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Category: AllFollow the MoneyDecember 19, 2008
Highlights
All roads to new legislation in Washington run through the Congressional Budget Office, and the CBO yesterday offered health policy makers a menu of 115 choices of reform initiatives, with price tags attached. It's like a shopping list for policy makers, who, using our money, will mix and match ideas and offer new ones of their own. While we can dispute the assumptions and therefore the numbers, the CBO estimates preview the critical roadmap that Congress will follow in devising legislation, seeking those ideas that have the biggest impact while costing the government the least or that raise new revenues by cutting out things members don't like. A big section is devoted to looking at changing the tax treatment of health insurance. For example:
Punishing Americans:
Big-ticket items: Some of the proposals supported by congressional leaders and President-elect Obama come with a hefty cost. For example:
Low cost, high impact: Several items show up in these documents as costing the federal government little, and therefore they will be particularly attractive to policy makers, but they could have a major impact on the health sector.
And a few things we'd like, if done right:
And while these numbers can seem dry and boring, the estimates will indeed be directive in determining the shape of reform proposals to come. Here are links to the CBO Budget Options and Key Issues documents, which will play a major role in development of legislation next year. You can devise your own plan.
 Competition and choice in the UK? As it seems that the U.S. is moving more and more toward centralization of our health sector, the most centralized systems in Europe are discovering the wisdom of individual choice and market competition. Just one example: Direct payments and personal budgets are being offered as part of the British government's goal of giving people more choice and control over their access to routine health care services. "The key word is personalization" in the Putting People First initiative. Let's see if we can get CBO to score that.
The Boston Globe carries an article today about Massachusetts' "incremental universalism" which it says could serve as a model for the federal government and other states to follow in their health reform initiatives. Massachusetts says it has reduced its uninsured rate to 2.6%, but we're still trying to find out where those mysterious 100,000 newly insured people came from just about the time the state was trying to convince Washington to release $21 billion in Medicaid money to fund the program over three years. It was an interesting coincidence that state officials and health plans went back to look at the numbers last summer, leading to the jump in coverage. Is there enough matching Medicaid money in Washington to allow all states to boost their health spending to these levels? Massachusetts only has 6.4 million residents, about 550,000 of whom were deemed to have been uninsured when the legislation passed in 2006. Now, the state says about 170,000 still are uninsured. Cost: $21 billion. Costs continue to be a major problem with the system. With state officials dictating the level of allowed premium increases, many plans have little choice but to cut back on benefits to make the numbers work. I also continue to hear from people who are struggling to figure out how they are going to comply with the individual mandate for purchasing health insurance -- and pay their heating and grocery bills. The majority of the newly insured are covered through taxpayer-subsidized plans or mid-sized employers who now are mandated to provide or pay for coverage for their workers. And there are problems with access to care, especially a shortage of primary-care physicians. One woman wrote to me: "Before, I was uninsured and couldn't see a doctor. Then I made the sacrifice to buy insurance, but I still can't find a doctor who will see me. So I still don't get to see a doctor, but it's just costing me more now." We will have a paper coming out early next year with more on this issue.
And all of us at the Galen Institute send you our very best wishes for a joyous Christmas and holiday season. We will be back in the New Year to continue to keep you informed about the challenging debate in the coming months. Grace-Marie Turner Recent News Articles and Studies Providing Coverage for All Through Private Health Insurance Providing Coverage for All Through Private Health Insurance There is an alternative to expansion of government health programs that can provide health insurance coverage for all Americans, writes Turner. Congress and the new administration could dramatically expand access to private health insurance through three key steps: 1) providing new subsidies to individuals to purchase private health insurance; 2) creating new markets for affordable, portable insurance; and 3) protecting those with pre-existing conditions so they can purchase and maintain insurance coverage. In a separate paper, Turner focuses on the coming SCHIP debate and why expanding this government program to higher-income families will be harmful to the poor children it is designed to help, leading to compromises in care and coverage. Drug Safety: Jurors Shouldn't Be Practicing Medicine The Supreme Court just heard oral arguments in Wyeth v. Levine, challenging a legal doctrine known as "preemption," which means that federal law trumps state law when they conflict. If Wyeth loses before the Court, consumers can look forward to a litigation free-for-all in which juries -- not scientists or clinicians -- are the de facto providers of information on drugs, writes White. But if the Court stands in support of preemption, patients will know the warning labels posted on drugs are vetted by scientists with the medical insight and expertise necessary for making them. PRESCRIPTION DRUGSPrescription Drug Spending Trends in the United States: Looking Beyond the Turning Point Prescription drug spending has reached a turning point, and spending trends of the past two and a half decades no longer apply, write Aitken, Berndt, and Cutler. Annual growth in retail prescription drug spending averaged 9.9% from 1997 to 2007, but spending growth has slowed since 2003, falling to 1.6% in 2007, according to figures from IMS Health. Slower growth in prescription drug spending is likely to continue, which suggests that "for payers and consumers, the health spending prospects are more optimistic than many fear," write the authors. The researchers cite several factors behind the slowdown in pharmaceutical spending, such as more patent expirations, increased generic penetration, and reduced innovation. The paper is part of a five-paper package on prescription drugs released this week by Health Affairs. STATE ISSUESA State-Based Initiative States that are experimenting with innovative approaches in health care through Medicaid can serve as a viable alternative to a massive federalization of American health care, writes Capretta. Indiana's Mitch Daniels is implementing an innovative plan to expand coverage to low-wage households in Indiana. Mark Sanford of South Carolina and former governor Jeb Bush of Florida also spearheaded aggressive Medicaid-reform programs that emphasize personal responsibility and choice instead of overbearing governmental regulation. And Louisiana Governor Bobby Jindal recently released an ambitious plan to reshape his state's Medicaid program and expand coverage to a large segment of the state's uninsured. If Republicans are to survive the Obama years and find their voice on health care, it will be because Jindal, Daniels, Sanford, Bush, and like-minded reformers in the states were able to demonstrate to the voting public that there are better and more practical ways to fix health care than a full-blown and irreversible federal takeover, concludes Capretta. HEALTH INSURANCEFundamental Insurance Changes Needed to Reform American Healthcare As Americans debate health care policy, there seems to be bipartisan agreement that reform is long overdue. But as we have seen time and again, campaign promises do not guarantee change, writes Helms. To get to real reform we must change the open-ended payment policies of the three principal financing sources -- private insurance, Medicare, and Medicaid -- that now funnel money to physicians, hospitals, and other providers. What we all seem to want from health reform is a better system that will provide us with higher quality care and more economic value. Achieving such reform will require us to replace the current open-ended payment systems with systems that reward quality and value. The longer we wait, the more difficult true change will be. How a Federal Health Board Will Cancel Private Coverage and Care President-elect Obama, Senator Max Baucus, and HHS-Secretary Designate Thomas Daschle have outlined policy proposals that, if enacted, would negatively impact private health care for millions of Americans, writes Moffit. All three have advocated the creation of a new federal health board. The expertise of men and women from the health sector -- with achievements in medical science, biomedical research, technology, or clinical experience -- would, for all practical purposes, be subordinated to the expertise of those appointed to the health board. For millions of Americans, a powerful Federal Health Board, plus the dynamics of a controlled "market" dominated by a government health plan, would end their existing private coverage and ensure unprecedented government interference in the delivery of care. Less than 15% of U.S. voters support, and 53% oppose, a proposal pushed by health insurers requiring every American to provide proof of private health insurance or face tax penalties or other fines, according to a poll commissioned by Consumer Watchdog. Why Tie Health Insurance to a Job? Americans and the president-elect need to ask whether the health care system that was founded in the 1940s is the best health care system for the 21st century, write Dr. Emanuel and Senator Wyden. For too many, the employer-based system is insufficient. The money that employers are spending to buy health care for their employees could otherwise go to workers in the form of higher wages, empowering individuals to make their own health care choices. Americans need some of the benefits of the employer-based system: the security of being part of a large group, of not being denied coverage because of age and pre-existing conditions, and the convenience of having experts screen qualified plans and manage enrollment. But Americans also need portable insurance -- coverage that follows them when they change jobs, lose jobs, start a business or whatever else may come. Americans need more choices and the market power to buy the health coverage that works best for them and their families and, in turn, to make insurance companies compete for their business. CONSUMER-DRIVEN HEALTH CAREAvailability, Contributions, Account Balances, and Rollovers in Account-Based Health Plans Employer contributions to health savings accounts increased from 2006 to 2008, according to additional findings from the 2008 EBRI Consumer Engagement Health Care Survey. Individual contributions to these accounts also increased. Other key findings:
Upcoming Events Grace-Marie Turner speaking on the Morning Drive show The Role of States in Driving National Health Reform
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