So much for common ground on health care reform in the United States Senate. It wasn’t that long ago, May 30th to be exact, that Senate Finance Committee Chair Max Baucus and Senate Health Education Labor and Pensions Committee Chair Edward Kennedy issued a joint statement that read, “”For both of us, reforming the nation’s health care system to cut cost, improve quality and provide affordable coverage remains the top priority on our two committees.  We have worked together closely over many months and will continue to do so.  We intend to ensure that our committees report similar and complementary legislation that can be quickly merged into one bill for consideration on the Senate floor before the August recess.”

That was then. This is now: The Associated Press is reporting that the Senate HELP Committee is moving forward with legislation to create a government-run insurance plan to compete with private carriers. This provision, along with one imposing a $750 per worker annual fee on large employers who fail to offer health care coverage to workers, guarantees the legislation will pass through the committee with only Democratic votes. As I described in yesterday’s post, the committee has tried to position their public plan as more innocuous than was originally contemplated. It is not.

Meanwhile the Senate Finance Committee continues to seek a bipartisan health care reform package. The Associated Press story notes that, “As a result, a government-run option for coverage is unlikely to be included. Negotiations are centered on a proposal for a nonprofit cooperative to sell insurance as a competitor to private companies.” Co-ops can be considered public plans, but unlike the version proposed by the Senate HELP Committee, it is far more likely health insurance cooperatives will result in a more fair marketplace. The devil dwells in the details and we have not seen those yet. But if Senator Baucus is sincerely seeking GOP votes, and it appears he is, his committee will avoid a result that would eventually lead to a single, government-run carrier.

(Democrats on the House side of the Capital also pledged to work together — and they are doing so. The three committees with jurisdiction in that chamber are all working from the Tri-Committee Health Reform Draft Proposal. They expect to have their work done by the end of July. Like the Senate HELP Committee, their plan will include a robust government-run health plan.)

What’s significant about the divergence in approaches by the Senate HELP and Senate Finance Committee is that it makes responsible compromise more likely. Senator Kennedy and House Democrats are providing a haven for liberals in the debate. If liberals had 60 votes in the Senate, or even 50 for that matter, their legislative versions would foreshadow the final package. But as I noted yesterday, the fact that the Senate HELP Committee needed to dress their public plan in fig leaves of compromise is evidence they do not have the votes. Moderates will dictate what health care reform legislation passes Congress.

The Senate Finance Committee recognizes this reality. Heck, they are this reality. Which is why what this committee proposes concerning a host of controversial issues — requirements for individuals and/or companies to buy health care coverage, the structure, purpose and powers of an Exchange to present coverage options to individuals and small businesses, cost containment provisions such as turning to comparative effectiveness research for treatment guidelines — is so important.

It is not the common ground between the Senate Finance and Senate HELP committees that matters. It is the compromises reached within Senate Finance that will foreshadow the health care reform bill that winds up on President Barack Obama’s desk for his signature.

Posted in Barack Obama, Health Care Reform, Healthcare Reform, Politics Tagged: comparative effectiveness research, Edward Kennedy, Max Baucus, Senate Finance Committee, Senate Health Education Labor and Pensions Committee, Senate HELP Committee, Tri-Committee Health Reform Draft

The Senate Health, Education, Labor and Pensions Committee worked hard to produce a final draft of its health care reform legislation before Congress adjourned for the July 4th holiday. It made substantial progress, but failed to complete work some key elements, including those related to a government-run health plan and a requirement that employers obtain coverage for their workers. However, the broad outlines of their approach to a public plan are taking shape.

As I posted last month, the Senate HELP Committee and its chair, Senator Edward Kennedy, seemed intent on anchoring the left on several provisions, including a public health insurance plan. When first proposed, the government-run plan would be permitted to limit doctor and hospital payments to just 10 percent above those paid by Medicare. This would still have resulted in payments less than the providers’ actual costs in many instances, resulting in a cost shift to the private plans. This would create a tremendous premium gap between the private carriers and the public plan with the inevitable result that, eventually, the government plan would be the only carrier remaining.

Republicans and some moderate Democrats have made it clear that this chain of events is unacceptable. The response of the Senate HELP Committee is intriguing. Instead of simply ramming through their initial provision, they seem to be trying to dress it up as more moderate. According to Bloomberg.com  the committee will now call on the  public plan to abide by “the same rules for defining benefits, protecting consumers and setting premiums ‘that are fair and based on local costs.’” Although the government would pay the first three months of [the public plan's] claims, these “would be considered a loan to be repaid over time,” according to Bloomberg. The government-run plan would be empowered to pay providers up to the “local average private rates.”

While this might sound like a retreat from their original position, it’s less movement than it is meant to convey. The public plan may pay up to the average rates paid by private carriers in a community, but it can also pay less. The Secretary of Health and Human Services would negotiate the reimbursement schedule. The Secretary is a political appointment of the President. Regardless of which party controls the White House, does anyone think the Secretary would — or should — seek to settle for the maximize payment amounts? If so, that anyone has not paid attention to what Democratic and Republican Administrations have done to Medicaid and Medicare providers.

Another fig leaf: although the public plan would be expected to pay its own way (after initial seed money) it would also be eligible for “‘risk corridor protections’ to offset or reclaim excessive losses,” reports Bloomberg. In other words, if the artificially low premiums it charges are not enough to pay its bills, a bailout from the federal government is already in place. Maybe I’m missing something, but recipients of bailouts are, by definition, not paying their own way.

What’s matters about all this is not that the Senate HELP Committee’s compromises are insubstantial, but that Democrats on the committee felt the need to compromise at all. It is a clear sign that support for a government-run health plan is waning in the Senate. Continued talk in support of health insurance co-ops as a possible compromise underscores this reality. So does the intensity of public health plan advocates campaigns against moderate Democrats. These campaigns are facing tough going in some states. For example, the Wall Street Journal’s Washington Wire blog reports that Senator Mary Landrieu continues to express reservations about a public option in spite television and radio advertising attacks on her by liberal groups like Move-on.org and Democracy for America. Senator Landrieu, through a spokes person, continues to be “committed to reforming the health care system and ensuring that all Americans are covered … but does not believe that healthcare reform starts with a public option. Senator Landrieu supports a predominantly private system that features a federal backup plan that serves as a safety net.”  Co-ops could serve this safety net function.

There’s a long way to go before the final act and advocates of public health plans will win a few skirmishes between now and then. The need for fig leaves, however, underscores that, for now at least, they are in danger of losing the war.

Posted in Barack Obama, Health Care Reform, Healthcare Reform, Politics Tagged: Democracy for America, Edward Kennedy, government health plan, Mary Landrieu, Move-on.org, public health insurance plan, Senate Health Education Labor and Pensions Committee

In an era when technology allows personal health information to be more easily stored, updated, accessed and exchanged, the following rights should be self-evident and inalienable. We the people:

• Have the right to our own health data
• Have the right to know the source of each health data element
• Have the right to take possession of a complete copy of our individual health data, without delay, at minimal or no cost; if data exist in computable form, they must be made available in that form
• Have the right to share our health data with others as we see fit

These principles express basic human rights as well as essential elements of health care that is participatory, appropriate and in the interests of each patient. No law or policy should abridge these rights.

President Barack Obama wants health care reform. He sincerely believes we need to fix what’s broken in the current system because it is the right thing to do and as a necessary step to get America’s economy moving forward again. He has put forward what elements he wants to see as part of comprehensive reform package, but instead of plopping a finished product in the lap of Congress (as the Clinton Administration did during their botched health care reform effort), he is asking Congress to take the lead in developing legislation (imagine that, letting legislators legislate). He and his allies have made clear they are willing to discuss almost any idea. The mantra they repeat often is that “everything is on the table.”

Almost. President Obama has also repeatedly made clear that acceptable health  care reform must adhere to three core principles. As they are described on his Organizing for Health Care web site, reform must:

• Reduce Costs — Rising health care costs are crushing the budgets of governments, businesses, individuals and families and they must be brought under control
• Guarantee Choice — Americans must have the freedom to keep whatever doctor and health care plan they have, or to select a new doctor or health care plan if they choose
• Ensure Affordable Care for All — All Americans must have quality and affordable health care

Don’t misunderstand. He has clear ideas on how these principles should be achieved, but he is not insisting Congress do things his way, only that they do them.  This approach was clear in President Obama’s Tuesday press conference when he was asked about the health care reform. His response to the first question on health care reform laid out his approach to the issue.

He began by emphasizing the need for reform. “So the notion that somehow we can just keep on doing what we’re doing, and that’s OK, that’s just not true. We have a long-standing critical problem in our health care system that is pulling down our economy. It’s burdening families. It’s burdening businesses. And it is the primary driver of our federal deficits.”

President Obama then focused on the need to control costs. “It means that we look at the kinds of incentives that exist, what our delivery system is like, why it is that some communities are spending 30 percent less than other communities, but getting better health care outcomes, and figuring out how can we make sure that everybody is benefiting from lower costs and better quality by improving practices. It means health  I.T. It means prevention. So all of these things are the starting point, I think, for reform. And I’ve said very clearly, if any bill arrives from Congress that is not controlling costs, that’s not a bill I can support. It’s going to have to control costs. It’s going to have to be paid for.”

President Obama next turned to the need to expand coverage to more Americans. “[W]hile we are in the process of dealing with the cost issue, I think it’s also wise policy and the right thing to do to start providing coverage for people who don’t have health insurance or are underinsured ….”

He then went on to describe the rationale for including a public health plan as one of the health plans available to American consumers. “As one of those options, for us to be able to say, here’s a public option that’s not profit-driven, that can keep down administrative costs, and that provides you good, quality care for a reasonable price as one of the options for you to choose, I think that makes sense.”

The President explicitly rejected the complaints of health insurance carriers who claim a public plan will drive them out of business. “But just conceptually, the notion that all these insurance companies who say they’re giving consumers the best possible deal, if they can’t compete against a public plan as one option, with consumers making the decision what’s the best deal, that defies logic, which is why I think you’ve seen in the polling data overwhelming support for a public plan.”

President Obama’s answer makes sense if the public health plan were just another non-profit competitor. In many parts of America for-profit health insurers compete vigorously with non-profit carriers. Sometimes they win. Sometimes they lose. But the competition between them is fair.

What the president’s answer ignores is the possibility — indeed, the likelihood — that competition between private for-profit and non-profit insurance carriers on one side and a government-run health plan on the other will not be a fair contest. The government, which would both regulates the market and,  under several proposals being promoted in Congress, run the public plan, might tilt the playing field in its own favor (take, for example, the Affordable Health Choices Act introduced by Senator Edward Kennedy and other Democrats on the Senate Health, Education, Labor and Pensions Committee.)

What is nice to see is that President Obama seems to appreciate the balance that must be struck if a public plan is not to undermine the private market. “So there are going to be some ground rules that are going to apply to all insurance companies,” he said. “I take those advocates of the free market to heart when they say that, you know, the free market is innovative and is going to compete on service and is going to compete on, you know, their ability to deliver good care to families. And if that’s the case, then this just becomes one more option.”

Interestingly, the President was not the only Administration member speaking about health care reform on Tuesday. Peter Orszag, the Director of the White House Office of Management and Budget appeared on the Diane Rehm show on National Public Radio. In responding to a question about health insurance profits, he observed that “One of the questions that will be in play during the reform process is whether additional competition, for example, through a public plan option, or a co-op or a non-profit, would be beneficial.”  (For those listening to the podcast, this comments begins at about the 29 minute, 18 second mark). He then goes on to say that co-ops could address a lack of competition in “a growing number of local markets.” (emphasis added).

This is an very significant statement. The health insurance co-ops being discussed in Washington are not government-run. The government provides seed money, either in the form of grants or loans, but once it’s up and running, the co-op is owned and operated by its members. They would be community based and would have to abide by the health insurance laws of their state.  Here is a senior official of the Obama Administration, one of its leading voices on health care reform, describing health insurance co-ops as comparable to a government-run public plan when it comes to providing competition.

Taken together, the President and his OMB Director are saying:

• Competition in the health insurance marketplace should be preserved as it is beneficial.
• The purpose of a public health plan is to increase competition in the health insurance marketplace.
• Health insurance co-ops increase competition as much as a government-run plan.

For those who care about fair competition, please note that it is far more likely co-ops will compete on a level playing field than a government-run plan would — especially if co-ops are concentrated in local markets that need a new competitor.

None of this is to say that a government-run health plan will not be part of the final health care reform package. It does, however, underscore the point I tried to make in my previous post: the final outcome of the health care reform debate is far from settled. The Obama Administration is showing flexibility — and will need to in order to get comprehensive legislation passed. Now is not the time to panic. Now is the time to get involved.

Posted in Barack Obama, Health Care Reform, Healthcare Reform, Politics Tagged: government health plan, Office of Management and Budget, Peter Orszag, public health insurance plan, Senate Health Education Labor and Pensions Committee, Senate HELP Committee

The legislative process is like Kabuki Theater. Very stylized. Clear-cut characters. Starts off slow, proceeds through several acts, ends fast and furious. The Congressional tussle over health care reform is no exception. We have the champions of the left and right pounding across the stage, striking poses, shouting out their predictable lines, scaring the bejeebies (whatever they are) out of the audience (otherwise known as constituents) and generally creating high drama. This is important work as it gives the 24 hour news stations something to talk about and this, in turn, keeps the commercials from running together in an endless loop of paid messages for help fighting the IRS, encouragement to ask your doctor about the benefits of an unhealthy number of medications, easy ways to get low cost loans and willing buyers of your excess gold jewelry.

At the same time we have numerous audience members who are quickly losing whatever bejeebies they might possess. If you are among the 470,000 Americans employed by the health insurance industry, for instance or among the tens of thousands of health insurance brokers in this country, you might feel like people are out to get you. Good catch because people are out to get you. Don’t feel too bad, though, you’re not alone. They’re also out to get doctors, hospitals, pharmaceutical companies and a host of others. 

Every health care reform idea on the table is scary to someone. Government-run plans, exchanges, mandates to sell coverage, mandates to buy coverage, taxes, cost containment. The list of proposals go on endlessly. Everybody with a stake in health care (which is everybody) has something to lose from some these reforms and someone is out there working hard to make sure these stakeholders lose it. In the health care reform everyone is an archer and everyone is a target.

So as someone with a stake in the system, but who has also spent more time than sane people should involved in politics and the legislative process, I would like to offer some simple advice to my fellow targets:

         Don’t Panic.

Don’t get comfortable, but don’t panic.

The good news is the health care reform most likely to emerge from Congress will be far more moderate than the proposals whipping around the Capital hallways today imply. This is theater — and it’s politics. Everyone in Washington is busy staking out negotiating positions, trying to score points, and auditioning for an appearance on CNN, Fox or MSNBC. Which means what they say matters, but not as much as they’d like to think it does.

In negotiations you expect to compromise so you start off asking for more than you expect to get. Every eight year old discussing bed time knows this. So do politicians. What we’re seeing at this point is primarily Democrats and Republicans anchoring their positions. In Kabuki Theater, actors will strike stances that identify their role in the story. In Congressional theater, this role is played by lawmakers. 

Which leads us to the effort of scoring points. Nothing revs up the base like lambasting opponents. The number of people who make a living by keeping a significant portion of the American population seething is significant and appalling. These people (and I use the term loosely) paint the world in terms of good and evil, black and white, us and them. Anyone who disagrees with “us” is a traitor, a fool, a liar or all of the above. They care less about moving the country forward than in adding to their power or their bank account. (Have you ever noticed how often their diatribes are followed by an appeal for cash or an advertisement?) These blowhards replace bombast for thought. They have honed the cheap shot and the stiletto implication into art forms. Fortunately there’s a cozy spot in Hell reserved for them where they’ll have to listen to themselves blather for eternity. Until then, we’re the ones stuck in their noisy hurricanes of malicious hot air. 

The subset of these sub-humans who hold public office will be especially prominent during this portion of the legislative process. Ignore them. Like the extreme positions taken by negotiators, the extreme rhetoric spouting from these Katrinas of politics are designed to rile you up, get your money and generate news clippings, not educate or move the debate forward.

The real action on health care reform is taking place in the nooks and crannies of Washington where moderates dwell. For example, keep your eye on the Senate Finance Committee. They seem to be trying to find solutions the nation can afford and that might actually work. Track the movements of moderates in the Senate, too. Senators Olympia Snow and Susan Collins are the two trendsetters on the amazing-shrinking-group of GOP moderates. On the Democratic side of the Senate moderates gather weekly in a self-described  Working Group. (Insert your own snide comment here).

The fact is, in Washington moderates win. The system is designed this way. It may not seem like it, but that’s the way it usually goes. This is the point articulately made by Jay Cost in his HorseRaceBlog over at RealClearPolitics.com. In two postings (Part 1 and Part 2) he lays out the pivot points in the legislative process and applies them specifically to the current health care reform debate. (My thanks to John Nelson for sending these my way). What he shows is that the true partisans are merely the fodder necessary to get to the number of votes needed to turn legislation into law. These pivot points vary depending on the political context.

Need to overcome a filibuster? The most powerful Senator is not the true believers who immediately vote yes or no, but the Senator who represents the 60th vote for cloture. Only that Senator can move the bill forward. The rest simply set the stage. When it comes to health care reform, watch the moderates. They are the key actors in this play because it is from among their group, along with critical  negotiators like Senators Max Baucus and Charles Grassley, from which the decisive votes will come. 

With 17 votes (maybe 18 now that Senator Arlen Specter is a Democrat) the moderate Democrats in the Senate will determine the final shape of healthcare reform. They are the ones the partisans on both sides are already seeking to persuade or, failing that, threaten (good news for television and radio stations in their states looking to sell advertising time). If these partisans are serious about passing something, however, that something will need to earn the votes of these moderates. Keep in mind, Democrats have a large majority in both chambers of Congress, but they got it by appealing broadly to the electorate. Democrats rarely are genetically incapable of group thought even when there’s just a few of them. Put 60 into one room (say, the floor of the Senate) and the chances of agreement on anything controversial is reduced to a theoretical nil.

What all this means is that the partisan posturing of the current debate is simply sound and fury signifying the hopes and aspirations of sincere partisans and cynical pot stirrers (which is which is sometimes hard to tell, but there is a difference — only the latter are despicable). Eventually the play will reach its final act. At this point the moderates take center stage and with their arrival the odds of disappointed extremists on both sides  increases(disappointing extremists is, after all, what moderates d0).

This doesn’t mean they will come up with the perfect health care reform plan. If you care about the issue you need to make your voice heard. Moderates are capable of making bad policy — and whether the truck that runs you over is driven by a true partisan or a moderate doesn’t really matter, it still hurts. Moderates are more likely, however to produce reforms that are closer to something reasonable than might seem possible appear today.

In the meantime, let the loud and boisterous actors strike their poses. It’s all part of the play.

Posted in Barack Obama, Health Care Reform, Healthcare Reform, Insurance Agents, Politics Tagged: Arlen Specter, Charles Grassley, HoreseRaceBlog, Jay Cost, Max Baucus, Moderate Dems Working Group, Senate Health Education Labor and Pensions Committee