Lowering the bar on health care reform?

[Joanne98]

I have been discussing health care reform with a number of people from all across the political spectrum. Most of the people I meet are really not very well informed about what is being proposed by the administration. While quite a few like the idea of a government plan and ability to have secure and affordable health insurance, there is also a significant number who have come to believe the rampant disinformation and are frankly scared; for them it is the fear of the unknown. They want to know how will the new bill affect them, will their taxes go up and finally will the administration deliver everything that they are saying.

At the same time I have engaged a number of Republicans who are spreading this disinformation. The overarching discussion now is based on the HR 3200 bill from the House Energy and Commerce Committee. The disinformation regarding this bill can be debunked quite easily, but then these guys pull the final card "all that is fine but you know this bill will never become law, Obama has already said that he is willing to forgo a large government plan". To this point I have no answer. Because really I do not know what direction the final health care bill will take.



Frankly if I am to believe all the recent indicators the bar for health care reform is being lowered from something that is supposed to be ambitious and comprehensive to something that is passable. These are not indicators coming from partisan sources and blogs but from respectable news organizations and often corroborated by the White House.

Take this one from the New York Times:


Pressed by industry lobbyists, White House officials on Wednesday assured drug makers that the administration stood by a behind-the-scenes deal to block any Congressional effort to extract cost savings from them beyond an agreed-upon $80 billion.

Drug industry lobbyists reacted with alarm this week to a House health care overhaul measure that would allow the government to negotiate drug prices and demand additional rebates from drug manufacturers.

In response, the industry successfully demanded that the White House explicitly acknowledge for the first time that it had committed to protect drug makers from bearing further costs in the overhaul. The Obama administration had never spelled out the details of the agreement.

"We were assured: `We need somebody to come in first. If you come in first, you will have a rock-solid deal,' " Billy Tauzin, the former Republican House member from Louisiana who now leads the pharmaceutical trade group, said Wednesday. "Who is ever going to go into a deal with the White House again if they don't keep their word? You are just going to duke it out instead."


This deal while perplexing because it is counter to everything that Obama campaigned on, that is ending the influence of powerful of lobbyists in the White House, can be partially explained by the more recent story in the New York Times:


The drug industry has authorized its lobbyists to spend as much as $150 million on television commercials supporting President Obama's health care overhaul, beginning over the August Congressional recess, people briefed on the plans said Saturday.

The unusually large scale of the industry's commitment to the cause helps explain some of a contentious back-and-forth playing out in recent days between the odd-couple allies over a deal that the White House struck with the industry in June to secure its support. The terms of the deal were not fully disclosed. Both sides had announced that the drug industry would contribute $80 billion over 10 years to the cost of the health care overhaul without spelling out the details.

With House Democrats moving to extract more than that just as the drug makers finalized their advertising plans, the industry lobbyists pressed the Obama administration for public reassurances that it had agreed to cap the industry's additional costs at $80 billion. The White House, meanwhile, has struggled to mollify its most pivotal health industry ally without alienating Congressional Democrats who want to demand far more of the drug makers. White House officials could not immediately be reached for comment.

Many Democratic lawmakers have railed for years against what they consider the industry's excessive profits and pointedly insisted in recent days that they do not feel bound by the White House's commitments.

Sources briefed on the drug industry's plans, speaking on condition of anonymity because the details remain confidential, say top officials of the industry's trade group, the Pharmaceutical Research and Manufacturers of America, or PhRMA, are scheduled to meet next week to finalize its fall plans. The final budget could be less or more than what was authorized, the sources said.


On the face of it, this is sound political tactic. The administration would rather neutralize one powerful lobby rather than open a confrontation with both Phrma and AHIP, on top of the usual players from the right wing. However this deal also betrays a sort of short-sightedness: Everyone knows that the cost of health insurance is in three areas, administrative, health care costs and drug costs. In Medicare one of the main problems was Part D, an unfunded expansion of entitlement that was always considered a major giveaway to Pharma. So while Phrma decided to fill the "doughnut hole" by 50% with its commitment of $80 billion, one has to ask that for an industry committed to profit is it making enough concessions? For that matter can a public option offer affordable premiums if it cannot negotiate drug prices and health care costs?

Which of course brings me to the fate of the public option. Right now things definitely do not look good, in fact if anything it looks bleak for any meaningful public option in the final bill. As the Business Week reports in their latest article, the battle for public option may have already been won by the health insurance industry:


As the health reform fight shifts this month from a vacationing Washington to congressional districts and local airwaves around the country, much more of the battle than most people realize is already over. The likely victors are insurance giants such as UnitedHealth Group (UNH), Aetna (AET), and WellPoint (WLP). The carriers have succeeded in redefining the terms of the reform debate to such a degree that no matter what specifics emerge in the voluminous bill Congress may send to President Obama this fall, the insurance industry will emerge more profitable. Health reform could come with a $1 trillion price tag over the next decade, and it may complicate matters for some large employers. But insurance CEOs ought to be smiling.

Executives from UnitedHealth certainly showed no signs of worry on the mid-July day that Senate Democrats proposed to help pay for reform with a new tax on the insurance industry. Instead, UnitedHealth parked a shiny 18-wheeler outfitted with high-tech medical gear near the Capitol and invited members of Congress aboard. Inside the mobile diagnostic center, which enables doctors to examine distant patients via satellite television, Representative Jim Matheson didn't disguise his wonderment. "Fascinating, fascinating," said the Democrat from Utah. "Amazing."

<snip>

Despite such episodes, UnitedHealth is generally well received in legislative circles in Washington. In late May its in-house point man on reform, Simon Stevens, hand-delivered a report to key senators detailing ways to save an estimated $540 billion in federal spending over 10 years. A week later, on June 4, Stevens accompanied UnitedHealth's chief executive, Stephen J. Hemsley, to a meeting with Senator Kent Conrad (D-N.D.), an influential moderate member of the Senate Finance Committee. Conrad has since led an effort to create nonprofit medical cooperatives that would operate much like utility co-ops as a substitute for a federally run plan. With less heft than a proposed national plan, the state medical cooperatives would pose a far weaker competitive threat to private insurers.

Conrad says in an interview that the co-op idea evolved independently of any industry input. Skirmishing over the public plan could jeopardize efforts at reform, he warns. Co-ops, he argues, are "the only alternative that's got much of a shot" to gain sufficient votes in the Senate.

<snip>

Sommer has retained such influential outsiders as Tom Daschle, the former Democratic Senate Leader who now works for the large law and lobbying firm Alston & Bird. Daschle, a liberal from South Dakota, dropped out of the running to be Obama's Secretary of Health & Human Services after disclosures that he failed to pay taxes on perks given to him by a private client. He advised UnitedHealth in 2007 and 2008 and resumed that role this year. Daschle personally advocates a government-run competitor to private insurers. But he sells his expertise to UnitedHealth, which opposes any such public insurance plan. Among the services Daschle offers are tips on the personalities and policy proclivities of members of Congress he has known for decades.

<snip>

A fundamental question about the health overhaul is what minimum standards will apply to the coverage all Americans will be required to have. UnitedHealth has been exchanging a high volume of information on the topic with members of the Senate Finance Committee and their staff. Stevens, the former British health aide, regularly scans PowerPoint presentations generated by the committee staff that attempt to calculate the actuarial value of proposed benefit packages. Senators stung by the projected $1 trillion price tag are winnowing down the required coverage levels to cut costs.

This is good news for UnitedHealth, which benefits when patients pick up more of the tab. In late spring, the Finance Committee was assuming a 76% reimbursement rate on average, meaning consumers would be responsible for paying the remaining 24% of their medical bills, in addition to their insurance premiums. Stevens and his UnitedHealth colleagues urged a more industry-friendly ratio. Subsequently the committee reduced the reimbursement figure to 65%, suggesting a 35% contribution by consumers--more in line with what the big insurer wants. The final figures are still being debated.

Stevens says UnitedHealth and its corporate clients want to steer Congress toward benefit levels and cost sharing that can help control overall health spending: "We are providing another resource of actual modeling and advice on how proposals in the committees are structured and some potential unintended consequences of going down certain routes."



Not surprisingly there have been indicators coming from the Senate and the White House that the public option can be ditched in favor of Kent Conrad's co-ops:


President Barack Obama may accept nonprofit health-insurance cooperatives in place of a new government-run plan as long as consumers are guaranteed more choice and competition in buying insurance, a top aide said.

"We would be interested in that" if those conditions are met, Nancy-Ann DeParle, director of the White House Office of Health Reform, said in an interview with Bloomberg Television's "Conversations with Judy Woodruff" airing today.

DeParle said she expected Congress to pass health-care legislation on a bipartisan vote "around Thanksgiving."


The operative words being a bipartisan bill that promotes choice and competition. While the White House immediately released a statement that the President stands behind a public plan, the conflicting statements coming from the White House is difficult to interpret:


Robert Gibbs, the White House press secretary, reinforced that view during his briefing yesterday when asked if Obama would sign a bill that didn't include a public plan.

"The president is open to a bill that increases choice and competition," he said.


Today Sen. Durbin, who is considered one of the champions of public option indicated that he is open to alternatives:


One of Barack Obama's chief allies in the United States Senate hinted on Sunday that a public insurance option could go by the wayside as Congress hammers out its health care legislation.

Appearing on CNN's "State of the Union," Sen. Dick Durbin (D-Ill.), one of the chamber's foremost progressives, said that while he supported a government-run option for insurance, he was "open" to alternatives.

"Just understand that, after we pass this bill -- and I hope we do -- in the Senate, it will go to conference committee," said Durbin. "We'll have a chance to work out all of our differences."


But what of the co-ops? Do they really present that good an alternative to the public plan? Sen. Rockefeller who is in the Finance Committee, has been critical of this plan:


We've been in touch with the folks that oversee all the -- represent all the co-ops in the country on all subjects, and they point out that there are probably less than 20 health co-ops in the country. There are only two that really work that well, one in Puget Sound, one in Minnesota.

Except for those two, they're all unlicensed. All present health co-ops are unlicensed, they're unregulated, nobody knows anything about them, nobody has any control over them. And nobody's ever, they said, which is a stunning thing to me, no government organization or private organization has ever done a study on what effect they might have in terms of bringing down insurance prices.


I understand that health care reform is a complex issue. There are multiple competing interests not just in the Senate and the Congress, but even within the Democratic party. The influence of money in politics can never be underestimated as we have seen and the lobbyists are still powerful and still have an influence in the White House. However in this complex debate what is lacking is a clear direction, a legislative consensus that allows grass-roots workers to argue for or against something. As it now stands no one knows what the final bill will be and as August recess gets hotter with astro-turfed townhall protests and a well orchestrated disinformation campaign that is aimed to scare people already scared in this climate of economic uncertainty, the overarching question now is will we get real health care reform or just another band-aid?

http://www.mydd.com/story/2009/8/9/14945/05476

[timeforpeace]

1. "or just another band-aid?" Not even that. However the insurance industry will get an IV push of

taxpayers' money, billions (trillions?) of it. A bolus dose if you will. Not an OD, they will develop a tolerance for the trillions, and eventually need much more to feed their addiction. Health Insurance Reform NOW!

[Cleita]

2. HR 3200 is a joke and not only that, promotes class divisions and

that is against our very Constitution. It should be scrapped. There's about 300 pages that could be useful for a new bill. The rest should go into the shredder or better yet, just pass HR676 as a public option and let it be done at that.

[Scruffy1]

3. co-ops

This whole co-op idea is just nonsense. I already belong to the largest and best co-op in the USA-Health Partners. The premiums are about $13000-16000 per year. They provide a good level of care and are great to deal with but they can't control costs. I will call to get their 10k tomorrow, but I'm sure that they don't have the top heavy systems that plague the for profit insurance industry. We also have some of the main villains in Minneapolis-United Health Care for one. Insurance companies of course have no reason to contain costs since they work on a percentage of the gross. Bigger bills equal bigger profits. It is my opinion if we don't get some kind of top to bottom overhaul with a single payer and results based incentives we might as well spike the whole thing. Guys like Durbin have always been willing to sell out-but I really can't blame him for getting tired of battling the entrenched ignorance of the voting public. Bill mahers op-ed on the huff today says it all.