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 Our 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.Newsletters1 2 3 4 5 Next >July 18, 2008
High StakesSen. Barack Obama this week announced a plan designed to help businesses afford health insurance, but the ideas would perpetuate today's problems and add new bureaucracy in the process. Small businesses would get refundable tax credits to offset 50% of the amount they pay for health insurance for their workers and have the government take over a portion of the catastrophic costs of high-cost employees. What's wrong with that? Several things. Sen. Barack Obama this week announced a plan designed to help businesses afford health insurance, but the ideas would perpetuate today's problems and add new bureaucracy in the process.Small businesses would get refundable tax credits to offset 50% of the amount they pay for health insurance for their workers and have the government take over a portion of the catastrophic costs of high-cost employees. What's wrong with that? Several things.
Sen. Obama also would heavily regulate health insurance companies and how they do business to the point that they would become little more than functionaries in a new federal government regulatory regime. He would, for example, require forms of guaranteed issue for health insurance and community rating of premiums that have driven up health costs in state after state experimenting with the regulations. Many of the provisions, in fact, seem borrowed from the SHOP Act (Small Business Health Options Program of 2008, S.2795) and from ideas offered by Sen. Hillary Clinton that open large new portals for a much bigger role for government in our health sector.  More government or a properly functioning market in the health sector? That really is what the national debate over health reform is all about. The results of this fall's election will be decisive in determining the direction of our nation. Sen. Obama sees a much bigger role for government in trying to solve the problems in the health sector while Sen. McCain believes in unleashing incentives to create more competition in the private health sector that will give people more choices of more affordable care and coverage. The next president will be determined to do something on health care and will be directed by a vision that will have a great impact on the direction Congress takes in shaping legislation. The stakes are enormous for the future of this one-sixth of our economy represented by the health sector. We see many of the problems with the U.S. health sector as rooted in the encroachment of regulation and bureaucracy that are stifling its ability to call on the genius of our economy to create a health sector that is more responsive to demands for lower costs and higher quality. Instead of tax credits to small businesses, credits could be offered to individuals to help them purchase health insurance, as Senator McCain proposes. People eligible for the credits could purchase the health coverage of their choice, either through their places of work, on their own, or through new groups that would emerge in a market where health insurance and subsidies are more portable. Purchasing reforms would make the insurance market more competitive and policies more affordable. Taking the idea a step further, credits also could be a vehicle to move toward much-expanded or even universal health insurance coverage. If people don't take specific action to purchase a policy directly, their credit could be assigned to one of several insurers offering coverage in their state or region to buy a policy that offers the best coverage the credit can provide. It may be a higher-deductible policy or a plan with more limited benefits, but it would protect them -- and taxpayers -- against catastrophic costs. Making insurance more affordable and accessible would dramatically increase the number of Americans with coverage. Making the subsidies assignable to an insurer even if people don't take action to buy coverage would further boost coverage. And other reforms could assure that people currently shut out of the market can get coverage. These actions together would likely get us as close to universal coverage as any of the other more onerous proposals being offered, including and especially, imposition of an individual and/or employer mandate. Grace-Marie Turner Recent News Articles and Studies How to Fix Medicare: Let's Pay Patients, Not Physicians How to Fix Medicare: Let's Pay Patients, Not Physicians Roger Feldman, University of Minnesota Medicare's current method of paying physicians sets fees for more than 8,000 separate procedures and services. Health economist Roger Feldman argues that a radical shift in Medicare policy is not only possible but imperative. Under Feldman's "medical indemnity" proposal, Medicare would pay each patient a fixed amount of money, reserving larger subsidies for sicker people. Patients, in turn, would select their own medical services from providers who would set their own competitive rates. A medical indemnity system would do away with the distortion in patients' incentives wrought by conventional Medicare coverage. Given a fixed amount of money to spend on medical care, patients would have strong incentives to shop for the combination of services, providers, and prices that most closely meet their needs. Feldman's indemnity system protects patients whose conditions are much costlier than average while avoiding the proliferation of costly individual indemnities. As Arizona Goes, So Goes the Nation: How Medicaid Ruins the States' Fiscal Health Michael S. Greve, AEI and Philip Wallach, Princeton University The fiscal balances of state and local governments will rapidly deteriorate in less than a decade and Medicaid spending is the principal culprit, according to a new AEI report based upon a Government Accountability Office study. Measured as a percentage of the state's fiscal year 2008 general fund, Arizona's projected FY 2009 deficit was the most serious shortfall of any state, due chiefly to the state's expansion of its Medicaid program and the perverse incentives created by Medicaid's inordinately generous transfers to the states, write Greve and Wallach. By making program expansions look cheap and making cuts look outrageously expensive, federal matching grants ratchet up spending and taxes and tend to exacerbate the states' boom-and-bust budget cycles. With a Medicaid matching rate of 66.2%, for each dollar Arizona spends on Medicaid, the federal government sends the state $1.96. Medicaid spending in Arizona now exceeds the average spending level and has increased from roughly 8% of general fund spending to a projected 14.4% in FY 2009. Patients Curb Prescription Spending Shirley S. Wang and Avery Johnson In an ominous sign for drug makers, the number of prescriptions dispensed by pharmacies in the U.S. is growing at its lowest rate in at least a decade, writes The Wall Street Journal. Data from IMS Health show growth in prescription volume for the first five months of this year slowed to 1.5%. By comparison, annual volume growth averaged 3% from 2003 to 2007. Flagging prescription growth comes at a period of particular vulnerability for the drug industry. Several blockbuster products have lost patent protection in the past two years, the main reason industry sales growth is at its lowest level since the 1960s, and more patent expirations loom. Further, there are few new drugs in late-state development to take up the slack, the Journal reports. Making a Killing: The Deadly Implications of the Counterfeit Drug Trade Roger Bate Roger Bate traces pharmaceutical counterfeiting around the world in his new book, from developed nations, where counterfeits often target "lifestyle" drugs such as Viagra, to developing countries, where counterfeiters favor therapeutic medicines such as antimalarials and antibiotics. Enforcement in developing nations is hampered by inadequate education, feeble regulation, and sluggish policing of existing laws, writes Bate. And the U.S. is struggling to thwart an insidious Internet market. Bate champions greater cooperation between wealthy and poor nations to quash the trade in counterfeit pharmaceuticals. He calls for fortified policing resources, harsher penalties for counterfeiters, widespread public education, and commonsense consumer vigilance against this danger. Western policymakers must act immediately to quell the deadly counterfeit market in developing countries -- and to ensure the integrity of their products at home. CMPI's Peter Pitts writes that California's recent decision to delay implementation of a controversial law to create an electronic chain of custody for pharmaceuticals is welcome news. The law's aim was noble -- beat back the rising tide of counterfeit drugs -- but it would have imposed back-breaking costs on pharmaceutical manufacturers and dramatically inflated drug prices for consumers while doing little to undermine counterfeiters. Patent Gridlock Suppresses Innovation L. Gordon Crovitz For the third year in a row, Congress has just given up on passing a law reforming how patents are awarded and litigated, writes columnist Crovitz. This despite growing evidence that for most industries, today's patent system causes more harm than good. Litigation costs, driven by uncertainty about who owns what rights, now are so huge that they outweigh the profits earned from patents. New empirical research by Boston University law professors found that the value of pharmaceutical patents outweighed the costs of pharmaceutical-patent litigation. But for all other industries combined, they estimate that since the mid-1990s, the cost of U.S. patent litigation to alleged infringers ($12 billion in legal and business costs in 1999) is greater than the global profits that companies earn from patents (less than $4 billion in 1999). These are shocking findings, but they point to a solution, writes Crovitz. New drugs require great specificity to earn a patent, whereas patents are often granted to broad but vague innovations in software, communications and other technologies. It's true that defining intellectual property is hard at a time when new technologies upset the traditional ways of protecting rights, but our patent system is a disincentive at a time when we expect software and other technology companies to be the growth engine of the economy, concludes Crovitz. HSAs' Reign Among Consumer-Driven Plans May Come to an End Jerry Geisel There are signs that Washington's five-year honeymoon with health savings accounts may be coming to an end among lawmakers and, depending on the outcome of the November presidential election, the White House, writes Geisel. One sign came in April when the House passed legislation to require banks and other financial institutions that administer HSAs to substantiate that account distributions are for health-care related expenses, such as prescription drug copayments. And Sen. Barack Obama, the presumptive Democratic presidential candidate, is at best lukewarm about HSAs. By contrast, Sen. John McCain, the presumptive Republican presidential candidate, has been more supportive, saying he would work to encourage and expand HSAs if elected. The contrasting views mean the future of HSAs could depend on the outcome of the November elections, said Galen's Grace-Marie Turner. Tax Subsidies for Health Insurance Kaiser Family Foundation, 07/10/08 Today almost 160 million people in the United States obtain health insurance through an employer in large part because the tax system subsidizes the purchase of employer-sponsored coverage. The current subsidy costs the U.S. Treasury more than $200 billion in lost revenue since premiums for employer-provided health coverage are excluded from income taxes and from payroll taxes. This issue brief uses examples of workers with different earnings to illustrate how the current tax code affects families depending on whether they have health coverage, and whether that coverage is provided through their employer. By excluding the value of employer-sponsored health benefits from taxable income, the current law generally provides a larger subsidy to higher-income families, since higher-income workers pay federal and state income taxes at a higher marginal tax rate than lower-income workers. The brief also looks at several other tax provisions that affect the treatment of insurance, including the itemized deduction for medical expenses, which can help offset the cost of individually purchased (non-group) health insurance, and the special tax deduction for health insurance premiums for self-employed taxpayers. The analysis compares the tax treatment of premiums under these scenarios and concludes that they are generally less generous than the treatment of premiums for employer-sponsored coverage. Upcoming Events Making Medicare Sustainable: Transforming Our Health Program for America's Seniors Beyond More Health Insurance Coverage, toward Better Health Outcomes IRS HSA Grab Bag Webinar Emerging Issues Roundtable: Meeting Today's Challenges through Innovation and IP Rights Health Care Reform Task Force Meeting Small Market Drugs, Big Price Tags: Are Drug Companies Exploiting People with Rare Diseases? Grace-Marie Turner speaking on the In The Booth Show Grace-Marie Turner speaking on the Morning News Watch Show Can Consumers Save Medicare? Rising Rates of Chronic Health Conditions: What Can Be Done? 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.
Categories:
Small Business July 11, 2008
Outside the BoxThere really wasn't a controversy about whether to delay Medicare's scheduled cuts in physician fees, but you'd never know it from reading about this issue in the mainstream media over the last month. Both sides wanted to undo the cuts, but the real debate was over how to pay for the "fix" since the cuts were built into the federal budget. The leadership's solution was to get the money from the popular Medicare Advantage program, particularly private Medicare fee-for-service plans. There really wasn't a controversy about whether to delay Medicare's scheduled cuts in physician fees, but you'd never know it from reading about this issue in the mainstream media over the last month.Both sides wanted to undo the cuts, but the real debate was over how to pay for the "fix" since the cuts were built into the federal budget. The leadership's solution was to get the money from the popular Medicare Advantage program, particularly private Medicare fee-for-service plans. This is yet another example of the growing politicization of the health sector in the U.S. And it shows how the congressional leadership used the issue of delaying the cuts to obscure a secondary agenda of trimming private plan participation in Medicare. Republicans who voted against the measure earlier because they objected to the "pay for" were hammered when they went home for recess last week. Both houses of Congress now have passed legislation to delay for 18 months the scheduled 10.6% reduction in physician fees, with a promise that fees would be increased by 1.1% in 2009. President Bush has threatened the veto the bill because he believes it is so important to keep private, competing plans in Medicare, but both houses have passed the legislation by veto-proof margins, so it will be an uphill fight. Battles like this will continue as long as we have a massive spending program dominated by price controls and politically-motivated decisions. The silver lining in this may be to show physicians what would be in store for them under a government-run health care system. Do they really want to have to wage a national fight every year to literally get an Act of Congress passed just to keep their fees level? And is a 1.1% pay increase next year — which will be another battle, by the way — really worth much of a celebration? There has to be a better way! Visionary reform And there is: Congressman Paul Ryan (R-WI) has developed a Roadmap for America's Future that moves us off the field of these small battles and into the larger arena of visionary reform. He has developed a legislative plan that would put Medicare, Medicaid, and Social Security on a sustainable pathway while transforming our hopelessly complex and burdensome income tax code so America can be competitive in a 21st century global economy. And he would modernize the financing of private health insurance along the way. The stakes are enormous, and these skirmishes over physician payments completely obscure the meteorite heading toward us because of uncontrolled entitlement spending. A recent analysis by Peter Orszag, director of the Congressional Budget Office, says that Congress has three options to address the unsustainable growth of entitlement programs:
I have long believed that we must get outside the box of battles over spending cuts to individual programs to focus on much larger and transformative changes. For the first time, a legislative plan has actually been developed that does just that, with the very able assistance of Ryan's terrific staff on the House Budget Committee, where he serves as ranking Republican. I have known Paul Ryan since he was an intern in Jack Kemp's office more than 15 years ago where he was imbued with the passion for free-market ideas. Now, as a leader in Congress, Ryan has developed a plan that would allow the U.S. to survive and even thrive in a 21st century economy, fulfill the promise of the entitlement programs, and lift the incredible burden of debt the country — and our children and grandchildren — are facing. "In the history of our country, each generation has confronted the challenges before it so that the next generation will be better off and have a more prosperous future," he told a Capitol Hill briefing on Tuesday sponsored by the National Center for Policy Analysis. The current trajectory is unsustainable. Without change, our economy will collapse and the next generation will be poorer, and the light of liberty that has been America for more than two centuries will surely fade. "Entitlement spending is the seminal economic fight of our time," Ryan told a gathering at The Heritage Foundation yesterday. And he has offered a plan to let that light continue to shine. The Congressional Budget Office, in a May 19, 2008 letter to Mr. Ryan, said that his plan would slow the growth of budget deficits from entitlement spending and eventually eliminate them. Importantly, the plan also includes significant reductions in federal income tax rates that would spur economic growth. Economic growth would continue to grow, rising from $45,000 per capita in 2007 to $165,000 in 2082 — a dramatic reversal from the projections under the tax-increase/deficit spending scenario described by CBO. Here's a brief overview of the Roadmap:
Grace-Marie Turner Recent News Articles and Studies Congress Is Trying to Limit Your Health Care Choices Congress Is Trying to Limit Your Health Care Choices Grace-Marie Turner, Galen Institute In New Hampshire, more than 35,000 people who are trying to save money on health insurance could get slapped with new paperwork requirements from Congress, writes Grace-Marie Turner. Under a measure recently passed in the House, federal regulators would need proof that each withdrawal from an HSA is spent on qualified medical expenses. The prospect of navigating an administrative labyrinth would scare many away from HSAs as substantiation would be costly and time-consuming, writes Turner. Supporters of the measure claim HSAs are prone to abuse because expenditures are self-reported, but there are safeguards in place. Most HSA payments are made with a specially designated debit card, so it's easy to track where the money goes. And unqualified withdrawals are subject to taxes plus a 10% penalty. Lawmakers shouldn't be throwing up administrative hurdles to keep Americans away from HSAs, concludes Turner. How Good Is Our Health Care System? Grace-Marie Turner, Galen Institute The World Health Organization's rankings of international health systems, which put the U.S. at 37th, are a poor reflection of reality, writes Grace-Marie Turner. Countries with tax-funded, socialized systems tend to be ranked higher simply because citizens are treated equally — even when the quality of care is much poorer than in the U.S. The most crucial reading of a health care system is how well you do if you get sick, but, amazingly, the WHO chose not to include that data in its survey. For key diseases that respond to medical care, an American patient's chances of surviving are much better than a patient in countries with much higher WHO rankings. For example, the prestigious journal Lancet Oncology compared cancer survival rates and found:
Have Health Reformers Forgotten Medicare? Joseph Antos The current debate over physician payments in Medicare should be used as a starting point for a larger discussion on Medicare reform, writes Antos. It is uncertain whether broad health system reform will be accomplished in the next four years, but it is clear that reform will fail — or fall short of its goals — if Medicare is not an integral part of the proposal. Medicare is caught in a dilemma of its own making, writes Antos. It is hugely popular with the public, which does not want to see substantial changes in the program that could reduce benefits or impose additional costs on beneficiaries. Yet, if strong actions are not taken, Medicare soon will be unable to fulfill the public's expectation of generous health coverage that guarantees to millions of Americans access to the latest medical treatments. More regulations will not solve this problem, and neither will more money, if that means repeating the mistakes we are now making, concludes Antos. Code on Interactions with Healthcare Professionals Pharmaceutical Research and Manufacturers of America (PhRMA), 07/10/08 PhRMA this week released a stricter marketing code to ensure that pharmaceutical marketing practices comply with the highest ethical standards. The code reaffirms that interactions between company representatives and healthcare professionals "should be focused on informing the healthcare professionals about products, providing scientific and educational information, and supporting medical research and education." Among the changes, the revised code:
From Heart Transplants to Hairpieces: The Questionable Benefits of State Benefit Mandates for Health Insurance John R. Graham Workers pay for health benefit mandates through reduced wages, working longer hours, and sometimes losing health insurance altogether, Graham concludes after surveying 28 original articles that attempt to estimate the cost of benefit mandates. The impact of this encroachment of mandates falls hardest on those buying health insurance on their own or firms that can't afford to self insure to escape the mandates. But that isn't stopping state legislators from passing more mandates. Mandates introduced since the year 2000 include: hearing aids, hormone replacement therapy, and reimbursement for clinical trial participation. In 2007, 13 states mandated coverage for the human papillomavirus vaccine. Meanwhile, only two mandated benefits were repealed between 1949 and 2002. Health Care Reform in Massachusetts: Medicaid Waiver Renewal Will Set a Precedent Greg D'Angelo and Edmund F. Haislmaier The core principle of the Massachusetts Medicaid demonstration waiver is an experiment in shifting from targeting government funds to health care providers to redirecting those funds to patients to help them buy insurance, write D'Angelo and Haislmaier. As Massachusetts applies for a waiver extension for its major reform program, this policy precedent should remain in place and apply to other states requesting waivers as well, D'Angelo and Haislmaier conclude. A report from the Government Accountability Office finds that the Centers for Medicare and Medicaid Services should review the billions of dollars being spent on supplemental Medicaid payments in all states. A separate report from the Department of Health and Human Services Office of Inspector General provides examples of fraud within the Medicaid program. When Things Go Wrong, It's Better To Be at Home Suz Redfearn The Washington Post reports on the potential disadvantages of medical tourism. When things go badly after an overseas operation, a patient may be left facing a host of challenges: lack of access to follow-up care at home; doctors who won't get involved in corrective procedures; extra money that must be spent to undo what has been done; and a complicated legal picture if they want to try to recoup costs, writes the Post. "Aftercare is one of the most important issues and problems in medical tourism," said Jonathan Edelheit, president of the Medical Tourism Association. Edelheit said that his organization is trying to educate U.S. doctors so that they will not discriminate against patients who are coming home from surgeries abroad and may be in need of care, writes the Post. The trade group is also trying to raise standards and increase transparency in the now wide-open and unregulated field. Karlyn Bowman, American Enterprise Institute While Americans are satisfied with their own health care, they worry about increasing costs and how well the system is serving others, writes Bowman. Recent polls on health care find:
Upcoming Events Innovations in Patient Care: Lessons from the Field The Premier Biotech and Pharmaceutical Public Policy Congress State Coverage Initiatives: Lessons for the Nation Getting Better Value in Health Care The Birth of Freedom Prevention for A Healthier America: Investments in Disease Prevention Yield Significant Savings, Stronger Communities Making the Grade: Improving the U.S. Health System Health Care Quality: Thumbs up in Oregon? Emerging Issues Roundtable: Meeting Today's Challenges through Innovation and IP Rights 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.
Tags:
Medicare, physician fees, Paul Ryan, Roadmap for America's Future, HSAs, World Health Organization, international health systems, Joe Antos, Medicare, PhRMA, mandates, John Graham, The Heritage Foundation, Greg D'Angelo, Edmund Haislmaier, Medicaid, fraud, medical tourism, health care polls
Categories:
Medicare June 27, 2008
Single-Payer ReduxThere is mounting evidence that centrally-controlled, government-dominated, taxpayer-financed, rule-driven health care systems are failing. Even the godfather of the Canadian system, Claude Castonguay, now acknowledges that it is in crisis, as the Manhattan Institute’s David Gratzer reports. "We thought we could resolve the system's problems by rationing services or injecting massive amounts of new money into it," Castonguay said. But he now believes the solution is to bring private sector forces into play, with greater freedom of choice for patients.HighlightsProblems in Canada and the UK: There is mounting evidence that centrally-controlled, government-dominated, taxpayer-financed, rule-driven health care systems are failing. We found a surprising number of articles this week about problems in paradise -- aka, British and Canadian single-payer health care systems. We’ve written summaries of them in the articles round up below. Even the godfather of the Canadian system, Claude Castonguay, now acknowledges that it is in crisis, as the Manhattan Institute’s David Gratzer reports. "We thought we could resolve the system's problems by rationing services or injecting massive amounts of new money into it," Castonguay said. But he now believes the solution is to bring private sector forces into play, with greater freedom of choice for patients. Now if only we could get American political leaders to see the light BEFORE they go down this futile road.
The Center for Medicine in the Public Interest held a reception at the National Press Club on Monday evening to preview a new film that counters, with actual patient stories, the SiCKO fiction. And they launched a new website called BigGovHealth.org to provide easy access to articles, videos, and testimonials about the costs and consequences of centralized government control over health care. President Peter Pitts invited Canadian Shona Holmes to the reception to tell her story: She was diagnosed with a fast-growing brain tumor that was causing her to go blind; the expected survival time without treatment was less than the expected waiting time to begin treatment in Canada. So she decided to go to the Mayo Clinic for care. It was successful, and she credits Mayo with saving her vision and her life. Her husband is working a second job to pay the bills -- as well as the taxes to pay for the Canadian universal health care system. But she is alive three years after the surgery. “Please don’t do to your health care system what we have done to ours,” she pleaded. “Otherwise, where would we go?” The Chairman of CMPI, noted cardiologist Michael A. Weber, told the audience that he spent part of his childhood in England and, as a young boy, was told that he needed to have his tonsils removed. The physician said: “Go home, and you will receive a letter from the government telling you when and where to show up for your surgery,” he recounted. “Every day, I look at my mail for that letter to arrive,” he said. “I’m still waiting.”
Physician payments: Meanwhile, the Congress has itself tied in knots trying to reverse an automatic 10% Medicare pay cut for physicians, scheduled to go into effect July 1. Members on both sides of the aisle overwhelmingly agree they want to stop the physician pay cut from kicking in, but a number of other issues are attached -- including cuts to the popular Medicare Advantage program and competitive bidding for durable medical equipment. Barring a last minute miracle, it now appears that Congress will leave town for the July 4 recess without passing a bill. With the health sector now representing one-sixth of our economy and almost half of that run through government programs, politicians have enormous power over health care decisions. Do we really want to give them even more with health care reform proposals that give government a much bigger role in our health sector? Now how long would we wait for decisions? That’s a good question to ponder this Independence Day.
I did a radio interview this morning with the hosts of Money Matters Radio in Massachusetts. One was espousing the typical liberal line about health care systems in other countries being so much better at taking care of patients. I responded with actual facts about the growing difficulty of many Canadians to find a primary care doctor still accepting patients, long waiting times to see specialists and begin treatment, and lower survival rates in Canada and Europe for diseases like cancer. The hosts didn’t hang up quite quickly enough: After they said goodbye, one said I was knowledgeable and a great guest. The other said: “I thought she was annoying.” The facts are so difficult to swallow!
The uninsured: The American Medical Association approved at its annual meeting earlier this month detailed recommendations offered by the Council on Medical Service to standardize its policies on the tax treatment of health insurance, as I reported last week. The AMA was one of the first major organizations, under the leadership of then-president Dr. Stormy Johnson, to see the wisdom of refundable tax credits to help the uninsured purchase health insurance. Over time, the AMA passed a number of follow-on recommendations to support the policy, some of which are now overtaken by events and others of which contradict other policies. The new report standardizes the AMA policy and clarifies its position, which is quite bold. The long-standing AMA policy supports replacing the tax exclusion for employment-based health insurance with refundable, advanceable tax credits or vouchers. Further, the AMA would income-adjust the credits to provide more generous assistance to those with lower incomes. While the AMA does not specify dollar amounts for the credits or cut-off points, the policy could mean that their own members could face higher tax bills because they would lose their current tax break for health insurance but their incomes likely would be too high to qualify for a credit. Some members are distressed over this. (Sen. John McCain also would replace the tax exclusion with a credit, but the credit would be a fixed amount of $2,500 for individuals or $5,000 for families and it would be universally available.) There is much more to the AMA policy, which also involves integration with HSAs and payroll taxes. Here is a link to the AMA documents.
HSA update: HSAs seem so simple. But even with these straightforward accounts -- a savings account coupled with health insurance -- there seems to be an endless number of questions about them. The Treasury Department provided this week 28 pages of guidance governing everything from how HSAs interact with Health Reimbursement Arrangements and Flexible Spending Accounts, to whether people can qualify for an HSA if they receive preventive care through the VA, to nuances about employer contributions to the accounts. This shows that any program authorized by government requires rules and complexity, but Treasury is to be congratulated for these clarifications. And hopefully more will be forthcoming about other unsettled issues before the change in administrations next January. Also, two new reports are out this week with updated data on health savings accounts. Things we learned: Average account balances hit $1,400, up from $1,028 in December 2006, according to an HSA Benchmarking Survey from Celent, a research and advisory firm. An HSA Market Report from Canopy Financial, a provider of financial technology and electronic payment systems, reports that the average health plan had a deductible of about $2,500, that the average account holder was 43 years old, and that the average employer contribution was $68 a month, $58 for employees.
Our system is far from perfect, but it's so important to value its strengths as we move forward with reforms. Health Policy Matters will return after July 4. Celebrate freedom! Grace-Marie Turner Recent News Articles and Studies
Financing the U.S. Health System: Issues and Options for Change What’s at Stake in the Medicare Showdown Trouble in Europe and Canada with health care The ‘Uninsurable’ The Orphan Drug Act Has Been a Huge Success The Truth About Drug Innovation: Thirty-Five Summary Case Histories on Private Sector Contributions to Pharmaceutical ScienceBenjamin Zycher, Joseph A. DiMasi, Christopher-Paul MilneManhattan Institute Center for Medical Progress, 06/08 Ben Zycher and colleagues investigated whether new and improved medicines are the fruit of research financed or conducted by public agencies, the National Institutes of Health foremost among them, or by the pharmaceutical companies that produce and market the drugs. The authors investigated 35 important drugs currently being prescribed and found that the scientific contributions of the private sector were crucial for the discovery and/or development of virtually all of them. Private-sector research was responsible for central advances in basic science for seven, in applied science for 34, and in the development of drugs yielding improved clinical performance or manufacturing processes for 28. In short, all or almost all of the drugs and drug classes examined in this study would not have been developed -- or their development would have been delayed significantly -- in the absence of the scientific or technical contributions of the pharmaceutical firms, they found. Financing the U.S. Health System: Issues and Options for ChangeJoseph Antos, Jeanne M. Lambrew, Meena SeshamaniBipartisan Policy Center, 06/01/08 Health reform proposals across the spectrum have included changes in how the U.S. health system is financed. The goals of such changes include using financing incentives to promote system goals, replacing insufficient financing mechanisms with more sustainable ones, and increasing federal subsidies for a reformed health system. Irrespective of their specific design and independent of the delivery system changes they support, these options have policy implications that have received little public attention. This paper examines the implications of different options for financing the health system. Specifically, it describes recently proposed policies including continuing current financing and redirecting health spending to more effective uses, rolling back high-income tax cuts, modifying the current tax exclusion for health benefits, a play-or-pay model, and a value-added tax. Their effects on individuals, employers, and the health system are explored. What’s at Stake in the Medicare ShowdownScott Gottlieb, M.D., American Enterprise InstituteThe Wall Street Journal, 06/24/08 Congress is considering cuts to Medicare Advantage -- a program that allows millions of seniors to use federal dollars to buy private health insurance -- in order to avert cuts to physician pay. But the result of curtailing private plan participation in Medicare would be more bureaucratic control and less patient choice over health care decisions. Although private health insurance is imperfect, competition for beneficiaries means private plans need to provide better access for appeals, modern services and more personal considerations than what’s offered by Medicare, a monopoly supplier. Dr. Gottlieb also has written a new paper on “Measuring Biomedical Progress: How Do We Align Use with Estimates of ‘Value’ in Clinical Medicine?”
Trouble in Europe and Canada with health care:Canadian Health Care We So Envy Lies In Ruins, Its Architect AdmitsDavid Gratzer, Manhattan Institute for Policy ResearchInvestor’s Business Daily, 06/25/08 Canadian physician and Manhattan Institute scholar David Gratzer reports that the godfather of Canada’s health care system, Claude Castonguay, has concluded that four decades after it began, the system now is in crisis. "We thought we could resolve the system's problems by rationing services or injecting massive amounts of new money into it," says Castonguay. But now he prescribes a radical overhaul: "We are proposing to give a greater role to the private sector so that people can exercise freedom of choice." Castonguay advocates contracting out services to the private sector, going so far as suggesting that public hospitals rent space during off-hours to entrepreneurial doctors. He supports co-pays for patients who want to see physicians. Castonguay, the man who championed public health insurance in Canada, now urges for the legalization of private health insurance. In America, these ideas may not sound shocking. But in Canada, where the private sector has been shunned for decades, these are extraordinary views, especially coming from Castonguay. Time to Bury Those Myths About the NHSGillian BowditchThe Sunday Times, 06/01/08 Edinburgh is the first city in the UK to get a pioneering CT scanner as part of a £4m bequest from the Royal Bank of Scotland, which will pay for the maintenance and staffing of the machine for five years in return for access to the scanner 25% of the time for its employees, writes Sunday Times columnist and feature writer Gillian Bowditch. But the gift has led to claims that the bank is undermining the “founding principle” of the National Health Service (NHS) of equal treatment and access for all. But if ever there was a sacred cow that needed slaughtered it is the “founding principle” of the NHS, an unchallenged premise that has sheltered apathy, lethargy and mediocrity for decades, writes Bowditch. It is the “founding principle” of the NHS which leads to your routine operation being cancelled for the eighth time to make way for emergency surgery until you realize, with growing despair, that the only way you will be seen is when you become an emergency yourself. By elevating the “founding principle” of the NHS over all other considerations, we have failed to allow the NHS to develop into a service fit for the 21st century, she writes. In every other area of life, people are allowed to exercise real choice and decide their own priorities. Only in the NHS are they treated like the inhabitants of a communist state, expected to pay homage to an ideal which is constantly failing them. Far from condemning the Royal Bank of Scotland we should be encouraging more of these private/public partnerships, she concludes. Sixty Years On -- Who Cares for the NHS?Helen Evans, Nurses for ReformInstitute of Economic Affairs, 06/22/08 The consensus that lay behind the concept of a centrally planned, government-funded National Health Service is now broken, writes Dr. Helen Evans of Nurses for Reform and the Adam Smith Institute. The monograph, which marks the 60th anniversary of the NHS, finds that opinion formers now consider the problem of monopoly and lack of consumer information to be substantially greater problems in a government-provided healthcare system than they would be in a market-based system of healthcare. Coming Soon: Not-So-NICE Health Care?Sally Pipes, Pacific Research InstituteInvestor’s Business Daily, 06/25/08 A British court just ruled that the U.K. government unfairly denied anti-dementia drugs to Alzheimer's patients. The government's reason for refusing to cover the drugs? Money. Sally Pipes of the Pacific Research Institute writes that government scrooges didn't want to foot the bill. She says this kind of penny-pinching happens all too often in Britain, thanks to the National Institute for Health and Clinical Effectiveness, or NICE, the agency that determines which treatments get covered by the British health care system. And if some congressional lawmakers get their way, the United States soon will have a similar agency to create a Comparative Effectiveness Research Institute under Medicare. Big drugs companies shift trials from UKAndrew JackFinancial Times, 06/26/08 The Financial Times reports that several leading pharmaceutical companies are cutting back on clinical research in Britain, claiming insufficient commitment by the government and the National Health Service to support new drug development. These restrictive government policies mean that British patients will have fewer options to enroll in trials testing experimental medicines for life-threatening diseases such as cancer. The ‘Uninsurable’Merrill Matthews, Council for Affordable Health InsuranceThe Washington Times, 06/16/08 While much of the health care reform debate centers on the 47 million uninsured Americans, there is an equally important subgroup that must be part of the solution -- the uninsurable -- i.e., those who have been denied health insurance coverage because of a pre-existing medical condition, or whose condition results in premiums much higher than the standard, writes Matthews. Democratic presidential candidate Barack Obama has said he would forbid insurers from denying anyone who applied. But seven states tried what Mr. Obama is proposing in the mid-1990s, and every one of them virtually destroyed their individual markets, writes Matthews. The best solution is to let the health insurance market work for the vast majority of Americans and create a safety net for those who can’t get coverage. That’s what Mr. McCain’s “Guaranteed Access Plan” tries to do. If we want a market-based health care system, and John McCain apparently does, high-risk pools are the most effective way to address the safety-net problem of the uninsurable, writes Matthews. The debate should be over how to make the pools better, because a heavy-handed government-run system is not a good or affordable alternative. The Orphan Drug Act Has Been a Huge SuccessEd Rensi, Team Rensi MotorsportsThe Wall Street Journal, 06/23/08 The Orphan Drug Act, signed into law by President Reagan 25 years ago, made it possible for companies to invest hundreds of millions of dollars in the development of potential treatments for rare diseases, writes Ed Rensi, former president and CEO of McDonald’s USA and current co-owner of Team Rensi Motorsports. By offering tax incentives for clinical trials of these treatments and granting seven years of patent exclusivity once the drug is approved -- compared to an average of five years with most new drugs -- the Orphan Drug Act gave hope to the collective millions of Americans living with these horrible diseases. One of its most notable achievements has been to make the capital markets less risky for biotechnology investors, writes Rensi. Prior to this legislation, it was prohibitively expensive for a company to develop a drug for a disease that affects so few. In the 25 years since, more than 1,100 new treatments for orphan diseases have entered the research pipeline, and over 300 new orphan drugs have been approved by the Food and Drug Administration. Upcoming Events Aging and Future Health Care Spending: Red Herrings, Time to Death, and Insurance Choices Health in India and China: Challenges, Solutions and Lessons For U.S. Health Care The Future of Insurance Regulation 13th Annual Wall Street Comes to Washington Conference Long-Term Care Reform The Birth of Freedom 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. June 20, 2008
Wake-Up CallsKey members of Congress got another wake-up call this week about the serious threat that rising government health spending poses to the future of our health sector — and our economy. During a summit sponsored on Monday at the Library of Congress by the Senate Finance Committee, Federal Reserve Chairman Ben Bernanke told members "The decisions we make about health care reform will affect many aspects of our economy, including the pace of economic growth, wages and living standards, and government budgets, to name a few." Highlights
A Federal Health Board? Key members of Congress got another wake-up call this week about the serious threat that rising government health spending poses to the future of our health sector — and our economy. During a summit sponsored on Monday at the Library of Congress by the Senate Finance Committee, Federal Reserve Chairman Ben Bernanke told members "The decisions we make about health care reform will affect many aspects of our economy, including the pace of economic growth, wages and living standards, and government budgets, to name a few." The numbers are, in fact, frightening. Bernanke said that "higher government spending on health care spending will, of necessity, require reductions in other government programs, higher taxes, or larger budget deficits." So what was the solution offered by the chairman of the Finance Committee? Sen. Max Baucus said he wants to create an "independent federal health board" to make controversial health policy decisions involving payments through Medicare and other health programs. Which would mean that Congress would delegate to an unelected board the authority to make decisions over hundreds of billions of taxpayer dollars to provide medical care for tens of millions of Americans. What kind of democracy is that? Federal health boards are common in single-payer and other government-dominated health systems. The Clinton plan in the 1990s had a federal health board. This is a very bad idea that needs to be put to rest immediately. Tackling difficult decisions is the responsibility of Congress. The good news is that members may be paying attention to the critical importance of this issue. But sound decisions need to be made in the open political arena about spending and benefits. Congress can't punt on this one, and it needs to get serious about reform while it still has options.
Single-Payer Health Care? And speaking of bad ideas, advocates of single-payer health care continue their push, especially on the Left Coast. California State Senator Sheila Kuehl, chairman of the state's powerful Health Committee, continues to press for her bill to enact a health plan in which the state would collect taxes to pay the health care bills for all Californians, and the state would pay doctors, hospitals, and other providers directly — hence the name "single payer." But she, too, got a wake-up call from a new study by the state's highly respected and nonpartisan Legislative Analyst's Office: It concluded, basically, that the single-payer health reform plan would be a fiscal train wreck. Sen. Kuehl's single-payer plan would be more than $42 billion in the red in the first year! The state would collect $167 billion with a new 12% payroll tax and similar levies on small business and even on investments but would be faced with an estimated $210 billion in health care bills in the first year of operation (2010). And the red ink would continue to flow, year after year. To close the shortfall, these taxes would have to be raised to at least 16%, and then higher every year after that. Has anyone told Silicon Valley about this? Talk about a jobs and economic killer! That familiar song would have to be changed to "Nevada, here we come!"
Market Innovations: Meanwhile, in the real world, common sense and market innovations are continuing: Assurant Health announced this week that it has partnered with TelaDoc Medical Services to provide its customers with access to a network of board-certified, licensed primary care physicians on demand, over the telephone, 24/7. Fast. Convenient. And cost effective. Isn't that what consumers are looking for in health care? And it also helps people living in rural and other medically underserved areas and those with transportation challenges — including $4-a-gallon gas. Assurant Health focuses on individual and small group health insurance and is a major player in the HSA marketplace. The company always is looking for ways to distinguish itself from bigger competitors — such as offering same-day decisions to people who apply for health insurance. Now it is taking innovation another step further by partnering with TelaDoc. TelaDoc, with one million subscribers, offers quick and convenient access to a physician consultation anytime of the day or night, 365 days a year. It helps people avoid the time and expense — and delay — of an office visit or a trip to the emergency room. And last year, Assurant announced that MinuteClinics would be covered as an in-network provider of health care services for policyholders. Can you possibly imagine these kinds of market innovations taking root in California under a single-payer system?
Medical Tourism: And finally, the American Medical Association, in its annual meeting in Chicago this week, issued its first-ever guidance for patients considering traveling abroad for medical care. The fledgling medical tourism industry is gaining interest and attention as hospitals around the world — in India, Thailand, Guatemala, and elsewhere — are marketing their new facilities and services. An estimated 150,000 Americans are expected to receive care overseas this year. The AMA acknowledges that people with limited resources and even companies searching for lower-cost medical care for their employees are turning to medical tourism. But the AMA lists nine principles to guide consumers venturing into medical tourism, including making sure the decision to seek care outside the U.S. is voluntary, that facilities are accredited, patients are well-informed about risks, and that there are provisions for follow-up care. The AMA also reportedly has amended its long-standing position on tax credits and health insurance. We'll investigate that and report back next week. Grace-Marie Turner Recent News Articles and Studies Medicare: Drifting Toward Disaster Medicare: Drifting Toward Disaster Health and Human Services Secretary Michael O. Leavitt HHS Secretary Michael Leavitt gave a visionary but chilling speech about the looming threat that Medicare presents to taxpayers, to our economy, and to other government responsibilities during a major forum jointly sponsored by the Galen Institute, The Heritage Foundation, and the American Enterprise Institute. "This is serious business involving trillions of dollars and the lives of hundreds of millions of people," he told a large audience assembled at the Newseum on April 29 in Washington, D.C. This is the full transcript of his important speech, with introductions by Grace-Marie Turner, Bob Moffit, and former Sen. John Breaux. Tom Miller of AEI, a co-host and panel moderator at the event, has written a paper elaborating on the remarks he presented. He argues that presidential candidates, policymakers, and the public do not yet want to deal with Medicare's fundamental problems. Until they do, he says, we need incremental action on many fronts to get better results for the money we will continue to spend in the traditional Medicare program. Grace-Marie Turner, Galen Institute The Service Employees International Union (SEIU), the AARP, the Business Roundtable, and the National Federation of Independent Business (NFIB) have joined together in a campaign called "Divided We Fail" to show that employers, employees, and labor unions all place a high priority on health and employee benefit reform. While the four groups may seem to have common problems and even goals, they will find it very difficult to reconcile their principles when they get down to the task of actually talking about solutions, writes Grace-Marie Turner. Regardless of the business community's wishes, legislators inevitably would require employers to contribute. Indeed, every recent push for universal coverage has included a "play or pay" mandate requiring businesses to either provide insurance to their employees or pay a fine or a fee toward a public insurance pool. It's understandable that businesses want urgent action on health issues, but bringing competition and choice into our health sector to get prices down would be a much more powerful force than more government control and expensive new mandates on employers, writes Turner. In its unorthodox attempt at unity, the business community could unwittingly provide political cover to special interests with a decidedly anti-business agenda. The Success of Medicare Advantage Plans: What Seniors Should Know Robert E. Moffit, Ph.D. Medicare Advantage, which enrolls 20% of all Medicare beneficiaries in private plans, is a success in giving seniors unprecedented choices with superior benefits at affordable prices offered by health plans competing to provide value. But Medicare Advantage is only the first stage of reform. Given Medicare's $36.3 trillion in unfunded liabilities, Congress must start the process of comprehensive reform that builds on the success of the competitive Medicare Advantage model. Congress will have to restructure the existing payment system to provide seniors a generous but fixed contribution that can be adjusted for such factors as age, income, and health condition. And it will have to learn to be a reliable business partner, with payments based upon real market conditions not arbitrary payment formulas. In a separate paper, Moffit criticizes Congress for blocking efforts by the government to require competitive bidding for durable medical equipment and supplies in the Medicare program. If Members of Congress, Democrats and Republicans alike, cannot allow for competitive bidding to commence, it is hard to imagine how they will summon the fortitude when larger challenges inevitably arrive, Moffit writes. Behind the Numbers: Medical Cost Trends for 2009 PricewaterhouseCoopers' Health Research Institute, 06/08 The growth in medical cost trends for the private sector is expected to level off in 2009 following five years of deceleration, according to a new report from PricewaterhouseCoopers' Health Research Institute. Costs are expected to grow 9.6% in 2009 compared with 9.9% in 2008. Other key findings from the report:
Health Care 2008: A Political Primer James C. Capretta, Ethics and Public Policy Center Capretta provides an overview of the current health care reform movement, from its political origins in the 1990s to the forces driving today's debates. He describes how a 1991 Pennsylvania senator's campaign became a watershed moment in the health care debates, the Clinton health care plan, and Senator John McCain's dramatic proposal for reforming the tax preference for employment-based health insurance. It is crucial to see just how much progress has been made since the first iteration of the health care debate, and just how much better positioned Republicans now are to take the initiative, writes Capretta. Indeed, health care reform just might turn out to be what tax reform was in the 1980s and welfare reform was in the 1990s: a platform for a focused conservative effort to achieve through market forces and economic incentives what the left has failed to do through government. Canada's Drug Price Paradox 2008 Brett J. Skinner and Mark Rovere Prices for generic drugs in Canada are more than twice as high as those in the United States because government policies in Canada distort the market for prescription medicines, according to a new study from the Vancouver-based Fraser Institute. The study found that Canadian prices for generic prescription drugs in 2007 were on average 112% higher than U.S. prices for identical drugs in 2007. Of the total prescriptions dispensed in Canada in 2007, 48% were for generic drugs and 52% were for brand name drugs. In the U.S., 67% of prescriptions were for generics with just 33% for brand name drugs. If Canada repealed policies that distort the market for prescription drugs, net savings for Canadians could reach between $2.9 billion and $7.5 billion (2007) annually for total retail pharmacy sales of generic and brand-name drugs. Sally Satel, M.D., American Enterprise Institute Satel provides a compelling account of the questions raised recently when four members of the Japanese mafia received liver transplants at a UCLA medical center (two of whom later donated $100,000 to the center). When resources are scarce — transplantable organs being the classic example — should some institution pass judgment when facts about a patient's criminality are known? It's a perfect storm of ethical anxieties and calls to mind a time when character did determine access to scarce treatment, writes Satel. In 1962, Seattle's Swedish Hospital established the "God Committee," which considered nonmedical traits, including marital status, net worth, nature of occupation and church attendance, to decide which terminal patient would get access to dialysis machines. No one wants to return to the days of the character biopsy — judging a patient's social value — in deciding who gets access to rare treatments, but the UCLA story and others like it will continue to offend our sense of fairness as long as the nation's dire organ shortage persists. The only way to dispel the ethical quandaries that stem from rationing is to expand the pool of organs so that more people can receive lifesaving transplants, writes Satel. Repealing the ban on donor compensation would permit the federal or state governments to devise a safe, regulated system in which would-be donors are rewarded for giving an organ to the next stranger on the list. Upcoming Events A Health Care Debate: What is the Best Way to Control Costs, Improve Quality and Expand Access? Health Information Technology and Its Future: More than the Money BigGovHealth.org Premiere Health Insurance Reform Elements: A Look at Wellness, Adverse Selection and Consumer Based Health Plans New HSA Rules Webinar Aging and Future Health Care Spending: Red Herrings, Time to Death, and Insurance Choices
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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Single Payer June 13, 2008
DrumbeatsThe Commonwealth Fund continues its advocacy for universal coverage and a larger role for government in our health sector with a new paper in Health Affairs: It cites the rising number of people with health coverage that does not adequately protect them from high medical expenses — the under-insured.The Commonwealth Fund continues its advocacy for universal coverage and a larger role for government in our health sector with a new paper in Health Affairs: It cites the rising number of people with health coverage that does not adequately protect them from high medical expenses — the under-insured.News coverage has headlined the study's finding of a 60% increase in the number of people who are underinsured since 2003, bringing to more than 25 million the number of adults under age 65 who "had inadequate insurance in 2007." You will hear this number repeated often in the political debate this year, but it is worth noting that the number is based solely upon subjective recollections of participants in a telephone survey taken last year. Here's the back story: People are considered underinsured if they had out of pocket medical expenses equal to 10% of their income (5% for those earning under $40,000) or if their deductible was 5% or more of their income. That means that if a family earning $60,000 a year purchased a health insurance policy with a $3,000 deductible, they were underinsured, even if they chose that option — as they very well might do in order to save on insurance premiums and qualify for a Health Savings Account. Certainly there are millions of people for whom paying for health care and health insurance is a hardship. But should those who choose the sensible option of buying a more affordable, higher-deductible policy also be considered victims of the system? Yes, the authors imply, led by Cathy Schoen, senior vice president of Commonwealth. This gets to the fundamental definition of health insurance: Should it provide financial protection against major medical bills or protect against even moderate expenditures on health care? That is a valid policy question, but one ignored by the study.
Fast forward to a system where government domination of the health system is firmly established — in Italy. I spoke in Milan last Friday at a seminar sponsored by my good friend and colleague, Alberto Mingardi, director of the Istituto Bruno Leoni. While academics predictably defended their system as fair and equitable, others said that it was increasingly not serving its citizens: A lack of public money leads to shortages of personnel, equipment, surgical time, diagnostics, and medicines. "We have a promise of universal care in name only," one participant told me. Clearly, the problems of cost and access to care are universal. Europeans increasingly are facing a more informed patient population that is gaining access to information via the Internet and demanding greater access to care and new medicines. These nations recognize that consumerism is inevitable, and some are looking at new models of supplementary private insurance and even Health Savings Accounts to meet patient demands. They have a hard time listening to the ideas and innovations offered in the U.S. because they have been so poisoned against our system by the constant drumbeat tearing it down. But the U.S. system is flexible and adaptive, and these ideas and innovations could be beneficial. No one country has a lock on the right solution. But recognizing that all of us share similar problems would be a big step toward exploring solutions enabled by a more efficient and rational use of resources and a more informed, engaged patient population. Grace-Marie Turner Recent News Articles and Studies It's Hard to See Doctors Favoring Less Pay, Care, More Paperwork It's Hard to See Doctors Favoring Less Pay, Care, More Paperwork Grace-Marie Turner, Galen Institute A new study shows that a majority of U.S. physicians surveyed say they would favor legislation to establish national health insurance, but doctors may be a bit less enthusiastic if they knew more about where such a system would take us, writes Grace-Marie Turner. U.S. doctors would surely face a huge pay cut if government were in control of as much of the health sector as it does in other developed countries. The average physician in the U.S. makes between $200,000 and $300,000, while his or her European counterpart makes much less than half of that ($116,000 in France, $81,000 in Italy, and $56,000 in Germany). The government would also decide what drugs, medical procedures, and other treatments will be available — or not, writes Turner. So when we hear that nearly six in ten doctors support national health insurance, that most likely means that the other four in ten know enough to be concerned. James C. Capretta, Ethics and Public Policy Center Sen. Barack Obama's health reform plan would sow the seeds of destruction for private health insurance, writes Jim Capretta. Sen. Obama's plan would create a new publicly-run insurance plan modeled on Medicare, with the federal government acting as the insurer and collecting premiums from enrollees. Large employers might, for a time, continue providing health insurance for their workers. But with each passing year, the premium differential between private plans and the public option would grow and induce additional migration from private to public insurance, he writes. This would, in turn, increase the government's ability to impose lower prices, further widening the premium gap. The tragedy is that price controls are only effective if they control and limit the supply of services. In time, he warns, that means waiting lists and other barriers to accessing care, along with skyrocketing costs to the taxpayer. A Primer for Follow-On Biologics Sally Pipes, Pacific Research Institute Conventional generics have proven effective at reducing health care costs and increasing medical access. Unfortunately, the same model simply cannot be applied to follow-on biologics, writes Pipes, because they are much more complex. For example, Herceptin, a popular anti-cancer biologic, is comprised of about 25,000 atoms — more than a thousand times as many as Tylenol. Further, biologics can combine several patents — one on the molecule itself and numerous others on the process for creating it. A longer period of data exclusivity and financial protections are needed if future medical breakthroughs are to continue. A Shared Responsibility: Advancing Toward a More Accessible, Safe, and Affordable Health Care System for America America's Health Insurance Plans, 05/29/08 The nation's total health care expenditures could be reduced by $145 billion by 2015 by implementing five initiatives outlined by AHIP, according to a PricewaterhouseCoopers analysis. They include:
47 Million and Counting: How the Health Care Marketplace Is Broken Ronald A. Williams, Aetna Inc. Solving the problem of the uninsured will require addressing the interrelated areas of cost, quality, and access, said Aetna Chairman and CEO Ronald Williams in testimony before the Senate Finance Committee. Williams discussed the systemic challenges that stand in the way of achieving universal coverage and described Aetna's experience in grappling with them. For example, Aetna has been a leader in increasing transparency, providing new tools to control costs and enhance quality. Aetna is also focusing on wellness, prevention and early intervention. Strategies include providing access to preventive care without co-pays and deductibles, promoting smoking cessation and weight loss programs, and offering new disease management tools. The Common Sense Guide to Health Savings Accounts: What You Need to Know about High Deductible Health Plans and Health Savings Accounts Roy Ramthun Roy Ramthun, former Treasury official, senior health policy advisor at the White House, and now president of HSA Consulting, has updated his guide to Health Savings Accounts, and he also has released a version of the guide in Spanish. The "Buyer's Guide" provides advice, reminders, and things to consider when examining an HSA plus answers to frequently asked questions, definitions of terms, and a description of additional resources available throughout the Internet. Upcoming Events Forum on Drug Safety and Post-Market Evidence Healthcare and Markets Prepare for Launch: Health Reform Summit 2008 Solving the Medicare Crisis with Personal Accounts Responsible Health Reform: Competition, Innovation, and Individual Control A Health Care Debate: What is the Best Way to Control Costs, Improve Quality and Expand Access? BigGovHealth.org Premiere New HSA Rules Webinar
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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Universal Coverage | |