When it Comes To Health Care Policy It Really Doesn't Matter Which Democrat Or Which Republican Wins Their Nomination

With "Super Tuesday" upon us, I am once again bringing back a post that argues there is little difference among the candidates in each of their respective parties.

My suggestion is that you not cast your caucus or primary vote for a candidate based upon their health care reform plan.

From “thirty thousand feet” the leading Republicans are offering much the same health care policy ideas—a more vibrant market serving a more responsible consumer who would control his health care choices in a system that doesn’t need to spend more money.

And, from that same "thirty thousand feet," the two remaining Democrats are all offering about the same thing--$100 billion+ in new annual spending to guarantee access for virtually all Americans to existing public and private health plan options as well as some new ones created by the government.

Republicans support an open market—no mandates and less insurance regulation—believing that the market must first get costs under control by developing new and more efficient offerings for people in the private market based on consumer-driven principles and new and more efficient and appealing options for people who have public coverage as well.

Democrats call for shared responsibility—often mandating employers and consumers to participate in their near universal system made up of Medicare, Medicaid, SCHIP, private individual coverage offered through government-run marketing structures, a Medicare-like government plan option for those under age-65, and existing employer plans.

I hate to say that it doesn’t really matter which of the Democrats, or Republicans, wins their separate primary battles. But in terms of the nits health care policy it really doesn’t.

Sure there are differences in their health care policy proposals. Among the Democrats, Obama doesn't have an individual mandate to buy coverage while Clinton does. Among the Republicans, McCain uses a tax credit to help people buy coverage while Romney talks about tax deductions.

But remember, these are political proposals--generally just a few pages long. The real health reform process will eventually have to go through the legislative "sausage factory" that is Congress and I will suggest that the starting point from one Democrat compared to another, or one Republican compared to another, is hardly material.

As you prepare to vote in your state's caucus or primary, I would recommend that you focus on the other issues that are important to you, the "electability" of each of the candidates, and perhaps most importantly on the issue of health care, which of these candidates can finally break the health care reform logjam and get something done.

Whoever the eventual nominee is in each of the parties, we will have a Democrat and a Republican offering a dramatically different approach to American health care security.

The general election is where the big decision will be made on health care--and everything else.

You can see my analysis of each of the candidates plans by using the index in the right column.

Poll Shows Democratic Presidential Candidates Attracting Independents and Moderates With Their Health Reform Plans

I was struck by this conclusion in today's Los Angeles Times regarding their recent voter survey:

"In one of the most politically significant results, the poll finds that independents and moderates were generally lining up with Democrats in the healthcare debate.

"The survey also suggested an explanation for the emerging alignment: Independents were most likely to complain about "job lock" -- the view that they are stuck in jobs they don't like solely because of health benefits.

"In all, 20% of independents said they or someone in their household were forced to stay in a job because it provided healthcare, compared with 13% of Democrats and 5% of Republicans.

"Independents are more insecure in terms of the issue of 'job lock,' which causes them to lean more toward Democrats on the healthcare issue than Republicans, said Robert Blendon, a public opinion expert at the Harvard School of Public Health."

As I have said in earlier posts regarding the Republicans' health reform proposals, their positions may look good in the primaries where they must please only conservative Republican voters, but they risk losing the middle of the country if they don't get a lot more serious about health care reform.

Leading Democratic Presidential Candidates Comment on Health Care This Week

Joe Paduda, over at Managed Care Matters, is attending the "Take Back America" conference in DC this week. Joe has been posting a review on his site of each of the Democratic candidates comments on health care.

Comments include a review of Clinton, Edwards, Obama, and Richardson.

Wall Street Journal Sends Shockwaves Through the Health Insurance Markets With the Headline "Health Savings Plans Start to Falter"

It's the kind of headline I would have expected to see in the New York Times instead of the Wall Street Journal but there it was in Tuesday's edition.

Vanessa Fuhrmans' article seems to have unleashed some pent-up frustration in the health benefits market on the subject of health savings accounts (HSAs) specifically and consumer-driven care generally. It is as if it represents a turning point for how health savings accounts (HSAs) and consumer-driven care are going to be seen by the benefits market from this point forward.

The article points out that HSA growth may have stalled--the number of workers enrolled in HSAs through work grew only slightly, from 2.4 million in 2005 to 2.7 million in 2006. When employees had a choice of plan type, only 19% picked an HSA. The surveys also show low satisfaction rates for these plans. The managing director of Towers Perrin's health care practice: "If I were a product manager in any other industry and saw the scores this low in customer satisfaction and understanding, I'd be thinking of pulling that product from the shelves and retooling it."

Just to get my own bias on this issue out in the open, I have never believed that consumer-driven health care was any kind of silver bullet for solving America's health care problems. That said, I don't see much harm in making these plans available--particularly to consumers who can afford the extra financial risks they can create. These plans enjoy better consumer acceptance in the individual health market--particularly among higher paid consumers because they are a fantastic tax preference and a great way to fund the high deductible plans this higher-earning market tends to want anyway.

But HSAs as a health policy tool to fix the American health care system? Give me a break.

Consumer-driven care is a concept built on a free market foundation. And that foundation is turning out to be one that is pretty weak.

• First, for people to act in an efficient way, they have to have information. They have to know their options and be able to assess the options. The medical directors of the leading health plans can hardly manage care optimally. How did we ever expect regular folks to figure it out. The information just doesn't exist--beyond some marketing brochures.
• Second, the consumer-driven movement assumed that patients would want to take more control of their health care challenges if there was a financial incentive for them to do it. We are finding that the opposite is true. The health care delivery system is a hugely complex tangle and consumers are more interested in finding providers and/or insurers they can trust to guide them through it than thinking this needs to be their preoccupation. Ask anyone who has had a serious illness, or managed one for a close relative, and they will recount one nightmare after another about trying to get the best care and their frustration in trying to untangle bills and insurance documents. Who would actually want to do this?
• Third, and you have all heard this a million times but we have to keep it on the list, 75% of all health care costs are incurred by the 15% sickest people. Look at all the consumer-driven financial incentives and you will find they are first-dollar oriented. Those people with all the high health care claims, and most of the costs, blow through those corridors very quickly and into full-pay areas where they no longer have financial incentives to better manage care--if they wanted to and could.

More information, price transparency, incentives to be better health care consumers, are all great ideas. Clearly, these concepts are responsible for the much better take-up rate for generic drugs and the huge savings there. The $5 co-pay and $100 deductible were around way too long. But the consumer's ability to be buy serious health care like he would buy a set of tires was a silly idea in the first place. This idea was pushed by the same "geniuses" who today write books about how we will save the U.S. health care system with new technology as the next "silver-bullet." All true to some extent but far more a sign of just how naive they are about the down-to-earth challenges we face.

We are at an interesting place in the national health policy debate.

One Democrat after another--so far Obama and Edwards--is proposing comprehensive health reform built around the Massachusetts health reform plan. That plan now has its challenges in getting off the ground and proving-out its proponents' ideas.

On the Republican side, we already have two candidates--Giuliani and McCain--who have said they want to work toward a more market-driven health care system with the consumer-driven concepts and HSAs at its core. But now even the Wall Street Journal is challenging the bottom line in that health care philosophy.

We have two big competing health reform ideas--one Democratic and one Republican--facing off in the upcoming national election just as real life results from both of these models are becoming available.

The candidates had better be careful to connect their rhetoric to the reality.

McCain to Propose a Health Care Reform Plan--Both Democrats and Republicans Becoming Predictable on Health Care

Republican presidential candidate Senator John McCain said this weekend that he is working on a health care reform proposal. He gave no time for its release but did mention a number of components:

• His plan will not include tax increases.
  
• It will not include any coverage mandates--presumably individual or employer mandates.
• He would make greater use of health care information technology.
• It will expand on the current State Children's Health Insurance Program (S-CHIP).
• It will include greater emphasis on individual responsibility and will include the use of health savings accounts (HSAs).
• It will include medical malpractice reform.
  

While short on details at this early stage, McCain's health reform plan would appear to follow the usual conservative Republican philosophy of more individual responsibility and the use of market forces.

It would also appear that McCain's proposal will be very similar to the preliminary information we have seen on Rudy Giuliani's forthcoming health care reform proposal.

Both the leading Democratic and Republican presidential candidates appear to be falling in line along predictable policy outlines.

Generally, Democrats are emphasizing more comprehensive and expensive plans that look a lot like the recently enacted Massachusetts plan--with costly expansions of existing public and private plans and requirements that individuals and/or employers pay for coverage. Many Democrats see the bigger health insurance pools, like employer plans and traditional Medicare, as the best way to deliver affordable and comprehensive benefits.

Republicans, on the other hand, generally favor more individual responsibility, a more transparent market, and a movement away from the traditional, and generous, employer-provided health care that many Republicans believe have helped push health care costs higher. Many conservative Republicans believe employer plans have insulated consumers so much that the usual market forces have been lost in health care and that the private markets should also be brought to bear to bring Medicare and Medicaid costs under control.

During the primary season at least, health care doesn't look to be a deciding issue. Simply, the leading Democrats all look to have similar health care proposals--no real opportunity to differentiate candidates there. Now, it appears that at least two of the leading Republicans--McCain and Giuliani--will also have indistinguishable health care proposals.

However, Republican presidential candidate Mitt Romney has yet to tell us what his health care platform will look like. Romney is presenting himself as a conservative Republican but, as the recent Governor of Massachusetts, has signed the Massachusetts health reform law that has become the baseline for the leading Democratic candidates' health care reform proposals.

Now what will Romney do? Will he move in the direction of the Democratic Massachusetts-like proposals or will he move away from his own legacy and away from Massachusetts? I wouldn't bet on this self-described conservative offering anything like the Massachusetts-style plans we have seen the Democrats propose.

Presuming no surprises from Romney, there will be little on health care to differentiate the front-runners in either party from their leading rivals during the primary season.

But, come the general election, there will likely be a clear choice on health care. From what we have seen so far, Clinton, Edwards, and Obama all have proposals dramatically different than what we will see from McCain and Giuliani--and likely Romney.

Come November on health care, the choice will likely be very clear.

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

As the presidential candidates, Republican and Democratic, begin to come forward with their health reform plans, a side debate is heating up about whether any meaningful health care reform plan has to have a mandate, individual or employer.

The reasoning goes that for health care reform to work we need to get about everyone in the pool--both in order to solve the uninsured problem and to be able to adequately spread the cost of health insurance across as many people as possible.

We do need to spread the cost of insurance over a big pool to get the best cost structure--a pool that isn't just populated by the old and sick and therefore one that costs a lot.

However, the notion that we have to either mandate that all individuals buy coverage--or that all employers provide it--is a myth.

Today, there are a number of health insurance pools that are large enough to provide an optimal spread of risk. Each of these pools is voluntary--not mandatory:

• Most employer plans. No employer requires all employees to join their health plan. All employer health plans are voluntary. Yet employer after employer--many self-insured with just a few hundred participants--have very efficient programs.
• The Part D Medicare drug benefit. The plan is voluntary and enough people have signed up to make it workable.
• Part B of Medicare. The portion of Medicare that covers physician and other non-hospital costs is voluntary and almost all seniors sign up for it.

Each of these voluntary health insurance plans works quite well without any individual mandate.

However, each of these plans is affordable. Employers typically pay at least 75% of the costs for their employees. The government pays 75% of Medicare Part D and Part B costs.

So, it's simple.

The problem is not making people buy coverage--the problem is making health insurance coverage affordable. Massachusetts learned that this year when they first tried to mandate that all citizens buy health insurance but had to back-off because they couldn't produce a health insurance plan that everyone could afford.

If you make health care affordable enough people will come to adequately populate the insurance pool.

The challenge is not to force people to buy health insurance. The challenge is making it affordable so they can.

Many are now focusing on whether or not Barack Obama, John Edwards, Hillary Clinton, Rudy Giuliani, or any of the rest, have a mandate in their health reform plans.

Wrong.

What we need to focus on is how are they going to make health care affordable.

It's the costs, stupid!

Related posts:
Giuliani Set to Announce a Health Care Proposal--But He Has to Make it Affordable for Everyone

Deja Vu in Massachusetts--We've Been Down this Road Before--The Massachusetts Health Care Plan and Health Care Costs

It's the Cost of Health Care Stupid!!!

Clinton, Edwards, Obama--Offering Health Care Reform Proposals More Similar Than Different

In sailboat racing there is a strategy called "covering." It means that when your competitor makes a move you make exactly the same move. That way, you have covered their every move and they can't get away from you because of any new tactic they aim to employ.

When you "cover" you intentionally stay even during that phase of the race--you have no intention of getting ahead at that point.

On health care so far in the Democratic race, Clinton, Edwards, and Obama are "covering." They are proposing pretty much the same things and as a result protecting themselves from criticism--when compared to their Democratic rivals--on the issue of health care reform.

Hillary Clinton, John Edwards, and Barack Obama obviously don't intend to win the nomination on health care--but more importantly they don't intend to lose the nomination on this highly volatile issue.

Each of the Democratic front-runners have so far proposed essentially the same health care reform steps.

Months ago, John Edwards proposed a comprehensive plan building on existing public and private programs and largely paid for by ending the Bush tax cuts for the "rich" and mandatory employer contributions. His plan contained an individual mandate and a series of mostly non-controversial cost containment provisions I would label "cost containment lite." His plan looks very similar to the recently enacted Massachusetts health reform plan.

Last week, Hillary Clinton unveiled the first elements of her plan focusing on a series of cost containment proposals using many of the same "cost containment lite" elements. She will discuss her plans to improve access and quality later. Earlier post: Hillary Clinton Outlines the First Elements of Her Health Care Reform Plan

Hillary Clinton may be using the smartest tactics. Politically vulnerable from the failure of her 1993 failed Clinton Health Plan, she has waited for her two main rivals to put their plans on the table and will now offer something very similar. That makes it difficult for her Democratic rivals to use health care as a weakness against her.

Today, Barack Obama released his health care reform outline. It looks a lot like the John Edwards plan (and Massachusetts) and also includes many of the cost containment provisions Mrs Clinton proposed. Obama would also end the Bush tax cuts on the "rich" to pay for his plan. Like Edwards, Obama would create a "more efficient health insurance market" similar to the Massachusetts "Connector" and the Federal Employee Health Benefit plan.

There are some differences. Edwards would mandate that individuals buy health insurance (with substantial support for the low income). Obama would not require that individuals buy insurance but both would require employers to pay for it (Obama would exempt the smallest employers)--and both would also offer substantial payment support for the poor. Obama has also proposed a large claim reinsurance scheme similar to the Kerry proposal.

So, when the day is done the Edwards and Obama plans look a lot alike--incremental expansion of existing public and private plans with plenty of money being spent to subsidize low-income folks. From what we have seen from Mrs. Clinton, all three candidates would employ generally non-controversial cost containment proposals such as the expansion of health information technology, broader use of evidence-based medicine, more preventive care, and chronic disease management.

I fully expect that when Hillary Clinton adds her access and quality components they will look very much like those proposed by Edwards and Obama.

So, when it is all over, each candidate can criticize some nuances in their opponents plans but can't lose a lot of ground to the others over health care.

The are "covering."

A recent post on why these incremental health reform proposals may be the only practical way to achieve health care reform: The “Realistic” Way to Do Health Care Reform

A recent review of the leading Republican health care positions: Giuliani, McCain, and Romney--Where Are Their Health Care Plans?

Barack Obama is a Rookie on Health Care Policy Reform

Barack Obama was recently quoted as saying he would institute a system of universal health care by the end of his first term. He provided no other details for what would be the Obama Health Care Reform Plan.

He is apparently new at this--health care reform policy and fixing America's health care problems.

Apparently, he doesn't understand it is the details that matter when it comes to health care reform. Or maybe he thinks people are so enamored of him that they aren't going to worry about his being able to deliver the rest in any kind of detail. We just need his leadership, optimism, and fresh ideas (whatever they are) to lick this most frustrating of domestic issues.

Obama better be careful with his health care policy naivete. It just may be that health care will be the issue that gives him a taste of political reality!

See if you can find the plan (sort of like finding Waldo): The Obama speech to the Families USA Conference 1/07.

President Bush Has a Proven Strategy to Fix the Individual Health Insurance System!!!

The Bush administration has already implemented an individual health insurance system that is voluntary, community rated, and excludes no one--no matter what their age or health status.

President Bush's recent proposal to reform the health insurance system (see post) is based upon greater use of the individual health insurance system. He would eliminate the employee tax exemption on employer-provided health care and substitute a standard deduction of $7,500 for individuals and $15,000 for families.

His proposal is a non-starter in the Democratic Congress as it is.

But, now 10 Republican and Democratic Senators are signaling they are willing to work with the White House on a reform plan (see post) that puts the employer health care tax preference on the table. As a result, there may be some long-term hope for the many conservatives who would like to rebuild the U.S. health care system in a way that transfers the ownership of coverage to the individual.

Proponents of an individual-based health insurance system argue that the employer system has too often sheltered consumers from the real cost of health care and that has had a great part in driving costs up.

Others, often Democrats, want to build on the existing employer-based health insurance system and believe the most efficient way to provide care is through the largest risk pools that employers--and existing government programs--generally provide.

Both sides make good points and my own opinion is that both an employer-based system and an individual-based system can work. They can even work together.

However, one of the most legitimate complaints regarding the individual-based system--and the Bush proposal--is that the individual health insurance market is nowhere near where it needs to be to offer affordable coverage (see post).

In the individual market today, a healthy 20-year-old can get coverage for less than $1,000 per year. But a 60-year-old might pay $5,000 per year. If that 60-year-old is sick, they probably wouldn't be able to get coverage at all. These, and other issues endemic to the individual market, make it unusable in its current form as any kind of platform to deal with the large number of uninsured we have.

But, George Bush knows how to fix the individual health insurance market.

In fact, he's been incredibly successful at showing us a model in the individual market that insures more than 10 million Americans.

His administration has successfully launched individual health coverage that charges the same price no matter how old you are--there are people in his system that are a good 30 years apart in age--and the price doesn't vary based upon their health status. In his system, everybody gets coverage no matter how sick they are--as long as they sign up when they are eligible. And, they don't have to buy the coverage--it's completely voluntary and about 10% of the people haven't bought it. It's also an incredibly (and to me surprisingly) competitive market with insurers tripping over each other to participate. In fact, the price for coverage is lower than most of us thought it would be. And, those that have low incomes get direct premium support so they can afford it.

Yep, it's Part D.

In Part D, we have 65-year-olds and we have 95-year-olds--a 30 year spread. We have healthy people who don't take any drugs and we have the sickest and most expensive patients in the country in Part D--all paying the same price for the same policy. We have more insurers than we need all competing on product and price and the number of those offering Part D increased this year.

The individual market can work---------and George Bush knows how to do it!!

Who would have thought!!!

Now if he would just take his tax proposal and fill in the rest of the details.

10 Bipartisan Senators Offer a Health Care Reform Outline

Just a few weeks ago I wrote a post that began, it's a new day in the health care debate. Health care reform is breaking out all over.

My point was that I haven't seen such enthusiasm for reform since the early 90's and the resulting Clinton Health Plan effort. Everyone seems to have a plan--not the least of which are offered by some very powerful bedfellows.

That trend continued this week when five Republican Senators and five Democrats sent President Bush a letter arguing it's time to move forward. They outlined only broad points that included:

• Universal coverage done in a way that protects Medicare and Medicaid.
• Agreeing with Bush that the current tax treatment of employer health benefits needs to be on the table. The value of that tax benefit is almost $200 billion a year--money that can be shifted to pay for new coverage.

These concepts cover the things that many Democrats want--reform built upon existing programs--and something many Republicans favor--moving away from the employer-based system toward one more oriented to individual responsibility.

There isn't a lot of detail here.

What there is--and this is huge--is a bipartisan agreement that we need to find common ground and begin to solve this problem. They are saying the possible is more important than the perfect because this problem just can't continue for the good of our people and our global competitiveness.

The initial White House reaction, to what was merely an invitation to begin a process, was positive.

As I have said before, major health reform will not occur until after the next election and we elect a new President and Congress--in great part based upon what they say about health care reform. This debate needs a great deal more progress beyond the conceptual level it is at.

But the process is under way----for real.

Health reform is breaking out all over!!

Don't Forget Consumer Choice in Reforming the Health Care System!

Bill Boyles is the publisher of Consumer Driven Market Report and Health Market Survey. He is one of the most effective spokesmen for the consumer driven movement and the effectiveness of the market in managing the cost and quality of care.

Today, he reminds us that those offering the new reform proposals shouldn't forget consumer choice:

The Uninsured Need Consumer Choice First

The only humane way to help the uninsured is to let them choose how much they can afford out-of-pocket and then enroll in that plan. Dozens of studies show why: the vast majority of people lacking insurance simply cannot afford it. Offering them unaffordable options is not only unworkable, it’s cruel.

Allowing people to choose high deductibles is never mentioned by all the Wal-Marts and coalitions and pious employer alliances. That’s too much detail. Once the cameras are packed up the job is over and the pious groups are delighted by headlines saying the issue is reaching new heights.

The worst example of this cruelty is the Massachusetts plan and its progeny in other states. They give the uninsured no choice at all under the guise of allowing them to choose their plan in brightly-colored brochures. The victim then finds out they cannot choose a low-premium plan which matches how much they can afford in out-of-pocket costs for their own family. It’s a false promise – hiding under the guise of “we know how much you need and we won’t offer you a cheaper plan because it’s not good enough.”

Surprise. You can’t force Americans to buy health insurance they can’t afford -- even if it is what they need. Even if it is what’s best for “the system.”

The irony here is that a better solution is endorsed by both Sen. Kennedy on the left and conservative health economists on the right. The new Kennedy plan offers all families a choice of plans via the federal employees program model, including varying deductibles, copays and premiums. The same distribution model is endorsed by the Heritage Foundation and others.

The state plans do not even have to go that far. They could offer the uninsured a choice of five plans with five levels of out-of-pocket costs and five levels of premium. These plans can easily be mandated to have low-cost prevention coverage too. No government-developed standardized benefits package can outguess the personal selection of a health plan when family income is so low that comprehensive coverage is out of the question.

For 30 years Americans have been told they cannot be offered things like high deductibles with low premiums because it’s bad for them and the system. It’s time for all of these companies and coalitions and Wal-Marts to stop the self-righteous talk and give the people a choice of what they can afford.

The Edwards Health Plan--Where Are the Other Plans?

Democratic presidential candidate John Edwards has proposed a comprehensive health care reform plan. (See the entire plan on his site).

Good for him!

It is going to be very easy for all of us to point to all the things we don't like about it.

But I will suggest there is something more important for all of us to do--ask where all the other candidates, Democrat and Republican, are with their plans.

It is conventional political wisdom in this town to keep your own health reform agenda as vague as possible and hope the other candidates will shoot themselves in the foot with a detailed comprehensive health care plan.

The Clinton Health plan fiasco of 1993 and 1994 taught politicians to stay as far away from health care reform details as they possibly can. I used to say about the Clinton Plan that it was 1362 pages of which every man, woman, and child in American could find 300 pages to strongly disagree with--it's just that everyone had a different 300 pages to hate.

Health care is one of those issues that if you put any kind of detailed plan on the table you are going to gore a lot of very powerful oxen.

John Edwards has gored his share with this plan.

But, if the American public (and the health policy establishment) now does what all the other candidates want them to do--hoot it down hard--we will get what we have had in the past. The other candidates--Democrats and Republicans--will only confirm their fear of being too forthcoming with health care reform details and not tackle this issue. They will give us just vague platitudes about health care costs, quality, and the uninsured. But they will not tell us about the important parts of what they would do--which oxen they would gore and how.

Don't take this as an endorsement for Edwards or his plan. Just his willingness to put the plan out there, gore some oxen (and not gore some he should have), and his courage in doing it. Sure, he's a distant third in the Dem polls and a dark horse with nothing to lose and a lot to gain. But at least he did the right thing in putting his plan (really a 7 page outline) out there.

If we all do what the other candidates expect us to and give Edwards the usual cynical reaction then the remaining first tier presidential candidates get exactly what they want and we get exactly what we don't want.

Wouldn't it be great to suspend our health care policy cynicism for a few months and let the hooting be focused at the front runners who haven't put their detailed proposals (oxen and all) on the table?

If Clinton, Obama, McCain, Giuliani, Romney, and the rest, all gave us their details, then we'd have something really productive to talk about!