Health Reform: Gang-Bang - Senator Tom Coburn, MD, and the Gang of Six Proposal

July 22, 2011 - Tom Coburn (R-Oklahoma) and the Gang of Six proposal is making a Big Bang in the Budget Battle. The media says their proposal will be a Grand Bang because it is “bipartisan” and “balanced. “

This may be wishful thinking. It will probably pass in the Senate but be rejected in the House.

Peggy Noonan, former Reagan speechwriter, sums it up nicely in today’s Wall Street Journal,

The Gang of Six—three Democrats and three Republicans in the Senate—this week put forward a plan aimed at reducing the national debt by almost $4 trillion over the next 10 years. It includes $500 billion in immediate cuts, and repeals a costly provision of ObamaCare. The plan would lower the top individual tax rate to 29%, push corporate tax rates down to 29% from 35%, and abolish the Alternative Minimum tax. On long-term spending the plan includes a legislative supermajority and sequester feature. In the words of a senator involved in the bargaining, "For the first time, we have some real teeth" in spending control.

Health Care Components

For health care reform , the basic elements of the Gang of Six proposal are:

• Ending Obama’s Long-Term Care savings CLASS Act (Community Living Assisted Service and Support Act), designed to relieve pressure on Medicaid by keeping patients out of nursing homes and at home by tending to their eating, bathing, and other needs in the home.

• Imposing further cuts on hospitals on top of the $575 billion cuts already in the health care law.

• Suspending the Sustainable Growth Rate (SGR) formula which calls for $298 billion in physician Medicare cuts.

The Gang of Six proposal, particularly its health reform elements, is widely considered to be the catalytic handiwork of Senator Tom Coburn, MD, a tough-minded conservative purported to be a buddy of President Obama.

Whether the Gang of Six proposal will ever see the light of day is doubtful. The Senate may pass it, but the House will probably not give its OK.

In the latest twist of the Budget argument, Coburn says passage of the Gang of Six proposal may not even be necessary. Coburn now says if the Cut, Cap & Balance legislation, just passed by the House, lands on President Obama's desk he would sign it.

Porterhouse Steak Bet

Coburn adds, "So the point is I'm willing to go out across this country, even if the polls are 70 percent against what we're doing -- the fact is you can't solve our problem unless you do what "Cut, Cap, and Balance" wants to do. So, it doesn't matter what the polls are. We've got to fix our country, and this is the only viable plan right now that will do that, and I will bet you a Porterhouse steak if it lands on his desk, he will sign this puppy," C

How Coburn Thinks

To give you some insight into how Senator Coburn thinks, I reprint here an interview I conducted with the Senator back in 2010, before Obamacare passed and before the Budget Battle reached its current epic heights, said by Obama representatives and the mainstream press as threatening to undermine the financial credibility of the United States.

Interview with Tom Coburn, MD, Republican Senator from Oklahoma

Preface: This interview took place on January 26, 2010 – a critical time when Obamacare’s fate hung in the balance. After the bill passed, Senator Coburn, a conservative Republican and a fierce opponent of the health reform bill, caused a stir and raised a few eyebrows by defending Nancy Pelosi as a “nice person” and by taking a swipe at the objectivity of Fox News.

Q: Do you think the President’s and Democrats’ ideology will permit a market-centered system?

A: I don’t know. We will have to wait and see. I don’t assume anything. I don’t think either the President or the Democratic leadership is stupid.

The question is: Do their constituencies allow them to move to the market? Will those who want a single-payer government-run system and those who are hard out on a more socialistic-bent get the message, the message being what they are doing isn’t working?

Leadership is about doing what is right, not in doing what is right for your constituents.

If Obama moves to the center and really tries to accomplish what the vast majority of people in the country want and what is good policy, he could reverse a lot of the perceived losses.

Q: You’re still a practicing physician?

A: I only practice on Monday mornings. I am a family practice obstetrician. I did a general surgery residency and then did family practice.

Look. What is ultimately good for patients will be good for doctors. If doctors are most concerned about their patients and the care they give, they will do just fine.

The reason doctors are in a pinch right now is that we have government-mandated price controls, which do not pay them to give the best care. We need to get back to where we reward great care and don’t reward poor care.

Q: One of the things that concerns me, and which I wrote a great deal about in my book Obama, Doctors, and Health Reform is the impending and growing doctor shortage. I know this shortage is acute in Oklahoma, where I practiced for five years, because Oklahoma has fewer doctors per capita than almost any other state. The next crisis is going to be access to doctors.

A: You are right. It’s important to keep in mind the federal government has mandated the doctor shortage. When the payment differential between primary care doctors and specialists averages about 300 percent, and that is based on Medicare payment rates, Medicare created the primary care doctor shortage.

Medicare augmented too much of a move to sub-specialization through their payment practices. Again we have not allowed market forces to work.

When only one of 50 doctors who graduated from medical school last year went into primary care, you know we are going to have a shortage. We need to let the market solve the shortage.

But we won’t do that. There are things in this health bill to correct the situation, but the plan we need the most is to pay them what they are worth rather than some fixed price that Medicare sets.

Q: Could you tick off the market forces you think are necessary to rectify this situation?

A: Transparency in the market as to price and outcomes, in other words, quality; and reconnecting the consumer with the purchase and payment of health care, rather than saying someone else is paying my bill. In other words, reconnect that. If you look at the Safeway model, what they’ve done, besides emphasizing prevention and management of chronic disease, is that they’ve made good consumers out of their employees by having a $2000 deductible.

The consumers now make a choice and they also shop for price and quality. If you do just those two things and you allow market forces to reward good care, you will get a whole lot more primary care, and you’ll do it by the very tenets you and I were taught in medical school, i.e. listen to the patient. If something has already been done, then don’t do it. And don’t do any harm.

Q: What about these other factors, like shopping across state lines, facilitating health savings accounts, or heath care tax credits for all, for the self-employed and individuals, rather than just corporate employees?

A: Those factors are good as well. We need a real national market for health insurance. Just look at the market for auto insurance and how those rates has come down with real competition throughout the country.

In health insurance, we have regulated minimal competition. Part of that is because we buy it through our employer. Recently many major employers are beginning to copy what Safeway and Pitney Bowes and several others have done. We are going to see those costs come down as we get more aggressive. But we limit that because we have a HIPPA limitation on how much employers with ERISA can do.

Shopping across state lines brings you real competition and is something we need to do. The other thing is to allow consumers to buy what they need rather than what is mandated by a bunch of state legislators that they have to have.

Consumers aren’t stupid. They will buy what they need. That includes the ability to buy a high deductible plan that is truly competitive. Right now the high deductible plans are too expensive, because there is not really any true competition for them.

Q: In my book Innovation-Driven Care, I have an interview with a health agent who sells HSAs to 120 employers in Minnestoa , and he said high deductible plans have taken off in that liberal state. Why haven’t HSAs taken off elsewhere?

A: They have taken off, but they are still too expensive because there hasn’t been enough competition. We limited the amount they could grow by statute, and we’ve limited the true competition for the pricing of the product. When you’ve limited the pricing and how many people can get them, you can see where that’s a restraint on growth.

Q: So your position is we’ve got to free up market forces so they can do what only they can do – bring down costs and raise quality.

A: Well, markets work. We can interfere with them so they don’t work. You can come back and create a safety net for those who need our help, but market forces will certainly allocate costs down and minimize those who need help.

Q: If we unleash market forces, do you envision that will expand access enough to satisfy those on the left?

A: The only thing that will satisfy those on the left is single-payer universal coverage.

Q: So liberals see health care as their historical legacy, and they have got to pass a comprehensive bill while they can.

A: Massive Health care reform should not be the number one priority for our nation right now. The number one priority is to downsize the cost and increase the efficiencies of the federal government so people can have more of their own money to spend on things that concern them most