The superior legislator perseveres

Did Senator Edward M. Kennedy know of the saying from the ancient Chinese text the I Ching: "The superior man perseveres"?

We don't know. We do know, however, as his biographer Adam Clymer explained last week, that for over 40 years perseverance was a key weapon in the arsenal he deployed in his fight to achieve the goal of universal health care coverage in the U.S. "Perseverance is critical in a body [the Senate] configured for delay and inaction," Clymer says.

What are the results of this perseverance? The Massachusetts Senator didn't live to see enactment of comprehensive health care reform, what he called the "cause of my life" , but in the past 25 years alone he authored or shepherded several pieces of legislation that have expanded health care access or security. Kaiser Health News has compiled a list of these legislative achievements--note these highlights:

• COBRA continuation coverage, introduced by the Senator and signed by President Reagan in 1986, guarantees 18 months of employer-provided insurance to workers who lose their jobs;
• Health Insurance Portability and Accountability Act of 1996, co-sponsored by Kennedy and former Republican Senator from Kansas Nancy Kassebaum, provides, among other things, increased protection from preexisting condition exclusions for workers changing jobs; and
• The State Children's Health Insurance Program (SCHIP), which provides health insurance for millions of otherwise uninsured children, championed by Kennedy in 1997 along with Senator Orrin Hatch (R-Utah).

Check out the whole list here. It's an impressive one.

Happy With Medicare, Don’t Let Government Take It Over

"I'm happy with Medicare. Don't let the government take it over."

In one form or another, we all have heard this sentiment expressed over and over, and most of us dismiss it as nothing more than misinformation and the irrational fears of those who don’t want any changes made in their own health care.

But there may be something else going on, which is the almost absolute disconnect between anything that works well (Medicare, Social Security) and anything associated with the government (tax system in general, Katrina, failing public schools, etc., etc.).

This disconnect began in earnest when President Ronald Reagan, a man many Americans trusted implicitly, said at his first Inaugural Address:

“Government is not the solution to our problem; government is the problem.”

This sound bite remains as a touchstone for anti-government attacks and has fueled more than a generation of those who fear government policy no matter what. No matter that Mr. Reagan signed the federal law providing COBRA continuation of coverage benefits; no matter that Mr. Reagan endorsed and signed into law the provisions that cut Social Security benefits by raising the entitlement age. No matter that in practice, even those who decry government involvement in the life of the people are happy to benefit from government largesse, from farm, oil, and gas subsidies through the federal employees health plan provided to all in Congress and Medicare, which now provides “socialized medicine” to more than 44 million citizens, whether they want government involved in their lives or not.

Given this abiding faith in existing government programs and nagging fear of any new ones, the path for legislators seeking to reform our health system seems clear—pass legislation, provide coverage for most of those now uninsured, wait five years, and prepare yourself for the critics who don’t want the government to take away their Exchange-run Community Health Insurance plan.

Don’t tread on my FSA, advocacy group warns

As I mentioned in a previous post, the House Ways and Means Committee has approved an amendment to America’s Affordable Health Choices Act (H.R. 3200) that would prohibit employees from using health FSA dollars to pay for over-the-counter medications. There also are indications that the Senate Finance Committee is considering various caps on the amount of money that individuals can contribute to their FSAs each year.

Not so fast, say FSA fans!

Save our plans. The Employers Council on Flexible Compensation (ECFC), a non-profit organization dedicated to the maintenance and expansion of private employee benefit programs on a tax-advantaged basis, has formed a national grassroots advocacy organization called Save Flexible Spending Plans “to protect against the elimination of flexible spending accounts as an option to help fund a small portion of the costs for health care reform efforts.”

“It would be disastrous if the millions of Americans who rely on flexible spending accounts to manage their health care costs become the unintended victims of health care reform,” said Jody Dietel, spokesperson for Save Flexible Spending Plans and Compliance Officer at WageWorks, a benefits company based in San Mateo, California. “An elimination or cap on flexible spending accounts will force plan participants to pay higher taxes and incur higher health care costs at a time when many can least afford it. Sadly, a change to the structure of flexible spending accounts will disproportionately affect those who need the program the most – individuals and families battling chronic conditions that require ongoing care and medical supplies.”

Are these FAQs facts? The group’s website contains several interesting sections, including an action center with links to write or call members of Congress, a calculator to determine what the elimination of FSAs would mean for your income, and some FAQs.

One of the FAQs is as follows:

"Doesn’t the 'use it or lose it' requirement of FSAs promote wasteful health care spending and a rush to spend all remaining FSA dollars by year’s end?"

That’s the issue I had mentioned in my previous post about FSAs. That folks with a balance in their FSAs just before the period ends for using those funds tend to run out and buy items they might not need lest they lose the remaining amounts. The group’s answer is as follows:

“No. FSAs allow consumers to effectively plan and fund a personal health budget for an entire year. Generally speaking, a consumer will not put money into an FSA unless they have a high degree of confidence they will actually need it. It has also been shown that FSA spending peaks in February through June, with 65 percent of FSA spending occurring by July 1st.”

It’s hard to know whether this answer is accurate because the group doesn’t cite any survey, study or report upon which it is based.

At any rate, I’m finding it interesting to watch the advocacy efforts of this group (and other expressions of individuals’ First Amendment rights) in the ongoing reform discussions. It’s been quite a summer, hasn’t it?

Back to our regularly scheduled programming…

The silly season is almost over. As usually happens this time of year, the weather starts to cool off a bit and we Cub fans start to think about throwing in the towel on another lost season. The kids start heading back to school (my niece and nephew start today). But this fall, there'll be more going on than just football and falling leaves. It’ll soon be health reform season.

Now that their summer recess is waning, lawmakers will soon get back to business. Summertime goings on, like yelling and shrieking at town hall meetings about “death panels,” will be a thing of the past. (I suspect that most town hall participants were actually calm and thoughtful and only the extremes got the media coverage.) Sure, lawmakers will still be buttonholed by lobbyists but the business of making our nation’s laws should return to “normal” once the lawmakers get back to Washington. Maybe there can be a calm, rational debate about what's needed and how it can be done.

Will the events of the August recess have changed anything? I don’t think so. Once you get past the political gamesmanship, most groups that need to be are still on board with health reform, to some extent or other. Personally, I think it’s less a question of whether there’ll be health reform this fall—some sort of health reform seems pretty certain--but more a question of what form it’ll take and exactly when it’ll be finalized.

Note, with the news this morning about the death of Senator Ted Kennedy (D-MA) yesterday, health reform passage has gotten harder in the short-term, as a practical matter, because his seat will be open until a special election is held. Under Massachusetts law, a special election must occur 145 to 160 days after the seat became vacant. However, because he was a long-time champion of health reform, in the longer term, Kennedy's death may galvanize support to pass health reform legislation in his honor.

So, what to look for? The whole subject of health care reform is fascinating but some parts are more interesting than others. Key issues include:

--Will the final version include a public option? If not, how does this impact other provisions? For instance, would Congress impose an individual or employer mandate without offering a public option?

--Will the final bill be comprehensive health reform or take a more bare-bones, approach, containing such provisions as eliminating preexisting condition clauses and guaranteeing insurance coverage renewal?

--How will health reform be paid for? Taxing the rich, taxing health benefits, cutting Medicare, or something else?

--How will health care reform get accomplished? Will the Democrats do it alone or will any Republicans be on board? Will Democrats use the budget reconciliation process or more traditional methods?

Whatever your views on health reform, it’s time to fasten your seat belts. We should be in for a wild health reform ride. The silly season of summer is almost over and the health reform season is about to begin.

What's $1.6 Trillion?

Many Americans have been extremely agitated at the mere mention that health reform proposals as currently structured, may cost the U.S. trillions of dollars and sink us further into debt. The Congressional Budget Office has estimated that the Senate Finance Committee proposal would cost $1.6 trillion over ten years, and that proposal doesn’t even include the much maligned public option. But the “agitators” ignore the fact that the price tags mentioned are spread over ten years and that the cost of doing nothing or indefinitely delaying reform, ultimately will be much higher..

Compare this estimate with the Congressional Research Service’s May 2009 report that, including requested funds for fiscal year 2010 (beginning October 1, 2009), funding for the wars in Iraq and Afghanistan and other “global war on terror” initiatives since Sept. 11, 2001, would total more than $1 trillion. For fiscal year 2009 alone, Congress has allocated $941 billion for the “global war on terror;” and less than 1% of that allocation is targeted for veterans’ care.

Urban Institute analysts Linda Blumberg and John Holahan, in their study “Beyond the $1.6 Trillion Sticker Shock,” place the $1.6 trillion estimate in context by showing that the costs of health reform are less than 1 percent of the projected $187 trillion Gross Domestic Product, or GDP, as well as a small fraction of expected health care spending for that 10-year period.

What if we don’t enact reform this year? Then we can expect total health care expenditures, public and private, will total $33.0 trillion, over the ten years 2010-2019. “There would be considerable loss of employer coverage, particularly among the middle class, and a substantial increase in the number of uninsured, from an estimated 49 million in 2009 to over 60 million in 2019,” Ms. Blumberg and Mr. Holahan predict.

“The number of nonelderly people enrolled in Medicaid would increase substantially, from 44 million in 2009 to well over 50 million by 2019, increasing state and federal government costs appreciably,” they continued. “Because of the greater number of uninsured, the amount of uncompensated care that hospitals and clinics would provide would also increase dramatically, putting further pressure on government budgets. We estimate that Medicaid spending would increase over the 10 years by about $800 billion without reform and that the costs of uncompensated care would rise by about $250 billion.”

Furthermore, without health reform, employer costs would also rise substantially, as would costs from higher premiums and out-of-pocket costs to individuals and families, Ms. Blumberg and Mr. Holahan warned. As employer contributions to premiums rise, individuals and families would receive lower wages.

Since premiums for employer-provided health insurance benefits are tax exempt, if premiums for those benefits make up a higher share of total compensation, federal tax revenue would drop. “Thus, individuals would be faced with lower wages, higher out-of-pocket costs for premiums and cost sharing, new taxes to support higher Medicaid enrollment and uncompensated care, and a need to replace tax revenue lost due to growing employer contributions to health insurance.” And, many individuals and families would be uninsured.

The National Coalition on Health Care (NCHC), an alliance of large and small businesses, large labor, consumer, religious and primary care provider groups, and the largest health and pension funds, working to improve America’s health care, provides further statistical fodder.

The $1.6 trillion health reform cost over ten years seems a veritable drop in the bucket when we consider that national health spending is expected to reach $2.5 trillion in 2009, accounting for 17.6% of GDP, and in less than ten years, by 2018, is expected to reach $4.4 trillion—more than double 2007 spending.

Among other consequences, rising health care costs correlate to lower rates of insurance coverage, bankrupt families (62% of bankruptcies in 2007, even those with health insurance, 80%); lead families to lose their homes (1.5 million families annually).

Over the last decade, employer-sponsored health insurance premiums, and employees’ share of those premiums, have increased 119%. This increase has made it much more difficult for businesses to continue to provide coverage to their employees and for workers to afford the coverage. Total health insurance costs for employers could reach nearly $850 billion by 2019. Individual and family spending will jump considerably from $326 billion in 2009 to $550 billion in 2019.

“Without health care reform, small businesses will pay nearly $2.4 trillion dollars over the next ten years in health care costs for their workers, 178,000 small business jobs will be lost by 2018 as a result of health care costs, $834 billion in small business wages will be lost due to high health care costs over the next ten years, small businesses will lose $52.1 billion in profits to high health care costs and 1.6 million small business workers will suffer “job lock“— roughly one in 16 people currently insured by their employers,” the NCHC warns.

So, all things considered, what’s $1.6 trillion….

Avoiding the health reform "Byrdbath"

Sheesh. President Obama is having enough trouble at the moment getting one health care reform bill passed. Why would some Obama strategists suggest, as was reported last week, that the reform plan be divvied up into two bills?

First, some background. As hope for a bipartisan bill fades, some Democrats are increasingly open to using the special legislative process known as "reconciliation." If you'll remember from last week's quiz, if a budget-related bill moves through Congress using the reconciliation process, then it can't be filibustered in the Senate. This means it needs only a simple majority vote to pass.

It's not as simple as it sounds. (C'mon. This is the government we're talking about.) To use reconciliation, Democrats must follow rules contained in the Congressional Budget Act of 1974. The key points are summarized in a terrific primer prepared by the Center on Budget and Policy Priorities:

• A "reconciliation directive" must be included in the budget resolution Congress uses as its fiscal roadmap for a given year (under this year's resolution, which was approved in the spring, reconciliation can be used to pass health care reform if no agreement is reached by October 15).


• All bill provisions must be budget-related. This means that any Senator may invoke the "Byrd rule" (named for West Virginia Senator Robert Byrd) and ask the Senate parliamentarian to strip a non-budget related provision from the bill (or, in Senate lingo, to give it a "Byrdbath"). If that happens, then at least 60 Senators must agree to add the provision back to the bill. (While Democrats nominally have a 60-vote majority, the ill health of Senator Byrd and Senator Kennedy (among other things) make actually getting 60 votes problematic.)

Many provisions in a comprehensive reform bill are vulnerable to the Byrdbath maneuver. To take one example, what does a ban on insurance pre-existing conditions have to do with the federal budget? The danger is that if too many of these provisions get stripped from the bill, comprehensive reform is gone.

So, the proposed two-bill strategy is one way to avoid the threat of the Byrdbath. One bill, which follows the regular legislative rules, contains the non-budget related aspects of the package. (The theory is that these provisions are less controversial and can survive a filibuster threat.)

A second bill, which uses the reconciliation process, contains budget-related provisions (tax increases, spending cuts, etc..). Where would the public option fall? In the reconciliation bill, at least according to some Democratic policy experts.

Will it work? I don't know, but if you thought a bipartisanship approach was tricky....

Why You Don’t Want The Health Coverage You Have

“If you like your private health insurance plan, you can keep it. If your employer provides you health insurance on the job, nobody is talking about messing with that.”
Remarks by President Barack Obama, Aug. 20, 2009

President Obama’s repeated insistence that health reform is not going “to mess” with employer-provided insurance and that you can keep your health plan if you want to is misleading and seems to contradict other statements of his that “the status quo is unsustainable.”

I absolutely concur that the status quo is unsustainable, and thus there are many reasons why employees should not like the health plans they already have and just as many reasons why they won’t be able to keep them anyway, with or without health reform. Here are just a few.

---Health care costs will continue to rise four times quicker than salaries. For every thousand dollars you spend on health care now now, in five years you would be spending more than $1,500. What’s to like?

---For those with individual insurance, a recent national survey found that 12.6 million non-elderly adults who tried to buy insurance on the private market were discriminated against in the past three years because an insurance company deemed them ineligible for coverage because of a pre-existing condition, charged them a higher premium, or refused to cover their condition. What’s to like?

---An individual who mailed a premium payment for COBRA continuation of coverage that was postmarked one day after the due date for the premium could not have health care benefits reinstated (Eleventh Circuit U.S. Court of Appeals in Harris v. United Automobile Insurance Group, Inc. (No. 08-16097)). This is the kind of health care we like?

--A recent study suggests that on average individuals between the ages of 18 and 42 hold 10 different jobs. Which health insurance are you going to keep?

--Unemployment now hovers close to 10%, and even with COBRA, health insurance for newly unemployed workers will run out in 18 months. Which health insurance are you keeping?

--Finally, I don’t know about the rest of you, but my employer-provided health insurance has changed several times in the last five years, not because I wanted the change but because my employer made the changes. This is not health insurance I can keep.


So without health reform, many will continue to lose health insurance or face higher costs and lower benefits. That’s not the health insurance we want or can keep.

And with health reform? Take a deep breath, but our coverage won’t be the same as it is now. It might actually be more secure, more consistent, more reliable, and less subject to the vagaries of the market than current coverage. Rather than worrying about losing the health coverage we have now, we should be cheering about the health coverage we could have in the future.

Getting to know your government’s lingo

While Congress is on recess, this seems like as good a time as any to brush up on our knowledge of legislative terms. If you already know these terms, please thank your high school civics teacher. If you don’t know these terms, perhaps the short quiz below will help you prepare for Congress’ return and the ongoing process of crafting health care reform legislation. The answers (if you need them, but I’m pretty sure you won’t) are at the bottom of this post.

1. What does the term “reconciliation” mean?

a. Making peace with your neighbor
b. A fast-track process that was originally intended to make it easier to move deficit-reduction measures through Congress
c. I don’t know

2. What is a “filibuster”?

a. The sister of Dustbuster
b. An informal term for any attempt to block or delay Senate action on a bill or other matter by debating it at length, by offering numerous procedural motions, or by any other delaying or obstructive actions
c. I have no clue

3. Who uses “markup” and why?

a. English teachers use it in the form of a red pen to correct grammatical mistakes
b. I don’t care
c. Congressional committees and subcommittees use this process to debate, amend, and rewrite proposed legislation

4. What is an “amendment in the nature of a substitute”?

a. An amendment that would strike out the entire text of a bill or other measure and insert a different full text
b. A substitute who teaches nature
c. I don’t like nature

And finally, an unrelated, but still important, question:

5. Who will win MLB’s National League Central division?

a. the Chicago Cubs
b. the St. Louis Cardinals
c. the Milwaukee Brewers
d. I prefer the American League

Answers:
1. b.
2. b.
3. c.
4. a.
5. The answer is TBD, but my money is on the Cardinals (can you say 10 World Series Championships?)

Health reform is big business…for lobbyists

Back in the 1960s, in their hit single, Surf City, Jan and Dean sang about summertime fun and “two girls for every boy.” Nowadays, in the summertime health reform debate, it’s more like six lobbyists for every lawmaker--six lobbyists for each of the 535 members of the U.S. House and Senate.

When you add up the numbers, you’ll find that there are 3,300 lobbyists for more than 1,500 organizations, representing every viewpoint, who are trying to exert their influence over the health reform debate. According to Bloomberg, three more organizations are signing up as health reform lobbyists every day.

According to Reuters, the American healthcare and insurance industries have spent at least $340 million on health reform lobbying so far this year. In fact, healthcare lobbyists say that this is the biggest lobbying effort since the Tax Reform Act of 1986, Bloomberg reports. All told, since 1998, the health sector has poured $3.4 billion into its lobbying efforts, according to the Center for Responsive Politics.

The money doesn’t stop there. Politico quotes Evan Tracey, founder of the Campaign Media Analysis Group, as saying that health care reform has “the potential to become the mother of all advocacy ad wars.” More than $51 million has been spent on healthcare-related TV ads since President Barack Obama was elected last fall, Tracey says.

As those TV pitchmen always say “but wait, there’s more.” If $340 million for lobbying and $51 million in TV ads aren't enough for you, how about political contributions? Reuters also reports that corporate political action committees (PACs) and company employees have made health reform-related political contributions of at least $27 million for the 2010 congressional election cycle, so far. Labor unions and liberal advocacy groups are spending an additional $10 million to $20 million during August alone.

The amount of money sloshing around the health reform debate is truly staggering. Think about that the next time you hear someone say “let’s not rush into things.” The longer the health reform debate lasts, the more expensive the lobbying effort will become. In the end, I wonder who’ll be paying for all of this. Hmmm, let me guess...

Is President Obama Giving Up On Public Option?

Comments made this past weekend by U.S. Department of Health and Human Services Secretary Kathleen Sebelius and by President Obama himself appear to signal that the Administration is caving in to opponents of a public health insurance option as a crucial element of health care reform.

Secretary Sebelius said the administration was willing to compromise and would consider a proposal for nonprofit health cooperatives advocated by Sen. Kent Conrad, Democrat of North Dakota. The non-profit co-ops could operate on a state or even a national level and be operated by their members. However, without the economies of scale that a large group would provide, the co-ops certainly would not have the same clout in provider price and coverage negotiations, and would be vulnerable to fraud.

On Sunday, Ms. Sebelius, a former Kansas Insurance Commissioner, said that the public insurance option was not a crucial element of the administration’s health care (or, is it “insurance”?) reform.

At a town-hall meeting on Saturday in Grand Junction, Colo., President Obama also downplayed the importance to health reform of a public plan option. President Obama reportedly said that “The public option, whether we have it or we don’t have it, is not the entirety of health care reform…it is just one sliver of it, one aspect of it.”

But, many others involved in the discussion consider the public plan option a “must”, in order to “guarantee that all consumers have affordable, meaningful and accountable options available in the health insurance marketplace,” as West Virginia Democratic Sen. John D. Rockefeller IV put it. And Howard Dean, a physician who previously served as Democratic Party Chairman and Vermont governor, told interviewers on Monday that a public option was “indispensable” for meaningful health care reform. “We shouldn't spend $60 billion a year subsidizing the insurance industry," he said.

Reuters reported on Monday that the health care and health insurance industries have so far this year paid lobbyists at least $340 million to protect their interests from health reform. “Corporate political action committees and company employees have also channeled at least $27 million into federal campaign coffers for the 2010 congressional election cycle,” with Democrats among the top beneficiaries, Reuters noted. The data Reuters used comes from the Center for Responsive Politics website, current as of Aug. 12.

According to statistics compiled by the Center for Responsive Politics, the largest amount of contributions to Congress members came from health professionals with a total of $10.7 million, followed by the insurance industry at $7 million. Bu the top spenders for lobbying were the pharmaceutical industry ($134.5 million), and insurance ($81.5 million). You don’t suppose that the opposition to the public health insurance option has anything to do with these figures, do you?

Meanwhile a Watson Wyatt survey of human resource executives at 175 U.S.-based companies on the adjustments they have made to benefits in response to the economic crisis found that 66% of respondents that increased the percentage that employees pay for health care premiums do not expect to reverse that decision. Seventy-one percent of respondents have made some change to their 2010 health care plans, most commonly, increased deductibles, co-pays or out-of-pocket maximums (41%), and increased the share of premiums employees pay (40%).

In an opinion piece published in the Sunday New York Times, President Obama wrote: “This is not about putting the government in charge of your health insurance…I don’t believe anyone should be in charge of your health care decisions but you and your doctor — not government bureaucrats, not insurance companies.” And, he concluded, “In the end, this isn’t about politics. This is about people’s lives and livelihoods. This is about people’s businesses. This is about America’s future, and whether we will be able to look back years from now and say that this was the moment when we made the changes we needed, and gave our children a better life. I believe we can, and I believe we will.”

The question is, will our Congressional representatives have the courage to stand up to the special interests throwing money at them and instead stand up for the “little people” on U.S. Main Streets everywhere who can gain (or lose) their health, and, ultimately, their lives?

Health care reform 2009: back to basics

In a victory for the power of reasoned, rationale debate [yes, I am being ironic], Sen. Grassley (R-IA), ranking member on the Senate Finance Committee, announced late last week that a controversial provision in the House reform bill allowing for Medicare funding of a voluntary discussion of living wills and other end-of-life issues would be stripped from any Senate bill. (Indeed, early this morning Grassley clarified to Politico.com and other reporters that at least for purposes of the bipartisan negotiations ongoing within the SFC, the end-of-life language has been gone for weeks.)

Perhaps it makes sense, at a time when the debate has become heated, to take a step back from all the drama and reacquaint ourselves with the basic issues on the table in the 2009 debate over health care. From the sedate (some might say boring) perspective of the policy wonk, and not that of the political firebrand.

A recent introduction to health care reform published by the Congressional Research Service offers a cogent (and brief) summary of the key issues. According to CRS, the 2009 reform effort attempts to address three key concerns:

• health care costs are rising at an unsustainable rate, both for individual families and the society as a whole;
• for all the U.S. spends on health care, by some measures the quality of care provided is inferior to the care provided in other developed countries;
• The number of Americans who lack insurance coverage is a problem in and of itself that also exacerbates the cost and quality issues.

In addition to summarizing key elements of proposed solutions to these problems (e.g., public v. private insurance, the role of employment-based coverage), the report highlights opportunities for further learning. So, if you're an ERISA beginner, go here. Or, if the tax exclusion for employer-provided insurance is your thing, go here.

Why Does The Insurance Industry Continue To Support Health Reform?

After being identified as part of the health reform problem by President Barack Obama and as a villain by House Speaker Nancy Pelosi, America’s Health Insurance Plans (AHIP) response has been surprisingly muted, and one might wonder why AHIP remains committed to health reform, with both the executive and legislative branches of the federal government taking jabs at it?

AHIP “embraces insurance reform,” and is in favor of universal coverage. AHIP has reiterated its support of health reform that prohibits preexisting condition exclusions and includes an individual mandate, and the group has released a report that attempts to make insurers the guardians of health costs while depicting doctors, at least those who won’t join insurance panels, as the enemies of cost control.

Like the rest of the major stakeholder (providers, employers, governments), the insurance industry has laid out a position that approves of reform when the insurance industry is largely unaffected and disapproves when its own ox is gored. So universal coverage is great. But what about health care costs and premiums?

Here is AHIP’s general position on reforming the health delivery system to cut health care costs:

“Patients across the country fail to receive high quality care on a consistent basis, while health spending is increasing, on an annual basis, 2-3 percentage points above overall economic growth. These challenges have persisted largely due to inappropriate incentives within the system. Traditional fee-for-service arrangements often pay for services whether or not they are appropriate or effective. In short, the current system is wasteful and unsustainable.

“The system overpays and encourages the overuse of costly specialty care, yet underpays primary care which fosters care coordination and chronic care management.”

So the insurance industry is in favor of provisions that would impose restrictions on those pesky doctors and hospitals—not too surprising.

As far as cost cutting that affect insurance, here are some of the provisions in the House and Senate bills that AHIP likely would endorse:

--Impose the same insurance market regulations relating to guarantee issue, premium rating, and prohibitions on pre-existing condition exclusions in the individual and small group markets and in a national exchange.
--Require health insurers to provide financial incentives to providers to better coordinate care through case management and chronic disease management, promote wellness and health improvement activities, improve patient safety, and reduce medical errors.
--Provide dependent coverage for children up to age 26 for all individual and group policies.
--Require insurers and group plans to notify enrollees if coverage does not meet minimum qualifying coverage standards for purposes of satisfying the individual mandate for coverage.
--Permit licensed health insurers to sell health insurance policies outside of the Gateway. States will regulate these outside-the-Gateway plans.
--Limit health plans’ medical loss ratio to a percentage specified by the Secretary to be enforced through a rebate back to consumers (one Senate Committee has suggested 85%). Note that while this provision is in a Senate bill, the House only has suggested that health insurers be required to report their medical loss ratio.
--Adopt standards for financial and administrative transactions to promote administrative simplification.

I would bet that the loss ratio provision will be look more like the House version in any final; bill, and except for that, there really isn’t much that the insurance companies will be giving up in exchange (no pun intended) for 46 to 50 million new customers, as mandated by an individual coverage provision.

Have you noticed any other provisions that actually might get insurance premiums reduced? Neither have I (except of course for various government subsidies, which artificially will prop up already excessive premiums).

Did I metion that AHIP continues to oppose any type of public plan option that might force some additional competition into the market?

So maybe there really is no mystery about why AHIP remains firmly committed to health insurance reform.

Employers: On your mark, get set . . . prepare!

Employers are major stakeholders in the efforts to reform health care. They’ve been watching the legislative process anxiously and have weighed in on various proposals. To provide you with additional insights on the impact that reform could have on employers, I conducted a quick Q/A with Kathryn Bakich, JD, Senior Vice President, National Director of Health Care Compliance at The Segal Company.


Q1: What should employers do to prepare for health care reform?

The best thing that employers can do to prepare for health care reform is to make sure that they are aware of the cost and benefit details of the plans they offer now. While we don’t know what will be included in reform legislation, it is likely that we will see an individual obligation to purchase health insurance, an employer mandate to provide health coverage, and reforms in the insurance market. Employers will need to maintain their expertise as purchasers of health care under the new system. But in addition, they will have to work under the constraints of the new system. This means making sure that the coverage that they offer is good enough to allow employees to meet their “individual mandate” to have coverage, but also good enough so that the employer satisfies whatever mandate may exist.

A mandate might include a minimum coverage requirement – probably about the same as the minimum individual coverage standard – plus a minimum contribution requirement for employers. Contribution ranges being discussed range from 60% in Senate legislation to 65% family/72.5% individual in House bills. The standards would apply to full and part time employees, and a financial penalty would exist if the standard is not met.

Consequently it is important to understand the coverage and contribution rules as they exist now, and to understand how health care standards might affect them.

Financing of health care reform, including potential changes in how employer-sponsored health coverage is taxed, is another key area to watch. Initial proposals would have capped or eliminated the exclusion from income for employer-provided health insurance. The Senate Finance Committee is currently discussing a premium tax for health insurance premiums, which could also apply to self-insured plans. None of these changes are in writing or in bills at this time, so we do not know the details of what is being discussed. Obviously, however, changes in the taxation of coverage would have a significant impact on employer plan costs and coverage decisions.

Q2: How might a public option affect employer-sponsored health plans?

Employers will likely see significant insurance market reforms with health reform, such as elimination of preexisting condition exclusions, guaranteed issue, continuation of coverage for children up to age 26, and other requirements. All proposals also would create a health insurance "exchange" similar to the Massachusetts Connector, which would be a portal through which employees would enter and select from a choice of insurance plans. The plans would have to meet minimum qualification standards, and there would be subsidies for low-income individuals. The final piece of insurance reform would be a public plan option that would be offered through the health exchange.

The impact of the public plan option on employers is not clear, but there are several issues that are being discussed now in Congress that are important. First, who could purchase coverage through the exchange and, possibly, through the public plan? Only individuals? Very small employers (e.g. under 10)? Or larger employers? Second, how would the coverage and provider payments under the public plan affect both the insurer market and employers that self-insure coverage? Third, would coverage innovations in the public plan (e.g. payments for wellness or disease management) set trends that could help employers hold down the costs of health care? Further, how would individual and employer subsidies affect employers who purchase coverage under the exchange.

As the debate on a public plan, and other insurance reforms, develops, employers should pay attention to these concerns.

Q3: How might health care reform affect employer-sponsored retiree plans?

The bills that have passed committees in the House and Senate would create a reinsurance program for pre-Medicare retirees between 55 and 64. If enacted, the program would begin immediately but would only be temporary. It would reimburse employers (including multiemployer plans and other voluntary employees’ beneficiary associations (VEBAs)) for 80 percent of a claim between $15,000 and $90,000. This reimbursement is limited to claims of individuals between 55 and 64 who are not active employees and are not Medicare eligible. Employers would only be eligible if they are located in a state that has not set up a health insurance exchange. This program could provide a boost for employers that have continued retiree health coverage, and will allow retirees who have trouble finding affordable individual coverage to continue coverage with an employer. The program would terminate when a health insurance exchange is available, because these individuals should be able to obtain affordable coverage through that exchange.

Employers providing retiree coverage to Medicare-eligible retirees may see changes in Medicare reimbursement policies, particularly reimbursement to Medicare Advantage plans, that could affect plan costs.

What do Canadians really think about their healthcare system?

The state of Canada’s health care system is a hot topic in the U.S. Everyone’s heard the horror stories about how their brother-in-law’s mother’s former co-worker’s best friend who lives in Canada says she had to wait forever for treatment. For every one of those stories, there’s a cousin’s neighbor’s hairdresser whose Canadian uncle thinks their healthcare system is absolutely great. Putting aside these “insightful” anecdotes for awhile, what do the majority of Canadians really think about their healthcare system?

According to a recent Canadian survey by Harris Decima, 70 percent of the respondents say that Canada’s healthcare system is working well (either very well or fairly well). Further, 82-percent of respondents said they preferred the Canadian system to the American system, which was favored by only 8 percent of respondents. The preference for the Canadian system was found across all demographics and in all parts of Canada.

Think of how tough it is to get 82 percent of anyone to agree on anything. With 25 percent of respondents to a recent British magazine survey doubting that humans ever landed on the moon, there are probably very few topics that would garner 82 percent support of anyone so this result is pretty significant.

With a healthcare system that is so popular north of the border, you’d think we could learn at least a little something from Canada. American critics may call it socialized medicine, but what Canada has is really socialized insurance. Doctors run their own practices and do not work for the government, that is, medical delivery is private. Doctors bill the provinces under a single-payer system that is paid for via income tax and sales tax. All Canadians are covered and they pay no co-pays or deductibles, though they do pay a small monthly fee to the province, a fee that is often picked up by their employers. (Exact plan details vary by province.) Private insurers offer inexpensive add-on policies to cover those things that are not covered by the basic insurance, such as outpatient prescriptions and vision care. Again, exact details of what is or isn’t covered vary by province.

Oh, and Canada spends just over ten percent of its GDP on healthcare while the U.S. spends 16 percent. According to another survey, an overwhelming number of Canadians have a primary care doctor (85 percent) and would recommend their doctor to a family member or friend (92 percent).

So, the next time your brother-in-law’s mother’s former co-worker’s best friend who lives in Canada says she hates the Canadian healthcare system, ask her what the rest of the country thinks. Besides having a lot of great tourist destinations (I once had my picture taken with the Stanley Cup at the Hockey Hall of Fame in Toronto), Canada also has a healthcare system that works for, and is appreciated by, its citizens.

Health Prevention And Wellness--Are They Worth It?

“Although different types of preventive care have different effects on spending, the evidence suggests that for most preventive services, expanded utilization leads to higher, not lower, medical spending overall,” the Congressional Budget Office wrote in response to a request by Georgia Rep. Nathan Deal to analyze the potential budgetary effects of proposals to expand government support for prevention and wellness interventions. The same could be said for wellness measures, the CBO noted. Rep. Deal is a member of the House Energy and Commerce Committee considering H.R. 3200, the America’s Affordable Health Insurance Act.

The health reform legislation from the Senate Health, Employment, Labor, and Pensions Committee, the House Tri-Committee, and President Barack Obama all include provisions for coverage of health prevention and wellness measures. Sponsors maintain that these measures will yield cost savings through improved population health and lower costs for treatment of major illnesses. Many experts also see savings from reduced absenteeism and improved productivity.

To determine any potential reductions in federal costs from improvements in health resulting from these interventions, “CBO takes into account any estimated savings that would result from greater use of such care as well as the estimated costs of that additional care,” explained Douglas W. Elmendorf, CBO director, in his August 7 letter. Preventive measures include screenings for various cancers and immunizations, while wellness measures involve encouraging healthy diet and exercise, and avoiding bad habits such as smoking. Many employers, particularly major ones, sponsor prevention and wellness programs for their employees and their families.

“Judging the overall effect on medical spending requires analysts to calculate not just the savings from the relatively few individuals who would avoid more expensive treatment later, but also the costs for the many who would make greater use of preventive care…preventive care can have the largest benefits relative to costs when it is targeted at people who are most likely to suffer from a particular medical problem,” Mr. Elmendorf explained.

However, “when analyzing the effects of preventive care on total spending for health care, it is important to recognize that doctors do not know beforehand which patients are going to develop costly illnesses…To avert one case of acute illness, it is usually necessary to provide preventive care to many patients, most of whom would not have suffered that illness anyway.”

The results of a review of hundreds of previous studies of preventive care, published in the Feb. 14, 2008, New England Journal of Medicine, indicated that fewer than 20% of the services that were examined save money, while the rest add to costs.

Another study by researchers from the American Diabetes Association, the American Heart Association, and the American Cancer Society estimated the effects over a 30-year period of achieving widespread use of several highly recommended preventive measures aimed at heart disease—such as monitoring and using medications to reduce diabetics’ blood pressure levels and cholesterol levels for individuals at high risk of heart disease. The researchers found that although those steps would substantially reduce the projected number of heart attacks and strokes, the ultimate savings would offset only about 10% of the costs of the preventive services, on average.

Still some of these preventive and wellness medical interventions may be considered by many to be a good “investment” and cost-effective—about 60% of preventive services examined in the heart review cited above have additional costs that many in the health care community consider to be reasonable relative to their clinical benefits, Mr. Elmendorf acknowledged.

He also acknowledged the same dilemma in weighing the costs and benefits of treatments for medical conditions—about 20% of these treatments save money and 60% represent costs often considered “reasonable” relative to their benefits. “Thus, not only preventive services but medical services more generally could be evaluated in order to encourage high-value services of both types and discourage low-value ones.”

Many health insurance plans and employers already cover some preventive and wellness services at little or no cost to participants, so a new government policy to encourage prevention and wellness could result in duplication, Mr. Elmendorf noted. Furthermore, the effect of wellness efforts may not be realized for many years. And some preventive care measures may increase longevity and thus ultimately raise federal government spending for Social Security and Medicare

According to Vienna, Va.-based Health2 Resources, a health care and e-health specialty public relations firm providing market trend research and analysis, 73% of companies that sponsor a health and wellness program for their employees measure the return on their investment and 83% report an ROI of more than $1 for each dollar spent.

Mercer’s National Survey of Employer-Sponsored Health Plans 2008 found that four-fifths of large employers have incorporated some aspects of health management into their health benefit programs. Of these, 63% say that it has been somewhat or very successful in efforts to control health benefits costs. About one-quarter of employers offering at least one health management program have attempted to measure ROI of their programs, and a majority of them (74%) are satisfied with the ROI.

PriceWaterhouseCoopers found that two-thirds of employers used wellness programs, and nearly 50% said these programs were somewhat effective.

Ultimately, we must consider health prevention and wellness programs as an investment in the well-being of our population—they may not yield immediate returns, but wise and properly administered investment will accumulate interest a few years down the road.

How to debunk reform rumors

OK. We've all read the rumors that "Obamacare" (as its detractors term it) will mandate that senior citizens receive "end of life" instructions, or, as one member of Congress put it, will require seniors citizens to be "put to death by their government." Huh?

Specifically, it's Act Section 1233 of the House bill H.R. 3200 (see page 424) that's causing this ruckus. Here's what that section actually says. If passed, the provision would require coverage under Medicare Part B for a VOLUNTARY consultation between a Medicare recipient and her doctor about issues associated with the end of life, including living wills, durable powers of attorney, palliative and hospice care, etc... In other words, if your Grandma chooses to have this conversation with her doctor, and she pays for Part B coverage, then Medicare will pay for this service. That's it. End of story.

Fortunately, many of us have also seen this rumor thoroughly debunked in the mainstream press--see here, for example. And plenty of people have posted the actual text of the legislation to the Internet. Ironically, though, that may be part of the problem. It's arcane, confusing stuff--deciphering it requires you to have knowledge of how the Medicare statute is structured, how this new provision fits in with the existing statute, what Medicare Part B is about, etc... It's easy to get confused by the language itself.

So, without spending hours wading through legislative language, how can you investigate a health reform rumor so that you can decide for yourself? Today the White House has a new Web page up it says is designed to help you separate fact from fiction. For those of you looking for nonpartisan expertise, here are two suggestions:
--Bookmark this Pulitzer-prize winning fact-checking site maintained by the St. Petersburg Times (here's what they had to say about the end of life rumor); and
--Sign up for CCH/Wolters Kluwer's free weekly newsletter on the health reform debate.

The Health State Of States In Certain Regions

“As the health reform debate progresses, the impact of reform on individual states will vary based on their economic situation, current health insurance coverage, and health care expenditures,” the Kaiser Family Foundation’s new report, State Variation and Health Reform, commented.

This peaked my curiosity. Might there be a correlation between the facts about states in certain geographic regions--number of uninsured, the incidence of people living with lower incomes and in poverty, and residents with poor health status and lower access to health care--and the way their Congressional representatives vote on health care (or insurance) reform? I found an interesting trend that, unfortunately, leads to politics.

Southern states, with dominant agriculture and service industries, typically have lower median incomes and greater shares of their population that live in poverty compared to those in the Northeast and parts of the Midwest, the Kaiser report observed. Also noted is that the service, construction, and agriculture industries are less likely to offer health insurance coverage.

Poorer states receive a much larger federal contribution share for Medicaid, the federal-state financed program for the poor and disabled. States in the South appropriated smaller shares of their general funds to Medicaid compared to states in other regions.

Southern states with the highest proportion (20% to 28%) of non-elderly population who live in poverty include Texas, Louisiana, Mississippi, Alabama, Tennessee, Kentucky, and West Virginia. And 11 of the 16 states with the lowest rates of population with employer-sponsored health insurance are in the Southern states, which have the greatest share of uninsured with family incomes below the poverty level (Mississippi has 55%, but in other Southern states it ranges from 37%). Poverty level income in 2007 was $21, 203 for a family of four.

The states with the lowest rates of residents with private health insurance are New Mexico (54.8%), Texas (58%), and Louisiana (58.8%), according to a report released earlier this year from the Robert Wood Johnson Foundation.. The rate of uninsurance is highest in Texas (27.5%) and New Mexico (25.7%) and in the South and Western regions.

Most Southern states also have a greater proportion of uninsured who are low income (200% of federal poverty level in 2007 was $42, 406 for a family of four). For example the proportion of low income uninsured in 2007 was 81% in Mississippi and 72% in Kentucky.

States in the South and the Western regions are more likely to have a shortage of primary care medical providers, and States in the South disproportionately report higher rates of unmet health care need. And the proportion of people who did not see a doctor due to costs was over 15% in most of the Southern states, and over 20% in Texas.

The United Health Foundation’s America’s Health Rankings for 2008 finds ten Southern states are the unhealthiest in the country—Louisiana (50th), Mississippi (49th), South Carolina (48%), Tennessee (47th), Texas (46th), Florida (45th), Arkansas (43rd), Georgia (41st), Alabama (40th), and West Virginia (39th)

Why do these figures pertaining to the Southern states matter? Because members of Congress representing Southern states tend to either be Republican and vote as one with members of that party, or to be conservative Democrats. For example, of the 32 U.S. House members from Texas, 20 are Republicans and one is a conservative Democrat, while both of the state’s senators are Republicans. And the Republican members of Congress have been unanimously against any health reform, especially any reform that includes a public health insurance option.

Conservatives claim that the health reform proposals currently in Congress would raise the national deficit by unacceptably high amounts and that it would lead to “government-run” (as distinct from government-financed, like Medicare and Medicaid, I suppose) health care. And yet, it is those conservative Congressmen’s constituents, in the Southern states particularly, who stand to gain the most in terms of access to health insurance and to health care services and resulting improvements in health.

Maybe if these “conservative” Congressmen, and their constituents, were more aware of the health state of their states they would be more willing to work collaboratively to make health care coverage available to their vulnerable residents?

Reform bill would stick $10 billion band-aid on retiree health plans

The percentage of large employers (200 or more workers) offering retiree health benefits has fallen from 66% in 1988 to 31% in 2008, according to one survey.

Ouch!

Lawmakers to the rescue. To attempt to slow the erosion of such employment-based plans, the House Energy and Commerce Committee has included a reinsurance program in Section 164 of its reform bill. The provision establishes a temporary program to provide reimbursement to plans for part of the cost of providing health benefits to retirees and their families. The bill establishes a Retiree Reserve Trust Fund and appropriates $10 billion for the fund. The funds are available until expended.

Who’s a retiree? For purposes of the reinsurance provision, the term “retiree” means an individual who is:

• 55 or older,
• not eligible for Medicare, and
• not an active employee of the employer maintaining the plan.

Program payments. Employment-based plans must apply to participate and be approved by the Secretary of Health and Human Services. The program reimburses participating employment-based plans for 80% of the cost of benefits provided per enrollee in excess of $15,000 and below $90,000.

Use of payments. Amounts paid to a participating employment-based plan must be used to lower the costs borne directly by the participants and beneficiaries for health benefits provided under such plan in the form of premiums, co-payments, deductibles, co-insurance, or other out-of-pocket costs. Such payments cannot be used to reduce the costs of an employer maintaining the participating employment-based plan.

Will it work? It’s doubtful this provision will have much of an effect on the decline of employment-based retiree health plans. The cost of insuring retirees tends to be high, and employers just can’t afford these plans any more. It’s nice to cover a wound with a band-aid, but in the end, it always hurts when you rip it off.

Health reform debate could intensify during summer recess

As Congress heads home for its month-long summer recess, some people may think that the debate over health reform might quiet down for awhile. They are probably wrong. In fact, in many ways, the debate might even intensify as our elected federal officials face their constituents.

With the fate of health reform hanging in the balance, various groups will be spending millions of dollars running ads on the airwaves, both pro and con, to fire up their supporters. In fact, so many health reform ads are expected that The Nielsen Company has announced the creation of a new CLIO award for healthcare ads. According to Evan Tracey, the founder of the Campaign Media Awareness Group, the last time we saw such a large policy ad blitz was health reform, 1993. Tracey notes that the only group that has staked out a hard position is the soda makers.

Though supporters of health reform believe that it will survive the recess, opponents are pushing the fight to the Democratic supporters of the bills. One thing is certain: the side that wins the P.R. debate battle during the August recess could well win the health reform war.

Our elected representatives will be holding public forums and hearing about it from their constituents. Early indications are that various groups are organizing themselves to attend these public forums. It doesn’t look like August will be a quiet, laid-back stretch of “fun in the sun” for our elected officials.

Maybe our elected officials and ordinary citizens alike can use some of this time to sit down and read through the 1000+ page House bill, the America's Affordable Health Choices Act of 2009 (H.R. 3200). Not exactly light summer beach reading (I prefer mysteries, myself) but it makes for some interesting reading, nonetheless.

Of course, if you want to take the summer recess off from the health reform debate, you can rest assured that we’ll still be here, talking about the latest health reform news.

Protection From “Unfair” Competition For Whom?

Aiming to “protect” the private health insurance system from the “unfair” competition posed by a public health insurance option, many legislators now deliberating various national health reform proposals are insisting that the public option operate on a “level playing field” with private insurance in a health insurance exchange. In May of this year, New York Sen. Charles Schumer proposed that any new government run health insurance program comply with all the rules and standards that apply ot private insurers, that it be self-sustaining with financing solely from premiums and copayments, and that it pay providers more than Medicare pays.

Furthermore, H.R. 3200, the Affordable Health Choices Act just approved by the Energy and Commerce Committee, the last of the three House committees responsible for reform, includes the following provision under Subtitle B—Public Health Insurance Option, Sec. 221:

(2) ENSURING A LEVEL PLAYING FIELD.—Consistent with this subtitle, the public health insurance option shall comply with requirements that are applicable under this title to an Exchange-participating health benefits plan, including requirements related to benefits, benefit levels, provider networks, notices, consumer protections, and cost sharing.

Private health insurers claim that public programs such as Medicare and Medicaid underpay medical providers this shifting costs to the private sector. Experts point out that these two programs alone represent about 45% of the health care market, so it could be argued that the programs receive a “volume discount.” By one estimate, Medicare and Medicaid cost-shifting accounted for only 12% of the increase in private health insurance costs between 1993 and 2001.

Private insurers too negotiate substantial discounts from medical providers—just take a look at your insurance explanation of benefits and look at the difference between what the provider billed and the insurer paid network providers

It is also questionable that private insurers currently operate in a “competitive” manner as major health insurers frequently capture a substantial portion of the insurance market in many regions. According to a 2007 study by the American Medical Association, in 96% of the country's metropolitan statistical areas, at least one private insurer controls at least a 30% share of the commercial market and one insurer had at least half of the market in 15 states. How many insurance options do you suppose a person with any preexisting condition or of older age, even if healthy, has? Even employment-based health insurance offers limited options and prices.

Health insurance markets currently are not competitive. “These markets are not providing the benefits one would expect from competition, including efficient operations and consequent control over health care costs.” John F. Holahan and Linda J. Blumberg, economists and researchers at the Urban Institute’s Health Policy Center, wrote recently in Is the Public Plan Option a Necessary Part of Health Reform?. These markets have consolidated. in the past several years. In 2003, in 36 of the 50 states, three or fewer health insurers accounted for 65% of the commercial market.

A public plan option “can address failures of competitive health insurance markets today,” according to Karen Pollitz, research professor at Georgetown University’s Health Policy Institute, told the House Energy and Commerce Committee a a June 25 hearing on the Three Committee Draft Proposal for Health Care Reform. One of our June posts reviewed highlights of Ms. Pollitz’ testimony, some of which is repeated below.“First, it offers consumers an alternative to private health plans that, for years, have competed on the basis of discriminating against people when they are sick….If consumers are required to buy health insurance, having a public coverage option that does not have to compete on the basis of profits will give many peace of mind.”

“Second, a public plan option will promote cost containment,” Ms. Pollitz continued. “Research shows that health insurance markets today do not compete to hold down costs. Rather, insurers and providers negotiate to pass cost increases through to policyholders while maintaining and even growing corporate profits…A public plan will initially pay medical providers based on the Medicare fee schedule, but at a higher level than Medicare pays, negotiate prescription drug payments with drug makers, offer bonuses to providers that participate both in Medicare and the public plan, and develop innovative payment methods that contain costs and promote quality….This will help move the market in the direction of competition based on the efficient delivery of health care services.” -

“Health care’s shift from a public service to a busi­ness model has raised costs, partly by stimulating the growth of bureaucracy,” asserted Steffie Woolhandler and David Himmelstein, physicians and professors of medicine at the Harvard Medical School in an article published in the December 2007 online international medical journal BMJ. “The proportion of health funds devoted to administration in the US has risen 50% in the past 30 years and now stands at 31% of total health spending, nearly twice the proportion in Canada. Meanwhile, administration has been transmogrified from the servant of medicine to its master, from a handful of support staff dedicated to facilitating patient care to a vast army preoccupied with profitability.”.

“Two factors are at work,” Drs. Woolhandler and Himmelstein continued. “Firstly, fragmenting the funding stream, with multiple payers rather than a single government one, necessarily adds complexity and redundancy. Secondly, high administrative costs are intrinsic to the commercial mode (in medical care as elsewhere)… the decision to unleash market forces is, among other things, a decision to divert healthcare dollars to paperwork…In practice, public-private competition means that private firms carve out the profitable niches, leaving a financially depleted public sector responsible for the unprofitable patients and services.”.

For example, the Veterans Health Admin­istration system, “a network of hospitals and clinics owned and operated by government was long derided as a US example of failed Soviet-style central planning,” Drs. Woolhandler and Himmelstein wrote.. “Yet it has recently emerged as a widely recognised leader in quality improvement and information tech­nology. At present, the Veterans Health Administration offers more equitable care, of higher quality, at compa­rable or lower cost than private sector alternatives.”

“August will be the month of sound bites on health care reform,” noted Don McCanne, a retired family practice physician and proponent of single payer health care, in his August 3 blog post comment. “One of these sound bites is ‘unfair competition.’ It is really a silly argument designed to suppress even the most feeble of reform efforts.”

“But the really unfair competition this month will be between those who can explain the relatively complex health policies that can benefit everyone (except those who are wasting our resources), and those who have at their command the very effective tool of simple sound bites,” Dr. McCanne concluded. “These sound bites relieve the listener of any responsibility to try to understand these complex issues.”

Who do you suppose will win the competition?

The winds of public opinion

Which way is the wind of public opinion blowing on health care reform?

Late last week key national newspapers fronted their print editions with the release of polling data (here and here) purporting to show the current state of Americans’ views on the health care overhaul debate. Headlines were downbeat (from the Obama Administration’s perspective, that is): “Supports Slips for Health Plan,” says the Wall Street Journal; “New Poll Finds Growing Unease on Health Plan,” the New York Times reports. (For additional recent polling data on health policy issues, try this handy compilation site.)

Perhaps more disquieting for fans of the President’s proposals than these snapshot, moment-in-time type polls is an analysis of historical polling data conducted by Columbia University Political Science Professor Robert Shapiro (with Sara Arrow) and discussed here (scroll down to Gelman’s July 29 post). It suggests that public support for Obama’s proposals isn’t any higher than support was for the Clinton health care plan in 1993-94. And we all know what happened then.

Of course polls are only as good as their methodology, so it’s important to understand the geeky details of opinion polls—response rate, sample population, the questions posed, etc..—before placing too much emphasis on the results. For a dated but still mostly valid primer on how to read a poll, try this. It even helps you calculate a poll’s margin of error all by yourself! (How popular you’ll be at your next dinner party.)