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Lessons From The Health Care Summit



March 1st, 2010

Many journalists have called and asked me what I have learned from watching the much heralded Health Care Summit at Blair House.

Actually quite a bit, as the discourse there crystallized so clearly the ideological division that makes coherent and comprehensive health reform so difficult in this country, if not impossible.

In thinking about this question, I make a distinction between the policy-making elite and the “American people” — the plebs — for whom, allegedly, the elite makes policy. My counter-question then is: Are either the elite or the plebs actually ready for health reform at this time? I think not.

Let me focus on the policy-making elite first.

The view from the left. In the ideal world envisaged by the policy-making elite left of center of the ideological spectrum, the individual’s health care experience is independent of that individual’s socio-economic class, and the individual’s financial contribution to pay for health care is based on that individual’s ability to pay and completely divorced from that individual’s health status. Access to needed and locally available health care is viewed as an individual’s inherent right. This dream makes the financing of health care in the country a collective responsibility in which relatively healthier and/or wealthier people subsidize the health care used by relatively sicker and/or poorer members of society. Rationing health care by income class has no place in this picture. Heavy government involvement to enforce the implied redistribution of income does.

The view from the right. By contrast, the policy-making elite right of center of the ideological spectrum dreams of a world in which the individual’s use of health care is, in the first place, his or her own financial responsibility, although some collectively financed subsidies should be granted low-income families to help them afford at least a bare-bones, minimal package of health-care services. In this view, it is not only acceptable but entirely proper that sicker individuals should be charged higher health insurance premiums than are charged healthier individuals. Furthermore, rationing a good part of health care by income class – especially primary and secondary care — is countenanced with equanimity, because health care is viewed as basically not different from other basic commodities, such as food, housing and clothing, whose quantity and quality also is rationed by income class. Access to needed health care is decidedly not viewed as an individual’s right. It is, at most, a privilege bestowed on the less fortunate by the more fortunate. Government’s role in health care in this vision is to be kept to a minimum.

When I say “rationing by income class” I mean the following. Textbooks in economics explain that the role of prices in an economy is to ration scarce resources among unlimited wants. If prices and high cost sharing by patients are used as instruments of cost control in health care, they will ration low-income families much more out of health care than they will high-income families – hence rationing by income class.

Because these different visions of the ideal health system are driven strictly by ideology, one cannot judge one wrong and the other one correct, or even inferior or superior. They must both be respected, even if not shared, by all. And they cannot be resolved through health-services research, which can at most move closer to the facts the folklore on which ideology so often is defended.

A Uniquely American Ideological Impasse  

Most industrialized countries in the world have closed this ideological gap long ago. They now slouch heavily toward the more egalitarian view espoused by left-of-center Americans. 

Not so in the United States. And as long as I have lived in this country, I have seen efforts at health reform tumble into this ideological gulf, which has only grown wide over time. Health reform is likely to tumble into this ideological abyss in the future, until one or the other ideology clearly triumphs in the political arena, which would then make the imposition of one vision on the plebs possible. So far the center of the ideological spectrum has not been able to evolve an amalgamated vision that could carry the day on Capitol Hill.

Thus, short of a cram down of some reform by one or the other side in the ideological fray – e.g., through deft parliamentary maneuvers — reform of our health-care sector will not be possible in this country, and the sector will continue to both save Americans physiologically and devastate them financially for years to come. We may just have to get used to it.

In a recent address to the AcademyHealth conference on health policy, and on a blog post in The New York Times, I have suggested that one practical way to fathom the width and depth of this gulf might have been for the President to ask the Republican participants in the Summit to complete the following table after, of course, having the President entering the Democrats’ numbers first. (We can in fact find them in the 11-page description of the President’s ideas on health reform):

In the meantime, as the policy-making elite stews in its stalemate, the American plebs dreams of a political Messiah willing to build for them a health system that:

  1. Lets only patients and their own physicians determine how to respond clinically to a given medical condition, never an insurance clerk or, even worse, government bureaucrats.
  2. Limits their families’ out-of-pocket payments for health care to make it “affordable.”
  3. Keeps insurance premiums and taxes for health care low.
  4. Does not ever ration health care, because that is un-American and practiced only by un-American alien nations with inferior health systems.
  5. Does not allow public or private insurers to let “costs” or “cost-effectiveness” ever enter coverage decisions, because that would implicitly put a price on human life which, in America, unlike elsewhere in the world, is priceless.
  6. Does not mandate individuals to purchase health insurance, if they do not wish to do so, if for no other reason than that this would be unconstitutional and, therefore, un-American.
  7. On the other hand, grants every American the moral right – backed up by a government mandate called EMTALA– to receive critically needed and possibly high cost health care from hospitals and their affiliated doctors, even if they are uninsured and could not possibly pay for that expensive care with their own resources.
  8. Controls Medicare spending, which is widely thought to be completely out of control, as long as it does not reduce payments to hospitals or to doctors or to producers of medical technology, or to any other provider of health care.
  9. Provides universal health insurance coverage to all Americans, provided it does not mean raising taxes or cutting Medicare spending or raising premiums on healthy Americans.
  10. Keeps government out of health care but somehow makes sure that insurance companies do not exploit patients through incomprehensible fine print, no one engages in price gouging – e.g., charge $10 for an aspirin — and no one in health care earns excessive profits (or any at all).

That’s all.

One must wonder why America’s policy-making elite has found it so hard to satisfy these simple wishes of the American plebs. And as the American people anxiously wait for that Messiah, I wish them luck. In the meantime, we shall muddle through as usual.

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1 Trackback for “Lessons From The Health Care Summit”

  1. uberVU - social comments
    March 3rd, 2010 at 6:43 am

13 Responses to “Lessons From The Health Care Summit”

  1. Uwe E. Reinhardt Says:

    Charles Weller offers an interesting perspective, but also raises an interesting question.

    He writes “The decision makers for these 100 million people can act today, nationwide, to implement PVOs and start paying provider teams on the basis of the value they provide to patients,” where PVO stands for “Pay for Value Organizations.”

    These self-insured funds and employers have been around for a long time. The question then is this: Given that they CAN do what Chuck Weller says, why have they not actually DONE it long ago, with possibly a very few exceptions?

  2. Dr. M.Z.Younis Says:

    I’d like to summarize all this (if I am correct) that President Obama & Democrats Major mistake is “Honesty” .
    They run this as a “Health Care Reform” which let many people get confused. In fact all what the President doing is “Health Insurance Reform”.
    Honesty and the dislike of the health insurance business by the American people would give the Democrat the upper hand in this public debate long time ago despite the flaws in this proposed reform, which is another story.

  3. Charles Weller Says:

    Uwe’s conclusion that ideological divisions mean that neither the policy-making elite nor the American people are ready for health reform now, and today’s article on the “Partisan Divide on the Uninsured,” can have more optimistic results if three things are done.
    1st-focus on what there is no real partisan divide on, which is that to avoid all of us being uninsured — the 260 million with health benefits and 40+ million without, we need to change from FFS to Pay for Value. Peter Orszag, the President’s OMB Director, citing Republican Dr. First, put it well:
    “The single most important thing we can do — and this is something Bill Frist wrote about in the New York Times — is move the incentive systems for providers … away from fee-for-service and towards fee for value”
    Mr. Orszag also has stated our blunt reality:
    “If we fail to do more to move toward a high-value, low-cost health care system, we will be on an unsustainable fiscal path, no matter what else we do.”
    2d-To date, all eyes have been fixed on Washington to make the change to Pay for Value. Yet changing how an elected official’s local hospitals, doctors and other providers are paid would be a Pickett’s Charge for any politician — even before special interests descended who, at last count, have spent over $1 billion already on lobbying.
    Are we all on the Titanic, doomed to just re-arranging our health care desk chairs?
    Yes, if we ask our elected officials to do what Mr. Orszag said must be done: “move toward a high-value, low-cost health care system,” with what I call “Pay for Value Organizations” (PVOs) for a patient’s medical condition (an idea developed only recently by Michael Porter and Elizabeth Teisberg they call “integrated practice units by medical condition).
    3d-What to do? Don’t expect the political process to be the actor. Instead, go where no one has yet gone. As a practicing lawyer for 37 years, it’s a place most people never go to for solutions: law and lawyers. Specifically, the solution starts with the legal distinction between “insurance,” and “self-insurance,” because the wonderful thing that happens is that 100 million people have self-insured Taft-Hartley union-management or employer health benefits that are not subject to the political process of any state or the Federal government, or not subject to government lobbyists, and not subject any insurance company or HMO.
    The decision makers for these 100 million people can act today, nationwide, to implement PVOs and start paying provider teams on the basis of the value they provide to patients.
    Nor is this “Pay for Value Organization” (PVOs) solution just a theory. It is the same method self-insured employers and others I was fortunate as a lawyer to represent used to implement what were called PPOs, starting in the 1980s (hence my term PVOs now).
    The result then is the result we need now. The Congressional Budget Office reported the result was “the slowest rate of growth in over 30 years” in both public and private health care programs.
    That’s the “Pay for Value Organization” Solution that can make today’s health care system like horse and buggies in 1890. In a few years, we can add the best of the PVO innovations to Medicare, Medicaid, deal with the Sustainable Growth Rate problem and those without health benefits.

  4. John Goodman Says:

    I believe Uwe Reinhardt is going to refuse to look at the evidence forever. But it would be a shame to leave readers of this blog in doubt. This is from the British Medical Journal (http://www.bmj.com/cgi/content/full/340/jan14_1/b5479). Analysis of hospital admissions for breast, colon and lung cancer illustrates that people from low-income areas are more likely to be admitted as emergencies; and less likely to receive surgical intervention.

    • Patients in the top fifth most-affluent areas are 12% more likely to receive surgery for rectal cancer than the poorest regions.

    • Women in the top-fifth most-affluent areas are 18% more likely to receive surgery for breast cancer than the poorest regions.

    This is no anomaly. Every study that has ever been done in Britain has found huge inequalities in access to care.

  5. Uwe E. Reinhardt Says:

    John Goodman writes: “For Britain, it appears there is as much inequality today as there was before the National Health Service was started.”

    I have a hunch he refers here to the Whitehall studies, which show a high variance in health-status indicators by civil service rank in the U.K. and similar studies for the larger population. One finds these variances also in France, in Canada and in most countries.

    Here we must be careful to distinguish between inequality of population “health-status” metrics and inequality in the “health-care experience” of individuals. By the latter I understand the relative ease of gaining access to health care in case of perceived need, the process of receiving health care, and the financial impact of having used health care on an individual’s or family’s household budget.

    A nation may offer its citizens fairly equal “health care experiences,” regardless of socio-economic class, and still exhibit large variances in “health-status” metrics as a function of socio-economic class.

    It is so because, as a growing body of research has shown, population health-status metrics are driven much more by non-medical-care factors, such as genetics, early childhood cognition, educational attainment, physical environment, allostatic load, etc., than by health care proper. Inferring the distribution of the health-care experience of citizens in a nation from population health-status indicators therefore can be treacherous.

    I do owe Tom Miller and Devon Herrick an apology for not recognizing Tom’s work on measuring quality and Devon’s work on pharmaceutical prices. They have reason to be vexed by my careless remark. It was colored by my experience in writing a paper on how one might make the prices charged by hospitals and physicians more compatible with Consumer Directed Health Care (http://content.healthaffairs.org/cgi/content/abstract/25/1/57 and http://healthaffairs.org/blog/2009/07/24/a-modest-proposal-on-payment-reform/ ). Hospitals charge masters have roughly 20,000 distinct items in them, most of them with incomprehensible names. Physician fee schedules include about 9,000 distinct items. I was struck at the time how little work had been devoted to making the prices of these providers understandable in a user friendly way to prospective and actual patients in a world of high deductibles and coinsurance. Furthermore, my own and my students’ experience in trying to obtain prices from providers in this area has been discouraging. Perhaps New Jersey is unusually backward in this regard. But I wonder how many readers have adequate information on hospital and physician prices accessible to them.

    As to Jeff Nelligan’s comment, I agree with him and Ed Miller of Hopkins Medicine. Medicaid managed-care companies are well aware that newly enrolled Medicaid patients usually bring with them some pent-up demand that can cause cost bubbles of sufficient magnitude to chew up profit margins. Ideally, the states should adjust for it in the premiums paid these companies.

  6. Jeff Nelligan Says:

    Dr. Reinhardt raises some compelling points; one aspect of this debate, under-reported perhaps but no less important, is the massive and sudden expansion of the Medicaid program. The numbers are startling: as many as 16 million new beneficiaries by 2014. Dean and CEO of Johns Hopkins Medicine, Dr. Edward Miller, wrote about this recently in the Wall Street Journal —- Jeff
    DECEMBER 5, 2009
    Health Reform Could Harm Medicaid Patients
    By EDWARD MILLER
    Baltimore, Md.
    Both the House and Senate health-care reform bills call for a large increase in Medicaid—about 18 million more people will begin enrolling in Medicaid under the House bill starting in 2013, Centers for Medicare and Medicaid Services (CMS) Actuary Richard Foster estimates.
    We at Johns Hopkins Medicine (JHM) endorse efforts to improve the quality and reduce the cost of health care. But we also understand all too well the impact a dramatic expansion of Medicaid will have on us and our state—and likely the country as a whole.
    A flood of new patients will be seeking health services, many of whom have never seen a doctor on more than a sporadic basis. Some will also have multiple and costly chronic conditions. And almost all of them will come from poor or disadvantaged backgrounds.
    We know this because we’ve been caring for Medicaid patients in a managed-care setting for 14 years, as well as providing world-class care to people from all over the country and the world. Our experience provides a glimpse of the acute cost bubble that the health-care system will suffer with the reforms now being proposed.
    The rest of the piece can be found on the Johns Hopkins Medicine “Perspectives on Heatlh Care” webpage: http://www.hopkinsmedicine.org/mediaII/hopkins_on_health_care/

    View Author Bio

  7. Devon Herrick Says:

    If Uwe Reinhardt actually visited the National Center for Policy Analysis web site, he might make fewer wildly inaccurate claims.

    My report “Shopping for Drugs” gives people step-by-step advice on how they can save up to 90 percent or more on drug costs by using simple techniques. The publication and its follow ups have been referenced on television and in hundreds of magazines, newspaper articles and trade publications. It is one of our most popular publications — drawing thousands of viewers.

    Shopping for Drugs http://www.ncpa.org/pdfs/st262.pdf
    Shopping for Drugs: 2004 http://www.ncpa.org/pdfs/st270.pdf
    Shopping for Drugs: 2007 http://www.ncpa.org/pdfs/st293.pdf
    Shopping for Drugs: 2010, forthcoming

  8. Dr. M.Z.Younis Says:

    “WHAT OPTIONS LEFT FOR THE “LEFT””
    Universal health care reform faces philosophical differences from the progressives and conservatives in the government. To pass health care reform, we need to close the ideological gap between progressives and conservatives. At present, this challenge seems to request an almost insurmountable gap to bridge. The only option left is for the progressives to pass “up and down” vote and make the argument that demoralizes the conservative ideology for the public; otherwise, the healthcare system will stay as a major cause of financial stress and personal bankruptcy for the foreseeable future.

  9. tmiller Says:

    “Deception” and “Delusion” are quite strong words, but they are devalued and depreciated when used too loosely. John Goodman certainly can defend the record of NCPA more than adequately (as could Grace-Marie Turner of Galen when not blindsided), but perhaps Professor Reinhardt should consider spendng less time pontificating online about the work of others and more time in the arduous task of actually reading it.

    “I have never seen either the National Center for Policy Analysis or the Galen Institute or the American Enterprise Institute devote much research funding or effort to the arduous task of even providing the fundamentally needed information on prices and quality that would empower individuals to have proper control over their own health care.” March 1st, 2010 at 4:01 pm

    Below is a short “spring break” reading list for Uwe to consider before his next set of amusing, if not always evidence-based, posts:

    http://www.aei.org/article/100999
    http://www.aei.org/event/100179
    http://www.aei.org/docLib/ABetterPrescription.pdf
    http://www.aei.org/event/1604
    http://www.aei.org/article/24887
    http://www.aei.org/speech/25979

    Tom Miller

  10. John Goodman Says:

    It is simply not true that in other developed countries 90% of the population has equal access to care, regardless of social class. I’m surprised that Uwe Reinhardt is unaware of the literature on this. The British study this question extensively — every decade or so. There is also a growing literature for Canada.

    Some of this is summarized in my book, Lives at Risk. See also our paper, “Health Care Reform: Do Other Countries Have the Answers?”

    For Britain, it appears there is as much inequality today as there was before the National Health Service was started. Also, people in all social classes there are routinely denied care that Americans take for granted and they can get it only if they have the ability to pay outside the system.

  11. Miki Kapoor Says:

    I’m not sure I agree with the argument Reinhardt makes about Americans really believing health care is an economically-rationable commodity, but that argument certainly provides the counterpoint/balance he is looking for in his article. I happen to think that Americans don’t believe in either extreme on the spectrum of health care reform (like Reinhardt’s article might have us think). On the other hand, like everything in life, health care reform is more nuanced than picking sides on a spectrum … I do believe more people lie closer to the ‘rights-based health care’ side of the spectrum (many studies have shown that), which in my book means that our politicians should be mobilizing toward creating legislation around that belief (since they know this opportunity won’t arise again for many, many years). If they don’t create any change at all (which is what Reinhardt suggests will likely happen), then I believe our politicians will have failed to do the very job they purport to do (i.e. figure out ways to empower the collective wills of their constituencies).

  12. Uwe E. Reinhardt Says:

    John Goodman has a point in his assertion that the European social insurance systems — think here of the Netherlands, France, Germany — and also the UK, as well as Canada, do not cover 100% of the population with exactly the same health care. All these nations have an escape valve for a small, moneyed minority who either buy private insurance or, in the case of the UK and Canada, travel outside their countries’ borders to get health care either not available to them at all in their country or for which they must wait in a queue.

    But for the great bulk of the population in these countries — 90 percent or so — the health care experience of the individual is largely independent of their socio-economic status. One does not find waitresses or other low-income pople in those countries wondering whether or not to take a child with chest pain to a physician for fear of not being able to afford such a visit or foregoing a drug therapy precribed by a physician for want of ability to pay. Having a baby in those countries is not a fiscal calamity, as it so often is in this country. People in those countries are not umpteen thousands of dollars in debt to hospitals because they happened to have had a serious illness. We do not have millions of people without any health insurance in those countries. So in this respect I find John’s comment a bit disingenuous.

    John claims that Americans are less delusional about health care in their speech than are people in other countries. Perhaps we are less delusional in thought, but not in speech. Name me an American politician who would go on TV and proclaim that we should ration health care by income class in America. Indeed, has John himself ever written it down forthrightly for attribution?

    The trouble with our debate on health reform has always been that we use delicate code words for uncomfortable truths. So, instead of saying “we should ration health care by income class,” John and the politicians he inspires usually prefer to say that “we should give people more control over their health care,” by which they mean, in the first place, that people should face higher deductibles and have HSAs which, alas, like the employment based system bestow far greater tax benefits on high income people than on low income people. I have never seen either the National Center for Policy Analysis or the Galen Institute or the American Enterprise Institute devote much research funding or effort to the arduous task of even providing the fundamentally needed information on prices and quality that would empower individuals to have proper control over their own health care. It’s all just about financial skin in the game, which gets tweaked less and less as we go up the income scale.

    Perhaps we are less delusional than Europeans in our thinking about these matters, but certainly not in our spoken and written word. There we are highly deceptive in a way that would make even George Orwell cringe.

  13. John Goodman Says:

    Uwe Reinhardt is quite wrong in his comparison of the American view of health care versus the reality in other countries.

    Other developed countries accept the rhetoric of egalitarianism and repeat it far more frequently than Americans do. However, they go on to set up systems with barriers to care (often nonprice barriers, but sometimes price barriers as well) which are easier to overcome, the higher ones wealth, income and social class.

    As a result, inequality of health care among the nonminority population of Canada appears to be greater than among the nonminority population of the US. I believe the same is true for the US and Britain.

    I don’t know why I have to point this out, since it has been confirmed by every British study that has ever been done on the subject: Inequality of care in Britain is as great today as it was 60 years ago.

    The biggest differnce between Americans and Canadians and the British is that Americans are not systematically delusional. We do not give speeches, write editorials and issue endless proclamations pledging allegiance to equal access to care when we all know that nothing of the sort exists.

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