The mission of Prognosis is to explore the nexus at which healthcare policy meets healthcare practice and how one affects the other. This blog makes readers more aware of the innovations taking place in healthcare delivery, financing and technology and the types of public policies that will encourage further progress.
Healthcare In Focus is a public education initiative of the HLC, created to promote a constructive dialogue about the state and future of American healthcare.
In order to boost public support for its health reform push, the White House added a new wrinkle to the Senate-passed reform bill it has, by and large, embraced. The White House proposes to create a new federal agency with the power to review, regulate and, if it so wishes, block health insurance rate increases.
It’s not difficult to see the political strategy involved here. With health insurance premium increases in the news as of late, the health reform debate has been cast as a heroes-versus-villains morality play. A new federal rate commission will save vulnerable Americans from the health insurance industry and its, as one Administration spokesman termed them, “wildly excessive rate increases.”
But, as veteran health policy journalist Robert Pear writes in today’s New York Times, there are serious flaws with this populist initiative.
For one, health insurance premiums are already regulated by the states. As Sean Dilweg, Wisconsin’s insurance commissioner, said, “The federal proposal would be a huge pre-emption of decisions that states have made over their history.”
It’s important to note here the difference between what states actually do and the new federal responsibilities being proposed. When states analyze proposed insurance rate increases, they look at the entire picture. What are overall healthcare costs? How much of an increase can consumers reasonably absorb? What is essential to keep health insurers solvent?
In Pear’s story, Kansas insurance commissioner Sandy Praeger put it this way, “You are not necessarily helping the consumer if you keep rates artificially low. What’s worse for the consumer: having a premium increase or having to pay the full amount of a medical expense because the company is out of business?”
State insurance commissions work without fanfare, making their decisions on the basis of objective data and analysis. A federal rate commission would be under a harsher spotlight and under greater pressure to reject rate increases, regardless of their merit and necessity.
This issue is another indicator of how the health reform debate has lost its essential focus. When we should be discussing how to implement delivery reforms to improve both the quality and cost-effectiveness of care, as well as steps to expand the accessibility of private insurance, instead a disproportionate amount of attention is being devote to excessive hyperbole about insurance companies and proposed “solutions” that could make those companies less solvent and, thus, less available to those who need coverage. Consumers are not being well served by the direction of this debate.
There’s an inherent problem with most news media coverage of the healthcare industry. The companies, the products, the processes and the issues surrounding them are so complex that it’s difficult to fully grasp an understanding of an industry in a two-minute TV news report or a 500-word newspaper story.
That’s why I have to give credit to USA Today. This week, the newspaper devoted more than an entire page to an interview with Abbott Laboratories CEO Miles White, who was speaking at a USA Today-sponsored forum at Michigan State University. In an interview, Miles gave his views and perspectives on a panorama of issues. It’s a piece well worth reading because Miles makes important points on, for example, why the differentials on what people in different countries pay for drugs should be treated as an international trade issue. Among some of the highlights:
Miles White on different pricing for pharmaceutical products around the world…
“In most countries around the world, when we seek licensure of our product, there’s negotiation with the government over the price of that drug. It’s a government-run health care plan in France, Germany, etc. And they’ll just impose a price decrease. We have not much to say about it.
“People will say to me, isn’t the U.S. consumer subsidizing the availability of drugs in the rest of the world? You know what? That’s true. The issue isn’t something a consumer can manage. It’s a trade issue that governments have to manage.
On the industry providing medicines to people in need…
“I’ve never sat in a meeting where we looked at a drug and somebody said, ‘But, gee, we can’t make money on it because it’s only for poor people.’ We happen to have one of the leading (anti-HIV) drugs in the States, and we provide it either free or below cost. And we developed heat-stable forms of it so (in poorer countries), it didn’t have to be refrigerated. We do have a social obligation to balance with our financial obligations.”
On the next major pharmaceutical challenges…
“I have a particular passion and focus on Alzheimer’s and diseases of dementia. There’s just so much scientifically that we don’t know, and we can know. And because so many of those patients are institutionalized for there are, if we can find ways to solve that, we not only (improve) quality of life for the patient, but we also prevent the medical system from being burdened by enormous cost as we age.”
On partisanship in Washington, D.C…
“I’m as disgusted as anybody with what I see as the inability of Washington to be collaborative. I think, ‘Why don’t you guys put down all of your Republican and Democratic shields and arms and uniforms and think about this on behalf of the American public, setting ideology aside here?” Because most of us are in the middle.”
The U.S. healthcare system takes no shortage of criticism. Often, these criticisms fall into two camps. There are those of us who believe that the United States has one of the strongest, most innovative health systems in the world, but we need delivery and payment reforms to increase value as well as insurance reforms and subsidies to strengthen accessibility. There are others who see the U.S. ranking well below dozens of other countries’ health systems and that we’re inherently condemned to this inferiority unless we begin taking steps to model ourselves after the government-run systems of Europe.
As we consider these two views, it’s good to get a little perspective. That perspective is brought to us from the Times of London.
The Times recently reported an appalling instance. Cost-cutting to meet government budget requirements took priority over providing hospital patients even basic, decent care. Doctors and nurses “stopped providing safe care because they were preoccupied with government targets and cutting costs.” This negligence and maltreatment led to the deaths of between 400 and 1,200 patients at this one hospital alone between 2005 and 2008. Read more
On the eve of the White House’s bipartisan health reform summit, the Healthcare Leadership Council has signed onto a full page ad, initiated by the Mayo Clinic, in Roll Call, the Capitol Hill newspaper. The ad calls for health reforms “that provide quality, affordable health care for all Americans.” Other signers include HLC members Aetna, Cleveland Clinic and Marshfield Clinic as well as the U.S. Chamber of Commerce, America’s Health Insurance Plans and high-profile health providers from across the country.
Specifically, those of us who signed the ad are emphasizing that there must be two core elements to any health reform measure that becomes law, specifically:
• Create a cost-effective Medicare payment system by establishing incentives for doctors and hospitals to offer the highest quality care at the most reasonable cost. This will reduce unnecessary procedures and ensure Medicare is viable for future generations.
• Coordinate basic, private insurance offerings and provide sliding-scale subsidies to enable all Americans to purchase health insurance.
Many of us have argued for some time now that health reform is indeed achievable if Congress will agree to strip away the political and ideological excesses that lead inevitably to partisan gridlock, and focus on these vital elements – give people of modest means the ability to gain access to the system through private insurance, and then improve the system so that we’re paying for quality instead of simply volume of services.
We’ve signed onto the ad in Roll Call because we believe it’s not too late to get this done.
Yes, there’s a lot of understandable frustration in Washington, DC these days, and not just because of the horrendous post-blizzard rush hour traffic. There’s a sense of desperation in the air as the November elections draw ever nearer and health reform legislation remains stuck short of the finish line.
With the clock running, it’s more than a little dispiriting to see that some politicians and interest groups, instead of trying to craft a middle-ground solution that can gain strong popular and political support, are turning to an old chestnut of a strategy.
Let’s beat up on the insurance companies.
As we head toward next week’s bipartisan White House summit on health reform, a loud refrain is being heard right now. We need to pass health reform in order to protect Americans from the big, bad insurers. The linchpin for this chorus is the premium rate increase that Anthem Blue Cross proposed in California. Read more
CATEGORIES: 