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.”
Chairman Baucus deserves to be commended for his steadfast efforts to develop health reform legislation that has the potential to gain strong majority support in the United States Senate. Health reform – an issue that affects our nation’s long-term prosperity and the well-being of every American – needs to be bipartisan and avoid ideological extremes that divide the country rather than uniting us. Chairman Baucus has committed to work with Democrats and Republicans in the Senate and that is an effort that must continue.
The Baucus bill takes some very positive steps toward improving our nation’s health care system. It addressed the uninsured by bringing everyone into the system, proposing essential insurance market reforms and providing subsidies and tax credits to Americans of limited means. The bill makes critical delivery and payment reforms, aligning dollars with healthcare quality and incentivizing coordinated care. It calls for significant investments in prevention and wellness. Read more
Long before congressional committees began debating health reform legislation, Ascension Health, a Healthcare Leadership Council member and the nation’s largest non-profit healthcare system, had developed a set of principles on how to move toward a high-quality U.S. healthcare system that offered affordable coverage for all Americans.
Ascension CEO Anthony Tersigni has been a leading, insightful voice in the health reform debate and, therefore, I took great interest in an interview with he and Ascension’s Chief Advocacy Officer Susan Nestor Levy conducted by Kaiser News Service. Read more
I’ll say once again that the government option controversy is taking up so much space in this debate that we’re losing sight of the other essential objectives of health reform. We need legislation that will increase access to health coverage and that will incentivize care coordination between providers. We need to align health care payments with quality and value. We need to find ways to use comparative effectiveness as a tool to improve clinical performance. These are issues that will affect every American patient and health care consumer, but they’re not getting the attention they deserve.
President Obama said at one of his recent town hall meetings that the government option is just a “small sliver” of the health reform debate. HHS Secretary Sebelius said the Administration, while it still prefers a government option, needs to be open to other workable coverage alternatives. Read more
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