The American Medical Association has endorsed the Senate health care plan. In light of the role that doctors and hospitals played in defeating health care reform 17 years ago, this was a significant development, but it was not particularly a surprise. However, I hadn't realized how much consensus there is in favor of health care reform until I read what AHIP (the private health insurance lobbying group) and the U.S. Chamber of Commerce are saying about the Senate bill.
The A.M.A. has been largely supportive of health care reform for some time. The current legislation achieves a number of its goals. There will be near-universal health insurance coverage, and health insurance policies will be far more comprehensive. There will be coverage for pre-existing conditions and no annual or lifetime limits for necessary medical care. There will be no public option, thus postponing the development of a "single-payer" system such Canada's or Britain's. Best of all from the A.M.A.'s standpoint, there will be no expansion of the relatively low Medicare reimbursement rates through either a public option or Medicare buy-in plan. Had either of those provisions passed the Senate, doctors and hospitals would almost certainly have opposed the legislation. The legislation will increase demand for medical care which will ensure a market for the services of medical care providers. It is therefore not surprising that doctors and hospitals support the legislation.
More surprising is the rather tepid opposition being offered by AHIP and the U.S. Chamber of Commerce.
Karen Ignagni, President of AHIP, issued a statement on December 19, in which she advocates changes to the current legislation – notably eliminating the $10 billion per year tax on health insurance companies and restoration of the 14% premium that the government pays for Medicare Advantage plans – but she does not call for the defeat of the legislation. Here a portion of her statement:
“The debate before us today is not whether insurance market reforms are needed. In fact, health plans proposed and support a complete overhaul of insurance market rules and new consumer protections to ensure all Americans have guaranteed access to affordable, portable coverage. The critical policy questions are whether the current legislation can bend the cost curve and result in a sustainable system. While the bill makes important improvements in access and takes steps towards cost-containment, it lacks accountability to ensure that costs are brought under control. Moreover, this bill includes provisions that will increase costs for families and small businesses and disrupt the quality coverage on which millions of Americans rely today.”
The private health insurance industry stands to gain much under the current legislation. Health insurance will be mandated, thus vastly expanding the market for their product. It is for this reason that many liberals oppose the Senate bill. Many on the left attribute all of the problems in health care to "greedy" insurance companies that deny people medical care. Regular readers of this column are aware that I do not agree with this characterization of the insurance industry. Someone has to make utilization review decisions, and experience has shown that private companies are far more effective in this role than the government is. One might just as well criticize doctors and hospitals as being "greedy" for charging too much. But the problems here are not moral, they are economic, and the solution is to put in place a system that covers everybody but rewards efficiency. In my opinion the private health insurance industry is a key component of that solution, if administrative costs can be brought under control. That is what the health care legislation attempts to do.
Finally, here is a lengthy list of proposals for health care reform being touted by the Chamber of Commerce, the main business group that has been opposed to the House and Senate health care reform legislation. Notice how many of the following provisions are already contained in the health care bill, including individual mandates, creation of pooling mechanisms such as insurance exchanges, subsidies for low-income persons to purchase insurance, elimination of exclusions for pre-existing conditions, comparative effectiveness research, wellness and prevenion, creation of medical homes, administrative simplification, pay-for-performance reform, long-term care reform, and (drum roll) … "living wills and end-of-life issues." Is the Chamber of Commerce finally endorsing "death panels?" Here are the Chamber's proposals:
1) Get costs under control. Use an all-of-the-above strategy.
Medical liability reform
FDA pathway for biosimilars
Health information technology
Comparative effectiveness research
Wellness and prevention
Coordination of care and medical homes
Pay-for-Performance reform
Combating fraud and abuse
Living wills and end-of-life issues
Reinsurance
Consumer-driven health options
Small business pooling
Administrative simplification
Long-term care reform
Tax parity: Let individuals/small business deduct the full cost of insurance expenses
Without spending a trillion dollars or raising taxes, we could implement these and many other reforms that would help us start to bend the cost curve.
2) Reform the insurance system.
Eliminating the use of pre-existing conditions or health status
Guaranteeing that any individual or entity will be issued a policy
Guaranteeing that policies will not be revoked
Place reasonable limits on rating differences
Subsidies for those who cannot afford coverage
An individual obligation to obtain coverage
For negligible costs to the taxpayers, we could make the insurance system work. Insurance companies support it. An individual obligation is necessary to the equation, and would raise billions for the government that could be spent toward subsidies for the poor. New rating rules would make the system fair for small business and the selfemployed.
3) Create a vibrant market place.
Create a national all-inclusive connector/exchange that removes fragmentation
Should allow individuals and businesses from anywhere in the country to enroll
Should facilitate improved pooling mechanisms, choice, and competition
These three simple steps, at low cost to taxpayers, could make the insurance system work for everyone (thereby increasing access for the uninsured), improve our health care delivery system, and make serious progress toward controlling costs. They have support from a vast array of stakeholders. We don't need a $1-2 trillion dollar possible government takeover of health care — we need simple, pragmatic reforms.
Employers, like individuals, are consumers of health care, and they stand to gain from any changes that will make health care more affordable. If we can lick this problem the American workforce will be more productive and our businesses will be more competitive.
The positions now being taken by the AMA, AHIP, and the Chamber of Commerce are persuasive evidence of the necessity to overhaul our system of health care by extending health insurance to cover more people and all medical conditions. Different groups may object to specific aspects of the plan – principally on the revenue side of the equation, such as where cuts in federal spending will be made and who will have to pay the taxes necessary to purchase health insurance for an additional 30 million people – but there is a surprising amount of consensus on what we must do.
Visit Professor Huhn's website on health care financing reform for links to information about proposed legislation, studies and reports, public agencies, and private organizations concerned with this issue.
{ 8 comments… read them below or add one }
I'm not sure the AMA represents "doctors and hospitals" nor do I think "tepid opposition" equals consensus. It's been unanimous that healthcare needs some reform all along, but it's nearly as unanimous that the current bills suck.
larry,
If I were to pick one item that surprised me the most, it is that the Chamber of Commerce supports the individual mandate. I suppose it makes sense. Health care premiums will come down if all people are insured, for two reasons: healthy people will be paying into the system, and doctors and hospitals won't have to overcharge insured patients to cover the cost of paying for uninsured patients. How can a conservative oppose the individual mandate in light of the fact that both employers and health insurers support it?
AHIP and the COC also support subsidies permitting low-income persons to purchase health insurance. That makes sense, too. Mandates and subsidies go hand-in-hand. But the money to pay for those subsidies (about $100 billion annually) has to come from somewhere, either new taxes or cuts in spending. If someone wants to criticize the revenue side of the bill then they have to identify alternative sources of funding to pay for the subsidies. Again, this places conservatives in a box.
I like the Senate bill. In my opinion the opposition to the bill from both sides is ideological rather than practical. Liberals have elevated the private insurance companies to demons that should be exorcised rather than placated, and conservatives have a visceral reaction against government spending. But as a practical matter, we have to extend health care to everyone (thus necessitating a substantial redistribution of resources), and we have to control costs (thus necessitating efficiency measures such as competition and utilization review that only the private sector is capable of performing).
The private insurance companies and corporate executives quite naturally do not want to pay higher taxes to pay for this reform. But their position papers indicate that they support the fundamental aspects of the reform legislation.
You are either living in a dreamworld or being disingenuous to claim the COC is "finally endorsing death panels," professor. Here is the chamber's latest "tepid" statement:
U.S. Chamber Urges Senate to Jettison Irresponsible Health Care Bill
There is a broad consensus that this bill is wrong for America
WASHINGTON, D.C.—Bruce Josten, executive vice president for Government Affairs at the U.S. Chamber of Commerce, issued the following statement in response to the Senate’s first vote to move toward passing a health care bill:
“Now that sixty Senators have decided against using their opportunity to improve the latest version of health care reform, it appears the concerns of the broader business community will not be addressed. We recognize the inclusion of a few improvements in the nearly 400-page Manager’s Amendment, which was revealed Saturday morning and voted on Sunday night. However, slightly increasing the threshold for minor small business tax credits is more than cancelled out by significantly increasing the payroll surtax and the addition of a new voucher system that will devastate those same small businesses.”
“We are disappointed that Senators would be willing to trade their votes for favors to their states, despite knowing that this bill will create considerable new burdens for the states’ job creators and will do nothing to lift us out of the current economic quagmire. We concur with a broad array of groups from all across the spectrum that say this bill is no good – the Senate should reject this trillion dollar bill that raises taxes by $500 billion, and instead design a targeted bill that addresses health care cost without killing jobs or denying care to Medicare patients. Start over.”
larry,
I could be wrong, but I think {"…and (drum roll) … "living wills and end-of-life issues." Is the Chamber of Commerce finally endorsing "death panels?""} is more likely a tongue-in-cheek question than a 'claim'. As I recall, Ms. Palin and her cronies were the ones who tried to turn a proposed Medicare paid voluntarily requested consultation with a physician into a coin flip by the grim reaper. It seems to me that the COC, in its list of talking points for "three simple steps" toward reform, has simply acknowledged that "Living wills and end-of-life issues" are topics worthy of inclusion in healthcare reform legislation.
And, RE: "We concur with a broad array of groups from all across the spectrum that say this bill is no good – the Senate should reject this trillion dollar bill that raises taxes by $500 billion, and instead design a targeted bill that addresses health care cost without killing jobs or denying care to Medicare patients. Start over.”
Since the US COC claims to represent over 3 million businesses, and according to Professor Huhn, "we have to extend health care to everyone (thus necessitating a substantial redistribution of resources), and we have to control costs (thus necessitating efficiency measures such as competition and utilization review that only the private sector is capable of performing)." let's turn the final crafting of reform measures over to a blue ribbon group of American business leaders supported by the bean counters of the CBO. Let them hammer out a proposal that makes economic sense without including pork as payment for votes. Then let the legislative legal minds put it into a form that is worthy of a yes or no vote by the reconciliation committee. Could that be a workable solution?
I realize the professor was tongue in cheek in writing "death panels," but of course the death panel hyperbole was about rationing and repeating it as if it's something else is partisan hackery on the professor's part, and ignorance on yours, apparently. There is in fact a creepy panel within the bill that will make rationing decisions, and Grandma Reid is trying to make it so a two-thirds majority will be needed to amend that part of the legislation, for those who are keeping score.
My main problem with the professor's post however is his dishonest implication that the COC is supporting this bill in part when it's quite clear they recognize the bill as the fiasco it is. He also pretends that the AMA represents a majority of doctors and hospitals. Obama pulls that kind of fib all the time, and it's a very cynical ideology that allows lefties to operate so dishonestly.
larry,
Hmmm…..I didn't realize you were so proficient at neuro-linguistic analysis. I guess that's just one more sign of my overall ignorance and lack of communication skills. Actually, my comments were based (I thought anyway) on a literal reading of the Professor's statement:"long-term care reform, and (drum roll) … "living wills and end-of-life issues." Is the Chamber of Commerce finally endorsing "death panels?"" and your comment:"You are either living in a dreamworld or being disingenuous to claim the COC is "finally endorsing death panels," professor." The remainder of your comment consisted of a copy of a brief statement from the COC that had nothing to do with either rationing or end of life issues.
It is my opinion that "Living wills and end-of-life issues" were included at face value with about 14 other items intended to "Without spending a trillion dollars or raising taxes, we could implement these and many other reforms that would help us start to bend the cost curve." Of course, the followup claim:"These three simple steps, at low cost to taxpayers, could make the insurance system work for everyone (thereby increasing access for the uninsured), improve our health care delivery system, and make serious progress toward controlling costs." made by the COC could be interpreted to suggest that the COC did actually endorse Grandmacide or rationing of Grandma's cancer treatments as a cost saving tool. However, ignorant as I may be, I do not believe that was the intent of either the COC or the Professor.
And finally, thank you for only considering me ignorant and not dishonest too. That seems to be quite a concession from an individual who implies that his cohort has a monopoly on The Truth.
As a lawyer, I can attest to the fact that the ABA does not speak for me or many of my legal colleagues.Why should we think the doctors are different. Larry is correct that the AMA should not be construed as the voice of a majority of the medical community on the latest iteration of Obamacare.
This same logic applies to the Professor's comment that conservatives should support the individual mandate because "both employers and health insurers support it". Those entities are driven by the profit motive and have concluded that support is in their interest. With insurers the reason is obvious. The individual mandate creates, by government fiat, millions of new customers. Of course insurance companies support it. But it does not follow that conservatives should support it. Perhaps the Professor can enlighten us by giving voice to his unspoken assumptions as to why "conservatives" naturally follow the political dictates of "employers and health insurers".
The Professor is also wrong that those who criticize "the revenue side of the bill" are required to "identify alternative sources of funding". Since, contrary to the self-congratulatory rhetoric of Harry Reid, there is no fundamental right to tax subsidized health care, conservatives are free to criticize all aspects of the bill including the fact it is economically unsustainable, without offering "fixes". The Democrats never attempted to craft a bi-partisan bill. It is their albatross.
I was too harsh Dan S. and didn't mean "ignorant" as the insult it has usually come to convey. The media has harped on "death panels" to twist what was meant by the original use of the term in order to squelch the very real issue of rationing and I now assume that many folks simply swallow that propagandistic version. Your statement on the term led me to believe that was the version of the term you were referring to. The professor should know better as I've pointed it out several times to him, though he continues to use the term to simply demonize dissenting voices.
As to the gist of his post, I don't see how you can deny that he's implying that the COC and "doctors and hospitals" are more supportive of the current effort than they actually are. This kind of disingenuous spin coming from supporters and politicians is insulting and a major factor in Americans' declining support for the bill.