Monday, August 31, 2009

Making Health Care Reform "Deficit Neutral" Accomplishes Little--So Why Is That the President's Health Care Reform Budget Objective?

For me, one of the more amazing things about this health care debate is the way the press and many advocates of health care reform have accepted the notion that the fiscal objective should be to pass a health care bill that is "deficit neutral."

With health care costs unsustainable, why is that an appropriate goal?

Deficit neutral means that any impact of a health care bill on the federal budget would neither increase costs, nor would a bill decrease costs, from what they would have been without reform. So, if federal health care costs remain the same post-reform why would we expect the outcome to be any different for the rest of the system? Why shouldn't we believe that post-reform health care would cost the same $4.5 trillion and 22% of GDP we expect it would cost in 2018 anyway?

Now, the Democratic bills would bring in many millions of people who are uninsured today and that is a real benefit. But we would bring them into that same unsustainable system.

I was struck by a recent exchange between Senator Evan Bayh (D-IN) and Fed Chairman Ben Bernanke earlier this summer. In the second minute of the video link below, Bayh and Bernanke point out that any "deficit neutral" health care bill does not get at the "heart of the problem" and agreed we need to do more--we need "systemic reform."

Why then is "deficit neutral" the stated fiscal objective for the President and the Democratic leadership in their health care bills?

Video link

Friday, August 28, 2009

Bob Bennett Wants to Turn "Control of Our Health Insurance System Over to the Government"–-Say What?

That’s what the Club for Growth is saying about Senator Bob Bennett’s health care proposals.

Apparently, the Club for Growth has a reading comprehension problem. Or, are they just trying to twist the truth about the Utah Republican's health care efforts? The Wyden-Bennett Healthy Americans Act has to be the most pro-market health care reform proposal on the table.

First, it does not have the controversial public health care plan option that the pending Democratic health care legislation does have. Every one of the health insurance plans that would be offered under Bennett’s bill would be a private plan.

The Wyden-Bennett plan also puts the value of any employer-provided health plan in the hands of the consumer. Employers can keep their plans and employees can remain in them. But consumers can also take the cash and go purchase any plan available.

For a long time, conservatives have suggested putting the value of health care plans in the hands of consumers, so they could use the money to buy the kind of plan that works for them, as well as changing the tax code as Wyden-Bennett does to facilitate that.

Senator Bennett’s bill also creates a health insurance exchange where consumers could go to compare policies and pick the one that is right for them but that is hardly a proposal for government to take over the health care system.

Likely the truth the Club for Growth is trying to twist has its roots in this: The conservative Heritage Foundation has been critical of the design of these insurance exchanges in Wyden-Bennett because they rely on the use of a standard plan. As they put it, “standardization undermines personal choice and market innovation.” I think that is a valid criticism of a bill that is by no means perfect in its original form.

But that is a long way from condemning Senator Bennett’s efforts to find a way to accomplish bipartisan health care reform as promoting “a government takeover.” As the conservative Heritage Foundation put it in their review of the bill:
“By introducing the Healthy Americans Act (S. 334), Senator Ron Wyden (D-OR) and his chief co-sponsor, Senator Robert Bennett (R-UT), have courageously challenged the status quo on the federal tax treatment of health insurance and public health programs for the poor. The bill correctly targets the inequitable tax treatment of health care that favors coverage obtained through the place of work. It also recognizes the weakness of the existing public health programs, Medicaid and the State Children's Health Insurance Program (SCHIP). The bipartisan bill has attracted a dozen co-sponsors, drawn equally from both parties.

“Still, as the chief sponsors point out, the bill is a work in progress, intended to stimulate discussion. And despite many attractive tax reform aspects, a troubling feature of the bill is that it would replace the current health system with one that is heavily regulated by the federal government: Individuals would have access only to plans permitted by the government and would be required to purchase such a plan.”
A “courageous” attempt at reform that Bennett and all of the other authors agree is a “work in progress” is hardly a reason for the Club for Growth to condemn good faith efforts.

The Club for Growth also claims that Bennett is sponsoring the bill with "liberal Democrats." The Wyden-Bennett bill has such “liberals” co-sponsoring it as Republicans Judd Gregg of New Hampshire, Mike Crapo of Idaho, Lindsay Graham of South Carolina, and Lamar Alexander of Tennessee.

Here are what these Senator’s and their co-sponsors for the Wyden-Bennett bill recently said in a Washington Post op-ed piece:
“The Democrats among us accepted an end to the tax-free treatment of employer-sponsored health insurance; instead, everyone—not just those who currently get insurance through their employer—would get a generous standard deduction that they would use to buy insurance—and keep the excess if they buy a less expensive policy.

“The Republicans agreed to require all individuals to have coverage and to provide subsidies where necessary to ensure that everyone can afford it. Most have agreed to require employers to contribute to the system and to pay workers wages equal to the amount the employer now contributes for health care.”
Legislating is about give and take. I expect Senator Bennett would favor a health insurance market more like the one the Heritage Foundation has outlined. But for this kind of effective leadership, and not having the perfect bill, the Club for Growth says Bob Bennett is in favor of government control of health care?

If we had more Senators like Bob Bennett conservative ideas for modernizing America’s health care system, like turning massive health care purchasing power over to consumers and creating a health insurance supermarket, would be making even more progress.

Bob Bennett deserves a lot better than this cheap shot by people who were supposedly his friends!

Thursday, August 27, 2009

The Health Reform Bills Would Be Great For the Business Of Health Care

Have you noticed how none of the big health care business special interests is running any negative health care reform ads? Why should they when each is poised to gain billions of dollars from it?

As President Barack Obama has said many times, any health care bill that costs about $1 trillion would be paid for, roughly half and half, with savings in the health care system and new revenues (taxes).

All told, health care providers will likely get hit by $500 billion in federal payment reductions over 10 years from what they would have received otherwise. This is their "savings" contribution to help pay for the overhaul effort. It amounts to no more than a couple of percentage points less than they would have received anyway.

But more importantly, the Congress is getting ready to spend $1 trillion over the same 10 years mostly to expand Medicaid and provide subsidies to the uninsured to help them purchase private health insurance and be able to pay their medical bills. The health industry, by giving up $500 billion, gets millions more patients armed with public and private health insurance cards. Not a bad deal—particularly when the other $500 billion needed to finance the bill comes from new levies on taxpayers, not bigger industry cuts.

The details show an even prettier picture for the business of health care.

Read the rest of this column at Kaiser Health News.

Wednesday, August 26, 2009

Health Care Reforms Deeper Problems


Note: We were asked by Northeast Florida's regional newspaper, the Florida Times-Union, to write a piece for lay audiences distilling our thoughts on what's behind the reform curtain. This piece published this week and, while we doubt much of it will be news to this blog’s readers, we wanted to offer it up as a summary statement.

Congress' health care reform debate has highlighted how American governance is broken and the difficulty of addressing our national problems.

Take, for example, whether health care is in crisis at all. Conservative commentators argue that America's health system is fine, that our excellent care simply costs more than other countries' poorer quality, and that most uninsureds can afford coverage. They ask why we should revamp a great system for the two or three percent of Americans who get less.

This misrepresents reality, though. Care and outcomes are often superior in other developed nations. In America, the ranks of the uninsured and under-insured have skyrocketed, from insurance costs that have grown four times general inflation for a decade. Health coverage is employers' most unpredictable major cost, a threat to their businesses' competitiveness, and they have increasingly offloaded costs onto employees. So while the marginalized uninsured are an important problem, declining coverage for the mainstream is the greater worry. Most know that, even with insurance, any major health problem can spell financial ruin.

As businesses and individuals have been priced out of health coverage over the last four years, commercial health plan enrollment has plummeted by as much as 20 percent, or about 36 million people. The Kaiser Family Foundation reports that 40 percent who lose group health coverage probably become uninsured.

Fewer people buying coverage means less money to pay for health care products and services, so the industry is experiencing an unprecedented financial decline. With reforms looming, it has fiercely advocated for universal coverage, which would provide stable funding for a larger patient population. Meanwhile, the industry has opposed changing business mechanisms that encourage waste, even though experts agree that one-third or more of all health care cost is unnecessary or inappropriate. But this raises an important question. Why not spend less by recovering wasted dollars, and then improve access?

The industry has pressed its goals through lobbying, which lets special interests exchange campaign contributions for policy influence. The non-partisan Center for Responsive Politics reports that, between January and June, the industry gave Congress more than $260 million. One lobbyist commented, "A person can reach no other conclusion than this is a quid pro quo [this for that] activity."

The funds have gone mostly to Democrats, the party in power now, and are producing their contributors' desired results. The current proposals expand coverage, but do little to reduce cost, failing to heed any of health care's management lessons from the last 25 years. For example, they won't re-empower primary care, which other nations have found will maintain a healthy populace for half the cost of our specialist-dominated approach. They fail to make care quality and cost transparent, which would let health care finally work as a market, and help identify the best health care vendors. They continue to favor fee-for-service reimbursement, which rewards delivering more products and services rather than rewarding results. And they all but ignore our capricious medical malpractice system, which most doctors say encourages defensive practice.

These problems and their solutions are structural, and are well understood within the industry. If reform does not pursue these structural approaches, health care will continue to drag down the larger economy. Our current problems will remain and intensify, at enormous cost.

Out of this experience, the American people should become aware of a couple of harsh truths.

First, so long as Congress willingly exchanges money for influence, American policy will favor special interests rather than the public interest. We'll be unable to meaningfully address our national problems: energy, the environment, education, and so on.

Second, so long as partisans distort the truth to discredit their opponents, rather than focusing on our very real problems, America's future will continue to be compromised.

Which is to say that we have deeper problems than an inability to fix health care.
Brian Klepper, PhD is a health care analyst based in Atlantic Beach. David C. Kibbe MD MBA is a physician and Senior Consultant to the American Academy of Family Physicians

Monday, August 24, 2009

There Will Not Be Health Care Reform in 2009 Without Republican Leadership

I will suggest that there is an opportunity for the Republicans to score a huge political and policy win. It can be done in a bipartisan way and it can be done in a way that does not sell out the core principles that either Republicans or Democrats believe in.

It would require a new effort—a clean sheet—this time initiated by the Republicans.

The Republicans have won August. No doubt about it. But they have “won,” not because they actually did anything to deserve the win—they pretty much sat back and let political gravity do all of the work.

Now what? Do Republicans really think they can sit back and do nothing for three or four more months and come out “winners?”

At this rate, this health care debate is headed for a stalemate that will not do the country, nor either party, any good.

More, I don’t know any leading Republicans who don’t think this health care system is in crisis, that we have to bring our costs under control, and every responsible American should have health insurance.

The Democrats could just be on their way to a health care reform “Waterloo”—again. Letting them implode on their own—with a little bit of help from the far right—is a tantalizing proposition. But it is not a terribly patriotic one.

I will also suggest that the American people are smart enough to know the difference between a Republican Party that reaches out to take a constructive role in turning this around as opposed to the party of “No” that backs themselves into an accidental “win.”

For Republicans who think they can again convert the Democrats’ health care problems into a big election victory in 2010, there is one huge difference between this battle and 1994. In 1994 the Congressional Republicans hadn’t been in power for decades—they had new and intriguing ideas. After the American voters’ verdict in the 2006 and 2008 elections, it is clear the American people don’t exactly see Republicans as a new and intriguing brand.

It’s pretty clear that the Republicans have as great a need to prove something to voters, as do the Democrats. Republican leaders just sitting there letting the talkmeisters do their work for them isn’t going to turn around voters’ perceptions of the Republican Party.

I will also suggest there is a pathway Republicans can be enthusiastic about suggesting to Democrats, that there already is precedence for, and about which Democrats should be able to become enthusiastic.

I would suggest four ideas for the Republicans:

1. Propose Bulletproof Health Care Security - Lots of Americans, especially those with health insurance, are worried health reform will hurt them. Republicans have a chance to put those fears to bed. They can propose that the President, the Congress, and all federal political appointees should have to get their health care from that same health insurance exchange regular citizens would use in the community in which their families live. Insurance underwriting reform would be part of it.

That guy we saw in a town hall this month screaming at his Senator could be a lot more comfortable knowing he would get exactly the same health insurance choices his Senator—and his President—got.

This approach would send a message that everyone could be confident about because their elected officials would be in the same boat.

It is also clear that most Democrats and Republicans can agree on leaving the employer-based system of health insurance alone—including ERISA. This would give individuals the right to keep the employer plan they now have or join their elected officials in the insurance exchange. It is the citizens’ choice—whatever leaves them wealthier and happier.

With this approach, Republicans can combine the kind of insurance networks the conservative Heritage Foundation has argued on behalf of for years with the kind of health insurance Ted Kennedy called for in his recent Newsweek essay.

2. Medical Malpractice Reform – None of the Democratic bills that have made it through committee even mention it. There won’t be any compromise between Democrats and Republicans over the old arguments about whether or not we need to cap damages. But the thinking over malpractice has evolved greatly in recent years—health courts, for example, designed to quickly resolve medical injury claims and promote medical error reporting toward improved quality.

In candidate Obama’s health care plan document he called for “promot[ing] new models for addressing physician errors that improve patient safety.” Sounds like health courts to me. Republicans should call him out on it by putting it in their offer!

3. Paying for It – It is gratifying that both Republicans and Democrats see the need to give families not covered by employer plans the subsidies they need to buy health insurance. Of course, that is by far the greatest cost in any bill.

I was struck by a recent Washington Post op-ed written by the co-sponsors of the Wyden-Bennett Healthy Americans Act—six Democrats and one independent plus five Republicans. In it, they said:
“The Democrats among us accepted an end to the tax-free treatment of employer-sponsored health insurance; instead, everyone—not just those who currently get insurance through their employer—would get a generous standard deduction that they would use to buy insurance—and keep the excess if they buy a less expensive policy.

“The Republicans agreed to require all individuals to have coverage and to provide subsidies where necessary to ensure that everyone can afford it. Most have agreed to require employers to contribute to the system and to pay workers wages equal to the amount the employer now contributes for health care.”
Let me suggest that Republican Senators Bennett, Gregg, Crapo, Graham, and Alexander are showing the way. Republicans don’t need to sign-on to the entire Wyden-Bennett bill so much as recognize that these bipartisan Senators have found a way to reorganize and modernize existing health care tax incentives toward raising revenue and making the system more efficient in a way that appeals to both parties.

And, it is notable that these Republicans and Democrats have also compromised on ways to reform the medical malpractice system with some unique ideas.

Wyden-Bennett is a model that covers everyone and is deficit neutral in the second year after it is enacted—and begins to bend costs down in the third year.

4. Tough Cost Containment – Liberals tend to believe that the best way to control costs is with the public option. I disagree with that just like Republicans do—I see it as a means to artificially suppress provider payments but not get at the waste in the volume of care that is really at the crux of the cost issue.

But what I have been gratified by are all of the liberals who say passing a health care bill would not be health care reform—more that it would be a wasteful exercise—without cost containment. I doubt there are any conservatives who would disagree with that statement!

August has proven that the public plan option is not tenable—as a cost containment device or anything else.

So how could both parties agree on containing costs?

I have suggested something I call the Affordability Model. Simply, we set and phase-in affordability goals for health care a number of years down the line. Insurance companies, doctors, hospitals, drug makers, and everyone else in the system gets to do business in the way they believe will improve cost and quality. Patients get to choose any health plan available in their market—a completely free market. Republicans ought to like that.

The networks of insurers, doctors, hospitals, and drug companies that are right in their choices and meet the cost containment goals would get to continue to offer their services and products through networks as tax deductible health plans for employers and consumers. The networks that don’t control their costs or maintain their quality will not be attractive to patients and employers. They will also not be tax deductible any longer—a meaningful government enforcement mechanism. More, if there were not any affordable networks available at the end of the period, a government plan would be made available. Democrats ought to like the enforceability of it all.

There are a number of other health care proposals both Republicans and Democrats can agree on such as greater use of health information technology, prevention, wellness, and comparative effectiveness research.

One can see a pathway to a very meaningful reform of America’s health care system that both sides could agree to.

But with the politics of health care now so polarized who is in the best position to extend the “olive branch” and break the impasse? I believe it is the Republicans who hold the keys to a breakthrough. A breakthrough that would be bipartisan and therefore one the American people could have confidence in. A Republican led bipartisan breakthrough on health care also wouldn’t hurt anyone’s confidence in the American political system.

Which course will most likely lead to a Republican return to power?

Sitting on their hands watching somebody else’s “Waterloo”—or demonstrating real leadership?

Thursday, August 20, 2009

Splitting the Bills? The Democratic Leadership and the White House Staff Really Need a Vacation

The latest word is that the Democratic leadership and the White House see a 60% chance” they will split their health care bill into two parts—one a budget bill that would be eligible for the 51-vote Senate rule and the other the operational non-budget portions that will need 60 votes.

This is all intended to get around the Byrd Rule—which allows the use of reconciliation rules only for budget items. I explained that rule in a post yesterday.

This week just keeps getting more bizarre. After the Secretary of HHS backpedaled on the public option on Sunday and liberals went ballistic on Monday, on Tuesday the White House said they really weren’t changing anything. Things took another big turn late Tuesday night with White House “sources” saying they were going to play hardball and go it alone by ramming Democratic health bills through with 51 Senate votes. But on Wednesday they were saying going it alone was not so much a threat as what would be left to them if the Republicans don’t deal in good faith—that nothing has been decided.

Now, they are 60% sure they are going to spit the bills and ram it through—concluding there is little or no chance for a deal with Republicans.

You know, it’s only Thursday—what are they going to leak tomorrow?

The split the bills idea has to be the most bizarre of all.

It would seem the assumption is that they can load the most controversial parts of their health care bills into one unpopular bill—the President’s health care approval rating is down to 41% per the NBC poll yesterday. Presuming they can get the public option into the budget portion—a big if—they would then get their most committed House and Senate members to pass that. Then they would tell the Blue Dogs and moderate Senate Democrats they should have no hesitation to vote for the operational part two of the bill. If course, without their vote for part two the more controversial part one could not become operational.

I can see the Democratic leadership selling this to doubtful members: “So we’ll do the tough vote and you moderates and Blue Dogs will only have to vote for part two and the fact that it makes the overall bill operational shouldn’t be a concern to you. All those people back at the town halls won’t have a clue you had anything to do with creating a public health plan option.”

The Democratic leadership and the White House staff really need a vacation.

In my mind, this does nothing for the real challenge Democratic leaders and the White House face. That challenge isn’t about legislative strategy in the House or the Senate. The real challenge is the fact that their health care approval rating is in the low 40s.

Wednesday, August 19, 2009

The Obama Admistration Would Do Well to Read the Senate Rules and the Polls

The latest reports are that the White House is getting ready to ditch any thoughts about a bipartisan health care bill and just ram the Democratic bills through the Senate with bare majorities.

Readers of this blog know that I don’t think it is ever possible to ram anything so big as health care through with slim Congressional majorities and even less public support. I would suggest people who think this is a good idea take a look at two things—the latest polls and the Byrd Rule.

Today, NBC is out with a poll that shows support for the Democratic bills well under 50%--and worse amongst swing independent voters. That is not to say the Republicans are doing well either—but they aren’t trying to ram anything through.

This poll was taken August 15th to the 17th—after the President’s town halls.

A few of the findings:

  • 54% are worried that government is going too far—41% are worried that reform will not do enough to lower costs and cover the uninsured.
  • 41% approve of the President’s handling of health care—47% disapprove.
  • Just 36% believe that Obama’s efforts to reform the health care system are a good idea—only 24% think they will result in better quality.
  • 43% say they approve of a public option—47% oppose it.
  • The cheap shots are having an effect—majorities think the Democrats would grant coverage to illegal immigrants, for example.
  • Only 21% approve of the Republican’s handling of health care.
  • 60% said the system needs big change—but that is down 12 points since April.

The notion that Democrats can ram something so big as health care reform through with the 41% approval rating the President now has on health care is just nuts.

Politically, they would be asking for an even bigger polarization on this issue than we already have. It is hard to believe they wouldn’t pay a huge price for that in November 2010. I know many liberals think this is the right course but the fact is that Obama won the presidency and Democrats extended their Congressional majorities not because of who liberals voted for but who moderates in this country voted for.

More, they can’t pass health care reform in the U.S. Senate with 51 votes. The “reconciliation” rules that allow for 51 votes are budget rules. The second the Dems try that route a Republican Senator will rise with a “point of order” successfully pointing out that 900 of the thousand page bill is “extraneous” to the budget—things like a public option, insurance exchanges, new underwriting rules.

The opportunity for parliamentary objections would occur under the “Byrd Rule.”

Here is the summary of the Byrd Rule from the Congressional Research Service:

The Byrd rule defines matter to be extraneous in six cases: (1) if it does not produce a change in outlays or revenues; (2) if it produces an outlay increase or revenue decrease when the instructed committee is not in compliance with its instructions; (3) if it is outside the jurisdiction of the committee that submitted the title or provision for inclusion in the reconciliation measure; (4) if it produces a change in outlays or revenues which is merely incidental to the non-budgetary components of the provision; (5) if it would increase the deficit for a fiscal year beyond those covered by the reconciliation measure; and (6) if it recommends changes in Social Security. (Italics added)

The first point, that reconciliation cannot be used to for matters that did not produce a change in outlays or revenues, would likely be the provision a Republican would use—pointing to insurance underwriting rule reform, for example, as not having a federal budget impact.

Law in the Budget Act defines the Byrd Rule—it cannot be suspended by a simple majority vote in the Senate.

It is likely that a Republican point of order on a any one of the non budget items in the bill would be found “extraneous” by the Senate parliamentarian—there is enormous precedent for such a ruling. In fact, the rule’s author, Robert Byrd (D-WV), warned President Clinton that he could not use reconciliation to ram his health plan through!

To overcome the parliamentarian’s ruling would take 60 votes.

The upshot of all of this—it will take 60 votes to pass a comprehensive health care bill.

It will also take a lot more than a 41% health care approval rating.

The White House needs to start thinking about how it will accomplish that and stop the threats it can’t carry through on.

August 20 update: Splitting the Bills? The Democratic Leadership and the White House Staff Really Need a Vacation

Monday, August 17, 2009

Co-Ops Are the Single Dumbest Idea I Have Heard in the Health Care Debate in Twenty Years

This is a repost from June 23--sort of like regifting...

I am sure you have heard the story about the committee that was charged with designing a horse but, because of the bureaucratic ways of the committee process, instead ended up creating a camel.

We will not see a Medicare-like public health plan as part of any health care reform bill in 2009. I know proponents don’t want to hear that but it is crystal clear to me there simply are not the Democratic votes in either house of Congress for it.

But proponents are bound and determined to get something with the moniker “public plan” attached to it before they will sign-on to a bill. In an effort to compromise, North Dakota Senator Kent Conrad has suggested a defanged public plan in the form of a not-for-profit health care cooperative. I have been critical of that suggestion on this blog because his proposals look to me to be no different than the dozens of not-for-profit community-based health plans already operating—not the least of which is North Dakota Blue Cross.

When the day is done, what would Senator Conrad’s co-op proposal accomplish that is any different than the not-for-profit community-based health plans, that already have 50% of the market share in the under-age-65 market, have achieved?

But let’s take it a bit further.

At the thirty thousand foot level the notion of a public health plan cooperative doesn’t sound like a bad one.

But when you dig into it and actually explore how such a thing would work, it looks more and more like a camel to me.

First, the stated objective of a public plan cooperative would be to step up market competition to lower costs—to negotiate lower prices and more efficient provider treatment protocols. The argument goes that the existing plans aren’t trying hard enough.

OK, let’s start with the notion that a co-op can do a better job of negotiating prices and protocols. But wait, on day one how many members does the co-op have? Well it has no members on day one. So, the co-op's provider relations guy goes to the doctor and hospital administrator and demands better prices and protocols. My guess is the provider’s response would go something like this, “So you are here because your stated objective is to screw my reimbursement down more than it is, you have no members now, and if I give you the rates to take members away from the existing health plans you are going to make life even more difficult for me than those existing health plans have?" My guess is that when the provider stops laughing…

Next, the co-op has to hire people to staff its management and operations ranks. Who are they going to hire? Out-of-work realtors? Obviously, the co-op will have to hire experienced health plan people. First, for those of you in the business, just think of all the competition for your services if 50 new health plans suddenly get lots of capital to start-up. But secondly, if the co-ops hire the same people as are running today’s health plans—particularly people in not-for-profit plans now—why would the end result be any different?

And, how will they compete with health plans--for and not-for-profit--who have spent decades developing billion dollar information technology systems, pricing databases, and provider networks? From a standing stop, how many decades will it take to create anything meaningful? And when they are done, on what basis does anyone believe they will look any different than all of the not-for-profits we have today?

And, how will the co-op compete for these new hires? Why would the best talent want to go to work for a quasi government agency paying government pay scales whose future is in doubt? Will the co-op pay more than existing health plans to lure talent away? If so, how will their administrative costs be any lower? After all, payroll is at least half of total overhead costs.

Just how will the government decide how to capitalize these new plans? In the 90s we spent $75 million to $100 million to capitalize a health plan in each of the major markets. How much capital will each co-op get? In the market, that question was answered through the creation of a business plan. Any private not-for-profit health plan that did not ultimately meet minimum scale or reserve requirements was scuttled. Just how much, and over how many years, will the government dump capital into these plans and who will make the decision that the limit has been reached? Will co-ops have an unlimited access to government capital without accountability? No matter how ineffective they are will the government just keep subsidizing their losses?

Already, there is talk in the Congress about allocating $10 billion to build these things.

This whole debate gets back to the simple question I have not heard any of the co-op proponents answer: Just how will a co-op turn out to be any different than North Dakota Blue Cross with its profit percentage of less than 1% and its board a cross section of the provider, business, and consumer community?

Or for that matter, any one of the dozens of other similar Blues plans and not-for-profit community-based HMOs in just about every county in America?

But when you are grasping for a compromise—and putting the urgency for compromise ahead of good policy—it sure is easy to come up with a camel.

Related posts:

Here's an Example of a Cooperative Not-For-Profit Health Plan--North Dakota Blue Cross

Health Care Cooperatives--An Old New Idea--So What's a Blue Cross Plan?

A Public Health Plan That Looks Just Like a Big HMO---Why?

The Other National Universal Systems of Care Are Not Our Problem

You can't have an American health care debate without plenty of trashing of single payer systems elsewhere.

I am not a single-payer advocate. I believe it is simplistic to think that if we just had one and eliminated the duplicate expenses multiple payers bring with them everything would be OK.

I think a single-payer solution is simplistic because it misses the different histories that have gone on. When advocates compare what we have to Canada and industrialized Europe they miss a critical point--these single payer systems are 40 to 50 years old. Over these decades, our free market system has evolved to a point very different than the Canadian and European systems. Their systems had much less money poured into them than ours did over this period. The biggest difference is that we now have this huge medical industrial complex that devours great sums of money. Does it often provide excellent, even better care? Yes. But it needs to be fed vast quantities of dollars every day to keep it humming.

Layer a single-payer system over this money monster and I fail to see how politicians are going to stand in its way any more than they are this summer. This, by the way, is not intended to be an endorsement of the free market that has pretty much stood by the side of the road and watched--and profited from it.

Just what place we will ultimately come to that will fix our system is still very much a work in progress--and it will have to be both political and market-based.

My point here is that trashing systems in Canada and Europe is a handy political exercise but it really isnn't helpful. In fact, it just diverts us from the discussion WE need to have about OUR system.

I have lived in Canada and carried an Ontario Health Insurance Plan (OHIP) card (as a documented alien no less.) I had Canadian insurance company executives defend their system over the mess they thought we had.

I have worked with many of the people who lead our European systems. Their challenges look a lot like ours. We had far more in common than was different.

There is an op-ed in today's Washington Post, "In defense of Britain's Health System," penned by a former British Health Minister.

A few points:

Every Briton is registered with his or her own family doctor, whom they can see when they need -- without paying a fee. These doctors are independent contractors to the health service and are recognized and rewarded for quality in their compensation -- so they can focus on what works, not just what pays. Expanding on the facilities that are already in place, by next year every community in England will have a physician's office open from 8 a.m. to 8 p.m. every day of the year, and you can simply walk in and see a doctor, for free, regardless of whether you are registered.

In the unfortunate instance that a patient is diagnosed with a dire disease, such as cancer, it often takes only a week or two for a patient to be seen by all the right specialists, complete all the required diagnostic tests and be ready for surgery or other interventions. This rivals the best care in the United States or anywhere else in the world.

Under our NHS constitution, patients have a legal right to choice of provider. That means any provider -- public, private or not-for-profit. By April 2010 our NHS will be the first health system in the world to systematically measure and openly publish the quality of care achieved by every clinical department in every hospital. It means patients will be able to make meaningful, informed choices on what is best for them and their family. Some of this data is already published.

Many of the mischief-making rumors have focused on our National Institute for Health and Clinical Excellence, the clinically led body, independent of government, that gives advice on the effectiveness of drugs and treatments. Call it fiscal conservatism or old-fashioned common sense, but we think you should pay only for what works. At the same time, it should be remembered that Britain's pharmaceutical industry is second only to the United States in its innovation and the significance of its discoveries. The NHS invents and delivers pioneering treatments, from the first clinical use of MRI in the 1960s to leading developments in robotically enabled scar-free surgery today.

You can read the full op-ed here.

Should we have the British system in the U.S?

No. They have plenty of their own problems not the least of which is the millions of their citizens that have bailed in favor of a private plan. But the vast majority of Brits, Canadians, and all the rest are proud enough of their systems not to want ours.

Let's stop trashing some pretty good systems that work for their people and focus on something that will finally make our people proud.

Saturday, August 15, 2009

Are Democrats Getting Ready to Ditch the Public Option? But They Would Still Be Challenged by the Trillion Dollar Price Tag

It looks to me like the popular objections to a health care bill being expressed by voters this month are concentrated in two primary areas:
  1. A concern about “government control of the health care system”—mostly around the public plan option.
  2. The trillion-dollar cost of a health care bill at a time deficits are swelling and worries about who will really end up paying for it.
As a result of the first concern, we are getting the first indications that some Democratic leaders are ready to ditch the robust Medicare-like public option and are beginning the process of talking the party out of demanding it be included in a health care bill.

This from Politico today:
After the toughest week yet for health reform, leading Democrats are warning that the party likely will have to accept major compromises to get a bill passed this year – perhaps even dropping a proposal to create a government-run plan that is almost an article of faith among some liberals…

"Trying to hold the president's feet to the fire is fine, but first we have to win the big argument," former President Bill Clinton said Thursday at the Netroots Nation convention, a gathering of liberal activists and bloggers who will prove most difficult to convince. "I am pleading with you. It is OK with me if you want to keep everybody honest. . . .But try to keep this thing in the lane of getting something done. We need to pass a bill and move this thing forward."
It has been clear to me for months, and I have been saying so on this blog, that the public option has not had the votes even among Democrats to make the finals. With all the heat “a government takeover” of health care has attracted from those at the town hall meetings either the Democrats ditch it or get used to the idea they have no chance of passing health care reform.

Given all of the stridency we have heard from liberals in recent weeks making inclusion of a public plan a litmus test for the minimum health bill they will vote for, it will be interesting to see just how this rolls out.

But getting rid of the public option doesn’t make health care reform easy.

While there are lots of other issues to sort through, I will suggest that the public’s unease with health care goes beyond the public plan. Voters seem every bit as uncomfortable with the trillion-dollar cost of reform and just how it would be paid for. They just don’t seem to buy the argument that savings from the current system and a tax on someone else will save them from eventually having to pay for it—and I think they are justified in believing that.

With talk about abandoning the public option also comes a discussion about a smaller health care bill that would cost less and just make a down payment on reform—focusing on insurance rules and the insurance exchange.

That is a possibility. However, even that will not be easy.

In order to craft an insurance system where pre-existing conditions limits and medial underwriting could be largely or entirely done away with, it would also have to be a fix that got lots of the healthy people to buy coverage. To do that, get a good mix of the sick and the healthy to maintain a viable insurance pool, the subsidies for those now uninsured and unable to afford the thousands of dollars health insurance costs would have to be robust.

Those insurance subsidies are what costs so much and make up the better part of the trillion dollar price tag the current Democratic health care plans have.

So, we can theoretically get rid of the robust Medicare-like public plan option with a stroke of the pen but not the trillion dollar price tag—and with it the voters’ concern about how much a bill costs and who will pay for it.

Related posts:

Health Insurance Reform or Health Care Reform? The President Gets It Right!

The Public Plan Option: Litmus Tests Are Never a Good Sign

Thursday, August 13, 2009

You Call This a Health Care Debate?

Any of us who do health care policy full time might as well take the rest of the month off and let the demagogues bent on scarring the American people just get it all out. I swear it is getting worse by the hour. Then maybe we can get back to a rational debate.

The British Health System's National Institute for Health and Clinical Excellence (NICE) and Dr. Ezekiel Emanuel have been particularly taking it on the chin lately. They are what we are all supposed to be afraid of.

NICE is run by a guy named Andrew Dillon. Dr. Emanuel is advising the Obama administration on health care and is one of the most respected health care ethicists in the country (but is handicapped by what his brother does for a living).

Sarah Palin want-to-be Betsy McCaughey, who had her last 15 minutes of fame during the Clinton health care debate, claims Dr. Emanuel endorses age discrimination for health care services--basically saying he wants to pull grandma's plug.

NICE actually makes the British system's tough decisions so many worry might have to be made here. For example, last year NICE issued guidance rejecting kidney cancer drugs Sutent (sunitinib), Avastin (bevacizumab), Nexavar (sorafenib) and Torisel (temsirolimus). This leaves patients with only one treatment option – interferon. The reason is these drugs only extended the life of the patient a very few months but they cost about $200,000 to keep a patient alive that long.

Dr. Emanuel is one of the most widely respected health care ethicists in the country. The issues McCaughey is using were quoted out of context and had to do with one of the things Dr. Emanuel gets to think about at the National Institutes of Health--what to do when you don't have enough organ donors for those who want organs.

A few years ago Andrew spoke at an international conference I chaired in DC having to do with how different industrialized nations manage their use of medical technology. It was clear to me that NICE was making some very difficult but unavoidable decisions about when to use expensive technology and when it just did not make sense to--all following the science. Whatever, he was doing what a consensus in his country had decided he should be doing.

Would you expect your group insurance plan to spend hundreds of thousands of dollars on a drug that extended your life for a very few months? Or your individual health plan? Or Medicare? Lots of gray areas? How would you propose settling them?

Unless of course you are one of these people out there these days telling the American people there is nothing wrong with a health care system that we can't afford (and is on its way to doubling in cost in the next ten years) and there is no reason why we can't just pretend that we can continue to have it all.

Would you want careful and deliberate thought given to just how we manage organs whose supply falls short of demand? Would you want someone to stand up and say $200,000 coming out of an insurance pool--public or private--for two more months with your body racked with cancer is nuts?

Well I would.

Tell you what, I will stand with Zeke Emanuel and Andrew Dillon any day of the week rather than these fear mongers that know better than to say the things they are saying and have no conscience for what they are doing.

I don't like the Democratic health care plans nor am I a single payer advocate. But just when did we get to the point that smearing some really fine people and getting 15 minutes of fame was worth scoring some cheap political points?


Related article in the London Telegraph rebutting criticisms of UK system.

Wednesday, August 12, 2009

Why the Democrats Are On Their Way To Blowing Health Care –Again

There will be a pretty long list of answers to this question but I will give you what I consider to be the number one reason.

The Democrats chose partisanship over bipartisanship.

There has been a school of thought in this town, of which I have strongly agreed with on this blog, that the only way you can do something as big and complicated and close to people’s self interests as health care is to do it in a bipartisan way.

The White House let the Democratic Congressional leaders choose a partisan route thinking they could ram something as big as health care through with their big majorities and without political cover from the center.

Now they are left with the 2009 health care reform well poisoned. Their far right opponents have, at least for now, hijacked the debate. This is no longer about health care reform. It is about just how far the American people want government to go past what has already happened this year. The new mantra is, “too far too fast.”

My sense is that when the government took over Chevrolet a switch went off in the minds of lots of middle Americans and the far right has capitalized on it. Message lost.

I firmly believe health care can only pass the Congress if in the Senate, for example, you have 70 or 75 votes. Simply, either party trying to move such a politically complex proposal has got to have bipartisan political cover. You will recall there were a ton of Democratic votes for George Bush’s Part D bill.

Whether health care reform comes from Republicans or Democrats the opposition will try to do what the opposition did in 1994 and is doing now. When the attacks start you need a bill that is not hard left or hard right but something the middle of the country can be comfortable with—you need a coalition of at least one side plus the middle. The best way to deliver that comfort to voters is to have lots of minority party folks on line with the majority—in the form of 70 or 75 Senate votes.

After this August fiasco, just how many Blue Dog arms do you think Pelosi is going to be able to break?

I will even go a step further--if this thing continues to sink the Democrats are going to have to demonstrate they clearly got the message or they will risk another defeat just as they did in the '94 elections over a health care debacle. That means dumping the architects of this mess--at least Pelosi and probably Reid.

After all, who will Pelosi have to blame? The "villain" insurance companies? I don't see any of their "fingerprints" on this.

I know there have been bipartisan efforts led by Baucus and Grassley in Senate Finance. Now, people will ask if that is the only hope left for a bill this year. The answer is no. While I have the greatest respect for these Senators, I see their effort as tantamount to trying to build a rickety bridge across a great chasm. The real problem they have faced in Senate Finance is that their parties are so far apart that it has been all but impossible for the two sides in these discussions to find anything practical to make everyone happy.

The “gang of six” from Senate Finance MIGHT come up with a compromise in September but it will be so convoluted in order to bridge the big divide that it will quickly fall flat—and that is IF the Republican party lets their three Senators even attempt to take the Dems off the hook they are dangling from.

Is health care bipartisanship a pipe dream? No. Ron Wyden figured out how to do it.

Insurance Companies Say They Can't Compete With a Public Option--But FedEx and UPS Do Pretty Well Against the Post Office--What's the Difference?

The Post Office doesn’t get to unilaterally fix the cost of all of the things it buys that go into its services--Medicare and Medicaid do.

What critics of the public health plan option often fear is that, like Medicare, a public option health plan would be able to unilaterally set what it pays doctors, hospitals, drug companies, and other providers. Private health insurers often pay providers 20% to 30% more than Medicare does.

If the Post Office had the purchasing power Medicare has it would unilaterally pay whatever price it wanted to for its labor contracts, its trucks, it’s office leases, etc. If the post office had that power just how long do you think FedEx and UPS would stay in business?

Since President Obama and supporters of the Democratic health care plans were asking that question all day yesterday I thought it might be helpful to answer it.

Tuesday, August 11, 2009

This Health Care Reform Debate is Really Starting to Scare Me—What if We Were Having a Real One?

The recent stridency of this health care debate has led me to wonder what if the Democrats were proposing real health care reform?

The Democratic health care bills are hardly more than expansions of the health insurance entitlement paid for by largely insignificant cuts to existing spending and lots of new taxes. Any provider cuts to Medicare are so small they will be easily cost shifted to the private sector.

These Democratic bills are not health care reform. Nothing in them would "bend any curves" or make our system more sustainable. They are clearly not the systemic health care reform we need. At the end of the day our federal deficits, for example, are projected to be just where they would have been.

So, if these people out to scare folks more than conduct a rational debate can get away with it over such minor changes to the American health care system can you imagine the things they would be saying about real health care reform?

George Lundberg has a great post over at The Health Care Blog in which he suggests a number of meaningful changes to how care is delivered—by eliminating waste not medical necessity. Here is a portion of his post:
Currently several House and Senate bills include various proposals to lower costs. But they are tepid at best, in danger of being bought out by special interests at worst.

So, what can we in the USA do RIGHT NOW to begin to cut health care costs?

An alliance of informed patients and physicians can widely apply recently learned comparative effectiveness science to big ticket items, saving vast sums while improving quality of care.

  1. Intensive medical therapy should be substituted for coronary artery bypass grafting (currently around 500,000 procedures annually) for many patients with established coronary artery disease, saving many billions of dollars annually.

  2. The same for invasive angioplasty and stenting (currently around 1,000,000 procedures per year) saving tens of billions of dollars annually.

  3. Most non-indicated PSA screening for prostate cancer should be stopped. Radical surgery as the usual treatment for most prostate cancers should cease since it causes more harm than good. Billions saved here.

  4. Screening mammography in women under 50 who have no clinical indication should be stopped and for those over 50 sharply curtailed, since it now seems to lead to at least as much harm as good. More billions saved.

  5. CAT scans and MRIs are impressive art forms and can be useful clinically. However, their use is unnecessary much of the time to guide correct therapeutic decisions. Such expensive diagnostic tests should not be paid for on a case by case basis but grouped along with other diagnostic tests, by some capitated or packaged method that is use-neutral. More billions saved.

  6. We must stop paying huge sums to clinical oncologists and their institutions for administering chemotherapeutic false hope, along with real suffering from adverse effects, to patients with widespread metastatic cancer. More billions saved.

  7. Death, which comes to us all, should be as dignified and free from pain and suffering as possible. We should stop paying physicians and institutions to prolong dying with false hope, bravado, and intensive therapy which only adds to their profit margin. Such behavior is almost unthinkable and yet is commonplace. More billions saved.
Can you imagine what these people would be saying about George's ideas?

Monday, August 10, 2009

The Bigger the Lie

I come from a corporate background.

A longtime ago a chief marketing officer introduced me to the term, “The Big Lie.” Apparently, this also applies to politics.

As he put it, in not a complementary way, the bigger the lie that is told the easier it is to believe.

Sarah Palin has been practicing Big Lie politics.

She recently posted on her Facebook account:
“The America I know and love is not one in which my parents or my baby with Down Syndrome will have to stand in front of Obama’s ‘death panel’ so his bureaucrats can decide, based on a subjective judgment of their ‘level of productivity in society,’ whether they are worthy of health care. Such a system is downright evil.”
Now, readers of this blog know I am not enamored by the Democratic health care bills—my view is that they are about a little cost containment “lite,” shave the providers a little bit, and raise taxes by at least $500 billion and call it “health care reform.” I am more than disappointed in where the majority party has taken this.

But what Palin and a number of other right-wingers are doing is appalling.

And, too often Republican and conservative leaders have attempted to rationalize this behavior—if not outright use it for political advantage. Newt Gingrich responding to Palin's comments for example, “Communal standards historically is a very dangerous concept. …You are asking us to trust turning power over to the government, when there are clearly people in American who believe in establishing euthanasia, including selective standards.”

Rather than rationalizing this kind of thing it’s high time that leading Republicans and conservatives disavow any connection to this kind of behavior—they know better.

It looks like lots of mainstream Americans are having trouble with the Democrat’s health care plan. They should.

But these extremists who just plain misrepresent the facts only undermine credible criticism and they risk a backlash that will just bounce this debate from one extreme to another that would have nothing to do with the honest health care debate this country needs.

Just how much lower are they prepared to go?

Patriots indeed.

Saturday, August 8, 2009

Health Insurance Reform or Health Care Reform? The President Gets It Right!

Advocates of the health care bills now pending in Congress, led by the President, have been calling for health care reform. They argue that our health care system is unsustainable as it is. Not only do we need to create a system of universal coverage but also we need to do it in a way that is sustainable, affordable, and doesn’t continue to add to our deficits.

They are right.

But, for months I have been saying that the health care bills in the Congress have not been health care reform bills but expansions of the health insurance entitlement with some cost containment “lite,” a little shaving off provider payments (a cut of about 1% from what providers would have received in aggregate over the next ten years anyway), and $500 billion or more in new taxes.

In his radio address on Saturday, the President used the term “health insurance reform” five times in talking about why we need legislation this year and not once did he call for health care reform.

The President said, "We must lay a new foundation for future growth and prosperity, and a key pillar of a new foundation is health insurance reform - reform that we are now closer to achieving than ever before."

I believe we need a lot more than health insurance reform—we desperately need health care reform--for all the reasons the President said we did when he first opened this debate.

But at least he’s now calling it what it is.

Thursday, August 6, 2009

The Public Plan Option: Litmus Tests Are Never a Good Sign

Before now, I can think of only one “litmus test” in American politics—abortion.

That is an issue that simply polarizes the nation—and our political system. On a good day, people on one side or the other just agree to disagree and move on.

But I think we are seeing another litmus test issue emerge—the public health plan option.

I have no doubt that there are not the votes to pass a public plan option in the U.S. Senate. After this recess, I very much doubt there will be the votes to pass it in the House.

If you don’t believe me, listen to the Democratic Budget Chairman, Kent Conrad; "The hard reality is . . . that a public option does not have enough support in the Senate to pass.”

I have also never heard the political dialogue on an issue so strident so late in a debate—coming from both sides.

Neither side gives any indication—even between the lines—they are willing to give on this issue.

I recently saw a news conference held by the Democratic Chairs of the Progressive, Black, and Asian Pacific Caucuses in the House all come up to the microphone and say in the most uncompromising terms they will not ever vote for a health care bill that does not have a robust public plan option. The language was way beyond the normal political posturing.

Needless to say, conservatives won’t have anything to do with a public health plan option. More, they see their opposition as gaining traction and they see no reason to let the Democrats off the hook.

The White House has not been helping either. Way past the point that I would have expected them to begin softening their tone on the issue, getting ready to take what they can get on health care, they continue to be adamant in support.

No one is leaving themselves an escape hatch.

A litmus test for any policy issue is a prescription for a political train wreck.

Never Give Up!

At the rate this crazy health care reform debate is going it could well come full circle and back to twelve Senators who still think they have a good idea--if everyone else would stop digging in on what they can't agree on.

This from a Washington Post op-ed they co-authored this week:

As 12 U.S. senators from both sides of the aisle who have widely varying philosophies, we offer a concrete demonstration that it is possible to find common ground and pass real health reform this year. The process has been rocky, and slower than many had hoped. But the reports of the death of bipartisan health reform have been greatly exaggerated. Now is the time to resuscitate it, before the best opportunity in years is wasted.

The Democrats among us accepted an end to the tax-free treatment of employer-sponsored health insurance; instead, everyone -- not just those who currently get insurance through their employer -- would get a generous standard deduction that they would use to buy insurance -- and keep the excess if they buy a less expensive policy.

The Republicans agreed to require all individuals to have coverage and to provide subsidies where necessary to ensure that everyone can afford it. Most have agreed to require employers to contribute to the system and to pay workers wages equal to the amount the employer now contributes for health care. The Congressional Budget Office has reported that this framework is the only one thus far that bends the health-care cost curve down and makes it possible for the new system to pay for itself. It does this by creating a competitive market for health insurance in which individuals are empowered to choose the best values for their money and by cutting administrative costs and spreading risk across large groups of Americans.

Ron Wyden is a Democratic senator from Oregon. Robert F. Bennett is a Republican senator from Utah. The other authors of this op-ed, and co-sponsors of the Healthy Americans Act, are Sens. Debbie Stabenow (D-Mich.), Ted Kaufman (D-Del.), Daniel K. Inouye (D-Hawaii), Mary Landrieu (D-La.), Joseph I. Lieberman (I-Conn.), Bill Nelson (D-Fla.), Judd Gregg (R-N.H.), Michael D. Crapo (R-Idaho), Lindsey O. Graham (R-S.C.) and Lamar Alexander (R-Tenn.).

Are these twelve "tilting at windmills?"

My observation is that we are nowhere close to achieving any kind of health care bill in 2009. This thing is deadlocked. When I drill down past all of the optimistic spin I find Senators and Representatives that can't agree on any one of dozens of key issues. Those House bills that are out of committee? Wait til you see the floor debate on those. After this recess, it won't be pretty and I'm talking about moderate and conservative Democrats here.

The Senate Finance bipartisan "gang of six" are attracting loads of attention as the Senate heads home for the recess. But take a look at what they're coming up with and I doubt you could find another six Senators that would sign on to it.

But the twelve who have signed on to the Wyden-Bennett Healthy Americans Act aren't giving up.

Don't count them out--they just might outlast every other idea put on the table. Goodness knows they've outlasted dozens that have come and gone already!

Tuesday, August 4, 2009

Leave the Town Halls Alone!

Apparently, conservative activists are attempting to disrupt town hall meetings being held by Democratic members of Congress to discuss the health care bills.

I can tell you from conversations I have had with members of Congress that these town hall meetings are VERY important to representatives and senators of both parties as a way to gauge the mood of their constituents. If activist groups disrupt them members will not know what they're voters really think and the time back home with constituents will be severely undercut.

These town hall meetings are grass roots democracy at work.

If the activists really believe in what they are saying they should have the confidence to let the people speak.

Finally, A Reasonable Plan for Certification of EHR Technologies


A caution to readers: This post is about methods for certifying Electronic Health Record (EHR) technologies used by physicians, medical practices, and hospitals who hope to qualify for federal incentive payments under the so-called HITECH portion of the American Recovery and Reinvestment Act (ARRA). It may not be as critical as the larger health care reform effort or as entertaining as Sarah Palin, but it WILL matter to hundreds of thousands of physicians, influencing how difficult or easily those in small and medium size practices acquire health IT. And indirectly for the foreseeable future, it could affect millions of Americans patients, their ability to securely access their medical records, and the safety, quality, and the cost of medical care.

Three weeks ago, on July 14-15, 2009, the ONC's Health IT Policy Committee held hearings in DC to review and consider changes to CCHIT's current certification process. The Policy Committee is one of two panels formed to advise the new National Coordinator for Health IT, David Blumenthal. In a session that was a model of open-mindedness and balance, the Committee heard from all perspectives: vendors, standards organizations, physician groups, and many others.

And then, on July 16, they released their final recommendations on what is now referred to as "HHS Certification." The effects of their recommendations - these are available online and should be read in their entirety to grasp their extent - are potentially monumental, and could very positively change health IT for the foreseeable future.

At the heart of these hearings was the issue of who will define the certification criteria and who will evaluate vendors' products. Among many others, we have voiced concerns that the Certification Commission for Health Information Technology (CCHIT), the body currently contracted by HHS to perform EHR certification, has been partial to traditional health IT vendors in defining the certification criteria, and in the ways certification is carried out, and thereby able to inhibit innovation in this industry sector. Despite its leaders' claims that the certification process has been developed using an open framework, CCHT's obvious ties to the old guard IT vendors have created an overwhelming appearance of conflict of interest. That appearance has not been refuted by CCHIT's resistance to and delays in implementing interoperability standards, or by its focus on features and functions over safety, security, and standards compliance.

In the hearings that led to the recommendations, longtime IT watchers were treated to some extraordinary commentary, much of which dramatically undermined CCHIT's position.
  • Dr. William Stead from Vanderbilt recommended a narrow focus for certification on 'data liquidity' and solving the problem of health data exchange (i.e., interoperability) of summary health information. Dr. Stead supported the idea of separating the data from the applications, which we have written about in our blogs on several occasions.
  • Two very experienced Technology Standards professionals, Cita Furlani and Gordon Gillerman of the National Institute of Standards and Technology (NIST) laid out the international standards-based framework for Conformity Assessment, one small part of which is certification, testing for which is always performed by Third Parties. They pointed out that under this framework, Third Parties are by definition independent and unbiased, and required to not have financial interests in the outcomes of the certification process.
  • In more on-the-ground testimony, Paula Anthony, CIO at East Texas Regional Medical Center, described her organization's decision, after a multi-million dollar investment, to jettison one CCHIT-certified EHR product because it could not reliably and safely exchange data with another CCHIT-certified HIT product. If there was ever a succinct indictment of the failures of CCHIT, this was it, and everyone in the room knew it.
The recommendations released the day after the public sessions reflected these concerns. Among the Policy Committee's major recommendations:

A New Certification Definition
"HHS Certification means that a system is able to achieve government requirements for security, privacy, and interoperability, and that the system would enable the Meaningful Use results that the government expects...HHS Certification is not intended to be viewed as a 'seal of approval' or an indication of the benefits of one system over another."

In other words, as the definition of Meaningful Use is now tied to specific quality and safety improvements and cost savings that result from health IT -- among them e-Prescribing, quality and cost reporting, data exchange for care coordination, and patient access to summary health data -- HHS Certification will closely follow. Rather than pertain to an EHR's long list of features and functions, some of which have nothing to do with Meaningful Use, certification will be focused on each IT system's ability to enable practices and hospitals to collect, store, and exchange health data securely.

Who Determines the Certification Criteria
The Office of the National Coordinator - not CCHIT - would determine certification criteria, which "should be limited to the minimum set of criteria that are necessary to: (a) meet the functional requirements of the statute, and (b) achieve the Meaningful Use Objectives." As regulator, funder for this project, and a major purchaser of health services, the government, not users or vendors, will now determine HHS' Certification criteria.

A New Emphasis on Interoperability
"Criteria on functions/features should be high level; however, criteria on interoperability should be more explicit." That is, functions/features criteria will be broadly defined, but there will be a greater focus in the future on the specifics associated with bringing about straightforward data exchange.

Multiple Certifying Organizations
ONC would develop an accreditation process and select an organization to accredit certifying organizations, then allow multiple organizations to perform certification testing. In other words, the Committee recommended that CCHIT's monopoly end .

Third Party Validation
The "Validation" process would be redefined to prove that an EHR technology properly implemented and used by physician or hospital can perform the requirements of Meaningful Use. Self-attestation, along with reporting and audits performed by a Third Party, could be used to monitor the validation program.

Broader Interpretation of HHS Certification
HHS Certification would be broadly interpreted to include open source, modular, and non-vendor EHR and PHR technologies and their components.

These bold, forward-thinking proposals from the HIT Policy Committee have not been accepted yet. But in our opinion they should be. These measures would encourage new technologies to enter the market for physician medical practices seeking EHR technology, and wrest control away from the legacy health IT vendors that have maintained barriers and delayed adoption, so you can be sure that the old guard players are doing everything possible to have them rejected.

But these are hugely progressive steps in the right direction, toward allowing HIT to enable improvements in care and cost efficiencies that would be in the best interests of users and the public at large. If implemented, the changes recommended by the HIT Policy Committee would create greater choice, more standardization, lower price, less interruption of the practices -- as well as a check from CMS or Medicaid each year to help smooth the implementation, starting in 2011.

David C. Kibbe MD MBA is a Family Physician and Senior Advisor to the American Academy of Family Physicians who consults on health care professional and consumer technologies. Brian Klepper PhD is a health care market analyst. Their collected collaborative columns may be found here.


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