Health Insurance

A few health tidbits in Washington’s musical chairs before January.

Peter Orszag, the respected head of the Congressional Budget Office, looks likely to head up the White House Office of Budget and Management. Orszag "gets" health care, and he has been extremely effective in his two years at CBO in helping others in Washington "get" it too. He is one big reason why you hear a different dialogue around town these days, a dialogue that reflects understanding of the huge amount of waste and poor quality built into our anachronistic payment and delivery sytem. Orszag appears to live, breathe, eat and sleep Dartmouth Atlas data, and wants us to invest in comparative effectiveness research so we don't deliver and pay for care of  "dubious value."

We asked Leif Wellington Haase, director of New America's California Program, and Micah Weinberg, a research fellow in the California program, to fill us in on the latest developments on health care in California, particularly the possible cuts to funding the state’s Healthy Family Program for low income kids.

This blog has documented the flurry of activity in health reform in Washington in recent weeks. Senator Max Baucus has floated major new proposal to overhaul the delivery and funding of care and Sen. Edward Kennedy is working on a related initiative. Former Senate Majority Leader Bill Frist has urged Republicans to work with Obama to make helping the uninsured an “immediate” priority.

But will immediately be soon enough?

That strange bedfellow Divided We Fail coalition you've heard us talk about before about is putting its money where its mouth is in the name of health reform. The Business Roundtable, the National Federation of Independent Businesses, the AARP and the SEIU have sent President-elect Barack Obama an open letter urging him to enact comprehensive health reform. And they are backing it up with a nearly $1 million TV and newspaper ad campaign.

"What we are doing is reminding not just the president but the Congress as well that . . . this remains one of the most important issues facing the country," Business Roundtable President John Castellani was quoted as saying in the Los Angeles Times. The coalition sees health reform as an essential aspect of economic recovery and job creation.

"Addressing skyrocketing healthcare costs is a critical component of stabilizing household, national and global economies," the letter from the business-labor-senior citizen group said. "Inaction undermines the economic security of our families; limits the productivity of our workforce; stagnates job creation and wage growth; and threatens to crowd out investments in energy, education and infrastructure."

FLYP, a pretty cool interactive online magazine, takes a look at what's ahead for the Obama administration. New America health policy director Len Nichols was among the experts providing advice. His suggestion is not surprising: fix health care.

Len looked both back to the lessons of the Clinton years and forward to how to realistically bring about change. Fixing the health care delivery system—creating an infrastructure that allows better decision-making clinical tools and use of best practices and comparative effectiveness data—will take five to seven years, he predicted. That means we need to "start this afternoon."

Len also strongly believes that, as hard as it is to get bipartisan agreement on something as complex as health care, it's even harder to pass (let alone sustain in the long-run) significant reform without bipartisanship. That doesn't mean you need unanimity, but you do have to find some way of accommodating different values and priorities. A bipartisan deal should create a health care system that will finally make sure that everyone has affordable health coverage, with help for low-income people, but doing it in a way that preserves choice and (fairly-regulated, level-playing-field) markets. Doing nothing, he says, is not an option.

Senate Finance Committee Chairman Max Baucus (D-MT)isn't waiting until President-elect Barack Obama takes office to get started on comprehensive health reform. As he pointed out in a letter congratulating Obama on his victory, he's already begun. The goal: "to finalize a comprehensive health reform plan that can pass the Congress and be put on your desk in a timely fashion for signature into law."

Baucus, who has been holding lots of preliminary hearings and meetings for many months, will unveil some specific policy options next week and brief Obama's health transition team.

"I intend for us to move swiftly and decisively with legislation in early 2009," Baucus said in a statement accompanying the release of his letter to Obama.

Baucus laid out five goals:

In case you were wondering, the Arizona ballot initiative that would block government-run health care for all in the state (not that the state was exactly on the brink of creating it) is still too close to call. Here's a link to a piece in the Arizona Republic. We'll check back and post again once the results are known. In addition to potential impact on future health reform initiatives in Arizona, some experts see the initiative as laying the legal foundation for a potential challenge to federal health reform.

With so much buzz about how Rahm Emanuel may become President-elect Obama's White House chief of staff, we thought it would be useful to share this glimpse of how he saw the priorities of the new administration. It comes from a New York Magazine piece that ran shortly before the election:

"My view is that we gotta be the party of reform," Emanuel begins when I reach him on his cell phone. "There are four reforms. There's financial-regulatory reform, tax reform, health-care reform, and energy. Regulatory will kinda come down the chute fast. Tax reform will take a little longer, because it's not until 2010 that Bush's tax cuts expire. Energy, you can do some things immediately. And with health care, you've got the children's health insurance as the first piece of a series of things you gotta do."

Emanuel's reform agenda is helpful because it's clarifying-in terms of timing, in terms of priorities, and in terms of suggesting where Obama's plans and the appetites (and political tolerances) of congressional Democrats intersect.

So health care is in there, part of the Big Four. How quickly Obama moves ahead, whether SCHIP expansion will include any other health cost, quality or coverage elements, isn't yet clear. We at New America of course believe that we should—and can—do more than expand SCHIP, and we know that a lot of people on the Hill are already hard at work figuring out how to get there and the election results will only make them work harder. But even if the hard-charging Emanuel sees a more gradual approach, it's reassuring to know that he recognizes there are a lot of things "you gotta do."

Joe Paduda, who blogs at Managed Care Matters, says his "gut" may tell him that there's no money for health care reform, but his other organs disagree.

"Hell, if we can afford to give AIG an eighth of a trillion dollars, we can definitely afford big-time health reform," he writes.

Paduda sums up the pre-election health care rumblings on the Democratic side of the Senate—but notes that key Democrats, notably Sen. Kennedy, are reaching out for some bipartisanship as they try not to repeat the myriad mistakes of the 1992-94 health reform initiative.

Naturally nobody expects health care to be easy (as we like to say around here at New America, if it were easy we'd have done it already). But he isn't underestimating Kennedy's ability to get this moving, particularly if Obama wins. Kennedy of course was one of Obama's key early endorsers. So Paduda writes, don't think of these health reform meetings going on as the "last gasp" of an ailing Kennedy. Think of them as "the final roar of the Lion of the Senate."

Crowd-out—when public insurance programs displace private ones—has been a big concern in health reform. Anticipated crowd-out was one reason the Bush Administration opposed SCHIP expansion earlier this year, and critics of other health proposals (including Barack Obama's) fear that adding more public options would lead to a stampede away from private plans. A new study on the first year of health reform in Massachusetts, up on Health Affairs web site, suggests that's not the case.

We found no evidence of a drop in firms offering health insurance coverage. Overall, the share of workers in firms that offered coverage was constant over the period, at 90 percent. For workers in small firms (1-50 workers), where employers are less likely to offer coverage and where employers may be more likely to drop coverage under reform, we found no evidence that the share of workers in firms offering employer coverage dropped. In fact, the share of workers in small firms who were working for a firm that offered coverage actually increased slightly over the study period, from 72 percent in fall 2006 to 76 percent in fall 2007, although the difference is not statistically significant.

Here's some preliminary but quite striking data (which we read on the Health Care Policy and Marketplace Review blog) on how the health care crisis is fueling the mortgage fiasco. Many of the people who are losing their homes aren't irresponsible buyers who got subprime mortgages for homes they should never have bought. They are people who could have managed to stay afloat in their homes if they hadn't had a health care crisis that did them in financially. Here's what one study in four states by Christopher Robertson, Richard Egelhof and Michael Hoke found: