute as vitally to the welfare of the 21st century as the discovery of the antibiotic altered the course of human history for the better in the century just concluded.

The Dollars and Sense of Prevention: A Primer for Health Policy Makers
Center for Studying Health System Change Event
Monday, June 8, 2009, 9:00 a.m. - 12:00 p.m.
Washington, DC

Implementing Comparative Effectiveness Research: Priorities, Methods and Impact
The Brookings Institution Event
Tuesday, June 9, 2009, 8:30 a.m. - 12:45 p.m.
Washington, DC

Comparative Effectiveness Research around the World
The Commonwealth Fund and Alliance for Health Reform Roundtable
Tuesday, June 9, 2009, 12:30 p.m. - 3:30 p.m.
Washington, DC
For more information, please contact Deanna Okrent at deannaokrent@allhealth.org or 202-789-2300.

The Future of Employer-Provided Health Care
The Heritage Foundation Event
Tuesday, June 9, 2009, 12:30 p.m.
Washington, DC

The Convergence of Health and Wealth: The Next Frontier
Metavante Corporation Webinar
Tuesday, June 9, 2009, 1:00 p.m. EDT

Reducing Health Care Costs: Chronic Disease Management for Alcohol and Drug Problems
Congressional Addiction, Treatment and Recovery Caucus Event
Thursday, June 11, 2009, 1:00 p.m. - 3:00 p.m.
Washington, DC
For more information, e-mail alexae@thenationalcouncil.org.

Health Reform: Journalists' Perspectives
Congressional Health Care Caucus Event
Friday, June 12, 2009, 10:00 a.m. - 11:00 a.m.
Washington, DC

Health Care Reform
Cato Institute Conference
Wednesday, June 17, 2009, 8:00 a.m. - 5:00 p.m.
Washington, DC

Biosimilar Biological Products
Congressional Quarterly Forum
Wednesday, June 17, 2009, 8:00 a.m. - 11:00 a.m.
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 www.galen.org.

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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.