It’s quite clear the public plan option is not going to be part of any health reform bill, if any health reform bill is passed.
This despite the announcement yesterday that sixty progressive/Democrat members of Congress signed a document that they would not support a reform bill that does not include a public plan option. While I admire their willingness to take a stand, I don’t believe that they will follow through.
THe good folks at the Campaign for America’s Future invited me to participate in a call yesterday with Dr. Jacob Hacker, the brains behind the public plan option, as well as two Congressmen, Rep. Raul Grijalva and Keith Ellison. The gentlemen waxed eloquent about the progressive caucus’ commitment to the public plan option, and all the reporters who got to ask questions focused on the political issues surrounding their position.
I didn’t get to ask the ‘other’ question, which was in three parts; “How will this save money, and how will you convince providers to sign up, and how will it prevent cost shifting to private plans?”
Dr. Hacker addressed these questions in a monograph published by CAF; providers would be automatically signed up but could opt out; reimbursement would be set at 5% above Medicare; and cost-shifting is overblown.
I don’t agree with Dr Hacker that most providers would join (why would they join a plan with no members at reimbursement much less than they are currently getting to serve their current patients?) or that cost-shifting is overblown – I see too much of this every day. I also don’t see how a public plan would control the single biggest driver of health cost – utilization.
But it doesn’t really matter if he’s right or I’m right or we’re both wrong – what matters is the political reality is there aren’t the votes in the Senate to pass a plan with a public option.
The continued political brawl over the public option is pointless on at least two levels – it is clear there is not enough support for the option to include it in a bill that will pass the House and Senate, and if health reform legislation is written intelligently, the public option is unnecessary. Moreover, I seriously doubt the progressives will fall on their collective swords and vote ‘No’ on a comprehensive health reform bill if it doesn’t include a public plan option.
My sense all along has been the public option is a stalking horse, one that the President and a few Democrats let out of the stable to create a little excitement, rile up the opposition, and distract attention from other provisions that are more important and meaningful, like insurance reform, mandated universal coverage, and comparative effectiveness research.
Boy were they successful. Once out of the stable, the horse took off bucking and snorting, and kicked up enough of a ruckus to perhaps kill the whole reform process.

The scaremongers have apparently succeeded in forcing Senate Democrats to remove end of life planning from their health reform plans. This despite the original provision was introduced by a Republican (Johnny Isakson of Georgia) support of the measure by none other than conservative icon Newt Gingrich (at least he supported it until a few weeks ago…), a new study that demonstrates the importance of end of life planning, and the bill itself, which does NOT include mandatory ‘advance care planning’.
(Section 1233 of America’s Affordable Health Choices Act of 2009 amends the Social Security Act to ensure that advance care planning will be covered if a patient requests it from a qualified care provider [America’s Affordable Health Choices Act, Sec. 1233]. Media Matters notes “According to an analysis of the bill produced by the three relevant House committees, the section “[p]rovides coverage for consultation between enrollees and practitioners to discuss orders for life-sustaining treatment. Instructs CMS to modify ‘Medicare & You’ handbook to incorporate information on end-of-life planning resources and to incorporate measures on advance care planning into the physician’s quality reporting initiative.” [waysandmeans.house.gov, accessed 7/29/09])
The reality is a relatively innocuous provision that had broad bipartisan support and was widely recognized as appropriate and helpful by the medical community has been used by opponents of health reform to scare the bejesus out of enough Americans to force its removal from the (future) Senate Bill.
And if you think the battle is over, you’re sadly mistaken.
I don’t know what seemingly mundane the next battle will be over, but if reform opponents can use advance life care planning as a cudgel to beat the heck out of the Democrats, than no provision is safe.
The Dems have all but lost the reform battle; polls are not favorable, opponents have created fear and concern among independents and moderates, and the President has been unable (to date) to use his formidable communicative powers and infrastructure to regain the momentum.
Unless President Obama and the Democrats get their act together, reform’s chances are fading like an iceberg in a heat wave.

There are definitely more than ten, but here’s my list.
10. A federal death panel will decide who gets care and who gets ‘suicide-d’. This has been debunked almost as many times as it’s been ‘bunked’, Section 1233 of America’s Affordable Health Choices Act of 2009 amends the Social Security Act to ensure that advance care planning will be covered if a patient requests it from a qualified care provider [America’s Affordable Health Choices Act, Sec. 1233]. According to an analysis of the bill produced by the three relevant House committees, the section “[p]rovides coverage for consultation between enrollees and practitioners to discuss orders for life-sustaining treatment. Instructs CMS to modify ‘Medicare & You’ handbook to incorporate information on end-of-life planning resources and to incorporate measures on advance care planning into the physician’s quality reporting initiative.” (Media Matters)
9. Illegal aliens will get free coverage. Nope, not true. In fact, none of the plans currently before Congress would allow the federal government to provide health coverage for illegal immigrants. The federal government does not currently provide coverage for illegal immigrants.
8. It’s deficit neutral. President Obama has repeatedly claimed the current health care reform initiative will be paid for by savings, increased taxes on wealthier Americans, and reductions in Medicare Advantage and other payments. I doubt it. Providing coverage to tens of millions of folks who don’t have it now will increase utilization – just like it did for Part D – and we can probably expect prices to go up too.
7. Health reform will lead to rationing. Again, I guess it depends on your definition of ‘rationing’. If ‘rationing’ will reduce the amount of unnecessary and probably hurtful care, that’s a great result. According to the Dartmouth Atlas, about a third of the health care delivered to Americans is not necessary and wasteful. I’m fine with eliminating that care – even if that means I can’t get an MRI on my twisted ankle. That’s not rationing, that’s good medicine. Unfortunately, I don’t see that happening anytime soon. And therein lies the problem with the ‘deficit neutral’ argument – more coverage will mean more services which will cost more money, driving up the nation’s health care cost.
6. The free market which can solve the problem without government intervention. I’d agree (and have stated before) that the private insurance market could fix our health insurance problem, but there has to be a market first. The reality today is that almost every market is already dominated by a very few health plans, so much so that in most markets, there really is very little market competition amongst health plans. Until and unless we have open competition, we won’t have choice.
5. This is socialism. Well, I guess it depends on your definition of ‘socialism’. According to generally accepted definitions, socialized medicine is when the government employs the doctors and owns the hospitals and provides the insurance. None of the bills under consideration are anywhere close to that -which, BTW, exists in a relatively few countries like the UK and Cuba. In the proposed system, private insurers would continue to provide insurance to most non-seniors, Medicare would continue, and providers would remain independent.
4. My tax dollars would be used for abortions. Yes and no. Federal dollars for abortions are currently quite restricted, and would continue to be. Coverage for abortion services would remain only for rape, incest and to protect the mother’s life.
3. We should just can all the private insurers and go to single payer, which will save lots of money in administrative expense. Not true. Private insurers have to account for and report future liabilities; the government doesn’t. The ultimate liability for Medicare and Medicaid is in the tens of trillions of dollars. Moreover, the admin expense argument is unfair as the Medicare population is markedly different from the demographic served by private insurers. First, there’s only one enrollment per lifetime. Second, there are minimal marketing/advertising expenses. Third, there are no premium taxes or other costs of compliance. No, while admin expenses would be lower, the huge savings touted by single payer advocates result from an unfair analysis.
2. A public plan would crush private insurers and we’d all end up covered by the public plan. Not even close to the truth. Some continue to complain private health plans will not be able to compete with a public option as the public plan will just dictate pricing to providers, and public plans wouldn’t have the capital and financial stability requirements forced on private plans. They’re half right. Re the capital requirements, they’ve got a valid argument. As we know all too well with Medicare and Medicaid, the Feds (and we taxpayers) have an ultimate unfunded liability in excess of $22 trillion, but that figure doesn’t show up on any formal financial statements.
But when they complain about pricing, that’s a red herring – for two reasons.
First, physicians don’t have to accept Medicare or Medicaid, and wouldn’t have to agree to any ‘public option’ pricing. In fact many docs don’t accept Medicare today. As participants in the free market, they are able to opt out if they feel the compensation is too low – and many do.
The other factor is just as simple – pricing is but one component of the health cost equation. The others are utilization and frequency. ‘Utilization’ is the number of a specific type of services used by a patient, while ‘Frequency’ is the percentage/number of patients that use that type of service. And Medicare has not shown any ability to address either of these two factors.
1. And the top misperception about health reform – it will mean a bureaucrat will determine my health care, not me and my doctor. Uhhh, what do you think happens now?

Pull out your health insurance card, and turn it over. See the phone numbers on the back? Those connect you (first to voice mail hell), then eventually, if you’re lucky and very persistent, to a ‘bureaucrat’, albeit one employed by your health insurer. They might even be located offshore …

Jonathan Cohn writing at ‘The New Republic’ has summarized what’s happening with health reform better than I could. Here’s an excerpt:
“Exhibit number one is the treatment of Eziekel Emanuel, the distinguished oncologist and bioethicist who is working on health reform at the Office of Management and Budget. In the course of his writings, which span academia and popular publications, he has argued forcefully and clearly against physician-assisted suicide. Yet somehow Emanuel finds himself accused of–wait for it–advocating physician assisted suicide…The attack on Emanuel is part of a broader offensive–an effort to persuade anxious Americans that health reformers will harm people who are seriously ill or who have disabilities…Every year, millions of families struggle to get affordable medical care for themselves or their loved ones–and end up in financial ruin, going without medical care, or some combination of the two. Many of these cases involve diseases like cerebral palsy or Parkinson’s–or other conditions that require ongoing, expensive care.
Insurance companies try their best to avoid taking on these people. Apply for an individual policy with one of these pre-existing conditions and an insurer will reject you if it can. If it can’t–if, say, you’re lucky enough to get coverage through an employer–you may well find the insurance doesn’t cover what you need.
Changing that isn’t merely a by-product of reform. It’s the whole point of reform. The plan Obama and his allies support would make coverage available to everybody regardless of pre-existing medical conditions. It would require insurers to cover a broad range of medical services. And it would police insurers to make sure they didn’t try to get around those requirements.”
Bob Laszewski has a similar perspective.
“Sarah Palin want-to-be Betsy McCaughey, who had her last 15 minutes of fame during the Clinton health care debate, claims Dr. Emanuel endorses age discrimination for health care services–basically saying he wants to pull grandma’s plug.
NICE actually makes the British system’s tough decisions so many worry might have to be made here. For example, last year NICE issued guidance rejecting kidney cancer drugs Sutent (sunitinib), Avastin (bevacizumab), Nexavar (sorafenib) and Torisel (temsirolimus). This leaves patients with only one treatment option – interferon. The reason is these drugs only extended the life of the patient a very few months but they cost about $200,000 to keep a patient alive that long.
Dr. Emanuel is one of the most widely respected health care ethicists in the country. The issues McCaughey is using were quoted out of context and had to do with one of the things Dr. Emanuel gets to think about at the National Institutes of Health–what to do when you don’t have enough organ donors for those who want organs.”
The question that opponents of reform are ignoring is this: “what happens to me and my family if Iose my health insurance? Am I confident that I will get the health care coverage I need at a price I can afford? And when prices double in ten years, will that still be the case?”
Our current health care system is unsustainable. Opponents of reform who do nothing but lie and have no real solutions will have no one to blame but themselves if reform fails and they can’t get insurance or care.

Yesterday we examined the potential impact on insurers and insureds of a failure to pass meaningful comprehensive health reform . Today we’ll look at the effect on providers.
Again, we’ll leave aside the possibility of individual bills addressing physician compensation under Medicare, a superMedPAC and other potential measures.
As health care costs increase, the number of employers who can afford coverage drops, as does the percentage of their workers willing to pay their share of the premium. And without meaningful reform that includes cost controls, there is zero evidence that costs will moderate on their own. While the cost cycle will persist, without structural change in the form of changed incentives for payers and revamped reimbursement by Medicare we’re stuck with the same underlying trend of a couple points higher than overall inflation.
The latest data indicate this is already happening, as the largest health plans lost over four hundred thousand commercial members in total in the first quarter.
We’re looking at fewer working families with insurance, but there’s another problem – as employers change to high deductible plans, or increase the deductibles on current plans, employees will have to come up with more cash to pay for their care before their insurance kicks in. Fact is, almost one-fifth of Health Savings Accounts don’t have any funds in them, and most aren’t fully funded (the average account balance was about $950 for individual accounts and $1500 for family as of Q3 2008). Moreover, that only counts the folks who are enrolled in HSA-type plans who’ve opened accounts; according to a GAO study, in 2007 almost half of HSA-eligible plan enrollees hadn’t opened an account.
The net? More patients without coverage, and a sizable chunk of those with ‘coverage’ don’t have funds to pay their deductibles. The result? More indigent care, more unpaid bills, and more trips to the ER instead of primary care doc visits, trips that won’t be compensated and will therefore result in more losses for hospitals and cost-shifting to the shrinking population of commercial insured patients.
Specialties that will be particularly hard hit include orthopedics, ophthalmology, dermatology, ob/gyn, neurology, physical therapy and neurosurgery. With many of their patients presenting with non-emergent conditions, these specialists will likely see a decline in patients as those without coverage put off care – that aching knee, slightly blurry vision, skin blotch or loss of sensation will be ignored as much as possible as long as possible. Ob/gyns will see an increase in indigent care, and a potentially considerable growth in patients covered by Medicaid (a notoriously poor payer in many states).
The consolidation in the payer industry (noted yesterday) will shift more bargaining power to healthplans, especially for physician contracts. Hospitals are a little better off, as many have gotten pretty good at negotiating with insurers and their proxies. But for those providers in markets with two or one dominant payer, rate negotiations will become increasingly one-sided.

We know that much of the town hall opposition has been funded by right-wing advocacy groups. What we don’t know is what will happen if they are successful in stopping Congress’ efforts to pass and the President’s to sign a comprehensive health care reform bill.
I’ll leave aside the potential impact of bills addressing a ‘superMedPAC’, changes to Medicare physician reimbursement, and the possibility that HHS will get a better deal from big pharma. What will our country’s health system look like in five years if there isn’t reform?
Today we’ll look at insurers and families, tomorrow providers and the ‘macro’ impact.
Impact on insurers
Without reform of the insurance underwriting and rating laws, insurers will seek to be even more selective about the policies they write. That’s already starting to happen, and is a major reason the larger health plans are losing members this year for the first time in recent history. They just don’t want the ‘risk’ that someone will have a claim. Healthplans will also continue to ‘churn’ their books – to try to dump policies that have been in place for more than three years, as that is about when claims start to pile up.
Can’t blame them, as many are for-profit and therefore more committed to shareholder returns than patient care. That is not a value statement – it is a statement of fact.
The number of viable healthplans will continue to shrink. As a mature industry, the healthplan business has been steadily consolidating – if anything that will accelerate. And no, the free market will not increase ‘choice’; we already have a free market for commercial plans (and Medicare Advantage and Part D) and in most areas there are at most two plans to choose from.
Smaller healthplans will find it increasingly hard to compete, as the big plans get ever-better discounts from providers, who have to make up the lost revenue by cost-shifting to the smaller plans with less clout. As their costs go up, so will their rates, until they either wither away or get bought out by the big plans.
PPO plans will get ‘nichier and nichier’. Their higher medical costs will push members towards HMO-type plans, making it harder for employers with widely-spread workers to get affordable coverage unless they buy insurance from one of the big plans that operates in all the areas the employer has bodies. Inevitably, some workers will be left with poor coverage…
Impact on individuals and families
Bureaucrats at insurance companies will still be making decisions about what doctors you can see and how much they’ll pay and what they’ll cover and what they won’t. You’ll have to ask permission for services, and hope and pray they get paid. Those same bureaucrats will tell you they’re interested in keeping you healthy, but that’s only till they can churn you out of their book.
There will continue to be a hodgepodge of state-specific insurance mandates, rules, regulations, and enforcement mechanisms, as well as benefit designs and limitations. I’d note that under some of the reform bills under consideration, states will maintain a very significant regulatory role, but the benefit design and other ‘customer-facing’ issues should be simplified.
But the big problem is this – it will get harder and harder for individuals and employers to get insurance coverage.
Here’s one all-too-common scenario. The breadwinner loses her/his job, and with it health insurance coverage. They find a new job, but that company doesn’t offer benefits as they are too expensive. So, Ms/Mr Breadwinner, responsible person that s/he is, tries to buy an individual policy. There are several insurers that write those policies, so the applications go in – followed by requests for medical records, documents, and attestations signed by their physicians. Oops, one of the family has a mild case of asthma, and dad takes cholesterol medication, and mom saw a counselor a few years ago after her dad died.
Three insurers decline to offer a proposal, and the one that does will exclude any cardiovascular coverage for dad, any pulmonary issues for junior, and mom won’t be covered for any psychiatric or anxiety or related issues. And, oh, the policy is 50% more expensive than the original quote. Leaving Mr/Ms Breadwinner to decide if they want to come up with $22,000 a year for less-than-full coverage and their HSA deductible (in 2009 dollars)…
Unfortunately there isn’t any governmental assistance, so the Breadwinners, who make $75k a year, are looking at spending almost a third of their gross income on health insurance – insurance that doesn’t cover their most likely health problems.
Think this is hyperbole? You’re wrong. This is happening every day in every community, and if health reform doesn’t happen, it is going to happen more and more often.
Unlike the right-wing fear death panels, this is reality.