April 1, 2009 11:44AM

Democrats Agree on Health Plan Outline: Be Afraid, Be Very Afraid

The New York Times reports that key congressional Democrats have agreed on the basic provisions for a health care reform bill. And while many details remain to be negotiated, the broad outline provides a dog’s breakfast of bad ideas that will lead to higher taxes, fewer choices, and poorer quality care.

Among the items that are expected to be included in the final bill:

  • An Individual Mandate. Every American will be required to buy an insurance policy that meets certain government requirements. Even individuals who are currently insured — and happy with their insurance — will have to switch to insurance that meets the government’s definition of acceptable insurance, even if that insurance is more expensive or contains benefits that they do not want or need. Get ready for the lobbying frenzy as every special interest group in Washington, both providers and disease constituencies, demand to be included.
  • An Employer Mandate. At a time of rising unemployment, the government will raise the cost of hiring workers by requiring all employers to provide health insurance to their workers or pay a fee (tax) to subsidize government coverage.
  • A Government‐​Run Plan, competing with private insurance. Because such a plan is subsidized by taxpayers, it will have an unfair advantage, allowing it to squeeze out private insurance. In addition, because government insurance plans traditionally under‐​reimburse providers, such costs are shifted to private insurance plans, driving up their premiums and making them even less competitive. The actuarial firm Lewin Associates estimates that, depending on how premiums, benefits, reimbursement rates, and subsidies were structured, as many as 118.5 million would shift from private to public coverage. That would mean a nearly 60 percent reduction in the number of Americans with private insurance. It is unlikely that any significant private insurance market could continue to exist under such circumstances, putting us on the road to a single‐​payer system.
  • Massive New Subsidies. This includes not just subsidies to help low‐​income people buy insurance, but expansions of government programs such as Medicaid and Medicare.
  • Government Playing Doctor. Democrats agree that one goal of their reform plan is to push for “less use of aggressive treatments that raise costs but do not result in better outcomes.” While no mechanism has yet been spelled out, it seems likely that the plan will use government‐​sponsored comparative effectiveness research to impose cost‐​effectiveness guidelines on medical care, initially in government programs, but eventually extending such restrictions to private insurance.

Given the problems facing our health care system‐​high costs, uneven quality, millions of Americans without health insurance – it seems that things couldn’t get any worse. But a bill based on these ideas, will almost certainly make things much, much worse.

Or maybe it’s all just a massive April Fool’s joke.

March 13, 2009 4:45PM

The Beginning of the End of All that Comparative‐​Effectiveness Research

In “A Better Way to Generate and Use Comparative‐​Effectiveness Research,” I predicted that taxpayer‐​funded research on which medical treatments work best would ultimately be defunded at the behest of those who make a living providing the less‐​effective treatments. Because, well, that’s what always happens.

Well, it turns out those folks have gone and formed themselves a coalition and launched a media campaign to ensure that comparative‐​effectiveness research doesn’t put a dent in their incomes. According to the Associated Press:

People’s lives and plenty of money are at stake when it comes to determining which medical treatments work best.

So some prominent health industry and patient advocacy groups are trying to reframe the debate over how such decisions are made in order to ensure their interests are protected…

It’s a big concern for drug and biotech companies too since they could lose out if a treatment they’ve developed is found to be less effective than a competitor’s. But a drug company’s bottom line isn’t likely to draw as much public sympathy as a disabled person’s needs.

That makes [former Rep. Tony] Coelho a good face for the Partnership to Improve Patient Care, which formed as the issue began to surface last fall and is funded by groups including the Easter Seals, Friends of Cancer Research, the Alliance for Aging Research, the Advanced Medical Technology Association and the powerful pharmaceutical and biotech industry lobbies.

It also makes the Partnership to Improve Patient Care the very type of “patient‐​provider pincer movement” of which Tom Daschle wrote in his book.