During a recent appearance on MSNBC’s Hardball, former Gov. Howard Dean
(D-VT) said that a public insurance option is essential to any health
reform effort (Thanks to Igor Volsky for pointing this out on The Wonk Room, and Hat-tip to Dr. SteveB on Daily Kos.)

Here is what Dean said: “If Barack Obama’s bill gets changed to exclude the public entities, it is not health insurance reform…it rises and falls on whether the public is allowed to choose Medicare if they’re under 65 or not.
If they are allowed to choose Medicare as an option, this bill will be
real health care reform. If they’re not, we will be back fighting about
it for another 20 years before somebody tries again.”

As I have suggested in the past if private insurers are forced to compete on a level playing field with a public sector option (which some call Medicare-for-All ) this means that they will be tightly regulated in terms of what they must cover. It also means that they will not be able to “cherry-pick” by charging some customers more because they are older or because they are sick.

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Yesterday, I suggested that the Commonwealth Fund’s recent proposal for healthcare reform underlines just how difficult it will be to build a sustainable, effective, safe healthcare program for all Americans.

Today, President Obama’s budget reinforces the message. His ten-year $634-billion plan for funding healthcare reform depends on “asking the wealthy to pitch in a bit more” (budget director Peter Orszag’s happy phrase), wringing some of the waste out of Medicare and Medicaid (cuts that are needed, but that will not be popular ); and strong-arming drug makers to raise discounts on Medicare drugs from 15 percent to 21 percent. About half of the money will come from changes in government programs, half from tax increases.

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Last
week the Commonwealth Fund published a proposal for a “High-Performance Health
Care System” that
is ambitious, and admirably honest. Unlike many health care
pundits, the lead author, Cathy Schoen, understands our Byzantine health care system
from the inside out. As a result, she does not try to paper over the
complexities, inefficiencies and inequities of U.S. health care.
She acknowledges them as she struggles to make an irrational system
rational.

The Commonwealth Fund’s 90-page report
deserves a close reading. But before  I begin
to analyze it, let me stress that whatever objections I may raise about the
Commonwealth proposal only illustrate just how hard it is to devise a
plan that will deliver high quality, affordable, sustainable health care to all
Americans.

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Last night, President Obama diagnosed the disease: runaway healthcare inflation. The cure: “We must address the crushing cost of health care.”  If we don’t we will never be able to bring down our budget deficit—a deficit that Obama pledges to halve by the end of his first term. As Peter Orszag, the president’s budget director, observed in October: “the nation’s looming fiscal gap . . . is driven primarily by rising health care costs.”

President Obama stressed that we must begin Now.  At the same time, he made it clear that he does not have a finished plan in his back pocket: “There are different opinions and ideas about how to achieve reform,” he acknowledged as he called for a summit to begin work on this issue next week.  “I suffer no illusions that this will be an easy process,” he added.” It will be hard.”

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The New York Times has invited me to be part of a online panel of healthcare experts
commenting on the President’s speech. Our comments should be posted here by mid-day tomorrow.

This has led me to think
about what I hope the President will say.

Most likely, he will outline
a broad plan for universal healthcare.
Then he will toss it back to Congress to figure out how to fully fund
reform.

 I say this because the President and OMB
director Peter Orszag (who is fast becoming the president’s unofficial
healthcare czar) understand that universal coverage will be very expensive. We
cannot cover everyone without controlling costs. And this will take time. This
is why the President has repeatedly said that he hopes to achieve universal
coverage by the end of his first term. Not this year, not next year, but in
four years.

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Today, fearmongers are trying to start
a generational war. Their goal is to persuade younger Americans that we cannot
afford Medicare. I have always
been candid about the waste in our healthcare system. U.S.medicine is inordinately and unnecessarily
expensive; we must put a brake on healthcare inflation. But conservatives such
as billionaire Wall Street baron Pete Peterson wildly exaggerate the numbers when
they suggest that spending on aging boomers will bankrupt the nation.

 Pete Peterson is, I am sorry
to say, simply a cranky old man in a pinstriped suit. In a word, he’s a crank
–i.e. “an unbalanced person who is overzealous in
the advocacy of a private cause.”

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My belief that Peter Orszag, director of President Obama’s Office of Management and Budget, (OMB) will play a pivotal role in making sure that comparative effectiveness research stands at the center of healthcare reform was confirmed by an article that appeared on Politico today.

According to the report, Orszag helped “shape the final compromise” on the administration’s first budget last Wednesday and is emerging “as a central figure and key negotiator in the Obama’s economic policy team.” 

“Orszag . . . left a profound mark on the stimulus,” Ben Smith writes, “and the bill spends more than $1 billion on Orszag’s pet cause, research on the effectiveness of medical practices, which he sees as an opening to reforming American health care through sheer analytical will."

In the past, I have written about Orszag’s desire to use this research to rein in health care inflation. As the former Congressional Budget Office director has observed, there is so much waste in the system, “that there are opportunities to reduce costs without impairing health outcomes overall.”  Less costly care does not mean lower-quality care.

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One of the most controversial provisions in the economic stimulus bill that President Obama just signed would give $1.1 billion to fund medical research that compares the benefits and risks of alternative medical treatments. 

Ostensibly, progressive health care reformers won this round: the funding was approved.  But now, observers are questioning whether Congress will give Medicare the power to use this research in a way that that matters: to redistribute health care dollars with an eye to lifting the quality and reducing the cost of healthcare.  Wednesday on The HealthCare Blog, Joe Flower suggested that, in the end, the forces of darkness (Rush Limbaugh, et.al.)  will prevail.  Or as he puts it, the “fulminating rage” of those who peddle “fear and ignorance” will overcome both reason and science. 

Here, I have to disagree. As regular readers know, I am hardly a recklessly optimistic voice on the healthcare reform circuit. But this is a subject that The Century Foundation’s Working Group on Medicare Reform has been discussing, and based on our conversations, I believe that Medicare will be able to give the research financial teeth. (For information on the Working Group, and its members, click here)

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 What Do
Healthcare Coalitions and  the Show, Survivor, 
Have In Common?

 Despite much talk about
bi-partisan compromise and unlikely bedfellows, the truth is that the political
debate over healthcare reform will ultimately come down to a battle over money.
And the special interests will fight to the death before giving anything up.

A story in yesterday’s Chicago Tribune confirms that coalitions
between “Labor unions and business groups that have
teamed up in a multimillion-dollar national lobbying campaign to pressure President Barack Obama
and Congress for big changes in the nation's health care system” are
now “quietly at odds.”

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