Editore"s Note
Tilting at Windmills

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August 28, 2009

STILL WAITING FOR THAT GOP ALTERNATIVE.... Democratic health care reform proposals have become a little controversial, but if we put the politics aside for a moment, we see that the majority party has -- for good or ill -- grabbed a bull by the horns. The country has been waiting for policymakers to step up on health care for the better part of a century, and Democrats have put together a credible, affordable proposal(s) that expands coverage, offers consumer protections, tackles rising costs, and strengthens Medicare. It's a serious plan that makes hard choices. It's the kind of thing grown-up policymakers do.

I thought about this after seeing Jonathan Cohn's item today on the latest stupidity from the RNC on Medicare.

For all of the Republican talk about helping seniors, they have almost nothing in their policy arsenal that would actually, you know, help seniors. They're not, for example, proposing to fill in the donut hole -- the gap in Medicare prescription drug coverage that means high out-of-pocket costs for seniors with multiple conditions. Nor do they have any ideas for how to improve the program's financial footing -- except, of course, to cut it. Democrats are trying to do both, though you'd never know it from the way the health reform debate is unfolding.

It got me thinking. Cohn's right, the Republicans' policy on Medicare falls somewhere between incoherent and imaginary. But let's go one step further: weren't Republicans actually supposed to come up with a health care plan of their own, rather than just taking pathetic shots at the proposal on the table?

The last time I checked, Rep. Roy Blunt (R-Mo.), chairman of the House GOP Health Care Solutions Group, said House Republicans would not release a health care reform alternative. Republican lawmakers had promised -- publicly and repeatedly -- that they would not only come up with a reform plan, but that their plan would be vastly superior to the Democratic approach. Blunt was walking those assurances back.

A day later, House Minority Leader John Boehner (R-Ohio) said GOP officials are "continuing to put the final touches on our bill." He added, "[W]e hope to see it soon."

Come to think of it, we'd all like to see it soon. Boehner's comments on this came 35 days ago. The "final touches" seem to be taking longer than expected.

So, where is it? Presumably, Republicans came up with a Health Care Solutions Group because it has some "solutions" in mind.

It's easy to take dishonest shots at the credible bill on the table, but to be taken seriously, Republicans -- who would like to be in the majority in 2011 -- should tell the country how they'd improve the failing system.

Talk is cheap. GOP leaders have said they have a plan, will present a plan, and can prove that their plan is the better way to go. I'm sure Americans would benefit from the opportunity to evaluate two competing approaches to the same crisis, seeing which plan is stronger.

Put-up-or-shut-up time.

Steve Benen 2:10 PM Permalink | Trackbacks | Comments (26)

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All that one had to know is that "final touches" would leave fingerprints...

Posted by: jemerson48 on August 28, 2009 at 2:14 PM | PERMALINK

Republicans should change their mascot from an elephant to a lion cowering in the corner. They have clearly become the cowardly lion party, terrified of everything.

Posted by: Shalimar on August 28, 2009 at 2:14 PM | PERMALINK

the 'final touches' wont be completed until Repugnant staffers return with a fresh supply of Repugnant health care policy material from the cow pasture...

Posted by: neill on August 28, 2009 at 2:15 PM | PERMALINK

Yes, but if a Republican health care reform proposal falls in the woods, and no mainstream media outlet inquires to Republican leaders as to its whereabouts, did Republicans actually ever mention of said proposal in the first place?

To quote Bush, "in other words," if there is no media follow-up, it never happened.

Posted by: terraformer on August 28, 2009 at 2:16 PM | PERMALINK

Gop Alternative:

"This page intentionally left blank."

Posted by: MobiusKlein on August 28, 2009 at 2:19 PM | PERMALINK

The GOP has put up plans if you want to call them that. Mark Kirk (IL-10) says he has a plan that runs up to 12 pages which sounds more like a press release than an actual bill. Coburn (R-OK) and Paul Ryan (W-3?) have a plan that was scored by the CBO. The CBO said it would result in fewer insured than there are now, and fewer protections for those who remain insured. In other words a disaster.

Posted by: markg8 on August 28, 2009 at 2:27 PM | PERMALINK

The Republican Health Care Reform Plan

1. Cut the income tax rate of the top bracket by 20 percent.

2. Encourage the "Free Market" by eliminating all regulation on insurance companies.

3. Eliminate the capital gains tax.

4. Require a personal bond of $100,000.00 from anyone who file a malpractice suit. That would make sure that the courts won't be clogged by people who don't truly deserve compensation.

5. Cut the income tax rate of the top bracket by another 20 percent.

6. No money (not federal money -- no money of any kind) may be used to pay for abortions.

7. Carve Ronald Reagan's face (He of Blessed Memory) on Mt. Rushmore.

8. Screw it, cut the income tax rate of the top bracket to zero.

Posted by: SteveT on August 28, 2009 at 2:27 PM | PERMALINK

I think what is lost here is that the Republicans have become a rump party. They care nothing about health care, public safety, good government. These are not people of ideas, these are simply people of ideology. If it doesn't fit into their world view it must be bad. And no amount of liberal "reality" is going to change their mind. Trust me I know. My family fits right in their.

Posted by: Liam J on August 28, 2009 at 2:29 PM | PERMALINK

It is called tort reform, opening up markets across state boundaries, and de regulating insurance so a 20 something does not have to have AIDS coverage if they don't want to.

Unfortunately it is not up to the GOP to offer alternatives as they are an opposition party, so even if they have then, they would not get passed unless there were 60 CONSERVATIVE Republicans in the Senate which is unlikely ever to happen.

Posted by: chukmaty on August 28, 2009 at 2:29 PM | PERMALINK

Oh, they have a plan all right. When they are in the majority again, they'll whip out the plan, pass it through reconciliation, then tell everyone "Here it is, if you don't like it... go screw yourselves." And all the people that are screaming about being forced to use the Democrat's plan will gladly bend over.

Posted by: kanopsis on August 28, 2009 at 2:33 PM | PERMALINK

Their 'plan' will only come out at the last minute, if it looks like the dems are actually going to pass some facsimile of a heath care reform bill. It may not even matter much what is in their plan. The object will be to stall the dem bill with turmoil or, at least, get even more concessions from the dems.

Posted by: Michael7843853 on August 28, 2009 at 2:34 PM | PERMALINK

chukmaty said:
. . . unless there were 60 CONSERVATIVE Republicans in the Senate

So the Republicans currently in the Senate (excluding Collins and Snowe) are going to try to recruit candidates from their left?

Posted by: SteveT on August 28, 2009 at 2:35 PM | PERMALINK

and de regulating insurance so a 20 something does not have to have AIDS coverage if they don't want to.

Yes, because we all know you get AIDS by butt f*cking, and therefore insurance for it is a purely optional choice. Having a hospital staffer reuse needles on multiple patients, or having some whore purchasing conservative politician infect his wife is not part of a GOP reality.

Posted by: oh my on August 28, 2009 at 2:37 PM | PERMALINK
“We’re continuing to put the final touches on our bill as the Democrats are continuing to put the finishing touches on their bill,” Boehner said.

Boehner's office has no plan. I just spoke to one of his staff members and got that confirmation.

Not only is there no GOP plan, there is not even anyone on Boehner's staff with whom I could speak to discuss health care reform.

In addition to being orange, Boehner is a liar.

Posted by: karen marie on August 28, 2009 at 2:45 PM | PERMALINK

Steve T Has it figured.
With a few changes this becomes the republican plan for everything.

The Generic Republican Plan (fill in blanks)

1. Cut the income tax rate of the top bracket by 20 percent.

2. Encourage the "Free Market" by eliminating all regulation on _________ .

3. Eliminate the capital gains tax.

4. Require a personal bond of $100,000.00 from anyone who file a _________ suit. That would make sure that the courts won't be clogged by people who don't truly deserve compensation.

5. Cut the income tax rate of the top bracket by another 20 percent.

6. No money (not federal money -- no money of any kind) may be used to pay for abortions.

7. Carve Ronald Reagan's face (He of Blessed Memory) on Mt. Rushmore.

8. Institute a mandatory hour of prayer in all schools, along with a 'why creation is great' course.

9. Screw it, cut the income tax rate of the top bracket to zero.

Posted by: Buford on August 28, 2009 at 2:51 PM | PERMALINK

"Put-up-or-shut-up time."

Wishful thinking, but I'd like them to choose Door No. 2.

Posted by: Chocolate Thunder on August 28, 2009 at 2:55 PM | PERMALINK

BS! The GOP put out its plan a long time ago. Not only will it work, but it will be incredibly inexpensive and easy to put in place.

The GOP plan: Don't get sick.

Posted by: Big Lefty on August 28, 2009 at 3:18 PM | PERMALINK

As long as there are screaming birthers, 'I want my country back' racists, and gun toting 'Patriotic Terrorists', any plan put forth by the GOP is superfluous.

Besides, "Everybody Knows---" (fill in the blank with the fabrication of your choice.)

Posted by: DAY on August 28, 2009 at 3:27 PM | PERMALINK

If they revealed their plan to throw Grandma off Medicare and to die in the streets, they'd be voted out in even larger numbers. They CAN'T reveal their plan.

As for health insurance reform, not requiring insurers to actually provide coverage for anything would not go over well. But maybe United Health can just put out a few more lies so that everyone believes we are better off without a public option.

At least we wouldn't have death panels deciding who lives and dies.....we'd all die...see, no discrimination.

Posted by: GreyGuy on August 28, 2009 at 3:33 PM | PERMALINK

You says the GOP have not revealed their plan, yet you also say they revealed nothing. Which is it?

Posted by: Memekiller on August 28, 2009 at 3:57 PM | PERMALINK

I hate to repeat myself, but the Republican plan is here.

Posted by: Cap'n Chucky on August 28, 2009 at 4:14 PM | PERMALINK

Put-up-or-shut-up time.

Come on, Steve. It's never put up or shut up time for these clowns. It's always okay to say anything if you're a Republican. The MSM wets its pants at the thought of calling out the GOP and being labeled . . . liberal.

Posted by: Lifelong Dem on August 28, 2009 at 4:29 PM | PERMALINK

Just five months ago Republicans tried to add an amendment to the Budget that "would have converted Medicare from an open-ended entitlement that guarantees seniors virtually unlimited access to care into a voucher system that provides future retirees only a fixed sum of money to purchase private health insurance." Ron Brownstein

The Republicans want to abolish Medicare and SS, it is against their belief system to develop any alternative other than doing away with all social safety-net type programs.

Posted by: Diane on August 28, 2009 at 4:46 PM | PERMALINK

if you remember...

the gop did the same kind of thing with their alternative budget...

how'd that work out?

Posted by: mr. irony on August 28, 2009 at 5:01 PM | PERMALINK

In all honesty, there are actually two GOP alternatives, one of them basically a joke, and one actual prospective piece of legislation.

The first, the joke, is the basic Health Care "Plan" from Blunt. It's really not much more than a statement of principles and magic-wand-waving.

The second, the actual bill, is H.R. 2520: Patients' Choice Act. Unfortunately, it just doesn't do much to bring down costs.

Posted by: PaulB on August 28, 2009 at 6:39 PM | PERMALINK

Fixing Health Care

Health care premiums have been rising faster than wages, in part because wages have been flat for the last decade. However, stagnation in wages will not be helped by increasing the deficit even further, which HR3200 will surely do despite assurances to the contrary. Raising taxes on the top 1-2% of earners will not come close to paying for the bill. The so-called “savings” in the bill are mostly illusory, as per the CBO, and further cuts in reimbursements (which is all that “competition” in this context means), especially of the magnitude being considered, will undoubtedly restrict access to care. Of the 66% increase in national health expenses from 2000 to 2007, 40% was due to inflation and 10% to the increase in population, so that real per capita spending increased 30% over that time (compared to a more than 40% rise in GDP). Further, the annual growth in total health care costs has been steadily shrinking, with the annual growth in real per capita spending decreasing from 5.5%/yr in 2000 to 1.8%/yr in 2007 (CMS data). While providing room for improvement, these costs are hardly “skyrocketing”. Finally, of the 45 million uninsured in this country (15% of the population), 15 million are only transiently uninsured while transitioning between jobs and waiting for SSDI or Medicaid approval (per AHRQ), 9.6 million are illegal immigrants (Census Bureau), and approximately 6 million are uninsured by choice (young, healthy and unwilling to subsidize the sick). This leaves only 5% of US citizens who are forced long term uninsured (unable to afford health insurance), which helps explain why polls have shown that over 90% of people are happy with their current care. This is not intended to suggest that nothing should be done to fix the health care system, but that a more cost effective solution should be found.

Why universal health insurance is a bad idea

It is no wonder that Medicare and other health insurance organizations have been unsuccessful in controlling health care costs. Health insurance, in fact, is part of the reason costs have risen. In the current system (as well as the reform proposals being considered in Washington) neither patients nor doctors have any real insight into how much any given plan of care costs, nor a significant incentive to trim those costs. On the contrary, imaging studies have become a benchmark of care, taking precedence over clinical judgment in quality assessments. This creates an incentive to spend, not to save. In addition, given the increasingly litigious nature of our society and the greatest share of lawyers in the world, doctors in the US are forced to order excessive tests to rule out even very unlikely, though potentially serious, problems. While the total costs of liability insurance represent a small percentage of total health care costs, the true impact of "defensive medicine" is far greater, and today permeates the culture of US medical care.

The notion that accountants and money managers can, from a distance, control costs better than patients themselves in consultation with their own doctors is absurd. Cost cutting mandates are essentially arbitrary, inefficient, and can limit access to care even for the insured. Many cases of patients going without appropriate care are due to denials by their insurance companies, including Medicare, not necessarily due to a lack of insurance. Access to insurance therefore does not necessarily imply access to appropriate care. Universal health insurance would only serve to amplify the problems already inherent in the current US health care system. Patients and their doctors need to determine a plan of care without interference from clerks, accountants, or staff physicians many miles away.

How the current system works

The US health care system currently employs socialized pricing, with prices set by insurers, not determined by supply and demand. Service providers (like doctors, hospitals, nursing homes, and imaging centers) are told what they will be paid for every individual service, regardless of the costs involved in actually providing the service, which eliminates competition. Reference to "competition" among health insurance companies refers to pressure to arbitrarily lower reimbursements, not competition in the usual supply and demand sense involving individual providers competing against each other to provide the given service at the lowest cost. Medicare dictates most prices, with private insurers generally mirroring Medicare rates, though with some flexibility in negotiations with providers. Medicare reimbursements are inflexible, and do not seek input from the health care community in establishing rates. Instead Medicare reimbursements are determined by a payment formula established by Congress in 1997 to tie payments to the US gross domestic product. This was done in an effort to control costs, and has resulted in the need over the last few years for Congress to curtail drastic cuts by so far providing temporary pieces of stopgap legislation. The current formula mandates a 21.5% across-the-board cut in physician reimbursements in 2010. A permanent fix to this problem has yet to be established, but is being considered in current reform legislation. This was the leverage used to pressure the American Medical Association into endorsing the current reform package. The concern, of course, is that too drastic cuts in reimbursement would result in some physician practices becoming insolvent, reducing the number of physicians and thereby restricting patient access to care.

Cost cutting efforts

As an example of the arbitrary nature of cost cutting efforts, CMS (Center for Medicare and Medicaid Services) decided it would reimburse hospitals for the diagnosis of "urosepsis" as if it referred to a simple urinary tract infection. However, the term urosepsis is commonly accepted medical shorthand for septic shock arising from a urinary tract infection. This is a life threatening condition with a high mortality, generally requiring treatment in an intensive care unit. Charges to a hospital can be enormous for this type of care, compared to the trivial reimbursement for a simple, uncomplicated UTI that would typically be treated as an outpatient. CMS imposes its decisions retroactively, often years after the encounter, using tactics like this to unfairly and arbitrarily limit reimbursements, with no thought whatever to any medical rationale. To survive, hospitals now charge much higher rates for tests and imaging procedures than are charged in doctor's offices, not because the test is more costly to perform in a hospital, but to recoup these types of losses in other areas.

There are myriad examples of such tactics effecting hospitals, physician office practices, and every other aspect of care, which serve to control costs in ways that offer no sound medical rationale, concocted by people with no medical background, and who have never taken care of a patient. How can anyone believe that this is the best or only approach to limiting health care costs? Add to this the cacophony of private insurance plans, each with its own set of rules, arbitrary and often ruthless tactics, and separate formularies, allowed costs, and pre-authorization criteria, and the result is a system which cannot possibly be expected to work well, and which has predictably overseen a dramatic rise in health care costs.

How far is too far?

The problem with the current Medicare payment formula underscores the broader problem of a system where prices are mandated, not determined by market forces. There is no mechanism for determining when cuts have gone too far and begin restricting access to care. This is currently mitigated somewhat by private insurers having a willingness to negotiate rates with providers, though this would be eliminated in any single payer system. Single payer systems produce a steady downward pressure on reimbursements with no natural brake, resulting inexorably in restricted access to care that could reverse some of the gains in health care outcomes and mortality rates enjoyed over decades. Changes in this type of system are slow in coming, based mainly on pressure from physicians and the public frustrated by long wait times and difficulty obtaining needed services, as is happening now in Canada. Our current system has already come dangerously close to this point, with many hospital closings and forced consolidations. The number of emergency departments in the US has been decreasing despite an increase in the patient population, resulting in long emergency room wait times.

The problems with US health care would be amplified, not solved, by a single payer system, particularly Medicare with its inflexible payment formula, and which consistently demonstrates a complete lack of concern regarding the ability of the health care community to continue to provide services at ever decreasing reimbursements. The notion is instead that forcing down reimbursements will promote greater "efficiency". This is taken more or less on faith as no mechanism has been proposed to support this idea. Quite the contrary, if reimbursements are arbitrarily lowered for, say, imaging studies, doctors will have an incentive to increase the number of imaging studies ordered to curtail the loss in income. This will tend to decrease efficiency, not increase it. Billing departments navigating the complex web of reimbursement policies, legal costs to fend off unfair judgments, physician time wasted learning documentation requirements that have no medical basis, are all further examples of the inefficiencies imposed by Medicare and private insurers. There is no magic mechanism whereby simply lowering payments produces a better system. Unless a mechanism can be found to realistically reflect the cost of providing care, and in particular to promote true market based competition, the US health care system will continue to put future health at risk.

How to fix health care

The answer is a movement away from insurance controlling routine care, which can cut costs dramatically by altering incentives and expanding information technology to bring physician's offices into the 21st century. One way of achieving this is to have universal, government funded health care accounts that will be managed exclusively by patients and their doctors (though the government would determine the dollar amounts allocated to every individual account). These will be personal, lifetime accounts independent of marriage or employment, funded according to health status, which will be immediately updated as any change in status occurs. The accounts will be designed to allay "unaffordable" health care costs up-front, allowing everyone to decide on their own appropriate plan of care, the excess cost of which will be paid out-of-pocket (up to a pre-specified limit beyond which catastrophic insurance will take over). Any savings achieved will therefore directly cut out-of-pocket expenses, maximizing the patient's incentive to save.

The health care accounts can be coupled with universal electronic medical records interfaced with a national cost database (with prices entered by the private sector). An electronic billing statement will be produced at every office visit with an itemized listing of costs for the initially proposed plan of care, along with an automatic display of less costly alternatives (outside the individual doctor's control). Less costly alternatives would include the lowest cost suppliers or service providers within the local area, as well as cheaper generic drugs, or kinds of imaging studies or other tests that produce a clinically equivalent result. The latter incorporated by the FDA and appropriate medical societies as "pre-specified equivalents". The plan of care would then be finalized by substituting these less costly alternatives at the discretion of the patient and physician, maximizing cost effectiveness. A print out of the finalized billing statement would be required to be provided to the patient for their records. This will finally give doctors the information they need to manage the cost of providing care. It will also provide direct competition among health care suppliers, all of who will be required to input their prices into the database, and many of whom will be directly competing for supplies and services within the local area. Prices will be determined by the market, not government or private insurance mandates.

This office based, computerized system will also provide a readily accessible real-time source of continuing medical education among health care practitioners, allowing studies, guidelines, appropriateness criteria, pharmaceutical information, medical alerts, and other timely data to be readily available at every patient encounter. National outcomes and cost effectiveness data would also become available for research purposes and as a guide in the allocation of government research monies to fill more readily identifiable knowledge gaps.

Funding of the health care accounts can be provided through existing government spending supplemented initially by a business surcharge tax in the amount currently paid toward benefit premiums, which will no longer be needed, and the surcharge phased out over five years. If required, an additional payroll tax on business can be phased in during the transition period, as the surcharge is phased-out, resulting in no net cost to business. This will have the added benefit of relieving the business community of any further health care obligations beyond the total payroll tax, making hiring and other employment decisions much easier.

Health insurance companies will provide expanded, universal coverage in the form of the catastrophic policies, which will be government mandated (funded by tax credits for low income households). Although policy premiums will be much lower than existing health care premiums (perhaps 90% lower), claims will also be proportionately lower so that insurance companies may stand to gain slightly from these proposed changes as the total number of beneficiaries is increased. The total private sector health care administrative work force, however, would shrink considerably, segueing into the non-health care sector. Insurance companies will then be back in the business of managing risk, not routine health care, and the business community will finally have the health care monkey off its back.

A complete proposal, including a detailed economic analysis, can be requested from the address below.

Kenneth Coleman, MD FACC
Schenectady, NY 12303

Posted by: Kenneth Coleman on August 29, 2009 at 7:36 PM | PERMALINK
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