The Alan Katz Health Care Reform Blog

Health Care Reform From One Person's Perspective

Vacations Almost Over – It’s Time to Get Real

Posted by Alan on September 2, 2009


The August vacation is almost over and not a moment too soon. Vacations are supposed to be a time of relaxation, recharging, maybe even contemplation. It’s a break from the norm; a chance to get a new perspective on things.

Sometimes.  Then again there’s the vacation from hell where everything goes wrong and you can’t wait to get back home. The hotel that looked pretty in pictures turns out to make the Bates Motel look hospitable. And let’s not even get into the crowded airports and late flights. Such vacations are not about rest, their about survival.

When it comes to health care reform, August was more of the vacation as disaster variety. A month of demonization (fitting, somehow, for a vacation from hell), dark fantasies, and an ever increasing lack of civility. Instead of an opportunity for all sides to present their differing perspectives and to present persuasive arguments for their point-of-view we witnessed the Outrage of 2009. Sincere people whipped into a frenzy by those who profit from conflict and fear. It was not only a bad month, it was a sad one.

But that will soon be behind us. Labor Day marks the end of summer (at least psychologically if not astronomically). It will soon be time to get serious. Here’s my take on what we have to look forward in September. Some of these items are well publicized, others guesses, and still others the result of wishful thinking. As a whole, however, I expect this list identifies much of what is to come now that we’re done “relaxing.”

  • President Barack Obama will describe ObamaCare.
    According to the Associated Press, the White House is “considering a speech to spell out more details of his goals for overhauling health care ….” My guess is he’ll have to go beyond detailing goals and dive into specific on legislation. To date the President has been content to outline a broad definition of meaningful reform. There were advantages to this approach, but the downside is rapidly overwhelming those benefits. The Administration’s vagueness kept its options open, but allowed Congressional Committees to define the President’s health care plan in the public’s mind. The bills attacked during the various town hall meetings are Congressional proposals, not President Obama’s. The Administration needs to define “acceptable compromise.”  Otherwise opponents of change will continue to savage the process of reform, killing the purpose of reform without having to engage in a debate on policy.
  • The Senate Finance Committee will meet its September 15th deadline for issuing a bi-partisan proposal, or on September 16th we’ll see a Democratic proposal emerge from the committee.
    Senator Max Baucus, Chair of the Finance Committee, and his colleagues are to be commended for seeking health care reform that can gain the support of moderates in both parties. They have spent months working through both broad policies and minute details – hard work on easy issues, a herculean task when it comes to something as complex and controversial as health care reform. The time has come, however, to move on. They have created expectations that the fruits of their labor will be made public by September 15th. That expectation needs to become a reality. To date, President Obama has given them political cover by continuing to speak of principals as opposed to specific provisions. As noted above, however, that position is too tenuous to continue. If the Senate Finance Committee fails to bring forward a compromise plan before the President begins staking out firm political and policy positions their compromise won’t matter. If the Finance Committee acts first, however, the President can elevate their approach to the first proposal among equals. The most potent ordering of things is for the Senate Finance Committee to get specific first with President Obama following suit shortly thereafter. If handled correctly it would create a strong middle ground upon which moderates could take a firm stand.
  • The political attacks will continue and become more vicious …
    The Keith Olbermanns and Glenn Becks of the world have found a ratings magnet: vilify the opposition while rejecting any possibility that opponents might have a reasonable, albeit different, position. Demonizing opponents sells to those already on your side. As cable news blabbers have no need to make policy they are free to paint the world in deepest blacks and whites and “find their audience.” At the same time partisans on both sides are reveling in the fundraising bonus blind anger generates while, at the same time, proving their bona fides to core constituencies for future political efforts. As the August press coverage demonstrates, hate, slander, lies and fear sell. And there are plenty of politicians and media outlets willing to take advantage of this ugly reality.
  • … and the political attacks will become more subtle.
    At the same time the extremists will get even more viscous, lawmakers, who operate in shades of gray, will begin to prod opponents into compromises with stilettos as well as reasoned arguments. An example: Senior White House adviser David Axelrod’s claim that Republican Senators Charles Grassley and Mike Enzi have not acted in good faith during their discussions with Senator Max Baucus and other Senate Finance Democrats to produce a bi-partisan health care reform bill. The attack by Mr. Axelrod is both a means of assuring liberals that the White House is capable of playing hardball as it is of prodding the GOP Senators to continue negotiations.
  • The Status Quo is in for a beating.
    The only way to enact substantial change is to convince people the status quo is untenable. This is good news for reformers as the health care system’s status quo is untenable. Medical costs must be constrained or state governments and private businesses alike will be bankrupt. Families cannot live in fear of facing a choice between financial and health security. The medical infrastructure of emergency rooms and pro bono care cannot continue to handle their ever increasing burden. Advocates of reform will make this case repeatedly and in the harshest of terms. The resulting cacophony will be painful in many senses of the word, but it’s an inevitable part of the process.
  • Many issues will be in play, only a few will be discussed.
    Change will come, either thoughtfully and not. All Americans will benefit from a thoughtful approach.Such thoughtful reform includes tackling medical cost containment. Health insurance premiums, after all, reflect the cost of health care. Those premiums have doubled in the past 10 years, an unsustainable rate of increase. If we’re going to “bend the cost curve” as President Obama puts it, tough decisions will be required. Making those decisions is especially difficult in an environment when consultations on living wills is construed as creating death panels, but making them is essential nonetheless. Politically, however, lawmakers need a bad guy. So the public debate will focus on market reforms (Exchanges and public plans, pre-existing conditions and mandates to buy coverage) which permit the vilification of insurance companies while, hopefully, quieter arguments focus on cost containment. Hopefully, because if health care reform is to have any long term meaning, it needs to control costs.

By the end of the year President Obama will sign into law health care reform legislation. That final package may not look much like the legislation discussed at the town hall meetings in August, but it will dramatically change America’s health care system nonetheless. And when the raucous debates, political warfare and mongering of fear is over, when the reforms are signed into law but before the long process of making them work begins, hopefully there will be time for a real vacation.

3 Responses to “Vacations Almost Over – It’s Time to Get Real”

  1. Bart said

    I’m not a politician, so I fatigue quickly of politicizing issues on order to “get one’s way”. While burning calories this way may procure votes, inflate egos and make money, it’s sheer luck if ‘solutions’ so generated actually address the real problem.
    One ‘real problem’ is the cost of health care. Unless this society shifts from entitlement (give me what I deserve) to giving (let’s take care of our members), then the escalating COST of health care in this economy will trump all other issues, including the real problems of access to, and quality of, care.

    Mr. Katz’ last bullet point mentioned cost containment. But I remain confused about whether cost in this context refers to premiums/taxes contributed to payers, or what is paid for actual medical services. I believe the two are very different: the former represents payment while the latter is cost. It also would seem that policies aimed at trying to modulate the health care economy by regulating payments (the former) would have drastically different long-term consequences than trying to regulate costs (the latter).

    For example, multinational medical device company Device, Inc. (supply name of choice), receives $18K from a hospital for a device utilized during a 2 day stay in which that hospital receives a DRG check for $20K. Thus, Device, Inc. costs 90% of the ‘payment’ while all other resources required for that encounter have to make do with 10% of the payment. This is a very common scenario in medical care, and it plays out repeatedly whether the cost entity is a vendor, hospital, pharmacy, insurance margin, malpractice premium/payout, physician, etc….very complex. If one were simply to reduce ‘payment’, then the dominant cost entity generally would prevail…reducing the presence of others (primary care docs, nurses, etc.) very much to the detriment of patient care.

    Since intervention by a ‘higher power’ appears inevitable in order to cool off the health care economy, could some expert explain why regulatory policies can’t be developed to control cost? For example, if Device (or Pharmacy), Inc. wants to do business in the health care sector, it’s margin is limited to 5%, if Insurance, Inc. wishes to do the same, it’s medical loss ratio is no less than 90%, if Dr. Inc. wants to practice in this economy, her/his earnings are regulated based on his preferred workload, etc. THEN, one can approach the payment issue with some sanity……. It would seem that, in the long run, cost control (not payment regulation) would be a more effective means of governing down the percentage of GDP spent on health care.

    • Alan said

      Thank you for your thoughtful comment Bart. For the record, I was referring to the underlying cost of medical care. The cost is driven by utilization, technology, and consumer expectations, among other factors. Today private insurance and government plans (think Medicare) try to control costs by determining what treatment is covered and what is not. Of course, when these same practices are mentioned in the health care reform proposals currently on the table the hue and cry is about death panels, killing granny and rationing care. My hope is that while the jabbering hysteria fills the cable news programs serious discussions can move forward to find solutions. Then again, I’m an optimist.

  2. npg said

    “And when the raucous debates, political warfare and mongering of fear is over, when the reforms are signed into law but before the long process of making them work begins, hopefully there will be time for a real vacation.”…no, hopefully, agents will not be screwed

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