The Politics of Health Care

11/11/09 The Politics of Health Care Center for Senior Citizens November 10, 2009 Honorable David Durenberger Senior Health Policy Fellow

What is health policy? The statement of a problem with health and health care which is experienced enough to become a response that eliminates or reduces the problem - over time.

PROGRAMS PROGRAMS Legislative enactments designed to achieve specific policy objectives.

“ I AM NOT THE FIRST PRESIDENT TO TAKE UP THE CAUSE OF HEALTH REFORM, BUT I AM DETERMINED TO BE THE LAST” PROMISES

"What we have to do today is make a covenant, to slit our wrists, be blood brothers on this thing. This will not pass. We will do whatever it takes to make sure this doesn't pass.” "Let's not destroy the greatest health care system the world has ever known.” Rep. Michelle Bachmann August 27, 2009 POLITICS

Health Care Town Halls more POLITICS

The United States has always enjoyed a healthcare system different from all other countries Children’s Hospital, Winnipeg Hospital in Kinshasa, DR Congo German Heart Institute Berlin Dubai Healthcare City New Delhi Hospital

Health Care Non-System
Highly fragmented system/cottage industry
Lacks even rudimentary information systems
Unnecessary duplication
Long wait times and delays
Overuse of services
Services delivered where the risk of harm outweighs the benefits
Lacks “value” orientation
- Institute of Medicine 2001 “Crossing the Quality Chasm”

11/11/09 Bridges Should Not Fall Down
Patient safety
Employee safety
Quality disparity
Practice disparity
Access disparity
Chronic illness
Obesity
Medical liability
Capacity/productivity
17 years from discovery to practice
Professions education/”the guild”
Markets are a myth
21% of premium costs to employ private insurance
47 million uninsured

“ The American system
developed under the
shaping influence of
incentives for private
decision makers to
expand and intensify
medical services.”
- Paul Starr , The Logic of Health Care Reform, 1994 Why?

HEALTH CARE REFORM IS A JOURNEY, NOT A DESTINATION

Campaigning on the National Insurance Issue Former Pres. Theodore Roosevelt campaigns on the Progressive Party ticket promising national health insurance. “ What Germany has done in the of old-age pensions or insurance should be studied by us and adapt the system to ours uses” 1912

1931 1932 The Cost of Coverage Results of a five year national study overseen by Dr. Ray Wilbur, interior secretary, estimates the average family spends $5 per week or $250 a year on health care Calls for Group Insurance The Wilbur Commission finds that adequate medical attention is beyond the reach of millions of Americans and recommends expansion of group medical practices and group repayment systems to spread financial risks.

Congress Funds Hospital Program Recognizing a growing gap in access to medical care between urban and rural area, Congress passes the Hill-Burton Act to finance a vast wave of hospital construction. I requires hospital to provide charity care, and prohibits discrimination based on race, religion or nationality , but allows for “separate by equal” facilities. The law provides the foundation for much hospital regulation today. 1946

For as long as most of us can remember, health policy reform has been driven by costs of health care . In the 1940-50s tax subsidies for employer provided health insurance responded to a need to assure working Americans they could afford healthcare.

1954 Employee Benefits Exempt From Taxes The Internal Revenue Act exempts employee benefits, like pensions and health insurance, from income taxes. The tax exemption has been hotly debated ever since. In 2008 alone, according to the joint Congressional committee on taxation, the exemption cost a estimated $226 billion in lost taxes.

In the 1960s , the creation of Medicaid was a response to the inability of state and local government to afford to pay for healthcare for low income, non-working people. Medicare was a national government assurance that all persons 65 and older and those unable to earn because of disabilities could afford healthcare.

In the 1970s employer purchasers of health care were much concerned about the cost to them of healthcare....
HMO and FEHBP
PSO-BHCAG in MSP
Durenberger Consumer Choice Healthcare Act 1979

1971 Pres. Richard Nixon backs a proposal requiring employers to provide a minimum level of insurance to employees, but maintain competition among private insurance companies. Competing Plans Introduced Senator Edward Kennedy counter proposes the “Health Security Act,” a universal single-payer health reform plan. It is the start of a career long effort to overhaul the country’s health care.

1976 Carter Campaigns for National Health Insurance Jimmy Carter is elected president and calls for “a comprehensive national health insurance system with universal and mandatory coverage.” As the nation falls into a deep recession, economic recovery knocks health care from lawmakers priorities.

President Ronald Reagan Social Security bankruptcy (from inflation at 14%) '83 Medicare Pt A DRG - 1983 HMO Risk Contract privatizing Medicare - 1985

1988-89 Medicare Catastrophic Coverage Act (MCCA) The first major health care bill in years is overwhelmingly approved by congress and signed into law by President Reagan. The MCCA is created to protect older Americans from financial ruin because of illness, and its benefits include ceilings on a Medicare patient’s payments for hospitals, doctors and prescription drugs. The law calls for the program to be financed entirely by the 33 million elderly and disabled Medicare beneficiaries.

States That Can’t Wait

President George H.W. Bush Medicare Pt. B RBRVS and VPS AHCPR Health care Report Cards The Pepper/Rockefeller Commission ...Long term care insurance ...Employer pay or play mandates

President Bill Clinton Health Security Act of 1993 Democratic Congress Bi-partisan Senate "Mainstream" Gingrich/Gramm/Kristol GOP opposition to anything

Clinton and the GOP Congress: HIPPA Medicare Plus Choice privatization Medicare Private competitive bidding Bi-partisan Commission on Future of Medicare

President George W. Bush Consumer Driven Health Care Medicare Modernization Act of 2003 Prescription Drugs for AARP and HSA for GOP HHS Secretary Leavitt and regional health care systems 2003

Why is change so Hard?
Medicine
Most intense science of all
10,000 new articles a year
17 years from research to practice (AHRQ)
Business
Predominately privately owned and operated
Still cottage industry in many places
Many interests don’t want change
Market failures abound
It’s Personal
Everyone is part of the system
Strong feelings about my health, my family’s health, my doctor
It’s Political

A $2.5 trillion industry producing $1.5 trillion value, will not reform itself. Payers must: 1. Employer 2. Government 3. Consumers/patients 4. Investors and entrepreneurs 5. Physician leaders/HMO’s

Figure 19. Variation in Per Capita Medicare Spending by Hospital Referral Region, 2000 Source: The Commonwealth Fund, from Eliot Fisher, presentation at Academy Health Annual Research Meeting, June 2006.

The Policy Journey CMS and FDA are critical Political re-alignment in America Health Insurance expansion and reform Physician payment reform and practice variation issue Implementation of healthcare quality improvement Implementation of healthcare information improvement Informed patient choice practice standard Federalism - role of the states Ending the entitlement financing policy of medical technology Reducing the medical arms race Population health policy issues Fiscal issues: Health care cost containment & entitlement reform

The Health Care Journey Creating a demand for low cost healthcare Reducing the cost of access Redesign primary care: Medical home, upstream retail clinics/urgi-centers Return of the HMO: Accountable care organizations and integrated systems Health management Hospital/surgery safety; error reduction Increasing efficiency/productivity Informed medical decision-making Insurance claims and medical data simplification/standardization Reducing the cost of info technology Health professions education Enhancing value

11/11/09 Thank you ddurenberger@stthomas.edu

The Politics of Health Care

by Center for Health & Medical Affairs, University of St. Thomas on Nov 11, 2009

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