A Comprehensive and Independent Progress Report on the Massachusetts Health Plan

The Center for Studying Health System Change has issued a comprehensive report on the progress of the Massachusetts health reform plan.

Anyone interested in the plan's progress will find this must reading.

From their overview:

As Massachusetts' landmark effort to reach nearly universal health coverage continues, affordability of coverage remains a key concern for individuals and small employers, according to a study released today by the Center for Studying Health System Change (HSC).

"Despite reforms of the individual and small-group health insurance markets, including development of new insurance products, concerns remain about the affordability of coverage and the ability to stem rising health care costs," said Paul B. Ginsburg, Ph.D., president of HSC, a nonpartisan policy research organization funded primarily by the Robert Wood Johnson Foundation (RWJF).

Funded by RWJF, the study's findings are detailed in a new HSC Issue Brief—Massachusetts Health Reform: Employers, Lower-Wage Workers and Universal Coverage—available here. The study was based on interviews with about 25 market observers in January 2007, including representatives of employer groups, state agencies, health plans, providers, advocates and other health care leaders knowledgeable about the reform. HSC's Community Tracking Study site visit to Boston in June 2007 provided additional perspectives on the reform.

Health Wonk Review for July 26, 2007

This time it's my turn to host Health Wonk Review, a compendium of some of the best health care policy and market posts from the health care blog world.

Joe Paduda seemingly gave up his extra summer time researching the arguments against universal coverage. Joe digs into the logical, philosophical, and political issues; there's also a great summary. With all the recent attention to other nation's systems of care his series of posts is a valuable contribution. And no, Joe's not a socialist.

Richard Eskow is causing trouble again over at "The Sentinel Effect" with his post noting that the average U.S. physician income was $199,000 while the comparable OECD median physician income was $70,324 in his post. "Doctors Incomes and Universal Coverage: Another Inconvenient Truth."

Colorado Insurance Insider is a relatively new member of our little health policy wonk club. But I'm not so sure we should have let them in. Instead of waxing on the theory of health care, Jay actually went out and road-tested one of the big theories--consumerism and price transparency. As Jay put it in his post, "Dealing with health care providers without the assistance of an insurance company is like dealing with the mafia." His real life experiences should be mandated reading for the rest of us!

David Williams, at "Health Business Blog," calls attention to the fascinating developments in Singapore. He briefly updates us on the "country’s overall strategy to be a biomedical hub" to strengthen "its position as a medical travel destination, especially for complex procedures and treatments" and links to a more comprehensive podcast.

David Harlow, on "Healthblawg," asks, "Should the potential positive secondary uses of individual health information in EHRs [electronic health records] overcome the privacy concerns around collection and use of the data?" in his contribution.

Adam Fein, on his blog, "Drug Channels," makes clear the significance of the new CMS rule on drug prices that he sees leading to big disruptions in the retail pharmacy marketplace. If you have any interest in how the rules are changing in drug pricing you will want to pay close attention to Adam's very detailed post.

Roy Poses, writing at "Health Care Renewal," gives us his take on efforts to naming a school of public health at the University of Iowa after an insurance company and tells us why he sees it as "a new and very in your face version of institutional conflict of interest."

Hank Stern, over at "Insure Blog," has some fun with the recent Rand Study on the effect of insurance prices and the willingness to buy coverage arguing that "a lot of folks who really don't care how much health insurance (or health care) costs, they ain't buyin.'

Although, I had a different take in my post on the significance of the Rand study.

But if you really want a dissertation on what motivates people to buy health insurance when the government is involved you will enjoy Jason Shafrin's review, on his blog "Healthcare Economist," of a paper on the "political feasibility of different health care systems within a democracy." I give this one a pretty high "Wow" factor.

Daniel Goldberg of Medical Humanities Blog also gives us some quality food for thought. He discusses a new study attributing longevity increases in certain states to access to newer drugs. But he contends, there is good evidence suggesting that public health and prevention medicine are likely to have a much greater effect on health in the aggregate.

Julie Ferguson of Workers Comp Insider discusses the Federal Motor Carrier Safety Administration's increasing concern about the health of the nation's big rig truckers. Recent research shows that severe health issues are a contributing factor in about 10% of the fatalities studied. With trucks involved in 12% of all highway fatalities, it seems to be an issue worth exploring.

The current debate on how to reauthorize the State Children's Health Insurance Program (S-CHIP) is topic number one here in Washington. The Health Affairs Blog does its usual service by giving us the background facts. This time Sarah Dine provides a historical context for the current S-CHIP reauthorization debate

Contributions from the Cato@Liberty Blog give us three perspectives on the same theme--"big government conservatism." David Boaz argues that President Bush's willingness to veto the Senate S-CHIP bill "is in no way a reversal from his stance that big spending is okay as long as Republicans can take credit." Michael Cannon goes on to argue that one conservative proposal for compromise on S-CHIP even goes to far in another post on the topic. Michael Tanner posts on the same "big government" theme but this time telling us that the President's nominee for Surgeon General is, "All in all, a perfect national nanny, and another example of President Bush’s big-government conservatism at work."

Matt Holt on the other hand doesn't have the same problems with more government in our health care system in a post that counters arguments that the veterans health care scandal in no way undermines the notion that the government can do more for the rest of us.

Romney Condemns Obama's Health Plan--But Obama's Plan is a Clone of the Massachusetts Plan Romney Signed!

Mitt Romney criticized Barack Obama's health care proposal over the weekend in New Hampshire. According to The Baltimore Sun, Romney said, "Barack Obama said we're going to have the government take over health care. He at least had the integrity to say he wants to raise your taxes." He added, "The right answer is not a government takeover, it's not socialized medicine. It's not Hillarycare." Separately, at a Sunday town hall meeting, Romney said, "I don't want the guys who ran the [Hurricane] Katrina cleanup running my health care system."

I am not here to tell you Obama has the best plan, or he doesn't--or that any other candidate does or doesn't for that matter. I do feel comfortable in telling you that Obama pretty much has the plan Romney signed into law in Massachusetts.

In fact, Obama's plan doesn't go as far as the Mass plan Romney signed--the Obama plan doesn't have an individual mandate!

Which planet is Romney from?

Previous post on Obama plan details: Clinton, Edwards, Obama--Offering Health Care Reform Proposals More Similar Than Different

Previous post on the Mass plan as political "baggage" for Romney: Mitt Romney Looking for Support Among Conservative Republicans--A Health Care Achilles Heel?

Massachusetts Expected to Further Backpedal on its Individual Mandate

The Boston Globe is reporting that the Massachusetts legislature "will probably make changes" to the new health care law that could well include capping what a person has to pay for health insurance at 10% before the individual mandate law can be enforced.

Presumably, this would mean a family with a household income of $50,000 per year would have to pay no more than $5,000. I fear that is still too high a number for a family of three, for example, who would not qualify for a state subsidy.

Let me first say that I continue to applaud Massachusetts for at least trying to deal with this health care issue and that I believe the "Connector" is doing all it can with the cards it has been dealt.

But what the discussion in the Mass legislature does point to is something I have been talking about for months: Massachusetts will not be able to implement their new health care law to anywhere near the point they wanted because they have not adequately dealt with the fundamental underlying problem--the cost of health care.

My earlier post: The Massachusetts Health Plan Will Turn Out to Be Little More Than a Fancy Expansion of Medicaid--Bids Come In At $250 Per Person Per Month

New York AG Objects to Insurer's Method for Ranking Doctors by Cost and Quality--Just What We Need in Health Metrics--Lawyers

At the core of any market-based ability to control costs--pay-for-performance or consumer-driven care--is the notion that patients and payers have information available to them on a health care provider's cost and quality results.

Too often the health plan rhetoric--or marketing brochures--have got out ahead of anyone's real ability to measure cost and quality both accurately and in a way that is useful.

These efforts have also been plagued by providers too often more interested in undermining these efforts to protect their interests than cooperating in solving the complex challenges that crafting an effective system entails.

And it is not just the private markets that depend on progress here. Medicare has entered the world of pay-for-performance as well and it is likely that any government-run system would have to be use these kinds of metrics.

The latest evidence that we have a long way to go can be found, of all places, in the New York attorney general's office. From a New York Times article: "In a sharply worded letter, the New York State attorney general's office asked a health insurance company yesterday to halt its planned introduction of a method for ranking doctors by quality of care and cost of service, warning of legal action if it did not comply."

The letter was sent to UnitedHealthcare--but it could have been sent to any number of health plans looking to use provider performance information as a means to rank those in their networks.

But here's where this whole episode gets to the core of whether provider performance will ever matter. The AG said in the letter: "To compound the situation, we understand that employers may act on these 'ratings' to offer financial inducements such as lower co-payments or deductibles to promote 'cost-effective' doctors to their employees."

Well what else would they use it for?

Health care providers have complained that the United program just measures cost and not quality. Of course they would.

United has said cost and quality is "exactly what this is about." Of course they would.

When the day is done, it is in both the provider community's and the health plan community's interest to come to an agreement on how to measure both cost and quality.

While no one is riding any "white horses" in this business, I have to tell you that the provider community would have a disproportionate impact on developing a useful system if they could come to the conclusion that health metrics are here to stay and critical to our getting our health care system under control and take a leading role in their development--no matter if it is a private market system or a government-run system.

Good faith cooperation on both sides is crucial to getting a health metrics system that works for patient, payers, and providers.

We sure don't need an attorney general getting into the health care economics business--it's hard enough anyway.

Brian Klepper has also done a post on this issue. Brian makes a point I am not qualified to make arguing that the United tool suffers from a basic component needed for provider/payer relations to exist in good faith--transparency. He also makes a good argument for the importance of objectivity.

I suggest going over to, "The Doctor Weighs In" for a very good post and another perspective.

Bush Reaffirms Veto Threat Over SCHIP Despite Strong Republican Support for Bipartisan Compromise—What’s Really Going On Here?

The most exasperated person in Washington has to be Senator Chuck Grassley (R-IA). The Ranking Republican on the Senate Finance Committee has worked out a bipartisan compromise with his good friend Senator Max Baucus (D-MT) to continue the State Children’s Health Insurance Program (SCHIP) past its September 30 expiration date.

The plan currently covers 6.6 million low income kids and would cover another 3.3 million under the plan that would increase spending by $35 billion over five years and pay for it with a new 61 cent per pack tobacco tax.

But President Bush says he will veto the deal because he worries that it is a dangerous expansion of government-run health care.

Not only is Grassley exasperated over that comment but so is about everyone else in Washington. This is a truly bipartisan deal with the Senate Finance Committee overwhelmingly approving it with plenty of Republican support.

What makes this so puzzling is that Bush’s stance is out of synch with the facts and his own health care track record:

1. The President has called for expansion of health insurance since he took office through assistance for the poor to buy health insurance in the private market. SCHIP is largely provided through private insurance companies—public funding of private coverage albeit without a choice of different plans by the consumer. Private insurance companies support the deal because setting up Part D-like multiple choices for kids is not practical.
2. A centerpiece of the Bush administration is the Medicare Part D drug plan for seniors—government financed and provided through private insurers.
3. The Bush administration has approved one state waiver after another allowing states to expand the program beyond its original intent. The Bush administration just approved such a big expansion in Wisconsin. The Senate deal would go a long way toward eliminating the "over expansion" Bush has been complaining about.
   

The Part D drug benefit was the biggest expansion of a government health care program since Medicare was passed in 1965—and Bush sees it as a big victory. SCHIP is maybe a tenth the size of Part D and largely delivered through private insurers who have to competitively bid the contract and Bush says it’s opening “an avenue for people to switch from private insurance to government.” Never mind that there is no "switch" involved here because they are almost always uninsured to begin with.

The President also says he wants to have a discussion over his proposal to change the way health benefits are taxed with an eye toward giving consumers more individual control over their health care. OK. But that general idea has been around for 15 years and he never made that proposal in the six years he had a Republican Congress who would have been a great deal more supportive of the idea then the current Democratic Congress.

What’s really going on here?

My sense is that this President has decided he needs a whopper of a political fight with the Democrats to recharge his flagging presidency and he’s decided to take them on over his view that Democrats would like to “socialize health care" in the U.S. Apparently, his political advisers are telling him the “socialized health care” line is still a good one with mainstream voters.

Never mind the fact that many Republicans—including Grassley and Orin Hatch (R-UT) who are key authors of the compromise and plenty of other Senate Republicans--are onside.

In an earlier post I said that it looks to me like we have a desperate President with nothing to lose as he tries to get his administration back on track in its last year.

I also made the point that it looks to me like Bush is willing to finally veto lots of spending bills—he didn’t veto any Republican spending bills during his first six years.

Is this just the opening round in a bigger fight from a President willing to have a government shutdown battle with the Congress to reassert his presidency?

In 1995, the roles were reversed. Democrat Clinton was looking to reassert his flagging presidency just as just as Republican Gingrich was looking to make a new Congressional majority dominant. Is Bush taking a page from Bill Clinton's game book?

Is Bush trying to make himself "relevant" again?

"Cavalcade of Risk" is Up Over At "Sentinel Effect"

Richard Eskow has more than two dozen carefully selected posts from the world of insurance blogs up over at his "Sentinel Effect."

Richard has put a lot of time into giving us a wide array of good work.

"Government Subsidies That halve Premiums Would Cut Number of Uninsured by 3%"--No Surprise There But it Was the Wrong Question

That's the headline on a story regarding a Rand study that says giving people subsidies won't do much to decrease the number of those uninsured.

But here's the problem with that study: Paying for half the cost of health insurance that averages more than $11,000 for a family in the U.S. still makes health insurance prohibitively expensive for all but the well off.

As I posted yesterday, voluntary health plans that are successful, like employer plans, Medicare Part D, and Medicare Part B pay 75% of the cost of coverage bringing the cost into line with what people can afford and get great participation.

Asking people if they can afford half of something like $11,000 was a dumb premise for a study in the first place.

All the folks at Rand needed to do was to go look at their own company health plan. My bet is that Rand pays about 75% of the costs for its employees and has more than 75% of its workers enrolled--and probably 95% of its workers that don't have coverage through a spouse.

California Health Care Reform—An Individual Mandate is Nowhere Near as Important as Affordable Health Insurance

California is entering the final weeks of a major effort to reform the state’s health insurance system.

Good for them and in particular good for Governor Schwarzenegger who is willing to tackle this most prickly of domestic policy issues!

The Governor and the legislature will need to get a deal done by the end of September if it is going to happen in this session—or maybe for a long time to come.

As we have learned in Massachusetts, health care reform is hard and inevitably has uneven results. But the alternative, doing nothing, gets us nowhere.

In health care reform, no pain—no gain.

The big issue in California is whether to have an individual mandate or not.

Governor Schwarzenegger believes an individual mandate is necessary to get everyone covered and spread the risk across the largest pool—therefore providing the most efficient cost.

Democratic leaders, who control the legislature, oppose a mandate in part because of opposition from labor groups trying to avoid the direct cost of expensive health insurance on workers. They would rather concentrate the burden on the employer community proposing a 7.5% minimum payroll contribution.

Hospitals and doctors are also objecting to a provider tax.

It seems that worker groups, health plans, hospitals, and doctors all have in common the notion that California should have universal coverage but only the employer should have to pay for it.

That’s the subject of another post.

While most of the California debate’s focus is today on whether there should be an individual mandate, or an employer mandate, or both, let me suggest that is not the big question for California policymakers.

As we have learned in Massachusetts, a mandate is a moot point if individuals, or employers, can’t afford the cost of insurance.

In Massachusetts, a health insurance plan with a $2,000 individual/$5,000 family deductible costs around $200 per month per person at an average age of 37. For a 55-year-old the cost is around $500 per person per month.

The good news is that Massachusetts looks like it has already covered about 150,000 people that didn’t have health insurance before the new law. But there are somewhere between 200,000 and 400,000 more who still do not have coverage.

When all the Massachusetts data is in, my bet is that we are going to see the very low income (under 200% of poverty), who get almost 100% subsidies, fairly well covered and those with little or no subsidy help still unable, or unwilling, to buy the coverage.

Those between 200% of the poverty level and 400% of the poverty level are going to be particularly pained to buy coverage because they make too much for assistance and too little to pay for it on their own.

In an earlier post, I argued that you don’t need an individual or employer mandate to make a health insurance reform plan workable.

My training as a health insurance underwriter many years ago taught me that to have an efficient “spread of risk” you only need to get 70% to 80% of those offered coverage to sign up.

Employer plans do not require their workers to sign up and they almost always get an efficient spread of risk. The Part D Medicare drug plan is voluntary and has achieved a very efficient pool, as has the Part B portion of Medicare, which is also voluntary.

Employer plans, Medicare Part D, and Medicare Part B all have in common the fact that they are affordable because either the employer, or Medicare, pays most of the cost so the remainder is affordable for employees and seniors. Medicare pays 75% of these costs and employers also typically pay 75% of the cost of health insurance.

California, just like Massachusetts before it, is focusing on the wrong thing—making people buy insurance and whether to do it through an individual or employer mandate.

Don’t get me wrong. The most equitable form of health reform is one everyone is a part of. Freeloaders don’t help health reform efforts. But I would not let health care reform fail over the issue of whether there should or shouldn't be a mandate.

This whole debate over whether to mandate or not misses the critical point: Have we made the cost of health insurance affordable for individuals and employers?

It’s also hard for me to see how health care reform can have any chance of being affordable unless the burden is spread across the greatest number of stakeholders—individuals, employers, health plans, doctors, hospitals, and taxpayers.

Give credit where credit is due in Massachusetts. But I hope California doesn’t make the same mistake Massachusetts made in focusing too much on mandates and too little on how to offer a health insurance policy people can afford.

Related post: The Mandate Myth--Health Reform Plans Don't Have to Mandate Coverage to Work But They Do Have Be Affordable

But maybe we won't have a practical choice other than just getting everyone covered and let the resulting out-of-control costs drive the rest of the solution: The “Realistic” Way to Do Health Care Reform

President Bush is Not Backing Down on His SCHIP Veto Threat

The President is sticking to his guns over his threatened veto of the Senate Finance Committee bipartisan deal to reauthorize and expand the State Children's Health Insurance Plan (SCHIP) at a cost of $35 billion. The deal would expand S-CHIP and pay for it with a big 61 cent cigarette tax--taking the federal per pack tax to $1.

A White House spokesman said on Saturday that his advisers "will certainly recommend a veto of this proposal. And there is no question that the president would veto it."

The White House seemed to also be offering a way out: "Congress needs to deliver a bill the president can sign or they need to send him an extension so that people don't worry about losing their current coverage."

That last comment about an extension looks like the President is willing to extend the existing plan. There was no mention of where the money to pay for it should come from.

The President is holding firm on limiting S-CHIP because he believes the program has already gone well beyond its original intent of covering only poor children (under 200% of poverty in this case) and the new Senate Finance deal would take it even further.

The President sees the existing S-CHIP program, and the new and larger version pending in Senate Finance, as encroaching on the private health insurance market.

The President is worried that this is an expansion of government-provided health insurance to the detriment of his proposed private market policies.

However, Republican Senators like Grassley and Hatch don't agree with him. Grassley said in response to the President's veto threat, the Senate Finance deal "refocuses S-CHIP on low-income children cost effectively, using appropriate targeting policies." He went on, the plan "straightens out the mess created by all the waivers that have spent program resources on adults and higher-income kids."

A show-down between the Congress--including prominent Republicans--and the President over S-CHIP is upon us.

Unless a deal is struck, the Congress may have no alternative but to pass a continuing S-CHIP resolution and bury the final outcome in the year-end budget process that will include dozens of things not the least of which is a solution to the upcoming Medicare physician fee cuts and likely cuts in Medicare Advantage payments to HMOs.

Bush looks to me like he is in the mood to veto lots of spending bills and that could really give us a year-end donnybrook!

Earlier post:
Key Republican Senators Call on President Bush Not to Veto S-CHIP Reauthorization--A President Acting Like He Has Nothing to Lose

The Latest Health Wonk Review is Up

Here's a summary from the latest edition over at "Colorado Health Insurance Insider:"

The Health Wonk Review is THE top health policy roundup in the blogosphere. It’s known for only including the best and brightest, and only the keenest observations of the health policy community. The collection of articles below represent the cream of the crop of recent entries in the ongoing US health care policy discussion.

I’m honored that The Colorado Health Insurance Insider was selected to host such an important piece of the health policy debate. With the recent release of the Michael Moore film “SiCKO”, the private vs. socialized health care discussion has gone through the roof. So I started out with articles more directly related to that topic, and I arranged them in a way that should feel like it’s more of a conversation - rather than a list of articles. Make sure you give yourself time to read every one. They’re ALL the best-of-the-best! (if I overlooked your entry, let me know)

Without further ado, the July 12, 2007 edition of the Health Wonk Review:

Read the rest...

Key Republican Senators Call on President Bush Not to Veto S-CHIP Reauthorization--A President Acting Like He Has Nothing to Lose

On Thursday I commented on the Senate Finance deal to reauthorize the State Children's Health Insurance Plan (S-CHIP). The bipartisan deal calls for a $35 billion expansion of the program, reversing state efforts to use it to cover adults, and pays for it with a whopping new 61 cent per pack tobacco tax.

Yesterday, two very important Republican members--Grassley and Hatch--of the Senate Finance Committee called on the White House to stop their S-CHIP reauthorization veto threats--the President wants an increase in S-CHIP spending of $5 billion.

The S-CHIP reauthorization process is quickly becoming not a Republican versus Democrat battle but a Congress versus the President fight.

To be sure, there are lots of conservative Republicans that side with the President in their concern that S-CHIP has expanded too quickly and beyond its original scope. But it is clear that about all Democrats and lots of important Republicans are going to go along with this deal.

In fact, the House wants more. House Democratic leaders want to spend $50 billion and they not only want a tobacco tax but they want to cut the private Medicare Advantage program to come up with more money.

My sense continues to be that:

• The Congress will reauthorize S-CHIP along the lines of the Senate Finance deal.
• Medicare Advantage payments to health plans will be cut at year-end as part of the final budget reconciliation process to pay for Medicare provider payments--particularly the coming 10% physician fee cuts.
• Medicare private Fee For Service will take the biggest of the cuts--perhaps seeing those payments frozen.

However, where I have begun to wonder is over George Bush and how he is going to respond to this S-CHIP spending specifically and the upcoming Democratic spending bills in general.

This President has never vetoed a spending bill--even when the Republican Congress spent like a "bunch of drunken sailors." (He did veto an Iraq spending bill over a troop pull-out amendment.)

No modern president has every been weaker politically. Now, his Iraq problems look to be snowballing on Capitol Hill creating even more political problems for him.

Two very loyal and important Republican Senators have now told him "hands off" on S-CHIP. When you think about it, that's pretty incredible in its own right and says a lot about his political weakness.

While I sense that both the House and Senate can easily pass the Senate Finance compromise on S-CHIP, I also don't see the two-thirds margin necessary to over-ride a Bush veto.

I have to tell you that I just get the sense we could be in for a major showdown between the President and the Congress--including key Republicans. It looks to me like Bush is now acting like he has nothing to lose in staying his course on all of his issues--including health care.

Passage of the Senate Finance compromise on S-CHIP and a veto by Bush would just push the whole thing into the year-end reconciliation. Load that up with lots of things Bush won't accept and he just might elevate this to the kind of government shutdown battle we saw in 1995/1996 between Gingrich and Clinton.

The prospect from anything like that and the resulting fallout in an election-year has to have plenty of Republicans really worried about a President with nothing to lose.

Thursday's Post:

Senate Finance Committee Reaches Bipartisan Agreement to Fund S-CHIP Expansion With a Tobacco Tax--No Cuts to Medicare Advantage

"Those Crazy Californians. This Time Its Childhood Obesity."

That's the title of Brian Klepper's recent post over at the Blog, "The Doctor Weighs In."

He mentions my recent post on this and takes it further. It's a good read.

Here's the first part and a link to the rest:

California always seems to be ahead on things that matter. A CNN story this week highlights that state's terrific anti-obesity TV campaign. The ads have cute kids sweetly asking "Dad, could you buy me some diabetes?" and "Can I drink another cup of sugar?" The goal is to shock adults into appreciating that the cheap, tasty foods they shovel down their children's gullets will have real impact. In one of the CNN clips, Adam Sandler says the ads work so well that he and his little girl suddenly dropped their cheeseburgers. I passed along the link to folks in Florida's government, and asked, "Why aren't we doing something like this?"

It's a fair question, but as I tried to point out in my post the other day on food companies' lobbying influence, these ads, powerful as they are, are hardly a match for the food industry's virtually unlimited resources and unrestrained marketing power. A well-intentioned state agency may place a few high profile ads, but the food companies can run theirs unrelentingly and in many different media. They're all over kids’ TV programming, in children’s books, and at schools. They have product placements in the movies, and are on Internet gaming sites. It's difficult to go head-to-head and expect to win against such sophisticated techniques and on so many fronts.

We’re utterly losing the war on obesity. The disease and cost numbers make that abundantly clear. The other day, Bob Laszewski at The Health Care Policy and Marketplace Review reminded us of an important 2005 Emory University study on the topic. The team, led by prominent health services researcher Kenneth Thorpe PhD, analyzed the 20 medical conditions that accounted for most of the growth in health insurance spending between 1987 and 2002.

The conditions, in order of their influence, included:

1. Newborn and Maternity Care
2. Cancer
3. Pulmonary Conditions
4. Arthritis
5. Mental Disorders
6. Hyperlipidemia
7. Hypertension
8. Lupus
9. Back Problems
10. Upper Gasterintestinal
11. Diabetes
12. Kidney Problems
13. Infectious Disease
14. Heart Disease
15. Skin Disorders
16. Bronchitis
17. Endocrine Disorders
18. Other Gasterointestinal Diseases
19. Bone Disorders
20. Cerebrovascular Disease

During that 15-year period, the cost of treating obesity-related conditions rose tenfold, growing to two-thirds of our total health care spending. The number of people who became obese, the percentage of obese people with serious medical conditions, and the cost to treat each obese patient all skyrocketed.

The rest of the Brian's post

United Health Launches a New Health Plan That Rewards Healthy Workers--Immediately Criticized for "Turning Health Care Into a Police State."

Under a new program announced by United Health, health plan participants who take tests and other evaluations to prove they are meeting goals for blood pressure, cholesterol, height/weight ratio, and smoking status would be eligible to receive $500 reductions in their health plan deductible ($1,000 family) for every goal met.

The plan starts out with a $2,000 single/$5,000 family deductible.

In a USA Today article, a "consumer advocate" was quoted as saying, "This is turning health care into a police state."

Over the years, the health insurance industry has been criticized for rating-up, or refusing to cover altogether, those that have preexisting health conditions. I have generally concurred with that criticism especially when consumers were willing to buy insurance when it was first offered to them.

So, I'd like to take this discussion past the usual concern most of us have about a health care system that could discriminate against people over things they don't have any control over.

Ken Thorpe of Emory University is a health care economist I have come to greatly respect over the years. This from an overview of his 2005 study on the impact obesity has on America's health care costs:

"The obesity epidemic has caused a tenfold increase in the nation's private health insurance bill for conditions related to being overweight, according to a self-funded study by researchers with the Emory University Rollins School of Public Health published today in the online version of the journal Health Affairs. According to the study the cost of treating conditions linked to obesity increased from $3.6 billion to $36.5 billion between 1987 and 2002. The study concludes that the best way to lower healthcare spending is to target the rise in population risk factors -- especially obesity."

"Current approaches to controlling healthcare costs are not working because they ignore the true drivers of those costs,' Dr. Thorpe says. 'Increases in the number of people getting treatment for serious health problems like diabetes, heart disease, high cholesterol, and mental disorders are directly linked to population increases in obesity. If insurers and employers are serious about reigning in health care spending, then obesity prevention should be at the top of their agenda."

Let's read that last statement again: "If insurers and employers are serious about reigning in health care spending, then obesity prevention should be at the top of their agenda."

We have made great strides in reducing the impact of tobacco use because as a society we have pretty much come to the conclusion that smoking is a dumb thing to do.

But obesity is killing more of us, and doing more to undermine our quality of life, than is tobacco.

We have got to deal with the obesity epidemic in the United States and we won't do that until we are willing to start talking about this and acting on it.

I really applaud United Health for taking a first step.

They deserve our all taking a deep breath and giving this some serious consideration.

Senate Finance Committee Reaches Bipartisan Agreement to Fund S-CHIP Expansion With a Tobacco Tax--No Cuts to Medicare Advantage

The Senate Finance Committee has reached a tentative agreement to expand the State Children’s Health Insurance Program (S-CHIP) by increasing the tobacco tax by another 61 cents—for a total per pack federal tax of $1. With state taxes, the average per pack tax would rise to about $1.68.

Under the agreement, the Senate would not go forward with any Medicare Advantage cuts to fund S-CHIP.

While 2 million kids would be added to the 6 million already covered, the program would be tightened up in other places. The tentative deal reportedly includes excluding all adults except pregnant women and moving any adults currently covered to Medicaid.

Democrats have called for an increase to S-CHIP spending of as much as $50 billion over five years. This compromise would increase the program’s spending by about $35 billion over five years.

It appears the House is still interested in putting Medicare Advantage cuts on the table as part of their parallel legislation that would increase S-CHIP spending by $50 billion. However, without Senate support it will be very hard for the House to get more than the Senate compromise. It is particularly important that there are plenty of Senate Republicans onside with the Senate Finance compromise.

President Bush has called for an increase in S-CHIP spending of only $5 billion over five years arguing that the program has been too often expanded in the states beyond its original low-income objectives. The President would like to limit eligibility to children in households below 200% of the poverty level and provide access assistance to private plans for the uninsured above the 200% level.

The President has relatively few allies in this opinion.

When a final House/Senate bill is worked out later this summer—most likely looking like this Senate compromise, it will set up a major showdown with the President who could well veto it. Just what action the President will take will have a lot to do with exactly how many Senate Republicans come onside. The final compromise could easily get 60-votes in the Senate but it would take two-thirds in both houses to override a Bush veto.

So steep a tobacco tax is not a slam-dunk.

Would this tentative deal mean the threat to Medicare Advantage cuts is past?

Not at all.

The Congress still needs plenty of money to offset pending physician and hospital Medicare cuts. It makes more sense for Democrats to deal with potential Medicare Advantage cuts in the final omnibus budget work at year-end where a simple Senate majority is necessary and a Bush veto of a comprehensive budget bill it a lot harder.

There is also a sense of inevitability here in Washington that private Medicare Advantage plans are going to sustain cuts--particularly the Private Fee For Service product.

What this agreement would do is make it virtually impossible for the Congress to impact 2008 Medicare Advantage funding—the earliest a year-end agreement would impact private Medicare Advantage payments would be January 1, 2009.

But, none of this is final and it will be important to follow the Senate’s final negotiations and the reconciliation that will have to occur with the House during the summer.

This compromise could also set up a remarkable show-down between the Congress, which looks like it will come to a bipartisan agreement, and a "lame-duck" President opposed to it on ideological grounds who has been severely weakened politically.

If the President is able to block the deal, then everything shunts forward to the year-end budget negotiations and Medicare Advantage cuts as a means to fund S-CHIP come back on the table.

This will be a fascinating process to watch!

The Best 39 Minutes You Can Spend Understanding the Various National Health Systems

NPR's "Fresh Air" broadcast a 39-minute interview with Jonathan Oberlander, a political scientist with expertise in health care politics and policy and the University of North Carolina at Chapel Hill.

Studying other systems is important as we in America look to reform our health care system. Unfortunately, we hear many things out of context and some outright myths.

Listening to Professor Oberlander, I came away impressed that I had listened to one of the most informed and dispassionate discussions of the U.S. health care system, as well as many of the other industrialized systems we have heard about.

If you want a straight down-the-middle 39-minute tour de force of leading international health care systems, as well as our own, give it a listen.

You can access it here.

Can the Democrats Take the Health Care Agenda Back? S-CHIP is the First Test and the Test is On

The debate over how the State Children's Health Insurance Plan (S-CHIP) will be reauthorized is really about whether the Democrats can finally take the health care agenda back from the Republicans.

If the Congress cuts private Medicare plan payments to pay for a bigger S-CHIP, it will be a double whammy--a bigger government health plan and potentially a smaller private Medicare program.

Congress is returning today for a critical few weeks before the August recess and we expect to see action in both the Senate and the House on S-CHIP.

The Democrats will attempt to reauthorize and expand the State Children's Health Insurance Plan (S-CHIP), which is scheduled to expire on September 30th if it is not reauthorized.

S-CHIP was a 1996 effort to build on Medicaid, state by state, for children. Because of that bipartisan legislation, 7.5 million children are covered.

Many, on both sides of the aisle, laud the program as having made a very positive step at a time the uninsured were otherwise growing. However, many conservatives believe too many of the states have taken the program further than the Congress originally intended by covering children above 200% of the poverty level, and even some adults, and want to rein it back in to its original scope.

The latter group includes President Bush who sees S-CHIP's current level as having gone further then it should have and Democratic efforts to expand it as a back door attempt at a government-run health care system.

At the heart of this is an ideological question: Should we expand the private market's involvement in health care or government's?

Conservatives like President Bush want to develop a primarily private health insurance program based on individual choice and responsibility. This would include vouchers for people to buy private plans including health savings accounts.

Many Democrats want to see the expansion of existing public and private health plans that emphasize large pools of people like employer plans, traditional Medicare, Medicaid, and S-CHIP.

Democrats want to add an extra $50 billion to the S-CHIP program over the next five years--something President Bush has labeled a "massive expansion" in government-run health care. The President would increase spending by $5 billion--a level that would likely force states back to eligibility levels closer to 200% of poverty.

So, the battle lines are set.

S-CHIP is really about whether Democrats will be able to begin to move their vision of health care reform forward or whether conservatives still have enough clout--including the Bush veto--to hold them off.

The S-CHIP battle will also impact a number of other big 2007 health care issues including Medicare provider payments--most notably the pending 10% physician fee cut--and payments to private Medicare plans.

To come up with the money to reauthorize S-CHIP at any level, Democrats will need money. Paying for S-CHIP, offsetting some or all of the coming doctor cuts, and maintaining payment levels for other Medicare providers are all going to cost a bundle--perhaps as much as $100 billion.

It is possible that the Congress will stalemate over S-CHIP reauthorization before the program's funding expires on September 30th. Democrats will need 60 votes in the Senate and that could be a real problem if they want to spend $50 billion. A stalemate would likely lead to an agreement to continue the program temporarily until the Congress can work out the issue--likely as part of the year-end budget process.

If S-CHIP gets lumped into the final omnibus budget bill that will be a big help to Democrats who would then be less susceptible to a Bush veto or the Senate 60-vote rule if an S-CHIP deal is just one cog in a final comprehensive budget bill.

So just how S-CHIP will be reauthorized is the first test for the new Democratic majority and their ability to move a Democratic health care agenda.

That makes the next few weeks an especially critical period for American health care reform.

"Sicko" Revenue Wanes at the Box Office--Why Didn't "Sicko" Resonate?

The Michael Moore movie about the U.S. health care system's problems, "Sicko," had incredible press before its debut. Moore appeared on the likes of Larry King, Leno, and Letterman, and about everywhere else in the days before its premier to hype his newest critical documentary.

Last week when the movie grossed only $4.5 million (putting it in 9th place) supporters pointed out that it only opened on 441 screens. The producer said he was just opening on a few screens while the movie "got its legs." Moore's last movie, "Fahrenheit 911," had opened on twice the screens--and grossed more than five times as much at $23.9 million in its first week on its way to a $100 million take.

Wait until next week they all said.

Well next week has come and gone.

On almost twice as many screens, "Sicko grossed only $3.6 million this past weekend--still putting it in 9th place and actually reporting less revenue than it did last weekend. Per screen, its revenue fell by about 50%.

So far, about a million people have seen it with a cumulative gross of $11.5 million. On the one-hand that's a lot of people.

But as a political statement, in a country with 300 million people, that's a pretty small audience. The antithesis of Moore, Bill O'Reilly, gets an audience multiples of that every weekday night.

After all the hype and with a U.S. health care system in such a fix, why hasn't "Sicko" resonated beyond what appears to be the already converted?

There could be any number of reasons. Perhaps its perceived as focusing on the negative with no viable alternative presented to its audience--people already know what the problem is and they want solutions.

More likely the 20-something folks, that go to movies more often than the rest of us, were more interested in seeing their childhood toys come to life in "Transformers" this weekend. Heavy policy isn't exactly what a lot of people think of for summertime entertainment.

"Sicko" is also a pitch for a single-payer government-run health care system.

Maybe someday America will get to that point. But I doubt it will be anytime soon.

During the past few years here in Washington, I have noted a marked focus on the part of many long-time single-payer supporters away from the policy they may see as the best--but also one they do not see as attainable anytime soon. They seem tired of holding-out for everything and getting nothing. The result has been a focus on "more realistic" incremental progress. "Families USA" is a case in point.

To be sure, there are those, like Moore, who haven't given up on getting us to a single-payer health care system in the U.S. But they look to be more marginalized at the moment than gaining traction. The presidential campaign of single-payer advocate Democrat Dennis Kucinich comes to mind.

"Sicko" is a political statement full of half truths taking pot shots at a system no one can defend.

I guess the people who buy movie tickets already knew that and just didn't think it was worth ten bucks.

July 16 Update: "Sicko" continues to wane. The weekend of July 13-15 Sicko grossed only $2.6 million in 756 theaters for a screen average of $3,500--the lowest of the three weeks. It has a three week gross of $15.8 million--66% of "Fahrenheit 911's" first weekend.

July 23 Update: Weekend gross of $1.9 million for 11th place with $1,701 per theater. Cumulative gross still below "F-911" first weekend at $19.4 million.

Watch the Wolf Blitzer interview with Michael Moore as Moore goes after CNN for trashing his movie.

Earlier post: A Review of the Movie "Sicko"--Michael Moore Blew It!

New Tool Kit: Massachusetts Health Reform

Ed Howard and his team at the non-partisan Alliance for Health Reform here in Washington have done another of their great jobs in putting together a resource for anyone interested in the Massachusetts health reform plan.

From their overview:

"Starting July 1, every adult in Massachusetts is required to have health coverage (except for 60,000 people exempted by the state). To help you understand the state's pace-setting near-universal coverage plan and its implications, the Alliance for Health Reform has compiled a toolkit with links to representative articles and documents from across the ideological spectrum."

You can download it from their site.

The Market Has a Place in Health Care But It Also Has Its Limits

Every leading health care proposal today includes a place for the market. Some believe government should run it all and then there are those who believe the real solution lies in just letting an unfettered market get it all done.

Health care is not like buying a set of tires. We lose our market-driven objectivity pretty quickly when we are faced with scary medical decisions for ourselves or for someone in our family.

The notion that if you just let an insurance plan rate consumers for their risks, with no rules, is market simplicity taken to the ridiculous.

Two Cato authors recently proposed just letting the market take its course:

"If companies [insurers] can charge more to cover people who are likely to need more care — smokers, the elderly, etc. — then it won't make any difference who does or doesn't buy insurance."

Two of my good friends, Joe Paduda and Richard Eskow, both highly familiar with the advantages and disadvantages of the marketplace quickly pointed out the deficiencies in such a unilateral approach.

From Joe's recent post:

"One of the more puzzling arguments against universal coverage is that advanced by the worthies at the Cato Institute. They argue that if insurance companies could just charge people based on their risk profile, the market would solve the problem of coverage."

This from Richard's recent post:

"The Invisible Hand does many wonderful things, but the notion of the free market as a Universal Solution Machine is closer to theology than it is to economics. The United States has the most deregulated and privatized health system of any OECD country, and we also lag in virtually all major health measures. Don’t think there’s a correlation? Then you have an argument to prove. The Cato authors don’t succeed."

Joe's full post: 'Free markets' in health insurance just don't work

Richard's full post: Daydream Believers: Libertarians and Healthcare

If it's raining where you are this 4th of July, their posts are worth a read.

Have a safe and fun holiday.

My take on the right mix of government and private markets: There is a Health Care Reform Plan That Doesn't Duck the Big Issues--and More Than 100 Heavyweight Stakeholders Support It!