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.
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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?

Demystifying U.S. Health Care Spending--Some Surprising Information

Paul Ginsburg, of the Center for Studying Health System Change, has just authored a new report, "High and Rising Health Care Costs: Demystifying U.S. Health Care Spending." The report is part of the Robert Wood Johnson Foundation's Synthesis Project.

This paper reviews existing literature in search of a more clear understanding of U.S. health care costs, the drivers, and the trends.

It is an encyclopedia of the research on U.S health care costs and required reading for any health policy wonk!

I found the following notable:

• Technology is the key driver in health care spending accounting for an estimated 38% to 65% of spending growth.
• "Obesity is a significant factor driving health spending, accounting for an estimated 12% of the growth in recent years." However, any gains from reducing obesity would be concentrated in the short and intermediate period "because some of the savings will be offset by increased longevity and the cost of disease that are most prevalent during old age." The irony is that obese people die sooner thereby avoiding the high medical costs associated with living longer.
• If we insure more people our health care system will cost more not less. "The increase in the percentage of people with health insurance accounted for approximately 10% to 13% of the historical growth in spending." The uninsured has not contributed to the recent growth in health spending in the aggregate and will not be a driver in the future unless we find a way to insure more people.
• Aging will not be a major factor in driving health care spending, and will not become one, despite aging baby boomers.
• Medical malpractice is not a major driver of spending trends. Medmal does contribute to health spending at any moment in time, but is not a large factor nor a significant factor in overall growth of health care spending.
  
• "Productivity gains in the health care sector have probably been lower than in other industries."
• U.S. health care cost increases continue to outstrip those in other industrialized nations by a large margin. Excess health care growth in the OECD nations was 0.6% between 1985 and 2002 compared to 2% in the U.S. for that period.
• When compared to the health systems of other industrialized nations, "prices, efficiency, and insurance administration are the most important differences."
• Drug prices are 70% higher in the U.S., physician compensation is 6.6 times per capita GDP for specialists and 4.2 times for primary care compared to 4 and 3.2 in OECD nations, the U.S spends 54% more for the top five inpatient medical devices, and the U.S. spends six times more for administration than the OECD nations.
  
• "Overall our understanding of high and rising costs is fairly solid. Our most pressing needs are not as much on the research side as on the development side, that is, all of the technical work needed to pursue many of the reforms..."

Aging and medical malpractice costs are not major contributors to the cost of health care in America? If we solve our obesity epidemic we will just increase longevity, more people will make it to old age, and we'll have all sorts of other high costs? Covering everyone will cost us more in the aggregate not less--getting them all in the system won't be a money saver?

Are these the "inconvenient truths" in health care reform?

The data would seem to say they are.

So does this mean we should back off on tackling obesity, forget medical malpractice reform, and scrap plans to reduce the uninsured?

No. I'd respond it's fair to say that is not what the author has in mind.

There is a moral imperative to deal with the uninsured. Being obese may save the system some money in the long-term because the person dies a lot earlier--hardly a desirable policy objective. That obese person still costs us a lot more in the near term and typically suffers from chronic disease in the meantime. Our medical liability system needs reform if only to reduce the rate of medial errors and the human toll those take.

But when it comes to health care costs, the real target needs to be productivity--or said another way cost containment.

One finding from this report really struck me: "If the efficiency of the delivery of services could by increased by 20% over 10 years, this would roughly close the gap between health care spending and GDP over that period." The bottom line is that if we want to contain our health care costs we need to find productivity improvement in things like technology use, treatment patterns, and administrative overhead.

Today, most health care reform plans focus on things like expanding the number of the insured and wellness initiatives. Those are good objectives.

But covering more people will cost more not less. Improvements in lifestyle--particularly obesity--can help.

But we cannot afford to stop there. Literally.

The big-ticket play is in productivity--the more discriminate use of medical technology, consistently practicing outcomes-based medicine, and reductions in system overhead particularly in the insurance system.

The problem with the health care productivity issues is that you have to step on some very powerful toes amongst the stakeholders to make any big gains--it's a lot easier to talk about insuring everyone and promoting wellness.

If we only increase access and don't hit the health care productivity issues head-on we will simply craft a system we will never be able to sustain.

Upcoming "Common Good" Forum: Health Courts, Administrative Compensation & Patient Safety: Research, Policy & Practice

For years we have debated reforming the medical malpractice system. But, most of that debate has focused on capping a system most people believe just doesn't work when it comes to improving the quality of our medical care. To me, that has always begged the question, Why cap a system that is fundamentally flawed?

Common Good has been doing good work on that more fundamental question and will have another in a series of forums:

UPCOMING COMMON GOOD FORUM: Health Courts, Administrative Compensation & Patient Safety: Research, Policy & Practice

November 5, 2007

Location: Washington, DC

This event, the fourth in our series of national forums sponsored by the Robert Wood Johnson Foundation, will provide information about: (1) the negligence standard and medical error causation; (2) the potential patient safety benefits to be gained from shifting to an “avoidability” standard for compensating medical injuries; (3) a variety of state reform initiatives; and (4) non-legislative approaches to crafting an administrative compensation system. The event is designed to discuss patient-safety focused alternatives to the current medical liability system, and to receive feedback from key stakeholders. In particular, this forum will focus on recent research conducted by a team at the Harvard School of Public Health (many of whom are notable for their previous work on medical liability, such as on The Project on Medical Liability in Pennsylvania funded by The Pew Charitable Trusts). The research paper, "Policy Experimentation with Administrative Compensation for Medical Injury: Issues under State Constitutional Law" is being published this winter in the Harvard Journal on Legislation. Speakers and respondents will include academics and representatives from consumer groups and health care quality and provider organizations.

More information and agenda

New Ideas in Medical Liability Reform: Health Courts

Today, our guest contributor is Brynna Pietz of Common Good.

Common Good has been a leader in arguing that it isn't enough to simply cap medical malpractice damages and call it reform. Instead, they believe we need to fundamentally change the health care tort system to one that does a better job of more quickly compensating the injured patient--and perhaps more importantly--improving the quality in our health care system.

I believe their work makes a lot of sense.

Here's Brynna's post:

The current medical liability system fails both patients and providers at every level. Malpractice lawsuits are extremely grueling for both sides, dragging on over a number of years and running up hundreds of thousands of dollars in legal and administrative costs. These costs eat up a tremendous portion of settlement payments, with nearly 60% going to cover attorney’s fees and court costs. Yet jury verdicts and awards vary widely and offer no consistent record for what constitutes negligent care, or better, how to avoid future mistakes.

Moreover, according to the Institute of Medicine, the tort system may actually be counterproductive to advancing patient safety and preventing future mistakes. The fear of being sued undermines open communication between physician and patient, an integral component in fostering trust and understanding. Disclosure is essential to facilitating a culture of collaboration and learning among peers, which would serve to improve patient safety and prevent future injuries.

Doctors, lawmakers and patient safety advocates have all stressed the need for reform, but current legislative initiatives, such as capping non-economic damages, provide only a limited solution to a wide-ranging problem. A new approach is needed for medical liability reform – one that fairly compensates injured patients, safeguards against litigation abuse, demands accountability, and promotes quality improvements. Momentum is building around a new proposal calling for the creation of specialized health courts, or administrative compensation systems dedicated to resolving medical liability disputes. Common Good, together with researchers from the Harvard School of Public Health and funding from the Robert Wood Johnson Foundation, is leading the effort to develop and introduce models for health courts.

The distinguishing feature of health courts is the use of specially trained adjudicators in proceedings. These adjudicators would make decisions based on evidence-based practice standards, such as the guidelines disseminated by the Agency for Healthcare Research and Quality. Independent experts retained by the court would provide unbiased testimony on standards of care to assist judges in their decision making.

To encourage predictability and consistency in determining verdicts, non-economic damages could be awarded according to a schedule that takes into account the nature of the injury as well as patient circumstances. There is also the potential to reduce adversarialism, drive adherence to best practices, and broaden the number of patients compensated by employing an alternative standard of liability – “avoidability” already used with success in Scandinavian countries. Under this standard patients would be compensated for injuries caused in the course of treatment that could have been avoided had best practices been followed.

Improving patient safety is a key goal of the health court model. As envisioned, de-identified information from case proceedings would be made available for review at the provider level and fed to patient safety authorities. Thus researchers and providers could examine patterns of errors to understand how to better deliver care and prevent similar injuries from recurring.

Policymakers at the state and federal levels have been working to pass legislation that would provide funding for health court pilot projects. On May 24th, bipartisan legislation was introduced in both the U.S House and Senate that would fund state-based demonstration projects. Several states including Massachusetts and Pennsylvania, have legislation currently pending.

The strong support coming from organizations such as the AARP, Consumers Advancing Patient Safety and the American College of Obstetricians and Gynecologists demonstrates the growing momentum around the health court model. Health courts address the broad failings of the medical liability system in a comprehensive manner – they would expedite compensation, encourage consistency, and support patient safety efforts. Health care is a fundamental issue in America today and fresh ideas are essential to improving access and functionality.