Apologies to readers: In our last “Update” I had promised to post this piece Saturday. But Friday night I was hit with a bad case of food poisoning, and wasn’t able to travel home from the Families USA conference until Sunday night. Today, as I sitting here sipping my Gatorade (a very good way to rehydrate), I’m very, very glad to be home, and back to the blog.
Ron Pollack, director of Families USA, has been a key force in organizing what he calls a “strange bedfellows” dialogue among some 20 organizations representing, business, labor and healthcare providers. The players, which includes PhRMA, the American Medical Association, American Health Insurance Plans (AHIP), the Service Employees International Union ( SEIU), Blue Cross, and Families USA represent a wide range of ideologies on health care reform. Pollack stresses that this is not a coalition, but a conversation. The goal is not to establish a consensus, but to see how far the participants can go in to trying to find common ground. As a result, Pollack told a small group of bloggers and journalists in an interview at the Families USA conference last Friday, “I know where the sharp dividing lines are.”
When NycEve, who blogs about healthcare on “Daily Kos,” asked “What are the intractable differences between the insurance industry and health care reform?” Pollack listed three:
- Insurance market reform: Should insurers be required to offer insurance to all, regardless of preexisting conditions (“guaranteed issue”)? And should the government insist that they offer policies to everyone in a given community at the same price, be they young or old, healthy or sick (“community rating”)?
- Medicare now pays private insurers a windfall bonus to offer Medicare Advantage —laying out 13 to 17% more than Medicare would spend if it were covering the same seniors directly. Medicare is heading for a financial crisis; should that bonus be cancelled?
- Both President Obama and other healthcare reformers envision a hybrid public/private health care system that includes private insurers, but insists that they must compete with a public sector alternative (some call if “Medicare for All”) on a level playing field. Private insurers are strongly opposed to being asked to compete with a public program.
Pollack was quick to add that, not all of these differences are, in fact, unbridgeable. For example, insurers have already said that they would be willing to offer insurance to everyone—as long as everyone is required to sign up for coverage. On the question of offering everyone in a given community the same policy at the same price, regardless of pre-existing conditions, insurers have been far less forthcoming. But Pollack said, “They are pretty close to agreeing to community rating”
This is excellent news. Without community rating, insurers could charge the sick and the elderly sky high premiums. Since any plan for universal coverage promises to subsidize insurance for those who cannot afford it, this would force taxpayers to finance premiums that could easily run as high as $20,000 or more a year.
But insurers are right on one point: if we are going to have guaranteed issue and community rating, we must have a mandate requiring that everyone has insurance. Otherwise, many people will wait until they are sick to apply for insurance, safe in the knowledge that insurance companies will have to take them, and cannot charge them more than the many customers who have been paying into the pool for years. Ultimately, these “free riders” would force premiums to rise for everyone. President Obama has not said publicly that he favors a mandate, but, as I reported more than a year ago, privately he has indicated that while he would prefer to see everyone sign up for insurance voluntarily, ultimately he recognizes that a mandate may be required. This wouldn’t necessarily mean that everyone would be required to go out and “buy” insurance: we might deduct the cost from paychecks, or add it to income taxes if filers could not show proof of coverage.
On the second sticking point, the Medicare Advantage bonus, Pollack indicated that while insurers will not say so publicly, privately, they are resigned to losing the windfall bonus for Medicare Advantage. I would add that Wall Street knows that the bonus will soon be history; the loss is already priced into insurance company stocks. Some fiscally conservative Republicans are likely to join Democrats on this vote.
But when it comes to asking private insurers to compete with “Medicare for All” –or some other public sector alternative, Pollack warns that “this is the tougher nut. That’s where the hard line is.”
Private insurers don’t want to have to compete with a public sector player on a level playing field because they know that since they must pay for advertising and lobbying—as well as seven-figure executive salaries and profits for shareholders—their administrative costs are higher. This will make it difficult to vie for customers, unless they can offer better service. Many Americans believe that private sector businesses are virtually always more efficient than government; but if forced compete directly, insurers would have to prove it.
Moreover, Pollack warns, I don’t think it’s just the health insurance industry,” that objects to a public-sector alternative to private insurance. “It’s also the doctors, hospitals, PhRMA, device makers, business, everybody.” This is why, “including a public-sector alternative in a national health program will be the toughest thing to achieve as part of a bipartisan package.”
Why do so many oppose a public-sector plan? Because Medicare pays less than most private insurers, and those who profit healthcare fear that a public sector health plan is likely to continue to try to put a brake on health care inflation by using “comparative effectiveness research” to determine whether a product or procedure is giving taxpayers a value for their health care dollars. Already there is a legislation in Congress calling for unbiased medical research that compares the risks and benefits of rival treatments, procedures and products, with an eye to determining which are most effective for patients who fit a particular profile. We already have research telling us that certain tests and procedures expose many patients to more risk than benefit ; yet, as I have written in an earlier post health care providers routinely ignore evidence-based recommendations and guidelines from the U.S. Preventive Services Task Force and even the National Cancer Institute.
But today, Medicare reformers are talking about reducing the fees Medicare pays physicians for certain very lucrative services that are, at best, marginally effective, while raising fees for services provided by primary care physicians pediatricians, palliative care physicians and general surgeons that offer much greater benefit for patients. It also is likely that Medicare—or “Medicare for all” -—would try to steer patients toward the most effective treatments by raising co-pays for procedures that we know provide little or no benefit for patients who fit a particular profile, while lowering co-pays for more effective, safer products and procedures.
Of course one man’s ineffective treatment is another man’s revenue stream—hence the resistance, in some quarters to a public sector health plan that focuses on getting the best value for our health care dollars. Let me add: not all health care providers resist cost-containment. Many realize that the waste in our health care system lowers the quality of care. But they need to make their voices heard.
One would think that private insurers also would want to avoid putting a match to money—and they do, up to a point. They tried to put a lid on health care inflation in the 1990s, and were successful.
(Some health care reformers argue that Medicare is always better at containing costs. But this just isn’t true. As the chart below reveals, from 1993 to 1997, private insurers held health care inflation down to 2.8 percent a year, while Medicare spending was rising by 6.1 percent annually. )
Unfortunately however, too many for-profit HMOs, “managed care” in the most short-sighted way possible, looking only at cost, not quality, refusing to cover a treatment simply because it was expensive– not because it was ineffective. Long-term, this would create greater medical problems for patients. But since private insurers’ patients often change plans, for-profit tended not to worry about long-term consequences. (By contrast since Medicare knows that patients will be with the program for life, it takes a long view. Some have suggested that a public-sector alternative should require patients who choose it to stick with it for at least five years to encourage an emphasis on chronic disease management and preventive care. .)
At the end of 1990s, the inevitable backlash came, as the public, the media, employers and the medical community rebelled against managed care. Doctors refused to join HMO networks; patients dropped out of managed care plans. HMOs backed off.
That is when insures discovered that if they began approving more procedures and products—even if they were expensive, and there was no clear medical evidence to support the test or treatment –they could pass the cost along in the form of higher premiums. Thus, over the past eight years, private insurance premiums have risen, roughly in tandem with the amount insurers are paying out for the a rising volume of ever-more expensive pills, products, tests and treatments. (As the chart above reveals, from 1999 to 2006 reimbursements by private insurers have been climbing by 8 percent to 8.5 percent a year.)
There is no question: if we want to offer universal coverage to everyone in America, we must rein in breakneck healthcare inflation . Otherwise, taxpayers simply will not be able to afford the subsidies needed to help those who cannot afford to buy their own insurance. We have seen the problem in Massachusetts.
The one huge flaw in that state’s heroic experiment is that it has not managed to contain spiraling health care bills As a result, the state cannot afford subsidies for everyone who needs them. Under the banner of “universal coverage,” some the state’s citizens remain uninsured. Meanwhile, those who are insured protest that they cannot afford to spend 8 percent of their incomes on health care (the amount they must spend before becoming eligible for a subsidy) while the state itself struggles to keep the program afloat. As Dr. Atul Gawande noted earlier in the conference, the Massachusetts plan is so expensive that it’s reached a point where we’re .now debating cutting benefits, raising taxes, or cutting payments.”
Nationwide , Pollack sees cost as ultimately most formidable obstacle that reformers face.. “This will be the biggest fight,” he predicts—“over the subsidies and how to pay for them.”
The goal of the “strange fellows dialogue” is, he says, to try to “lower the temperature” of the debate. People fight hardest, he warns, “If they think they are going to lose something.” In other words, those who fear losing the income stream that they have will fight even harder than those who are fighting for something—such as healthcare for all.
Will we be able to achieve bi-partisan reform? “Max Baucus, who is chairing the committee with the biggest say, has been saying for months now that he wants to pass reform with 70 to 80 votes,” Pollack confided last Friday. “I don’t know how he feels about it today after the bruising battle on SCHIP, mainly over the immigrant issue [the question as to whether SCHIP should cover Legal immigrant children] which shouldn’t have caused such a rupture.” That fight –whether poor children deserve healthcare —reminds us that ideological opposition to universal coverage remains fierce.
“The media is talking as if bipartisanship is a virtue all to its own,” Pollack adds. “I believe in it, but it’s not the top value.”
In the end, there are areas where reformers cannot compromise. There is no point in promising health care that we cannot afford to deliver. We must confront the question of how we are going to contain costs or, like Massachusetts, we will not be able to come through with the subsidies many Americans will need.
As one physician listening to CNN correspondent Paul Begala’s speech on the final afternoon of the Families USA conference put it: “Everyone in the health care industry that I know has a business plan that calls for 6% to 7% revenue growth next year.” Yet the economy will not be growing by 6% to 7% next year. Nor will workers’ wages.
“Reformers shouldn’t be worrying about ‘Harry and Louise,” the doctor added, referring to the “Harry and Louise” ads that insurers ran in the early 1990s to block healthcare reform. “They should be worrying about “Thelma & Louise.” In other words, if we race forward –without trying to figure out how we are going to finance health care reform– we risk driving our health care system “right over the cliff.” (Paul Begala agreed, telling the doctor: “I’m going to use that line on CNN. . . The first time I use it,” Begala promised him, “I’ll use your name.” The second time, “I’ll say, As a friend of mine once said.’” The third time it will be: “As I always say . . .”)
This is not to suggest that we cannot afford high quality, sustainable healthcare for all. We can—if we don’t continue to squander our healthcare dollars. But as Bob Laszewski argues in the post below: “The onerous cost of health care in America is the problem that needs to be solved. The number of uninsured—or on the edge of becoming uninsured—is a symptom of that problem.” Addressing the symptom leaves the underlying disease untreated.
Confronting the disease –an ingrained cultural belief that more care, and more expensive care, is always better care—and that someone else should pay for it—will, as Laszewski suggests, mean making some very tough political decisions.
It’s not merely cost…though that is the essence of discussion…it’s that we have interest groups that are adament in not taking the “hit” in terms of revenue stream. The Pres of the AHA has stated as such by indicating that if hospitals were to receive lower reimbursement…it’s a non-starter! AND if any one of the interest group representatives concede a point that results in a lower reimbursement, how soon do you think that representative would be replaced! I commend Families USA for its efforts in lowering the temperature of the debate, but in the end it the consensus MUST address a fair and equitable reimbursement paradigm coupled with evidence based and quality medicine.
Maggie — this post was useful until its closing remark which was a grave disappointment and set a really bad tone for reality-based discussion and constructive momentum on health reform work:
“Confronting the disease –an ingrained cultural belief that more care, and more expensive care, is always better care—and that someone else should pay for it”
I’ve been a nurse for almost 20 years in a variety of settings (inner city home care, in-pt oncology, caring for folks who are homeless, at a community detox, and teaching at academic hospitals) and from working intimately with thousands of patients and their famiies I’ve never gotten the sense that our dysfunctional and wasteful health care system is due to the supposed “cultural belief” that you (mistakenly) assign the blame to in the closing of your otherwise constructive post.
It makes me want to ask the following: did you after falling ill in DC recently insist on seeing multiple different specialists for your GI symptoms and proceed to have multiple diagnostic tests including redundant lab work and imaging studies and gastroesophogealduodenoesophogoscopies performed, all at “someone else’s expense? I think not. And I’m glad to know that you’re felling much better.
The most promising approach to meaningful reform at this time is being championed by the coalition Health Care for America Now (HCAN)
at http://www.healthcareforamericanow.org ; it’s imperative to say that HCAN is bolstered by the work of more long-standing group that advocates for “single-payer” reform, Healthcare-Now!, http://www.healthcare-now.org . Both efforts are essential to winning meaningful national reform so I fervently hope there will be some bridge-building between the two.
The healthcare reform debate is framing around the same old broken business model and stakeholders. Since none of this frames reform based on root problems and care for vulnerable people – patients – NOT conusmers, you can expect no real significant fundamental changes.
As usual, nurses and nursing are absent from the conference, from the discussion and from any mention in the phony reform planning and plans.
Expect more of the same.
The best questioning was done by tabloid nyceve?
That says quite a lot.
Quoting Gawande who uses passive osmosis – his patients voluntarily complaining – as his guide to the efficacy of the MA healthcare insurance industry as a front for healthcare reform is also telling.
The traditional power mongers and voices of “healthcare” – and unfortunately, I would have to include the health policy writers in this – are making and controlling all the healthcare debate noise. But the well is still poisoned with for-profit parasitic business models and incentives at the direct expense of patients, who continue to suffer preventable harm and die preventable deaths as a result of this hubris, greed, self-interest and immorality: the four foundational apocalyptic values of the free market American culture.
I know you’re sick of me polluting your comments section, and I’m sick of reading about the willful ignorance and self-interest that perpetuates the status quo. I won’t bother you further since it’s futile and aggravating to all concerned.
Annie — I can’t speak for Maggie, but I value your comments very much. The more squawking the better. Besides, I generally agree with much of what you post.
Annie, don’t go. You’re not polluting anything and I look forward to your posts…if you’re the same “Annie” that appeared here several months ago. I have always been a firm supporter of nurses and all things nursing. Still am. I want you to know, though, that even nurses are just as guilty of self serving tunnel vision. I was once working with a nationwide nursing organization…in the end once they got all they could from me they dumped me like a bad habit…and dumped patient safety like a bad habit.
In any event, nobody knows everything. You don’t know everything I know, Maggie doesn’t know everything you know, etc. We definately need your voice and I hope you stick around.
well, guess we need a little experiment to test the political theory that private providers are more efficient. surprise. we have one. it is called medicare advantage (and was called other things before that). so we basically trim their reimbursement rates to 99% of average paid by medicare locally and see if they can survive and thrive. in the past, they’ve been reluctant to play on those terms because they find 120% more attractive than 99%. That’s understandable, I would to. But right now there’s yet another of those logical disconnects. On the one hand, they argue that we should promote the industry because they’re more efficient. On the other, we pay them above average reimbursement.
Because COST IS THE ELEPHANT IN THE ROOM-
We need health care reform now more than ever (for that wrong reason)
My Rx?- More incentives for-
-primary care
-chronic disease mgt
-home health care
-public health
-ethical and compassionate rationing (usually at end of life)
HOW TO IMPLEMENT My Rx?- IDEAS WELCOME
Dr. Rick Lippin
Southampton,Pa
Just a technical note. When comparing the cost containment of private insurance and Medicare as in the chart above one has to adjust for the patient populations.
Medicare is all old folks who have high care costs and who have seen a higher rate of increase in treatment costs as well. This is because much of the latest high tech medicine is aimed at conditions that are increasingly common with age. Things like cancer, heart disease, arthritis, etc. are age related.
So for the chart to be meaningful the populations need to be normalized by age.
It’s encouraging to see more emphasis on the need to control costs as opposed to just expand health insurance coverage to the uninsured and underinsured. When it comes to building a consensus that requires every stakeholder group to give something up to get a healthcare system that we can afford and sustain, I think the strongest resistance is likely to come from doctors and hospitals. Getting drug and device manufacturers, insurers, trial lawyers and individual patients / consumers / taxpayers on board will be easier but still difficult. This is why I think every interest group, especially doctors and hospitals need to be challenged to suggest what hits they are prepared to accept for the greater good.
Separately, with respect to rationing, semantics are at work here, I believe. I can see where a purist might argue that rationing is anything short of whatever I want (at someone else’s expense) that might be at least marginally beneficial. If we refuse to cover drugs, devices, tests and procedures that the scientific evidence shows are not cost-effective, at worst, it’s rational rationing or common sense rationing. By contrast, rationing by income or ability to pay is not a good or rational way to ration, in my opinion. On The Healthcare Blog, commenter rbar (a physician who has practiced in Europe as well as here), suggests that overly aggressive treatment at the end of life is, in his word, “waste.” Others might call withholding such treatment rationing. In other countries, a less aggressive approach toward end of life care may just be considered good, sound medical practice in their medical and societal culture.
Yes, yes, and yes…when we talk about access to healthcare, we need to be sure that we include the cost and quality debate as well. They go hand in hand.
I don’t know why our legislators aren’t begging the question: Why is our healthcare so expensive? Overuse of technology for physician and patient convenience, lack of adherence to evidence based standards because no one ‘enforces’ it (ie; doctors are not employees of the hospital so no one holds them accountable to these standards, or the science of medicine).
Technology enters the market and is ‘sold’ via heavy marketing to physicians and wha-la!….they buy in. No sound scientific evidence is needed before it becomes mainstream medicine.
In obstetrics for example, fetal monitors, escalating induction and cesarean rates, epidurals, intrauterine pressure monitors, you name it…most moms having babies now look like they’re in the ICU they’re hooked up to so many machines. But are our infant and maternal mortality rates better? Heck NO! They are both increasing with the use of all this technology.
Medical errors and infections are known to be a leading cause of death and escalating costs, but hospitals refuse to spend on improved infection control efforts, or better training and staffing, in favor of more technology, beautiful lobbies, and offering more high risk treatments and surgery-centers to compete for a piece of the $$ action.
This profit-driven healthcare model has become the greatest threat to our well being.
At the Families USA conference, Dr. Gawande had it right when he said we need a National Health Board that would be in charge of ensuring that the delivery of healthcare is based on sound science.
But to make that happen, we also need evidence-based legislation.
Let’s put Dr. Gawande in Tom Daschle’s shoes!
To Lisa and Annie –
Ann Malone here, and I’m not the same person as Annie. Lisa, I recall that we emailed each other a few times many months ago after connecting on this blog. I appreciate your comments above, just as I appreciate and learn a lot from Annie’s commentary here and elsewhere.
Discussion is useful yet we must also mobilize for political action, and do it rather quickly since the time and space to kick off national hc reform is in the looming budget process of the President and Congress.
As I’ve stated before I’ve come to believe that the most promising approach to meaningful reform at this time is being championed by the coalition Health Care for America Now (HCAN)
at http://www.healthcareforamericanow.org
HCAN is bolstered by the work of more long-standing group that advocates for “single-payer” reform, Healthcare-Now! http://www.healthcare-now.org .
Both of these groups’ grassroots mobilization efforts are essential to winning meaningful national reform so I fervently hope there will be some bridge-building between the two.
Lori, Anne (Malone)
Annie, Jonathan
Thanks for your comments.
I’ll responding to a few comments right now and will be back to everyone else tomorrow. . .
Lori–
Thank you for your description of what is going on in obstetrics as an example of how we overuse medical technology:
“fetal monitors, escalating induction and cesarean rates, epidurals, intrauterine pressure monitors, you name it…most moms having babies now look like they’re in the ICU they’re hooked up to so many machines. But are our infant and maternal mortality rates better?”
Sadly, no. To my mind, the unncessary caesarians are most harmful.
And you’re entirely right that we have to talk about access, controlling costs and lifting quality simultaneously; they cannot be separated.
Anne (Malone)
In the settings where you have worked, probably the sense that “more care is better care and more expensive care is best” is not as pervasive. Often, in those settings, the most expensive care is not even available.
But it’s well documented that in much of middle-class and upper-middle-class America, from L.A. to Manhattan, Boston, Miami, Texas, New Jersey, San Diego —this is what people believe.
And unfortunately,as the Dartmouth research reveals, more care, and more aggressive care, does not bring better outcomes
Yet the notion that “more is better” is ingrained in our culture–whether we are talking about larger servings in restaurants, bigger homes, bigger cars . . .Though I suspect that in the hard times ahead, this may change.
Finally, you write “Discussion is useful yet we must also mobilize for political action . . ”
Anne, this blog is here for discussion. And I think discussion is more than “useful”. It allows us to exchange ideas and hone and expand our thinking.
But this blog is not a platform for various interest groups to post their placards, link to their sites, etc.
Anyone who reads this blog is sophisticated enough to be aware of the various groups– single payer advocates, consumer-driven advocates, etc, and to go to the appropriate sites.
If a HealthBeat post is about consumer-driven care, or single-payer, I welcome original ideas, arguments we haven’t heard. But please, no poltical ads, no bumper stickers. It just gets too repetitive.
Jonathan–
Thanks for the comment.
Yes, I’m afraid the fact that no interest group wants to take a hit is going to be a real problem. It’s another example of how we need more collective thinking . . .
Annie-
As Chris and Lisa indicated, no one wants you to leave the blog.
Often, your comments have been very helpful.
But you need to realize that not every post will mention nurses or focus on the issues that are most important to you–public health, preventive care etc.
They’re important to me too. But as Lisa indicated, it’s easy for any of us to develop tunnel vision and see only part of the problem in our healthcare system.
The economics of healthcare, the conflict of interest that leads to corruption, the fact that we overpay for certain things and underpay for others, the fact that poverty–not lack of access to healthcare– is the leading cause of premature death. . .
These, too, are important issues.
So I hope that, rather than becoming frustrated when we’re not talking about the issues nearest and dearest to your heart, you’ll contribute to discussions on other issues.
In health care Canadians agree politically that “we take of each other” because anyone of us could get terribly sick. Americans need to get over their cultural “I’ll take care of me” attitude and adopt the Canadian view. It is right to help care for those who get sick through no fault of their own.
Maggie- you might not have intended it but your reply to me came across as quite patronizing (“If a HealthBeat post is about consumer-driven care, or single-payer, I welcome original ideas, arguments we haven’t heard. But please, no poltical ads, no bumper stickers. It just gets too repetitive.”)
In fact, regarding the value of discussion to the reform issue, I had originally written that discussion is “essential” then edited it to “good” since I believe that political action is the most essential thing at this critical juncture. Seems like I hit a nerve with you by referring to discussion as good. No slight intended.
My closing comment gave voice to the need for the country’s two largest grassroots coalitions that have laser-focus on the health reform issue to find a way to work together despite some distinct policy differences. I haven’t heard or read anyone else making that specific recommendation.
How is that a “bumper sticker”–is it b/c the effort was made to provide direct links to the 2 organizations? Silly me for thinking that there might be a HealthBeat reader out there who’d appreciate a direct link to gather more information about a point you highlighted as being of special interest/importance in the original post: “including a public-sector alternative in a national health program will be the toughest thing to achieve as part of a bipartisan package.”
Bruce, Anne
Bruce–
I couldn’t agree more.
We (in the U.S.) need a “collective vison”. We need to think in terms of “we”
When push comes to shove, we, like other people do (WW II,for example.)
But I hope things don’t have to get that bad here for that to happen.
Anne–
I’m sorry if I offended you.
but this site just isn’t a platform for political ads. I realize you feel that your groups have a “laser-focus” on the problems, but other people (free marketeers, consumer rights’ advocaes)
believe that they, too, have found the very center of the problem.
This blog exists to discuss the entire healthcare roblem. It’s not a place for the various factions of the reform movement to advertise with links and statements or what they believe in (without argument or evidence )