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 Tag: Sally SatelOur 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 20, 2008
Wake-Up CallsKey members of Congress got another wake-up call this week about the serious threat that rising government health spending poses to the future of our health sector — and our economy. During a summit sponsored on Monday at the Library of Congress by the Senate Finance Committee, Federal Reserve Chairman Ben Bernanke told members "The decisions we make about health care reform will affect many aspects of our economy, including the pace of economic growth, wages and living standards, and government budgets, to name a few." Highlights
A Federal Health Board? Key members of Congress got another wake-up call this week about the serious threat that rising government health spending poses to the future of our health sector — and our economy. During a summit sponsored on Monday at the Library of Congress by the Senate Finance Committee, Federal Reserve Chairman Ben Bernanke told members "The decisions we make about health care reform will affect many aspects of our economy, including the pace of economic growth, wages and living standards, and government budgets, to name a few." The numbers are, in fact, frightening. Bernanke said that "higher government spending on health care spending will, of necessity, require reductions in other government programs, higher taxes, or larger budget deficits." So what was the solution offered by the chairman of the Finance Committee? Sen. Max Baucus said he wants to create an "independent federal health board" to make controversial health policy decisions involving payments through Medicare and other health programs. Which would mean that Congress would delegate to an unelected board the authority to make decisions over hundreds of billions of taxpayer dollars to provide medical care for tens of millions of Americans. What kind of democracy is that? Federal health boards are common in single-payer and other government-dominated health systems. The Clinton plan in the 1990s had a federal health board. This is a very bad idea that needs to be put to rest immediately. Tackling difficult decisions is the responsibility of Congress. The good news is that members may be paying attention to the critical importance of this issue. But sound decisions need to be made in the open political arena about spending and benefits. Congress can't punt on this one, and it needs to get serious about reform while it still has options.
 Single-Payer Health Care? And speaking of bad ideas, advocates of single-payer health care continue their push, especially on the Left Coast. California State Senator Sheila Kuehl, chairman of the state's powerful Health Committee, continues to press for her bill to enact a health plan in which the state would collect taxes to pay the health care bills for all Californians, and the state would pay doctors, hospitals, and other providers directly — hence the name "single payer." But she, too, got a wake-up call from a new study by the state's highly respected and nonpartisan Legislative Analyst's Office: It concluded, basically, that the single-payer health reform plan would be a fiscal train wreck. Sen. Kuehl's single-payer plan would be more than $42 billion in the red in the first year! The state would collect $167 billion with a new 12% payroll tax and similar levies on small business and even on investments but would be faced with an estimated $210 billion in health care bills in the first year of operation (2010). And the red ink would continue to flow, year after year. To close the shortfall, these taxes would have to be raised to at least 16%, and then higher every year after that. Has anyone told Silicon Valley about this? Talk about a jobs and economic killer! That familiar song would have to be changed to "Nevada, here we come!"
Market Innovations: Meanwhile, in the real world, common sense and market innovations are continuing: Assurant Health announced this week that it has partnered with TelaDoc Medical Services to provide its customers with access to a network of board-certified, licensed primary care physicians on demand, over the telephone, 24/7. Fast. Convenient. And cost effective. Isn't that what consumers are looking for in health care? And it also helps people living in rural and other medically underserved areas and those with transportation challenges — including $4-a-gallon gas. Assurant Health focuses on individual and small group health insurance and is a major player in the HSA marketplace. The company always is looking for ways to distinguish itself from bigger competitors — such as offering same-day decisions to people who apply for health insurance. Now it is taking innovation another step further by partnering with TelaDoc. TelaDoc, with one million subscribers, offers quick and convenient access to a physician consultation anytime of the day or night, 365 days a year. It helps people avoid the time and expense — and delay — of an office visit or a trip to the emergency room. And last year, Assurant announced that MinuteClinics would be covered as an in-network provider of health care services for policyholders. Can you possibly imagine these kinds of market innovations taking root in California under a single-payer system?
Medical Tourism: And finally, the American Medical Association, in its annual meeting in Chicago this week, issued its first-ever guidance for patients considering traveling abroad for medical care. The fledgling medical tourism industry is gaining interest and attention as hospitals around the world — in India, Thailand, Guatemala, and elsewhere — are marketing their new facilities and services. An estimated 150,000 Americans are expected to receive care overseas this year. The AMA acknowledges that people with limited resources and even companies searching for lower-cost medical care for their employees are turning to medical tourism. But the AMA lists nine principles to guide consumers venturing into medical tourism, including making sure the decision to seek care outside the U.S. is voluntary, that facilities are accredited, patients are well-informed about risks, and that there are provisions for follow-up care. The AMA also reportedly has amended its long-standing position on tax credits and health insurance. We'll investigate that and report back next week. Grace-Marie Turner Recent News Articles and Studies Medicare: Drifting Toward Disaster Medicare: Drifting Toward Disaster Health and Human Services Secretary Michael O. Leavitt HHS Secretary Michael Leavitt gave a visionary but chilling speech about the looming threat that Medicare presents to taxpayers, to our economy, and to other government responsibilities during a major forum jointly sponsored by the Galen Institute, The Heritage Foundation, and the American Enterprise Institute. "This is serious business involving trillions of dollars and the lives of hundreds of millions of people," he told a large audience assembled at the Newseum on April 29 in Washington, D.C. This is the full transcript of his important speech, with introductions by Grace-Marie Turner, Bob Moffit, and former Sen. John Breaux. Tom Miller of AEI, a co-host and panel moderator at the event, has written a paper elaborating on the remarks he presented. He argues that presidential candidates, policymakers, and the public do not yet want to deal with Medicare's fundamental problems. Until they do, he says, we need incremental action on many fronts to get better results for the money we will continue to spend in the traditional Medicare program. Grace-Marie Turner, Galen Institute The Service Employees International Union (SEIU), the AARP, the Business Roundtable, and the National Federation of Independent Business (NFIB) have joined together in a campaign called "Divided We Fail" to show that employers, employees, and labor unions all place a high priority on health and employee benefit reform. While the four groups may seem to have common problems and even goals, they will find it very difficult to reconcile their principles when they get down to the task of actually talking about solutions, writes Grace-Marie Turner. Regardless of the business community's wishes, legislators inevitably would require employers to contribute. Indeed, every recent push for universal coverage has included a "play or pay" mandate requiring businesses to either provide insurance to their employees or pay a fine or a fee toward a public insurance pool. It's understandable that businesses want urgent action on health issues, but bringing competition and choice into our health sector to get prices down would be a much more powerful force than more government control and expensive new mandates on employers, writes Turner. In its unorthodox attempt at unity, the business community could unwittingly provide political cover to special interests with a decidedly anti-business agenda. The Success of Medicare Advantage Plans: What Seniors Should Know Robert E. Moffit, Ph.D. Medicare Advantage, which enrolls 20% of all Medicare beneficiaries in private plans, is a success in giving seniors unprecedented choices with superior benefits at affordable prices offered by health plans competing to provide value. But Medicare Advantage is only the first stage of reform. Given Medicare's $36.3 trillion in unfunded liabilities, Congress must start the process of comprehensive reform that builds on the success of the competitive Medicare Advantage model. Congress will have to restructure the existing payment system to provide seniors a generous but fixed contribution that can be adjusted for such factors as age, income, and health condition. And it will have to learn to be a reliable business partner, with payments based upon real market conditions not arbitrary payment formulas. In a separate paper, Moffit criticizes Congress for blocking efforts by the government to require competitive bidding for durable medical equipment and supplies in the Medicare program. If Members of Congress, Democrats and Republicans alike, cannot allow for competitive bidding to commence, it is hard to imagine how they will summon the fortitude when larger challenges inevitably arrive, Moffit writes. Behind the Numbers: Medical Cost Trends for 2009 PricewaterhouseCoopers' Health Research Institute, 06/08 The growth in medical cost trends for the private sector is expected to level off in 2009 following five years of deceleration, according to a new report from PricewaterhouseCoopers' Health Research Institute. Costs are expected to grow 9.6% in 2009 compared with 9.9% in 2008. Other key findings from the report:
Health Care 2008: A Political Primer James C. Capretta, Ethics and Public Policy Center Capretta provides an overview of the current health care reform movement, from its political origins in the 1990s to the forces driving today's debates. He describes how a 1991 Pennsylvania senator's campaign became a watershed moment in the health care debates, the Clinton health care plan, and Senator John McCain's dramatic proposal for reforming the tax preference for employment-based health insurance. It is crucial to see just how much progress has been made since the first iteration of the health care debate, and just how much better positioned Republicans now are to take the initiative, writes Capretta. Indeed, health care reform just might turn out to be what tax reform was in the 1980s and welfare reform was in the 1990s: a platform for a focused conservative effort to achieve through market forces and economic incentives what the left has failed to do through government. Canada's Drug Price Paradox 2008 Brett J. Skinner and Mark Rovere Prices for generic drugs in Canada are more than twice as high as those in the United States because government policies in Canada distort the market for prescription medicines, according to a new study from the Vancouver-based Fraser Institute. The study found that Canadian prices for generic prescription drugs in 2007 were on average 112% higher than U.S. prices for identical drugs in 2007. Of the total prescriptions dispensed in Canada in 2007, 48% were for generic drugs and 52% were for brand name drugs. In the U.S., 67% of prescriptions were for generics with just 33% for brand name drugs. If Canada repealed policies that distort the market for prescription drugs, net savings for Canadians could reach between $2.9 billion and $7.5 billion (2007) annually for total retail pharmacy sales of generic and brand-name drugs. Sally Satel, M.D., American Enterprise Institute Satel provides a compelling account of the questions raised recently when four members of the Japanese mafia received liver transplants at a UCLA medical center (two of whom later donated $100,000 to the center). When resources are scarce — transplantable organs being the classic example — should some institution pass judgment when facts about a patient's criminality are known? It's a perfect storm of ethical anxieties and calls to mind a time when character did determine access to scarce treatment, writes Satel. In 1962, Seattle's Swedish Hospital established the "God Committee," which considered nonmedical traits, including marital status, net worth, nature of occupation and church attendance, to decide which terminal patient would get access to dialysis machines. No one wants to return to the days of the character biopsy — judging a patient's social value — in deciding who gets access to rare treatments, but the UCLA story and others like it will continue to offend our sense of fairness as long as the nation's dire organ shortage persists. The only way to dispel the ethical quandaries that stem from rationing is to expand the pool of organs so that more people can receive lifesaving transplants, writes Satel. Repealing the ban on donor compensation would permit the federal or state governments to devise a safe, regulated system in which would-be donors are rewarded for giving an organ to the next stranger on the list. Upcoming Events A Health Care Debate: What is the Best Way to Control Costs, Improve Quality and Expand Access? Health Information Technology and Its Future: More than the Money BigGovHealth.org Premiere Health Insurance Reform Elements: A Look at Wellness, Adverse Selection and Consumer Based Health Plans New HSA Rules Webinar Aging and Future Health Care Spending: Red Herrings, Time to Death, and Insurance Choices
Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features a commentary by Grace-Marie Turner on the major developments and issues of the week as well as summaries of writings by participants in the Health Policy Consensus Group and other articles of interest from the health policy world, plus announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at www.galen.org. If you wish to subscribe to this free weekly newsletter, update your address, or be removed from our list, please send an e-mail message to galen@galen.org. The views expressed in this newsletter are the opinions of the authors and do not necessarily reflect the views of the Galen Institute or its directors.
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Single Payer April 18, 2008
Good News and BadThe House passed legislation on Tuesday, the mis-named "Taxpayer Assistance and Simplification Act," that contained the awful provision that would throw a mountain of paperwork at Health Savings Accounts. But the good news is that the White House sent a letter to Congress warning that President Bush would veto the tax bill if it contains the HSA provision.
Upcoming Event And be sure to mark your calendars to join us for our major Medicare forum in Washington on April 29. It will feature an address by HHS Secretary Michael Leavitt on "Drifting toward Disaster" and a distinguished panel of experts offering diverse ideas on "Solutions for Sustainability." We will send you a separate email shortly with your invitation, but please do mark your calendars now to join us — 9:45 a.m., Tuesday, April 29, at the Newseum in Washington. HSA Threat The House passed legislation on Tuesday, the mis-named "Taxpayer Assistance and Simplification Act," that contained the awful provision that would throw a mountain of paperwork at Health Savings Accounts. But the good news is that the White House sent a letter to Congress warning that President Bush would veto the tax bill if it contains the HSA provision. Also, the Senate has shown no interest in the provision that would require verification of every HSA transaction in real time. At the very least, it should hold hearings on this measure to find out the real costs and implications. We may dodge a bullet this year, but it clearly shows that HSAs are vulnerable. The NFIB was not helpful on an issue that should be of great interest to small business. They issued a key vote letter that encouraged passage of the tax bill containing the HSA provision. Their letter offered an ambiguous statement about HSAs, but by saying this was a "key vote" that will determine how members are ranked in the NFIB rating, it put pressure on members to vote yes. The policy community is once again confused and upset about NFIB's position.
Real Insurance A new study from the Kaiser Family Foundation looks at the resources available to people who are uninsured and finds that "households with few assets cannot handle the cost-sharing requirements of many high-deductible health plan options." The study, by Paul Jacobs and Gary Claxton of Kaiser, is flawed in a number of ways:
Bottom line: Don't believe every headline you read!
Medicaid You will recall my testimony of two weeks ago about the administration's rules designed to curb some of the most obvious abuse of the Medicaid program. Well, the House Energy and Commerce Committee on Wednesday approved by a vote of 46-0 a bill that would stop the new rules from going into effect. Health and Human Services Secretary Leavitt warned that President Bush will veto the bill if it reaches his desk. The ranking Republican on the committee, Joe L. Barton of Texas, said he did not think Republicans would vote to sustain the veto. "I don't think the veto threat was appropriate, and I don't think it will be successful if vetoed, because the votes simply aren't there," Barton said. The wild card could be the Senate. Sen. Charles Grassley, ranking Republican on the Senate Finance Committee, does not support blocking the rules. "We ought to let them move forward instead of just delaying all of these Medicaid regulations all at once," Grassley said. So the Senate, of all places, may be the place we look to protect taxpayers from having Medicaid dollars be used for expenses that clearly are not medically-related, like transportation to bingo games, and for states determined to game the system.
BlackBerry Friendly I know when I am trying to read newsletters like this on my BlackBerry, the text is interrupted by strings of annoying links. But, when you read the newsletter on your desktop, the links and the nice graphics are welcome. We'd like to offer you a choice: If you would like to receive the newsletter in a text-only, BlackBerry-friendly format, we'd be happy to send it to you that way. Just send a quick note to Tara Persico at tara@galen.org and she will make the change here. Grace-Marie Turner Recent News Articles and Studies Medicare's Bad News: Is Anyone Listening? Medicare's Bad News: Is Anyone Listening? Unlike the mortgage crunch, Medicare's fiscal crisis does not seem real to most people. The difference in the public reaction to these two serious financial problems reveals three major issues with the way Medicare's bad news is communicated and perceived: it fails to connect on a visceral level with the public and the press; the trust fund concept in Medicare instills a misleading sense of confidence in the program's financing; and, no simple, easily understood number adequately captures the magnitude of Medicare's financing crisis. Yet, if the current trends continue, Medicare's Hospital Insurance trust fund will be depleted in 2019 and future generations will face a tax bill of $85 trillion to make good on the health care benefits promised to Americans. Antos suggests that structural reform — not merely tinkering around the edges of the current program — is needed. We need to replace Medicare's culture of entitlement, which distorts the decisions of patients and providers alike, with a culture of individual responsibility and efficient delivery of care. George Shultz and John Shoven's Big Fix Economist and former Secretary of State, Treasury, and Labor George P. Shultz has leapt into the reform fray with a bold new plan that aims not just to fix the health care system but also to solve the impending entitlement cost crisis and even to reinvigorate the economy, reports ReformPlans.com. Shultz and Stanford University economist John B. Shoven are co-authors of the new book, Putting Our House in Order. Their prescription includes more responsibility and authority for individuals, greater competition among insurers, and new kinds of "smart" means testing for public programs. Former Senators Tackle Health Issues Former Senate majority leaders Bob Dole, a Republican, and George Mitchell, a Democrat, may be facing their biggest challenge to date — reforming the nation's health care system, writes The Washington Post. The two senators said this week they would be joined by two other former Senate majority leaders, Democrat Tom Daschle and Republican Howard Baker, in crafting a series of health policy recommendations that would be delivered in 2009 to a new president and Congress. The senators will each oversee forums on four key pillars for reform: improving quality and value, improving access, ensuring a strong role for consumers, and finding a way to finance it. They will get technical advice from Dr. Mark McClellan, who recently oversaw the Centers for Medicare and Medicaid Services under President Bush, and Chris Jennings, former health advisor to President Clinton. While advisers will provide technical expertise, the senators stressed that they will be the ones responsible for the recommendations and will have final say on what's in the package. Sen. Daschle will lead the project's first health care forum on April 24 in Washington, D.C. 'Evidence-Based' Rx Miscues Hillary Clinton, Barack Obama and John McCain all favor increased federal funding for so-called "evidence-based" medicine to address the problem of escalating health-care costs, writes Pitts. The theory behind evidence-based medicine is simple: If government were to run clinical trials testing the effectiveness of drugs and medical technologies, and then use the results to determine what to cover, taxpayers would avoid paying for treatments that aren't effective enough to justify their price tag. Too bad that in practice, evidence-based programs are largely driven by the political imperative to cut costs — not the medical imperative to give patients the best care possible. Medical treatment should be based on the specific genetic, clinical and demographic factors of an individual patient. In an era of personalized medicine, one-size-fits-all health care strategies are dangerously outdated. Dollars to Doughnuts Diagnosis Many physicians feel that it's their mission to serve as many patients as possible rather than to provide the best care possible, writes Beverly Hills internist Albert Fuchs. Most significantly, doctors today are preoccupied with the bureaucracy of insurance companies. When Fuchs began his own private practice in internal medicine, volume grew quickly and so did his work hours. So he dropped an insurance plan — one that gave him the least compensation. Almost immediately, he had fewer patients but more time and energy for those he maintained. Like hundreds of doctors across the country, Fuchs now does not receive a single dollar from any insurance company. When doctors break free from the shackles of insurance companies, they can practice medicine the way they always hoped they could, he writes. And they can get back to the customer service model in which the paramount incentive is providing the best care. Code Red A few weeks ago, the Washington Post broke the dramatic medical news that as many as one third of all people waiting for an organ transplant are actually ineligible to receive one. Suggesting that the organ shortage is a manufactured crisis is misleading, write Satel and Hippen. Strikingly, most patients who are designated by their physicians as ineligible for immediate transplant were once fit enough to receive an organ. Tragically, they deteriorated during the years-long wait and became too sick to transplant. According to the United Network for Organ Sharing (UNOS), there are 98,517 people — transplant candidates — waiting for an organ. By summer, the queue will reach a daunting 100,000, with three quarters seeking kidneys. And the waiting time to renal transplantation is getting longer. Today it is five to eight years in major cities and by 2010 it will be ten years for some patients. With about one in three waitlisted patients on dialysis not surviving beyond five years, the majority of candidates just don't have that kind of time. This very trend is potent evidence why those who say the need is not so pressing are dead wrong. If the list had so many ineligible patients, then time-to-transplantation would be getting shorter not longer. Single-Payer Health Care for Maryland: Two Analyses This paper responds to a bill proposed by Maryland State Delegate Karen S. Montgomery (D-Montgomery), which would have established a "single payer" system in which the state would pay for all Marylanders' health care and no Marylander would be permitted not to participate in the system. Although the General Assembly did not adopt the Montgomery proposal, special interest pressure remains strong in Annapolis for government-financing of Marylanders health care. This report offers two analyses that address the flaws in a statewide universal health care system, including the high cost to the state budget that would inevitably lead to rationing of services by government officials. The study also issues strong warnings to Maryland from Canadians living under a single-payer system. Use of Health Savings Accounts Grows In a market where health insurance costs continue to rise for employers, more companies are turning to high-deductible health plans — and the accompanying health savings accounts to defray costs, writes the Springfield Business Journal. An estimated 7 million people are covered by 2.2 million health savings accounts as of the beginning of 2008, according to a survey by industry publishing company Atlantic Information Services Inc. Those accounts hold $3.2 billion, up 60% from $2 billion at the beginning of 2007. Several banks that offer health savings accounts say the accounts' popularity is growing — especially among small businesses that want to reduce their costs while still offering insurance benefits to employees. And demand for HSAs is only expected to continue. The U.S. Treasury Department estimates that, assuming the laws regulating HSAs are unchanged, up to 30 million people will be covered by HSAs by 2010. Upcoming Events Grace-Marie Turner speaking on KDKA News Radio Show 5th Annual World Health Care Congress Grace-Marie Turner speaking on The Scott Voorhees Show Hospital CEO Roundtable: Balancing Cooperation and Competition Grace-Marie Turner speaking on the Bill Mick Live Show A Roundtable Discussion with Mark Miller of the Medicare Payment Advisory Commission Grace-Marie Turner speaking on The David Smith Exchange Show Grace-Marie Turner speaking on Senior LifeStyles Show 2008 Leadership Development Breakfast Healthcare Policy Discussion: Cost vs. Coverage Third Annual World Intellectual Property Day Innovations in Health Care Delivery Concho Valley Community Media Relations Training on the Uninsured Engineering a Learning Healthcare System: A Look at the Future Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features a commentary by Grace-Marie Turner on the major developments and issues of the week as well as summaries of writings by participants in the Health Policy Consensus Group and other articles of interest from the health policy world, plus announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at www.galen.org. If you wish to subscribe to this free weekly newsletter, update your address, or be removed from our list, please send an e-mail message to galen@galen.org. The views expressed in this newsletter are the opinions of the authors and do not necessarily reflect the views of the Galen Institute or its directors. |
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