Posts Tagged The Wall Street Journal

The Government We Deserve: Healthcare Edition

So, the battle is joined – the passage of the Senate Finance Bill has forced every healthcare participant whose oxen might be gored into the open, and the fighting is fierce.

I don’t have a dog in the fight from an economic standpoint, unless Washington, D.C. decides to give everyone a full indemnity policy like the New Hampshire state union employees. As a result, I have had a freedom to think and speak in a way that few of my colleagues can.

It took me a while to realize that I would be so alone in this regard. I have been very fortunate to participate for the past five years in two different groups of nationally recognized healthcare executives with very diverse experiences. Several of them are very publicly prominent in the debate, and others are quietly influential. I have hoped that these groups might coalesce, create a blueprint for reform, and lead the way forward. While I am disappointed that has not happened, I am really surprised at how resolutely the group members have retreated to their economic realities or their philosophical ideals. In short, there has been no sustained dialogue with the goal of determining how hospitals, physicians, insurance companies, device manufacturers, pharmaceutical companies and others can create a reformed system. At the same time, I have observed all of us bemoan that “healthcare reform” is really “insurance coverage reform”, and not so impressive at that.

The result is that We, the People, have turned it over to Washington, D.C. In the coming weeks, 535 people who know a lot about politics, a little about the art of compromise, and almost nothing about how approximately 20% of the economy works will decide our future. The 20% of us employed in healthcare have failed to reform ourselves through real and shared sacrifice. The 80% is angry enough not to care that they don’t know the difference between a scalpel and a saw.

In the words of Dandy Don Meredith, some people in healthcare will need to “turn out the lights, the party’s over”. The tricky part is that we won’t know until the very end who that is.

On Wednesday, The Wall Street Journal ran an opinion piece called “Paying the Health Tax in Massachusetts” by an author named Wendy Williams. In it, Ms. Williams lamented that the Commonwealth of Massachusetts changed the definition of acceptable coverage. Her family’s policy no longer meets the requirement, so she must either (a) buy a more expensive policy, which she does not think she needs, or (b) enroll in the government option.

What caught my eye was the following:

Mr. Romney and Sen. Ted Kennedy publicly promised that the middle class – that is, people like us – would not be taxed and that our health-care costs would actually decrease if the plan became law.

My husband and I weren’t convinced. It all seemed inane, but we are neither politically or socially conservative and figured the plan wouldn’t affect us much. Besides, who could be against a plan that covers more people for less money?”

Here in the South, we might respond to that statement by saying, “I’m not sure I would have told that”, but I am afraid the subject is too serious to be that dismissive.

Ms. Williams, in four sentences, has summarized the debate.

First, in order to get elected, politicians have to tell people (us) what we want to hear. Politicians rarely make the call for sacrifice, and today’s America is not interested in that much anyway. Elections for 473 of the 535 positions will be held in 2010. For each of those 473, the calculus over the next 60 days is about how a vote on healthcare reform will play at home between now and November 4, 2010 (Note: “what will get me reelected” is sometimes phrased as “what my constituents want” but rarely as “what does my country need” or “what does courage require”).

Second, We, the People, know better. What is wrong with us? We aren’t that stupid, and we don’t even like Congress. On the other hand, we do seem to like something for nothing. The members of the Greatest Generation have given way to individuals who are more interested in their personal good than the common good. Most of us just listen for what we want to believe and ignore the rest; some of us listen to talk radio and shout at the rest. The Greatest Generation gave way to the Baby Boomers, who seem to be the majority of those in power. The generation of Timothy Leary and “Turn on, tune in, drop out” seems to have taken the “drop out” part to heart, except that Leary’s hope for self-reliance has morphed into singular self-interest.

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It is time for We, the People, to wake up:

  • As we proved spectacularly in Tennessee, you cannot cover more people for less money. No one in Washington, D.C. should know that better than Nancy-Ann Deparle.
  • The results of the Massachusetts experiment are that costs have increased, while quality and access have decreased. These results should be terrifying since Massachusetts had one of the lowest uninsured rates in the nation at the start of the Massachusetts Connector program. Up next, “global payments”, aka capitation – good luck with that at Partners.
  • In The Washington Post, Alec MacGillis reports that maybe the Mayo Clinic is not a model for reform since they restrict access to Medicare and Medicaid patients. As we continue to report, the Mayo Clinic does not deliver high healthcare value.
  • The Senate Finance Bill pretends that physicians will take a 25% cut in pay in 2011 to achieve the $900B cost; it appears that AMA has convinced Senator Reid otherwise.

Sir Winston Churchill famously stated that:
“Democracy is the worst form of government, except for all those other forms that have been tried from time to time.” He also said, “The best argument against democracy is a five-minute conversation with the average voter.” Let’s hope that we do not allow Washington, D.C. to test the former, and let’s see if America can prove Sir Winston wrong on the latter.

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Healthcare Reform: Going to the Dogs?

As the August recess in Washington, D.C. began, the White House and the Democratic members of Congress decided to focus on “health insurance reform” instead of “healthcare reform”. This is, of course, a political calculation driven by fear that doing nothing is untenable heading into 2010 House races. It is easy to vilify health insurers, and insurance reform is certainly important. At the same time, it is simply one component, and probably not the most important.

The Wall Street Journal published an article on Saturday by Theodore Dalrymple, aka Anthony Daniels, M.D., titled Man vs. Mutt. As the title suggests, Mr. Dalrymple discusses the differences in the healthcare provided to humans and canines in Great Britain. In turn, Mr. Dalrymple wonders how a National Health Service for dogs might work. As is customary for Mr. Dalrymple, the commentary is subtle, witty, and incisive.

Mr. Dalrymple’s article reminded me of my basic objection to the discussion of healthcare reform, in America. Why have the American people not been asked the fundamental question that underpins the idea of reform, namely whether we, the people, believe that the right to health care is one of the unalienable rights with which we are born?

Of course, we have never had a national conversation about whether our pets are entitled to healthcare coverage. That would be absurd, right? So what does that system look like?

In my experience, pet owners understand the costs of owning a pet, including the costs of its medical care. The price for services is transparent, payment is due at the time of service, and pet insurance is available for catastrophes. Additionally, it is taken for granted that the care will be compassionate and professional. 

So, how can it be that there is price transparency for healthcare for dogs but not their owners? Why does the government have to mandate the measurement of patient satisfaction for humans? Why is health insurance called “insurance”, when it is fundamentally not insurance?

One more key difference between the systems - it would never occur to a pet owner that the government would pay for the costs of veterinary care for the beloved family pet. With a very few exceptions, people with pets take care of them, knowing that failure to do so could result in huge costs, both financially and emotionally.

Where is that personal responsibility for ourselves? Do we really expect a system that allows absolute freedom with little or no responsibility with respect to the decisions that we make about our health? Do we expect our neighbors to pay for the poor choices that we make for ourselves? Do we think that the federal government is the best arbiter of those decisions? Do we think that would violate our Constitutional right to privacy?

I would suggest that the role of the federal government in healthcare should be limited to providing solutions for those who simply cannot afford coverage for themselves, or for those who simply cannot help their DNA. In each case, the federal government could be the insurer of last resort, with insurance in the true sense of the word – coverage against events that are unforseeable or catastrophic.

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Is It Worth It®: The Contrast between Higher Education and Healthcare

The Wall Street Journal published an article entitled Weighing Price and Value in Picking a College (subscription required) on July 15 about the difficult choices and trade-offs some families are making about higher education. Putting aside that we believe that price is an element of value, the article prompted me to think about both the parallels and contrasts between education and healthcare.

The following quotation was particularly interesting to me:

“Even when the economy picks up, some of this new price-consciousness is likely to endure. The engines that have enabled college costs to soar – easy credit, home-equity loans and growth in savings – have stalled. Total college costs are already up 67% in the past decade at private colleges and 84% at public four-year universities, based on College Board data, and graduates’ wages haven’t kept pace.”

Four thoughts come to mind:

  • Over the past decade, healthcare (together with health insurance) and education are the only two parts of the economy that have been able to generate 5-10% annual price inflation.
  • Price-consciousness is enabled by price transparency. The price of higher education is completely transparent, whereas the price of healthcare is almost completely opaque. I always find it curious when healthcare executives tell me that price does not matter, but they refuse to reveal the price.
  • The engine that has allowed healthcare costs to soar is the tax exclusion for employer-sponsored healthcare, which contributes to price opacity. The emerging focus on value in higher education is market-driven, whereas the strong lobbying efforts against taxing healthcare benefits will require government intervention for value-based purchasing in healthcare.
  • Paradoxically, cost is opaque in most consumer value analyses, whereas in hospitals, cost is public information. For example, the consumers referenced in the WSJ article have zero information about the actual cost of the education they are considering, only the price. Similarly, I don’t have any information about the cost of producing a plasma television or a gallon of milk. However, information about the cost of treating a patient with congestive heart failure is available, if not readily accessible.

Is It Worth It®? From the stories in the WSJ article, it appears that many people are deciding that the price of higher education, particularly Ivy League schools, is not worth it. Because price is transparent, I anticipate that colleges and universities will increasingly be forced to defend the value proposition of $50,000+ tuition. On the other hand, healthcare consumers will not become price-sensitive unless Congress taxes employer-sponsored healthcare benefits. When Americans are forced to pay for healthcare at the point of service with after-tax dollars, they will begin to demand information about price. When Americans begin to understand the price of healthcare, they will start to consider its value.

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Other Media Viewpoints on Health Reform

  • Lost in almost any media coverage of healthcare reform is a discussion of the Wyden-Bennett bill, a bipartisan effort with the support of 14 Senators; David Brooks remedies some of this with his June 23 column in The New York Times entitled “Something for Nothing”.
  • For a Constitutional perspective of the “public option”, check out “Is Government Health Care Constitutional” by David B. Rivkin, Jr. and Lee Casey in The Wall Street Journal. In addition to an interesting argument based on Roe v. Wade, there is great irony in using the arguments that one Connecticut politician made as a Supreme Court law clerk in 1972 against the arguments that another Connecticut politician is making as a Senator in 2009.
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