Health Care.

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By Dean Bliss:

One of the big challenges we have as Lean people is to get beyond presentations, classes, and posters, and get to the real work done by the real workers.

At our hospital system, we’re learning a technique from a group called Rule 4 Consulting that is an intriguing approach to the problem. The technique involves using the “rules in use” that were defined by Steven Spear in the 1999 HBR article “Decoding the DNA of the Toyota Production System” and applying them in a systematic way to directly to a workplace – in our case, an inpatient care unit.

The rules in use can be found summarized here via google books.

One of the key features is lots and lots (and lots) of direct observation, which results in a few things.

One, the observers develop the skills to “see” and to quantify what they are seeing (learning to see what we call “waste” in lean — we talk about learning to see with different eyes.). Two, the staff gets comfortable with the observation process. Three, the staff starts to be able to “see” problems in their work, which they previously either didn’t notice, or simply worked around. And four, the staff begins to identify suggestions for how the work can be done better – in other words, problem solving at the front line.

A simple example: When the food trays come to the floor, they frequently don’t have salt and pepper, since they must be ordered by the patient. The nurses have to run to the supply area to retrieve the condiments – on one day, there were 3 requests within a one hour timeframe. Each time the nurse made a trip to the supply area, which took time away from her other duties. When we first discovered this, their reaction was “yeah, we have to do this once in awhile – no big deal”. Now they see running to get salt and pepper as a workaround to the problem. We did an A3, and talked to patients, nurses, and the dining service people, and started to get to the root cause. Nothing has been solved yet, but the recognition is there from the nurses that there is a problem that can be solved.

We’re only about four weeks into the process, so we have a long way to go, but I see this as a possible way to get to the core of improvement work – problem-solvers at the staff level. And I think this process has the potential to take us to places we haven’t been before in terms of improvement.

I can’t wait to see how things progress. It’s exciting stuff. I’d be happy to follow up in a few weeks as we progress.

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Hell is paved with good intentions.

Samuel Johnson, in Boswell’s Life, 1775

In finance everything that is agreeable it unsound, and everything that is sound is disagreeable. Expenditure is always popular; the only unpopular part about it is the raising of the money to raise the expenditure.

Winston Churchill

If you can’t stand the heat, get out of the oven.

President Harry Truman

As I write, Congress is on vacation, but it will soon be back in the Washington oven to deal with red-hot health care issues – how to pay for it all given anxieties over,

• a continuing recession with rising unemployment,

• mounting federal deficits, unaffordable health care costs,

• a growing health care economic sector,

• public demands for easy access to medical technologies,

• a public plan that may make health care more inaccessible by driving hospitals and doctors out of business by paying them at Medicare and Medicaid rates.

• Fending off but pleasing lobbyists who fill their political coffers

Political Realities

Senators Ted Kennedy and Max Baucus are split on how to finance President Obama’s ambitious, fold, and unaffordable health proposals. Kennedy favors a public plan that looks like Medicare, while Baucus is reluctant unless the public plan makes private plans more affordable for all Americans. The financial honey-pot is the $300 billion now spent yearly in tax-free benefits that employers now enjoy for providing health benefits for employees. But doing that means making a political U-turn and embracing the Republican plan, which candidate McCain announced and Obama denounced during the campaign. Republicans fear a public plan would drive private plans out of business and lead to a single-payer system, or even worse, a public plan that would pay at Medicare rates, 20% to 40% below private rates.

Financial Realities

How to pay for it all? It is now clear, the Medicare “savings” proposed by President Obama are unproven to work and would only be band-aid in raising capital to cover proposed expenditures, estimated to be $1.5 trillion over 10 years. The alternative to raise expenditure is to raise sin taxes on tobacco, alcohol, and soft drinks, and by extension, anything else fattening, artery-clogging, pleasant, sedentary, or involved in the “pursuit of happiness.” Taxing health benefits at least has the benefit of punishing business. Then there’s VAT. Ezekial Emanuel, MD, the brother of Obama’s chief of staff Rahm Emanuel and Obama’s go-to-doctor, is calling for a VAT (Value Added Tax)to pay for every American not entitled to Medicare or Medicaid benefits with no deductions and no co-payments. Unfortunately VAT is an open-ended invitation to entitlement growth. Then there’s the recession. USA Today reports federal tax money is down 34% over last year, $138 billion less in April alone, making how to pay for federal largess even more problematical.

Personal Realities

Meanwhile I am making final corrections on the proofs of my book Obama, Doctors, and Health Reform. In it I give a kaleidoscopic multiple-points-of –view picture of the U.S. health care landscape. I place the odds for sweeping Obama reform at 30/70.

It’s going to a long hot summer for the reform debate. If you think health care is expensive now, just think of the consequences of a government-run system superimposed on the present system.

One of the great ironies of the current debate is that President Obama says, “We’ve got to get it done this year,” but his administration has yet to introduce a detailed reform proposal, and instead, waits for Democratic allies to work out the specifics – and to take the heat if it fails.

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New York Times health care policy uber-scribe Robert Pear has a report today on what’s shaping up not only to be the main fault line in the debate in Congress.  A public health insurance option that would compete directly with private insurance was part of the Obama campaign plan, is strongly supported in the House and even more strongly supported in the details that have circulated of Sen. Kennedy’s plan in the Senate Health, Education, Labor and Pensions Committee.  The Senate Finance Committee is a different story – they’ve gone trigger-happy.

The best quote in the piece is from Sen. Charles Schumer, who says, “It’s pretty certain that Senator Kennedy could not support the Baucus plan, and Senator Baucus could not support the Kennedy plan.”  Such a conflict was going to be inevitable on some detail or other.  The House is considered more progressive than the Senate, but Kennedy’s HELP Committee is traditionally very progressive, reflecting the character of its chairman.  As I wrote earlier this week, the details that leaked from the Kennedy draft, “tilts the emergency health care Congressional consensus away from a watered-down center and decidedly to the left.”  So it was only a matter of time before Kennedy disagreed with Sen. Max Baucus and the Senate Finance Committee.  Much like its chair, the Finance Committee tends to be more moderate and more consensus-focused.  One gets the impression that getting a health care bill with 75 votes — or even just one that doesn’t tick off ranking Republican Sen. Chuck Grassley — is just as important to Baucus as getting the best policy.

The public health insurance option was devised to compete with private insurance on cost, efficiency, quality, and making its customers healthier, where now the industry only competes on who can attract patients who are healthiest, or who can deny costly medical claims the best to create the biggest profit.  With a new player focused on lower costs, better quality and more transparency, the HMOs will need to either adapt or die.

How do you water down competition that’s specifically designed to address a major flaw in the current marketplace? Now we come to “the fallback plan” or trigger option.  An idea being floated by Sen. Olympia Snow and flat-out embarrassingly supported by Sen. Ron Wyden (who has publicly said he’s open to a public plan) would create a “trigger.”  Health care would happen this year, but the public plan would not.  As Pear explains, “the public plan would be created only if private insurance companies had not made meaningful, affordable coverage available to all Americans within several years.”  All of these terms – “meaningful,” “affordable” and “several years” – are as vague as can be. The trigger may be set up so, in effect, it never happens, similar to the Medicare Part D trigger that would have created a public prescription drug plan – but never did.  The threshold would be low enough that it could be easily, and superficially, met.  Throughout those “several years,” the insurance plans would receive all of the uninsured who enroll through a National Health Exchange, pocketing what we can hope are generous government subsidies, with very few changes to their behavior.    And even if the trigger is met and a public plan created years down the road, private insurance would have serious “status quo bias” on its side.  It’s one thing to be given a choice between public and private when you don’t have anything, something else entirely to actively switch your plan (although it should be noted that 21% of private Medicare Advantage plan holders choose to leave for the safe haven of public Medicare).  So let me get this straight:  for the sake of having a big, feel-good compromise in the Senate Finance Committee, we’d be willing to take the word of an insurance industry that has made record-breaking profits on the basis of cherry-picking, denying care, and setting up tilted, monopolized playing fields such that 94% of the health insurance markets in this country are deemed “non-competitive” that they can clean up a mess that currently makes them rich without a competitor to, in the words of the president, “keep them honest”?

Guns don’t kill good policy – trigger mechanisms in the Finance Committee do.

I sincerely doubt that the public plan will be the only point of disagreement between these two committees.  We haven’t even scratched the surface of controversial issues still waiting to erupt, from physician compensation to employer mandates to tax policy.  This is merely the one that makes the best lead for a news-article, since both pro-reform and anti-reform third parties have made the public competitor the focal point of their respective arguments.

But, as Howard Dean has said about the public plan, “we’ll be back fighting for another twenty years before somebody tries again.”

(Photo credit:  Curtis Gregory Perry on Flickr.)

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Peter Orszag, Director of the Office of Management and Budget, tackled the most confusing riddle in health care reform today on the OMB Blog yesterday:  Why should we spend money on reform if one of the stated goals is to spend less on health care?  It certainly seems like a paradox.  Since we spend so much more on health care than other nations, can’t we just move money around?

Orszag gives a quick answer by describing health care reform as having two moving parts – expanding coverage and cost control.  Expanding coverage means getting coverage for everyone who’s uninsured, and getting better coverage for everyone who’s underinsured.  To expand on Orszag’s point a little more, we’re currently paying for both the uninsured and, at times, the underinsured – we’re just doing it in the least efficient way possible.  This health care spending is largely invisible.  It comes out of our pockets in the form of tax dollars that go to hospitals for uncompensated care and in the form of extra costs passed from hospitals to insurance companies, which our insurance companies pass on to us in the form of higher premiums.  In the Obama/Baucus/Kennedy model, we get everyone covered through a combination of subsidies for those who can’t afford premiums on their own, having the federal government spend more on Medicaid and SCHIP to increase that eligibility, and creating a marketplace with transparency where those without insurance can buy comprehensive insurance at an affordable (with subsidies) rate without fear of being discriminated against for pre-existing conditions, having lifetime maximum benefits, or any of that jazz.  Yes – expanding eligibility, handing out subsidies, and building a new structure for individuals to shop for coverage all cots the federal government money.  This isn’t deficit-spending, Orszag is quick to point out – they’ll find the money for it in new revenue or cuts to other parts of the budget or both — but you have to pay upfront.

Single-payer is a similar process.  Right now, government pays for maybe a little over a trillion out of the $2.4 trillion we’ll spend.  That other $1.4 trillion to assume all health care spending in the budget has to come from somewhere.

However, this isn’t money out the window.  It’s an investment. We’re replacing uncompensated, expensive emergency interventions with regular access to less expensive primary care, sure, but that primary care actually decreases the likelihood of those expensive interventions later on.  That reduces cost in and of itself over time — you won’t see it in year one, just as the body of a diabetic who’s been unable to afford regular care will take time to adjust and show the effects of health living.  But just giving everybody access to primary care and preventative medicine isn’t enough – we also need to increase capacity and incentives throughout the system to deliver that primary care.  There’s a reason why every plan, Republican or Democrat, sings the praises of investing more in primary care, chronic disease management and preventative medicine.  It’s the ultimate no-brainer – it makes sense both economically and medically;  we can look for models of how to do it right, well, everywhere – from countries that have universal health care, or here in the U.S. with the VA Hospital system or private institutions like the Mayo Clinic.  Best practices abound.  What doesn’t abound is the political will to pay up front for it, knowing that we’ll get the money back – and then some – 10 years or more down the road.  Our status quo biad and our knee-jerk fear of increased spending — even when we can pay for it and even when it saves us money in the long-run — has been too strong so far.

Ezra Klein describes why we need to spend money on coverage and cost control in terms of an analogy – he suggests we think of a family that up until now has only fed 8 of 10 children at a restaurant each night, but then resolves to a.) feed all of its children and b.) learn how to shop at Costco and cook for itself most nights.  Yes, you’re going to be spending more on part A because the skills needed for part B takes time to develop, but then you wind up spending less in the long-term.  I would also think of this as starting a new division at a company – and not using an idea that’s new, just new for your particular company.  You’re relatively sure you can hire people with the skills who can get it done, study what your competitors are doing, and then build a better mousetrap.  But for a few months or a few years, that new division is going to operate at a loss, supported by money made in other divisions.  But if the new line is worth it, and you’ve hired the right people, and you’ve designed your product smartly, over time you make that money back in spades.

We’re not going to make all of our money back on health care for years, but we can bring costs down to a much more manageable level – one that doesn’t bankrupt us, our businesses or our government with out-of-control costs.  Think of it as a new venture – you’re going to need to take money from other divisions (read: other revenue or budget cuts) to pay for it for a while.  That’s not a weird thing at all in business.  It shouldn’t be a weird thing in government – particularly when we look around and see that our competitors (other countries) are already doing it, and doing it well.

Given that we’re not talking about a product but about people’s lives, health, and financial well-being, it’s more than worth us floating this start-up known as the American Health Care System, version 2.0.  We’re investing in us.

(Photo credit:  The National Academy of Sciences on Flickr).

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We live in the Internet Age.  FCC reports can be examined.  Votes can be tracked.  Position statements can be analyzed and reanalyzed, and the intersection of all of the above creates a pattern that can be inferred if not outright documented.  Activists and interest groups know this.  Many elected officials know this.  When is Sen. Ben Nelson (D-NE) going to learn?  Because there’s no way he’d be doing zigzags on health care like this if he was paying attention to the trail he’s leaving.

Nelson prides himself on being one of those “fiscal conservative” Democrats.  He’s in the sliver of the Senate known as the moderates and, as such, wields disproportionate power on the closest of votes.  The most common reaction of moderates when we’re attempting big, transformative change is to find a way to water it down, regardless of need.  Hence the spectacle of the Stimulus bill, when Sens. Nelson, Conrad, Snowe, Collins and others found a way to trim items out of the bill – acting not out of particular economic concerns, but out of a mix of ideology and because, well, they could.  They were the indispensible votes on a close but important piece of legislation.    That made Nelson the center of attention, as he often is.

Well, these days, if you’re the center of attention, you’ve got to watch your caboose.

Nelson made waves by being the first Democrat to come out against the public health insurance option that would compete with private insurance – a central feature of the plans put forward by Barack Obama, Max Baucus, Ted Kennedy and the House of Freakin’ Representatives.  Earlier this month, Ryan Grim reported that Nelson declared he would “be gathering together a coalition of like-minded senators to oppose the plan, the conservative Democrat from Nebraska promised.  [Almost a month] later, it’s still a coalition of one.”  He even told Congressional Quarterly the public plan would “be a deal-breaker.”  Seems a little strange, right, especially since many other moderates have been forthcoming with their support.  Enter the folks at Change Congress, the group spearheaded by Lawrence Lessig, who this week launched an ad campaign to demonstrate that Nelson has accepted over $2 million in campaign contributions from the insurance industry since the 1990s.  For the last election cycle alone, that number was $608,709.  Between that and the large number of private insurance companies who make their home in Nebraska – well, things are getting interesting.

Now correlation doesn’t imply causality.  But it does provide color.  You know what else provides color?  The fact that Nelson now says he’s open to the public plan!  Says a Democratic powerbroker emerging from a closed door meeting two days ago, “”He made it clear that he is open to the public option. That’s not a line in the sand where he says it must be off the table for him to move forward on health care reform.”  That’s a heck of a reversal, and such timing – immediately after he’s dinged by a very public ad campaign.

Note to Congress:  keep in mind this is the most public and important push to reform our health care system in a generation.  Given the pressures on our families, on our businesses, on our economy and on our state and federal budgets, we cannot afford to fail.  All eyes are on you.  If you’re going to deny the American people our chance to finally get it right, you better watch your caboose.

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We live in the Internet Age.  FCC reports can be examined.  Votes can be tracked.  Position statements can be analyzed and reanalyzed, and the intersection of all of the above creates a pattern that can be inferred if not outright documented.  Activists and interest groups know this.  Many elected officials know this.  When is Sen. Ben Nelson (D-NE) going to learn?  Because there’s no way he’d be doing zigzags on health care like this if he was paying attention to the trail he’s leaving.

Nelson prides himself on being one of those “fiscal conservative” Democrats.  He’s in the sliver of the Senate known as the moderates and, as such, wields disproportionate power on the closest of votes.  The most common reaction of moderates when we’re attempting big, transformative change is to find a way to water it down, regardless of need.  Hence the spectacle of the Stimulus bill, when Sens. Nelson, Conrad, Snowe, Collins and others found a way to trim items out of the bill – acting not out of particular economic concerns, but out of a mix of ideology and because, well, they could.  They were the indispensible votes on a close but important piece of legislation.    That made Nelson the center of attention, as he often is.

Well, these days, if you’re the center of attention, you’ve got to watch your caboose.

Nelson made waves by being the first Democrat to come out against the public health insurance option that would compete with private insurance – a central feature of the plans put forward by Barack Obama, Max Baucus, Ted Kennedy and the House of Freakin’ Representatives.  Earlier this month, Ryan Grim reported that Nelson declared he would “be gathering together a coalition of like-minded senators to oppose the plan, the conservative Democrat from Nebraska promised.  [Almost a month] later, it’s still a coalition of one.”  He even told Congressional Quarterly the public plan would “be a deal-breaker.”  Seems a little strange, right, especially since many other moderates have been forthcoming with their support.  Enter the folks at Change Congress, the group spearheaded by Lawrence Lessig, who this week launched an ad campaign to demonstrate that Nelson has accepted over $2 million in campaign contributions from the insurance industry since the 1990s.  For the last election cycle alone, that number was $608,709.  Between that and the large number of private insurance companies who make their home in Nebraska – well, things are getting interesting.

Now correlation doesn’t imply causality.  But it does provide color.  You know what else provides color?  The fact that Nelson now says he’s open to the public plan!  Says a Democratic powerbroker emerging from a closed door meeting two days ago, “”He made it clear that he is open to the public option. That’s not a line in the sand where he says it must be off the table for him to move forward on health care reform.”  That’s a heck of a reversal, and such timing – immediately after he’s dinged by a very public ad campaign.

Note to Congress:  keep in mind this is the most public and important push to reform our health care system in a generation.  Given the pressures on our families, on our businesses, on our economy and on our state and federal budgets, we cannot afford to fail.  All eyes are on you.  If you’re going to deny the American people our chance to finally get it right, you better watch your caboose.

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He’s a liberal and progressive icon for whom health care has been a lifelong passion.  But we have not heard an awful lot from Ted Kennedy lately.  We know he’s been having regular closed-door meetings with shareholders across the health care system.  Because of that many have been nervous about what type of reform proposals would surface in the Senate Health, Education, Labor and Pensions Committee.  For the first time today, we’ve begun to see hints about what Ted Kennedy has up his sleeve.  It looks very good, both for health care advocates and the country.

In an Op-Ed in the Boston Globe, Kennedy begins to lay out what reform will look like when his bill begins mark-up.  Because I always give short shift to these aspects of anyone’s plan – largely because almost everyone is in agreement on the importance of these steps, and most proposals are short on details – let me first mention Kennedy’s focus on “cost reduction,” “a new emphasis on prevention,” expanding home care, and “a 21st-century workforce” — all essential elements for a comprehensive plan.

But the section that will get most reporters, reformers and forces of the status quo stroking their chins explains how he would extend coverage to the uninsured.  After such a dramatic silence, it turns out his rhetoric contains few dramatic surprises.  It sounds like the Obama campaign plan, the public musings of Baucus’ Senate Finance Committee, and the leaked elements of the House plan:  the by-now traditional promise of “If you like the coverage you have now, you keep it”; “new gateways” – basically the health exchange model – that allows you to easily compare benefits and costs for participating plans; subsidies to “help you with your premiums if you can’t afford them”;  new regulation of the insurance industry, including a prohibition on cherry-picking;  and finally, the ever-controversial but much-needed “health insurance program backed by the government for the public good, not private profit.”

So far, no surprises.  It was at best a longshot that Kennedy would duck the Congressional trend and propose a single-payer or other left-field option.  But some of the private details that are leaking not only support the public rhetoric – they have the potential for Kennedy’s version to be the most progressive of all.  As reported by Igor Volsky [and with my notes in brackets], these include:

“a public plan option that would pay providers — who would be required to participate — 10 percent more than Medicare rates.” [A public plan proposal far more robust than we’re likely to get out of the Finance Committee.]

- An individual and employer mandate for coverage

- The legislation would expand the Medicaid program to cover individuals earning up to 150 percent of poverty [Baucus and Obama also propose expanding the federal share of Medicaid, but only to 100% of poverty]

– It would subsidize people earning up to 500% FPL to purchase insurance through state-based insurance exchanges [This is a big surprise.  Massachusetts subsidizes to 300%, which is far too low.  Most people had guessed 400% as a likely number.  If Kennedy really has 500%, his subsidies are equal to the generous eligibility of the Healthy San Francisco plan, and would still give a partial subsidy to a family of 4 making around $100,000.  Also, the state-based exchanges differ from Baucus and Obama, who have a federal one.  But it’s similar to the approach taken by Sen. Wyden or John Edwards in his campaign plan.]

– Expands the Children’s Health Insurance Program (CHIP) to people up to age 26 [Wow!  Given that those 0-26 are much more likely to be uninsured, this is a huge deal  It’s also an idea no one else seems to have had yet.]

– Establishing a “federal health reserve” type entity called a Medical Advisory Council that would assist in designing minimum standard benefits [This is a very good idea to de-politicize the benefits package for the exchanges.  The Council itself, however, is almost guaranteed to be divisive politics at its worst, as it will be accused of rationing care, slashing your tires, eating the last of the Crackin’ Oat Bran and punching your grandmother in the face.]

We still haven’t seen the bill, and a Kennedy spokesperson was quick to say “there is no final policy” and everything is still under negotiation, this is an impressive shake-up that tilts the emergency health care Congressional consensus away from a watered-down center and decidedly to the left.

Ted – it’s good to have you back, man.

(Photo credit:  johnmcnab on Flickr.)

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The path to health care reform in the Senate runs through two committees: Finance, which is led by Max Baucus; and Health, Education, Labor, and Pensions (HELP), which is led by Ted Kennedy. 

Finance has already published three briefing papers sketching out, in rough terms, its vision for what a reform bill should look like. Now it's HELP's turn. For the last week or so, drafts of a HELP paper outlining its reform vision have been circulating around Washington. At week's end, Politico's Carrie Budoff Brown–who's been writing great stuff about the health debate, by the way–published a complete draft.

The paper is still a work-in-progress. The draft Brown got was dated May 21 and, on Saturday, language was still changing "by the hour" according to one person with knowledge of the discussions. But HELP members will need the paper when they convene in committee session this week, so a final draft can't be that far off.

Meanwhile, we know enough from the existing drafts–and what insiders are saying–to get a resaonably good picture of how Kennedy and his committee allies hope to shape the debate going forward.

One of the more encouraging signs about reform so far has been the lack of discord among key committees. Finance is the committee with the bigger portfolio, because Medicare, Medicaid, and revenue all fall under its jurisdiction, while HELP is the committee with "health" in its name and Kennedy at its helm. But the two committees have been collaborating for more than a year now. And while there have been reports of tensions, it looks like they more or less agree on the basic architecture of a reformed system.

A requirement that everybody obtain
insurance, subsidies to help people pay their premiums, an insurance
exchange for buying coverage outside of the group market, expansions of Medicaid for the poor, efforts to change payment so that it encourages quailty–Finance wanted all of those elements in reform and, from the looks of things, HELP does too.

Still, the latest drafts of the document also hint at some significant differences between the committees. Among them:

• The public plan. HELP is committed to a public insurance option and, at the moment, is looking at pegging the plan's payment rates to 110 percent of what Medicare pays. (Why 110 percent? Read this.) Finance hasn't even promised to write a public plan into its bill; it's just a possibility. And several Finance members have expressed interest in setting up a "trigger," under which govenrment would launch a public plan only if private plans weren't working well enough.

• Treatment of young and old. While both committees have indicated they want to prohibit insurers from adjusting insurance prices based on people's medical status–what wonks call "community rating"–both would allow insurers to vary rates by age. But Finance, in its paper on coverage options, said it'd allow rates to vary by up to a factor of five. In other words, an insurer could charge a 62-year-old a $5,000 annual premiums while charging a 25-year-old a $1000 annual premium for the very same policy. HELP seems inclined towards a much narrower range; in the most recent draft, insurers could vary rates only by a factor of two.
• Regulating insurer profits. The May 21 HELP draft (the one posted on Politico) suggests that government should reuqire insurers to spend a certain percentage of revenue on patient care. California tried to do this in its ill-fated reform effort. Obama endorsed a similar measure during the campaign. Finance, by contrast, hasn't raised that possibility in its documents.

Notice a pattern here? HELP is staking out the territory to Finance's left, which isn't too surprising. Look down HELP's roster and you'll see some of the Senate's most liberal members, including Sherrod Brown, Tom Harkin, and Bernie Sanders. Finance, by contrast, has prominent centrists like Kent Conrad and Blance Lincoln. The chairmen also take different approaches to legislation. Both ideologically and temperamentally, Kennedy seems less determined to pursue bipartisanship than Baucus is.

The gap between the two committees is getting attention. In Saturday's New York Times, Robert Pear described the Baucus-Kennedy break over the public plan as a "significant split." That prompted the two senators to release a joint statement affirming their determination to merge their bills eventually.

Who's telling the real story here, the Times or the two senators? Both of them, I suspect. The committees are diverging, as you'd expect at this point in the debate, but it's not hard to imagine them coming back together again through some compromise package. (Whether that compromise will make liberals like me happy is, of course, another question entirely.)

–Jonathan Cohn

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By JOHN HALAMKA In my recent blog about the Red Flags rule, GreenLeaves commented that biometric checking would help reduce errors by establishing identity and uncovering fraud. Using biometrics to verify identity seems like a good idea, so I met…

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By Matthew Holt I have no idea why this was at HealthcampNashville today, but here’s sword swallower Dan Meyer swallowing a huge sword with change:healthcare’s Chris Parks removing it! More tweets from HealthcampNashville here

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By JOHN HALAMKA In my recent blog about the Red Flags rule, GreenLeaves commented that biometric checking would help reduce errors by establishing identity and uncovering fraud. Using biometrics to verify identity seems like a good idea, so I met…

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If you haven’t already, read Atul Gawande’s piece on health reform in the New Yorker, largely centered around McAllen, Texas, the community in America with the highest health care costs. It’s hard to quote the heart of the article, because it’s so good, so I’ll just quote the conclusion:

Something even more worrisome is going on as well. In the war over the culture of medicine—the war over whether our country’s anchor model will be Mayo or McAllen—the Mayo model is losing. In the sharpest economic downturn that our health system has faced in half a century, many people in medicine don’t see why they should do the hard work of organizing themselves in ways that reduce waste and improve quality if it means sacrificing revenue.

In El Paso, the for-profit health-care executive told me, a few leading physicians recently followed McAllen’s lead and opened their own centers for surgery and imaging. When I was in Tulsa a few months ago, a fellow-surgeon explained how he had made up for lost revenue by shifting his operations for well-insured patients to a specialty hospital that he partially owned while keeping his poor and uninsured patients at a nonprofit hospital in town. Even in Grand Junction, Michael Pramenko told me, “some of the doctors are beginning to complain about ‘leaving money on the table.’ ”

As America struggles to extend health-care coverage while curbing health-care costs, we face a decision that is more important than whether we have a public-insurance option, more important than whether we will have a single-payer system in the long run or a mixture of public and private insurance, as we do now. The decision is whether we are going to reward the leaders who are trying to build a new generation of Mayos and Grand Junctions. If we don’t, McAllen won’t be an outlier. It will be our future.

And he’s right. If we don’t get health care costs down, health reform will not work. People will still go bankrupt, we will still ration care based on ability to pay, and we will still have a health care crisis. And when you get down to it, health care costs are about how much and what medicine your doctor orders for you.

Conservatives will accuse those in favor of health reform of taking the easiest way out, in a sense. Health care costs are up? Ok, let’s ration care and drive those costs down. But that’s not what we’re proposing. And, as Gawande so eloquently points out, driving down health care costs and increasing the quality of that care actually can be one and the same. So that’s some pretty good news.

One thing about this article leaves me puzzled, though. Gawande seems to set up a conflict between advocacy for a public health insurance option and what he apparently considers “real” health care reform, which is setting up incentives for doctors to provide better care, not just more care. Maybe he’s just reacting to the media coverage around health care reform, which has been largely centered around a public health insurance option. And maybe I’m biased, seeing as I’ve been working to shape that media battle. But I really don’t think it’s either/or. Actually, I think Gawande’s point makes the public health insurance option more critical.

I agree with Gawande that we could end up with a public health insurance option that doesn’t foster the right incentives to control costs, and that wouldn’t be a big victory. But while Gawande is proposing some kind of outside board to control these incentives, I wonder if the public health insurance option isn’t the place where these reforms are put into action.

Think about it: One advantage to a public health insurance option is that it is transparent. Private insurance doesn’t tell you what they pay for services, how often these services are used, and whether these services have improved patient outcomes. A public health insurance option could make that data available and work with it to improve care and control costs. This data would put the public health insurance option in the perfect position to figure out why some places in America cost so much more and why their outcomes aren’t any better, and how to fix that.

We must get costs down, that much is clear. We need the tools to do it. I’m pretty convinced the public health insurance option can be at least a crucial part of that toolset.

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Watch this video from Think Progress:

ThinkProgress Video Report Exposes Profits-Driven Ideology And Scandal-Plagued History Of Leading Right-Wing Health Reform Opponent Rick Scott

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In the United States, the majority of people get their health insurance through their job or that of a family member’s. For many workers, that means staying in a job they don’t like just to keep the health benefits they and their families depend on. Ensuring they cannot be denied coverage if they leave their job is not enough to free them from this ‘job lock’ to become entrepreneurs or move on to more satisfying and lucrative work. They have to know they will be able to afford the coverage and that the coverage they get will cover the care they need. To accomplish that we need a public health insurance plan option.

Read more…

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Via Politico:

Progressive health care reform groups demanded on Thursday that Washington’s NBC television affiliate refuse to air a 30-minute infomercial funded by a conservative group opposed to creating a public insurance.

The Service Employees International Union sent a letter to NBC4, arguing that the station has a responsibility to pull the documentary-style commercial paid for by Conservatives for Patients’ Rights. The ad, set to run Sunday after “Meet the Press,” “will be false, deceitful, and a distortion,” the union’s attorney wrote in the letter.

…

If the ad is aired and does contain falsehoods, CPR could face a fine from the Federal Communications Commission, said Levana Layendecker, the online campaigns director for Health Care for America Now, a coalition pushing to create a public insurance plan.

The coalition, Democracy for America and the SEIU e-mailed their supporters, asking them to sign on to another letter that urges NBC and “Meet the Press” to refuse to air the infomercial. The groups plan to send another e-mail Friday to Washington-area supporters, rallying them to call the station with the same message.

Sign on to the letter and pressure NBC and Meet the Press to get Rick Scott’s lies off the air.

And, while you’re at it, call the NBC Washington station directly and let them know they’ll be liable for FCC fines if they air these lies: (202) 885-4000.

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NEWS

Obama: Now or never for health reform – Associated Press

President Obama warned Thursday that if Congress doesn’t deliver health care legislation by the end of the year, the opportunity will be lost, a plea to political supporters to pressure lawmakers to act.

Groups urge NBC to pull health care ad – Politico

Progressive health care reform groups demanded on Thursday that Washington’s NBC television affiliate refuse to air a 30-minute infomercial funded by a conservative group opposed to creating a public insurance plan.

Kennedy’s Health-Care Measure To Require Employers to Chip In – Washington Post

Sen. Edward M. Kennedy (D-Mass.) is circulating the outlines of sweeping health-care legislation that would require every American to have insurance and would mandate that employers contribute to workers’ coverage.

Nelson Now Open To Public Health Care, Baucus Will Fight For It - Huffington Post

The push to include a public health care option as part of a system-wide overhaul benefited from two major boosts Wednesday. Sen. Max Baucus (D-Mont.), the chairman of the Finance Committee and lead health care negotiator, is “fighting tooth and nail to include that in any final deal,” his chief of staff John Selib said at a town hall meeting in Montana, according to the Billings Gazette.

The Doctor Will See You—In Three Months – Business Week (old but good)

In reality, both data and anecdotes show that the American people are already waiting as long or longer than patients living with universal health-care systems. Take Susan M., a 54-year-old human resources executive in New York City. She faithfully makes an appointment for a mammogram every April, knowing the wait will be at least six weeks. She went in for her routine screening at the end of May, then had another because the first wasn’t clear. That second X-ray showed an abnormality, and the doctor wanted to perform a needle biopsy, an outpatient procedure. His first available date: mid-August. “I completely freaked out,” Susan says. “I couldn’t imagine spending the summer with this hanging over my head.” After many calls to five different facilities, she found a clinic that agreed to read her existing mammograms on June 25 and promised to schedule a follow-up MRI and biopsy if needed within 10 days. A full month had passed since the first suspicious X-rays. Ultimately, she was told the abnormality was nothing to worry about, but she should have another mammogram in six months. Taking no chances, she made an appointment on the spot. “The system is clearly broken,” she laments.

OPINION

Health-plan opposition – Winston-Salem Journal

Blue Cross Blue Shield of North Carolina has unfairly jumped the gun on President Barack Obama by preparing a public-relations campaign to oppose his still unannounced health care-reform package.

The Great $2 Billion Cost Cut “Promise” Meets Another Obstacle - The Health Care Blog

It turns out that the hospital, insurance and pharmaceutical organizations who announced with great fanfare a couple of weeks ago their plan to cut/maybe think about cutting* $2 trillion/maybe nothing* from their costs may have been even more devious/disingenuous/stupid* than was apparent at the time. [*choose one]

Healthcare Reform: Ben Nelson Doesn’t Know If He Didn’t Support a Public Plan – Firedoglake

Ben Nelson sure didn’t like the idea of a “public plan” when he spoke to CQ: “He called the inclusion of a public plan in legislation a “deal-breaker” for him.”

CBO Decides Against Crazy Ruling That Would Kill Health Reform - Ezra Klein

This is going to be one of those posts where I try to convince you that a dull, technical decision by the Congressional Budget Office is really a very big deal. Here goes: The CBO has decided against counting premiums paid under an individual mandate as a tax. In other words, if the government says you have to purchase health insurance, and you give Aetna $50 to purchase some health insurance, the CBO has decided that you’re not, in fact, paying a $50 tax to the government. That $50 will not be included in the price tag of the health reform bill.

Will Unions Kill Health Care Reform? – Ezra Klein

I have bad dreams. Nightmares, really. They used to be pretty rare. Every fortnight, maybe. But ever since the public employee union American Federation of State, County and Municipal Employees took a knife to Sen. Ron Wyden (D-Ore.), they’ve been coming more frequently.

Party of No… Ideas – Congress Matters

Whoops. Rob Portman, a Republican Senate candidate in Ohio, has now admitted in an interview that the GOP doesn’t have a position on health care. Worse, he says he came to that conclusion after multiple discussions with GOP Congressional leaders about the issue.

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Jacob Hacker at Campaign for America’s Future laid out the case for a Medicare-like public health insurance option:

A Medicare-like public plan would be much more stable and secure than other approaches. It would provide the broadest possible choice of doctors. It could be offered throughout the nation on the same terms. It would have the lowest administrative costs. And its bargaining power and large risk pool would allow it to offer the most affordable possible premiums and most effectively restrain costs while upgrading the quality of care.

Joe Paduda disagrees, arguing that the savings Hacker sees from Medicare are overstated. Instead, he proposes a different model for the public health insurance option:

I could go on, but the point is clear – Medicare’s supposed administrative and medical cost advantages are not real. That does NOT mean a public plan option isn’t viable. In fact, there is a government plan that is kicking the collective private health plan industry’s rear end. It’s the Veteran’s Administration, and rather than Medicare, i’d base a national plan on a dramatic expansion of the VA.

Who’s right? Well, both – or neither.

First, I should take issue with one of Paduda’s assertions. Medicare does indeed hold down health care costs. It’s costs are growing slower than private insurance. Now, that doesn’t mean costs aren’t growing – they are. If we don’t control health care costs, Medicare will indeed break the bank. That’s why we need the public health insurance option.

To analyze which type of public health insurance option will work best, I think it helps to understand the goal of the public health insurance option. First and foremost, the public health insurance option should exist to provide people with a place they can go to get quality health insurance if and when their private insurance fails to provide them with what they need. People should always have a choice to get out of the private, monopolistic system if they want.

This choice will lead to increased competition. (I’m not sure why Paduda says it “may” lead to more competition, it seems to me that increased competition is pretty much a guarantee.) The public option should be able to bargain with providers for lower rates, and with less overhead, it will be able to provide services for at least nominally less than private insurance right off the bat. This, combined with an insurance program designed to protect people’s health and not a corporate bottom line, will make the public health insurance option a strong competitor. Private insurance will be forced to respond.

This competition between public and private seems to me to be the main driver of lower costs and better outcomes. Private insurers will likely get creative finding ways to out-deliver and undercut public insurance. And public insurance, with access to a vast pool of data and government transparency regulation, will be able to really understand costs in the health care system in a new way, and derive further solutions from that, solutions like the ones Atul Gawande has proposed in this must-read article in the New Yorker.

So, in a way, it doesn’t matter much if the public health insurance option is Medicare-like or VA-like. As long as it provides people with quality health care and peace of mind, it will be popular. And as long as it is a strong competitor, it can adapt down the line to ratchet down health care costs even further.

(originally posted at Campaign for America’s Future)

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To dream the impossible dream, to fight the unbeatable foe, Don Quixote had only Sancho Panza at his side. President Barack Obama has the email addresses of over 13 million supporters at the click of a button.

On Thursday, the Man from the White House asked the vaunted grassroots operation that helped put him there, to turn their efforts to health care.

Joining an Organizing for America conference call from Air Force One, Obama told supporters just how important their efforts–such as the June 6 Health Care Organizing Kickoff–are.

"If we don’t get it done this year, we’re not going to get it done," Obama said, according an AP account of the call.

The events, similar to holiday house parties held last December, will bring Americans together in support for the three principles of reducing costs, guaranteeing choice, and ensuring all Americans have quality, affordable health care–which Obama believes health reform must achieve. The kickoffs will also serve as planning tool for local Health Care Day of Service activities the weekend of June 27.

Obama campaigned effectively on health care throughout the election. Having won the public’s votes, he’s asking them to help him win votes in Congress.

"If the country stands with the president and if the country is demanding health care reform then we’ll get it done," Obama’s former campaign manager David Plouffe, told participants on the call. "Washington will not have any option but to follow us,"

A hundred wonks locked up in the Old Executive Building, this is not.

Public outreach and education will be needed to help Americans understand and hopefully support the changes proposed as the reform process moves forward.

And that process is most certainly moving. New America’s director of health policy Len Nichols commented on the Patient’s Choice Act recently put forward by Republican members of Congress. The Washington Post’s Ceci Connelly reports on outline of legislation being circulated Senate HELP chairman Edward Kennedy–with a scheduled release of the bill next Monday. The Hill reports that markups of the HELP bill are scheduled to being June 16.

What once seemed an impossible dream of comprehensive health reform , is a whole lot closer than many ever thought it would be. Now, it’s the skeptics, cynics and defenders of the status quo who seem to be tilting at windmills.

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Health reform must be bipartisan to be politically and economically sustainable over time. That is why I am pleased to see Republicans continue to engage in the health reform debate by participating in the committee process and offering original legislation.

The plan released recently by Senators Coburn and Burr and Congressmen Ryan and Nunes attempts to address many problems in our health system and improve the health of our population. I applaud the authors’ emphasis on wellness and prevention as well as their willingness to consider changes to the Medicare Advantage payment structure.

Nevertheless, the legislation omits two necessary policy features and in doing so makes it difficult for those interested in covering all Americans to support this bill and bills like it. Until these flaws are addressed, this plan should not be viewed as a credible way to cover all Americans.

Guaranteed issue will not work well without an individual mandate.  I was very pleased to see the bill require all insurers to sell to all customers. This reform is absolutely necessary to make individual insurance markets work better for more Americans. However, instituting guaranteed issue without also requiring all Americans to purchase coverage is problematic.

Without a purchase requirement, insurers will legitimately fear that mostly the sick will buy health insurance (adverse selection). That fear will produce higher premium bids, which will cost people and governments more money. Furthermore, this scenario will make subsidies (offered in the form of a fixed tax credit) less effective in making coverage truly affordable.

AHIP (the insurance industry’s trade association) has said consistently that its members can support guaranteed issue if there is also a purchase requirement. The few states that tried guaranteed issue without a mandate in their individual markets experienced much higher premiums than other states. An individual requirement to purchase coverage will actually make markets work better. Therefore, failing to include an individual purchase requirement is an odd choice for market-oriented legislators.

An individual requirement to purchase coverage will guarantee that the population seeking care represents the entire population. As a result, insurers will bid lower, making premiums more affordable and tax credits more valuable

In addition, an individual purchase requirement ensures that all Americans pay their fair share for health care.  In the absence of a mandate, some individuals who could afford insurance will choose not to buy. When they get sick and cannot pay for their medical care, the costs they incur are passed on to the rest of us. Almost 20 percent of total uncompensated care is provided to the minority of uninsured who have incomes greater than four times poverty (a little over $80,000 a year for a family of four). These people are voluntarily uninsured and should be required to pay their fair share.

You can find more information about an individual requirement to purchase coverage here and here.

We must end health status rating. While the legislation does require all insurers to sell to all customers, it does not place limits on health status rating (charging people more because they are sick or were sick).  Guaranteed issue will not be effective if insurers are allowed to charge customers whatever they want based on pre-existing conditions and previous medical history. Without additional reforms, the risk adjustment mechanism outlined in the legislation is simply not sufficient to incentivize insurers to end the practice of medical underwriting.

One of the major goals of health reform is move insurers away from business models that rely on avoiding the sick and toward strategies that help people find high-value care that delivers on the promises of wellness and prevention. This bill would not accomplish this essential goal. Therefore, it should not be considered a credible alternative to proposals that would make insurance markets work for all.

Regardless of a given proposal’s current strengths and weaknesses, I am very happy to see that so many of our leaders in Congress recognize that the time to reform our health system is now. I look forward to the debate to come and am eager to work to improve all proposals to reach a bipartisan, sustainable solution.

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