In past blogs, I have observed that one of the fatal drawbacks to government-run health plans is their inability to respond flexibly to advances in medical science, even when medical evidence is relatively clear and the human and financial costs of not responding are very high. 

Rita Rubin of USA Today,  in the Monday, August 24, 2009, issue of the news daily, in an article entitled “Dialysis Treatment in USA: High Costs, High Death Rates” describes a clear example supporting my argument.  In that article, Ms. Rubin points out that when Medicare began paying for dialysis in the early 1970’s, the prevailing view was that between 3 and 6 hours of dialysis a day three days a week was sufficient.  Medical opinion has now come to the conclusion that 3-day-a-week treatments are extremely inadequate.  As Ms. Rubin summarizes a set of comments by Dallas nephrologist Thomas Parker III, co-organizer of a conference at Harvard’s Beth Israel Deaconess Medical Center:

“Normal kidneys work 24/7, not a few shifts a week, so the standard treatment replaces only 10% to 13% of their function, Parker says.  How much dialysis is enough isn’t clear, he says, because few studies have randomly assigned patients to different amounts to test which approach is more effective.”

Later in the article, she notes that many physicians and patients believe that longer and/or more frequent dialysis can not only improve the quality of life, but also reduce hospitalizations.  Given the fact that Medicare paid $8.6 billion in 2007 for dialysis treatment and that 20.1% of the patients on dialysis died in 2006 from heart disease and infections, one would think that correcting this problem and getting to the right answer would have been an urgent priority for the federal government.

Unfortunately, being a highly-politicized program with annual budget targets and many competing politically-driven demands and limited staff, Medicare has not taken up this issue and addressed it.  Moreover, it is unlikely that any government program would operate differently because the consequences of a mistake in a highly-centralized program are huge.

In a more decentralized health system, driven by cost-saving and quality improvement objectives, this problem would have been tackled and probably addressed by now.

I do not consider government officials to be incompetent or insensitive to issues like this.  However, the reality is that, in a single payer system in which every major decision is highly visible, has political consequences, and affects potentially millions of lives and billions of dollars per year, the likelihood is extremely high that either the decision will take a very long time, or it will never get made. 

Think about it for a moment: is any Medicare official or any lawmaker being held accountable for this bad outcome?  The answer is very clear: no one has been held accountable or will be held accountable for inaction.

On the other hand, if Medicare radically alters its approach and starts to pay for longer and more frequent dialysis, the short-term cost increases will be highly visible and heavily criticized.  The downstream savings in reduced hospitalizations and deaths, and in improved quality of health and life will not be visible, and therefore, the decision will be perceived as a bad one, perhaps shortening the career of whoever makes that decision.

This is not a good way to run a health care system, but a public plan option which ultimately wipes out a more decentralized and innovative set of health care systems would make this mediocre-to-poor decision process the norm across the entire system.

In the Thursday, August 13, 2009, Wall Street Journal, I read an article entitled “End-of-Life Provision Loses Favor.”  In this article, the reporter Janet Adamy refers to a provision on the House of Representatives version of the health care reform legislation which directs Medicare to pay physicians for sessions with patients in which they counsel patients on the need for living wills, health care powers-of-attorney, and other aspects of end-of-life planning.  On the one hand, the provision is one way to get doctors to take the time to get patients to do end-of-life planning, but as Ms. Adamy points out:

“Opponents say the provision shows that architects of the health-care overhaul want to ration seniors’ care.”

Care rationing is highly controversial, and probably could not sustain the support of a majority of Americans.

How did health care reform proponents end up in this situation?

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Periodically, my lifelong decision to be an independent voter, rather than a registered Democrat or Republican gets reinforced. My independence stems from a deep distrust of a concentration of power or financial reward anywhere in our governmental, business, or non-profit sectors.

Recently, I have seen evidence of what happens when there is the following lethal combination of circumstances we have today:

• highly-concentrated government or business power,
• inattentiveness of the majority of the population,
• exceptionally high rewards from the exercise of concentrated power, and
• more power concentrated in ideologically-driven people.

The vast majority of Americans are unhappy and insecure with respect to the political and business environment in which they find themselves. 

Fiscal Irresponsibility at all Levels of Government

Without most of us noticing it, state and local governments, which are required to balance their budgets every year, have engaged in a massive transfer of wealth from the vast majority of their citizens to a relatively small, but exceptionally militant and well-organized group of state and local government employees.  I am not angry at the demands made by these employees in their collective bargaining negotiations, but am disappointed that elected officials have not only supported and caved in to those demands, but have also hidden the true costs of these actions from voters.

In Connecticut, for example, the present value of retirement benefits for state employees, including elected members of the executive and legislative branches of state government, is $40 billion as of the end of the 2007 fiscal year, and it is probably higher today.  For roughly 80,000 full-time employees, that averages $500,000 per employee at the time of retirement.  Although this money is paid over time, it is part of the long-term indebtedness of the state that crowds out the ability of the state to invest in roads, bridges, public transit, education, public health, environmental sustainability, public safety, and rebuilding of our cities, among the much worthier uses to which the money could have been put.

Connecticut is not unique in this regard.  Virtually every state has some astronomical retirement benefit obligation, as amply demonstrated by a report of the U.S. Government Accounting Office, http://www.gao.gov/new.items/d08317.pdf

How did this happen?  Our elected officials are generally well-intentioned individuals with a desire to serve the broad public interest.  However, when confronted with well-organized public employees’ unions who want increases in pay and benefits, it has been far easier to concede on long-term benefits than on short-term pay increases, since the long-term benefits are not required to be reflected in annual state government  income statements.  I do not blame the unions for demanding these benefits, or even the elected officials for agreeing to them, but I believe that the public has been relatively disengaged for too long in monitoring issues like this.

On Monday, July 20, both Houses of the Connecticut General Assembly voted on straight party lines to override Governor Rell’s veto of a well-intended, but flawed, health care bill called the SustiNet bill.  Although the bill had many great features and was supported by many great leaders, one of its fatal flaws was the creation of a health policy board specifically designed to exclude many critical stakeholders, including large employers, insurance companies, hospital leaders, and pharmaceutical companies, all of whom should have been part of the board. 

In effect, the General Assembly, through amendments to the original legislation, set out to create a highly unrepresentative policy board on one of the state’s most critical competitiveness issues.  Until after this bill passed both houses of the General Assembly the first time, few business leaders were even aware of its existence, much less its damaging terms and conditions.  I wrote an Op-Ed piece in the July 19, 2009, Hartford Courant expressing my opposition to this legislation as enacted, specifically, in part because of whom it excluded from the health policy board, and called some of our elected representatives.  While I obviously did not succeed, I did my best to make sure that elected legislators knew how I felt.

Too many business leaders believe that they can escape fiscal crises and problems in their headquarters states by leaving those states, but we are increasingly coming to realize that there is no place to which to escape.  The federal government will end up bailing out state and local governments, as it has done with significant chunks of the stimulus legislation, and all of us will pick up the tab.

The answer is not to replace the incumbents, whether they be Democrats or Republicans with other incumbents, nor is it to have term limits (which I support for other reasons.)  The answer is a more continuously engaged and active citizenry, particularly in the business community.  Too many major CEOs and other senior executives think of themselves as world citizens who have little connection to the communities in which their companies have major operations.  Too often they delegate management of government affairs to specialized legal and government affairs professionals.

If we are to constrain the absolute power of government officials and the special interests to which they cater, we need the check and balance of continuous engagement by a much larger part of our citizenry.  As travel writer Rick Steves stated in his book Travel as a Political Act,

“Whether you’re a mom, a schoolteacher, a celebrity, a realtor, or a travel writer, it’s wrong to stop paying attention and let others (generally with a vested interest in the situation) make political decisions for us.  Our founding fathers didn’t envision career politicians and professional talking heads doing our political thinking for us.”

Although I do not plan to go as far as folk singer Arlo Guthrie and become a member of either party, I agree with his comment in the interview entitled “Just Folk” in the Sunday, July 26, 2009, New York Times:

“I became a registered Republican about five or six years ago because, to have a successful democracy, you have to have at least two parties, and one of them was failing miserably…We needed a loyal opposition.”

To put it simply, if we are to avoid the corrupting effects of concentrated power, we must take back that power from those who have it.  I do not believe those with power today are bad people.  In fact, I have much in common with their goals, and believe them to be decent people who want to do the right thing.  However, without checks and balances, everyone, including me, is highly likely to make significant and bad decisions.  We cannot let that happen.