The New Health Dialogue

HEALTH REFORM: The Cost of Doing Nothing... Part 984,039,825

Allison Levy — Fri, 20 Nov 2009 21:49:00 -0500

As we have discussed several times, doing nothing is simply not an option. We need to reform our health care system -- not despite our economic crisis, but because of the significant impact health care has on U.S. workers and businesses.

In an article for the Washington Post this morning, Peter Orszag, Director of the Office of Management and Budget, stresses that "as we enter the homestretch, the greatest risk we run is not completing health reform and letting this chance to lay a new foundation for our economy and our country pass us by."

He states that if we do not do anything to slow the rising cost of health care, the federal government will end up spending more on Medicare and Medicaid than all other government programs combined. And our country could not afford to let that happen.

We have established that the cost of doing nothing is high, yet, as Orszag notes, some still have their reserves. These are the people wondering whether it is truly possible to achieve comprehensive health reform in a fiscally responsible and sustainable manner.

But just in time for the Senate vote, Orszag takes the time to explain why in fact we do not need to fear the fiscal impact of health reform.

First, he emphasizes that the nonpartisan Congressional Budget Office has concluded that both the House and Senate bill would reduce the nation's deficit over the next ten years (and by more in the following decade). And the CBO's analyses, he stresses, are "based on hard, tangible savings -- not on the harder-to-quantify, yet very real steps that hold the most promise of transforming health care." This is good news.

What should also come as good news is this letter to President Obama. And the fact that the four elements that this group of 23 economists (consisting of Republicans, Democrats, former Bush administration officials and Nobel laureates) believe are absolutely critical to keeping the cost of health care under control -- can all be found within the pages of the legislation currently being reviewed.

The economists argue that responsible health reform legislation must include deficit neutrality, an excise tax on high-cost insurance plans, an independent Medicare commission and delivery system reforms:

Including these four elements ... will reduce long-term deficits, improve the quality of care, and put the nation on a firm fiscal footing. It will help transform the health care system from delivering too much care, to a system that consistently delivers higher-quality, high-value care. The projected increases in federal budget deficits, along with concerns about the value of the health care that Americans receive, make it particularly important to enact fiscally responsible and quality improving health reform now.

To all of you losing sleep over the impact of health reform on our budget -- rest easy tonight.

HEALTH POLITICS: Everybody's Working For The Weekend

Meredith Hughes — Fri, 20 Nov 2009 18:28:00 -0500

Or, at least, the Senate will be working this weekend. The Senate plans a rare Saturday night vote on a motion to proceed with Senate Majority Leader Harry Reid's $848 billion health care reform bill, released earlier this week. The pressure is on for Senate Democrats, who need 60 votes to ensure the bill makes it to the floor to begin debate.

Reid melded the Senate Finance and HELP committee's reform bills, but his "deep personal involvement in assembling the overhaul of the health care system," makes it "Reid's bill," writes Carl Hulse in The New York Times. If Reid successfully guides the health care reform bill through the Senate, it could be the biggest victory his career, and a huge boon for Obama and the Democratic Party, writes Hulse, but if he fails, it could mean disaster for the Democrats and an even tougher re-election battle for Reid in his home state of Nevada. Many Democrats expressed faith in Reid's skills as a legislator and a tactician, according to the Times,

Colleagues say Mr. Reid's extensive knowledge of Senate tactics and well-honed understanding of what drives and divides his Democratic colleagues leave him well positioned to pull off a legislative coup that has eluded seasoned and determined lawmakers for decades.

"I don't think there are many people in the whole world other than Harry Reid who could do this," said Senator Mary L. Landrieu, Democrat of Louisiana.

Landrieu however is one of three Democratic centrists who Reid is still wooing, along with Ben Nelson (D-NE) and Blanche Lincoln (D-AR). Moderates cite concerns about the cost to states and the abortion language. Nelson has now said he will vote with Reid on the first procedural motion. Lincoln told Reid her plans, but hasn't made them public. But as CongressDaily noted,

...the fact that Democrats aren't backing away from the weekend vote suggests that Lincoln has accepted the argument from leaders that Democrats should vote to move the bill, even if they oppose it and might vote against it in the end.

As we've mentioned before, Senator Joe Lieberman (I-CT) has threatened to block the final bill if it contains a public health insurance option. But for now he's agreed to vote with Democrats to get the debate started.

Reid even struck up a compromise of sorts with Republican opponents. According to Politico, Republicans agreed not to read the 2,074 page health reform bill out loud in its entirety. Instead, Reid offered them a full day of debate on Saturday before the evening vote. That means that everyone (even us!) gets a chance to head home for Thanksgiving.

Earlier this week, top Democratic strategists, such as pollsters Mark Mellman and Geoff Garin, White House communications director Dan Pfeiffer and White House deputy chief of staff Jim Messina, met with Senate Democrats to discuss the importance of health reform, reports TIME. Mellman urged senators to remember they are all in this together. A victory on health reform is important to the American people who are struggling with health care cost and coverage. But it's also important to the president's agenda and the Democratic Party's success in the upcoming midterm elections, said Mellman. Health reform wasn't the only element in the deep and wide Democratic losses following President Clinton's failure to pass health reform in 1994, but it was a big factor.

The battle could get uglier as the health reform bill moves through the Senate, but for now it looks like the Democrats are ready to get started on this debate. Time to make history. Time to make progress.

HEALTH POLITICS: A Fresh Look at Malpractice

Joanne Kenen — Fri, 20 Nov 2009 16:46:00 -0500

Over the past year or so, we began detecting some subtle changes in how Democrats were talking about malpractice. They weren't embracing the Republican tort reform agenda, weren't about to start limiting damages and saying "Sorry Charlie" to people who had suffered heartbreaking harm. But they weren't just changing the subject either. They were recognizing a problem, and considering solutions. Liability problems as well as larger obstacles to addressing serious patient safety problems.

We posted about it a few times (here and here). I started reading more about it, and I started talking (and listening) to what doctors had to say. Not just lobbyists for doctors, but doctors. Including some progressive docs in primary care who favor health reform or a single payer system. I have a piece online in American Prospect today, outlining some alternatives to traditional malpractice lawsuits that are worth trying. (Not to replace the current court system, but to test alternatives. And while we test alternative dispute resolution or other approaches, it should be voluntary.) One of my conclusions was that malpractice is getting in the way of all sorts of other things we need to do to fix our system. Getting in the way politically and economically. And getting in the way of some of the changes we need to make to create a system that is safer, evidence-based, and less wasteful. Some doctors will resist changes to the system -- because change is hard, or change is something that they don't think applies to them, or, for some doctors in some settings, change can sock them in the wallet. Getting the malpractice piece out of the way, or at least minimizing it a bit, may remove the legal smokescreens and let us get to the heart of the change resistance.

The CBO recently did its first estimate on the price of defensive medicine. I left out that figure from this article because it was based quite specifically on potential savings from Republican legislation ($11 billion a year). I don't think there is an agreed upon overall estimate that defensive medicine in the current system costs -- to federal health programs, the privately-insured, the doctors. But for readers who want a summary of some of the recent literature on this, Factcheck.org has a good wrap.

The approaches I mentioned -- health courts, "disclose and apologize" and certificates of merit -- aren't the only ideas floating around. As we do more comparative effectiveness research, and learn more about what doctors should be doing and why or why not, we may be able to weave more "safe harbors" into the legal system. Right now, as all the current confusion about prostate screenings and mammograms illustrates, we still have a lot of trouble agreeing on and comprehending best practices.

In the near future, we're going to post a bit more on patient safety (which we wrote about the other day) and have a bit more to say on the AMA's evolving views on malpractice and health reform. For now, we're going back to watching the Senate....

QUALITY: Dying Well Beats Dying Badly. And Expensively

Joanne Kenen — Fri, 20 Nov 2009 14:01:00 -0500

As we've written a lot on end of life care, we notice when others do the same. NPR's Joseph Shapiro this week reported on La Crosse, WI where 96 percent of the adults who die have an advanced directive. That extraordinarily high figure arises from the innovations and commitment from Gundersen Lutheran hospital. Careful, sensitive discussions by trained doctors and nurses -- they use a 12 page guide -- is time consuming. Medicare doesn't reimburse them for that time, A provision in the House health care bill would change that -- the provision that was caricaturized as a "death panel." The Senate bill doesn't contain it.

Shapiro's thoughtful piece shows many aspects of end of life decision-making, but one element we liked in particular was that it shows these decisions are not static. People can reflect, and can change. That's the beauty of advanced directives or advanced care planning. Joe Hauser, one of the patients profiled in the NPR piece, initially declined dialysis for his failing kidneys. His wife Janice begged him to reconsider. So he gathered more information and spoke to a nurse. He and his wife were trying to decide whether to visit a dialysis center, and a support group. He learned that if he tried dialysis, he would always have the option of stopping. When Shapiro last spoke to him, Hauser was still leaning against dialysis. But he wasn't sure:

There's a surprise. He extends his left arm across the kitchen table. He wants to show what he calls his "buzzer." It's a spot at his wrist where you can feel the vibration from an artery and a vein that a surgeon has joined together.

It turns out that Joe Hauser's decided to be ready, if he changes his mind. And if he decides he wants dialysis, then the needle of the dialysis machine can slip right in to that spot -- the fistula -- that the surgeon has prepared at his wrist.

We should point out that the Washington Post.'s Alec MacGillis also had a fine story about LaCrosse earlier this fall. Don't think we linked to it at the time. MacGillis looked at both the economics of end of life care, and some of the local cultural traits of La Crosse. The population is full of people of German or Scandinavian descent who seem to have a pretty pragmatic view of aging and dying. And the local doctors and nurses have a culture, too, that values communicating with patients, and respecting their wishes. People in LaCrosse spend far fewer days in the hospital in their final weeks and months of life than people elsewhere in the country. Not because the Wisconsin community doesn't want to spend the money, but because that's what the people who live there, and die there, choose.

This coming Sunday (Nov 22) 60 Minutes will do a piece on end of life, featuring our occasional guest blogger Dr. Ira Byock (read his posts here and here). The short preview on the CBS website focuses a lot on costs; we suspect the televised segment will tell a moving story about quality of care, and patient choice. Because we too have accompanied Dr. Byock in that ICU, and sat in on his team meetings, and we know that quality -- and care -- is what motivates them.

One last relevant link -- Oregon Democrat Rep. Earl Blumenauer, who authored the House provision on end of life conversations, wrote an op-ed in the New York Times this week, describing how a measure that had long and deep bipartisan roots turned into political poison: "The battle lines were being drawn. Little did I know how deep the trenches would be dug, nor how truth would be one of the first, and most obvious, casualties." Live and learn.

WORLDVIEW: Assume There's Morality

Joanne Kenen — Thu, 19 Nov 2009 21:16:00 -0500

Not many health writers -- not many writers of any ilk, for that matter -- can match T.R. Reid's ability to bring a light, witty touch to really serious topics. Like health policy around the globe.

Tom (that's what the "T" in "T.R." stands for) was the featured speaker at the Peterson Institute of International Economics today. Not the usual venue for the book tour for his best-seller, "Healing of America: A Global Quest for Better, Cheaper and Fairer Health Care." Before his talk, he told me he was planning to stress the moral case for covering everyone. Not the approach, perhaps, that this particular crowd was used to hearing. Go ahead, I told him. It is, after all, a roomful of economists eating a free lunch.

And that's what he did.

Every rich western democracy (and a few of the not so rich and not so democratic ones), he said, covers everyone. We don't.

None of their systems are perfect. Like us, they wrestle with the rising price of pharmaceuticals and medical technology, and with the needs of an aging population. But they all cover everyone. It's time, he said, for us to do the same. It's been time for a long time.

Reid argued that health care is a basic human right -- a controversial notion in the United States, but received wisdom elsewhere. He threw in some economic lingo as well. Covering everyone (and everyone, he said, means everyone) also brings about efficiencie that make the system work better. He talked about "distributional ethics." Every American -- both Bill Gates and the guy who mows his lawn -- each have one vote. But they don't each have one yacht. Health care, he said, should be more like a vote than a yacht.

Nor does he believe (as some Americans seem to, judging from decibel level of our national health reform debate) that expanding coverage is a zero sum game. I get more, you get less. He argues that we can all get more. More efficiency. More morality. If we find the will, other wealthy industrialized countries can show us a plethora of ways.

Two New America colleagues have reviewed his book. Phil Longman in the Washington Post called the book " a service to his nation," Shannon Brownlee in the Washington Monthly wished he had written more on the lack of evidence behind some of the treatments widely used in the U.S. We liked the film Reid did for Frontline last year, "Sick Around the World" and we liked the book, a readable account of different national health systems interspersed with his own amusing but enlightening global search for a fix for his bum shoulder. How can you not like a book that has sentences like:

France [is] a mirror image of the United States when it comes to health care: Americans strongly dislike their national health care system but haven't found the political will to change it; the French are highly satisfied with theirs but change it all the time."

Or, after having his shoulder treated (quite successfully) by traditional healers in India, when he wrote:

When the front office at the Arya Vaidya Chikitsalayam handed me a detailed accounting -- dozens and dozens of pages listing every navarakizhi, every poojah, and ever ancient herbal medication I had experienced -- I realized instantly that my U.S. insurance company was never going to pay this bill.

He didn't care. His shoulder was better -- and he had lost nine pounds.

Reid's message is not always wry or witty. Far from it. At the beginning of his book, and again near the end, he writes about Nikki White. She died of lupus at age 32. Not because her disease was so severe or untreatable. But because once she became too sick to work, she lost her insurance. And once she lost her insurance, she got sicker. She could not get the treatment she needed until she was so sick that it was too late.

"No other rich country would have tolerated the inequality that left Nikki White dead," he wrote. Designing a health system is an economic question, a medical question, a political question, he acknowledged. But in the end, he concluded, " the primary decision to be made is a moral one."

IN THE STATES: Up in Smoke

Allison Levy — Thu, 19 Nov 2009 20:29:00 -0500

The American Cancer Society Cancer Action Network celebrated the 34^th Great American Smokeout on Thursday. So it's a good time to mention that Massachusetts has been quite successful in helping Medicaid beneficiaries quit smoking (as well as getting them insured).

As we have noted before, while smoking rates have declined markedly in the past decade, tobacco remains the leading cause of preventable death in the U.S.. It kills more than 400,000 people each year and adds nearly $100 billion in health care costs.

The Center for Disease Control reports that while 20.6 percent of all adults smoke (16.0 percent in Massachusetts), 31.5 percent of adults living below the poverty line smoke. (And we know that the poor are less healthy to begin with.) Medicaid spends $22 billion annually on smoking-related health care costs. Specifically, each year, Massachusetts spends $3.54 billion on smoking related costs, and just over a quarter of that is covered by the state Medicaid program.

"Today, tobacco will kill more than 1,000 people, but we can reduce smoking rates," stated CDC Director Thomas R. Frieden, M.D., M.P.H in a press release this week.

Since July of 2006, MassHealth (the state Medicaid program) has offered coverage and easy access to smoking cessation programs to all its beneficiaries. The Massachusetts Tobacco Cessation and Prevention Program launched a widespread advertising campaign to kick off outreach efforts.

In just the past two and a half years, smoking rates for the Mass Medicaid population have dropped by a whopping 26 percent. State health officials report that this reduction in smoking is linked to fewer hospitalizations for heart attacks, fewer emergency-room visits for asthma and fewer maternal birth complications.

"The new Massachusetts results demonstrate once again that we know how to dramatically reduce tobacco use and its devastating toll in health, lives and dollars. What's needed is a political commitment to implement proven solutions, including health care coverage for smoking cessation and aggressive, well-funded tobacco prevention and cessation programs," said Matt Myers, president of the Campaign for Tobacco-Free Kids.

The bad news? Massachusetts' budget for tobacco prevention and cessation has been reduced by 65 percent -- funding for 2009 is just $6.1 million, falling way short of the $90 million suggested by the CDC. In light of health reform efforts, it is important that policy makers consider how these community-health programs can improve the lives and health of all Americans and move us toward a culture of health and wellness.

One last point -- health reform legislation pending in Congress would include Medicaid coverage for tobacco cessation programs for pregnant women, and include other programs to promote healthy lifestyles, in and out of Medicaid.

COVERAGE: Evaluating the Public Plan, Man

Paul Testa — Thu, 19 Nov 2009 20:23:00 -0500

Slate's Timothy Noah provides a thoughtful overview of the intellectual origins and political evolution of the public option's place in health reform.

It's a complicated case, the public option. Lotta ins. Lotta outs. But Timothy Noah is the Big Lebowski of health writers, and is the man for the job to keep all these strands together. (Yes, we know we've made that joke before, but like our living room rug it really ties the blog together.)

Noah's goal was to understand why the CBO and others estimated that premiums for a so-called level playing field public option would cost more than private plans. Noah spoke with New America's Len Nichols, whose paper with John Bertko helped outline how a public option with negotiated payment rates could compete on a level playing field with private plans.

At the heart of Noah's question are the assumptions these estimates make about the nature of the public option and the potential for adverse selection between insurers (in this case more sick people choosing the public option over private plans). Noah nicely illustrates the intricacies of this debate, and we'd like to add a few more points to consider.

First, we would argue the fears that a public option will necessarily attract a less healthy (higher cost) population are overblown. Health reform legislation encompasses new insurance market regulations (community rating, affordability standards tied to actuarial values, guaranteed issue and renewal). Coupling those new rules with the requirement that all Americans purchase health insurance removes much of the ability and incentive for private insurers to engage in the kind of cherry picking and lemon dropping that the Slate article addresses. Insurers will still try to attract healthier customers through advertising and marketing, but their ability to actively select customers based on health status and other risk factors would be limited. Risk adjustment will further address variation that might arise through this sort of "soft" risk selection.

Second, it seems unlikely that sicker individuals will drop existing coverage and flock to the public option. If they're offered coverage through an employer and that coverage is deemed affordable relative to their income, they're ineligible for the exchange. Furthermore the transition costs of switching plans when you've already set up a network of providers to care for your conditions are such that if you like what you have, you will probably prefer to keep it.

Finally, there is the question of how a public option would operate -- specifically, how would it employ methods of utilization management. Utilization management is ungainly jargon even for health policy. It should not be conflated with the cherry picking and lemon dropping of risk selection. When practiced correctly, utilization management is about delivering value for our health care dollar. It's about paying for what works, reducing unnecessary tests and procedures, and encouraging healthy behaviors. It's about avoiding the MRI when an X-ray will do, or making it easier for a diabetic to manage her blood sugar and avoid crises and complications that could send her to the ER -- or the OR. Or the ICU.

There are many real world examples where utilization management done right both saves money and improves patient care. But the CBO and others in their estimates basically assume that a public option would ignore the examples of plans like Group Health or Kaiser, and keep paying providers along the lines of fee-for-service Medicare. Why would the Secretary of HHS design a public option to perpetuate broken payment models, when it could be a driver for innovation in payment and delivery system reform? So for all the hand wringing over a public option, when it comes to estimates of adverse selection and utilization, remember, that "yeah, well, you know, that's just, like, your opinion, man." Cost estimates are important, but implementation is what really matters.

HEALTH REFORM: Quick Comparison ...and Sticking Points

Joanne Kenen — Thu, 19 Nov 2009 19:36:00 -0500

NPR and Kaiser Health News put together a short but useful comparison of the House and Senate health bills -- including a bit of oddsmaking on the big sticking points. Of the nine issues they assessed, abortion (no surprise there) and employer requirements are judged potentially the most contentious to resolve. The individual mandate, creation of a health insurance exchange, and help for small businesses and low-income individuals seem to have more common ground.

COST: The Price is Right for Health Reform

Paul Testa — Thu, 19 Nov 2009 18:50:00 -0500

After weeks of anticipation and speculation, Senate Majority Leader Harry Reid has unveiled the legislation that will bring health reform to the Senate floor in the coming weeks.

While waiting for the details of the bill to come out Wednesday, we created a little office pool, called the Price is Right for Health Reform. In an office-wide email, we asked our peers to guess the CBO's estimates of the gross costs of the bill. Showcase Showdown rules (closest without going over) applied. We were intentionally vague in our question because estimating the true costs of the bill is inherently a difficult process.

The number we were looking for was $848 billion. The CBO's estimate of the gross cost of the bill is essentially the total cost of coverage provisions over the next 10-years. This is the number most frequently reported in the media as the "cost" of the various health reform bills being discussed. But is this really the best indicator of the true costs of health reform? Maybe not. First, timing matters: $848 billion over ten years is a lot different than a $787 stimulus bill where 90 percent of the money is spent within the first 3 years. So do deficits. How much does a bill cost if it's fully paid for and in fact reduces the deficit as is the case for both the House ($109 billion) and Senate ($130 billion) bills?

We received plenty of calls from our co-workers asking just these questions. We tried to stay quiet, because we were interested in what the educated, non-health policy wonks think about the cost of reform. True to our think tank's "post-partisan roots" we got a range of answers from "too little" to "$600 trillion, Obama lies." We got a couple of "$1" which we assume was a reference to the bill's deficit neutrality, and $90 billion which seems like a reasonable estimate of yearly costs. But the majority of the answers clustered within the $800-$900 billion range, surprisingly close to the final answer. Few people seemed willing to go above $900 billion, suggesting the power of the official price tag President Obama put on reform during his September address to a Joint Session of Congress. So who won? The answer after this non-commercial break:

Marc Goldwein, the Policy Director, Committee for a Responsible Federal Budget and Policy, took home the prize for his guess of $845 billion. Lisa Guernsey, the Director, Early Education Initiative, came agonizingly close with pick of $850 billion. New America's President Steve Coll, was the next closest with a prediction of $837 billion.

Marc's prize potentially includes a Dodge Neon from 1996, a natural wood-like dinette set from 1982, or more likely a beer and some wings from the re-opened Black Rooster Pub (take that Peace Corps!). We suspect he'll also want us to plug the excellent work he and his colleagues do on all things budget. Congratulations Marc. Help control the pet population. Have your pets spayed or neutered.

As a side bet, we also asked contestants to name which current Senator looks most like Bob Barker. What do you think?

HEALTH REFORM: Highlights from the Senate Bill

Elizabeth Carpenter — Thu, 19 Nov 2009 16:04:00 -0500

The latest version of Senate health care legislation (pdf available here) crafted by Majority Leader Harry Reid is making its rounds. There is a lot to review, but an initial read shows the bill is close to the legislation approved by the Senate Finance Committee in early October with a few notable changes: more generous subsidies, a higher threshold for the excise tax on insurers who offer high-cost plans, an increase in the Medicare payroll tax for Americans making over $250,000, and the addition of a long-term care insurance program for people with disabilities.

While this legislation also delays the implementation of insurance market reforms and subsidies (when compared to the Senate Finance legislation) there are a number of provisions that would start helping Americans immediately. In particular, the legislation:

Provides $5 billion to enact a temporary insurance program for those who have been uninsured for several months and have a pre-existing condition. Financial assistance would be available for the purchase of such coverage until the exchanges (or new insurance marketplaces) are established.
Prohibits insurers from selling insurance products that have lifetime or annual caps on benefits and from rescinding coverage except in the case of fraud or misrepresentation.
Requires health insurance companies to report publicly the percentage of total premium revenue spent on patient care and quality versus administrative costs. Health insurance companies will be required to refund enrollees if costs not related to patient care exceed a certain threshold.
Establishes small business tax credits to help small employers afford coverage for their workers starting in 2011.
Extends dependent coverage to require all insurers to allow young adults to remain on their parents' insurance until the age of 26.

The fiscal picture of the legislation should also give moderates a lot to cheer about. CBO not only says the legislation would reduce the deficit by $130 billion over the next decade, but it also expects that:

Medicare spending under the bill would increase at an average annual rate of roughly 6 percent during the next two decades -- well below the roughly 8 percent annual growth rate of the past two decades...Adjusting for inflation, Medicare spending per beneficiary under the bill would increase at an average annual rate of roughly 2 percent during the next two decades -- much less than the roughly 4 percent annual growth rate of the past two decades.

In other words...curve benders rejoice!