Saturday, May 9, 2009

health care realities, health care truths - Dawning Health Reform Realities

As summer approaches, the health reform debate heats up, and Democrats sense the long sought-after jewel in their political crown, universal health care, is within their grasp, the dawning of certain political realities is beginning to set in.

1. The Democrats might fail - Democrats are anxious not to repeat the mistakes of Bill Clinton. He staked his presidency on health reform, then lost the House in 1994. Obama has cleverly left it to Congress to decide the details. Richard Gephardt, former Missouria Congressman and a major figure in Democratic politics for 28 years and former leader in the House, says universal or near-universal coverage can’t pass this year. He is urging the White House to defer that goal until it enacts cost-saving reforms in health care delivery. Otherwise, he argues, the new president risks the same losing argument about paying for expanded coverage that stymied President Bill Clinton 15 years ago.

2. The health care sector is the biggest single economic sector, and the only growth industry outside of government itself, in the U.S. economy. For example, the Lewin Group studied what would happen if a public health plan were offered as an alternative to private plans, it would cost hospitals $36 billion and physicians $33 billion. Another example: compelling employers to pay for coverage of employees might put employers over the edge.

3. If health care reform threatens your main constituency, your party affiliation may become irrelevant. Peter Rangle, chairman of the House Ways and Means Committee, declared on May 6 came out against taxing employers-benefits for employers, even though the Obama administration has said this might be a good way to finance universal coverage. Reason? Such a move would hurt New York City hospitals, long an economic mainstay of the New York metropolitan area, and for a years a pet project of Mr. Rangle, who sees these hospitals as the main source of care for his constituency – poor people.

4. Democrats are sensitive to accusations that the intent of the Obama administration is to bring about “socialized medicine.” Already Conservatives for Patients Rights, which has a $15 million budget, is hammering on this theme in TV and online ads featuring English and Canadian physicians bewailing care by bureaucrats and stressing freedom of choice and patients’ rights. Visions of people having to wait in long government lines for months and even years for access to MRIs and CT scans, mammograms, cancer treatment, and elective joint or heart surgeries frighten some Americans.

5. Fear of Medicare-for-all causing costs to spin out of control is a concern. This year the budget for Medicare and Medicaid passed the $1 trillion mark and now consumers 1/3 of the total budget. Bankruptcy may be less than five years away. Health costs show no signs of ebbing and there are no incentives for hospitals, doctors, patients, health plans, drug companies, and other suppliers to spend less. In Massachusetts, near universal coverage has produced a 32% increase in costs and a rush to expensive emergency rooms because people have had difficulty finding doctors.The only real alternatives for government are to somehow fix Medicare, pay doctors and hospitals less, or rationing care through comparative effectiveness tactics or paying only for “quality,” which are not so subtle forms of rationing.

6. Six things may kill the deal. The Consensus Group has come out with a list of "6 Deal-Killers For National Health Reform." The group includes, health policy experts from the American Enterprise Institute, the Center for Medicine in the Public Interest, the Ethics and Public Policy Center, the Galen Institute, The Heritage Foundation, the Independence Institute, the Institute for Policy Innovation, the Institute for Research on the Economics of Taxation, the National Center for Policy Analysis, the Pacific Research Institute." The following six items might not kill a bill embodying what Obama asks for but they would certainly prolong the debate, probably until November.

The six “deal killers” with my guess for the odds for success are -

• A government-sponsored health insurance plan to compete with private plans: Odds, 40/60

• A move to force employers to provide health insurance: Odds, 20/80

• A uniform, government-defined package of benefits: Odds, 20/80

• A mandate that individuals must purchase insurance: Odds, 10/90

• A National Health Insurance Exchange that extends federal regulatory powers over private insurance.: Odds, 30/70

• Federal interference in the practice of medicine through a federal health board, comparative effectiveness review or other government intrusions into medical decision-making. Odds, 50/50.

Kondrake View

Here is how Morton Kondrake, a Inside-the-Beltway sage, sums up the Democrats dilemma in May 8 Roll Cal, “Democrats Should Reform Medicare, Not Universalize It.”

“If President Barack Obama really is a pragmatic problem solver and not a liberal ideologue, he will stop pushing for a government-run insurance plan as part of health care reform.

And Democrats in Congress, instead of trying to drive all Americans into a Medicare-style, single-payer health plan, should first figure out how to reform Medicare itself, which is rapidly going broke while failing to serve all the medical needs of seniors.

As several studies show, if health reform includes a "public" insurance plan to "compete" with private insurance, it will mean the end of private insurance in America - all at once or gradually, depending on the design. If the model is Medicare, as pushed by liberals like Reps. Pete Stark (D-Calif.) and Henry Waxman (D-Calif.), it will also lead to the bankruptcy of major U.S. hospitals, including some of the biggest in Waxman and Stark's home state.

In an interview, C. Duane Dauner, president of the California Hospital Association, told me that if half of privately insured patients shift to a public plan paying Medicare rates, each of California's 430 hospitals would lose, on average, $40 million a year.

My View

As I see it, the chances for “sweeping reform” - universal coverage, Medicare-for-all, or for all of the six deal killers – are about 20/80 to 30/70 – largely because of the fragile economy, the massive funds required, and growing fears of the growing federal debt. However, the odds for “incremental, i.e. cosmetic, reform” in terms of IT subsidies, universal coverage of kids, comparative research, and economic punishment of health plans and drug companies, are very likely, in the 80/100 to 100/100 range. The Democrats will need something, and they will get it.

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