Uwe Reinhardt – No “simple” health reform

Posted by on Friday, Jan 29, 2010

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

No Such Thing as ‘Simple’ Health Reform

By Uwe Reinhardt
The New York Times
January 29, 2010

Even before Senator-elect Scott Brown’s stunning victory in the Massachusetts special election, there was no shortage of advice on simpler approaches to health reform that the president and his Congressional allies could have used in place of the bills now before Congress.

Although the current reform bills undoubtedly are burdened with many tangential items, one can easily underestimate how quickly any kind of health reform will become complex.

(He quotes Peggy Noonan who advocates for “small, discrete steps” such as “a simple bill that mandated insurance companies offer coverage without respect to previous medical conditions.”)

In the eyes of people unfamiliar with economics, the step she (like others before her) proposes may seem small.

She seems completely unaware that, to be implemented, that step has to be accompanied by (1) a mandate to be insured or, at the least, very powerful financial incentives to be insured. And if government imposes such a mandate on citizens, it must be ready (2) to subsidize low-income families in the acquisition of the mandated insurance. Already we have a bill requiring many pages.

(He quotes from Sen. Tom Coburn’s summary of his bill calling for guaranteed coverage, and affordable premiums through risk adjustment.)

The European systems Mr. Coburn has in mind are the Swiss and Dutch health systems, because we are referred to a paper on these systems.

It should be noted that the Dutch and especially the Swiss systems are subject to heavy government regulation — far heavier than is foreseen in the Senate health reform bill passed in late December.

For example, health insurance is mandatory in both countries. Both countries prescribe purely community-rated insurance premiums which, unlike the Senate bill, cannot take the age of the insured into account. And both countries extend sizable public subsidies toward the purchase of private health insurance.

In short, as Senator Coburn’s bill illustrates, “simply” to pass a bill that imposes community rating on health insurers, as Ms. Noonan suggests, is anything but simple. It opens a veritable Pandora’s box of additional, required legislation which, once fully fleshed out, would pretty much constitute the core of the insurance-reform bill currently in the Senate bill.

http://economix.blogs.nytimes.com/2010/01/29/no-such-thing-as-simple-health-reform/

Posted response of Don McCanne, San Juan Capistrano, CA (Response #23)

Once Congress decided to build on our existing, fragmented, dysfunctional system of financing health care, it became necessary to create the complex legislation that was generated in both the House and the Senate, precisely because of the reasons Prof. Reinhardt describes.

Congress and the administration began with the most expensive system in existence and then attempted to apply social insurance principles to our hybrid model, allegedly with the goal of covering everyone with a system with sustainable spending. The health policy literature is replete with simulations and real-life studies demonstrating that this is by far the most expensive model of reform, and it falls short on universality, equity, and efficiency.

The least expensive and most effective models are a government-owned health service (socialized medicine, not America’s first choice), or a bona fide social insurance program used to finance the largely private health care delivery system. Although there is no perfect system, a government social insurance program (like Medicare) does have an advantage over social insurance programs using a market of private plans in that administrative costs are lower and mechanisms to moderate spending increases are more effective. Also, the Swiss and Dutch private insurance-based programs still leave uninsured about 1.5 percent of their populations.

President Obama this week told the nation that he was eager to see a better approach to cover everyone and bring down costs, though in his prior comments he has revealed that he already knows how to do that. And what is that?

During this break in the negotiations on reform, we really should take a serious look at an improved Medicare program that would cover everyone. It is the least expensive model of reform. It has the greatest administrative efficiency. It would truly cover everyone automatically. And even for those who do not support social solidarity, it would finally control our intolerable growth in health care spending through the proven mechanism of a single payer monopsony.

President Obama is eager to see a better approach

Posted by on Wednesday, Jan 27, 2010

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

State of the Union Address

President Barack Obama
The White House
January 27, 2010

But if anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know.  (Applause.)  Let me know.  Let me know.  (Applause.)  I’m eager to see it.

http://www.whitehouse.gov/the-press-office/remarks-president-state-union-address

And…

Illinois AFL-CIO

Barack Obama
June 30, 2003

I happen to be a proponent of a single payer universal health care program. (applause) I see no reason why the United States of America, the wealthiest country in the history of the world, spending 14 percent of its Gross National Product on health care cannot provide basic health insurance to everybody. And that’s what Jim is talking about when he says everybody in, nobody out. A single payer health care plan, a universal health care plan. And that’s what I’d like to see. But as all of you know, we may not get there immediately. Because first we have to take back the White House, we have to take back the Senate, and we have to take back the House.

http://www.pnhp.org/news/2008/june/barack_obama_on_sing.php

Well?

SilverSneakers benefit for Medicare Advantage plans

Posted by on Wednesday, Jan 27, 2010

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Blue Shield of California to Offer Award-Winning Fitness Program to Medicare Beneficiaries in San Bernardino

Blue Shield of California
January 18, 2010

Blue Shield of California announced today that it will expand its contract with Healthways, Inc. to offer the SilverSneakers® Fitness Program to Blue Shield Medicare Advantage members in San Bernardino County. SilverSneakers, which Blue Shield already offers in Los Angeles and Orange counties, is the nation’s leading exercise program for older adults.

Using the SilverSneakers premier network, Blue Shield of California members get access to a variety of participating fitness and wellness facilities throughout the country, including such popular locations as Curves® and Bally Total Fitness®. Many sites offer amenities such as exercise equipment, treadmills and free weights, and the signature SilverSneakers fitness classes.

https://www.blueshieldca.com/bsc/newsroom/pr/sneakers_011810.jhtml

SilverSneakers: http://www.silversneakers.com/Home.aspx

Healthways SilverSneakers is a membership fitness program for seniors provided as a free benefit by many Medicare Advantage programs throughout the nation. It is not a benefit that is allowed in the traditional Medicare program.

We certainly applaud seniors who participate in programs designed to maintain physical fitness and general wellness. But there are two features of this program that should outrage taxpayers.

1) These programs are funded by government overpayments made to the private Medicare Advantage plans. Though some of the overpayments are used for additional benefits, much is wasted in excessive administrative costs and profits. Not only should taxpayers object to the waste, they should also object to a program that provides extra benefits limited to private plan enrollees but not available to those in the traditional Medicare program. If the extra benefits are appropriate, then all Medicare beneficiaries should receive them. If they are not appropriate, then no taxpayer funds should be used for these benefits. In either case, the overpayments directed to the private plans should either be redistributed amongst all Medicare beneficiaries or retained in our Medicare reserves. Regardless, the private Medicare Advantage plans should be eliminated as the wasteful intermediaries that they’ve proven to be.

2) Which of our seniors would find the SilverSneakers program to be an attractive benefit? Obviously only the healthiest without infirmities that would prevent them from participating in the exercise programs. SilverSneakers is being selectively marketed to the healthiest, lowest-cost seniors, even though their private plans are being paid much more than we spend taking care of patients in the traditional Medicare program which includes a disproportionate share of chronically ill patients. The taxpayers take care of the sick, while they doubly overpay the private plans to take care of the lower-cost healthier individuals.

The Republicans are feigning outrage by protesting that the proposal before Congress would “cut Medicare spending” by partially reducing some of the overpayments to the Medicare Advantage plans. Well, the Democrats actually are wrong. In a brave show of timidity, they suggest tweaking the Medicare Advantage overpayments, when they should show the temerity to throw those crooks out and use the funds to improve benefits in the traditional Medicare program.

While they’re at it, they should throw out the crooks running the rest of the private plans, and establish an improved Medicare program for all of us.

What about the seniors who would lose their SilverSneakers membership? They can buy a program directly from Curves or Bally Total Fitness, thereby eliminating both the SilverSneakers and the Medicare Advantage middlemen. Or better yet, they can organize their own fitness groups and continue to exercise – for free!

Malpractice lessons from Texas

Posted by on Tuesday, Jan 26, 2010

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Liability Limits in Texas Fail to Curb Medical Costs

by David Arkush, Peter Gosselar, Christine Hines and Taylor Lincoln
Public Citizen
December 2009

Supporters of limiting health providers’ liability have touted Texas’ medical malpractice experiment as the solution for improving national health care. For example, Minnesota Rep. Michele Bachmann held up Texas as a successful liability “pilot program” in an address in September, stating, “The state of Texas did a wonderful job of lawsuit reform and actually saw medical costs come down. We know it works.”

But most of the claims touting positive effects of the Texas law – which took effect in September 2003 and included a $250,000 per defendant liability cap – are flatly contradicted by the data.

By the measures commonly used to evaluate health care – such as cost, the uninsured rate, and access to care – Texas has regressed since its liability law took effect. Collectively, these measures show that Texas has one of the worst health care systems in the United States. Moreover, since 2003 Texas has either failed to improve or grown even worse compared to other states on almost every measure.

Since the liability laws took effect:

* The cost of health care in Texas (measured by per patient Medicare reimbursements) has increased at nearly double the national average;
* spending increases for diagnostic testing (measured by per patient Medicare reimbursements) have far exceeded the national average;
* the state’s uninsured rate has increased, remaining the highest in the country;
* the cost of health insurance in the state has more than doubled;
* growth in the number of doctors per capita has slowed; and
* the number of doctors per capita in underserved rural areas has declined.

http://www.citizen.org/documents/Texas_Liability_Limits.pdf

The malpractice system does not serve injured patients well. It needs to be reformed. It needs to be redesigned with incentives to reduce exposure to error, and to appropriately compensate patients when error does occur, all in a non-hostile environment that serves the interests of both patients (compensation for injury) and health care professionals (performance enhancement). This is not the topic of today’s message.

The Republican grandstanding has been sending a message calling for a blanket rejection of any reform advanced by the Democrats, and instead substituting the opening of insurance markets across state borders and the enactment of malpractice reform.

Since expanding insurance markets across state borders is not the topic of today’s message, we’ll quickly dismiss it as an unsound policy that would flood the market with less expensive underinsurance products that would fail to provide financial security for those who need health care. That is the worst possible way to expand health care coverage.

Regarding malpractice, when Republicans and some Democrats (except those beholden to trial attorneys) call for reducing health care spending through malpractice reform, they don’t really mean reform. They are merely calling for a cap on general damages (pain and suffering), such as the $250,000 cap enacted in Texas. They contend that this would reduce costs by eliminating excessive awards for “junk lawsuits,” and especially by reducing the pressure on physicians to order unnecessary tests. Many contend that the excess CYA testing is a major cause of our very high health care spending.

So what has happened in Texas after the cap was applied? Health care costs have increased at double the national average! Spending increases for diagnostic testing have far exceeded the national average! The cost of health insurance has more than doubled!

As an isolated policy, malpractice caps were ineffective in reducing spending and diagnostic testing in Texas. The issue of general damages needs to be addressed as part of a process leading to comprehensive malpractice reform, but it should be dismissed as the be all and end all for comprehensive health system reform.

The debate over malpractice should not distract us from our mission to support comprehensive reform that would ensure that absolutely everyone receives the health care that they need, under a financing system that eliminates the burden of medical debt. (Hint: a single payer national health program – an improved Medicare for all)

UnitedHealth wields a machete

Posted by on Monday, Jan 25, 2010

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Insurer Steps Up Fight to Control Health Care Cost

By Anemona Hartocollis
The New York Times
January 24, 2010

A front in the national health care battle has opened in New York City, where a major hospital chain and one of the nation’s largest insurance companies are locked in a struggle over control of treatment and costs that could have broad ramifications for millions of people with private health insurance.

The fight is between Continuum Health Partners, a consortium of five New York hospitals, including Beth Israel Medical Center and St. Luke’s-Roosevelt Hospital Center, both major teaching hospitals, and UnitedHealthcare.

The prestigious hospitals and the major health insurer have been in bitter contract negotiations, not just over rates but also over UnitedHealthcare’s demand that the hospitals notify the insurance company within 24 hours after a patient’s admission. If a hospital failed to do so, UnitedHealthcare would cut its reimbursements for the patient by half.

UnitedHealthcare says the proposed rule is meant to improve the quality of care and cut costs by allowing insurance case managers to jump in right away. The hospitals say that having their reimbursement cut in half is too much to pay for a clerical error, and that the revenue drain would ultimately hurt their patients.

The dispute signals a “ratcheting up” of a long tradition of insurers trying to cut costs, said Jeffrey Rubin, an economics professor at Rutgers University.

http://www.nytimes.com/2010/01/25/health/policy/25insure.html?ref=health&pagewanted=all

The leadership of America’s Health Insurance Plans (AHIP) and Physicians for a National Health Program (PNHP) do agree on one crucial point: the current health care reform proposal does very little to control the intolerable escalation of health care costs. Both agree that Congress must provide the remedies to control spending and improve health care value.

What will occur without government action? Cost containment will remain in the hands of the private insurance industry. The tools at their disposal are very intrusive and are what resulted in the managed care backlash by unhappy patients and their providers. With the continuing increase in costs and the need to avoid pricing premiums totally out of the market, more intensive and extensive intrusions can be anticipated.

Look at this provision that UnitedHealth is demanding in its contract negotiations with a prominent New York hospital chain. If a hospital commits the clerical error of failing to notify UnitedHealth of a patient’s admission within the first 24 hours, the hospital is penalized 50 percent of its already reduced contracted rate! When the insurer is notified, they have the “insurance case managers jump in right away.” Although they claim that it is to improve quality, no sane person is deceived by the budget machete that they wield.

Without effective reform, it will get much worse since premium increases must be limited – they’re already too high – so insurers will be left with no alternative but to whack away at spending. Whacking spending means whacking patient care. Insurers really don’t want to do that. It is not for altruistic reasons, but it is rather the fear that their business model could suffer irreparable harm under the wrath of enraged patients and their health care providers (not that it hasn’t already).

It is no wonder that AHIP wants Congress to enact cost containment so the government becomes the bad guys. But do they really expect Congress to establish a government bureaucracy of machete-wielding case managers while the insurance industry gets a free ride? Yet that is the form of cost containment that fits with the model in which the private insurers retain control of the funds.

We’ll say it again. Private health insurance plans are an obsolete model of financing health care. Affordable premiums, adequate benefits, and affordable out-of-pocket costs are incompatible under the private insurance model because of the very high health care prices in the United States.

Methods of cost containment is where PNHP and AHIP part ways. PNHP recommends eliminating the obsolete private insurance industry and replacing it with a single payer national health program – an improved Medicare for everyone.

An improved Medicare for all would save hundreds of billions of dollars in wasted administrative excesses. Although some claim that this is a one-time benefit, it is a profound waste that never returns, providing savings every year thereafter. The system would be operated under a global budget, adjusted for demographics, inflation, and beneficial advances in technology, maintaining spending at a sustainable level. Hospitals would be funded through global budgets, eliminating the need for armies of clerks attempting to obtain reimbursement from a multitude of payers for each itemized expenditure of the hospital. Health professionals would negotiate compensation to meet their costs and provide fair profits. Bulk purchasing at negotiated rates would enable fair pricing for pharmaceuticals and medical supplies. Capital improvements would be separately budgeted to correct for both excessive and deficient supply side capacity, avoiding excess costs by improving efficiency.

The differences could not be more clear. Private insurers want government interventions to protect their businesses. Advocates of an improved Medicare for all want everyone to have the health care that they need, while making the health care system affordable for all – individuals, businesses, and the government and its taxpayers.

by JB Fenix, CaPA Fellow

On Monday, January 11th, over 1,000 people rallied for California Single Payer on the steps of the Sacramento Capitol building. Following the rally, 500 health professional students from over 20 different California campuses, and ten different professional programs held over 90 legislative meetings. Through their efforts, state single-payer gained at least 3 additional co-authorships and a fresh cohort of legislators and staffers were educated in the midst of a pessimistic national debate.

The event was preceded by a six-hour training day on top of 8-hour bus rides for half of the students who left Southern California at 4 a.m. on Sunday morning. The two-day CaHPSA “Lobby Day” event was itself preceded by over 10 statewide conference calls, two regional conferences (with many days of preparation each), multiple press releases from the student media team, one leadership conference, and countless hours of work from local campus student teams including speakers’ series and fundraising drives. The event will be followed-up by selecting statewide student leaders, and campus student teams; by holding regional and campus training workshops; and by continuing to build partnerships with pro-single payer organizations and in key legislative offices through, with a little luck, summer student internships.

All of this should be seen as a phenomenal success, especially considering that it is 100% student run and that the students receive little if any support for their activities. So how can we explain such success amidst an unfriendly environment and when reform at the national level is struggling so dismally? And how can this success be replicated in other states? Two words: Enthusiasm and Organization.

Let’s start with enthusiasm. No one can go to CaHPSA Lobby Day and not come down with a case of infectious enthusiasm. Students sit through hours of preparation and vigorously engage in discussions with often unfriendly opponents of healthcare reform and come away more excited than ever. Young health professionals, with little or no previous exposure to any policy, effectively engage in the democratic process and come out the other end ready for more.

How does this happen? The first step is building enthusiasm at the campus level to get people to the event. This is usually a process of having strong single-payer speakers visit each campus at least once, with follow-up and endorsement from well regarded local student leaders. The leaders get involved because they have real control over the event and input into the formation of the activities. The final push to register students for the lobby day builds on this foundation and is often a combination of blast emails and appeals to friends and social networks. Once at the CaHPSA Lobby Day, the enthusiasm continues because the training day speakers are engaging, the community supporters at the rally are boisterous, and we have an unlimited supply of coffee. And most importantly, learning that you can actively engage in the democratic process is fun! And being well prepared with a group of your peers beforehand to knock down the arguments of your opponents feels great! (This should be seen in contrast to events that are not student led, where students play a secondary role in joint student-physician teams, or where the students feel poorly prepared, or discouraged by not having autonomy over their student group.) By being empowered to make decisions, we are learning that our actions today make a difference tomorrow.

Equally important to enthusiasm is organization. Lobby Day would not be possible without active campus teams and statewide coordination. And of these two, some form of active campus leadership/organization is especially important. In fact, on campuses where we are unable to establish a team or at least a first contact, we often lose the participation of the entire campus even if our event makes it to their local listserv. Over the past couple of years, the existing infrastructure of AMSA campus chapters has been key to our success, but as we try to continually expand beyond the medical student population to other health professional students and students in general, a new form of organization is emerging: CaHPSA, or the California Health Professional Student Alliance. Because we are “campus-based,” CaHPSA ties into the fundamental unit of identity for most students: the on-campus community.

A final essential component of our organization’s success has been community partnership. California Chapter of PNHP, the California Physicians’ Alliance, California School Employee’s Association, California Nurses Association, California OneCare, California Alliance of Retired Americans, Single Payer Now!, and others have been essential community partners both helping us with material supplies and cheering us on at the CaHPSA Lobby Day Rally. As we continue to grow our organization it will be crucial to maintain and further develop organizational partnerships with community partners who each bring their own high levels of enthusiasm and strong sense of organizational identity.

Lessons learned? Incredible success is possible by mobilizing students. And two keys to this success are enthusiasm and organization.

Educate. Advocate. Grow.

Insurers face consequences whether or not reform fails

Posted by on Friday, Jan 22, 2010

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

If Bills Fail, a Quandary for Insurers

By Reed Abelson
The New York Times
January 21, 2010

With the possible collapse of the Congressional health care effort, health insurers might seem to have reason to celebrate. The legislation threatened to remake much of their business, with the prospect of burdensome government regulation and less profit from selling coverage to individuals and small businesses.

But now, in the possible absence of forced change to their business, the insurers still face the daunting challenge of selling a product that is increasingly out of reach for more Americans as the cost of medical care — and thus premiums — continues to climb.

Moreover, the industry’s main business of selling coverage through employers has largely stalled, while the weak economy has speeded the loss of customers as people lose their jobs and their health insurance.

“People are still being crowded out of the market because they can’t afford it,” said Sheryl R. Skolnick, a health care analyst for Pali Capital in New York.

But without the aid of the government through some provisions of the legislation, some policy analysts say the insurers might be hard pressed to rein in the fees charged by hospitals and doctors.

“They’ve lost all the leverage reform would have given them,” said Len Nichols, a health care economist for the New America Foundation, a policy research organization that supports an overhaul.

And the insurers say they know they cannot fix many of the problems in the health care system without the support of the government.

For insurers, the largest risk may be that without a government-led overhaul, their industry faces an even bleaker future should medical costs and premiums continue to soar, perhaps eventually prompting draconian changes from the government.

By the time Congress dares to try again to overhaul health care, some analysts predict, the problems with the system might be so acute that Washington might regulate the insurers more heavily than has been considered for the current legislation — or flirt even more with the idea of the federal government becoming directly involved in providing insurance.

“It’s going to come back to the forefront again,” predicted Matthew Borsch, an analyst at Goldman Sachs who follows the industry and says the insurers face an increasingly daunting environment.

http://www.nytimes.com/2010/01/22/health/policy/22insure.html?hp=&pagewanted=all

We have stated repeatedly that health care costs are now so high that private insurers are no longer capable of providing health plans with affordable premiums if those plans are to be effective in preventing financial hardship in the face of medical need. Private health plans are an obsolete method of financing health care.

The health care reform process began with the goals of covering everyone and controlling health care costs. That would have been a straightforward task had they agreed to establish a single payer national health program. Instead it was decided to build reform on the foundation of our existing private insurance industry that is approaching obsolescence.

Keep in mind what health care now costs for our healthiest sector – the healthy workforce and their young healthy families. The average costs for a family of four is now $16,771 (Milliman Medical Index). This does not include insurer administrative costs. Considering that median household income is $50,303 (2008), the premium that must be charged for a private plan with adequate benefits, plus the out-of-pocket expenses, are totally out of reach for the average family.

The private insurance industry has survived to this point primarily for two reasons. Most important is that they have been able to sell their products to the healthiest of us – group plans for the healthy workforce, and individual plans for those who pass underwriting requirements. Also the tradition of employer sponsorship of plans has provided a revenue source that has been tolerated by workers who forgo their wage increases.

But the cost of these plans have reached a threshold such that employees are no longer tolerating stagnation of their wages, and employers are no longer tolerating the costs of their combined employee wage and benefit packages. Insurance plan innovations designed to slow the premium increases to keep them competitive have shifted costs to employees who actually need health care. The backlash against these unanticipated costs is sure to accelerate.

The insurance industry had no choice but to turn to the government for solutions that would ensure its survival. As Congress patched the reform proposal together, it became immediately obvious that the private insurance model was not capable of covering everyone, so they gave up on the goal of universal coverage. As they continued to work on the problem of high costs, the limitations of the private insurance model left them with wish-they-would-work policy options that would have very little impact on cost containment.

With abandonment of the two primary goals for reform, Congress was left with the job of patching together policies that would keep the insurance industry in play, as if protecting the private insurers was the primary goal in the first place. To greatly expand their market, the insurers would have to accept patients who actually needed health care, ending disqualification for preexisting disorders. To prevent adverse selection, everyone would be mandated to purchase health plans.

That would provide the plans with the market that they need, but it left one more problem. To make premiums affordable, even with subsidies, health care costs would have to be controlled. The insurers insist that the government must control the costs, but that does not work in a model designed to leave the private insurers in charge of health care financing.

If no reform is enacted, the entire insurance industry goes into the death spiral of ever higher premiums. If the Senate version is enacted, the insurers would get a temporary reprieve through the government subsidies, but it would not be long before rising costs would again be unbearable for the payers. The golden age of America’s private health insurance industry is about to end, whether or not a bill passes.

The Massachusetts election has given us a brief window in which we can step back and ponder, “What on earth are we doing!?” We can do it right. We can dismiss the obsolete model of private insurance plans and enact an equitably-financed, improved Medicare that really would include all of us, and provide an effective mechanism for slowing health care spending.

Will President Obama salvage his centerpiece?

Posted by on Thursday, Jan 21, 2010

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

George Stephanopoulos’ Exclusive Interview with President Obama

ABC News
January 20, 2010

President Obama:  I would advise that we try to move quickly to coalesce around those elements of the package that people agree on. We know that we need insurance reform, that the health insurance companies are taking advantage of people. We know that we have to have some form of cost containment because if we don’t, then our budgets are going to blow up and we know that small businesses are going to need help so that they can provide health insurance to their families. Those are the core, some of the core elements of, to this bill.

Later…

President Obama:  If you ask the American people about health care, one of the things that drives them crazy is insurance companies denying people coverage because of preexisting conditions. Well, it turns out that if you don’t — if you don’t make sure that everybody has health insurance, then you can’t eliminate insurance companies — you can’t stop insurance companies from discriminating against people because of preexisting conditions. Well, if you’re going to give everybody health insurance, you’ve got to make sure it’s affordable. So it turns out that a lot of these things are interconnected.

http://blogs.abcnews.com/george/2010/01/transcript-george-stephanopoulos-exclusive-interview-with-president-obama.html

It looks like there are four choices: 1) walk away and accept the status quo, 2) use alternative political maneuvers to move the bill through Congress,  3) attempt to salvage at least a portion of the less controversial components of the current proposal, or 4) start over. Let’s look at these.

1) Walk away

Far too many individuals and businesses are no longer capable of paying the very high costs of our health care system. The existing spending controls in government and in the marketplace show no evidence of ameliorating the excessive growth of our total national health expenditures. The status quo is unacceptable. On this everyone agrees, so we cannot walk away.

2) Move the bill through Congress anyway

The strategy that has been advanced to pass the bill relatively intact would be to have the House approve the Senate version, and then make corrections in a budget reconciliation process. We can forget this approach since the bill managers’ head count in the House has come up far short of the votes needed. Also, cramming the bill through before Sen. Kirk is replaced by Scott Brown has been rejected by President Obama and other Democratic leaders. But the overriding reason why this bill will not clear Congress intact is that a majority of Americans are very displeased with it – that includes all conservatives, most liberals, and a majority of moderates. Sometimes we question the collective wisdom of Congress, but they’re not that dense.

3) Salvage a portion of the legislation

Crafting a health care financing system and integrating it with the health care delivery system creates a dysfunctional system if it is done piecemeal. That’s what we’ve been doing over the past century, and it’s obvious where that has led. As President Obama said, “it turns out that a lot of these things are interconnected.”

President Obama and some members of Congress would still like to salvage the centerpiece of this legislation – making health insurance markets work for us. They would like to do that without including the policies that offended so many in Massachusetts and throughout the nation – new taxes, and an individual mandate to purchase private insurance. If there is no mandate then there is less need for the taxes that would be required to pay for the private insurance subsidies. Of course, without a mandate, many more will be left uninsured, but that seems to be the price that many members of Congress are willing to pay simply to pass something that looks like reform.

President Obama shows that he understands the greatest difficulty with reforming the private insurance market as a stand-alone process. The insurer abuses that he wants to eliminate were there for a reason. They are designed to reduce the amount of health care that the insurers fund. Once the insurers are required to cover all risks, insurance premiums increase. With no mandate, many of the healthy will decide they cannot afford the higher premiums and will remain uninsured. The adverse selection that would result could send our entire private insurance industry into a death spiral of skyrocketing premiums.

Obviously, as we’ve been saying all along, the centerpiece based on private insurance plans is inherently a dysfunctional model that can never achieve efficiency, equity, universality, and affordability for all of us.

That said, there are some measures in this legislation that could be salvaged and enacted on an emergency basis until we finish the task of delivering a just health care system for all. As prime examples, we should move immediately to expand Community Health Centers and to reinforce our primary care infrastructure. We should also recover the overpayments to the Medicare Advantage plans that are wasted on excess administration and investor profits. There are many other beneficial measures that could be enacted without requiring that they be part of an omnibus bill.

4) Start over

The policy work has already been done. We know what we need – an improved Medicare for all national health program. President Obama and most of the Democrats in Congress know that as well.

Even the conservatives certainly understand that it would work for all of us and that, once enacted, it would be in place forever because of its popularity. Since they can’t oppose it based on its sound policies, they simply oppose it based on their ideological opposition to social solidarity. That is perhaps the saddest reality in this whole debate.

What Would FDR Do?

Posted by on Wednesday, Jan 20, 2010

I had some face time with Rahm Emmanuel two weeks ago at my friend Owen’s. (Owen’s brother-in-law is the former Chair of the Democratic National Committee.) Rahm said nothing surprising, but made his points. He had just finished David Kennedy’s 1999 book Freedom from Fear about WW II, the Depression, and, germane to this conversation, the tremendous compromises involved in forging the New Deal. Politically, he asserted, if you want to make big changes, you have to choose your battles and win the big ones. If health reform goes down, then energy, global warming, financial reform, and labor’s legislative agenda are all at risk. He stayed right on message.

I posed this to him: “Many Democratic politicians, including our Blue Dog Rep. Baron Hill, tell us in private conversations that they believe we have to get to single payer eventually. What advice would you give on how to get there?” Without a blink, he replied it’s “going to be a long haul”, and if we don’t pass this bill it’s going to be even longer. He asserted that this bill begins building the required infrastructure for any future progress.

Since then, with the loss of the Democrats’ super-majority in the Senate everything is up in the air. Which brings us back to the recurring question – Should we Kill the Bill? There has been an incredible amount written in the Progressive community about this. At one end is Helen Redmond (CounterPunch 12/23) Beware the Progressive Democrat arguing that we can’t trust Sanders, Weiner, or Conyers and that we’ve got to build our movement without any of that unreliable crew (kind of a rough “logical”conclusion”, if you ask me).

At the other end is Nate Silver of FIveThirtyEight (12/16) Health Care: The Elevator Pitch (and a number of other posts) where this bright political analyst makes the case for incrementalism. Silver also notes “I’ve gotten as many nasty comments and e-mails from Democrats on this issue [over the last two weeks] as I have in the past six months from conservatives on all issues. That emotion is a factor in this debate seems self-evident to me.”

All that emotion is evident as the blame is ladled out for Scott Brown’s Senate victory. Is the message that the country is turning against the Progressives’ urge to legislate change, or that Obama has compromised the hope for change he promised by reverting to Washington business-as-usual and disappointing his base?

The healthcare bill will be at the center of this cyclone, and it’s too soon to say what gyrations the Dems will attempt to push it through. Our response as single payer advocates should remain unchanged – we have strong, informed positions on the poor policy provisions in the bill. I think we are best to remain silent on the political strategy (tragedy?) to be pursued. I see an important distinction between being a pointed, persistent, insistent, carping, kvetching, nagging critic of this bill for policy reasons on the one hand, and joining in the political discussion about the merits of killing the bill on the other.

Let’s not be drawn into the classic Progressive Circular Firing Squad. Our message is clear. If the Democrats still manage to pass some form of health reform, they can celebrate, but WE’RE STILL FOR HEALTH REFORM, AND THIS AIN’T IT!

If no bill passes, then we have a different set of problems/opportunities. If those who predict Republican ascendancy in the ’10 elections are right, then our work is really cut out for us. Meanwhile, all those who forsook single payer for the allure of the public option are ripe to be brought back into our fold. Movement building will continue. Opportunities to form coalitions will appear. As the business community becomes even more frustrated they will open to our message.

Here are the real lessons learned as we look back to the Iowa caucuses last January, from our vantage point looking out on the chaos this January:

1. As much as we had hoped that this was a historic opportunity to make drastic, needed changes in our healthcare system, there really wasn’t the support to go all the way to single payer. We can second guess Obama and Rahm forever, but I don’t believe there ever was a chance in hell that Evan Bayh, much less Lieberman or Ben Nelson would have ever voted for single payer.

2. We should look again at a strategy of incremental reforms, a strategy that has been fruitful for many movements. That is a longer story to explore later.

3. No matter how hard we try to predict the future, we will always be surprised. Remember that even if single payer had passed in the full glory of HR 676 without amendment, we would have to defend it, improve it, and deal with its unintended consequences. This work will never end.

How can we ever hope to win? As Bill Moyers asked David Corn on his PBS show January 8, “Have people been so politically abused that the will to fight for democracy, the political will has been dissipated? “

Will it first take campaign finance reform, to break the grip of the big money? Where will that movement come from? What other options do we have?

There is no better issue to organize around than universal health care. In the environmental movement we learned the word NIMBY – Not In My Back Yard. Sometimes people distain NIMBY’s, but many a NIMBY activist has started locally before coming around to a global perspective. Healthcare is everyone’s back yard, front yard, and right inside the house. Our issue’s not going away, even if some politicians do.

We will stay in this fight for the long haul. There is no real alternative except to quit. When I get discouraged, I turn to one of the original crusading journalists and a real hero, IF Stone (no relation):

“The only kinds of fights worth fighting are those you are going to lose, because somebody has to fight them and lose and lose and lose until someday, somebody who believes as you do wins. In order for somebody to win an important, major fight 100 years hence, a lot of other people have go to be willing – for the sheer fun and joy of it – to go right ahead and fight, knowing you’re going to lose. You mustn’t feel like a martyr. You’ve got to enjoy it.”

One of the great joys of being in PNHP has been the joy of meeting and working with so many wonderful people. I’m in this for the long haul and look forward to seeing you all many more times in the years to come.

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