Guaranteed Healthcare

We have seen this coming for many weeks, but the release of the Baucus plan in recent days by the Senate Finance Committee, without any Republican support within the Gang of Six, leaves no more doubt about Republican intentions or votes on health care reform. House Republicans have already been clear in their total opposition to reform bills in the House. Republicans want nothing to do with reform except to derail any plan put forward by the Democrats, and are salivating over making a defeat on health care reform a Waterloo event for the Obama Administation, carrying over into the elections of 2010 and 2012.

Americans are dying at a faster rate — 1 every 12 minutes, 5 an hour, 120 a day, 45,000 a year — not from war or natural disaster, but from lack of health insurance.

Medicare has long been a flashpoint generating intense disagreement across party lines over the role of private markets versus that of government. Republicans have fought against Medicare from the very beginning. They bitterly opposed it in various committees in both houses of Congress in 1964 -1965. But they relented, at least for a while, in the face of strong public support for the program, and it passed with bipartisan support.

As we recall, a high-profile event at the White House in May 2009 brought together most of the major corporate stakeholders in the U. S. health care system in an effort to build momentum toward reform. The Obama Administration welcomed the cooperative spirit and combined pledges of some stakeholders to shave 1.5 percent off the growth in health care spending over ten years, amounting to “savings” of about $2 trillion. The meeting was proclaimed “an historic event” boding well for the goals of reform — gaining near-universal coverage to affordable health care while reining in costs and improving quality of care.

Having considered four of the major corporate stakeholders in our medical industrial complex — the insurance, drug, and hospital industries as well as business — it is now time to turn our attention to organized medicine. Since physicians order almost all services that are provided within our health care system, they are obviously a key player and interest group in the debate over health care reform.

The politics and attitudes of business toward health care reform can be summed up in two words — fragmented and disunity. Unlike the insurance and drug industries, American business is by no means monolithic. There are big differences between the interests of big business, with its many multi-national corporations, and small business, which employs the majority of Americans. And there are also big differences within the large and small business sectors that put many members at odds with each other over health care reform.
Again, the driving factor driving business attitudes toward health care reform is money, and whether any bill in Congress will cost them more or less than they are now paying. Business of any size needs a healthy work force, but the costs of providing employer-sponsored insurance (ESI) have become an unsustainable burden for those employers providing coverage as well as unaffordable for many, if not most small businesses.

Faced with increasing political momentum toward some kind of health care reform, the hospital industry, together with other major stakeholders, wanted to retain a place at the negotiating table and protect its interests in whatever legislation resulted.  Urgency increased after the drug and insurance industries offered up their pledges to help with financing reform. Then the stakes increased further when the Obama Administration put out a proposal to cut payments to hospitals by $224 billion over the next ten years to help fund reform.

In May, 2009, President Obama held a high-profile event in the White House, convening leaders from the health care industry to a meeting to discuss reform of the U. S. health care system. Participants included representatives from the insurance, drug, medical device, and hospital industries as well as business, labor and organized medicine. This “alliance” for health care reform produced a voluntary, unenforceable “commitment” to reduce the costs of health care by 1.5 percent, which would amount to some $2 trillion over the next 10 years. Promises were vague, such as promising to “cut both overuse and underuse of health care by aligning quality and efficiency initiatives”. The White House was quick to call the meeting “an historic day, a watershed event, because these savings will help to achieve comprehensive health care reform.”

In June, 2009, Pharmaceutical Research and Manufacturers of America (PhRMA), the drug industry’s trade group, followed up on its offer to help finance expanded health coverage within health care reform. PhRMA’s CEO, Billy Tauzin, was very familiar with politics and the drug industry. The former Republican turned Democrat Congressman from Louisiana had played a leading role as chairman of a House committee in design and passage of the Medicare Prescription Drug, Improvement and Modernization (MMA) Act of 2003. That bill turned the new prescription drug benefit over to the private sector and prohibited the government from negotiating drug prices as the Veterans Administration does so effectively. Tauzin then used the revolving door between government, industry and K Street to become CEO of PhRMA and a top lobbyist in Washington, D.C. with a reported salary in the range of $2 million a year. He continued to lobby against price controls of drugs or importation of drugs from Canada or other countries. (Lueck, S. Tauzin is named top lobbyist for pharmaceuticals industry. Wall Street Journal, December 16, 2004: A4)

We are told by supporters of health care reform bills in the Democrat-controlled Congress that they will save us money in the long run and contain skyrocketing health care costs. But the CBO has projected that the most comprehensive proposal yet, America’s Affordable Health Choices Act of 2009 (H.R.3200 in the House), will add to the federal deficit by $239 billion over 10 years. So the Administration and most Democrats find themselves on the defensive over these costs as Republicans have a field day in proclaiming the risks of even higher deficits than we already are facing. As Rep. John Boehner (R-OH and Republican leader in the House of Representatives) says:

“Americans want a better plan to lower costs and improve the quality of health  care. —It’s not just about health care, it’s also about out-of-control government spending that’s piling debt on our kids and grandkids” (Boehner, J. Americans aren’t going to buy health care spin, Mr. President. Op-Ed. USA Today. August 13, 2009: 11A).