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 Tag: universal coverageOur 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.NewslettersJune 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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Commonwealth, universal coverage, underinsured, Italy, Istituto Bruno Leoni, doctors, physicians, Turner, Obama, Capretta, Pipes, biologics, America's Health Insurance Plans, Williams, uninsured, Aetna, Senate Finance Committee, Ramthun, HSA, health savings account, high deductible
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Universal Coverage April 11, 2008
Join Us!Please mark your calendars now to join us on Tuesday, April 29, for a major address on Medicare featuring HHS Secretary Michael Leavitt. The program, which we will jointly host with several other think tanks, begins at 9:45 a.m. at the brand new Newseum at 555 Pennsylvania Avenue in Washington. This will be the secretary's major address on the massive threat that Medicare and other entitlement programs present to our nation's economy, followed by a forum featuring experts presenting their ideas and research on solutions.
As we feared, the House Ways and Means Committee did indeed approve legislation on Wednesday that would require every expenditure from Health Savings Accounts to be approved, injecting new complexities, driving up costs, and discouraging HSA enrollment. Wisconsin Rep. Paul Ryan was the hero to HSA-advocates in leading the battle to strike the provision, but his amendment was defeated on a largely party-line vote. The measure was a tempting target for Democratic leaders in Congress who generally dislike HSAs and are always looking for new ways to raise money to pay for other spending. The Joint Tax Committee said the provision would save more than $300 million because the IRS will be collecting more penalties on HSAs and because contributions to HSAs will go down. They admitted that the HSA "substantiation" provision would have a significant impact on the HSA market. It's not clear that the Democratic leadership would have realized the damage they could do with this one seemingly small change, and there is a lot of anger at the Republican lobbyist who offered the idea on behalf of a self-interested benefits management company. And the legislation is totally unnecessary. Under current law, if people with HSAs use the money in their accounts for non-medical purposes, they have to pay taxes on the money, plus a 10% penalty — the same as if they had withdrawn the money directly. When people take a deduction for other kinds of medical expenses on their tax returns, they can claim anything they want, but if they are audited and can't validate the expense, they are subject to penalties. Chairman Rangel offered an amendment that would delay implementation by two years (until 2011) so there is still time to bring sense to this debate as it moves to a less-certain fate in the Senate. Clearly this was not a good week on Capitol Hill: The House Energy and Commerce Health Subcommittee approved legislation to block for a year the Bush Administration's rules to curb some of the fraud and abuse in the Medicaid program. You will recall that I testified on this last week, offering examples about Medicaid money being used to pay for transportation to bingo games and other non-medical expenses. The special interests won. The taxpayers lost. The measure passed on a voice vote, and Ranking Member Joe Barton signaled that it would be very difficult to override if the president were to veto to the bill. If nothing else, this shows how difficult it is to curb even documented abuse once a government health spending program is established. The only solution is to avoid expanding these programs that take on a life and constituency of their own. And I returned at 2 a.m. today from a six-day speaking trip that started last Saturday in Chicago, with a talk on transparency to the American Board of Quality Assurance and Utilization Review Physicians. Then on to Las Vegas to speak at the beautiful new Red Rock Resort to a Public Affairs conference of the National Association of Manufacturers on Monday. Then back to Harrah's on the Strip in Las Vegas for a talk on Medicare hosted by former Medicare Trustee Tom Saving at the Association of Private Enterprise Education conference on Tuesday. And finally, yesterday, a talk on "Can We Repair What's Wrong with Our Health Care System through Christian Principles?" at the Acton Institute's Lecture Series in Grand Rapids, Michigan, right after a quick visit to the beautiful President Ford Museum and Library there. These speeches and visits outside Washington are always encouraging to show, despite our problems with legislators in Washington, the wisdom and clear-headedness of the American people about the importance of keeping our health sector free and giving people new choices in a competitive economy. Grace-Marie Turner Recent News Articles and StudiesIn Massachusetts, Universal Coverage Strains Care In Massachusetts, Universal Coverage Strains Care Massachusetts' law requiring everyone to have health insurance is putting added pressure on primary care physicians and lengthening the wait for appointments — an unintended consequence of universal coverage, reports The New York Times. Physician Patricia A. Sereno said an influx of the newly insured to her practice just north of Boston has stretched her daily caseload to as many as 22 to 25 patients, up from 18 to 20 a year ago. To fit them in, she limits the number of 45-minute physicals she schedules each day, thereby doubling the wait for an exam to three months. "It's a recipe for disaster," Dr. Sereno said. "It's great that people have access to health care, but now we've got to find a way to give them access to preventive services. The point of the legislation was not to get people episodic care." Universal Coverage One Head at a Time — The Risks and Benefits of Individual Health Insurance Mandates The risks associated with individual mandates suggest that they are no panacea, writes Glied. One important concern is that the government will provide insufficient funds for the subsidies intended to accompany the mandate. In that case, the mandate will act as a very regressive tax, penalizing uninsured people who genuinely cannot afford to buy coverage. This concern has led Massachusetts to create a hardship exemption for its mandate — an escape clause that effectively undoes the mandate if subsidies are inefficient. The ease with which it is possible to lift the mandate if the legislature fails to appropriate funds may make the individual mandate a rather rickety form of universal coverage. Further, if subsidies are insufficient or benefits inappropriate, the mandate will be very difficult to enforce and draconian in effect. To be effective, an insurance mandate should be in place at the beginning of an insurance term, ensuring that people have coverage when an adverse event occurs. Developing a system to promptly identify and penalize scofflaws will take effort and ingenuity, particularly in our diverse and mobile country and may require a degree of intrusiveness and bureaucracy that some will find unpalatable. Medicare Coverage and Strategies: Impact of the MMA and PBMs AEI's Joe Antos describes ways in which the Centers for Medicare and Medicaid Services exerts its influence over the health sector in the wake of the Medicare Modernization Act and in the face of evidence-based medicine standards. Medicare's outpatient prescription drug benefit has ratcheted up CMS's direct involvement and influence on every aspect of the pharmaceutical industry, from research and development of new products to pricing and distribution to the end-user. The immediate impact of Part D has largely been beneficial to manufacturers, distributors, health plans, employers, and Medicare beneficiaries, he says. However, the substantial shift in pharmaceutical spending from private payors and Medicaid to Medicare will focus intense political pressure on every part of the supply chain. A CMS veteran, Antos also provides a chronology of CMS's role, from the agency's inception to today, and offers insight into CMS's strategy and tactical effects on the American health care system. To begin to address Medicare's looming insolvency, the federal government should allow Medicare beneficiaries to take full advantage of consumer-driven reforms that exist in the private sector, such as health savings accounts, writes John R. Graham of the Pacific Research Institute. Dutch and German Health Ministers Talk With Leading U.S. Analysts In Health Affairs Web Exclusive Interviews As the United States debates health reform, the Dutch and German health systems have been increasingly put forward as potential models. These nations have achieved universal coverage through competition among non-governmental insurers within a governing regulatory framework, along with government subsidies for those with low incomes. In interviews with Prof. Uwe Reinhardt and Tsung-Mei Cheng of Princeton and Prof. Alain Enthoven of Stanford, German Health Minister Ulla Schmidt and Dutch Health Minister Ab Klink discuss their health systems, including efforts their countries are making to increase competition. For example, Klink says: "Competition now is especially at the level of the insurance companies. Still, many of the prices for care are fixed by the Dutch government. What we are trying to do in the coming years is to free prices, on the one hand, and to make insurance policies transparent, so that these two issues form pillars of the competition that we want to achieve." The Misguided War Against Medicines Government spending on prescription drugs is not to blame for the Canadian health system's lack of financial sustainability, according to the Fraser Institute. This study shows that prescription drugs accounted for only 9.3% of total government spending on health in 2006, down from 9.6% in 2005. Patented prescription drugs accounted for only 6.3% of total government health spending in 2006, down from 6.8% in 2005. After spending on drugs is subtracted, all other areas of health care accounted for 91.4% to 90.7% of total government health spending between 2002 and 2006. The study also found no statistical link between annual growth rates in total government health spending and increased spending on drugs. Additionally, the study found that Canadian government data showed average prices for existing patented prescription drugs in Canada have grown at a slower annual pace than the general rate of inflation for 17 of the last 19 years. Covering Uninsured Children in the State Children's Health Insurance Program Orszag's testimony on the State Children's Health Insurance Program (SCHIP) focuses on its impact on the number of uninsured low-income children and the extent to which it displaces private coverage. According to CBO's estimates, the portion of children in families with income between 100% and 200% of the poverty level who were uninsured fell by about 25% between 1996 (the year before SCHIP was enacted) and 2006. In contrast, the uninsurance rate among higher-income children remained relatively stable during that period. CBO has concluded that for every 100 children who gain public coverage as a result of SCHIP, there is a corresponding reduction in private coverage of between 25 and 50 children. Orszag also discusses the Administration's August 17, 2007 directive to state health officials that imposes certain minimum requirements on states seeking to enroll children in SCHIP whose families have income above 250% of the poverty level. CBO's analysis suggests that the directive's impact on enrollment is likely to be modest. Upcoming Events Cracking Down on Killer Drugs: Dora Akunyili and the Nigerian Success Story The Impact of Health Insurance in Developing Countries: Experiences from China and Colombia Health Care in Crisis: What's Driving Health Reform in Canada and the United States? Election Year 2008: Health Care Reform Debate Nudge: Improving Decisions about Health, Wealth, and Happiness Hospital CEO Roundtable: Balancing Cooperation and Competition 2008 Leadership Development Breakfast Innovations in Health Care Delivery An address by Health and Human Services Secretary Michael Leavitt Jointly sponsored by the Galen Institute, The Heritage Foundation and the American Enterprise Institute Tuesday, April 29, 2008, 9:45 a.m. Washington, DC SAVE THE DATE! 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.
Tags:
health savings accounts, substantiation, HSA, Medicaid, Massachusetts, universal coverage, individual mandate, Germany, the Netherlands, Canada, prescription drugs, SCHIP
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