Health Reform

As we have discussed several times, doing nothing is simply not an option. We need to reform our health care system -- not despite our economic crisis, but because of the significant impact health care has on U.S. workers and businesses.

In an article for the Washington Post this morning, Peter Orszag, Director of the Office of Management and Budget, stresses that "as we enter the homestretch, the greatest risk we run is not completing health reform and letting this chance to lay a new foundation for our economy and our country pass us by."

He states that if we do not do anything to slow the rising cost of health care, the federal government will end up spending more on Medicare and Medicaid than all other government programs combined. And our country could not afford to let that happen.

We have established that the cost of doing nothing is high, yet, as Orszag notes, some still have their reserves. These are the people wondering whether it is truly possible to achieve comprehensive health reform in a fiscally responsible and sustainable manner.  

But just in time for the Senate vote, Orszag takes the time to explain why in fact we do not need to fear the fiscal impact of health reform.

Or, at least, the Senate will be working this weekend. The Senate plans a rare Saturday night vote on a motion to proceed with Senate Majority Leader Harry Reid's $848 billion health care reform bill,  released earlier this week. The pressure is on for Senate Democrats, who need 60 votes to ensure the bill makes it to the floor to begin debate.

Reid melded the Senate Finance and HELP committee's reform bills, but his "deep personal involvement in assembling the overhaul of the health care system," makes it  "Reid's bill," writes Carl Hulse in The New York Times. If Reid successfully guides the health care reform bill through the Senate, it could be the biggest victory his career, and a huge boon for Obama and the Democratic Party, writes Hulse, but if he fails, it could mean disaster for the Democrats and an even tougher re-election battle for Reid in his home state of Nevada. Many Democrats expressed faith in Reid's skills as a legislator and a tactician, according to the Times,

Over the past year or so, we began detecting some subtle changes in how Democrats were talking about malpractice. They weren't embracing the Republican tort reform agenda, weren't about to start limiting damages and saying "Sorry Charlie" to people who had suffered heartbreaking harm. But they weren't just changing the subject either. They were recognizing a problem, and considering solutions. Liability problems as well as larger obstacles to addressing serious patient safety problems.

We posted about it a few times (here and here). I started reading more about it, and I started talking (and listening) to what doctors had to say. Not just lobbyists for doctors, but doctors. Including some progressive docs in primary care who favor health reform or a single payer system. I have a piece online in American Prospect today, outlining some alternatives to traditional malpractice lawsuits that are worth trying. (Not to replace the current court system, but to test alternatives. And while we test alternative dispute resolution or other approaches, it should be voluntary.)

Not many health writers -- not many writers of any ilk, for that matter -- can match T.R. Reid's ability to bring a light, witty touch to really serious topics. Like health policy around the globe.

Tom (that's what the "T" in "T.R." stands for) was the featured speaker at the Peterson Institute of International Economics today. Not the usual venue for the book tour for his best-seller, "Healing of America: A Global Quest for Better, Cheaper and Fairer Health Care." Before his talk, he told me he was planning to stress the moral case for covering everyone. Not the approach, perhaps, that this particular crowd was used to hearing. Go ahead, I told him. It is, after all, a roomful of economists eating a free lunch.

And that's what he did.

Slate's Timothy Noah provides a thoughtful overview of the intellectual origins and political evolution of the public option's place in health reform.

It's a complicated case, the public option. Lotta ins. Lotta outs. But Timothy Noah is the Big Lebowski of health writers, and is the man for the job to keep all these strands together. (Yes, we know we've made that joke before, but like our living room rug it really ties the blog together.)

Noah's goal was to understand why the CBO and others estimated that premiums for a so-called level playing field public option would cost more than private plans. Noah spoke with New America's Len Nichols, whose paper with John Bertko helped outline how a public option with negotiated payment rates could compete on a level playing field with private plans.

After weeks of anticipation and speculation, Senate Majority Leader Harry Reid has unveiled the legislation that will bring health reform to the Senate floor in the coming weeks.

While waiting for the details of the bill to come out Wednesday, we created a little office pool, called the Price is Right for Health Reform. In an office-wide email, we asked our peers to guess the CBO's estimates of the gross costs of the bill. Showcase Showdown rules (closest without going over) applied. We were intentionally vague in our question because estimating the true costs of the bill is inherently a difficult process.

The number we were looking for was $848 billion. The CBO's estimate of the gross cost of the bill is essentially the total cost of coverage provisions over the next 10-years. This is the number most frequently reported in the media as the "cost" of the various health reform bills being discussed. But is this really the best indicator of the true costs of health reform? Maybe not. First, timing matters: $848 billion over ten years is a lot different than a $787 stimulus bill where 90 percent of the money is spent within the first 3 years. So do deficits. How much does a bill cost if it's fully paid for and in fact reduces the deficit as is the case for both the House ($109 billion) and Senate ($130 billion) bills?

We received plenty of calls from our co-workers asking just these questions. We tried to stay quiet, because we were interested in what the educated, non-health policy wonks think about the cost of reform. True to our think tank's "post-partisan roots" we got a range of answers from "too little" to "$600 trillion, Obama lies." We got a couple of "$1" which we assume was a reference to the bill's deficit neutrality, and $90 billion which seems like a reasonable estimate of yearly costs.  But the majority of the answers clustered within the $800-$900 billion range, surprisingly close to the final answer. Few people seemed willing to go above $900 billion, suggesting the power of the official price tag President Obama put on reform during his September address to a Joint Session of Congress. So who won? The answer after this non-commercial break:

The latest version of Senate health care legislation (pdf available here) crafted by Majority Leader Harry Reid is making its rounds.  There is a lot to review, but an initial read shows the bill is close to the legislation approved by the Senate Finance Committee in early October with a few notable changes: more generous subsidies, a higher threshold for the excise tax on insurers who offer high-cost plans, an increase in the Medicare payroll tax for Americans making over $250,000, and the addition of a long-term care insurance program for people with disabilities.

While this legislation also delays the implementation of insurance market reforms and subsidies (when compared to the Senate Finance legislation) there are a number of provisions that would start helping Americans immediately. In particular, the legislation:  

It's Wednesday (Sunday's football dissapointments seem so long ago) and there is a lot going on in the health care reform world. Where to start?

Reid will unveil his healthcare bill to Democratic Senators today at 5 pm at a special caucus meeting.

Senator Reid is "cautiously optimistic" that he will be able to secure the 60 votes he needs in order to defeat GOP procedural objections and move forward on the bill by this weekend.

But what can we even expect to see included in his bill?

Politico's Chris Frates tells us that:

If polling on health reform were a band, we'd call it The Hold Steady.

Several new surveys out this week show the public remains as conflicted as ever on health reform -- convinced of the need for change, but worried about the impact on their lives and the lives of their family.

A Washington Post-ABC News poll released Tuesday shows 48 percent of those surveyed supported the proposed reforms; 49 percent opposed them. An AP poll released Monday found a similar split, with 41 percent in favor; 43 percent opposed and 15 percent undecided.

These even divides are consistent with past polls, suggesting that the uproar in August was more of a bump in the road than turning point. However beneath the topline questions are some interesting trends.

Last week, Medicare's chief actuary (formally known as the Office of the Actuary, or OACT) released an analysis of the financial impact of the health reform legislation recently approved by the House of Representatives (H.R. 3962).  Here are a few thoughts:

Get familiar with the source.  Remember their history.  The Medicare and Medicaid actuarial team's job is to track and understand Medicare spending patterns.  By design, it is also their job -- and their historical pattern -- to be skeptical about proposals for change. Just for context, the office's estimate of the cost of the Medicare Modernization Act in 2003 (the bill that created the Medicare prescription drug program, Part D) was $100 billion, or 25 percent, more than the Congressional Budget Office's (and CBO is also conservative by nature and design).  Last year CMS's Chief Actuary testified to Congress that the 10-year cost of the Medicare drug benefit is 37 percent lower than originally projected in 2003, and 17 percent lower than the previous year's updated projections.   Don't get me wrong. We need conservative estimators to prevent Pollyanna policy from being enacted into law.  But we should take that conservatism for what it is: a useful check on the naturally optimistic expectations of reformers.