Universal Coverage

Advocates of universal health coverage are stepping up the pace. A few examples:

• The Senate Finance Committee on Wednesday began a series of five hearings on "Moving toward Universal Coverage." Committee Chairman Max Baucus set the stage by saying, "I believe health care should be a right, and I believe America is big enough and rich enough to guarantee that right."

  Peculiarly, Stuart Altman of Brandeis University, a long-time universal-coverage advocate, recommended that the government should first focus on covering the uninsured, and after that, tackle rising health costs. (Good grief. Don't they get it that one of the main reasons that so many millions of people don't have health coverage is the cost? And that once you set up a government-system, cutting back spending is almost impossible politically?)

• Also this week, Sen. Hillary Clinton pledged that "When I'm President, we will have universal health care coverage in our country so that every American has the quality health care they deserve."

• Many advocates of a taxpayer-funded, government-dominated universal coverage system believe that expansion of the State Children's Health Insurance Program is an important pillar in reaching their goal. This week, Senate Budget Chairman Kent Conrad proposed boosting spending for SCHIP by $50 billion over the next five years to expand coverage to 8.3 million more uninsured children.

• Massachusetts is still struggling to get its universal health care plan up and running. State officials this week recommended dropping a key requirement that the state-mandated insurance have no lifetime limits. They found that hundreds of thousands of people have health insurance with lifetime limits, and their policies would not otherwise qualify as valid under the new law. Residents will have extra time -- perhaps more than a year -- to obtain the state-stipulated coverage. All state residents, however, will still have to buy some insurance by the July 1 deadline set in law or pay a penalty.

  The state also is struggling with affordable policies: After Gov. Patrick's intervention, several companies agreed to lower-premium policies, which now range from $122 to $800 a month for individuals.

• And the Swiss are running into problems with their own system of mandatory health insurance. There are currently 87 private insurers providing coverage for basic health coverage for Swiss residents, but even in a country where purchasing health insurance is required, more than 100,000 people are no longer covered because they haven't paid their premiums.

  Health premiums have soared over the past decade, and the Left saw an opportunity. They promoted a national referendum that would have put everyone into a single health insurance plan with premiums based upon "wealth and income." But the Swiss this week voted 71% against a measure.

  Strange. When a single-payer system comes up for a vote -- as in California and Oregon recently in this country and now in Switzerland -- citizens reject the idea of having the government run their health care system.

This week, HHS Secretary Mike Leavitt said in a letter to House Speaker Nancy Pelosi that the president agrees with the goals of the group. But the president supports "an approach emphasizing consumer choice and options" rather than the "mandates and government intervention" the Working Group has recommended.

Rising health costs are a phenomenon of the developed world as more people demand more and more costly care, with the great majority under the impression that someone else is paying the bill. Watson Wyatt this week released results of a survey of 573 major companies and found that their health cost increases averaged 8%.

However, employers with 10% or more of their workforce in a consumer-directed plan are holding health care cost increases to a lower level -- an average of 6.5%. (The survey also found that the portion of companies offering a consumer-directed health plan increased from 33% to 38% in the last year, up from only 2% in 2002.)

Grace-Marie Turner

RECENT NEWS ARTICLES AND STUDIES:

• Restoring fiscal sanity 2007: The health spending challenge

• Who pays? Who benefits? Distributional issues in health care

• Potential effects of disclosing price rebates on the Medicare drug benefit

• Who killed healthcare?: America's $2 trillion medical problem -- and the consumer-driven cure

• Access delayed, access denied: Waiting for medicines in Canada

• Prescription for bias: Networks downplay drug costs, treat medicine as entitlement

RESTORING FISCAL SANITY 2007: THE HEALTH SPENDING CHALLENGE
Editors: Alice M. Rivlin and Joseph R. Antos
Source: The Brookings Institution, 03/15/07

Rising health spending is the topic of a new book edited by AEI's Joe Antos and Brookings' Alice M. Rivlin, both formerly with the Congressional Budget Office. Published by The Brookings Institution, Restoring Fiscal Sanity features chapters by the editors and other policy experts exploring the causes of rising health spending and strategies to slow the growth. Chapters analyze Medicare, Medicaid, and other federal health systems as well as private sector initiatives. The authors "reject the idea that there is one silver bullet solution" or that any one sector can solve the problem. Their focus is on "reforms in federal programs that have the potential to reduce the growth of spending for the entire health system, increase the efficiency and effectiveness of the care provided, and enhance health outcomes."
Full text: www.brookings.edu

WHO PAYS? WHO BENEFITS? DISTRIBUTIONAL ISSUES IN HEALTH CARE
Source: Law and Contemporary Problems, Autumn 2006

The issues of fairness in how we finance health care are explored in this Duke Law symposium, led by Prof. Clark Havighurst. "In general, we develop the hypothesis that the U.S. health care system operates more like a robber baron than like the Robin Hood it is reputed to be, taking excessive amounts from ordinary payers of health insurance premiums and enriching, directly or indirectly, the health care industry and its higher-income customers, both as consumers and as taxpayers." Wharton Professor Mark Pauly examines the employment-based tax subsidy and argues "that the subsidy tends to harm low-wage workers?by forcing those low-wage workers to take their income in a form biased toward overly generous health insurance rather than money wages and by restricting their ability to obtain insurance tailored to their preferences." AEI's Tom Miller argues that ?the distributive-injustice discussion must move well beyond simple consideration of increased health-services spending to a broader consideration of the mechanisms that promote healthy behavior that thus might obviate the need for medical care later in life.? Some measures might include enhancing educational opportunities for lower-income Americans, deregulating the delivery and financing of medical services, and developing new tools that help people become better consumers of health care services.
Full text: www.law.duke.edu

POTENTIAL EFFECTS OF DISCLOSING PRICE REBATES ON THE MEDICARE DRUG BENEFIT
Source: Congressional Budget Office, 03/12/07

The Congressional Budget Office finds that disclosing information on price rebates that have been negotiated by prescription drug plans (PDPs) would have a much smaller financial impact on Medicare than had been estimated prior to implementation of the Medicare prescription drug benefit. "CBO had expected that the combination of financial incentives and management tools that were provided by the [Medicare prescription drug] legislation would lead PDPs to establish relatively narrow formularies and to limit drug spending?however, plans are offering formularies under Medicare that more closely resemble commercial formularies," writes CBO Director Peter R. Orszag. As a result, "CBO now estimates that the expected impact of such disclosure provisions on Medicare spending over 10 years would very likely be less than $10 billion and could be significantly less."
Full text: www.cbo.gov

Disclosure of proprietary price data "could undermine the government's new drug benefit," writes AEI's Scott Gottlieb. He argues that "disclosing this commercial and confidential data could slowly erode the competitive activities that enable the Part D plans to save consumers' money and the new benefit program to lower drug costs."
Full text: www.aei.org

WHO KILLED HEALTHCARE?: AMERICA'S $2 TRILLION MEDICAL PROBLEM -- AND THE CONSUMER-DRIVEN CURE
Author: Regina Herzlinger
Source: McGraw-Hill, 06/07

In her latest book, renowned Harvard Professor and Manhattan Institute senior fellow Regina Herzlinger tackles America's health care crisis. She argues that consumers control virtually every aspect of their lives - except for health care. Insurance companies often dictate which medications, doctors, and treatments that consumers can use. Herzlinger argues that putting power and money into the hands of the consumer can transform the health sector by removing the middle man from the patient-physician relationship and by helping lower employer costs.
Pre-order the book: www.amazon.com

ACCESS DELAYED, ACCESS DENIED: WAITING FOR MEDICINES IN CANADA
Authors: Brett J. Skinner, Mark Rovere, and Courtney Glen
Source: The Fraser Institute, 03/07

"Canadians are waiting an extra two to three years for new medicines when you add up the total time it takes for the various federal and provincial government agencies to make up their minds on approving and paying for a new drug," according to a new study by Brett Skinner of the Vancouver-based Fraser Institute. "The end result is that Canadians are either forced or encouraged to opt for treatments that can be less efficient at treating their health conditions. And in the long run, this could end up costing everyone more."
Full text: www.fraserinstitute.ca

PRESCRIPTION FOR BIAS: NETWORKS DOWNPLAY DRUG COSTS, TREAT MEDICINE AS ENTITLEMENT
Authors: Ken Shepherd and Amy Menefee
Source: Business & Media Institute, 03/07

Network news coverage of the pharmaceutical industry is unbalanced, often "treating drugs as an entitlement rather than an expensive-to create product, refusing to credit and often ignoring entirely the companies that made the medicine," according to a new study from the Business & Media Institute at the Media Research Center. "A penchant for sensationalism and a bias toward controversy were the foundation of media coverage of the pharmaceutical industry." The study analyzed newscasts from ABC, CBS, and NBC on prescription or over-the-counter drugs between January 1 and September 30, 2006. Key findings include:

• 80% of the stories excluded the viewpoint of the pharmaceutical industry, failing to include either a company statement or a company spokesman.

• The media emphasized the costs of drugs to consumers 11 times for every one time they discussed the cost of drug development.

• Only 22% of the stories even named the company that developed the drug featured in the story.

UPCOMING EVENTS:

Health Coverage Revisited: Exploring Options for Expansion
Alliance for Health Reform Briefing
Monday, March 19, 2007, 12:15 p.m. - 2:00 p.m. (Lunch available at noon)
Washington, DC
For additional details and registration information, go to: www.allhealth.org.

A New Wave in Health Savings Accounts
Lighthouse1 Webcast
Wednesday, March 21, 2007, 2:00 p.m. ET
For additional details and registration information, go to: www.lighthouse1.com.

Charity Care and Community Benefit: Addressing Transparency, Responsibility & Standards
Oregon Health Forum Event
Thursday, March 22, 2007, 7:00 a.m. - 9:00 a.m.
Portland, OR
For additional details and registration information, go to: secure.354design.net.

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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