Thank you Senator Wyden for contributing to our humble TPM Cafe.

We don't always acknowledge it, but TPM readers are deeply appreciative of contributions from august members of the Congress like yourself. I also appreciate the time and effort you took in developing your bill. Hammering out compromises like this is hard work.

I do think there is an essential flaw in your formulation that every citizen must have 'private' health insurance. This is the worst part of Clinton-ism like pandering to industry lobbies.

A government mandate that I give my money to an industry that is literally only in it to profit is practically feudalism. Why not mandate that every American must have a credit card and pay $100 annual fee?

Not giving people the option of joining a plan administerd at minimal cost and zero profit by Medicaid is a non-starter.

Your plan to cut the federal government out of universal care smacks of Social Security privatization.

Has the insurance lobby so much power that it can literally write its own ticket in Washington DC?

The insurance lobby doesn't even contemplate the notion of competing with a non-profit federal health care administration.

I realize politics is the art of possible, but it seems as if we need to expand our notion of what is possible beyond what would be an ideal world for the insurance lobby.

Yes to you. If we could get literally every other employer other than health insurance companies to see it in their best interest to lobby against the insurance lobby, we just might have a fighting chance. Suddenly Detroit might be able to make cars at a profit again. Think about all the time and effort employers burn through procure health benefits for employees.

The mega-corporate lobbies are best dealt with by setting them against each other - that's the only way regular people can have the slimmest chance of making any progress.

how to deal with cost escalation?

in my job i get the 'pleasure' of tracking our trust fund's health care expenditures. our rates have gone up about 25% over the past two years. its gotten to the point where our health care contribution is about $8 per hour and is expected to rise to about $10 per hour at the end of our next contract.

so while the intention behind sen. wyden's proposal is more than noble, the mandate for carrying private insurance leads me to wonder if we'll be asked to simply subsidize the profits of insurance companies, which seem to be under no obligation to control their costs or provide an affordable product.

is there something that i'm not seeing?

Sen. Wyden's bipartisan team begins with the principle that "every single American has affordable, quality, private health coverage" (while protecting government programs). When laying down a common foundation for reform, you do not start by trading away anything. The word "private" should be deleted.

Senator

Welcome to TPMCafe.

Healthcare involves so many moving parts I am sure as a political matter you don't want to deal with too many of them.

However, partly because employers have been paying the bulk of health insurance in America much of healthcare reform has been focused on cost containment not on healthcare. Democrats could do a great service in dicussing healthcare from a realistic perspective. New drugs, new devices and an aging population all are causes of increased medical costs. Republicans would have you believe it is all about moral hazard. If Democrats acknowledge the truth about the cost it can then be said that as a wealthy country the United States can afford to spend more on medical care. There is no reason why as an advanced society we cannot use more of our GNP on medical spending than has been done in the past.

If universal coverage is a key goal disconnecting healthcare from employers may be even more important.

Daniel A. Greenbaum

Forcing people that already cannot afford private insurance (like the California plan would do) does nothing more than add profit to an already obscenely profitable industry. Private insurers routinely deny claims, and fight providing payment, knowing that many people will simply give up. What percentabge of these newly insured people are going to have the sophistication, time and wherewithal to fight for themselves?

Reforming health insurance is not the answer. Providing free health care to all Americans is.

Thank you Sen Wyden.

The first step is extending Medicare to all children under 18.

This has all kinds of advanatages beyond the obvious.

One, at a stroke it removes the single biggest obstacle to job mobility. Adults can and do make the rational decision to go without health insurance for a period of time, it is a lot harder to do when you are a parent.

Two, it gives some level of certainty to employers, particularly small employers. One new hire who has a child with a serious pre-existing condition potentially could ruin your plan. Yet, and for sound reasons, you are not allowed to ask about the number and health of children. Within limits you can judge your level of risk with the employee, though even there you risk discrimination issues, but you are totally exposed to the children. This reduces the risk and makes providing an employee only health plan more feasible.

Three, it allows entire new models of health care delivery to children. In particular it would make it feasible for schools to offer opt-in clinics for their students. Parents wouldn't have to use the service, but there would be huge efficiencies in having on site care especially for vaccinations and preventive care. Add an additional option that would allow parents to empower selected teachers to authorize care and a whole bunch of productivity is potentially restored. Right now parents have little option other than picking their kids up and taking them to a doctor.

Four, the problem of providing medical care to small towns would be alleviated if not solved. Generally there should be enough children and elderly in the area to support a Family Practice doctor who in turn could set rates for the uninsured at a level that wouldn't be crippling.

Five, on the same principle every Free Clinic in the country would be liberated. If you knew you had a steady revenue stream from treating the children then keeping the doors open to treat the adults just gets that much easier.

Six, it keeps some of the jerky libertarians off your back. They have a reasonable, if mean spirited, case that argues that they are paying their way, why should they have to pay for some adult who won't provide for himself. Well in this model, at least initially they wouldn't have to.

I think the model works. What it does is eliminate a huge source of structural economic friction. It is difficult to quantify the effects of one and two, of people taking a job or keeping a job simply because they need benefits for their kids as opposed to freely moving to another job or opening their own business, or from the other side the total uncertainty of offering a family plan to your employees. We know those costs are there, we all have seen employees and employers in those positions.

It is not just about the kids, it is the same principle that causes us to fund education through high school but not necessarily beyond. The economy and the nation benefit from a educated, healthy set of new workers. You can appeal to the basest motives of employers and still get this one done.

I like your points, but don't think that this would solve the problem of lack of health providers in rural America. But if this was coupled with a program that would allow new providers (doc's and nurses) to have their loans forgiven in exchange to work for x number of years in rural areas, then it might.

I have a cousin that began his dental career in the Navy working on reservations in South Dakota, the only dentist out there.

State funded through taxes. Thanks Robert.

.  .  .  modify your plan to include expanded or universal access to Medicare  .  .  .  .

Do you have an estimate of what the premium would be -- let's say for a family of four -- to opt in to Medicare?

Senator Wyden, You and I go way back and have agreed on a lot about Medicare. I think that all you have to do is look at how the Medicare Advantage plans work to see that there is no evidence that you can have meaningful competition, rein in costs and promote quality with a reform plan that relies exclusively on private health plans. While I'd like to be proven wrong, what Mark writes have never been true: "Most hybrids (the Wyden plan, for example) would require insurers to offer a basic benefit package, with community rating and guaranteed issue, and would subsidize the cost of that basic package. Rather than competing as they do now to reduce their exposure to risky customers, insurers would compete to offer the basic benefit most efficiently."
Perhaps because the health insurance business is unlike most other businesses and it is just plain impossible to distinguish among insurance plans other than based on a few bells and whistles, insurers do not appear to compete based on efficiency. Nor do they compete to deliver the best treatments to their policy holders who will most need them. Based on my knowledge of how the new prescription drug benefit under Medicare and Medicare private plans work, obligating insurers to deliver standard benefits to everyone at the same rate still leads them to compete to reduce their exposure to risky customers. Humana's first attempt at a drug benefit for people with Medicare in 2006 is telling. It offered one plan that filled the coverage gap and covered their brand name drugs. Guess what? Lots of people who needed high-cost brand name drugs signed up for this product, so Humana was losing money on it and Humana pulled this product from the market in 2007. Interestingly, Sierra Health Services decided to offer brand name coverage through the coverage gap in 2007. So what is Humana alleged to have done? Advised its members with high cost brand name drugs to switch to Sierra Health. It's good advice for the policy holders, helping them to get the coverage they need and great advice for Humana, allowing Humana to shift risk to Sierra Health. But, it's bad news for Sierra Health. In fact, such bad news for Sierra's bottom line that Kaiser reported on April 10 that Sierra is dropping that coverage. It is simply losing too much money selling people the product they need.

At the risk of inviting great cyber-scorn onto myself, I do have to say one thing about the big, bad, evil insurance industry. It's very easy (especially on TPMCafe) to blame a faceless evil corporation for all the ills of society, but let's look at 1 basic question: why is health insurance so expensive?

If you work in health care, the answer to that is pretty simple: the public is addicted to new pharmaceuticals and diagnostic technologies, and physicians are addicted to fancy new technologies and procedures, and covering people for all these things is really expensive. Just giving everyone insurance, by itself, isn't going to change this; most likely, it'll make it worse. Many of the single-payer plan ideas I hear from people on the left sound to me like a giant income assistance program for specialist physicians. I know it makes me sound like an evil libertarian conservative to bring up moral hazard, but moral hazard in health care is an empirical fact (see the Dartmouth Atlas). So, before we all conclude that abolishing private health insurers will solve all of society's ills, we should probably think about how providing higher-quality, more cost-effective care needs to fit into our visions of reform. In other words, our doctors and the insured, health service-consuming part of the population are big parts of the problem, whether we want to see it that way or not.

I'm fine with investment in health care. I'm not fine with investment in insurance company profits.

So ---  It's the blind leading the blind?

Undeniably true. There are real rising costs and we can't ignore that health care, not just health insurance is increasing rapidly in cost.

But...

There's something about writing a law that says I have to personally pay money to insurers that just burns my bacon.

It's not all about costs either. It's about taking away the Byzantine Bureacracy of dealing with your health insurer.

There's no law saying I have to own a house or car, so paying an insurance company is less onerous in that case.

The health insurance profitability guarantee act is another matter. It BURNS.

Why does Congress so often come up with brilliant schemes to give away the store to monied interests? This sounds exactly like what they did for railroads in the 19th Century.

Sen Wyden

Thanks for your post.

Cost containment is our only way out of this mess. It must be done with compassion and in an ethical manner.

Individual and institutional prevention must be part of anyone's plan.

Even Dr. Elias Zerhouni, head of the prestigious U.S.NIH, said last summer that "a treatment based health care system is not economincally sustainable"

Zerhouni is correct!

It is irresponsible to fail to address compassionate and ethical medical cost containment.

Dr. Rick Lippin
Southampton, Pa
http://medicalcrises.blogspot.com

I am sick and tired of feints at reform that lack the courage to take on the insurance industry. As an Oregonian, I know that Wyden was instrumental in crippling the Clinton plan. I know he circulated a dear colleague letter working to eliminate the provision allowing states to adopt single-payer options while telling activist groups that he thought the Clinton plan was the way to get to single payer. He has said to my face that single payer is the best option, but that it's not politically feasible. I have argued back that it would be more feasible if he weren't among the top recipients of insurance industry contributions. Wyden talks a good game while working feverishly to derail any reform that touches his real constituents, the insurance industry.

Re: Private insurers routinely deny claims, and fight providing payment, knowing that many people will simply give up.

Public plans do this too. In fact from my own experience in the industry, Medicare and Medicaid have an expertise at minimizing payouts that private plans can only envy.

But what if a Republican were to come to power again after SP has been enacted? You cannot expect the Democrates to hold the presidency in perpetuity.

It's not really a R vs. D issue for me. I just feel very nervous about handing the implementation of such a massive reform over to the Bush administration, which has proven itself hopelessly incapable of doing anything well.

There is really no hope of SP being enacted before Bush leaves office.

Let me rephrase my question: What if an incompetent president comes to power after health care financing has been consolidated into SP?

Point taken. However, the major alternative leaves us (all of us - funders, patients, providers and underwriters) more deeply invested in the deeply flawed system as time passes.

And again, that's true even before regulatory capture works its pernicious will. (Analogy in point, the student loan system.)

What are our choices? A quantum leap, a random walk, or a race to the bottom?

I'm still optimistic re purposeful, progressive increments ... but they'll have to get past both the Charybdis of conservative ideology and the Scylla of SP Purism.

Yes, of course, but you can't have it both ways. Either the savings will be passed on to the economy and supposedly create economic growth or it can be spent on more and better health care which will result in the same burdens on the ecomomy as today.

I am also very suspicious of the claims for vast savings without serious rationing of healthcare. I think the primary change that SP will bring about is to make the decision of how much to spent on health care and who gets it a political one. Maybe that’s a good thing, maybe the decision on how much to spend to keep grandma alive for six months more should not be an emotional one.

Wow, great comment!

I agree that health care is a mitigation, not entirely unlike military spending, we would all like to do without it.

There is a certain level of health care spending in the U.S. today which pays for a certain level of “healthiness”. If SP finds a way to deliver the same level of “healthiness” for less cost, the choice will be to spend the savings on other goods and services that we really enjoy, or spend more on healthcare for an incremental increase in our “healthiness”. Emotions aside, it is probably economically better to spend the windfall on stuff we enjoy. Politically, I am not sure that will happen.

One of the methods of rationing health care is the setting of reimbursement rates -- in other words, set the reimbursement rate for angioplasties low and there'll be a whole lot less of them.

But this sort of bureaucratic rationing is nontransparent, undemocratic, and subject to provider abuse. How would we, the health care users, assert control over the SP bureaucracy?

Your assumption is that a private bureaucracy is more amenable to control than a private bureaucracy. It is true in some instances and not in others.

A friend searched and searched for a civil service health care plan that didn't cover the cost of delivery of a child after he and his wife had had all the children they intended. He couldn't find one because there wasn't any - only because the government required all plans to cover pregnancy and delivery.

Much competition between private plans revolves around price rather than service and the government is far from absent.

There is plenty of reason to fear the power of government but liberals are not afraid of making government a servant. Conservatives prefer government to be the master.

Despite falsehoods that even "progressives" propagate, Republicans are the big government party. Nowhere is it more clear than in health care and social security. The Republicans would solve Social Security funding by instituting a huge new government plan that forces people to save for their retirement when they need to feed the family - or just themselves.

Best, Terry

Choice is an important theme when people choose their policies, private ones that is. Not so much choice when you are enrolled in a public assistance managed health care (medicaid/medicare). I hope we don't use Private policies as the universal evil scapegoat for what is the real problem.

I am a Mass. resident who buys health insurance as an individual. And I will just say "Ouch!" Inspired by the MassMandate Insurance, I am still going to be doing much better with a Private plan. To note, I qualify for the least subsidized Public plan. The understanding that I have gathered from months of comparison, albeit as a layman, is that the public managed policies are paying much more, with no added benefits. Is this because they are more influenced by industry or are they starting from such a deep hole when their initial bargaining point is at the MediCaid/Care level (oversight and value not a strongpoint).

With either Public or Private management, everyone is getting coverage at an affordable price. This is the important thing. Some quick numbers (which seem to change monthly) are State expenditures for Medicaid $442/month, with consumer premiums ranging from $0 - $106 under the State subsidized plans (up to 300% poverty level). The consumer premiums were originally much worse and unacceptable under the MassMandate Policy. Good bargaining for the consumer premiums but nothing for the State premiums. In effect, we (as the tax paying constituents) are still paying $442-294/month. In my opinion, it is a responsible and compassionate cost to pay.

What I don't get, seemingly because of market and bureaucratic faults, is that a Private Insurance Exchange Group (although governed by statute = Public) got a much better consumer premium. No subsidies, similar limited plans = $175. I am from Boston, so I understand the illogical forces of markets (our real estate market is silly), but this screams that someone is getting it bad.

So it is not always the case that a Public plan is cheaper than a Private, management costs or not. I think the history of our public checkbook is one that doesn't often consider value or utility. How much did we pay for that hammer, $3million?

What I think played out here is what needs to be done as a general policy across the board. State, or preferably Federal, regulations should be established to reign in and guide insurance management plans to be responsible to consumer priorities. So far, it has worked for one Private group. What has to be done for it to be done system wide? Would if matter if the plans were public or private if guidelines were established? Admittedly, consumer protection is oddly not a successful skill of our Public officials (see: Medicaid, VA, Fed Bank Regs), but maybe that is our problem? For how long have we said that "health care" is a major concern, yet haven't made them do anything about it. If it is that important to us, we will have to assume the obvious costs that will follow, AND we will have to force them to be our vanguards. This seems to be the real problem.

Having worked in healthcare for 30 years I'd like to respond to NPE's comment re-printed here:

"...why is health insurance so expensive? If you work in health care, the answer to that is pretty simple: the public is addicted to new pharmaceuticals and diagnostic technologies, and physicians are addicted to fancy new technologies and procedures, and covering people for all these things is really expensive. Just giving everyone insurance, by itself, isn't going to change this; most likely, it'll make it worse."

I'd like to first say that my reply is not meant to be scornful but is intended to help advance constructive dialogue and get us closer to common ground. Sharing an understanding of the root causes of our problems is essential to finding our way to effective solutions and fighting for their enactment.

Here goes, based on my 30 years working in healthcare in a wide variety of settings and from being a health reform activist for 20 years:

Insurance is expensive for a number of reasons, all of which can be meaningfully addressed with reforms that use single-payer financing that is non-profit and gov't administered to provide every U.S. resident with universal quality coverage

1. High admin. overhead costs due to hc insurance premium payments that are diverted away from care to profit-making and "market competition" expenses. This amount varies from 16-30% according to various rigorous studies. 16% overhead (non hc spending) is the figure for "non-profit" insurers that dominate the market here in Mass. Data can be found here http://www.mass.gov/healthcareaccess/

2. The misguided and wasteful policy of allowing for-profit care (on a large scale) deserves its own category.

3. Obscenely high cost of prescription drugs in the U.S. and overuse of drugs due to our gov't abandoning U.S. citizens to big Pharma's greed and allowing price gouging, and in the recent changing of laws to allow DTC advertising (extremely poor public health policy for clinical concerns, not to speak of the economic consequences).

Why should big Pharma co's make 4x the average profit margin of other Fortune 500 co's? -- it's the biggest national rip-off going!!! And this means that big Pharma has the most to lose and the most to spend trying to kill meaningful healthcare reforms.

4. Perverse incentives in the financing mechanisms of our current system that incentivize docs to do high tech invasive high reimbursement uneccessary procedures (that carry higher risks of complications to pts as well as wasting money). Addressing this is paramount and will be a challenge, I agree. Q&A and oversight mechanisms are needed. Having an actual national hc system would make implementing these effectively much more doable.

5. U.S. public policy has increasingly treated hc as a commodity instead of as the public good and human service that it is. (this is related to but seperate form for-profit care, I think).

This commodity paradigm sees health insurance and hc to be delivered in a market-driven environment where competition is based largely on price. This has done terrible harm to quality of care by causing a race to the bottom resulting in 98,000 preventable deaths a year due to poor quality care (IOM report).

6. Ramping up in the 1990's consultants have sold job and workplace re-engineering "solutions for cost control" based on "speed-up and through-put" and 7 minute visits. These have been widely used as a way to maximize profits. Ernst and Young and other consulting groups and individuals have siphoned huge amounts of hc dollars out of the hc system selling auto manufacturing tachniques to hospitals and nursing homes. Criminal, if you ask me.

On a related side note: Charlene Harrington, RN, PhD in CA conducts and publishes research that tallies the deaths of nursing home patients who have been starved to death, died of easily preventable dehydration, and are killed by treatable infections that went untreated simply b/c there are not enough staff on the payroll to provide basic needed care. (She documents that nurses and nursing assistants are doing their best in impossible working conditions). As I said, criminal.

7. These various financing and delivery policies that treat hc as a commodity rather than a human service have caused serious erosion of the doctor-patient relationship and eroded other kinds of caregiver-patient relationships. Relationships that negatively affect families' too and make them more distrustful and open to ambulance chaser ads.

8. Speed-up has led to the near-extinction of thorough medical history-taking. This is a time consuming but very valuable cliical tool.

These phenomena have led to an explosion in the practice of "defensive medicine" with its uneccessary tests that drive up hc costs.

Our shared social values of caring, compassion, fairness, quality, and stewardship, not the profit-driven corporate values of greed, competition and de-humanizing human beings, are what must shape and drive a re-made U.S. healthcare system.

Visit www.DefendHealth.org for more details on how caregivers are uniting to advance this vision of reform.