On Friday, February 26, 2010, Gerald F. Seib, the Wall Street Journal reporter for the Capital Journal column, wrote an insightful column entitled “Parties’ Differences Are Clear – and That’s a Start.”  In his column, he explained clearly the philosophical differences between Republicans and Democrats on health insurance reform.

He stated that there were three fundamental differences:

• Democrats favor comprehensive reform and transformation; Republicans favor a more incremental approach.
• Democrats believe that access is the priority, rather than cost reduction; Republicans believe that if health care costs are reduced, the access problem will get solved.
• Democrats believe strongly that the government needs to set standards for health insurance and health care; Republicans believe that the market, particularly consumers, need to decide what they want for health insurance and health care.

Where do I stand?

• I am somewhere between the two parties on the comprehensiveness issue, although I tend to believe that comprehensive reform opportunities come along infrequently and we should take advantage of this one.  On this issue, I would agree with the Democratic philosophy.
• On the other hand, I do not believe we can tackle the insurance access issue without understanding why access has been a problem in the past. Runaway health care costs cannot be deferred until later.  Business and global competitiveness depend on addressing cost before access.
• Relative to health care needs, I believe the government should create a safety net for those unable to get coverage from private insurance, although I do not believe that safety net should include either guaranteed issue or elimination of pre-existing condition requirements for private insurance policies.  The burden for the least healthy members of our society, and them alone, should be borne by all citizens, not in a way that burdens every private insurance policy.  Government is totally ill equipped to decide on minimum coverage for everyone else.  Over the years, elected officials have repeatedly added coverage mandates to all insurance policies because of the power of special interest groups, whether or not the mandates represented good medicine.  Think back to the excessive expansion of bone marrow transplants combined with high-dose chemotherapy in the early 1990’s because cancer advocacy groups mistakenly believed it could save lives.  In fact, after a Congressional mandate was also adopted in many states, the treatment was found to be worse, on average, than doing nothing.  It shortened lives.

Some very smart people have said to me: “Why don’t we solve the insurance problem now, since we can, and we’ll get to cost reduction later?”

Aside from the competitiveness issues to which I referred above, there are two other problems with expanding coverage and not dealing with upstream prevention and health care system issues:

• Giving someone access to health insurance is not only not the same as giving them access to health care, it often results in lower quality care for everyone because of increased demand, and, eventually, decisions by doctors to stop treating Medicaid patients because they get reimbursed less than they do through commercial insurance.  Having an insurance card, but no doctor to use it with, is useless. Massachusetts has had universal health insurance since 2006, but both the access to care and the quality of that care have suffered.  More non-elderly adults report difficulty in getting access to physicians in 2009 than they did in 2007.
• To the degree that there is universal insurance, but inadequate access to doctor care, there is even more strain on our emergency departments. Many studies have pointed out that a majority of the people who access the emergency department for non-urgent care, that is, inappropriately, have insurance coverage, but either do not have timely access to care or are too impatient to wait until they can get access.  The system gets stressed at its weakest point, emergency care.

I am most disappointed that the Democratic majority in Congress and the very capable White House staff could not establish a prevention and wellness agenda, and begin to take on the badly broken fee-for-service health care payment system.

People who argue the practical politics of tackling the insurance issue always point out to me that politicians are swayed by hard-luck stories, individuals who died or went bankrupt because they could not afford sufficient health insurance to cover catastrophic health problems like cancer, heart disease, or a serious injury.  Unfortunately, no health insurance system can eliminate these tragic stories.  Moreover, increasing demands on the health care system without increasing the supply of physicians and nurses creates other kinds of tragedies.

Politicians are very moved when an individual tells a story about being unable to afford a “life-saving” cancer treatment because of no or inadequate health insurance. What puzzles me about these stories is whether the patient has attempted to get relief directly from the pharmaceutical manufacturer.  Every pharmaceutical company has programs to provide life-saving drugs for individuals who cannot afford them, and they provide relief for many patients every year.

However, the tragedy of someone who had no primary care physician because doctors in his or her community did not accept Medicaid patients, and, who, as a result, has an undiagnosed heart or diabetic condition, is a harder one to portray on the evening news.  The patient generally does not understand that, but for a stingy government program, he or she might have had access to a doctor who could have diagnosed and treated the condition earlier.  A public health official from India described the explosive growth of undiagnosed chronic disease cases as a “health tragedy in slow motion”

Implementing universal and affordable health insurance without addressing the imbalance between supply and demand in the underlying system will simply swap one kind of tragedy for another, at a much higher cost to the taxpayer and to businesses that can create jobs to bring many more people out of poverty.  The Democratic majority seems hell-bent to do something, even if it is the wrong something, relative to health insurance.  That’s too bad, and we will all pay dearly for the mistake.

Not surprisingly, since this is the first anniversary of President Obama’s inauguration, and the special U.S. Senate election in Massachusetts has produced a result that seemed inconceivable six weeks ago, a Republican victory, many people have asked my opinion of President Obama’s performance.

I met the President four different times before he was elected, three of those times at National Urban League events. President Obama struck me as a person with virtually unlimited growth potential and tremendous intelligence and character, and I still believe he has those qualities.

At the same time, I remind myself that he had no executive experience of any significance before he secured his first executive job, being President of the United States.  I expected him to make some rookie mistakes because of his inexperience as a chief executive, and he has.

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I am going to make some end-of-the-year observations about the way I see the political system, the economy, and our society evolving.

Many elected officials do not have the political will to address fundamental structural economic and political issues.  We built an economy after World War II promising middle class wages for all Americans, but without the foundation of skills and educational capabilities to make such promises sustainable.  Public sector labor unions and unions in heavily politicized private sector industries like the automobile industry, successfully negotiated collective bargaining agreements allowing people with very low skills and educational attainment to secure middle class wages and benefits, and protections against downsizings, even as our economy has had to become more globally competitive.

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In the Monday, November 23, Wall Street Journal , reporter Melinda Beck recounts a number of our successes in improving public health in an article entitled “20 Advances to be Thankful For.” Among the advances she highlights are:

• The fact that we had the same number of traffic fatalities in 2008 as we had in 1961, which is remarkable considering the significant increase in the driving population, the number of cars on the road, and the number of miles driven;
• The 50% decline in trans fats in packaged foods since 2006;
• The fact that 71% of our population lives under either a state or local ban on smoking in workplaces and/or restaurants and bars; and
• The fact that the percentage of secondary school that no longer sell soda, candy, or high-fat snacks have each risen to 64%.

I zeroed in on this article for two reasons:

• It reminds us that we are doing many things well as a society, even though the media often choose to focus on things that are going wrong.
• More importantly, there are multiple success stories from which we can learn how to improve overall population health.  Government intervention was a factor in every one of these cases, but it was not the only factor.  There were many forces, including private sector advocacy groups, that influenced human behavior for the better.

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In the October 21, Wall Street Journal, there was an article entitled “Japan Post Goes in New Direction.” Reporters Atsuko Fukase and Allison Tudor reported on a change in leadership and the potential reversal of the government’s commitment to privatization.  As they described the unfolding situation, they cite a statement from the chairman of the Japanese Bankers Association, who stated that he believed that private banks would face unfair competition from a government-owned Japan Post that offers banking services.

If this sounds like the concern expressed about the “public option” U.S. health insurance reform proposal, there is a good reason: the issues are remarkably similar.  In the U.S., the U.S. Postal Service has largely avoided competition with the private sector, except in the area of package delivery, in which it competes with UPS and FedEx, express mail, in which it also competes with these same companies, and international mail, in which it competes with DHL, and, more recently, Pitney Bowes.

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Many people sought my reaction to President Obama’s health care speech.  I had a mixed reaction.  It was reassuring to see him take a decisive position in staking out the case for reform, his priorities, and the common-sense proposals on which there appears already to be agreement.  I also think that he was more eloquent than I have ever seen him on any issue, and I felt inspired by his leadership skills, and his obviously sincere and deep moral values that drive his passion on health care.

While I believe that we should attack the health crisis first, then the health care delivery crisis, and then attack health insurance, rather than his obvious prioritization of health insurance, his decisiveness and strong leadership has value independent of how he prioritized the issues.

There are two fundamental problems with his plan:

• The proposed public option is a flawed solution to the problems he outlines; and
• The proposed methods for paying for expanding care to tens of millions of additional Americans are highly unlikely to yield the revenues he has projected for them.

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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.

Bob Herbert published an Op-Ed piece in the Saturday, July 11 New York Times entitled “The Human Equation,” in which he takes the Obama administration to task for not being more aggressive in addressing the unemployment crisis in this country.  He says:

“I’d like to see the president go on television and, in a dramatic demonstration of real leadership, announce a plan geared toward increasing employment that is both big and visionary – something on the scale of the Manhattan Project, or the interstate highway program, or the Apollo spaceflight initiative.”

He goes to propose a “Rebuild America” campaign to put people to work rebuilding infrastructure, including roads, schools, electric power grids, and mass transportation. 

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