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 Category: Health ReformOur newsletter 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. It is emailed in an HTML format from the galen@galen.org email address, via Constant Contact, and you may have to adjust your email settings and junk mailbox to ensure that you don’t miss an issue.NewslettersApril 18, 2008
Good News and BadThe House passed legislation on Tuesday, the mis-named "Taxpayer Assistance and Simplification Act," that contained the awful provision that would throw a mountain of paperwork at Health Savings Accounts. But the good news is that the White House sent a letter to Congress warning that President Bush would veto the tax bill if it contains the HSA provision.
 Upcoming Event And be sure to mark your calendars to join us for our major Medicare forum in Washington on April 29. It will feature an address by HHS Secretary Michael Leavitt on "Drifting toward Disaster" and a distinguished panel of experts offering diverse ideas on "Solutions for Sustainability." We will send you a separate email shortly with your invitation, but please do mark your calendars now to join us — 9:45 a.m., Tuesday, April 29, at the Newseum in Washington. HSA Threat The House passed legislation on Tuesday, the mis-named "Taxpayer Assistance and Simplification Act," that contained the awful provision that would throw a mountain of paperwork at Health Savings Accounts. But the good news is that the White House sent a letter to Congress warning that President Bush would veto the tax bill if it contains the HSA provision. Also, the Senate has shown no interest in the provision that would require verification of every HSA transaction in real time. At the very least, it should hold hearings on this measure to find out the real costs and implications. We may dodge a bullet this year, but it clearly shows that HSAs are vulnerable. The NFIB was not helpful on an issue that should be of great interest to small business. They issued a key vote letter that encouraged passage of the tax bill containing the HSA provision. Their letter offered an ambiguous statement about HSAs, but by saying this was a "key vote" that will determine how members are ranked in the NFIB rating, it put pressure on members to vote yes. The policy community is once again confused and upset about NFIB's position.
Real Insurance A new study from the Kaiser Family Foundation looks at the resources available to people who are uninsured and finds that "households with few assets cannot handle the cost-sharing requirements of many high-deductible health plan options." The study, by Paul Jacobs and Gary Claxton of Kaiser, is flawed in a number of ways:
Bottom line: Don't believe every headline you read!
Medicaid You will recall my testimony of two weeks ago about the administration's rules designed to curb some of the most obvious abuse of the Medicaid program. Well, the House Energy and Commerce Committee on Wednesday approved by a vote of 46-0 a bill that would stop the new rules from going into effect. Health and Human Services Secretary Leavitt warned that President Bush will veto the bill if it reaches his desk. The ranking Republican on the committee, Joe L. Barton of Texas, said he did not think Republicans would vote to sustain the veto. "I don't think the veto threat was appropriate, and I don't think it will be successful if vetoed, because the votes simply aren't there," Barton said. The wild card could be the Senate. Sen. Charles Grassley, ranking Republican on the Senate Finance Committee, does not support blocking the rules. "We ought to let them move forward instead of just delaying all of these Medicaid regulations all at once," Grassley said. So the Senate, of all places, may be the place we look to protect taxpayers from having Medicaid dollars be used for expenses that clearly are not medically-related, like transportation to bingo games, and for states determined to game the system.
BlackBerry Friendly I know when I am trying to read newsletters like this on my BlackBerry, the text is interrupted by strings of annoying links. But, when you read the newsletter on your desktop, the links and the nice graphics are welcome. We'd like to offer you a choice: If you would like to receive the newsletter in a text-only, BlackBerry-friendly format, we'd be happy to send it to you that way. Just send a quick note to Tara Persico at tara@galen.org and she will make the change here. Grace-Marie Turner Recent News Articles and Studies Medicare's Bad News: Is Anyone Listening? Medicare's Bad News: Is Anyone Listening? Unlike the mortgage crunch, Medicare's fiscal crisis does not seem real to most people. The difference in the public reaction to these two serious financial problems reveals three major issues with the way Medicare's bad news is communicated and perceived: it fails to connect on a visceral level with the public and the press; the trust fund concept in Medicare instills a misleading sense of confidence in the program's financing; and, no simple, easily understood number adequately captures the magnitude of Medicare's financing crisis. Yet, if the current trends continue, Medicare's Hospital Insurance trust fund will be depleted in 2019 and future generations will face a tax bill of $85 trillion to make good on the health care benefits promised to Americans. Antos suggests that structural reform — not merely tinkering around the edges of the current program — is needed. We need to replace Medicare's culture of entitlement, which distorts the decisions of patients and providers alike, with a culture of individual responsibility and efficient delivery of care. George Shultz and John Shoven's Big Fix Economist and former Secretary of State, Treasury, and Labor George P. Shultz has leapt into the reform fray with a bold new plan that aims not just to fix the health care system but also to solve the impending entitlement cost crisis and even to reinvigorate the economy, reports ReformPlans.com. Shultz and Stanford University economist John B. Shoven are co-authors of the new book, Putting Our House in Order. Their prescription includes more responsibility and authority for individuals, greater competition among insurers, and new kinds of "smart" means testing for public programs. Former Senators Tackle Health Issues Former Senate majority leaders Bob Dole, a Republican, and George Mitchell, a Democrat, may be facing their biggest challenge to date — reforming the nation's health care system, writes The Washington Post. The two senators said this week they would be joined by two other former Senate majority leaders, Democrat Tom Daschle and Republican Howard Baker, in crafting a series of health policy recommendations that would be delivered in 2009 to a new president and Congress. The senators will each oversee forums on four key pillars for reform: improving quality and value, improving access, ensuring a strong role for consumers, and finding a way to finance it. They will get technical advice from Dr. Mark McClellan, who recently oversaw the Centers for Medicare and Medicaid Services under President Bush, and Chris Jennings, former health advisor to President Clinton. While advisers will provide technical expertise, the senators stressed that they will be the ones responsible for the recommendations and will have final say on what's in the package. Sen. Daschle will lead the project's first health care forum on April 24 in Washington, D.C. 'Evidence-Based' Rx Miscues Hillary Clinton, Barack Obama and John McCain all favor increased federal funding for so-called "evidence-based" medicine to address the problem of escalating health-care costs, writes Pitts. The theory behind evidence-based medicine is simple: If government were to run clinical trials testing the effectiveness of drugs and medical technologies, and then use the results to determine what to cover, taxpayers would avoid paying for treatments that aren't effective enough to justify their price tag. Too bad that in practice, evidence-based programs are largely driven by the political imperative to cut costs — not the medical imperative to give patients the best care possible. Medical treatment should be based on the specific genetic, clinical and demographic factors of an individual patient. In an era of personalized medicine, one-size-fits-all health care strategies are dangerously outdated. Dollars to Doughnuts Diagnosis Many physicians feel that it's their mission to serve as many patients as possible rather than to provide the best care possible, writes Beverly Hills internist Albert Fuchs. Most significantly, doctors today are preoccupied with the bureaucracy of insurance companies. When Fuchs began his own private practice in internal medicine, volume grew quickly and so did his work hours. So he dropped an insurance plan — one that gave him the least compensation. Almost immediately, he had fewer patients but more time and energy for those he maintained. Like hundreds of doctors across the country, Fuchs now does not receive a single dollar from any insurance company. When doctors break free from the shackles of insurance companies, they can practice medicine the way they always hoped they could, he writes. And they can get back to the customer service model in which the paramount incentive is providing the best care. Code Red A few weeks ago, the Washington Post broke the dramatic medical news that as many as one third of all people waiting for an organ transplant are actually ineligible to receive one. Suggesting that the organ shortage is a manufactured crisis is misleading, write Satel and Hippen. Strikingly, most patients who are designated by their physicians as ineligible for immediate transplant were once fit enough to receive an organ. Tragically, they deteriorated during the years-long wait and became too sick to transplant. According to the United Network for Organ Sharing (UNOS), there are 98,517 people — transplant candidates — waiting for an organ. By summer, the queue will reach a daunting 100,000, with three quarters seeking kidneys. And the waiting time to renal transplantation is getting longer. Today it is five to eight years in major cities and by 2010 it will be ten years for some patients. With about one in three waitlisted patients on dialysis not surviving beyond five years, the majority of candidates just don't have that kind of time. This very trend is potent evidence why those who say the need is not so pressing are dead wrong. If the list had so many ineligible patients, then time-to-transplantation would be getting shorter not longer. Single-Payer Health Care for Maryland: Two Analyses This paper responds to a bill proposed by Maryland State Delegate Karen S. Montgomery (D-Montgomery), which would have established a "single payer" system in which the state would pay for all Marylanders' health care and no Marylander would be permitted not to participate in the system. Although the General Assembly did not adopt the Montgomery proposal, special interest pressure remains strong in Annapolis for government-financing of Marylanders health care. This report offers two analyses that address the flaws in a statewide universal health care system, including the high cost to the state budget that would inevitably lead to rationing of services by government officials. The study also issues strong warnings to Maryland from Canadians living under a single-payer system. Use of Health Savings Accounts Grows In a market where health insurance costs continue to rise for employers, more companies are turning to high-deductible health plans — and the accompanying health savings accounts to defray costs, writes the Springfield Business Journal. An estimated 7 million people are covered by 2.2 million health savings accounts as of the beginning of 2008, according to a survey by industry publishing company Atlantic Information Services Inc. Those accounts hold $3.2 billion, up 60% from $2 billion at the beginning of 2007. Several banks that offer health savings accounts say the accounts' popularity is growing — especially among small businesses that want to reduce their costs while still offering insurance benefits to employees. And demand for HSAs is only expected to continue. The U.S. Treasury Department estimates that, assuming the laws regulating HSAs are unchanged, up to 30 million people will be covered by HSAs by 2010. Upcoming Events Grace-Marie Turner speaking on KDKA News Radio Show 5th Annual World Health Care Congress Grace-Marie Turner speaking on The Scott Voorhees Show Hospital CEO Roundtable: Balancing Cooperation and Competition Grace-Marie Turner speaking on the Bill Mick Live Show A Roundtable Discussion with Mark Miller of the Medicare Payment Advisory Commission Grace-Marie Turner speaking on The David Smith Exchange Show Grace-Marie Turner speaking on Senior LifeStyles Show 2008 Leadership Development Breakfast Healthcare Policy Discussion: Cost vs. Coverage Third Annual World Intellectual Property Day Innovations in Health Care Delivery Concho Valley Community Media Relations Training on the Uninsured Engineering a Learning Healthcare System: A Look at the Future 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. If you wish to subscribe to this free weekly newsletter, update your address, or be removed from our list, please send an e-mail message to galen@galen.org. 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. March 28, 2008
Healthy InsightsDr. Denis Cortese, president and chief executive officer of the Mayo Clinic, offered Washington a healthy dose of insight about the crucial importance of patient-focused care during a speech at the National Press Club on Good Friday. Mayo is renowned worldwide for its expertise in medical diagnosis, and Dr. Cortese drew on these capabilities to help policymakers think differently and more strategically about health reform.Dr. Denis Cortese, president and chief executive officer of the Mayo Clinic, offered Washington a healthy dose of insight about the crucial importance of patient-focused care during a speech at the National Press Club on Good Friday.Mayo is renowned worldwide for its expertise in medical diagnosis, and Dr. Cortese drew on these capabilities to help policymakers think differently and more strategically about health reform. Here are a few key points he made:
Having 90,000 avoidable hospital deaths a year is the equivalent of a major airliner crashing every two and a half days, Dr. Cortese said. That is unacceptable, but the lack of information is driving these mistakes. People get the right medical advice only about half the time. We need to exchange information in real time to improve, and we need transparency of outcomes, safety, and costs. We need teamwork to integrate care from diagnosis through treatment. And that care must be individually focused. Physicians need to think of themselves as team leaders and coordinators of the medical team. And Dr. Cortese concluded with some guidance for the new president, offering questions he or she should ask the new administration's health policy team every day:
It is not a coincidence that Minnesota, the Mayo Clinic's home state, ranked first in the nation in overall health care quality this year, based upon a report just issued by the Agency for Healthcare Research and Quality. Mayo offers valuable lessons for all of us interested in improvements in our health sector. Two experts writing in the Los Angeles Times offer some legal advice about current proposals to require everyone in America to obtain health insurance: They're probably unconstitutional. Karl Manheim, a law professor at Loyola Law School in Los Angeles, and Jamie Court of the Santa Monica-based Consumer Watchdog explain that a government mandate requiring people to purchase private insurance is either a constitutionally forbidden "taking" (of money) or a violation of constitutionally protected due process. They say a mandate would mean that the federal government would be requiring people to buy a good (health insurance) offered by private businesses, implicitly delegating taxing power to private business. The Constitution explicitly delegates taxing authority to the Congress (Article 1, Sec. 8). Yes, states can and do require people to buy automobile insurance or install fire sprinklers in a house. "But in such cases, the 'mandate' is discretionary -- you don't have to drive a car or build a house," they write. The same is true with requiring vaccinations for children enrolling in public schools: Parents have the option of sending their children to private schools or to home school them. But a health insurance mandate would not, by definition, be optional. "A health insurance mandate is essentially a forced contract." If government were instituting new taxing powers requiring everyone to enroll in a government program, that would actually pose less of a constitutional problem, they say. But that's not politically popular. In fact, Sen. Hillary Clinton would mandate insurance but would give people the "choice" of buying highly-regulated private coverage. It actually is this choice of private coverage that could trip up her plan with the court, as Manheim and Court explain. So is Massachusetts' individual mandate unconstitutional? Probably. "These 'unfunded mandates' are unlike any form of government regulation we've seen," they write. But someone has to take it to court first, and I'm not aware of any court challenges, at least yet. So here's an interesting prospect: Do we want to spend the next 10 years battling in the courts over the constitutionality of an individual mandate for health insurance? Or do we want to actually spend that time trying to give people more options of more affordable, private coverage? And the Harvard School of Public Health has a new poll out that underscores the huge partisan divide over health reform. More than twice as many Republicans (68%) as Democrats (32%) believe that the U.S. health system is "the best in the world." Further, more than half of Democrats (56%) say they would be more likely to vote for a candidate who advocates moving toward a system more like Canada's, France's, or Great Britain's. In contrast, only a fifth (19%) of Republicans say they would be more likely to vote for a candidate that advocates moving toward such systems. Interestingly, even though many people want to import other countries' health systems, they don't know much about them: 53% of all of those responding to the survey, for example, say that they aren't sure how our system compares to France's, for example. So it shows that people do think that the grass is greener. But maybe they need to learn a bit more about what it's really like living under those systems before they throw out the one health care system that is driving innovation in new medicines, new treatments, and new medical technologies, and that many people think is the best in the world. And we're going to help with that education: We welcome Brian Lee Crowley to the Galen Institute as our newest visiting senior fellow. Brian is the president of the Atlantic Institute for Market Studies in Nova Scotia, where he will continue working while he also helps us educate the debate over market-based solutions to problems in the health sector -- including a clearer picture of the challenges of Canada's health care system. Grace-Marie Turner Recent News Articles and Studies Loose Political Lips Can Sink Our Economy Loose Political Lips Can Sink Our Economy Grace-Marie Turner, Galen Institute The Wall Street Journal, 03/28/08 It would take much more than a weak dollar and the sub-prime mortgage collapse to shake confidence in an economy as strong as the United States is. Unfortunately, other forces are at play that could lead to just such a crisis, including: 1) Continual talk by Sens. Hillary Clinton and Barack Obama about huge future tax increases, including the expiration of President Bush's income and capital gains tax cuts; 2) The anti-immigration sentiment that could severely constrain the future labor pool; and 3) The erosion of our leadership in the investment world because of the insidious impact of Sarbanes-Oxley. Investors do look to the future, and taken together, these and other bad policy decisions could indeed undermine even the strongest economy in the world. It's time for political leaders to wake up and understand the damage caused by these anti-growth policies. Checking into Bumrungrad Hospital
This photo from a BusinessWeek report on the growing trend of medical tourism tells the story about how big this industry is becoming. Last year, 65,000 Americans went to Bumrungrad Hospital in Bangkok for in-patient or outpatient treatment, up from just 10,000 in 2001. Many of the patients from the U.S. were uninsured, taking advantage of medical costs that are a fraction of those in American hospitals. Last month, Bumrungrad announced an alliance with Blue Cross & Blue Shield of South Carolina, with the American insurer agreeing to cover expenses for members who travel from the U.S. to the Thai hospital. Other hospitals, including some in Singapore and India, have also teamed up with the South Carolina insurer, which is betting that some members would be willing to travel abroad rather than pay thousands more for operations in American hospitals. Bumrungrad's revenue from foreign patients rose 14% last year, and non-Thais now account for 55% of Bumrungrad's business. Who Really Pays for Health Care? Employers like to say -- and often believe -- that they pay for health care, write Emanuel and Fuchs. And union leaders want members to think that health benefits are a bonus on top of wages. But wages and fringe benefits, such as health insurance, are simply components of overall worker compensation. This cost-wage trade-off is usually well hidden from employers and workers, but it is nonetheless a painful reality for average Americans. The increasing cost of health care has resulted in American workers receiving relatively flat wages for 30 years, they write. The reality is that individuals bear the full cost of health care through lower wages and higher taxes. 2008 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds The financial outlook for the Medicare program continues to raise serious concerns, and a "Medicare funding warning" is triggered again by the findings of this report. Total Medicare expenditures were $432 billion in 2007 and are expected to increase in future years at a faster pace than either workers' earnings or the economy overall. The HI trust fund will be exhausted by 2019. As a percentage of Gross Domestic Product, expenditures are projected to increase from 3.2% in 2007 to 10.8% by 2082. Growth of this magnitude, if realized, would substantially increase the strain on the nation's workers, Medicare beneficiaries, and the federal budget. The American Enterprise Institute hosted a briefing this week to discuss the Medicare Trustees' report and the policy challenges facing the program. The Hazards of Harassing Doctors: Regulation and Reaction in Trans-Atlantic Healthcare Beyond its impact on the quality of care and on the invisible costs of illness, government tampering with doctor autonomy and patient choice raises crucial questions related to human liberty, writes Alphonse Crespo, a Swiss physician. Doctors have yet to make their voice heard in the battle of ideas between the guardians of obsolescent socialized medicine and proponents of a free society. But this is changing as bureaucratic interference with medical practice has reached a threshold that now pushes doctors to engage in protest movements in various parts of Europe. Enlightened health-policy makers can minimize the transition costs of change by deregulation of health insurance services, gradual privatization of public healthcare infrastructures, and fiscal incentives for medical savings accounts and health banking capital. In a separate essay, American physician Marc Siegel cautions that medicine is moving further in the direction of shrinking reimbursements and insurance company-controlled strategies which put a stranglehold on a doctor's decision-making. Five Myths of Health Care Sally Pipes debunks the five most prominent health-care myths: forty-seven million Americans do not have health insurance; universal health-care coverage can be achieved through an individual mandate; expensive prescription drugs are a big reason health-care costs increase; drug importation will save patients a fortune; and the state-run health-care systems in Europe and Canada are better and cheaper than America's. In a separate op-ed, Pipes writes that Thailand's misuse of compulsory licensing to obtain patented prescription drugs allowed corrupt officials to steal millions. Sick Thai citizens have yet to see any benefits and the move has set a dangerous precedent that will stifle innovation and endanger the health of millions. The newly elected Thai government is wisely examining this issue and appears more interested in pursuing a thoughtful, long-term policy of economic development that will serve its citizens far better than quick-fix political schemes that result in Thailand becoming a hero to anti-capitalist activists, but a pariah to the world economic community. Why McCain Has the Best Health-Care Plan Sen. John McCain's health care plan is the only one of the candidate proposals that has a chance of getting medical costs under control, writes Fortune Magazine. McCain's plan would eliminate the employer exclusion for health care and allow people to buy insurance plans on their own, including across state lines. In essence, he wants to create a kind of national insurance market that puts more decision-making power into the hands of consumers. John McCain's health care plan would create a world where health care is treated as the precious resource that it is, rather than a costless entitlement, and where nationwide competition pushes down prices and consumers focus their attention and spending on what's really crucial to their health. The price of health care is never going to get under control until patients get what they deserve: the right to be customers too. McCain bemoans the high cost of pharmaceuticals and, with a heavy dose of anti-corporate rhetoric, he champions the idea of drug reimportation. But McCain would be better served by abandoning this idea and speaking out instead in favor of reforms that will help Americans pay a fair price for prescription drugs, writes the Manhattan Institute's Dr. David Gratzer. McCain should offer Americans a way forward to lower drug prices, without endangering the innovation that has sparked the pharmaceutical revolution.
Upcoming Events Taking Back Our Fiscal Future H.R. 5613, Protecting the Medicaid Safety Net Act of 2008 Can Tax Credits Be a Linchpin for Health Reform? Lessons from the Factory Floor Enhancing Quality Performance Measurement: A New Paradigm for Health Care Accountability Has Arrived Is Free Trade Good for Your Health? Can We Repair What's Wrong with our Health Care System through Christian Principles? Whose Healthcare is it Anyway? Understanding the Patient as a Consumer Cracking Down on Killer Drugs: Dora Akunyili and the Nigerian Success Story 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. If you wish to subscribe to this free weekly newsletter, update your address, or be removed from our list, please send an e-mail message to galen@galen.org. 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. |
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