Meet the Radical Technocrat Helping Democrats Sell Single-Payer

If anyone had doubts about the radical nature of Democrats’ health care agenda, they needn’t look further than the second name on the witness list for this Wednesday’s House Ways and Means Committee hearing on single-payer health care: Donald Berwick of the Institute for Healthcare Improvement.

If that name sounds familiar, it should. In summer 2010, right after Obamacare’s passage, President Obama gave Berwick a controversial recess appointment to head the Centers for Medicare and Medicaid Services (CMS). Democrats refused to consider Berwick’s nomination despite controlling 59 votes in the Senate at the time, and he had to resign as CMS administrator at the end of his recess appointment in late 2011.

Berwick’s History of Radical Writings

Even a cursory review of Berwick’s writings explains why Obama’s only option was to push him through with a recess appointment, and why Democrats refused to give Berwick so much as a nomination hearing. As someone who read just about everything he wrote until his nomination—thousands of pages of journal articles, books, and speeches—I know the radical nature of Berwick’s thinking all too well. He believes passionately in a society ruled by a technocratic elite, thinking that a core group of government planners can run the country’s health care system better than individual doctors and patients.

Here is what this doctor believes in, in his own words:

  • Socialized Medicine: “Cynics beware: I am romantic about the National Health Service; I love it. All I need to do to rediscover the romance is to look at health care in my own country.”
  • Control by Elites: “I cannot believe that the individual health care consumer can enforce through choice the proper configurations of a system as massive and complex as health care. That is for leaders to do.”
  • Wealth Redistribution: “Any health care funding plan that is just, equitable, civilized, and humane must—must—redistribute wealth from the richer among us to the poorer and less fortunate.”
  • Shutting Medical Facilities: “Reduce the total supply of high-technology medical and surgical care and consolidate high-technology services into regional and community-wide centers … Most metropolitan areas in the United States should reduce the number of centers engaging in cardiac surgery, high-risk obstetrics, neonatal intensive care, organ transplantation, tertiary cancer care, high-level trauma care, and high-technology imaging.”
  • End of Life Care: “Most people who have serious pain do not need advanced methods; they just need the morphine and counseling that have been available for centuries.”
  • Cost-Effectiveness Rationing of Care: “The decision is not whether or not we will ration care—the decision is whether we will ration with our eyes open.”
  • Doctors Putting “The System” over their Patients: “Doctors and other clinicians should be advocates for patients or the populations they service but should refrain from manipulating the system to obtain benefits for them to the substantial disadvantage of others.”
  • Standardized “Cookbook Medicine”: “I would place a commitment to excellence—standardization to the best-known method—above clinician autonomy as a rule for care.”

For those who want a fuller picture of Berwick’s views, in 2010-11 I compiled a nearly 30-page dossier featuring excerpts of his beliefs, based on my comprehensive review of his prior writings and speeches. That document is now available online here, and below.

Where’s the Political Accountability?

Some of Berwick’s greatest admiration is saved for Britain’s National Health Service on the grounds that it was ultimately politically accountable to patients. For instance, Berwick said his “rationing with our eyes open” quote was “distorted,” claiming that

Someone, like your health insurance company, is going to limit what you can get. That’s the way it’s set up. The government, unlike many private health insurance plans, is working in the daylight. That’s a strength.

When running for governor of Massachusetts in 2013, Berwick claimed he “regrets listening to White House orders to avoid reaching out to congressional Republicans.” But that doesn’t absolve the fact that Berwick went to great lengths to avoid the political accountability he previously claimed to embrace.

It also doesn’t answer the significant questions about why Obama waited until after Obamacare’s enactment to nominate Berwick—deliberately keeping the public in the dark about the radical nature of the person he wanted to administer vast swathes of the law.

Thankfully, however, Wednesday’s hearing provides a case of “better late than never.” Republicans will finally get a chance to ask Berwick about the extreme views expressed in his writings. They will also be able to raise questions about why Democrats decided to give him an official platform to talk about single payer (and who knows what else).

This post was originally published at The Federalist.

Note to Britain: You Can Have Your NHS

As expected, the American press has heavily covered President Trump’s visit to Europe, including his time spent in Great Britain. But a row (that’s British for “argument”) that has gone under-reported on this side of the Atlantic also holds major implications for American patients.

Based on comments the President made earlier in the week, British politicians now believe they need to protect the country’s National Health Service (NHS) from “privatization” at the hands of American corporations. But even as they do so, another controversy—about the ways in which Britain denies life-saving treatments to patients, solely on cost grounds—illustrates the problems with socialized medicine, which the left wants to export to the United States.

Concern about Trade Agreements

During a press conference in London Tuesday, a British reporter questioned Trump about a post-Brexit trade deal between the U.S. and Britain. The reporter specifically asked whether “the entire economy needs to be on the table” in those discussions, “including the NHS.” Trump responded that “everything with a trade deal is on the table.”

Those comments—which Trump later attempted to walk back—prompted outrage that Britain’s “beloved” NHS was at risk. British politicians across parties raised concern that American companies could receive NHS contracts (even though subsidiaries of U.S. corporations have already done so), or that a free trade agreement could supersede legislative efforts by Parliament to prohibit additional private contracting within the health service.

The Health Secretary, Matt Hancock—an announced candidate in the race to succeed Theresa May as Conservative Party leader and Prime Minister—epitomized the sentiments, claiming that “the NHS

NHS Denying Patients Care

The controversy continued at Prime Minister’s Questions in the House of Commons Wednesday. In that hourlong session, no fewer than five questions asked whether the NHS was “for sale,” or some variation thereof. But the sixth NHS-related question, by Labour MP Karl Turner, proved the most revealing:

Twelve months ago, the Prime Minister told this House that she wanted a speedy resolution to the funding row between NHS England and Vertex regarding the drug Orkambi to treat cystic fibrosis. My seven-year-old constituent Oliver Ward wrote to the Prime Minister recently asking what progress she has made. Could the Minister please give Oliver some good news and tell him that he need not get up every day worrying about this terrible injustice?

Turner’s question referred to Orkambi, a drug that could help thousands of British patients currently suffering from cystic fibrosis. But the NHS refuses to pay for the drug—not because it does not work, but because it does not meet cost thresholds that government bureaucrats have set.

Britain’s National Institute for Health and Clinical Excellence decided in 2016 that the NHS would not pay for Orkambi at the price set by its manufacturer. For the three years since, British patients have not found that decision very NICE at all.

A Precursor of an American Single-Payer System?

Unfortunately, however, liberals want to export the British model of rationing health care on cost grounds to the United States. Recall President Obama’s comments about the issue a decade ago:

The chronically ill and those toward the end of their lives are accounting for potentially 80 percent of the total health care bill out here….There is going to have to be a conversation that is guided by doctors, scientists, ethicists. And then there is going to have to be a very difficult democratic conversation that takes place.

Months after those comments, the New York Times ran an article, entitled “Why We Must Ration Health Care,” that argued for bringing a British-style rationing model to our shores.

This prevailing mentality among intellectual elites explains why neither the House nor Senate single-payer bills prohibit a government-run health plan from implementing cost-effectiveness research. In fact, the House bill explicitly provides for cost-effectiveness research as a method of determining drug prices, because most liberals believe that bureaucrats can and should have the power to restrict access to care on cost grounds. Most Americans, on the other hand, would strongly object to this rationing of care.

As for British politicians saying the NHS “isn’t for sale,” I could not care less—I wouldn’t want to buy it even if it were. The American health care system has its flaws, to be sure, but I have little interest in creating a system where government bureaucrats have near-total control over patients’ medical decisions, and use that power to deny access to life-saving care. I think most Americans would agree.

This post was originally published at The Federalist.

The CBO Report on Single Payer Isn’t the One We Deserve to See

On Wednesday, the Congressional Budget Office (CBO) released a 30-page report analyzing a single-payer health insurance plan. While the publication explained some policy considerations behind such a massive change to America’s health care market, it included precious few specifics about such a change—like what it would cost.

Sen. Bernie Sanders (I-VT), perhaps single payer’s biggest supporter, serves as the ranking member of the Senate Budget Committee. If he asked the budget scorekeepers to analyze his legislation in full to determine what it would cost, and how to go about paying for the spending, CBO would give it high-priority treatment.

But to the best of this observer’s knowledge, that hasn’t happened. Might that be because the senator does not want to know—or, more specifically, does not want the public to know—the dirty secrets behind his proposed health-care takeover?

Hypothetical Scenarios

The CBO report examined single payer as an academic policy exercise, running through various options for establishing and operating such a mechanism. In the span of roughly thirty pages, the report used the word “would” 245 times and “could” 209 times, outlining various hypothetical scenarios.

That said, CBO did highlight several potential implications of a single-payer system for both the demand and supply of care. For instance, “free” health care could lead to major increases in demand that the government system could not meet:

An expansion of insurance coverage under a single-payer system would increase the demand for care and put pressure on the available supply of care. People who are currently uninsured would receive coverage, and some people who are currently insured could receive additional benefits under the single-payer system, depending on its design. Whether the supply of providers would be adequate to meet the greater demand would depend on various components of the system, such as provider payment rates. If the number of providers was not sufficient to meet demand, patients might face increased wait times and reduced access to care.

The report noted that in the United Kingdom, a system of global budgets—a concept included in the House’s single-payer legislation—has led to massive strains on the health-care system. Because payments to hospitals have not kept up with inflation, hospitals have had to reduce the available supply of care, leading to annual “winter crises” within the National Health Service:

In England, the global budget is allocated to approximately 200 local organizations that are responsible for paying for health care. Since 2010, the global budget in England has grown by about 1 percent annually in real (inflation-adjusted) terms, compared with an average real growth of about 4 percent previously. The relatively slow growth in the global budget since 2010 has created severe financial strains on the health care system. Provider payment rates have been reduced, many providers have incurred financial deficits, and wait times for receiving care have increased.

While cutting payments to hospitals could cause pain in the short term, CBO noted that reducing reimbursement levels could also have consequences in the long term, dissuading people from taking up medicine to permanently reduce the capacity of America’s health-care market:

Changes in provider payment rates under the single-payer system could have longer-term effects on the supply of providers. If the average provider payment rate under a single-payer system was significantly lower than it currently is, fewer people might decide to enter the medical profession in the future. The number of hospitals and other health care facilities might also decline as a result of closures, and there might be less investment in new and existing facilities. That decline could lead to a shortage of providers, longer wait times, and changes in the quality of care, especially if patient demand increased substantially because many previously uninsured people received coverage and if previously insured people received more generous benefits.

That said, because the report did not analyze a specific legislative proposal, its proverbial “On the one hand, on the other hand” approach generates a distinctly muted tone.

Tax Increases Ahead

To give some perspective, the report spent a whopping two pages discussing “How Would a Single Payer System Be Financed?” (Seriously.) This raises the obvious question: If single-payer advocates think their bill would improve the lives of ordinary Americans, because the middle class would save so much money by not having to pay insurance premiums, wouldn’t they want the Congressional Budget Office to fully analyze how much money people would save?

During his Fox News town hall debate last month, Sanders claimed a large show of support from blue-collar residents of Bethlehem, Pennsylvania for single payer. The ostensible support might have something to do with Sanders’ claim during the town hall that “the overwhelming majority of people are going to end up paying less for health care because they’re not paying premiums, co-payments, and deductibles.”

Where have we heard that kind of rhetoric before? Oh yeah—I remember:

At least one analysis has already discounted the accuracy of Sanders’ claims about people paying less. In scrutinizing Sanders’ 2016 presidential campaign plan, Emory University economist Kenneth Thorpe concluded that the plan had a $10 trillion—yes, that’s $10 trillion—hole in its financing mechanism.

Filling that hole with tax increases meant that 71 percent of households would pay more under single payer than under the status quo, because taxes would have to go up by an average of 20 percentage points. Worse yet, 85 percent of Medicaid households—that is, people with the lowest incomes—would pay more, because a single-payer system would have to rely on regressive payroll taxes, which hit the poor hardest, to fund socialized medicine.

Put Up or Shut Up, Bernie

If Sanders really wants to prove the accuracy of his statement at the Fox News town hall, he should 1) ask CBO to score his bill, 2) release specific tax increases to pay for the spending in the bill, and 3) ask CBO to analyze the number of households that would pay more, and pay less, under the bill and all its funding mechanisms.

That said, I’m not holding my breath. A full, public, and honest accounting of single payer, and how to pay for it, would expose the game of three-card monty that underpins Sanders’ rhetoric. But conservatives should keep pushing for Sanders to request that score from CBO—better yet, they should request it themselves.

This post was originally published at The Federalist.

Single Payer Wouldn’t Make Health Care a “Right”

In talking about his single-payer bill, which he reintroduced in the Senate on Wednesday, Sen. Bernie Sanders often claims that “I want to end the international embarrassment of the United States of America being the only major country on earth that doesn’t guarantee health care to all people as a right and not a privilege.”

But his legislation would do no such thing. Understanding why demonstrates the inherent drawbacks of his government-centered approach to health policy.

In our own country, low reimbursement rates in many state Medicaid programs can make finding doctors difficult. One 2011 study found that two-thirds of specialist physicians would not accept Medicaid patients, whereas only 11 percent of patients with private insurance could not obtain appointments. Patients with Medicaid also had to wait an average of three weeks longer for an appointment for the few doctors who would see them.

Medicaid suffers from so many access problems that one former director of a state program called a Medicaid card a “hunting license,” because it “gave you a chance to go find a doctor.” That’s the only “guarantee” the Sanders bill actually provides—the guarantee you can try to go find care, not a guarantee you can receive it.

But “access to a waiting list is not access to care.” So ruled four Canadian justices in a landmark 2005 ruling, Chaoulli v. Quebec. In that case, Canada’s Supreme Court overturned Quebec’s ban on private health insurance, finding that it “interfere[d] with life and security,” because “the government is failing to deliver health care in a reasonable manner.”

Indeed, delays and long waits for care plague Canada’s single-payer health system. One study found that approximately 3 percent of the nation’s population remained on waiting lists for care in 2018. From physician referral to the start of treatment, waiting times averaged five months—double that for orthopedic surgery cases.

Government-run health care systems traditionally attempt to contain costs by limiting the available supply of care. Britain’s National Health Service (NHS) follows the same approach as Canada’s single payer system. So patients wait for care there, also.

Consider what happened just last year, when the winter flu outbreak created a national “crisis”: The NHS had to cancel tens of thousands of operations, emergency rooms resembled “Third World” conditions, and ambulances waited for hours to unload patients—because hospitals had no place to put them.

The language in Sanders’ legislation demonstrates how, instead of making health care a “right,” single payer would instead increase demand for care—demand the system could not fulfill. To add insult to injury, the Sanders bill would ban private health insurance—the same type of ban Canada’s Supreme Court struck down—here to the United States, giving patients little way out of a clogged government health system.

Promises aside, Sanders’ “guarantee” of coverage would quickly turn into a guarantee that patients would wait, and wait, for care. The American people deserve better.

This post was originally published at The Federalist.

Lowlights of Democrats’ New Single-Payer Bill

Some might think that, having embraced socialism and taking away the health coverage of millions of Americans, the Democratic Party couldn’t move further to the left. Think again.

House Democrats introduced their single-payer bill on Wednesday, and claimed that it’s a “significantly different” bill compared to versions introduced in prior Congresses. It definitely meets that definition—because, believe it or not, it’s gotten significantly worse.

What Remains

Abolition of Medicare—and Most Other Insurance Coverage: As I noted last year, the bill would still eliminate the current Medicare program, by prohibiting Title XVIII of the Social Security Act from paying for any service (Section 901(a)(1)(A)) and liquidating the current Medicare trust funds (Section 701(d)). Likewise, the bill would eliminate the existing insurance coverage of all but the 2.2 million who receive care from the Indian Health Service and the 9.3 million enrolled veterans receiving care from the Veterans Administration.

Taxpayer Funding of Abortion: As before, Section 701(b)(3) of the bill contains provisions prohibiting “any other provision of law…restricting the use of federal funds for any reproductive health service” from applying to the single-payer system. This language would put the single-payer system outside the scope of the Hyde Amendment, thereby permitting taxpayer funding for all abortions.

Lack of Accountability: As with the prior bill, the legislation would give massive amounts of power to bureaucrats within the Department of Health and Human Services (HHS). For instance, the legislation would establish new regional directors of the single-payer system—none of whom would be subject to Senate confirmation.

What Lawmakers Added

More Spending: Section 204 of the new bill federalizes the provision of long-term supports and services as part of the single-payer benefit package. Prior versions of the bill had retained those services as part of the Medicaid program, implemented by states with matching funds from the federal government.

In addition, the revised bill eliminated language in Section 202(b) of the Sanders legislation, which permitted co-payments for prescription drugs to encourage the use of generics. With the co-payments (capped at an annual maximum of $200 in the Sanders bill from last Congress) eliminated, the bill envisions the federal government providing all health services without cost-sharing. This change, coupled with the federalization of long-term supports and services, will result in increased spending—as more people demand “free” health care.

Faster Elimination of Private Coverage: Rather than envisioning a four-year transition to the single-payer system, the revised bill would eliminate all private health insurance within a two-year period. Over and above the myriad philosophical concerns associated with single-payer health care, this accelerated transition period raises obvious questions about whether the new system could get up and running so quickly. After all, Obamacare had an implementation period of nearly four years—yet healthcare.gov failed miserably during its initial launch phase.

In theory, moving away from a fee-for-service method of paying medical providers would eliminate their incentive to perform more procedures—a worthy goal. But in practice, global budgets could also lead to de facto rationing, as hospitals that exceed their budgets might have to stop providing care to patients—just as under-funding within Britain’s National Health Service (NHS) has led to chronic hospital overcrowding.

Compensation Caps: Section 611(b)(5) of the new bill would limit “compensation costs for any employee or any contractor or any subcontractor employee of an institutional provider receiving global budgets,” by applying existing pay restrictions on government contractors to hospitals and facilities in the single-payer program. These restrictions might lead some to wonder whether hospitals could truly be considered independent entities, or merely an arm of the state.

Effective Abolition of For-Profit Medicine: Section 614(a) of the revised bill states that “payments to providers…may not take into account…or be used by a provider for” marketing; “the profit or net revenue of the provider, or increasing the profit or net revenue of the provider;” any type of incentive payment—“including any value-based payment;” and political contributions prohibited by government contractors.

Liberals would argue that eliminating the profit motive will encourage doctors to provide better care, by focusing on patients rather than ways to enrich themselves. But the profit motive also encourages individuals to invest in health care—as opposed to other sectors of the economy—by allowing them to recover a return on their investment.

Effective Elimination of Patents: Section 616(c)(1) of the bill states that “if the manufacturer of a covered pharmaceutical, medical supply, medical technology, or medically necessary assistive equipment refuses to negotiation a reasonable price, the Secretary shall waive or void any government-granted exclusivities with respect to such drug or product,” and shall allow other companies to manufacture the product. By allowing the federal government to march in on a whim and seize a company’s intellectual property, the bill would discourage individuals from investing in such intellectual property in the first place.

“Reasonable” Prices and Rationing: As noted above, Section 616 of the bill requires HHS to determine when the prices of drugs and medical devices are “not reasonable,” by taking into account among other things “the therapeutic value of the drug or product, including cost-effectiveness and comparative effectiveness.” This provision could lead to the federal government denying patients access to drugs deemed too expensive, as occurs currently within Britain’s National Health Service.

This post was originally published at The Federalist.

Did Orrin Hatch Call the Wrong Party “Stupid” Over Obamacare?

Republican Sen. Orrin Hatch called Obamacare “the stupidest, dumbass bill” he’s ever seen at a recent American Enterprise Institute forum. “Some of you may have loved it,” he said. “And if you do, you are one of the stupidest, dumbass people I’ve ever met.”

Hatch ended up apologizing for his comment, but the question remains: If the chairman of the Senate Finance Committee considers Obamacare the “stupidest, dumbass” law on earth, then why on earth are his fellow Republicans so desperate to bail it out?

But of course, that approach would involve actually repealing Obamacare. And instead of solving the underlying problem, by repealing the regulations that led premiums to increase, Republicans want to throw money at the problem, giving insurance companies corporate welfare payments hand-over-fist in the hope that these efforts will mitigate ever-rising premiums.

This strategy does seem like a “dumbass” approach for several reasons. First, it does not repeal Obamacare. Numerous studies have demonstrated that Obamacare’s regulations have raised premiums. Occam’s Razor concludes that, if Congress wants to solve the problem of higher premiums, it should start by fixing the underlying reason for those higher premiums.

Second, this approach not only does not repeal Obamacare, it also entrenches it by making it the federal government’s business to “lower” health insurance premiums. The federal government has no more business dictating the price of health insurance than it does the price of homes, or food, or shoes. But by throwing more money at the Exchanges, Republicans will make it the business of the federal government — and federal taxpayers — to “lower” health insurance premiums.

President Trump hinted at the fundamental problems this approach brings last month, when he tweeted about protests in Britain over the National Health Service (NHS). One need only watch Prime Minister’s Questions to observe the ways in which Members of Parliament in Britain turn the NHS into a political tool. Most opposition parties pledge to “fix” the NHS by throwing more money at it. And last month, Jeremy Corbyn, head of the Labour Party and Leader of the Opposition, attacked the Conservative Government for “refusing to give our NHS the money it needs and needs now.”

If the federal government takes political responsibility for health insurance premiums, the “stability” fund would soon turn into a perpetual — and perpetually expanding — money pit. Even with a theoretical expiration date, Congress would face pressure to renew the fund, lest premiums increase if it lapses. And if premiums continue to rise, politicians would propose even greater corporate welfare payments, to “stabilize” the markets with yet more taxpayer dollars.

That scenario leads to the third problem, which Margaret Thatcher famously described four decades ago: Socialist governments traditionally do make a financial mess. They always run out of other people’s money.

That quote, coupled with our existing $20 trillion in federal debt, explains why, in their attempts to micro-manage the health insurance system from Washington, the Republican-Socialists who wish to bail out Obamacare have proposed much the same kind of “dumbass” policies as Hatch himself criticized.

This post was originally published at The Federalist.

Donald Berwick’s Rationed Transparency

Dr. Donald Berwick is back in the public eye. The former administrator of the Centers for Medicare and Medicaid Services (CMS) has announced he will run for governor in Massachusetts.

Berwick first entered the public spotlight in April 2010, when President Obama nominated him for the CMS post. But Berwick never went through the regular confirmation process. Instead, the president granted him a surprise recess appointment that July.

The president renominated him in January 2011, but it became apparent that he could not garner enough votes for Senate confirmation. That December, Berwick resigned. Now, he is pursuing office as an elected, rather than an appointed, official.

Berwick’s short tenure at CMS was defined by a series of controversial statements he made before his appointment. He defended both Britain’s National Health Service and government rationing of health care. Most famously, in a June 2009 interview, he stated that “the decision is not whether or not we will ration care — the decision is whether we will ration with our eyes open.”

After leaving CMS, Berwick said his comments were merely an attempt to argue for greater transparency in decision-making. “Someone, like your health-insurance company, is going to limit what you can get. That’s the way it’s set up,” he told the New York Times. “The government, unlike many private health-insurance plans, is working in the daylight,” he insisted. “That’s a strength.”

Unfortunately, Berwick himself, while head of CMS, went to great lengths to avoid transparency. He ducked reporters, in one instance even “exit[ing] behind a stage” to avoid press queries. Another time he went so far as to request a “security escort” to avoid questions.

Today, Berwick concedes his lack of transparency. According to a Politico report, he now “regrets listening to White House orders to avoid reaching out to congressional Republicans.”

The lack of transparency is endemic in the Obama administration. Case in point: the enactment of Obamacare. During his 2008 campaign, Barack Obama promised health-care negotiations televised on C-SPAN. Instead, we got a series of notorious backroom deals: the Cornhusker Kickback, the Louisiana Purchase, the Gator Aid.

“It’s an ugly process, and it looks like there are a bunch of backroom deals,” Obama feebly admitted in January 2010 — only to retreat again to the smoke-filled rooms two months later, where he cut the final deals to ram the legislation through Congress.

Obamacare is premised on the belief that government knows best. And those who share that belief all too often regard transparency and public accountability as inconveniences.

Consider the administration’s approach to regulating the proposed health-insurance “exchanges.” Obamacare requires state-based exchanges to “hold public meetings and input sessions,” but it fails to apply these same transparency standards to the federally run exchanges Washington will create in 33 states. The result: Many key questions remain unanswered.

Thus a law written in secret is being implemented in secret, with a maximum of opacity and a minimum of accountability from the administration.

This post was originally published at National Review.

Weekly Newsletter: November 12, 2008

Medicaid Bailout Once Again on Congressional Agenda

This Thursday, the House Energy and Commerce Committee will hold a Subcommittee hearing on various ways to “stimulate” the economy during the current downturn. Witnesses are expected to focus on both additional federal spending, in the form of an enhanced federal Medicaid match and higher funding for the National Institutes of Health, as ways to promote economic growth.

Some conservatives may be skeptical of the effectiveness of both approaches. An enhanced federal Medicaid match would merely substitute federal dollars for state spending, and provide a perverse disincentive for states not to undertake structural Medicaid reforms. Higher NIH funding would similarly lack any short-term “stimulative” effect, as long lead times to evaluate and conduct research trials would likely preclude any impact on economic growth for years. With some experts predicting the federal deficit this fiscal year could top $1 trillion, conservatives may question whether and why Congressional Democrats are attempting to enact all manner of increased federal spending under the guise of economic “stimulus.”

The RSC has prepared a new one-pager articulating 10 reasons why conservatives may oppose a Medicaid bailout for states; the document can be found here.

British U-Turn Illustrates Problems with Comparative Effectiveness

Last Tuesday, the British Department of Health announced a reversal of a ban on “top-up” payments within the National Health Service (NHS). Previously patients who wished to use their own money to purchase drugs not deemed cost-effective by the NHS needed to forfeit their right to basic NHS care. The Government’s reversal will allow patients purchasing their own therapies to maintain their right to NHS care under certain conditions. In addition, the report proposed to raise the National Institute on Clinical Effectiveness’ (NICE) cost-effectiveness threshold for certain drug therapies, potentially allowing British patients access to some cancer drugs which the NHS had previously refused to pay.

Conservatives may view both these developments as illustrative of the premise that comparative effectiveness research may not yield the potential savings its adherents claim. Practical political concerns, sparked by an outcry from the British public over rationed health care, prompted the Government’s reversal of measures designed to save NHS funds. Given that efforts to tie Medicare reimbursement and coverage decisions are likely to prompt the same response from the American public as it did in Britain, some conservatives may argue that market-based reforms to Medicare, rather than government-imposed rationing, would have a more beneficial and long-lasting effect at slowing the growth of health care costs.

The RSC has previously issued a Policy Brief analyzing comparative effectiveness research in greater detail; the document can be found here.

Weekly Newsletter: September 15, 2008

Medicaid: More Spending Does Not Equal Reform

Today, Health and Human Services Secretary Mike Leavitt will be addressing a conference on Medicaid reform in Washington. The symposium comes at a time when some want Congress to pass legislation (H.R. 5268) providing more than $10 billion in Medicaid spending to states as a way to “fix” the program’s problems. However, many conservatives may believe that policy-makers should not use additional spending as a way to shirk from their duties to reform what is often an outmoded model of care.

In the past few years, several states have embarked upon novel and innovative reforms to improve the quality of care provided in the Medicaid program. Most recently, Rhode Island submitted a waiver application to the Centers for Medicare and Medicaid Services (CMS), asking for flexibility to revamp its program. Notable elements of this reform proposal include:

  • Incentives to promote wellness and prevention, including consumer-directed accounts and Health Savings Accounts (HSAs);
  • A shift to home and community-based care instead of a traditional nursing home setting for elderly populations;
  • Incentives to purchase long-term care insurance, so as to eliminate the need for Medicaid long-term care financing;
  • Competitive bidding for durable medical equipment; and
  • A novel financing model that ensures that total Medicaid expenses will rise by up to 5% per year.

    Many conservatives may support these and other similar reform initiatives proposed by states, as one way to slow the growth of health care costs and thereby reduce America’s unsustainable entitlement spending. Moreover, some conservatives may believe that time on the legislative calendar debating a Medicaid bailout should instead be used to discuss these types of comprehensive structural reforms to the program—so that the poorest beneficiaries are not subjected to more of the same from a government health system that does not work for many.

    The RSC has prepared a one-pager highlighting the need for comprehensive Medicaid reform based on examples from several states; the document can be found here.

    Cautionary Tales from Across the Pond

    This past week, a British think-tank published a paper that spoke the heretofore unthinkable: the policy group Reform advocated replacing the single-payer National Health Service with a voucher-based private health system. Under the proposal, individuals would receive a £2,000 voucher to purchase private insurance—injecting competition into a health system previously dominated by government, and bringing with it the potential to slow the growth of costs while achieving better value through improved care.

    The Reform proposal comes on the heels of several disturbing developments regarding the National Health Service last month. One survey found that a quarter of cancer specialists are purposely keeping their patients “in the dark” about treatment options—in order to avoid upsetting those patients when they find out the NHS will not pay for their treatments. Several weeks earlier, the National Institute of Health and Clinical Excellence (NICE)—Britain’s comparative effectiveness institute—adopted a policy of refusing to pay for four kidney cancer drugs, even though the pharmaceuticals made “significant gains” in survival times, because NICE did not believe the drugs were cost-effective.

    Conservatives may not be surprised by any of these developments—as the rationing of care frequently leads to demands to reform or abolish the governmental bureaucracies that deny life-saving treatments to patients. Some conservatives may also believe that the type of changes advocated by Reform with respect to the National Health Service, if applied to Medicare, could allow seniors a wide range of options to receive their health care, while achieving cost-savings through competition that could slow the growth of skyrocketing health and entitlement costs.

    Read the BBC News article: “Doctors ‘Keep Cancer Drugs Quiet’”

    Article of Note: The Hospital-Industrial Complex

    An article in the Wall Street Journal last month revealed the continuance of a troubling trend: hospitals using their monopoly power to raise prices for consumers—helping to contribute to the growth in health care costs. Consolidations in recent decades—coupled with state certificate-of-need laws that provide government-sanctioned exclusivity in most states—have allowed regional hospitals to tighten their grip on many markets, and the Journal article tells the tale of Carilion Health System in southwest Virginia:

  • Colonoscopy prices four to 10 times higher than a local clinic;
  • Neck CT scans more than double the price of an imaging center;
  • A significant spike in regional health insurance premiums to the highest level in the state; and
  • Over $105 million in net income achieved by a non-profit hospital over the past five years.

One local businessman called the area a “one-market town…in terms of health care,” noting that the hospital “has the leverage”—and the article demonstrates that its impact on both physician practices and the insurance premiums paid by thousands of Virginians has been significant.

The piece comes at a time when the hospital industry is attempting to eradicate one of its few remaining sources of competition, by asking Congress to place a ban on the development of physician-owned specialty hospitals. Some conservatives may oppose this measure as a high-handed approach by Washington policy-makers to interfere with free markets, further solidifying existing hospitals’ monopolies, and stifling the type of innovation in health care that new entrants like specialty hospitals can create to slow the growth of health care costs.

Additionally, conservatives may note a letter from the Department of Health and Human Services’ Inspector General from this April, which publicly rebuked several hospital trade associations for making “several statements that misrepresent our findings and draw[ing] several conclusions that we did not make” in a white paper to Congressional policy-makers on the need for a specialty hospital ban. Some conservatives may therefore be highly skeptical of claims from self-interested parties exhibiting monopolistic tendencies, who have made deceptive and misleading statements to Congress to advance their claims—and apparently lack the integrity to apologize for doing so.

Read the article here: Wall Street Journal: “Non-profit Hospitals Flex Pricing Power

Weekly Newsletter: July 7, 2008

Medicare Votes Likely This Week

After returning from its Independence Day recess, Congress will once again return to debate legislation addressing physician reimbursement levels under Medicare. Because Senate Democrats objected to Republicans’ unanimous consent requests to pass a “clean” physician payment bill before the recess, physicians will take a 10% cut in their reimbursement levels unless and until Congress passes a retroactive fix. Additional Senate votes are likely later in the week on this issue.

While all parties agree on the need to address the physician reimbursement provisions, Senate Republicans have called for passage of bipartisan legislation that would forestall the significant cuts to Medicare Advantage plans made in House-passed legislation (H.R. 6331). Some conservatives may be concerned that the House-passed bill’s significant cuts to Medicare Advantage would have the effect of driving beneficiaries away from a privately-run model of health insurance that has provided enhanced benefits and choice for millions of seniors, especially the 2.2 million beneficiaries in private fee-for-service plans. Some conservatives may also believe that the short-term nature of current physician reimbursement extensions, coupled with their potential to become entwined in unrelated disputes and/or “held hostage” due to various political considerations, makes a powerful argument for more comprehensive reforms to Medicare, including a long-term solution to physician reimbursement policy.

While it is currently unclear whether Democrats will continue to block Republican attempts to pass noncontroversial physician payment legislation, or what precise form a more bipartisan bill designed to address the reimbursement provisions will take, the RSC will weigh in with conservative concerns and updates on H.R. 6331 and any other physician payment legislation which may be introduced or considered.

The Legislative Bulletin on H.R. 6331 can be found here.

There are additional RSC Policy Briefs on issues related to the Medicare bill: Physician Payments; Medicare Advantage; Bidding for Durable Medical Equipment; and the Medicare Trustees Report.

Article of Note: Report Finds Comparative Effectiveness Rationing Not So NICE

A report released in Great Britain last week on the occasion of the National Health Service’s (NHS’) 60th anniversary noted the need for reforms in the way the NHS administers care based on comparative effectiveness research. Health Minister Lord Darzi’s study admitted problems with the existing National Institute for Health and Clinical Excellence (NICE), established in 1999 to review the effectiveness of drugs and other therapies. Specifically, the report conceded that “it has sometimes taken too long for NICE appraisal guidance to be made available on newly licensed drugs” and that “there remains unexplained variation in the way local decisions are made on the funding of new drugs before the appraisal takes place.”

With the Congressional Budget Office (CBO) holding up the British establishment of NICE as one model way to achieve comparative effectiveness research in the United States, some conservatives may be concerned by the implications such an institute would present. At a time when the British government has admitted that NICE’s introduction has led to years-long delays in drug approval times and inherently arbitrary rationing of access to drugs from location to location, some conservatives may believe that such a heavy-handed—to say nothing of bureaucratically ineffective—role for government to play in American health care would be both counter-productive and inappropriate.

Read a summary of the clinical effectiveness provisions from BBC News here.

The RSC has prepared a Policy Brief on comparative effectiveness research, which can be found here.