Today’s headlines tell us that last night the nation’s hospitals agreed to contribute $155 billion over 10 years toward the cost of insuring the 47 million Americans without health coverage.  According to the Washington Post  “the agreement that three hospital associations reached with White House officials and leaders of the Senate Finance Committee is the latest in a series of side deals that aim to reduce the cost of revamping the nation's health-care system and to neutralize influential industries that have historically opposed such reforms."

We’re told that “about $40 billion would be saved by slowly reducing what hospitals get to care for the uninsured . . . . The reductions would probably not begin for several years, after a significant number of people have enrolled in the new insurance programs.

“For their part, hospital officials have an understanding that, if the final legislation includes a new government-sponsored insurance program, it will not pay at Medicare or Medicaid reimbursement rates, which the industry has long argued do not cover the cost of services.”

What Does This Mean?

I have a few questions. First, how can anyone promise that a public sector plan “will not pay at Medicare or Medicaid reimbursement rates” when we don’t know what Medicare and Medicaid reimbursement rates will be in 2010 or 2011? 

We do know that there are plans to change the structure of reimbursements—bundling payments to doctors and hospitals, refusing to pay for preventable readmissions, paying bonuses to hospitals and doctors that approach benchmarks for efficiency set by hospitals like the Mayo Clinic.  Medicare has been experimenting with bundling payments to the doctors and hospital involved in a single episode of care for quite a while. All of this is part of a larger plan to begin to pay for quality, not quantity of care. Presumably, a public sector plan will follow suit.

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There’s powerful storytelling going on over at Obama’s grassroots website, Organizing for America,  and clearly the goal is to use gripping narrative to get Americans to stop thinking about health care reform and start feeling the need for change. The newest addition to this site is called “Health Care Stories for America” and it includes a neat, interactive map of the U.S. that is constantly updating with new stories of health care woe from real people across the country. Site visitors can click on a megaphone at the bottom of a story they like to help promote its status and increase the anecdote’s chance of being pegged on the interactive map.

Here is an excerpt from a highly rated story from “Barbara” in Wocester, MA who was faced with $65,000 in medical bills when her insurer denied coverage after her son was in a serious bicycle accident:

“It's the phone call in the middle of the night that no parent ever wants to receive. Your son, a student at George Washington University, has been taken by ambulance to the emergency room. The doctor on the other end of the line explains, as you desperately wake-up into the nightmare, that in a bicycle accident your child has landed on his jaw, has broken almost all the bones in his face and has lost many teeth. He's lucky; there was no spinal damage, no brain injury, no eye involvement, and he's alive. But even after 5 hours of surgery, and 8 titanium plates installed into his face, you are told that reconstruction and recovery will take a year. Somehow your son gets through the long hospitalization, and the trauma. But there is no preparation for the next phone call: all further medical treatment is being denied by your insurance company.”

The Obama campaign plans to use stories from this site as the President conducts his “listening tour” around America to garner local support for his health plan and other issues that include energy policy and his Supreme Court nominee. Tomorrow alone, there are public meetings scheduled for several cities in New Hampshire, South Carolina and North Carolina. They will continue throughout the month of July as Congress remains in recess.

The use of anecdotes to influence health policy is not new; both sides used the technique during the 1993 battle over Clinton’s health plan. (The main difference being that conservative opponents used a fictitious couple—Harry and Louise—to act out a fictitious dilemma to make their point.)

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Today’s Washington Post reports that “The nation's largest insurers, hospitals and medical groups have hired more than 350 former government staff members and retired members of Congress in hopes of influencing their old bosses and colleagues.”  And here’s the kicker:  “Nearly half of the insiders previously worked for the key committees and lawmakers, including Sens. Max Baucus (D-Mont.) and Charles E. Grassley (R-Iowa) debating whether to adopt a public insurance option opposed by major industry groups.” 

Indeed, at least 50 former employees of the Senate Finance Committee or its members now lobby on behalf of the health care industry. Here you’ll find a Washington Post “Sphere of Influence” graphic showing how 41 lobbyists are linked to specific members of the Finance Committee.  (Note Max Baucus at the center near the top of the circle.)

The health care industry has embarked on “a record-breaking influence campaign” the Post observes,  “spending more than $1.4 million a day on lobbying in the current fight, according to disclosure records. And even in a city where lobbying is a part of life, the scale of the effort has drawn attention. For example, the Pharmaceutical Research and Manufacturers of America (PhRMA) doubled its spending to nearly $7 million in the first quarter of 2009, followed by Pfizer, with more than $6 million.”

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“Plan To Slash U.S. Health Costs May Be Tough Pill To Swallow” blared a headline on Investors Business.com late last week. The story begins: “When someone takes out a scalpel, it's usually going to hurt — a lot. Yet Peter Orszag, President Obama's budget director, claims the U.S. could slash $700 billion in annual medical costs without affecting quality.”

The article quotes arguments on both side of the debate, but the headline has already signaled that the story has a point of view.  And this hard-hitting quote from Greg Scandlen, head of the conservative “Consumers for Health Care Choices” at the Heartland Institute, seemed to sum up the story’s thesis: "It is often impossible to know ahead of time what is going to work and what won't. The notion that a physician should only deliver services that he knows ahead of time will work ignores real-life conditions. "It's offensive that a bean counter like Orszag should Monday-morning-quarterback physician decisions."

The truth is that Scandlen simplifies “real-life conditions” by ignoring the fact that every medical treatment carries risks as well as hope of benefits. If there were only benefits then the old-fashioned “Oh what the heck, let’s just go in there—what harm can it do?” school of medicine would make sense.
But it doesn’t. This is why patients should ask questions about the downside.

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Politco.Com’s Mike Allen broke the story yesterday: “For $25,000 to $250,000, The Washington Post has offered lobbyists  . . . off-the-record, non-confrontational access to Obama administration officials, members of Congress, and the paper’s own reporters and editors. http://www.politico.com/news/stories/0709/24441.html

 “The astonishing offer was detailed in a flier circulated Wednesday to a health care lobbyist, who provided it to a reporter because the lobbyist said he felt it was a conflict for the paper to charge for access to, as the flier says, its “health care reporting and editorial staff."

The event was billed as a “Washington Post Salon,” an intimate" off-the-record dinner and discussion at the home of CEO and Publisher Katharine Weymouth.”

Before the news cycle ended yesterday, the planned series of dinners had been cancelled. Today, the Washington Post’s Howard Kurtz quoted Weymouth “This should never have happened. The fliers got out and weren't vetted. They didn't represent at all what we were attempting to do. We're not going to do any dinners that would impugn the integrity of the newsroom."

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One would think that insurers would want to do their own comparative effectiveness research to find out whether cutting edge drugs, devices and procedures really provide greater benefits. 

Past experience tells us that newer treatments are not always better for many patients. Often, they are effective for a small group that fits a particular profile, but not for most of us. And they are almost always more expensive. Wouldn’t it make sense for the insurers to invest in comparative clinical trials? They could save billions, and show their customers that they were watching out for them—protecting many of them from needlessly aggressive, potentially risky, care, while covering the treatment for those who would benefit.

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Some observers have begun to suggest that it really doesn’t matter who pays for health care. What matters is how we pay, and what we pay for.

Dr. Atul Gawande made this point in the brilliant piece that the NewYorker published at the beginning of this month.  “Activists and policymakers spend an inordinate amount of time arguing about whether the solution to high medical costs is to have government or private insurance companies write the checks . . . ” Gawande observes.  “These arguments miss the main issue. When it comes to making care better and cheaper, changing who pays the doctor makes no difference.” In other words, he is saying, it just isn’t important whether we have a public-sector insurance plan competing with private sector insurers.

Over at the Huffington Post, Jim Jaffe makes a similar argument. He begins by saying that health care spending has become unsustainable. Trying to pay less for health care services isn’t the whole answer: “Ultimately we have to provide fewer services.” 

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Drug companies have been allowed to introduce generic versions of traditional pharmaceuticals since 1984—saving the U.S. health care system an estimated $734 billion over the last ten years alone. But there currently is no regulatory pathway for creating generic versions of “biologics”. Unlike traditional, small-molecule pharmaceuticals, biologics such as  Avastin, a drug used to treat cancer, are protein-based and include monoclonal antibodies, growth factors, immune modulators and other molecules that are derived from living matter or manufactured by cells. Currently, brand-name biologics account for approximately 15 percent of total U.S. prescription drug sales—and they are growing in importance.

Little wonder that President Obama is determined to try to bring generic biologics to market.

Why don’t we already have generic versions of these popular drugs? One reason cited for the holdup is that biologics are more complex than small-molecule drugs and that it’s virtually impossible to create an exact replica (a so-called bioequivalent) of a pioneer biologic drug. The “follow-on” version of a biologic can be very similar to the branded drug but it might be manufactured a bit differently or might have slightly different side effects in certain patients. That means the approval process for follow-on biologics will involve more testing than is normally done for generic versions of small molecule drugs like antidepressants or heart drugs.

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Ezra Klein does a bang-up job of
explaining the fundamental problem with for-profit health insurance over at his
Washington Post blog.
Ezra also links to Congressional testimony by one Wendell Potter, who worked in
the insurance industry for some 20 years.

I would add only that non-profit private sector insurers don’t
labor under the same built-in conflict of interest. They don’t have “a
fiduciary duty to maximize profits.”

In Europe,
every country offers some combination of regulated non-profit private sector insurance
and public-sector insurance. The hybrid model seems to work well.  If you have only public sector insurance (as
in the U.K.)
and Sarah Palin is elected president, you have a problem. Don’t laugh. Were
you laughing when GWB was re-elected? Okay, some people liked President Bush.
Obviously quite a few people voted for him. But you never know who is going to
wind up in the White House. When Margaret Thatcher took charge in the U.K.,
she took a hatchet to the National Health Service. It still hasn’t fully recovered.

Over on the always-excellent Schwitzer Health News Blog,  the University of Minnesota’s Gary
Schwitzer spotlights a notice that appeared in the Society of Professional
Journalist’s (SPJ) e-newsletter:

“Interested in covering the health
industry, science and medical research? Even more interested in using
journalism to inform the public about the leading cause of illness and death
worldwide? The National Press Foundation offers an all-expenses-paid four-day
fellowship for journalists on ‘Cancer Issues.’ The program will be in Washington,
D.C. Sept. 13-16. Fifteen fellowships will be awarded and they all include
lodging, airfare and most meals. The applications deadline is 5 p.m. July 28,
2009."

Who exactly is paying for such
largesse?  Schwitzer provides a link to
the National Press Foundation website where, at the very bottom of the announcement, in small type, you discover that
“This program is underwritten by Pfizer Inc.”  In an e-mail that I received earlier
this week, Schwitzer writes:  “As always,
I see health policy ramifications here. At a time when Pharma is
negotiating just what its role in health care reform will be, this is
especially troubling."

I couldn’t agree more.

 Schwitzer also points to a 2008 BMJ 
article titled “Who’s Watching the Watchdog” by  Lisa Schwartz and Steve Woloshin, both
associate professors at the  Dartmouth
Institute for Health Policy and Clinical practice, and Ray Moynihan, a lecturer
at the University of New Castle, Australia.
 
“As watchdogs the media play a vital role in
highlighting interconnections between doctors, researchers and the drug
industry. But who watches the watchdogs? Financial ties between medical
journalists and for-profit companies they cover in their reporting have
received little attention in the media or from the research community. Such
ties warrant scrutiny, not least because many of us first learn about new
treatments from the news media, and these reports can affect the way the public
uses health care.”

Schwitzer also quotes SPJ’s own code
of ethics, adding “I don’t think SPJ should promote events in its own
newsletter that, in my reading, invites journalists to violate the SPJ
code.”  To read the whole post, click
here.