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Saturday, November 29th 2008

Where Now?


An Obama Campaign Video Addresses Health Care

I was pretty negligent with this blog during the election cycle. I didn’t even live blog the election as I did the midterms. And I certainly didn’t give the focus you might expect to the prospect of health care reform under both Presidential candidates.

That doesn’t mean I wasn’t paying attention; it just means the interview trail and the fourth year of medical school are weighing a bit right now.

But now we have a new President following an historic election. This is a President I happily admit I voted for despite some reservations about his plans to reform health care in this country. It’s important though to take a look at what those reforms may look like with the Democrats soundly controlling both sides of Congress and Barack Obama in the White House.

To be honest I have significant doubts about the possibility of ground shaking health care reforms occurring any time soon. The big hurdle is the economy. A massive shake up of how the U.S. finances health care is going to have significant launching costs; no matter the generous CBO estimates you read about any specific plan. In the current environment trying to cobble together a coalition to pass such costs, a challenge any day, is an even bigger hurdle. As well, we should be honest, despite polls showing the public’s interest in health care reform as a domestic issue, it likely to be pretty low on the agenda in Washington come January. Such is the state that Bush has left the country in. I also imagine some infighting amongst the Democrats themselves is inevitable. Various Democratic players already have a whole host of disparate plans they’ve introduced into the House and Senate over the years and since Obama’s election even more are coming out of the woodwork. I’ll get to some of those in a second. As well, the Party in power may be a little bit different but the major parties opposed to change continue to put money in the pockets of Blue Dog Congressmen and conservative minded Democratic Senators.

Still, I wanted to give a look at two things. First, what dream reform may look like for some Democrats (even if it turns out to be unpragmatic). Basically take a look at some of the plans for reform out there. Second, what may be more modest, but realistic goals for health care reform.

Much attention was focused on both candidate’s health care plans during the election. Obama’s ‘Plan for a Healthy America‘ got summarized by most major news publications, as well as some health care policy think thanks and health policy publications. The New England Journal of Medicine gave both campaign’s chances to editorialize their health plans and Obama’s campaign turned in this. The major points being:

  • “Through a national health-insurance exchange, people without employment-based insurance or who work in small businesses will have a choice of private insurance policies at rates similar to those offered through large firms. To promote competition among insurers, we will also give patients a new public-plan option, providing the same coverage that is offered to members of Congress and their families.”
  • “All insurance companies will have to take everyone, regardless of medical history.”
  • “My plan calls for investing $10 billion per year over 5 years in health information technology.”
  • “I will invest in programs, including loan repayment, training grants, and improved provider reimbursement, to give young doctors incentives to enter primary care.”

The most substantial reforms laid out in the Obama plan , financing wise, were the federal government entering the private insurance market, the regulation of health insurers to force them not to exclude people based on pre-existing conditions. and a pay-or-play mandate for employers of a certain size. The latter of these gets no mention in the NEJM piece.

Not entirely radical proposals but still not cheap. The costs of the full implementation of Obama’s plan has been put as high as $2.1 trillion over the first ten years of the plan’s life.

Health Affairs, the prominent health policy journal, criticized the plan thus,

It greatly increases the federal regulation of private insurance but does not address the core economic incentives that drive health care spending. This omission along with the very substantial short-term savings claimed raise serious questions about its fiscal sustainability.

This is certainly legitimate criticism. Obama’s plan would eventually almost certainly drive private insurers from the market and leave people with fewer options. Depending on the level of subsidization the government extends to those trying to buy insurance you may see mixed benefit in the affordability of insurance for families and questionable gains off the uninsured rolls. While true, specific provisions for controlling the seemingly unsustainable rise of health care costs may not be as overtly prohibitive to Obama’s plan as Health Affairs makes it out to be. Despite rising costs private insurers truly continue to reap record windfalls.

Don’t get me wrong, I’m not using ‘insurance company profit’ as a bad word. I personally believe we should let the current system lie. But, the point remains there is a discrepancy between what the insurers pay out to cover increasingly costly health care in this country and what they pull. Therefore, there is a margin for a federal plan working in the private market to succeed in. Such a plan would be significantly more efficient (in terms of bureaucratic costs) than any current private plan. Another boost to the margin.

So while there’s some validity to Health Affairs criticisms, it isn’t all disaster.

Other criticisms of Obama’s plan are of the more typical conservative variety. The American Enterprise Institute has been particularly critical, firing even since Obama’s election.

It’s easy to laugh at the AEI right now. Despite their stated mandate the AEI boasts far less libertarian thinking than say The Cato Institute or The Hoover Institute. The American Enterprise Instute really is more of a neo-conservative front. And after the disaster of the Bush presidency, which AEI visiting scholars and fellows helped shape, it will be hard for serious thinkers in Washington not to take the Institute’s proposals with quite a larger grain of salt for the next twenty years or longer. I say that without hyperbole. Policy wonks travel in small circles and such circles reliably don’t function as meritocracies. Your future success in the world of think tanks and political posts often has less to do with your credentials than who you know. Yet still, having an AEI Fellowship on your resume counts for something significantly less than what it did even four years ago. And their credibility counts for something less as well outside their own kind.

But still AEI fellows keep writing. Dr. Scott Gottlieb has published quite a bit on Obama’s health plan. The day before the election a piece went live on the AEI website which made the none too original claim that Obama’s plan would stifle biotech innovation; especially the pharmaceutical industry.

It’s easy to pick and prod at some of the ridiculous points Dr. Gottlieb makes to try to bolster his claim. It’s fun as well. Here’s what AEI has to say,

Obama has…championed a “comparative effectiveness” agency–styled after the United Kingdom’s National Institute for Health and Clinical Excellence (NICE)–that would conduct reviews and studies on the clinical and cost effectiveness of drugs to inform central rulings on which patients should be eligible for a new treatment.

NICE’s real mission is to protect the British health care budget. Since 2000 it has denied patients the ability to use the newest cancer drugs–by my count, in 226 different indications for which American insurers and Medicare currently pay and for which the National Comprehensive Cancer Network says there is “high-level evidence” or “uniform consensus” of clinical benefit. Cancer survival rates in the United Kingdom are substantially lower than in the United States, and the gap continues to widen.

This is a little bit terribly misleading. For one, the U.S. detects cancer at a more prominent rate and, more to the point, at an earlier stage. The prevalence of money making tests makes sure of that.

And while instinctively that might come off as a “good” thing, that isn’t always the case. Early detection also probably artificially inflates those five year survival statistics. What I mean is that, from that early point of detection of course cancer patients are going to survive longer.

But the biggest rebuttal is that despite UK’s lower five year survival (whether NICE is responsible or not) the fact remains that the United Kingdom’s universal health care contributes to their society’s impressive end health outcome measures. And across those measures they beat the Untied States (here and here and more).

No I’m not debating my long argued stance that things like life expectancy at birth and infant mortality are both: difficult things to actually measure at times and also the product of multiple etiologies, not all of which can be influenced in a physician office. But, it remains that health care access is important these kind’ve utilitarian health outcome measurements and the United States’ figures aren’t so impressive.

The point is, if you want to improve the health of the United States by quantifiable figures then improving access is a key (as I recently argued).

How Democratic health care reform may shape up, if it truly does, is still a bit nebulous.

I went over above how Obama’s plan during the campaign lacked some specifics; especially concerning the all important question of financing. Talking about costs is difficult and unpopular. Difficult in the sense that estimating costs for any specific plan is at times like throwing darts at a board. And declaring the costs up front is unpopular for obvious reasons.

The Wall Street Journal’s Health Blog recently had a nice little summary of the Democrat’s health care reform push in the Senate.

The Chairman and the ranking Republican on the Senate Finance Committee have recently published a white paper and a dedicated website on health care reform.

As Bob Laszweski argues, over at The Health Care Blog, the white paper doesn’t spell out a whole lot of specifics,

Baucus is so vague on key elements because there is no consensus, particularly from the key relevant stakeholders to any of these issues, on just how to proceed. There is no cost estimate because the plan is so vague in structure and timetable. There is no source for funding because there isn’t a source for the likely $100 billion this would cost in the first year.

[...]

If you read all 98 pages it is clear there is no consensus on many of the key details, what health reform would cost, the timetable for implementation, or the source for paying for it.

But there are plans with more specifics. Including ones that have been dropped in the hopper. Some ages ago and now looking to get sturdier looks from the legislative branch now that a Democrat is coming into the White House and the Democrat majorities in both houses have increased.

A notable one is Senator Baucus’ Healthy Americans Act. The WSJ Health Blog describes it as this,

The bill…would require everyone to buy health insurance. But instead of sending a check to the insurance company, the premium for basic coverage would be tacked onto your federal income tax. You’d choose from health plans offered by private insurers in your state or region. If you wanted to buy a plan that covered more than the basics, you’d pay extra.

If reform is coming then an individual mandate obviously sits well with the conservative minded, including myself. Personally I think, in the current economic climate, with the Dems holding less than 60 in the Senate and with the general tone of bipartisanship that Obama is preaching that some form of individual mandate is going to have to be a part of any major health care reform.

Such a mandate would be throwing a bone to the private insurance industry and may actually get them to accept some of the terms of Mr. Obama’s plan, which they would otherwise put their vast financial resources towards defeating. Just a week ago BC/BS and America’s Health Insurance Plans, the industry’s biggest trade group, put forth a proposal in which they would acquiesce to not barring individuals based on pre-existing conditionsif any such health care reform proposal also came with an individual mandate.

In separate actions, the two trade groups, America’s Health Insurance Plans and the Blue Cross and Blue Shield Association, announced their support for guaranteed coverage for people with pre-existing medical conditions, in conjunction with an enforceable mandate for individual coverage.

In the absence of such a mandate, insurers said, many people will wait until they become sick before they buy insurance.

A good sign and maybe one that both sides can bite on. The Healthy Americans Act, which has an individual mandate as described above, has sixteen co-sponsors (eight from each party).

Reform is likely to be graduated and the truly liberal wing of the Democratic party is likely to be left a little bit out in the cold. Crazy proposals like Dennis Kucinich’s straight to single payer proposal have little chance of coming around in the next eight years.

I guess we’ll see how much traction health care reform gets in Obama’s first one hundred days. Keep your eyes peeled.

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