Health Reform

Economic decisions are rarely the product of a simple costs-benefit analysis. This is particularly true of the decision to purchase health insurance, where the costs are upfront and certain, while the benefits are uncertain and down the road.

Requiring that all Americans purchase health insurance confronts this challenge, and it is a central aspect of the current health reform legislation in Congress. The so-called individual mandate is necessary to make other insurance market reforms like community rating and guaranteed issue work. Coupled with subsidies to make insurance affordable, the individual mandate can be an effective tool for coverage expansion.

The debate in Congress focuses mostly on whether the penalties for not purchasing health insurance ($750 in the Senate Finance Bill) relative to the coverage subsidies are enough to actually influence people's decisions. The success of an individual mandate, however, depends on more than just subsidies and fines, and Monday's Washington Post lays out some important lessons from the field of behavioral economics.

One of the central insights of behavioral economics -- reflected in recent books like Nudge, which was co-authored by the White House's Cass Sunstein -- is that the choices we make are often determined by how easy it is to make them. As Brookings' William J. Congdon tells the Post:

As U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius emphasizes, "One in eight women will have breast cancer at some point in their life but fewer women are dying from it because of medical advances in detection and treatment." But we still have many problems to address -- including the out of pocket costs of cancer care, and the difficulties cancer patients have in getting ongoing insurance coverage with a dreaded "pre-existing condition." Health reform can help, a fact underscored by all those pink outfits and accessories last Friday at an American Cancer Society Cancer Action Network White House Breast Cancer Awareness event .

Breast cancer is the second leading cause of death for women with cancer, but many women don't get regular exams. The Department of Health and Human Services reports that in 2005, 67 percent of women aged 40 and older had a mammogram within the past 2 years -- a fall in screening since 2003. There are complex reasons for that -- but insurance and cost is part of the picture.

The National Cancer Institute (NCI) just released an updated booklet, Understanding Breast Changes: A Health Guide for Women that encourages women to:

Senate Majority Leader Harry Reid (D-NV) said the merged health reform Senate bill will contain a public plan option but states can opt out until 2014. He said the "public option" is not a silver bullet but will boost competition, keep insurers honest, and give people more choices. He said it will add "meaningful reform" to a broken health care system.

Reid is sending his proposed bill to CBO for scoring "in a few hours." At a news conference he stopped short of saying he was positive he had 60 votes, but expressed quite a bit of confidence about health reform. He said he had the support of the White House, and key Democratic negotiators Max Baucus and Chris Dodd.

UPDATE: Statement from Chairman Baucus:

We've often cited estimates from the Dartmouth Atlas and others that about one out of every three dollars we spend on health care (which adds up to about $700 billion) adds no value whatsoever to our health. Zilch. Now a paper from Healthcare Analytics at Thomson Reuters confirms that figure, estimating that we waste between $600 and $850 billion a year:

In this white paper, we present evidence that supports the reasonableness of these claims. This evidence has been gathered from published research studies, expert opinion, and findings from our own Thomson Reuters analyses of our large healthcare databases. We describe the types of waste that are recognized by most experts along with estimates of the magnitude of that waste.

Robert Kelley, vice president of healthcare analytics at Thomson Reuters and author of the white paper said, "By attacking waste, healthcare costs can be reduced without adversely affecting the quality of care or access to care." (A copy of the full report is attached below. Here's a summary)

Here are some of the study's key findings and how they categorize the waste:

Details are firming up in the merged Senate health care reform bill, reports The Wall Street Journal (subscription required). Here's a preview of major provisions that appear to be highly likely to make it into the final bill:

Public option. The Senate bill will contain a public option, reports the WSJ, but states can opt out. Reid came out in favor of a public plan with an opt out last week, according to The New York Times. Some theorized the White House preferred a "trigger" for the public option,  appealing to moderates like Olympia Snowe (R-ME). But the White House Blog said that President Obama and Reid are pursing the same strategy, and the president supports both a public option and Reid's efforts to create a final Senate bill.   

Friday, the Kaiser Family Foundation released the latest results of the monthly Kaiser Health Tracking Poll. Public opinion is holding fairly steady from last month's poll, starting a gradual rebound after support for reform dipped during the raucous August congressional recess.

A majority of respondents (55 percent) believe it is more important than ever to tackle health reform right now. By party, that's 73 percent of Democrats and 55 percent of Independents, but only 30 percent of Republicans. A majority of Republicans believe they would be worse off if health reform passes, while only 29 percent of Independents and only seven percent of Democrats believe health reform would hurt them. According to the Kaiser Family Foundation's Mollyann Brodie, 8 out of 10 Americans are in favor of eliminating insurance denials based on pre-existing conditions, making it the most popular of all the reform provisions currently under consideration. The poll also found a majority of Americans are confused about the timetable of reform, thinking insurance market reforms and help for the uninsured will occur immediately after the bill is passed -- in reality, changes will be phased in over the course of several years. 

In the odyssey of health reform, the public plan is the Proteus of our wonkish mythology -- constantly shifting, capable of divining the future, but never willing to give you a straight answer. Sorry, Politico's Pulse already took the soap opera metaphor, "As the Public Option Turns" so we had to get Homeric.

Still, trying to get a handle on where the public plan stands is like wrestling a wet seal.

Earlier in the week, Democratic House leadership felt confident they had the votes to pass a "robust public option" tied to Medicare payment rates, but the latest whip counts suggest the leadership still has some work to get 218 votes in the House.

Meanwhile, in the Senate, Majority Leader Harry Reid (D-NV) is leaning toward including a public insurance option that would allow the states to opt out. The White House is said to favor a trigger option, hoping to keep the Republican Penelope from Maine weaving at her loom.

All this is subject to change, and next week, it will no doubt change again. And the week after that, too.  However, lawmakers should not let the protean politics of the public plan obscure other key aspects of reform. Insurance market reforms like guaranteed issue and community rating, may not have the same siren call of public plan debate, but they are critical in making health reform work.

A new issue brief from the Robert Wood Johnson Foundation and Health Affairs provides a thorough overview of the issue, looking at why insurance market regulation is needed, what's proposed in the various bills, and the possible objections and barriers to proposed solutions.

Dr. David Kessler, as you've probably heard, is out with a terrific best-seller called "The End of Overeating: Taking Control of the Insatiable American Appetite."

The cover grabs your attention: very pure white glossy background with a carrot cake and carrots.

I don't like carrot cake. But as I told Dr. Kessler, if the cover picture were an Oreo, I wouldn't be able to have his book in my house.

I got to know Kessler while I was covering tobacco back in the late 1990s, but hadn't seen him in quite a few years until he spoke at a conference of health writers I attended last week.

He was the luncheon speaker: the healthiest of the box lunch options, the one I chose, was vegetables -- drenched in salad dressing -- on a white-bread roll, an apple, and two chocolate chip cookies in plastic wrap. I didn't want to eat them until Kessler began talking about how smells triggers cravings and my friend Ivan sitting next to me unwrapped his cookies. But, concentrating intently on the dress I wanted to wear at a college reunion this weekend, I ignored Ivan and the cookies, and listened to Kessler. Luckily, they weren't Oreos.

Anyhow, David happened to be heading to Washington this week, and we ended up having a longer and more provocative conversation about fat, policy, parenting, Oreos and social norms than either of us expected.

Health care and bankruptcy. The two really shouldn't go hand in hand. Too often they do.

The Senate Judiciary Committee's Subcommittee on Administrative Oversight and the Courts held a hearing on medical bankruptcy earlier this week, "Medical Debt: Can Bankruptcy Reform Facilitate a Fresh Start?" Subcommittee chairman Sen. Sheldon Whitehouse (D-RI) introduced legislation that would make filing for bankruptcy less difficult for Americans with significant medical debt. His legislation, the Medical Bankruptcy Fairness Act of 2009, would also make it easier for those in medical bankruptcy to keep their homes, according to BNA (subscription required).

As health reform draws closer to the goal line, efforts to influence the debate have never been fiercer. Lobbying from health care groups is proceeding at a record pace, and everyday seems bring a new crop of ads. In fact, the most recent Kaiser Health tracking poll showed that over half of all Americans (54 percent) had seen, heard, or read an ad in the past week having to do with health reform -- up more than 30 points from June. Of those who’d seen an ad in the past week, 35 percent saw ads in favor of passing reform, 29 percent saw ads opposed, and 29 saw both.

While it’s hard to keep track of the ad wars, two recent productions caught our attention.

The first comes from Americans for Stable Quality Care, a diverse coalition of health care industries and providers, “who share the common belief that all Americans deserve access to stable quality health care.” The ad is titled "House."