Something has been bothering me about Sen. McCain’s health reform proposal, but till yesterday I couldn’t put my virtual finger on it. Something just underneath the coverage of the details of the McCain plan’s treatment of tax rates, personal health records, chronic disease prevention, and consumerism.
And much much more important, and in retrospect, very obvious.
McCain’s plan would almost certainly increase the number of uninsured in the US – by a lot.
McCain calls for greatly expanding individual insurance at the expense of the current employer-based system.
Employers would jump at the opportunity to dump their very expensive insurance plans, perhaps increasing employees’ pay and perhaps not. Remember, more and more employers are dropping coverage these days, a trend that would likely accelerate under McCain’s plan. There’s one obvious problem – administrative expense in the individual market is much higher, and one estimate puts the added cost at an additional $20 billion; I believe that is far too modest and the added admin expense will be much higher than $20 billion.
But that problem pales in comparison with the real issue – in general, there is no medical underwriting for larger employer plans (and limited underwriting for smaller groups) – anyone is eligible, and pre-existing conditions are usually covered (albeit with some limitations in some areas for a limited period of time).
That’s not the case in the individual market – most states allow medical underwriting.
The result? Under McCain’s plan, folks with pre-existing medical conditions would not be able to get coverage for those conditions (if they could get coverage at all). McCain’s ‘plan’ will almost certainly lead to many more uninsured Americans, and many of those that could get coverage in the individual market will almost certainly not have coverage for their current, pre-existing medical conditions.
I know, the Senator’s website has some mumbojumbo about how he would work with the states, and encourage this and that, and talk with governors; meaningless words that spin his position well beyond Pluto.
McCain’s’ faith in the ‘market’ as the solution is nothing short of laughable. We know he wouldn’t get coverage in the individual market today due to his pre-existing conditions; somehow he thinks that this would change if the market is further deregulated? Not likely – the states with more regulation happen to be the ones that limit, or prohibit, medical underwriting.
It is painfully obvious that McCain knows precious little about health insurance, or private enterprise for that matter. No profit-seeking entity would ever voluntarily insure someone with MS, or heart disease, or asthma, or Crohn’s disease, or melanoma, or hypertension, or high cholesterol, or any of the other medical conditions that are all too common in the US. At least not at a premium anyone other than a top McCain donor could afford.
And this guy is running for President? What a country.

Pretty good. I’d say better than 50:50; probably 60:40 or better that there will be major reform in the next Congress.
Here’s why.
Sen Ron Wyden’s (D OR) Healthy Americans Act has six D and six R Senate cosponsors, including Bob Bennett (R UT). There is broad bipartisan support for the bill, which mandates universal coverage.
WalMart and the SEIU back the bill.
The National Federation of Independent Businesses backs some form of ‘universal’ reform.
Both Democratic Presidential candidates back major reform.
Congress has been stung by criticism of its inability to get much done – and health care reform is something big that needs doing.
Many of the Fortune 500 back reform, including automakers, service companies, and manufacturers. And the unions that represent their workers do too.
This impressive array of supporters is opposed by…well, it must be opposed by some groups, companies, politicians, lobbies, but it is hard to find much in the way of opposition, at least using internet search engines. We can look to California to find out how and why their efforts to pass reform failed. A loose coalition, comprised of Republican legislators, Blue Cross of California [WellPoint], the state Chamber of Commerce, and the tobacco industry joined together to oppose the bill, and their efforts got a major push from legislators’ deep concerns about the cost of the initiative and the Golden State’s financial straits. A closely related issue is the concern by many that states, acting alone, cannot enact meaningful reform for the simple reason that 1/3 of all health care dollars are controlled (to a great extent) by the Feds, and if these dollars, and the care they pay for and members they cover aren’t integrated into a comprehensive reform measure, the effort is doomed to fail. Cost shifting, contradicting priorities, differing measures of success and evaluation methodologies will result in a confused, bifurcated system that serves neither population well.
Similarly, the problems emerging in Massachusetts and Maine make it less likely that states will successfully pursue reform measures. Instead, the states, a powerful lobbying group in and of themselves, will likely join others to support national reform.
As General Eric Shinseki, former Chief of Staff, U. S. Army, said “If you don’t like change, you’re going to like irrelevance even less.”

I and others have taken Sen McCain to task for his wildly expensive health reform plan that somehow manages to cost more than the Obama or Clinton plans, while insuring far fewer people.
How does he do this?
By relying on tax breaks and the existing completely broken health care system, making no changes to insurers’ current ability to medically underwrite, deny coverage to those with pre-existing conditions, and allow insurers to write policies across state lines, thereby contributing to the likelihood that adverse selection will speed the death spiral of plans that take all comers.
Brilliant.
Bob Laszewski provides us with a trenchant review of Mccain’s latest attempt to justify/explain his ‘plan’. Hint – it is neither a justification or explanation, but then again, it isn’t a plan.

The third session of the World Health Care Congress was begun by a talk from Rep Jim Cooper (D TN), one of Barack Obama’s health policy folks. Rep Cooper primarily condemned Sen McCain’s policy, while noting that both Democrats’ platforms were essentially identical – with one notable exception – Obama does not mandate coverage.
(A comparison of the Clinton and Obama plans is here)
According to Cooper, the upfront problem w universal coverage is that it will result in “zero Republican votes” – a completely wrong statement. For example, Ron Wyden’s (D OR) Healthy Americans Act has six (6) GOP cosponsors – and the HAA specifically calls for universal coverage.
McCain’s spokesman, Thomas Miller of the American Enterprise Institute, talked a good bit about the tax implications of McCain’s plan – a program that is remarkably similar to Pres. Bush’s plan (that got absolutely zero traction in Congress). Miller noted that McCain’s plan relies on the market and individual motivation to buy insurance, a motivation that will be enhanced by a tax credit for those how buy coverage (a tax credit that amounts to $2500 for an individual or $5000 for a family, about half of what coverage actually costs).
I’d note that Mr. Miller did not mention that Sen McCain’s plan will also be quite expensive. The cost of the Senator’s tax credits would be $206 billion in FY 2009 and $3.6 trillion over 10 years.
Chris Jennings spoke for Sen Clinton, and he started with the (I would argue sole) difference between the Clinton and Obama plans – she wants mandated universal coverage and he does not. Mr Jennings noted that half the cost comes from rolling back the Bush tax cuts and half from programmatic savings, but he did not add much in the way of new insights into how Sen Clinton’s plan will reduce costs.
There were two commentors – George Halvorson, CEO of Kaiser Permanente, and fomer Sec of State (and other departments) George Shultz. Halvorson began with the good news, that candidates are talking at a level of detail and comprehension re health care that is unprecedented. We’ve moved away from sound bites and deep into the details, a transformation that is quite encouraging to Mr. Halvorson.
George Shultz noted that if people work longer there will be more GDP, and this will help pay for more health care. He also opined that the reason people are living so much longer over the last 60-80 years is due to basic research and development of technology and pharmaceuticals. This, I would note, is in direct conflict with every other expert’s view on the subject – sanitation, nutrition, antibiotics and infectious disease control are overwhelmingly responsible for the improvement in lifespan, not MRI machines and new drugs (with the notable, but not overwhelmingly important, exception of antibiotics).
Finally, someone raised the question of comparative effectiveness evaluation – and all spokesmen agreed that we need to do a lot more of it. The elephant in the room is the AMA, and their likely-nuclear reaction to anything that smacks of ‘telling physicians how to practice medicine’.
But here’s my primary takeaway – everyone on the panel called for universal coverage even if McCain’s spokesman’s support was muted at best.

Health care ‘experts’ are coming out of the woodwork like termites after fumigation. Former Sec of State George Shultz and Stanford professor John Shoven are two of the latest emergent experts; they have written a book on reforming social security and health care – I haven’t read the social security part and after reading the health care section I don’t think I will.
One of the authors’ primary contentions is that involving the consumer in health care is a key to reforming the system. One of the bases for their argument is the history of laser eye surgery – Shultz and Shoven contend that the consumer’s involvement in selecting and negotiating for laser surgery demonstrates that consumerism can reduce costs while improving outcomes.
This because health insurance does not pay for lasix, forcing consumers to, well, be consumers. The huge differences between buying eye surgery (a pretty basic decision, with a tightly defined problem and expected outcome and easily measured result) and figuring out how to buy, or more accurately if you need to buy, health care for your child with an undiagnosed neural disorder are not addressed – at all. I find this to be an unforgivable error, an oversimplification of monumental proportion.
They call for risk adjustment as the way to spread risk and require insurers to take all comers for Medicare and Medicaid members, and seem to advocate universal coverage, but don’t adequately address, or I would argue even minimally address the issue of adverse selection. This issue – adverse selection – is central to the problem of health insurance today – people who need insurance buy it, and the sicker they are the more they are willing to pay, and the more expensive it is, the fewer healthy folks will sign up (because the cost:benefit doesn’t make sense). This is the death spiral – a current example is Humana, currently getting murdered in Part D (they are one of the only payers still offering a rich option, others have dropped the Cadillac plans because, surprise, the people who bought them were the ones who needed the most, and the most expensive, drugs.
What does this mean for you?
Listen to people like Bob Laszewski, Uwe Reinhardt, Alain Enthoven. People who know of what they speak.

The opening session for the World Health Care Congress featured Hans Rosling MD PhD of Sweden’s Karolinska Institute – a wizard in the use of statistics to explain the relationship between income, health status and the evolution thereof in ways that enable regular people to quickly and readily grasp the issues.
According to Rosling, the biggest disconnect between reality and our current perceptions there of is our segmentation of countries into ‘developed’ and ‘developing’, a segmentation that we use (that ‘we’ would include me) that now looks to really miss the mark – and not by a little.
There is no difference between the Western and developing worlds in two key areas – fertility rate and life expectancy at birth – this has been a remarkable change over the last 50 years, due to fewer kids, better sanitation and nutrition. Pretty simple stuff. But big in terms of implications – for example, demographically, Vietnam is precisely where the US was in 1980 – in terms of family size and life expectancy. And these changes happened before significant economic changes in Vietnam, changes that one would normally associate with dramatically improved population health status.
Most economic growth in the world is taking place in developing countries, the countries that make up 60% of world population and earn a quarter of total income. Yes, we still have about a billion poor people, but that number has remained static for over a hundred years – the percentage of the population that is poor has dropped dramatically.
Rosling’s presentation also made a very convincing case, or more accurately proved, his point that there are wide disparities between and among countries in the same areas – making general statements about OECD v Developing countries is not only dead wrong, it is misleading. Misleading in that we draw conclusions based on a split that appears to be deep and persistent, when in fact the ‘developing’ world is growing faster, economically and in terms of health status, and is rapidly catching up to the developed world.
What does this mean for you?
Always question your assumptions.

I’m covering the World Health Care Congress in D.C. today, and will be posting from the front row. I’ll start with the intro keynote, and post on each session separately. Here’s the order
1. Global Health Trends
2. Interview w George Shultz and Dr John Shoven on their incremental approach to reforming health care
3. Presidential Health Care Agenda – spokespersons from the three candidates left standing
4. Innovation in health care – with Clayton Christensen, perhaps the most insightful business author I’ve read in years
5. HealthGrades on Search and Transparency
6. Achieving accountable care – Elliott Fisher (Dartmouth) Mark McClellan, American Enterprise Institute
To those who subscribe, you will be inundated with posts today.

There has been, and will be, a lot of comparing and contrasting among competing versions of health care reform in this election. The brouhaha surrounding Sen Obama’s not-quite-universal coverage consumed a good bit of the blogosphere earlier this year, and (if the Dems ever agree on a candidate) the election itself will see the two candidates holding forth on the likelihood that their proposals will reduce the number of uninsured, cut costs, make us all healthier, and brighten our teeth as white as they can be.
Before you condemn or condone, dig into their stats, the basis for their arguments. Do their claims make sense? Are they basing their position on shaky ground? How are they validating their assumptions?
A lot is going to come down to statistics. Unless you are a blind ideologue (which this blog seems to have an uncanny ability to attract), in which case you won’t be bothered by facts, data, or logic.
Which makes this article from Wharton particularly relevant. Here’s what to watch out for.

• Selection bias – do the data selected to assess the plan look to be slanted in a particular direction?
• Misrepresentation – did the advocate report all relevant results, and not just the ones that supported their position? (this is very common in the policy world)
• Unintentional errors – are there math mistakes?

Here’s an example. A survey from the NFIB (National Federation of Independent Business) purports to speak for America’s small businesses. The NFIB has long been an advocate of high deductible plans and an opponent of mandated health insurance coverage. Knowing their history, it is not surprising their survey questions appear to reflect selection bias. Here’s an example.
Question – What is the BEST (their caps) general approach to controlling health care costs (Mark ONE only.)
1. Individuals shopping for the best prices in health care and health insurance.
2. Government regulating health insurance and health care prices
3. Employers choosing/purchasing health insurance on employees’ behalf
Surprisingly, only 49% of respondents voted for number 1. Surprising, because the other options are anathema to the typical independent small business owner. Yet the survey report stated “Small business owners responding to the survey indicated they believe the price mechanism could work to reduce healthcare costs.”
The last quote is indeed accurate, but it does reflect a certain amount of ‘selection bias’, both in the way the question was worded, and the way the responses were described (note the quote did not say how many small business owners believed…)
I’m not picking on the NFIB, which is doing some good work on the national health reform front – merely pointing out that agendas tend to drive results.
As the campaigns continue, keep a skeptical eye out for candidates torturing numbers to get them to say what they want.

A recent poll finds that 68% of Republicans think the US’ health care system is the world’s best.
Huh?
Are they really so brainwashed by the likes of O’Reilly, Limbaugh, and Coulter that they can’t see the reality staring them in their collective face?
Do they believe John McCain’s ‘straight talk’?
The health care system that costs twice as much as the average developed country and takes all that cash and delivers results on a par with many third-word countries?
A reality marked by access only via the ER for the uninsured (at 47 million and counting)?
A reality marked by billions in dollars for drugs that don’t do what their manufacturers claim?
Or is it just that the self-described Republicans (and I’m only speaking about the survey respondents) are part of the shrinking population of the self-satisfied and self-absorbed who don’t care that their neighbors are losing jobs and therefore health insurance?
Or are they…

Regardless of the rationale, or lack thereof, it is brutally clear that the respondents are an isolated, unique group with beliefs that are wildly different from their fellow Americans. Because when you compare their views to those of independents, the differences are striking.
A few samples from the survey –

• US has the best health care system in the world – GOP 68%, Dem 32%, Ind 40%
• Other countries have better systems – GOP 19% Dem 52% Ind 46%
• Is the US system better or worse than Canada’s – better – GOP 63%, Dem 25%, Ind 34%
• Worse than Canada’s? – GOP 16%, Dem 37%, Ind 36%

What does this mean?
GOP respondents are on one side of the chasm, with reality, and the independent voters who get that reality, on the other.