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POLITICS: A Democratic Perspective On The Impact Of The 2006 Elections On U.S. Health Policy

November 9th, 2006

Over•sight n. Supervision; watchful care. –American Heritage Dictionary

This week’s election results mean that the Congress will, for the first time in six years, be giving health programs “supervision” and “watchful care.”
• When the EPA fails to regulate toxic air pollutants, the Congress may soon request a briefing.
• When the CDC fails to update its information on HIV prevention for seven years, the Congress may soon ask why.
• When drug companies appear to be making billions because of the transfer of the low-income dual eligibles from Medicaid to Medicare, the Congress may soon request the records.
• And when CMS tells states to distort the Medicaid rules to disqualify thousands of American-born babies, the Congress may soon hold a hearing.

For anyone who believes in the fundamental American system of checks and balances, the past six years, during which the Congress has become the weakest branch, have been painful to watch. From secret meetings to wild regulatory interpretations to outright lies, the Bush administration has stretched Executive Power to historic levels–and the Congress has quietly stood by. (The exception that has proven the rule has been Sen. Charles Grassley, who has made the Finance Committee, which he chairs, the one congressional venue in which the administration has faced investigation. In the House, Rep. Tom Davis, chair of the Government Reform Committee, has also insisted on some transparency in executive branch actions. The occasional sound of their probing questions has made the other hearing rooms seem particularly quiet.)

There are few areas in which this has been more true than in health policy. All of the above examples are real, and there hasn’t been a hearing on a single one of them. Add to that the headlines over the last few months that have attracted public attention, but not that of the House and Senate committees (e.g., Medicare drug plans, Medicaid waivers, prescription drug marketing, rushed and conflicted FDA drug approval, pesticides tests in humans, collapsing morale within the CDC). All of these merit congressional oversight. With one or two Google and Thomas searches, you and I could name two dozen more.

(My personal hope is for inquiry into the myriad areas in which the administration has let politics override science — areas as diverse as childhood lead poisoning and emergency contraception. These lies, damned lies, and cooked books should have an airing as soon as possible so that policy can be made on the basis of facts, not ideology.)

The oversight in itself will produce corrections. Many of these administrative actions will not bear scrutiny in public. Just asking the questions will begin solving the problems.

Such oversight will have preventive effects, too. Administration officials who feel someone reviewing their work may be a little more cautious in their statutory interpretation or their revision of data. Sunshine — even subpoena-produced sunshine — can stop infections before they start.

That will be the major change in health policy from the election: oversight, supervision, and watchful care for the first time in the twenty-first century. Better late than never.

leg•is•late (lj-slt) v. intr. To create or pass laws. —- American Heritage Dictionary

But after the oversight will come some very tough legislative work. A few bills will be obvious and relatively easy: Lifting the ban on NIH funding of embryonic stem cell research is a major contender. Repealing the prohibition on HHS negotiating discounts for Medicare drugs is another. The president will probably veto both, but the respective positions of the branches will be clear.

Most other health legislation, however, is effectively budget legislation. Medicare and Medicaid are big programs. Even SCHIP is a big program. You can hardly add a comma to them without cutting or spending ten million. One Finance Committee friend of mine (Republican) used to say that she rounded everything under half a billion to zero.

And the budget is in chaos. The turn-of-the-twenty-first-century surplus has long ago been squandered, and now there are big deficits as far as the eye can see.

Moreover, the congressional budget process is in shambles. Its major purpose over the last few years has been to usher through tax cuts in a vehicle that cannot be filibustered. When the budget process has been used for health issues, it has distorted the policy so badly that the authors disown the results. (Ask Mr. Shaw and Ms. Johnson about that doughnut hole now.)

The bellwether for the new Congress on health legislation will be how it deals with the budget, the budget process, and SCHIP. SCHIP expires next year. It’s a very popular program that provides health care to millions of children; everyone will want to renew it. But how?

SCHIP is a budget amalgam: It is capped mandatory spending; the law guarantees that there will be X billion dollars available, but no more. Right now that’s about $5 billion, and it insures about four million children.

Because of health price inflation (which rises faster than the CPI) plus the cost of innovations in technology and drugs, providing the same amount of money next year for SCHIP will not be enough. By 2012, thirty-six states will have insufficient funding for their existing caseloads. According to preliminary estimates from the Center on Budget and Policy Priorities, to insure the same number of children will cost about $14 billion over the next five years above the levels assumed in the budget baseline; if the Congress wants to expand the program to reach other uninsured, low-income children, even more money will be needed. Flat funding of SCHIP will result in almost half the children being dropped from the program.

So there’s the question: Does the Congress want to keep funding the program at only $5 billion a year, or does it want to keep insuring at least four million children (or even more)? It can’t do both.

There is a range of legislative responses to this question.

• They could do what they did with Medicare Part D — i.e., set aside a specified amount of new spending for the specified purpose. (One hopes that they won’t go so far as to play Hide-the-Actuary to make the numbers appear to work out.)
• They could find savings in existing programs to allow them to expand SCHIP. (The repeal of the ban on negotiating discounts for Medicare drugs might save a large chunk of cash. So would the elimination of the Medicare HMO slush fund.)
• They could allow some of the tax-cut giveaways to expire, and use that money to insure kids.
• Or they could make the budget process itself more attentive to savings, recognizing the reduced disability and education costs among insured children or including some private-sector value for children’s insurance in the form of less absenteeism among parents and greater productivity on the job. (Consider, for example, the recent multi-volume IOM study on the “hidden costs and values lost” resulting from the lack of health insurance.)

Or, alternatively, they can keep the funding flat and watch SCHIP’s purchasing power erode and the number of children who are insured relentlessly decline.

Moreover, though first in line, SCHIP funding is relatively small. As the Congress moves toward Medicaid and Medicare, expansion and improvement will be scored as even more expensive.

Whatever they do, this is the kind of calculus that is going to face a new Congress as it tries to achieve its twin goals of expanding health insurance and reducing the deficit. It won’t be easy. But, boy, is it a lot better than where it was headed this year.

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1 Trackback for “POLITICS: A Democratic Perspective On The Impact Of The 2006 Elections On U.S. Health Policy”

  1. Health Business Blog » Blog Archive » Health Wonk Review #20
    December 18th, 2006 at 9:07 pm

5 Responses to “POLITICS: A Democratic Perspective On The Impact Of The 2006 Elections On U.S. Health Policy”

  1. acavale Says:

    Unfortunately a truly short-sighted explanation, indeed. Here are some suggestions I hope the Democrats will be wise in looking into:
    1) Creating a truly competitive and capitalistic health care industry (like it or not, that’s what it has become – large conglomerates have pushed aside small/individual providers of care, physicians, pharmacies, insurers, hospitals, etc.). By leveling the playing field, the patient can be the “real” consumer of health care services, rather than the insurers. Let people decide how they want their health care! Competition will weed out bad apples and keep costs down.
    2) Recognize (for the first time in their history) that Medical Liability insurance costs are one of the major causes for rise (and can be a large chunck of savings) in the cost of providing health care. Other Western democracies can sustain their health care costs mainly because they don’t have worry as much about litigation costs. Creating a balanced medical liability system, possibly creating special courts with sole jurisdiction to try medical malpractice cases, may be an answer, instead of the lottery system that we have currently.
    3) Stop shortchanging the physician community year after year (Medicare does not even keep up with cost of living increases to doctors). So where is the money going?
    4) Stop tinkering at the edges and get to the core of the problem. Congress as well as state Governors need to address why so-called not-for-profit insurers (like Blue Cross) should be legally allowed to maintain $ 3-4 billion yearly surpluses and keep increasing premiums yearly by 12- 20 % when their payments for services have only increased 1-2 % per year?

    The new Congress will need a gut-check and a clean conscience in order to clean up this mess. Unfortunately, there too much talk of repealing tax cuts and bashing pharma companies – that, in my opinion, would be the wrong direction to be looking!

  2. Neil Gardner Says:

    With everyone in and nobody out, costs CAN be controlled. The agency running the national system will be able to do an excellent job of negotiating reasonable prices with the pharmaceutical industry.

    It is called monopsony, or a single buyer created usually by legal framework. Certain Military hardware purchases in the US can only be made by the US government so the US government pretty well sets the prices that can be charged. I would say that a single governmental payer for healthcare services could do much the same as long as the legal framework required providers to only deal with that single payer entity as a monopsony!

    Does this mean that there is a social connection between military practices and healthcare practices that can justify the existence these monopsonies ???

  3. sarahweinberg Says:

    This Democratic Party statement spends an awful lot of time discussing which expensive band-aids to try. What about the gigantic elephant in the living room? WE NEED NATIONAL HEALTH INSURANCE, AND WE NEED IT NOW! The Democratic Party needs to LEAD this nation to do what every other developed nation has done: set up a government-sponsored universal health coverage system to cover every resident.

    National health insurance will mean that every resident of the U.S. will be covered for health care equally and with dignity. No more begging for handouts for the poor. No more failure to provide needed health care to newborns regardless of who their parents are. No more compartmentalization of segments of the population into programs such as Medicaid, Medicare, SCHIP, Veterans, Military, Military families, Indian Health Service…. No more losing health coverage because you lost your job, or because your employer can’t afford to pay for health insurance for you.

    With everyone in and nobody out, costs CAN be controlled. The agency running the national system will be able to do an excellent job of negotiating reasonable prices with the pharmaceutical industry. Absolutely enormous administrative costs of the hundreds of insurance companies with their thousands of different plans will be saved.

    Costs can also be controlled by using a technical advisory board to decide, on the basis of scientific evidence, which expensive treatments or diagnostic tests should be done under what conditions. Excessive use of expensive choices will be limited to those who choose to pay out of their own pockets.

    When the U.S. has one system that covers everyone, those running the system, as well as those deciding on its funding will deciding about their own coverage and costs. This will help curb underfunding and overly restrictive decisions about use of treatments and tests.

    I could go on and on and on…. But, I ask only: WHERE IS YOUR COURAGE, YOUR LEADERSHIP, O DEMOCRATS????

  4. marklinkc Says:

    I cannot wait to see Leslie Norwalk and Dennis Smith explain to Mr. Rangle how they twisted the law to restrict Medicaid eligibility for American-born babies. Tim is correct: the sunshine will be a welcome sight.

  5. Neil Gardner Says:

    And maybe for the first time in six years, various experts working for the Federal Government will be free to talk about and use their expertise in discussions without having every word first cleared and censored by Bush administration PR people or else!

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