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The Washington Post
January 25, 2004
Editorial
Unhealthy

For an insight into the inadequacy of the president’s health care proposals
put forward in his State of the Union speech last Tuesday, look closely at a
strike by supermarket workers in Southern California.

Labor leaders acknowledge that this is a national problem, one that they cannot solve at the negotiating table, even if the supermarkets ultimately improve their offer. But does the president acknowledge it? From his speech, it was hard to tell.

Mr. Bush did state that he remains opposed to a “government-run health system.” Fine — but if he wishes to avoid that outcome, Mr. Bush needs to
think more creatively about how he is going to keep the nation’s private health care system viable. A peculiar jumble of old ideas, long discussed but never acted upon, isn’t going to do it.

http://www.washingtonpost.com/wp-dyn/articles/A45228-2004Jan24.html

Comment: There is now near unanimous agreement that the funding crisis in
health care requires “a national solution.” There is no escaping the fact that this means federal action. Decades of social experimentation and advancement of health policy science have proven that “a peculiar jumble of old ideas” cannot possibly adequately address our problems in the funding health care.

Now that we accept the fact that a federal solution would be required, we must face squarely the real question. Do we move towards equity and affordability by adopting a federal solution, or do we accept the tragic status quo by rejecting reform through adherence to the politically divisive “government-run” rhetoric?

Let’s dump the rhetoric of the ideologues and get on with reform!

The Washington Post
January 25, 2004
Editorial
Unhealthy

For an insight into the inadequacy of the president’s health care proposals
put forward in his State of the Union speech last Tuesday, look closely at a
strike by supermarket workers in Southern California.

Labor leaders acknowledge that this is a national problem, one that they cannot solve at the negotiating table, even if the supermarkets ultimately improve their offer. But does the president acknowledge it? From his speech, it was hard to tell.

Mr. Bush did state that he remains opposed to a “government-run health system.” Fine — but if he wishes to avoid that outcome, Mr. Bush needs to
think more creatively about how he is going to keep the nation’s private health care system viable. A peculiar jumble of old ideas, long discussed but never acted upon, isn’t going to do it.

http://www.washingtonpost.com/wp-dyn/articles/A45228-2004Jan24.html

Comment: There is now near unanimous agreement that the funding crisis in
health care requires “a national solution.” There is no escaping the fact that this means federal action. Decades of social experimentation and advancement of health policy science have proven that “a peculiar jumble of old ideas” cannot possibly adequately address our problems in the funding health care.

Now that we accept the fact that a federal solution would be required, we must face squarely the real question. Do we move towards equity and affordability by adopting a federal solution, or do we accept the tragic status quo by rejecting reform through adherence to the politically divisive “government-run” rhetoric?

Let’s dump the rhetoric of the ideologues and get on with reform!

H.R.1
Medicare Prescription Drug, Improvement, and Modernization Act of 2003

Title X – Medicaid and Miscellaneous Provisions

Subtitle B – Miscellaneous Provisions

Sec. 1014 – Health Care that Works for All Americans: Citizens Health Care Working Group.

(b) Purposes – The purposes of this section are –

(1) to provide for a nationwide public debate about improving the health care system to provide every American with the ability to obtain quality, affordable health care coverage; and

(2) to provide for a vote by Congress on the recommendations that result from the debate.

(c) Establishment – The Secretary, acting through the Agency for Healthcare Research and Quality, shall establish an entity to be known as the Citizens’ Health Care Working Group (referred to in this section as the `Working Group’).

(d) Membership –

(1) Number and appointment – The Working Group shall be composed of 15 members. One member shall be the Secretary. The Comptroller General of the United States shall appoint 14 members.

f) Designation of the Chairperson – Not later than 15 days after the date on which all members of the Working Group have been appointed under subsection

(d)(1), the Comptroller General shall designate the chairperson of the Working Group.

http://thomas.loc.gov/ (In the “Bill Number” box insert “H.R.1″ and click Search”)

General Accounting Office
GAO Health Care Forum
January 13, 2004
Slide presentation
David M. Walker, Comptroller General of the United States

Slide 49:

The presence of insurance blunts sensitivity to the price of services and results in the tendency to overconsume.

Slide 51:

Tax incentives can serve to mask the cost of health care and impair achievement of desired cost-containment outcomes.

Administrative burdens reduce market efficiency and value to consumers.

Slide 52:

Reforms, although comprehensive, may need to be incremental in order to minimize disruptions and facilitate political consensus.

http://www.gao.gov/index.html (Under “From the Comptroller General” click “Slide presentation” for January 13, 2004. Then click “Health Care System Crisis: Significant Challenges Point to Need for Fundamental Reform.”)

Comment: An important provision in the Medicare Prescription Drug Bill is the requirement of “… a nationwide public debate about improving the health care system to provide every American with the ability to obtain quality, affordable health care coverage.” Further, the process provides for “… a vote by Congress on the recommendations that result from the debate.”

It is crucial that we closely observe this process that will result in a vote in Congress on systemic health care changes theoretically designed to bring quality care to every American.

The current Comptroller General, David Walker, will appoint 14 of the 15 members and the Chairperson of the Working Group. Since David Walker will be able to control the ideological complexion of the Working Group, we should try to understand his views.

Based on his health care forum presentation this month, it appears that he supports incremental reforms in the marketplace that place a greater emphasis on increasing price sensitivity for patients while decreasing the financial insulation provided by insurance.

Bill Thomas, as Co-Chair of the Bipartisan Medicare Commission helped to prove that it is nearly impossible to reach political consensus on important social issues through a bipartisan process. In drafting the Medicare Prescription Drug bill, Thomas and his colleagues made certain that the recommendations for comprehensive reform on which Congress will eventually vote will not be bipartisan, but will be produced by the independent Comptroller General (who just happens to share some of Thomas’ ideology on health care reform).

As structured, we have reason to anticipate that the Working Group will provide us with a unanimous recommendation for expanding health savings accounts, eliminating deductibility of employer-sponsored plans, Limiting tax deductibility to individually-owned catastrophic plans, shifting Medicare and Medicaid to private, marketplace plans with a commensurate reduction in the level of public funding, etc., etc.

It is unfortunate that this bill authorizes spending $6 million for this potentially phony partisan study when we really do need a consensus on comprehensive health care reform. Maybe we should approach David Walker in advance to see if he might consider allowing a true cross section of Americans to nominate the members of the committee. He is a man of integrity, even if biased, and he might consider a more democratic process.

(If you download the side show, be sure also to look at the other slides, especially slide 8. It demonstrates dramatically why some say that Social Security and Medicare spending will have to be dramatically reduced if we are to protect current tax cuts.)

From the office of Senator Edward Kennedy
For Immediate Release
January 22, 2004
Senator Edward M. Kennedy Introduces the Health Security and
Affordability Act

A new effort is… needed to end the crisis of the uninsured and provide comprehensive health insurance for all Americans. We can make health insurance affordable for individuals, businesses, and government.

I intend to introduce new legislation to do that-the Health Security and affordability Act. It will rely on the employer-based system to do that, because the most realistic way to reach this goal is through a combination of job-based coverage for workers and dependents where possible, and insurance through public and private programs where needed.

The cornerstone of universal health care should be a requirement that employers share in the responsibility to provide quality health insurance for employees and their dependents. Eighty percent of the uninsured are workers or family members of workers. Employer-based health insurance provides coverage for 170 million Americans today. We should improve it, not scrap it.

For decades, we have required employers to contribute to Social Security and
to Medicare. We require them to pay a minimum wage, and contribute to unemployment insurance. Now it is time to say that they also have an obligation to contribute to the cost of health insurance for their employees.

A solid majority of businesses already provide health insurance to their workers, and the rest should fulfill that obligation, too. The Health Security and Affordability Act will require all large businesses to provide coverage as good as the coverage now provided to every member of Congress and other federal employees. Small businesses will be asked to contribute to coverage based on their ability to pay.

In asking businesses to fulfill this obligation, government has an obligation too-to assist them in making health care affordable. Use of information technology, paying for results, improving quality, and a new emphasis on prevention will reduce health care costs for society as a whole. The bill I propose will include an additional guarantee. No employers will have to spend more than 12% of their payroll for health care for their employees. If health costs rise faster than a fair average of other costs, the government will cover the difference. We will protect America’s ability to compete in the world, and we will keep wages and profits from being consumed by health care costs.

For individuals without access to employment-based coverage, we will establish new options based on the Federal Employees Health Benefit Program-the program that provides good health insurance for members of Congress and Federal workers. The same options now available to members of Congress should be available to those not qualifying for coverage from other sources. Businesses can participate as well, so that they can make these choices available to their employees if they feel they offer better value.

Premiums for the plan will be based on ability to pay, including cost-sharing for low income families. It will also help low-income workers covered by their employer’s plan.

http://kennedy.senate.gov/

Comment: This is an historical moment. We are truly at a major fork in the road to comprehensive health care reform. The nation now agrees that reform is essential. We agree that health care must be affordable and accessible for everyone. Virtually all fully-informed observers of the health care scene recognize that the problems require a national solution. They agree that coverage must be universal. And most agree that now is the time to seriously address this problem.

The most important unresolved issue is whether universal coverage alone is an acceptable goal, or we need to include other goals such as equity and efficiency. It is a crucial decision. Reform has become an imperative. The model selected will not be a temporary measure to make do until we can enact something better. Although continuing refinements would be inevitable, the fundamental structure will be with of for decades, if not longer.

Sen. Kennedy’s proposal is a dramatic improvement over our existing system.
But, whether employer-sponsored plans or individual plans similar to the
federal employee options (FEHBP-type coverage), Sen. Kennedy’s proposal
will leave in place the current private health plans.

Private plan choices no longer include the option of comprehensive indemnity
coverage, but they are limited to variations of HMO or PPO managed care
plans plus self-insured programs. All plans today manipulate premiums, benefits (including restricted provider lists) and cost sharing to match the particular targeted patient populations. To ensure an equitable system of coverage for all, the federal government would have to mandate a comprehensive, accessible benefit package, set reasonable, modest limits on cost sharing, and ensure that premiums remain affordable. The Medicare + Choice options demonstrate that private plans cannot comply with such mandates without being granted extra taxpayer funds (as the Bush administration just did with the 10.6% increase for Medicare Advantage plans). Why should we lock into the system forever administratively-wasteful, superfluous, private plan bureaucracies? All studies confirm that a single, publicly-owned insurer would provide the administrative services much more efficiently. And we wouldn’t have private plans manipulating premiums, benefits and cost sharing to their own benefit.

Now that we have come to that fork in the road, let’s not merely follow Yogi
Berra’s advice and “take it,” but let’s intensify our efforts to be certain that policymakers and the public choose a path only as a fully-reasoned decision. One path offers universal coverage, and the other path adds equity, comprehensiveness, efficiency, affordability, a better framework for an integrated information technology system for error reduction and improved
resource allocation, and innumerable other important goals that we can achieve.

The administrative challenges of establishing our own public insurance program would not be much greater than those we faced when we established the Medicare and Medicaid programs. In contrast, we would face greater administrative issues for a complex program of large employer-mandated plans, separate small employer programs, multiple FEHBP-type individual plans, and an administrative nightmare of trying to match various employer and individual funding sources with the fragmented system of intermediary plans. It’s not the task of establishing a system of public funding, but it’s the special interests that continue to block reform.

As Sen. Kennedy says, “… let’s get it done-if not this year, then next year with a new Congress and a new Administration elected with a mandate to get it done.” He’s right. But let’s be sure that everyone understands what we are doing. We will have to live with it for a very long time.

From the office of Senator Edward Kennedy
For Immediate Release
January 22, 2004
Senator Edward M. Kennedy Introduces the Health Security and
Affordability Act

A new effort is… needed to end the crisis of the uninsured and provide comprehensive health insurance for all Americans. We can make health insurance affordable for individuals, businesses, and government.

I intend to introduce new legislation to do that-the Health Security and affordability Act. It will rely on the employer-based system to do that, because the most realistic way to reach this goal is through a combination of job-based coverage for workers and dependents where possible, and insurance through public and private programs where needed.

The cornerstone of universal health care should be a requirement that employers share in the responsibility to provide quality health insurance for employees and their dependents. Eighty percent of the uninsured are workers or family members of workers. Employer-based health insurance provides coverage for 170 million Americans today. We should improve it, not scrap it.

For decades, we have required employers to contribute to Social Security and
to Medicare. We require them to pay a minimum wage, and contribute to unemployment insurance. Now it is time to say that they also have an obligation to contribute to the cost of health insurance for their employees.

A solid majority of businesses already provide health insurance to their workers, and the rest should fulfill that obligation, too. The Health Security and Affordability Act will require all large businesses to provide coverage as good as the coverage now provided to every member of Congress and other federal employees. Small businesses will be asked to contribute to coverage based on their ability to pay.

In asking businesses to fulfill this obligation, government has an obligation too-to assist them in making health care affordable. Use of information technology, paying for results, improving quality, and a new emphasis on prevention will reduce health care costs for society as a whole. The bill I propose will include an additional guarantee. No employers will have to spend more than 12% of their payroll for health care for their employees. If health costs rise faster than a fair average of other costs, the government will cover the difference. We will protect America’s ability to compete in the world, and we will keep wages and profits from being consumed by health care costs.

For individuals without access to employment-based coverage, we will establish new options based on the Federal Employees Health Benefit Program-the program that provides good health insurance for members of Congress and Federal workers. The same options now available to members of Congress should be available to those not qualifying for coverage from other sources. Businesses can participate as well, so that they can make these choices available to their employees if they feel they offer better value.

Premiums for the plan will be based on ability to pay, including cost-sharing for low income families. It will also help low-income workers covered by their employer’s plan.

http://kennedy.senate.gov/

Comment: This is an historical moment. We are truly at a major fork in the road to comprehensive health care reform. The nation now agrees that reform is essential. We agree that health care must be affordable and accessible for everyone. Virtually all fully-informed observers of the health care scene recognize that the problems require a national solution. They agree that coverage must be universal. And most agree that now is the time to seriously address this problem.

The most important unresolved issue is whether universal coverage alone is an acceptable goal, or we need to include other goals such as equity and efficiency. It is a crucial decision. Reform has become an imperative. The model selected will not be a temporary measure to make do until we can enact something better. Although continuing refinements would be inevitable, the fundamental structure will be with of for decades, if not longer.

Sen. Kennedy’s proposal is a dramatic improvement over our existing system.
But, whether employer-sponsored plans or individual plans similar to the
federal employee options (FEHBP-type coverage), Sen. Kennedy’s proposal
will leave in place the current private health plans.

Private plan choices no longer include the option of comprehensive indemnity
coverage, but they are limited to variations of HMO or PPO managed care
plans plus self-insured programs. All plans today manipulate premiums, benefits (including restricted provider lists) and cost sharing to match the particular targeted patient populations. To ensure an equitable system of coverage for all, the federal government would have to mandate a comprehensive, accessible benefit package, set reasonable, modest limits on cost sharing, and ensure that premiums remain affordable. The Medicare + Choice options demonstrate that private plans cannot comply with such mandates without being granted extra taxpayer funds (as the Bush administration just did with the 10.6% increase for Medicare Advantage plans). Why should we lock into the system forever administratively-wasteful, superfluous, private plan bureaucracies? All studies confirm that a single, publicly-owned insurer would provide the administrative services much more efficiently. And we wouldn’t have private plans manipulating premiums, benefits and cost sharing to their own benefit.

Now that we have come to that fork in the road, let’s not merely follow Yogi
Berra’s advice and “take it,” but let’s intensify our efforts to be certain that policymakers and the public choose a path only as a fully-reasoned decision. One path offers universal coverage, and the other path adds equity, comprehensiveness, efficiency, affordability, a better framework for an integrated information technology system for error reduction and improved
resource allocation, and innumerable other important goals that we can achieve.

The administrative challenges of establishing our own public insurance program would not be much greater than those we faced when we established the Medicare and Medicaid programs. In contrast, we would face greater administrative issues for a complex program of large employer-mandated plans, separate small employer programs, multiple FEHBP-type individual plans, and an administrative nightmare of trying to match various employer and individual funding sources with the fragmented system of intermediary plans. It’s not the task of establishing a system of public funding, but it’s the special interests that continue to block reform.

As Sen. Kennedy says, “… let’s get it done-if not this year, then next year with a new Congress and a new Administration elected with a mandate to get it done.” He’s right. But let’s be sure that everyone understands what we are doing. We will have to live with it for a very long time.

The White House
January 20, 2004
State of the Union Address
President George W. Bush

On the critical issue of health care, our goal is to ensure that Americans can choose and afford private health care coverage that best fits their individual needs. To make insurance more affordable, Congress must act to address rapidly rising health care costs. Small businesses should be able to band together and negotiate for lower insurance rates, so they can cover more workers with health insurance. I urge you to pass association health plans. (Applause.) I ask you to give lower-income Americans a refundable tax credit that would allow millions to buy their own basic health insurance. (Applause.)

By computerizing health records, we can avoid dangerous medical mistakes, reduce costs, and improve care. To protect the doctor-patient relationship, and keep good doctors doing good work, we must eliminate wasteful and frivolous medical lawsuits. (Applause.) And tonight I propose that individuals who buy catastrophic health care coverage, as part of our new health savings accounts, be allowed to deduct 100 percent of the premiums from their taxes. (Applause.)

A government-run health care system is the wrong prescription.(Applause.) By keeping costs under control, expanding access, and helping more Americans afford coverage, we will preserve the system of private medicine that makes America’s health care the best in the world. (Applause.)

http://www.whitehouse.gov/news/releases/2004/01/20040120-7.html

Comment: Other than his comments on the recently enacted Medicare bill, the above is the entire section of his speech that covered his health care proposals.

President Bush’s proposals:
* “…ensure that Americans can choose and afford private health care coverage that best fits their individual needs…”

(Affordable coverage means plans stripped of benefits with excessive cost sharing)

* “…Congress must act to address rapidly rising health care costs.”

(Rhetoric without a substantive proposal)

* “Small businesses should be able to band together… (in) association health plans.”

(Association health plans enable the marketing of inadequate plans that escape adequate state insurance regulatory oversight)

* “… give lower-income Americans a refundable tax credit that would allow millions to buy their own basic health insurance.”

(Privatizing Medicaid while increasing the cost sharing of lower-income individuals!)

* “… computerizing health records…”

(An essential inevitability, made less possible by the perpetuation of our current fragmented method of funding health care)

* “… eliminate wasteful and frivolous medical lawsuits.”

(Malpractice reform is important, but “frivolous” lawsuits are hardly even a negligible portion of the health care cost problem)

* “… individuals who buy catastrophic health care coverage, as part of our new health savings accounts, be allowed to deduct 100 percent of the premiums from their taxes.”

(Regressive tax policy that disproportionately benefits higher-income individuals)

A government-run health care system is the wrong prescription. (Applause.)

By keeping costs under control, expanding access, and helping more Americans afford coverage, we will preserve the system of private medicine that makes America’s health care the best in the world. (Applause.)”

(Innumerable studies have confirmed that we rank first only in the cost of our health care system but that our system fails miserably in health care outcomes, especially considering our resources. America’s health care is clearly not the best in the world. Health policy experts across the political spectrum agree that we need a federal solution to our problems in funding health care. Our president, in condemning government involvement, is not demonstrating the political leadership that we desperately need.

Nor are the politicians who applauded these comments. Shouldn’t we be considering a regime change

The White House
January 20, 2004
State of the Union Address
President George W. Bush

On the critical issue of health care, our goal is to ensure that Americans can choose and afford private health care coverage that best fits their individual needs. To make insurance more affordable, Congress must act to address rapidly rising health care costs. Small businesses should be able to band together and negotiate for lower insurance rates, so they can cover more workers with health insurance. I urge you to pass association health plans. (Applause.) I ask you to give lower-income Americans a refundable tax credit that would allow millions to buy their own basic health insurance. (Applause.)

By computerizing health records, we can avoid dangerous medical mistakes, reduce costs, and improve care. To protect the doctor-patient relationship, and keep good doctors doing good work, we must eliminate wasteful and frivolous medical lawsuits. (Applause.) And tonight I propose that individuals who buy catastrophic health care coverage, as part of our new health savings accounts, be allowed to deduct 100 percent of the premiums from their taxes. (Applause.)

A government-run health care system is the wrong prescription.(Applause.) By keeping costs under control, expanding access, and helping more Americans afford coverage, we will preserve the system of private medicine that makes America’s health care the best in the world. (Applause.)

http://www.whitehouse.gov/news/releases/2004/01/20040120-7.html

Comment: Other than his comments on the recently enacted Medicare bill, the above is the entire section of his speech that covered his health care proposals.

President Bush’s proposals:
* “…ensure that Americans can choose and afford private health care coverage that best fits their individual needs…”

(Affordable coverage means plans stripped of benefits with excessive cost sharing)

* “…Congress must act to address rapidly rising health care costs.”

(Rhetoric without a substantive proposal)

* “Small businesses should be able to band together… (in) association health plans.”

(Association health plans enable the marketing of inadequate plans that escape adequate state insurance regulatory oversight)

* “… give lower-income Americans a refundable tax credit that would allow millions to buy their own basic health insurance.”

(Privatizing Medicaid while increasing the cost sharing of lower-income individuals!)

* “… computerizing health records…”

(An essential inevitability, made less possible by the perpetuation of our current fragmented method of funding health care)

* “… eliminate wasteful and frivolous medical lawsuits.”

(Malpractice reform is important, but “frivolous” lawsuits are hardly even a negligible portion of the health care cost problem)

* “… individuals who buy catastrophic health care coverage, as part of our new health savings accounts, be allowed to deduct 100 percent of the premiums from their taxes.”

(Regressive tax policy that disproportionately benefits higher-income individuals)

A government-run health care system is the wrong prescription. (Applause.)

By keeping costs under control, expanding access, and helping more Americans afford coverage, we will preserve the system of private medicine that makes America’s health care the best in the world. (Applause.)”

(Innumerable studies have confirmed that we rank first only in the cost of our health care system but that our system fails miserably in health care outcomes, especially considering our resources. America’s health care is clearly not the best in the world. Health policy experts across the political spectrum agree that we need a federal solution to our problems in funding health care. Our president, in condemning government involvement, is not demonstrating the political leadership that we desperately need.

Nor are the politicians who applauded these comments. Shouldn’t we be considering a regime change

The New York Times
January 20, 2004
Broader Health Coverage May Depend on Less
By Milt Freudenheim

With the number of uninsured Americans rising to new heights, some policy makers and influential health care experts are saying that the best way to give health coverage to more people is to give some people less.

Experiments in several states are establishing stripped-down packages of basic benefits intended to be affordable for employers and uninsured workers, including young, middle-class people who have dropped out of the health insurance pool. Some officials say that government health benefits could be extended to more people, too, if the benefit package were narrower.

Some experts warn that cutting back mandated benefits will neither yield enormous savings nor slow the increase in costs associated with medical advances.

“There is very little in health care that you can trim off,” said John Sheils, a health policy expert at the Lewin Group, a consulting firm based in Falls Church, Va., that has advised health care advocacy groups in several states. “If you develop a new procedure that does some good,” he added, “ultimately all the insurers are going to have to recognize it and pay for it.”

Comment: John Sheils is one of the nation’s most noted authorities in the analyses of health care reform proposals. His microsimulation models have demonstrated that little savings can be achieved by reducing the level of services covered, if the resulting product continues to protect individuals from the excessive financial burdens of health care.

Many proposals today call for ensuring “basic” coverage for everyone, as if that were a lower-cost, isolated segment of health care that people “really need.” But when attempts are made to define what should or should not be covered, the process falls apart. Theoretically, beneficial services should be covered and ineffective services should not. But, in fact, much of health care cannot be readily assigned to one of these two categories.

Thus, the concept of “basic” services really should mean that patients must have unimpeded access to physicians and other providers and to the institutions and services that they control. The ultimate decision for appropriate services should be made jointly by the patient and his or her health care professional. This process is not amenable to meat cleaver economics.

If eliminating non-basic services is not an effective option, then how can we control costs? Placing the entire health care system under a global budget will determine the capacity of the system. The budget allocation process will determine capacities for segments of the health care system.

That process may well limit the number of total knee replacements in nonagenarians. But isn’t that process better than depriving many of us of beneficial services merely because they fail to meet an arbitrary threshold of just what a basic service is?

The New York Times
January 20, 2004
Broader Health Coverage May Depend on Less
By Milt Freudenheim

With the number of uninsured Americans rising to new heights, some policy makers and influential health care experts are saying that the best way to give health coverage to more people is to give some people less.

Experiments in several states are establishing stripped-down packages of basic benefits intended to be affordable for employers and uninsured workers, including young, middle-class people who have dropped out of the health insurance pool. Some officials say that government health Benefits could be extended to more people, too, if the benefit package were narrower.

Some experts warn that cutting back mandated benefits will neither yield enormous savings nor slow the increase in costs associated with medical advances.

“There is very little in health care that you can trim off,” said John Sheils, a health policy expert at the Lewin Group, a consulting firm based in Falls Church, Va., that has advised health care advocacy groups in several states. “If you develop a new procedure that does some good,” he added, “ultimately all the insurers are going to have to recognize it and pay for it.”

Comment: John Sheils is one of the nation’s most noted authorities in the analyses of health care reform proposals. His microsimulation models have demonstrated that little savings can be achieved by reducing the level Of services covered, if the resulting product continues to protect individuals from the excessive financial burdens of health care.

Many proposals today call for ensuring “basic” coverage for everyone, as if that were a lower-cost, isolated segment of health care that people “really need.” But when attempts are made to define what should or should not be covered, the process falls apart. Theoretically, beneficial services Should be covered and ineffective services should not. But, in fact, much of health care cannot be readily assigned to one of these two categories.

Thus, the concept of “basic” services really should mean that patients must have unimpeded access to physicians and other providers and to the institutions and services that they control. The ultimate decision for appropriate services should be made jointly by the patient and his or Her health care professional. This process is not amenable to meat cleaver economics.

If eliminating non-basic services is not an effective option, then how can we control costs? Placing the entire health care system under a global budget will determine the capacity of the system. The budget allocation process will determine capacities for segments of the health care system. That process may well limit the number of total knee replacements in nonagenarians. But isn’t that process better than depriving many of us of beneficial services merely because they fail to meet an arbitrary threshold of just what a basic service is?