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Blaming The Health Care Law For Everything

In his latest Kaiser Health News column, Jonathan Cohn points to two health care trends in today’s papers (“Firms Cancel Health Coverage“) and (“Insurers Push Plans Limiting Patient Choice of Doctors“) and explains why reform is not to blame:

Insofar as the articles report broader trends–and they may not–they actually chronicle the same basic process at work. Health care is getting more expensive; the economy is still sputtering. Employers who provide and help pay for employee coverage can react to this in one of two ways. They can stop offering insurance altogether, which is what the Globe reports some small Massachusetts firms are doing. Or they can simply offer less generous policies, which is what the Times suggest will happen in those three cities. [...]

But what about the people who watch as employers whittle down coverage, restricting which doctors and hospitals they can see? Again, this happened before and was bound to happen again–only now, thanks to health reform, the law will limit how plans can do it. They can’t impose cost-sharing for basic preventive care. They can’t impose annual or lifetime dollar caps on benefits. And while they can limit beneficiaries to certain doctors and hospitals, they have to offer beneficiaries the right to appeal treatment denials–and the right to get treatment out-of-network if it’s not available in-network.

And that’s perhaps one of the ironies of reform: critics and the general public will blame the law for causing the very same long-existing problems that it seeks to ameliorate. (Remember when conservatives faulted the new grandfather regulations for forcing Americans out of their existing insurance plans, when in reality the regulations discourageed employers and insurers from stiffing beneficiaries with very higher costs?)

Over the short term, any anxiety about the changing insurance market or the shift from employer-based coverage will be blamed on the Democrats and reform. Stories like this one about businesses anxieties and loss of employer-sponsored coverage are and will continue to dominate the media. Only successful implementation of reform and time will change this narrative.

Republicans Don’t Think Government Should Help Poor People Afford Health Insurance

In yesterday’s Republican Radio Address, Sen. Pat Roberts (R-KS) reiterated the GOP’s attacks against Obama’s appointment of Dr. Don Berwick to head CMS, accusing the nominee of planning to redistribute the wealth:

ROBERTS: Now, as we all return to work after our Independence Day celebrations, we learn President Obama – again – has gone behind closed doors to appoint a health care czar without public debate.

President Obama gave a recess appointment – avoiding a public hearing and a vote in the Senate – to Dr. Donald Berwick, making him the Administrator for the Centers for Medicare and Medicaid Services. [...] He said, ‘any health-care funding plan…must—must—redistribute wealth from the richer among us to the poorer and less fortunate.’ Well, the obvious fear is Dr. Berwick will in fact use this position to redistribute the wealth in our country, cementing Obamacare as a giant, but stealthy, income transfer machine.

Watch it:

Roberts can talk about redistributing the wealth in all kinds of malicious tones, but I don’t think you can do health reform without it. Currently, poor Americans — particularly those without access to employer based coverage and those suffering from chronic conditions — are priced out of the system. They can’t find insurance to cover their chronic condition and so they go uninsured or seek uncompensated care in the emergency room once their condition becomes unbearable. The costs of their treatments are shifted throughout the system and contribute to higher premiums.

To eliminate these cost shifts and control health care spending, you have to bring everyone into the health care system. The health care law does this by establishing exchanges and providing subsidies for lower income Americans, while eliminating the tax exemption for so-called Cadillac health care plans. Republicans have proposed a more radical version of the same basic concept: giving everyone a one-size-fits-all tax credit to purchase health insurance on the individual market, while eliminating the tax exemption for all employer-based coverage. Now, I would argue that “the poorer and less fortunate among us” would do much better under the current health care law than the GOP’s scheme, but both plans would give poorer people money to buy health coverage and take away money from richer people (to varying degrees).

Covering people costs money, even under the Republican plan, and the fact that most of our nation’s dollars are concentrated among the very very wealthy (income inequality is the worst it has been since 1928, and according to the latest data, “the gaps in after-tax income between the richest 1 percent of Americans and the middle and poorest fifths of the country more than tripled between 1979 and 2007“) means that both Republicans and Democrats have to take those dollars from the top. What else can you do when the “top 1 percent of families now receive nearly 25 percent of the country’s income, after earning less than 10 percent in the 1970s?”

Roberts only has the GOP redistributive policies (from poor to rich) to blame.

Robert Samuelson Doesn’t Think We’ll Control Health Spending…Ever

Washington Post's Robert Samuelson

Washington Post's Robert Samuelson

In his reply to Robert Samuelson’s crystal ball predictions about how national health care reform will mirror the failures of the Massachusetts experiment, Jonathan Cohn argues that Massachusetts residents have better access to care, despite growing health care costs. But what’s most dispiriting and confusing about Samuelson’s op-ed is his overarching conclusion: the forces that lead to higher health care costs are simply beyond human control. Therefore, far from informing the national cost control effort, Massachusetts’ unsuccessful bid to rein in spending demonstrates that any national cost control effort will also fail:

The lesson from Massachusetts is that genuine cost control is avoided because it’s so politically difficult. It means curbing the incomes of doctors, hospitals and other providers. They object. To encourage “accountable care organizations” would limit consumer choice of doctors and hospitals. That’s unpopular. Spending restrictions, whether imposed by regulation or “global payments,” raise the specter of essential care denied. Also unpopular.

In other words, health care spending may be swallowing up the budget, but so long as doctors and hospitals oppose moving towards an outcome-based reimbursement system, policy makers will twiddle their thumbs or pass legislation to shield the medical community from the tough cuts.

Samuelson is wrong on several fronts. First, as Cohn points out, unlike the Massachusetts bill, the national law includes important cost containment provisions like “an independent board to calibrate and ratchet down Medicare spending. It imposes a tax on high-end benefits, to push down private insurance rates. And then it introduces a host of smaller delivery reforms–everything from penalizing hospitals with high infection rates to encouraging the formation of more efficient group medical practices–that should make it possible to lower spending without lowering quality.” “The Congressional Budget Office, which takes a skeptical view of these changes, still estimates that health reform will reduce the rate of growth in health care spending–which, as Samuelson knows, is the key to controlling costs long-term.”

Second, many hospitals and doctors may lobby against these changes, but in an era of ever growing health costs and deficits it’s not certain that they’ll succeed. For instance, the AMA has been trying to pass a permanent fix to the SGR for years, but has found itself rebuffed by lawmakers who have yet to find a way to pay for the overhaul. This same economic reality has contributed to the diminished clout of the AMA and has encouraged other providers to adopt the kind of outcome based reimbursement systems that Samuelson believes are so politically unfeasible.

Geisinger Health System, a physician driven system that has led the nation in delivery and payment reform, estimates that its advanced medical home model for the care of chronically ill Medicare patient has “bent the cost curve and lowered projected spending by up to 7 percent” and it has successfully adopted many of the new law’s delivery reforms without sacrificing profit. “We don’t know if the Geisinger experience is scalable or generalizable through U.S. health care, but we do think that the way our country pays for and delivers health care nationally will need to move to something that looks a little bit more like Geisinger in a relatively short period of time,” Geisinger’s CEO told Health Affairs. Indeed, other systems across the country are now adopting similar measures.

So Samuelson is undoubtedly right about the political challenges to controlling health care spending but he’s underestimating the extent to which economic necessity shapes reality for politicians and providers.

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