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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.Newsletters< Prev 1 2 3 4 5 6 7 8 Next >August, 10 2007
Differences among FriendsSeveral senators were poised to offer an amendment to the SCHIP bill during the Senate debate last week that reflected long hours of work on a free-market, patient-centered alternative. But they ran into a buzz-saw of opposition, not from the Left but fro... Several senators were poised to offer an amendment to the SCHIP bill during the Senate debate last week that reflected long hours of work on a free-market, patient-centered alternative. But they ran into a buzz-saw of opposition, not from the Left but from a friend of free markets, Grover Norquist of Americans for Tax Reform.The Senate amendment, which Sen. Richard Burr (R-NC) was preparing to offer on behalf of a number of his colleagues, would have replaced the seriously-flawed tax preference for job-based health insurance with a universal refundable tax credit for individuals and families to purchase private coverage. Not so fast, Grover warned, issuing a stern warning that he would consider the amendment to be a violation of ATR's no-tax-increase pledge, which has been signed by 42 senators and 196 members of the House. There was outrage all around, reflected in a nationally-syndicated column this Monday by Robert Novak. "The quarrel over the Burr amendment reflects not only a failed Republican reaction to big government but also a weakening of GOP resolve to hold down taxes," Novak wrote. Senators were furious that they are being depicted as tax increasers when they were trying to lead the fight against socialized medicine. They (correctly) believe that they were offering a solution to a major distortion in the tax code and wanted to fix it while expanding access to private health insurance for all Americans. "The 'Every American Insured Health Act' provides every American with a refundable, advanceable flat tax credit of $2,160 per individual and $5,400 per family that gives them the freedom to choose the health care plan that best meets their needs," Burr said in introducing the bill as free-standing legislation a week earlier with four colleagues. "The plan is budget neutral and puts an end to unfair discrimination in the IRS tax code that only benefits health coverage offered by employers and that disproportionately subsidizes Americans with more costly health plans and with higher incomes." But Norquist concluded that the senators' proposal would result in an $800 billion tax increase over 10 years by eliminating the tax preference for job-based health insurance, which he says would be a tax increase, and replacing it with refundable credits, which he says would be new spending. The policy community also was angry after advocating for years eliminating or capping the tax exclusion and replacing it with a system of individual credits. Sen. Jim DeMint (R-SC) had an alternative ready to go that solved Grover's complaint that the bill was a tax increase by coupling the health insurance amendment with a fix to the Alternative Minimum Tax to make the package "tax neutral." But Sen. Tom Coburn (R-OK), a leader in developing the senators' alternative approach, balked, forcefully arguing that the health care alternative is not a tax increase. So the amendment was pulled from the floor for another day's battle. It is essential to fix the tax treatment of health insurance if we are to address the problems in our health sector that shut tens of millions of people out of the system and give open-ended tax breaks to higher-income people to purchase expensive health insurance, exacerbating the problems of the uninsured by driving up costs. The alternative is to continue down the road to further encroachment of government control through expansion of government programs like SCHIP. You will recall that we put together a white paper two years ago bringing experts from the health and tax policy communities together to point out the flaws with the current tax preferences for employment-based health insurance. Health and tax policy experts alike criticized the current system for allowing an unlimited call on federal resources to subsidize expensive health insurance in an inequitable system. More than 58 policy experts signed the statement, which we delivered to President Bush's Tax Reform Commission. Our message was adopted in the commission's final report and became the foundation for Mr. Bush's bold tax and health reform proposal earlier this year. We will work to repair this rift over the tax exclusion for job-based insurance, which even President Reagan tried to fix 25 years ago. It's vital if we are to create an equitable system for access to private health insurance. ********* Despite all of this, we are making steady progress in educating the debate about the need to fix the problems with the tax treatment of health insurance. One more group has studied our health sector extensively and has come to our same conclusion. The Federal Bar Association's Section of Taxation is weighing in on refundable tax credits for health insurance in a forthcoming paper. The paper argues that "? a supplemental system of refundable tax credits whose benefits are aimed at those with low incomes is the best system for achieving the goal of insuring as many Americans as possible." It also says that the credits should be offered "in tandem with the current system. It is simply too risky to completely overhaul a system under which 75 percent of all Americans are insured." Okay. We have to start somewhere. It's vital that we focus on getting the policy right on both health and tax policy, and we can do that only if we can get free-market advocates to stop forming a circle with their firing squad. Grace-Marie Turner RECENT NEWS ARTICLES AND STUDIES:
Dynamics in Medicaid and SCHIP Eligibility among Children in SCHIP's Early Years: Implications for Reauthorization "Two-thirds of children in the United States were income-eligible for Medicaid or the State Children's Health Insurance Program (SCHIP) at some point from 1996 to 2000," according to this study. During those four years, about one-fifth (32%) of all eligible children were eligible for both Medicaid and SCHIP. "Another 57 percent were eligible only for Medicaid, and 12 percent were eligible only for SCHIP."
Medicare's Obesity Policy Flawed Medicare?s decision to limit access to the full range of obesity treatments is bad public health policy, writes Turner. Obesity is associated with a number of health problems, including heart disease and diabetes. Obesity's prevalence in Medicare "has doubled in the last 20 years, and the share of spending by Medicare on obese patients has almost tripled, from 9.4 percent to nearly 25 percent.? This proposal ?is inconsistent with Medicare?s new focus on care management and disease prevention,? writes Turner. ?As the obesity problem grows, Medicare needs to make sure that physicians and patients have all available treatment options.? Medicare's Financial Challenges: Actuaries Speak Out on Medicare's Future An analysis of Medicare from eight independent actuaries "leads to the clear conclusion that the system in its current form is unsustainable. Without substantial and fundamental changes, Medicare's financial requirements will increasingly strain the U.S. economy to the point of consuming a substantial, if not staggering, percent of the federal budget."
This study by an independent consulting firm examines the impact of Medicare's prescription drug program on issues such as out-of-pocket spending, generic drug usage, access to therapy, and rates of compliance. Key findings:
Drug Pricing and Its Discontents: At Home and Abroad An assessment of the market for chronic disease medications finds that an ideal differential pricing structure "yields prices affordable to both low- and middle-income countries and maintains incentives for research and development." Ending differential pricing "could increase access for some patients in the short run, but would pose a severe threat to global drug innovation in the long run, and probably lower access for some patients."
Pitts discusses the need for a communications revolution at the Food and Drug Administration in the wake of growing consumer empowerment. "All the science in the world -- precise and important as it may be -- is not going to help the average consumer understand why a new drug is important, why it was approved, or even what it does," he writes. "With so many new drugs on the market and so many more people needing them, the FDA must step up to the plate and realize that doing a better job in risk communications is not only a top priority for the agency's political survival -- but a marvelous opportunity to promote the public health." The Balitmore Sun writes that better information in published research, especially in widely read, peer-reviewed journals, should also be made available to help consumers make informed decisions about courses of treatment. Pharmaceutical firms, for example, are making study results available on their websites and federally funded clinical trials are now listed on a government website.
UPCOMING EVENTS: Legislative Rewind: How did Health Care Fare in 2007? Call for Entries: Best Practices in Consumer Empowerment and Protection Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features research and writings by participants in the Health Policy Consensus Group, articles of interest from the health policy world, and announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at www.galen.org. 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. August, 3 2007
Freedom vs. SecurityThe battle over health insurance for children reached a crescendo this week as both houses of Congress passed their own, very different, bills. Both go far beyond reauthorizing the 10-year-old SCHIP program, and together load onto the back of this one bil... The battle over health insurance for children reached a crescendo this week as both houses of Congress passed their own, very different, bills. Both go far beyond reauthorizing the 10-year-old SCHIP program, and together load onto the back of this one bill major changes to the Medicare Advantage program, to physician payment schedules, to the prescription drug benefit, expansions and changes to Medicaid, significant new taxes, and a broad expansion of taxpayer-supported health coverage well into the middle class.Major policy decisions are being made here that are far beyond the original purpose of the legislation to cover children in families that make too much to qualify for Medicaid and not enough to afford private coverage. But this is only the first round: President Bush has said forcefully that he will veto either version of the bill that reaches his desk, and for good reason. Conferees will try to cobble together a compromise -- no mean feat in itself -- and will come back for more votes before the Sept. 30 expiration date of the program. The question isn't whether children should or should not have health insurance. The question is how do we achieve that goal. We sponsored a Capitol Hill briefing and news conference yesterday morning to give our colleagues in the policy community an opportunity to offer their insights and analyses on the SCHIP proposals, and Rep. John Shadegg made a surprise but very welcome visit. He said that the bill that passed the House by a 225-204 vote on Wednesday night was ?written and passed in just eight days? and that few people in Congress, much less in the country, understand what is in it. He argues that it contains ?the most sweeping changes in decades? to our health care system and that ?the changes will affect every American.? A champion of free-market choices, he argued that the SCHIP debate is really about whether we will have a government-funded and therefore government-run health care system in America or a new, invigorated private market with more competition, more affordable choices, and more rational subsidies for people and families to obtain their own coverage. Other issues that our colleagues raised during the briefing about the current approach to SCHIP:
*********** The Liberty Fund conference that I attended last week in Sierre, Switzerland, was extraordinary -- an immersion in the epic struggles between freedom and security. Several of the participants had lived behind the Iron Curtain in Eastern Europe and are now university professors and heads of think tanks. They are passionate about the dangers of state control over people and economies and about the dangers of the ever-encroaching welfare state. Many thanks to the Liberty Fund for sponsoring conferences like this throughout the world to advance the conversation about freedom and liberty, and to our friend Alphonse Crespo, a Geneva physician who organized this conference and who spoke at a conference we hosted in Washington last fall. You remember his quote: "Citizens always wind up paying for health care, either through taxes, insurance premiums, or out-of-pocket costs. So we all have a single-payer system -- and we are the payers. The real question is whether they have single-decider systems?in which governments and their agents control our decisions.? *********** And finally for another booster shot in the battle for liberty, radio commentator Mark Levin aired this week a commentary by former President Reagan on the dangers of socialized medicine -- a commentary recorded in 1961 but which is just as relevant today as then. Go to marklevinshow.com. It is as though we have President Reagan guiding our work today against the incursion of government into our ?God given right to determine our own destiny.? Grace-Marie Turner RECENT NEWS ARTICLES AND STUDIES:
THE STATE CHILDREN'S HEALTH INSURANCE PROGRAM A number of think tanks and organizations have weighed in on the debate over SCHIP. Here is a selection of papers and articles:
TOO MUCH SAFETY CAN BE DEADLY The Food and Drug Administration Revitalization Act, currently moving its way through Congress, contains provisions that could impede getting new drugs and devices to patients, writes Grace-Marie Turner of the Galen Institute. For example, the legislation would require doctors to follow a checklist when prescribing certain drugs and, if passed into law, ?doctors would be in constant fear of lawsuits, making new drugs harder for patients to get,? writes Turner. The legislation will also inevitably drive up costs by requiring doctors, drug companies, and the FDA ?to continue to produce mountains of paperwork, even after a drug is approved.? Finally, the bill ?would allow private firms to import prescription drugs from other countries to take advantage of their systems of price controls?[which] is an open invitation for contamination of our drug supply,? concludes Turner. ?Unless the legislation is stripped of these provisions, it will make drugs less safe and more expensive.? DRUG IMPORTS ARE NO REMEDY Legislation that would allow the importation of prescription drugs from abroad ?would actually expose Americans to grave health risks,? writes Joel White, Galen Institute senior fellow. ?As the Food and Drug Administration has declared time and again, it simply can't guarantee the safety of imported drugs?the agency doesn't even have the ability to thoroughly vet drug imports at their current levels,? writes White. For example, on a typical day, only 500 to 700 of the roughly 40,000 packages suspected of containing drugs are inspected at the JFK International Airport mail facility. And while the volume of imported drugs has more than tripled over the past several years, the number of drug inspectors has grown by just 10 percent, further widening the gap between drug imports and inspectors. ?On every front, the health risks posed by drug importation are substantial,? concludes White. Instead of trying to legalize drug importation, Congress should clamp down on the unsafe imports already making their way here. Drug counterfeiting is a major public health hazard, with the latest evidence from Canada where British Columbia resident Marcia Bergeron became ?the first person known to die as a result of ingesting counterfeit meds,? reports the National Review of Medicine. The drugs purchased by Ms. Bergeron ?were manufactured poorly and contained impure 'filler' materials?the filler was likely contaminated by dangerous metals during production in Southeast Asia and sold by a website based in Eastern Europe, possibly the Czech Republic.? The toxicology report showed ?dangerously high levels of metals?the level of aluminum alone was 15 times higher than what's considered normal.? A HEALTHY MARKET? HEALTH TECHNOLOGY ASSESSMENT IN CONTEXT Health technology assessments (HTA), which compare clinical performance and cost-effectiveness to evaluate medical treatments, ?have had a clear impact on policymakers in Europe?concerning the adoption and distribution of health technologies in their healthcare systems,? according to a cross-national study of HTA from the Stockholm Network, a pan-European think tank. ?The nature of nationalized health services in Europe has meant that most countries in Europe have established HTA programmes linked to and supported by the national government?The government's monopoly over the uptake and diffusion of healthcare-related technologies allows it to ration medicine and treatments directly, either by price, by omission or by long waiting lists,? finds the study. ?The result is that?HTA is in fact used to restrict access to essential medicines and health technologies.? By contrast, HTA bodies in the United States, such as the Agency for Healthcare Research and Quality, focus instead on the ?expansion of sophisticated healthcare-related technologies in the market?to ensure the efficient transformation of research into practice.? HTA ?holds within itself the possible cause of its eventual demise by stifling innovation and causing long-term harm,? concludes the study. Europe and Canada ?must face up to the necessity of moving away from healthcare models dominated by government funding in order to deliver to consumers the choice and empowerment they want out of their healthcare systems.? WHO KILLED U.S. MEDICINE? Harvard Professor and Manhattan Institute senior fellow Regina Herzlinger writes that the American Medical Association is serving as a poor advocate for the nation's physicians, who are increasingly losing their income and autonomy. ?You might expect that the AMA would fight the insurers, hospitals, government bureaucrats and ivory tower academics who have diminished physicians' incomes, besmirched their ethical reputations and compromised their professionalism -- but you would be wrong,? writes Herzlinger. Instead, the AMA has chosen to fight against retail medical clinics, which provide convenient and affordable health care. ?Unfortunately, while the AMA engages in trivial turf warfare, physicians are increasingly forced to become salaried employees of hospitals and insurers and are constrained by recipes for the practice of medicine that are cooked up by government and insurance company bureaucrats,? concludes Herzlinger. ?We and doctors deserve better advocates.? Professor Herzlinger discusses her application of market principles and consumer focus to health care in a conversation with Bob Galvin of the General Electric Corporation and Yale University School of Medicine. Topics include the role of the consumer, focused factories, and the future of insurers. A CANADIAN DOCTOR DESCRIBES HOW SOCIALIZED MEDICINE DOESN'T WORK Canadian physician David Gratzer of the Manhattan Institute says single-payer systems in Canada and Europe are increasingly looking at market solutions to confront the problems of ?dirty hospitals, long waiting lists and substandard treatment.? For example, many Canadians are turning to private-sector medical brokers that ?set up surgical procedures, diagnostic tests and specialist consultations, privately and quickly.? Europe is also embracing this privatization trend, writes Gratzer. ?Sweden's government, after the latest round of privatizations, will be contracting out some 80% of Stockholm's primary care and 40% of its total health services,? he writes. ?America is right to seek a model for delivering good health care at good prices, but we should be looking not to Canada, but close to home,? concludes Gratzer. ?From telecommunications to retail, deregulation and market competition have driven prices down and quality and production up. Health care is long overdue for the same prescription.? The Washington Times reports that ?the beginning stages of change toward free-market health insurance? are being seen in Canada. ?There are approximately 23 private surgical centers offering medical services nationally, as well as 17 cataract clinics,? writes the Times. ?But despite a groundswell for more privatization in Canada, it remains illegal under federal law to pay for health care that is deemed medically necessary by a provincial government,? writes the paper. Dr. Jacques Chaoulli successfully challenged Quebec's ban on private health insurance coverage, but ?a major privatization wave won't occur until each of the 10 provincial governments and three territories moves to align its legislation with the Chaoulli decision and insurance companies step into the arena with new products.? UPCOMING EVENTS: Legislative Rewind: How did Health Care Fare in 2007? Call for Entries: Best Practices in Consumer Empowerment and Protection Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features research and writings by participants in the Health Policy Consensus Group, articles of interest from the health policy world, and announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at www.galen.org. 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. July, 20 2007
SCHIP ReduxDespite threats of a presidential veto, the Senate Finance Committee, with the support of a majority of its Republican members and all the Democrats, sent to the floor yesterday a five-year expansion of the State Children's Health Insurance Program with a... Despite threats of a presidential veto, the Senate Finance Committee, with the support of a majority of its Republican members and all the Democrats, sent to the floor yesterday a five-year expansion of the State Children's Health Insurance Program with a $60 billion price tag.Only Sens. Trent Lott (MS), John Ensign (NV), Jim Bunning (KY), and John Kyl (AZ) voted ?no? on the bill that HHS Secretary Mike Leavitt warned would lead to a ?gradual government takeover of health care.? The federal government would encourage states to put children on this taxpayer-financed program if their families earn as much as $60,000 a year, paying states an average of 70 cents on the dollar of their SCHIP costs. This is, by the way, more than the average of 57 cents it pays in Medicaid matching funds for children in much poorer families. That means that the federal government will continue to pay a higher percentage of the costs for wealthier SCHIP kids than for poorer Medicaid kids. This is bad policy. And exactly when did we have that major national debate about expanding this taxpayer-financed health program to middle-income Americans? The better alternative is to focus on the 689,000 children who the Urban Institute estimates are uninsured for a full year and who would be eligible for SCHIP at 200% of poverty. Let's protect the kids who likely don't have other options rather than expanding the program well into the middle class, where private coverage will likely be dropped so taxpayers can pick up the bill. The Wall Street Journal carried a front-page article on Thursday about how difficult it is for people on Medicaid to find a physician or a dentist because payment rates are so low, often below costs. SCHIP seldom pays providers much more than Medicaid, so where on earth are these millions of children going to go for care? The House Ways and Means Committee plans to mark up its version of the SCHIP bill next week, which could go all the way to 400% of poverty. If passed, that would mean that 71% of America's children would be on taxpayer-supported health insurance. Congress should focus instead on reauthorizing SCHIP for its core purpose, and then let's work on solving the problems in the rest of the health sector that make health insurance so expensive and that lock health insurance to the workplace. Senator Enzi (WY) introduced a Ten Point plan that we describe below that pulls together many good market-based ideas and would be a giant leap in the right direction. ************ We sponsored a luncheon on Monday featuring Indiana Gov. Mitch Daniels, who described to senior journalists and health policy experts his novel plan to increase access to health insurance for the uninsured through a program modeled on Health Savings Accounts. His plan is designed to help up to 132,000 uninsured Hoosiers earning less than about $20,000 a year with health insurance, preventive care, and a funded health spending account. The plan starts with a POWER account. The uninsured person would make a contribution, on a sliding income scale, to his or her account, with the contribution ranging from about $200 a year for those making $10,000 to about $900 a year for those earning $20,000. The state would top-off the account to bring it up to $1,100. People would spend this money first on health care, then private health insurance, paid by the state, triggers in. There are added incentives for people to use preventive care, which, like HSAs, doesn't come out of the account. And like HSAs, people would be able to rollover any money left in their account at the end of the year. This is indeed a consumer-friendly public program. Gov. Daniels has taken the heat to raise the state's cigarette tax by 44 cents to pay for the plan. And now he is having to fight the Washington bureaucracy to get approval to implement it. The reasons get into the arcane nature of Washington budgeting over the Medicaid money he needs to partially fund the program. Gov. Daniels expressed his frustrations about trying to do the right thing: Balance his state's budget (which he has done two years in a row), keep Medicaid spending in check, and pass ground-breaking legislation with bi-partisan support to provide a consumer-friendly option for the uninsured. And now he is being penalized by the Office of Management and Budget -- the very agency he ran before being elected governor of Indiana in 2004 -- for keeping his Medicaid spending down. States have incentives to spend as much as possible on Medicaid to draw down the maximum number of federal dollars. But here we have a responsible governor who didn't do that and who comes up with a creative plan that is fiscally responsible, yet the OMB could block him from trying something new. OMB says that Indiana's spending rate was too low in the past to approve the new program. Gov. Daniels could be a leader in showing the other states a new way to cover the uninsured rather than using onerous individual mandates, massive new regulatory bureaucracies, and big tax hikes. But he won't have the chance if Washington puts on the brakes. And we wonder why nothing ever changes here. ************ Finally, I will be in Switzerland next week, traveling to Sierre for a symposium sponsored by the Liberty Fund and organized by Dr. Alphonse Crespo of the Institut Constant de Rebecque. The timing could be better because I likely will be missing the heat of the SCHIP debate here. But I committed to the conference months ago, and it will be a wonderful opportunity to explore ?Von Mises and Hayek on Liberty, Man, and Utopia.? Policy experts from all over the world will be gathering at the conference, and I am sure to return with renewed devotion to our struggle to protect freedom and liberty. I will report back after I return July 29. Grace-Marie Turner RECENT NEWS ARTICLES AND STUDIES:
TEN STEPS TO TRANSFORM HEALTH CARE IN AMERICA Senator Mike Enzi, the ranking member of the Senate Health, Education, Labor and Pensions Committee, this week unveiled ?Ten Steps to Transform Health Care in America,? a comprehensive set of proposals to advance market-based reform. The bill ?eliminates the unfair tax treatment of health insurance?increases affordable options for working families to purchase health insurance through a standard deduction?[and] ensures affordable health insurance to low-income individuals through a refundable, advanceable, assignable tax-based subsidy.? The bill draws on a number of bills offered in this and previous congresses. On a day when the Senate Finance Committee voted to expand government-provision of health insurance, Sen. Enzi offered a vision that would revitalize the private market. ?We must begin a national debate to examine the whole health care system,? he said. ?That's what the Ten Steps does -- it is a comprehensive solution to a very big problem.? WHERE ARE THE INNOVATORS IN HEALTH CARE? ?No sector of our economy is more in need of innovation than health care, yet its many regulations handcuff entrepreneurs,? writes Harvard Professor and Manhattan Institute senior fellow Regina Herzlinger. ?Entrepreneurs avoid health-care delivery because status quo providers, abetted by legislators and insurance companies, have made it virtually impossible for them to succeed?Lately, payers are even telling doctors how to practice medicine.? She cites Duke University Medical Center's successful efforts to improve the health of cardiovascular patients, ?yielding the kind of do-good returns that would normally earn kudos from Wall Street and Main Street.? But Duke was penalized financially because ?third parties pay providers only for treating sick people.? Many more examples of barriers to innovation are detailed in her latest book, ?Who Killed Health Care?? which concludes that putting patients back in charge of the health care system is the only answer. FIRM BASING DEDUCTIBLES ON HEALTH TESTS SEES COSTS FALL USA Today reports on the ?growing effort by employers to both shift additional medical costs to workers and provide incentives for workers to pay more attention to their own health.? For example, the Swiss Village Retirement Community, a non-profit organization in Indiana, raised the annual deductible for its employees' health insurance three years ago from $500 to $2,500. To help offset the higher deductible, workers were offered a supplemental policy that would give them credits worth up to $2,000 if they didn't smoke, watched their weight, and met standards for cholesterol and blood pressure. ?The cost of providing health care dropped from 11.5% of wages before the program to 9.1% in the first year and have fallen to 7.5% since?Because of that, the amount workers pay in premiums has not increased in three years,? reports USA Today. UnitedHealthcare this month plans to offer similar policies ?to midsize employers in Rhode Island, Pennsylvania, Ohio and Colorado and may go nationwide next year.? STATE APPROACHES TO CONSUMER DIRECTION IN MEDICAID Consumer-directed approaches ?are increasingly being adopted and considered in Medicaid programs across the country,? according to a study published by the Center for Health Care Strategies. The study surveyed Medicaid agencies to identify which of 17 consumer-directed approaches, such as disease management, Cash and Counseling programs, and financial incentives to encourage healthy behaviors, are being implemented and considered by states. The study finds that Medicaid agencies in mid-2006 ?reported, on average, having four of the 17 consumer-directed approaches already in place.? The study also finds that five states planned to offer Health Opportunity Accounts (HOA) or similar account-based plans this year.? In addition, ?states are increasingly providing health plan quality data to Medicaid recipients?By the end of 2007, almost half of all states (24) will provide comparative health plan quality data to recipients and an additional 13 states are considering doing so in the future.? PRIVATE SUPPLY, PUBLIC BENEFIT ?Private specialty facilities?are the bogeyman of the moment in the Canadian health care policy debate,? according to a paper from the Canadian Health Policy Consensus Group. The Ontario Ministry of Health recently considered contracting with a private hospital to perform knee replacement surgery to reduce the waiting list, but pressure from those resistant to private care forced the province to back down. The Toronto Globe and Mail reported that had the contract been successful, ?Ontario would join other provincial governments that have learned that sometimes, the best way to reduce ballooning waiting times in the public health-care system is by going private.? Ontario Health Minister George Smitherman ?doesn't seem willing to give Ontarians the chance to decide for themselves whether adhering to the ideology of non-profit provision is more important than reducing their own waiting times,? writes the Canadian Health Policy Consensus Group. ?The idea that private specialty hospitals would be a threat to the Canadian health care system simply doesn't hold up when you go beyond ideology and look at the international evidence,? concludes the paper. Specialty hospitals are ?highly efficient?and while it's often said that they'll draw physicians and nurses away from general hospitals, they'll also draw patients away, and, if they are permitted to take full advantage of the efficiencies which come from specialization, the increased productivity will amount to a more than proportional increase in surgical capacity.? ARE CITIZENS OF THE WORLD SATISFIED WITH THEIR HEALTH? There is a remarkable consistency in individuals' satisfaction with their personal health across regions of the world, according to Jim Clifton, chairman and CEO of the Gallup Organization and Newt Gingrich, former speaker of the House and founder of the Center for Health Transformation. The Gallup World Poll surveyed citizens in more than 130 countries and territories regarding their health, personal well-being, and living conditions. Gallup found that ?perceptions of personal health correlate strongly with respondents' income level, both globally and regionally? In every region the wealthiest quartile of respondents are most likely to offer favorable responses and the bottom quartile, the least likely.? The study found that satisfaction rates in the population quartiles were generally consistent across regions, even in countries with vastly different average incomes. For example, 79% of U.S. residents were satisfied with their health as were 80% in Sub-Saharan Africa and 83% in Latin America. UPCOMING EVENTS: In the Quest for Global Health, What Puts Cuba on the Map? The Role of Chronic and Catastrophic-Care Management: Lessons for Health Care Reform Common Ground: Leadership Commitments to Improve Value in Healthcare Can We Get It for You Retail? Moving Beyond Wholesale Markets for Health-Care Services Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features research and writings by participants in the Health Policy Consensus Group, articles of interest from the health policy world, and announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at www.galen.org. 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. July, 13 2007
SCHIP OverreachThe State Children's Health Insurance Program is on the front burner in Congress, with the Senate Finance Committee expected to send a bill reauthorizing the program to the floor as early as next week. SCHIP will expire at the end of September unless Cong... The State Children's Health Insurance Program is on the front burner in Congress, with the Senate Finance Committee expected to send a bill reauthorizing the program to the floor as early as next week. SCHIP will expire at the end of September unless Congress acts.The battle lines are being drawn:
The CBO points out that 77% of children above 200% of poverty -- about $40,000 a year for a family of four -- have private health insurance now, as do 89% of children between 300 and 400% of poverty. An expansion of SCHIP would largely replace this private insurance with taxpayer-paid coverage. The expansion is a blatant attempt to put millions of children onto this public program and dry up the market for private insurance for children. A generation of children will grow up thinking that the place you get your health insurance is through the government. Some other things wrong with this legislative overreach:
The goal should be to cover more children at a lower cost rather than to create a heavily-subsidized expansion which would crowd-out private coverage and cover fewer children at a much higher cost. Covering children is a worthy goal. Those who oppose this massive expansion of SCHIP are drafting alternatives that would offer more children -- and families -- the option of private insurance, at a lower cost to the taxpayer. Watch this space for more details? *********** Rhode Island did the right thing this week in enacting legislation that allows insurers to offer mandate-light health plans to small employers. Reporter Elizabeth Gudrais of the Providence Journal writes that the bill, which was signed by the governor last week, enables small businesses with 50 or fewer employees ?to sign up for the new, bare-bones plans if they have not offered insurance to their employees in the previous 12 months.? This will not be the ?Rolls-Royce of health insurance,? she writes, but the Democratic sponsor of the bill and chairman of the House Finance Committee, Rep. Steven M. Costantino, said, ?Something is better than nothing, in my opinion.? The legislature cut some, but not all, of the strings to Rhode Island's 43 mandates: Policies must have coverage for mental health and substance abuse treatment equal to other medical care, and deductibles can be no more than $2,000 for individuals and $4,000 for families. The bill challenges insurers to come up with a plan that costs just $240 a month for an individual, roughly half the cost of a typical employer-sponsored plan. The law went into effect July 1. We will be looking to see if there is enough competition in the insurance market in Rhode Island to make this new, potentially more economical, health insurance an option for small employers before the pilot program expires in 2010. Grace-Marie Turner RECENT NEWS ARTICLES AND STUDIES:
MEDICARE ADVANTAGE AND THE FEDERAL BUDGET ?Medicare Advantage (MA) health plans play a critical role in bringing greater value to our overall health care system, in terms of enabling beneficiaries to get more up-to-date, higher-quality care at a lower cost,? said former CMS Administrator Mark McClellan in his recent testimony before the House Budget Committee. ?MA plans overall will have relatively modest payment increases in 2008 and possibly in subsequent years,? noted McClellan. ?The best solution to Medicare's financing problems isn't to take away innovative coverage options and shift costs to beneficiaries -- particularly those with limited means who are struggling with out-of-pocket costs today,? he said. ?Increasingly, efficient health care is about prevention, personalization, and coordination of services around the needs of each individual patient,? concluded McClellan. ?To achieve a high-value health care system -- the most important kind of 'efficiency' in health care -- Congress should continue to support the Medicare Advantage program, which is our best, proven avenue for improving prevention and chronic disease management in Medicare. ? RESPONSE TO SICKO As Michael Moore's film SiCKO continues to attract attention, those with first-hand experience with government-run health care offer some reality testing. Helen Evans, director of the London-based Nurses for Reform and one of the speakers at Galen's June 14th symposium, writes that Moore ignored Britain's ?waiting lists, substandard care and increased outsourcing, ?[and] outright rationing to control costs.? Brett Skinner of the Vancouver-based Fraser Institute says, ?Canada's single-payer system does not cover many of the advanced medical treatments and technologies that are commonplace in America.? Sally Pipes of the Pacific Research Institute, a native Canadian, describes her personal experience in battling for medical care for her mother. Pipes writes that her uncle lost his battle with non-Hodgkin's lymphoma after he was denied access to the miracle drug Rituxan that wasn't approved for use in Canada. And Canadian physician Dr. David Gratzer of the Manhattan Institute writes that the factual errors in Moore's film are plentiful, adding that he simplifies arguments ?to the point of absurdity,? creating ?a fantasy world reshaped by leftist ideas.? Grace-Marie Turner's recent commentary about SiCKO, which appeared in the Baltimore Sun, provoked a strong response from readers. WHY HAS LONGEVITY INCREASED MORE IN SOME STATES THAN IN OTHERS? THE ROLE OF MEDICAL INNOVATION AND OTHER FACTORS Columbia University economist Frank Lichtenberg examines variations in life-expectancy among the fifty states from 1991-2004 and concludes that medical innovation plays an important role in recent gains in the health and longevity of Americans. Lichtenberg finds that longevity increased the most in those states with the greatest access to newer drugs, as measured through Medicaid, Medicare, and other programs. Lichtenberg also finds ?that states that use newer drugs did not experience above-average increases in overall medical expenditure, which contradicts the common perception that advances in medical technology inevitably result in increased health-care spending.? A MODEST PROPOSAL: LET CONSUMERS KNOW MEDICAL COSTS Doctors' and hospitals' fees for frequently used services should be made available to consumers, writes Raj Bal of Assurant Health, one of the leading health insurers to individuals and small groups. ?Each day, 8 million [consumers] are doing their own research on medical conditions, treatment options and, in some areas, the performance of hospitals and doctors,? writes Bal. ?Yet as we enter the enlightened age of consumer-directed health care, no one can get an answer to what would seem to be simple questions? about physician and hospital charges. For example, base charges for an office visit for a child's ear infection can range from $50 to $150, and laparoscopic appendectomies can range from $10,000 to $25,000. Consumers should be given ?information that is easy to access, understand and use?they should have access to the full-price charges that will appear on their bills or be deducted from the health savings accounts,? he concludes. ?Whenever possible, we should eliminate the barriers that will allow market-based forces to determine fair, value-based pricing.? THE MAKING OF THE NEXT PRESIDENT'S HEALTH PLAN: WILL IT BE D?J? VU OF 1992? ?Parallels between U.S. health-care politics in 1992 -- the last time health issues played a highly significant role for presidential contenders -- and today's early campaigns have been overstated,? writes AEI's Tom Miller. ?The common element that 1992 and 2007 share is the electorate's unease, if not discontent, with the workings of the existing health-care system?but convergence on substantive solutions remains elusive,? he writes. ?The gravitational pull of universal coverage nostrums and stylized bipolar disputes between national health insurance and free market medicine tends to distract our national political debate from confronting more serious matters that need greater attention,? argues Miller. We should ?acknowledge that it is time to reconcile better the limits of public resources with needs, not wants,? concludes Miller. ?Defining better choices in the gray zone between 'you get what you pay for' and 'you will get what we decide to pay for' might not fit within a sixty second campaign spot or the paragraph of a stump speech, but it could begin to move us past the dead end of 1992 and beyond the initial teases of 2008.? MEDICAID REFORM IN KENTUCKY Kentucky newspapers are reporting that the Medicaid program reforms initiated by Gov. Ernie Fletcher are saving money for state taxpayers without threatening services to poor and disabled citizens. Two years ago, legislators predicted the program would lose between $125 million and $675 million a year. Instead, the program has ended the fiscal year in the black. The Ashland Daily Independent reported that, ?Having inherited a program?that was gushing red ink to the tune of more than $100 million a year and climbing, the task seemed impossible without denying health care benefits to thousands of poor and disabled Kentuckians,? write the editors. ?But the numbers show that [Secretary of Health and Family Services Mark] Birdwhistell -- the most competent administrator brought to Frankfort by Gov. Ernie Fletcher? has brought soaring Medicaid costs under control ?while still assuring the poor and disabled receive the medical care they need.?
Legislation that would allow the importation of pharmaceuticals from abroad ?is a dangerous response to high drug prices,? writes Peter Pitts of the Center for Medicine in the Public Interest and former associate commissioner of the Food and Drug Administration. According to the World Health Organization, up to 10% of globally traded drugs are counterfeit, with counterfeiters becoming increasingly adept at ?producing phony source codes and sophisticated graphic labeling to mimic brand-name products.? Pitts concludes that, ?Contrary to what advocates of importation declare, simply mandating safety by legislative fiat will not make imported drugs safer?Congress has a responsibility to protect Americans from overseas threats, not expose them to those hazards.? Henry Miller of the Hoover Institution, also a former FDA official, outlines several steps necessary ?to protect the integrity of pharmaceuticals dispensed in the United States.? He recommends that Congress increase the penalties for drug counterfeiting and that new track-and-trace technologies be applied to help protect drugs in the supply chain. Miller also writes that ?the FDA must more aggressively enforce regulations that require documentation of the 'pedigree,' or history, of a drug as it moves through distribution channels? and ?new authentication technologies must be developed to make it more difficult for counterfeiters to imitate legitimate drugs.? Additionally, ?consumers should patronize only pharmacies on the National Board of Pharmacy's recommended list?[and] should be vigilant for anything amiss in any prescription drug obtained anywhere.? UPCOMING EVENTS: SCHIP Expansion: Bad for Kids, Families, and Taxpayers Grace-Marie Turner speaking on Leadership Radio Medicare Advantage: Whose Cost, Whose Benefit? Who's Got the Cure? Four Options for Achieving Universal Coverage I Pay, You Pay, Variable Co-Pay: The Next Generation of Health Insurance Design The Value of New Cancer Drugs Medicaid's Soaring Costs: Time to Step on the Brakes In the Quest for Global Health, What Puts Cuba on the Map? The Role of Chronic and Catastrophic-Care Management: Lessons for Health Care Reform Common Ground: Leadership Commitments to Improve Value in Healthcare Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features research and writings by participants in the Health Policy Consensus Group, articles of interest from the health policy world, and announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at www.galen.org. 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, 28 2007
Oval Office MeetingPresident Bush expressed renewed interest in a refundable tax credit for the uninsured during an Oval Office meeting yesterday that I was privileged to attend, and he also drew the line on ?a massive expansion? of the State Children's Health Insurance Pro... President Bush expressed renewed interest in a refundable tax credit for the uninsured during an Oval Office meeting yesterday that I was privileged to attend, and he also drew the line on ?a massive expansion? of the State Children's Health Insurance Program.?[O]ur nation has a clear choice,? Mr. Bush said in a statement in the Roosevelt Room after the meeting. ?One option is to put more power in the hands of government by expanding federal health care programs and empowering bureaucrats to make medical decisions. The other option is to put more power in the hands of individuals, by making private health insurance more affordable and accessible and empowering people and their doctors to make the decisions that are right for them. That's the divide.? He sees the congressional battle over reauthorizing SCHIP as pivotal: ?This program was designed to ensure that poor children without health insurance receive the medical care they need. I support S-CHIP for that purpose.? But the president said he strongly opposes expanding ?its reach to include children from family that earn as much as $80,000 a year, as well as some adults.? The president was emphatic in our Oval Office meeting and later in his statement before the cameras, that he will fight ?steps down the path to government-run health care for every American. ?It's the wrong path for our nation. Government-run health care would deprive Americans of the choice and competition that comes from the private market. It would cause huge increases in government spending, which could lead to higher taxes. It would result in rationing, inefficiency and long-waiting lines. It would replace the doctor-patient relationship with dependency on people here in Washington, D.C.,? he said. The president emphasized in his statement, as he did during the private meeting with six of us from the policy community, the importance of addressing the tax treatment of health insurance to end the bias in the tax code ??to make basic private health insurance affordable for all Americans.? The president's proposal for a $15,000 standard deduction for a family to purchase health insurance has not gained much traction in a Democratic Congress, and he said he recognizes that others ?believe a tax credit for health insurance would be a better way to do so. ?For example, some have proposed a tax credit of $5,000 for every family with private coverage. This would have a similar outcome as the standard deduction I proposed, and I'm open to further discussions about these two options. ?Whichever plan we choose, reforming the tax code would have a major impact on American health care. That's what's important for our citizens to understand. There's a better way from expanding the government, and that is to reform the tax code,? he said. The president praised HHS Secretary Michael Leavitt, who also attended the meeting, for his work in helping states to institute reforms that would make health insurance more affordable. ?If we want a better system, the federal government has got a responsibility to reform, and so do states. As they do so, they should ensure that help is provided to those who can least afford coverage. ?We're at a decisive moment in the debate over health care,? the president said. ?The choices we make now will set the direction of medical care in America for years to come. I'm going to continue to work with members of both parties to look past tired, old proposals that make bigger government programs the solution to every problem. ?I'm going to continue to push for new and innovative ways to help every American afford basic private health insurance. I will continue to put my trust in the good judgment of the American people, and I'll put my trust in the finest system of private medicine in the world.? Secretary Leavitt and Al Hubbard, director of the National Economic Council, then held a briefing for the media, offering more details on the administration's positions. ?[I]n the meeting today with these six experts, some of them supported the standard deduction and some of them supported the tax credit, the refundable tax credits, and there are good arguments for both. And the president made it clear in his presentation today that although he supports the standard deduction, he is open to the refundable tax credit,? Hubbard said. There was even discussion of combining the two, he said. But the first battle is to avoid creating a huge new expansion of SCHIP. Instead, reauthorization of the program can be a platform to expand access to private health insurance, including making it easier for states to offer SCHIP as premium assistance so parents can put their kids on their own private policies. Despite the huge number of issues the president was dealing with yesterday, including immigration reform and Senate subpoenas, he still took a big part of his day to address health care -- and the importance of free-market reforms. Three cheers! Grace-Marie Turner RECENT NEWS ARTICLES AND STUDIES:
'KIDS' INSURANCE A STEP TOWARD UNIVERSAL HEALTH CARE Congressional proposals to expand the State Children's Health Insurance Program are ?the thin edge of the wedge to achieve the longtime goal of government-supplied universal health insurance and the suffocation of the private system,? writes columnist Robert Novak. Current legislation, sponsored by Sen. Hillary Clinton, would triple SCHIP's cost from $25 billion to $75 billion and extend coverage to families at 400 percent of poverty that make as much as $82,000 a year. ?An indirect but pervasive impact of Clinton's grand design would be the impact in the same family of children who are insured by the government while their parents are covered privately,? writes Novak. ?The overall effect would make three out of four American children accustomed to relying on government care no matter what course their parents take.? THE MEDICARE ADVANTAGE PROGRAM Peter Orszag, director of the Congressional Budget Office, provided an overview and anticipated trends for the Medicare Advantage Program in testimony today before the House Budget Committee. Enrollment in MA plans has increased over the past two years to about 18 percent of all Medicare enrollment, or 8 million beneficiaries. The CBO also ?projects that payments to Medicare Advantage plans will rise from an estimated $60 billion in calendar year 2006 to $196 billion in 2017?Much of that increase will result from growing enrollment (about 7 percent per year); the rest from increasing payments per enrollee (about 4 percent per year).? While emphasizing that this growth increases the net costs to Medicare, Orszag says that ?policymakers evaluating options for reducing payments to Medicare Advantage plans need to weigh the cost savings against benefits that the plans provide in managing care, the effect on health care costs overall, and the impact on beneficiaries.? BAD MEDICINE IN THE MARKET ?Counterfeit medicines are an insidious threat to global health, and the risks they pose have been largely underestimated to date,? write Roger Bate and Kathryn Boateng of the American Enterprise Institute. ?No area of the world is unaffected, but mounting evidence shows that the problem is disproportionately severe in developing and emerging-market countries,? write the authors. For example, in some areas of Southeast Asia, Latin America, and sub-Saharan Africa, more than 30 percent of medicines are counterfeit. ?Countries have the primary responsibility -- both in stopping criminal manufacturing and distribution and in protecting their citizens from counterfeit products -- but multilateral organizations such as the World Health Organization (WHO) must do more to expose the problem and help countries tighten regulatory controls.? ?Around 5.4 million adults -- or 2.5 percent of the American adult population -- have recently purchased prescription drugs from another country, such as Canada or Mexico,? according to a PhRMA survey of drug importers. About half of those who imported drugs ?did not have a doctor's prescription for medicines they wanted,? the survey finds. Further, ?85 percent of importers have insurance with prescription drug coverage.? AGAINST UNIVERSAL COVERAGE Republican presidential candidates should reject the goal of universal health care coverage, write the editors of National Review Online. ?Republicans should go in a different direction, proposing market reforms that make insurance more affordable and portable,? they write. Although some people, especially the young and healthy, may choose not to buy health insurance, this will not result in higher premiums for others. ?Forcing them to get insured would, on the other hand, lead to a worse health-care system for everyone because it would necessitate so much more government intervention,? the editors conclude. ?So what should the government do about the holdouts? Leave them alone. It's a free country.? WHO'S REALLY 'SICKO' Michael Moore's documentary SiCKO ignores evidence that ?government-run health systems have turned out to be less than utopian,? writes the Manhattan Institute's David Gratzer. ?His grand tour of public health care systems misses the big story: While he prescribes socialism, market-oriented reforms are percolating in cities from Stockholm to Saskatoon.? In its review of the film, The New Yorker finds that Moore ?scrapes bottom in his new documentary?[he] winds up treating the audience the same way that, he says, powerful people treat the weak in America -- as dopes easily satisfied with fairy tales and bland reassurances.? Moore also fails to ?interview any of the countless Americans who have been mulling over ways to reform our system,? writes The New Yorker. ?A shift to the left, or, at least, to the center, has overtaken Michael Moore, yielding an irony more striking than any he turns up: the changes in political consciousness that Moore himself has helped produce have rendered his latest film almost superfluous.? DOCTORS, RETAILERS SQUARE OFF The American Medical Association has asked for ?state and federal agencies to launch widespread investigations? into popular retail based health clinics, reports the Chicago Tribune. The AMA ?said lack of regulation at retail clinics might be fostering liability concerns, health risks and potential conflicts of interest.? But by doing this, ?medical societies would actually be taking actions that would decrease access to care by putting more regulatory hurdles and burdens on the [retail] facilities,? said Dr. Rebecca Hafner, an AMA member and medical director for MinuteClinic. But then the editors of the Chicago Sun-Times weigh in: ?Ostensibly, the opposition [to retail health clinics] is about quality control, about ensuring sound and safe treatment?But ?we have to wonder whether the medical establishment is more upset by clinics' 'drive-in kind of approach' or its potential loss of business for doctors,? the Sun-Times writes. ?But any parent who has endured the difficulty of getting an appointment with the pediatrician for a screaming child's earache, or waited anxiously during off hours for an on-call doctor to call back to authorize a visit to the emergency room for a scary tumble, will see the local retail clinic as an attractive alternative.? UPCOMING EVENTS: Republican Women's Club Meeting Medical Malpractice Insurance Studies Beyond US boundaries: Is the US Congress sacrificing EU patient safety? Ideology, Issues and Impact: A Health Care Forum SCHIP Expansion: Bad for Kids, Families, and Taxpayers Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features research and writings by participants in the Health Policy Consensus Group, articles of interest from the health policy world, and announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at www.galen.org. 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, 22 2007
SiCKO. Need We Say More?So Michael Moore brought his latest film to town on Wednesday for a well-publicized preview. SiCKO seems to have pushed most other serious health policy discussions off the agenda this week, even while key congressional committees were voting on more than... So Michael Moore brought his latest film to town on Wednesday for a well-publicized preview. SiCKO seems to have pushed most other serious health policy discussions off the agenda this week, even while key congressional committees were voting on more than a dozen important health care bills on prescription drug safety and health spending.Heaven forbid that we would wind up making policy by propaganda, because that is exactly what would happen if anyone were to base any serious health reform proposals on Moore's film. First, he makes the ridiculous assertion that Cuba's government-run, single-payer health care system is far superior to the United States. Give me a break! Cuban doctors even botched surgery on Fidel Castro, and a Spanish surgeon had to be called in to try to repair the damage. In a film scene reminiscent of the Keystone Cops, Cuban doctors dash around to care for several American patients (9/11 rescue workers) that Moore has brought over on a fishing boat he commandeered. The care they get is purported to be representative of the care that anyone in the socialized health care system in Cuba gets. Credible? You tell me. Moore has also been doing the TV interview circuit, and one question he was asked seemed to get to the heart of his incongruity. An interviewer for FoxNews asked why he would be calling for a health care system run by government when he is so opposed to government in the first place. ?Good question,? Moore responds. He then uses the opportunity to slam the Bush administration, saying that government used to do things right before the current administration took over. Exactly when was it that we had that perfect government? Today, it is overwhelmed just trying to issue passports. Could any government magically run an infinitely more complex health care system for 300 million Americans? The Cato Institute held a forum on Capitol Hill on Thursday morning to show clips of SiCKO as well as clips from several other films which tell the other side of the story. One of the presenters was filmmaker Stuart Browning of the Motion Picture Institute. He has produced a series of films at www.freemarketcure.com using interviews with patients to show the limits, restrictions on access, and rationing of care in single-payer health care systems, especially Canada. Another film is in production to answer Moore. Called Sick and Sicker, producer Logan Darrow Clements is filming in Canada right now and has interviewed a number of us from the free-market policy community to talk about the value of a free-market health care system that values people and progress. The inimitable John Stossel of ABC News also is working on a major hour-long special this summer to offer what surely will be a more balanced portrayal of the U.S. and other health care systems. One of Moore's core arguments in SiCKO is that profit in the health sector is evil. It is a view also shared by the chairs of many congressional committees and several presidential candidates. They believe that the health sector can be forced to operate under a different set of rules than those which govern the rest of our economy. But everywhere, profit is the reward that we give to the innovators, entrepreneurs, and risk-takers in our economy for offering something new or better. And the marketplace is where the conversation takes place between buyers and sellers to see if what they are offering has value and, if so, at what price. That's the genius of our economy and how progress works. But a government-run system stops this conversation in its tracks and replaces it with price controls, centralized decision-making, and government micromanagement. Single-payer advocates argue that we since we are such a rich country that wouldn't happen here - - that there is enough money for everyone to have all of the health care they need for the money we spend now. But we do have centralized micromanagement of decisions and price controls in our own government-run health care systems -- Medicare, Medicaid, and the VA for example. Government makes decisions about what will be covered, under what circumstances and for whom, and how much doctors and hospitals will be paid for their services. And government seldom gets it right -- overpaying for some and underpaying for others, but also inducing huge demand for over-consumption of health care. Earth to Michael Moore and crowd: The problems with the U.S. health sector aren't that it needs more government control and regulation but less! In a system governed by free-market principles, people won't be asked to make decisions about their medical treatment when they are on a gurney in an emergency room. But they would make decisions about the kind of health insurance coverage they want to protect them if that happens, and they would gain more control over their routine and non-emergency care. You do have to admit, however, that Moore is a master of publicity. He has created so much hype for his film, first premiering it before the liberal entertainment world at the Cannes Film Festival. Now, after a preview showing in Washington this week, he plans to open it in just one theater in New York today. And what will the cameras show? Long lines of people waiting to see the film, suggesting to all of the rest of us that this is a must-see movie. Don't believe it. ******** And if you see this in time, I am scheduled to be on CNBC's Power Lunch today at 1:20 p.m. Eastern time to, once again, talk about Michael Moore and universal health coverage. Grace-Marie Turner RECENT NEWS ARTICLES AND STUDIES:
COMPETITION: A PRESCRIPTION FOR HEALTH CARE TRANSFORMATION Senator Tom Coburn, the Senate's only physician, described the comprehensive health reform proposal he has developed at a recent forum hosted by The Heritage Foundation, which also featured commentary from the Galen Institute's Grace-Marie Turner and AEI's Joe Antos. Under Coburn's Universal Health Care Choice and Access Act, the current tax exclusion for job-based health insurance would be redirected to consumers as a tax rebate of $2,000 for individuals/$5,000 for families to buy their own health insurance. The plan would also provide new mechanisms and incentives for Medicare beneficiaries and Medicaid recipients to obtain private health insurance. Joe Antos of AEI thinks ?the Senator's proposal is very daring?[but] there isn't enough focus in the proposal on slowing the growth of health spending.? Galen's Grace-Marie Turner praised Coburn's ?comprehensive vision of free-market health reform? and focused on his reform plans for Medicaid that incorporate the Turner-Helms proposal for Medicaid Advantage. MAXING OUT ON DEBT HYSTERIA Media reports and academic studies would have us believe that ?Americans [are] being crushed under the onslaught of rising credit card debt and sky-rocketing medical expenses,? but that is simply not the case, write Aparna Mathur and Tom Miller of the American Enterprise Institute. The studies that say nearly half of all bankruptcy filings are caused by medical debt contain flawed data, write the authors. Miller and Mathur cite data from the Survey of Consumer Finances (SCF) that show medical debt was around 6.1% of all debt in 1989 and 6% in 2004. "Although one-time spikes in medical costs due to accidents or even long-term illnesses are likely to place a heavy strain on household finances, the average debtor today has not seen a huge rise in medical debts, even compared to the late 1980s,? conclude Miller and Mathur. ?Anecdotal snapshots based on few restricted and ultimately unconvincing samples deplete our understanding of complex issues by overdrawing their thin reserves of evidence.? TRIM3 SIMULATIONS OF FULL-YEAR UNINSURED CHILDREN AND THEIR ELIGIBILITY FOR MEDICAID AND SCHIP The Urban Institute finds that the number of uninsured children is about half the number cited by the Census Bureau's Current Population Survey (CPS). The Urban study finds that around ?4.9 million children were uninsured for the entire calendar year? in 2003 and 2004 versus the 8.8 million cited in the Census Bureau survey. The Urban model is based upon state-specific rules regarding eligibility for Medicaid and SCHIP. It shows that about 257,000 of these 4.9 million children were eligible for Medicaid at some point during the time period, and an additional 794,000 were eligible for SCHIP under current eligibility rules. Almost half (2.2 million) of the uninsured children were ineligible because their family incomes were too high to qualify, and about one-fourth (1.1 million) were undocumented or temporary immigrants who would not qualify. A fact sheet from the Department of Health and Human Services says funds should be targeted to uninsured children in families under 200% of poverty when Congress considers reauthorization of the State Children's Health Insurance Program, not expanded by $50 billion. A NEW BENEFIT PLATFORM FOR LIFE SECURITY An association that represents the nation's largest employers is calling for a much more flexible, portable system of employee benefits. A "New Benefit Platform for Life Security? is a comprehensive plan for medical, retirement and other life security benefits released by the ERISA Industry Committee (ERIC). ERIC's plan, which results from two years of work, envisions ?a new structure for providing benefits through independent Benefit Administrators who would compete with each other? based upon quality, use of IT, plan design, and cost. ?Since benefits would be separately administered, employees could move to new job opportunities while their benefits stay with the Benefit Administrator, allowing their new employers to make contributions.? This is an important new study that uses a defined contribution model for portable health and retirement benefits that would engage more individual responsibility and flexibility in benefits. FDA REFORM In an appropriately titled article for The Wall Street Journal, ?Uncle Sam, M.D.,? AEI's Scott Gottlieb strongly criticizes current congressional proposals to manage prescription drug risk. He said proposals now under consideration would put the Food and Drug Administration ?squarely in the role of regulating medical decisions.? The legislation, attached to the Prescription Drug User Fee Act, would give the agency ?unprecedented new authority? to ?restrict the doctors who can prescribe drugs, and even which patients can purchase them.? He said the experiment would ultimately end in failure, but not without creating ?a lot of obstacles and uncertainty?along the way.? Peter Pitts of the Center for Medicine in the Public Interest (CMPI) argues that the real FDA reform that is needed is to allow ?science not politics? to govern the agency's work. ?Currently, 50 percent of drugs that undergo large-scale late stage trials turn out to be too unsafe or not effective enough for marketing,? Pitts says. ?That is not a sustainable model for the 21st century.? The FDA approved 18 new drugs last year, down from 36 in 2004. ?A healthy and sustainable vision would include appropriate support of cooperative agreements, partnerships, [and] targeted infrastructure,? he concludes. In a New York Times commentary, Henry Miller of the Hoover Institution criticizes states for attempting to legalize the use of medical marijuana, saying that, ?if marijuana has therapeutic potential, it should be required to pass muster with the F.D.A. like any other medicine.? COST SHIFTING IN CALIFORNIA HOSPITALS: WHAT IS THE EFFECT ON PRIVATE PAYERS? Government underpayments to hospitals through Medicare and Medicaid in California are ?a substantial factor in driving up private health care costs,? according to a study released this month by the California Foundation for Commerce and Education. Stanford University's Daniel Kessler, the author of the study, found that these underpayments by public insurance programs contribute to a 10.8% increase in private health insurance costs. ?The message to state and federal policy makers is clear: The most effective way to reduce private health care premiums is to increase public insurance program reimbursements,? according to Foundation President Loren Kaye. The study also found minimal cost shifting to the uninsured of 1.4%. UPCOMING EVENTS: Insider's Look at Washington Politics | |