Commentary from Dave Durenberger

November 10, 2009

WATCHING HISTORY
The Democratic House of Representatives did what they promised Saturday night and delivered an historic expansion of health care access and coverage combined with health insurance reform and the promise of health care payment changes to reduce poor quality and high cost care. Republicans were permitted air time for their last-minute reform efforts and their anti-abortion amendment. The latter passed and is credited with giving Nancy Pelosi the votes she needed to pass the health reform bill.

The Senate will try to take up the bill as soon as possible. Then real legislative history is made when the House and Senate leadership take their respective bills into conference with the White House. That conference will produce the bill which commits President Obama to deliver on his campaign promise to provide affordable access to health care services to all Americans. The challenge is to make it affordable to all Americans, including future generations of Americans.

President Obama clearly promised that by the end of his time as president we could measure "affordability" by the fact that family health insurance coverage would cost $2,500 less than it would have if nothing was done to expand coverage. That will require President Obama to do something no other has done: Take on the Congress and the medical industry. To do that requires him to implement real health insurance reform that reduces insurance costs to consumers and to doctors and hospitals, while making it much more productive in reducing underlying medical care. This means both private insurance and the Medicare, Medicaid, VA and TriCare programs.

ON TO THE U.S. SENATE
A year ago, a member of the U.S. Senate was elected president for the first time since 1960. In fact, three members of the Senate were candidates for president and two were finalists. Senator Ron Wyden (D-OR) and Senator Bob Bennett (R-UT) had anticipated this event and launched an effort in the Senate to create a bipartisan health reform bill. Both had lived through the Clinton reform effort and believed the Senate could avoid a repeat. By the time the party conventions rolled around they had seven Democratic and seven Republican senators join them. They also formed a personal bond around the commitment, "If not now, when? If not us, who?"

Candidates McCain and Obama were nowhere near as invested in health policy or its reform. But they took positions. In their debates they differed not on the need, but largely on tax policy choices to finance coverage expansion. Then came Sarah Palin and Joe the Plumber and the end of bipartisan anything. Shortly after the elections, Bob Bennett was informed he would have a Republican challenger for the seat in the Senate he and his father before him had held for decades. Bob got off the bipartisan effort and, like formerly bipartisan Senate Finance Committee leader Chuck Grassley (R-IA), joined the opposition to universal coverage, "big government, and socialized medicine."

That leaves a serious leadership vacuum in the Senate. Harry Reid isn't George Mitchell when George is what reform policy requires. And Max Baucus and Tom Harkin are not Russell Long, Ted Kennedy, Bob Dole, Bob Packwood or Lloyd Bentson. The Senate has a better bill than the House, but it also has a 60-vote requirement which empowers the odd-ball "if not my way, the highway" members - like Joe Lieberman claiming that something like a public insurance plan violates his "conscience." I guess I don't understand Conservative Judaism. Or Ben Nelson (D-NE) who has a "Catholic conscience" on abortion and an insurance executive's self-interest objection to anti-trust rules being applied to his industry.

THE ART OF THE POSSIBLE
"We should rewrite the whole bill, there is considerable unease on both sides of the aisle about the impact of this bill, and as more analysis is done, I believe those concerns will only grow."… Senator Susan Collins (R-Maine), New York Times 11/10/09.

LET'S BE HONEST
"Let's be honest, the goal isn't to see whether I can pass this through the executive board of the Brookings Institution. I'm passing it through the United States Congress with people who represent constituents. I'm sure there are a lot of people sitting in the shade at the Aspen Institute - my brother being one of them - who will tell you what the ideal plan is. Great, fascinating. You have the art of the possible measured against the ideal."… Rahm Emanuel, President Obama's chief of staff, New York Times 11/10/09.

by Chris Weyant

PASS NATIONAL HEALTH REFORM NOW
Doing nothing is not an option. The U. S. Senate must face up to the reality that the status quo in health care is unsustainable. The fiscal, economic and personal consequences to most Americans of doing nothing is unconscionable. The impact of health care costs on budget deficits, the increasing number of uninsured and underinsured, the unsustainable cost growth in public and private programs and the adverse impact on employment and our economic recovery and international competitiveness are just some of the consequences. For that reason, it is impossible for the majority party - the Democrats - not to insure that policy reform leads to system reform leads to reducing the individual and family cost of access to care - by $2,500 per family plan according to candidate Obama.

Health reform is a journey, not a destination. As the House demonstrated Saturday, Democrats have an obligation - and an historic opportunity - to do what many presidents and members of Congress have tried and failed to do for decades. If the Senate does not work with the House to take the first step toward change, it is impossible for others in the system itself to take the next. A Democratic president like Obama has an obligation to do for coverage expansion, insurance payment reform and cost containment what other executives have tried and failed to do. Democratic and Republican governors and legislators across the country have opportunities to provide health systems with the opportunity to be examples to each other.

The Health Care Industry will never reform itself. The $2.5 trillion medical industry has enjoyed enormous innovative and economically rewarding success over the years. Little by the way of policy change has been demanded of this industry during the current legislative reform process, a process that will only increase the business of health care. In the years ahead we must ask them to shoulder the burden we have asked taxpayers and others to take on so that all Americans may enjoy what is a presumptive right of citizenship in every other developed nation in the world. The notion, for example, that the value of what health care professionals and technology producers do for us cannot be measured and compared for cost effectiveness should not be protected by public policy.

Universal coverage and private insurance reform is a necessary prelude to economic efficiency and quality improvement in health care delivery. I believe, with many of the nation's insurers, that the Congress has missed an opportunity to set predictable national rules for insurance markets that would bring much greater efficiency and productivity in health care for the premium dollar. The divisive and misleading debate over the "public plan" would have been unnecessary had Congress gone all the way to national market rules.

The wealth of information generated from insurance claims data and the evolution of information technology to clinical care could speed the day when the industry itself drives value out of health and health care. Despite that, enough progress has been made by members and staff toward the goal of competition to reduce health risks and care system failures that you must support it.

POLITICAL RE-ALIGNMENT
Critics were quick to pick up on the AMA and AARP endorsements of the House Reform Bill, as well as the earlier PhRMA endorsement. Traditional Republican allies like PhRMA and AMA were backing a Democratic bill. AARP, whose endorsement of the Republican Medicare Modernization Act of 2003 made its passage possible, were also accused of an excess of partisanship. The biggest surprise, though, has been the U.S. Conference of Catholic Bishops. It appears to have abandoned any pretense of political impartiality in rejecting President Obama's pledge to work with them to make abortion rare.

The Founding Fathers of this country, and the first and only Catholic president, would be surprised to see the Catholic bishops in the office of the Speaker of the House on the eve of an historic vote on universal health care coverage dictating the terms under which Democrats and Republicans could be free to support this historic-for the U.S.-effort to assure its citizens the right to affordable health care. The Stupak Amendment was a not-so-clever way to expand a 34-year old bar against funding abortion services in public insurance programs to private insurance. Five states currently have enacted such prohibitions. Their constitutionality has yet to be tested. The Stupak Amendment would make this the law in 50 states.

Abortion wasn't the only deal the bishops made with the GOP. They stood aside to let the Republicans and right wing media define "euthanasia." The likes of Sarah Palin used the August invention of "death panels" as a means of "killing" the health reform legislation which the House and the president favored. To top it off, the bishops brought out the principle of "subsidiarity" from Catholic social teaching as a foundational principle for this reform. In contemporary Republican "kill Obamacare" terms, that simply means that health insurance regulation and health care coverage should be left to the states wherever possible rather than the national government. So, a political journey which began in the mid-1970s for traditionally Democratic Party Catholics to the Republican Party is continuing to gain strength.

As a Catholic Republican, I am puzzled by the way in which mere mortals can shift the moral priorities of a Church over what, for a 2,000-year-old religion, is a relatively short period of time. As a new member of the U.S. Senate, I stood proudly with my Church in opposition to the expansion of the nuclear arms race, in definition of a just war, in efforts to reduce racial and economic discrimination and enact historic civil rights legislation.

How did a national law to prevent insurance companies, whose premium costs are defrayed in part by tax subsidies, from providing medical services related to abortion get to be a higher public priority for all Americans, not just Catholics, than financing access to health care services? Especially when it is unlikely this law will have that great an impact on the number of abortions performed in this country.

THE AMBASSADOR FROM ST. JOHN'S UNIVERSITY
Miguel Diaz was a 46-year-old professor of philosophy and theology at my alma mater when President Obama asked him to be the U.S. Ambassador to the Vatican. The religious right in this country had some reservations about the Cuban-born Diaz and his campaign support for a president whose abortion policies they opposed. But the Vatican welcomed him. Ambassador Diaz does not welcome the prominence of the abortion issue in the relations between the U.S. Catholic bishops and the U.S. president, whose policies and positions Ambassador Diaz must explain to those who lead the Roman Catholic Church. Said Diaz in a Minneapolis Star Tribune interview this week: "As a person of faith, I am stunned by any effort that seeks to divide us."

by Trevor

NOBODY WANTS TO HELP GET IT RIGHT
If you were part of an industry that Americans will pay $2.5 trillion to provide $1.5 trillion worth of value, would you want to change? Of course not. You'd want to create even more public demand for whatever you do. When a president of the United States commits the public treasury to expanding health insurance coverage to 100% of Americans, you hire lobbyists in Washington, D.C., to maximize the effort to expand coverage and minimize its financial impact on your business. A reported $253 million worth of lobbying was done in the first six months of 2009 by, among others, 1,752 insurance company lobbyists (as of 9-1-09).

So far they have all been successful. Interestingly, only one of the industries was really willing to change. That segment of the health insurance industry that represents a majority of the already insured was willing to transform insurance regulation from state to national rules to put competition among them at the level of risk assumption and care quality improvement. But the individual indemnity and specialty insurance segment fought it from the right, and the single payer and public plan advocates fought it from the left. So we missed a great opportunity to maximize purchasing/payment power.

No other industry offered to give up any major payment policy to which they'd become accustomed. (Hospitals gave up a little DSH because a few big academic centers were the only beneficiaries). Largely because it would move us from a system that pays every producer the same, to a system of differential payment based on comparative effectiveness, consistent access and quality, and financial accountability for results.

Consider the medical technology and the information technology industries. Drug, device and diagnostics companies have become accustomed to 70-80% margins on everything they produce that meets safety and efficacy tests. That they will not change because financial investors may go elsewhere. The info tech suppliers want to make even better margins off a medical industry that is so fractionalized that I companies can use government IT mandates to charge prices that in the public market (see Vista and the V.A. or any other country in the world), would be exorbitant.

DELEGATING HEALTH CARE DECISIONS TO COMMISSIONS
All of us who have tried to change national health policy have come to the conclusion that nothing as costly or as important as health or education should be left to the collective judgment of 535 people. Put another way, how can Medicare do as well as a private health plan can when it has 535 men and women, with varied experiences and little understanding of health insurance, on its board of directors?

Former Senate leader Tom Daschle wrote a book last year arguing for a National Health Board to make the difficult decisions about what to pay for in health care and how to pay it. The health policy reform legislation most likely to come out of this Congress as "ObamaCare" will likely have a couple of commissions of "independent experts" to whom some amount of decision-making authority is delegated, subject only to Congressional veto.

Two observations: First, "Government run health care" actually works, unless the health care industry is allowed to sabotage every government decision they don't like. Medicare payment policy, bolstered by "independent experts" at ProPAC, PhysPRC and now MedPAC, has been very good. But the better it was, the more often it was undermined in Congress by the undue influence of industry lobbyists. For a time, industry was even able to put its own people on MedPAC. The Veterans Administration (VAHC) is another excellent example of what works well. The VAHC works so much better than almost anything in the private sector, and a lot less expensively.

Second, any new commission-whether for Medicare (NMPAC) or Medicaid (MACPAC) or comparative effectiveness-MUST be made up of disinterested, un-affiliated, experienced "experts." Not the so-called "Chinese restaurant menu" choices in proposed legislation. Before Newt Gingrich Republicans destroyed the Office of Technology Assessment (OTA), it advised Congress through an equal number of experienced senior Senate and House members, mostly committee chairs, on complicated technology policy issues. It also recommended membership on the commissions I referred to above

IMPROVEMENT BY DEMONSTRATION
The health reform bill wouldn't have a chance of passing without support from newly elected, conservative and rural Democrats. Most of them come from parts of the country and areas in their states where Medicare payments are low and care quality is high. Democratic Senators and Congressmen from Minnesota, Wisconsin, the Dakotas and Iowa are examples.

The final legislation has commitments to demonstrating payment policy reform through pilots and demonstrations. Its goal is to pay better for better quality rather than the reverse, which is today's norm. Believe it or not. Included in this are bundled payments of Medicare Parts A and B. The House has an IOM study on practice/payment variation.

Ideally the reform legislation should authorize CMS to go ahead and develop pay differentials based on quality and value. But liberal Democrats representing high cost, low value practice areas launched a campaign against the notion of practice variation. They enlisted the aid of academic researchers at UCLA, conservative economists like Martin Feldstein, and Republican consumer-driven health insurance advocates. Because members like New York's Schumer and Rangel and Los Angeles' Henry Waxman hold key committee chairs, they blocked the effort and the more conservative Dems had to yield to them to get pilots and demonstrations.

As Gail Wilensky, a Bush 41 Medicare head, former MedPAC chair and United Health Group director, points out in Modern Healthcare: "Medicare demos delay the much needed reform of physician payment, and delay enables opponents to further undermine good payment policy."

HEALTH CARE OPINION LEADERS AGREE
The Commonwealth Foundation 20th survey of health care opinion leaders shows that the Medicare program is highly successful in providing older and disabled Americans with guaranteed access to basic health care services. But only 6% of opinion leaders believe Medicare is doing the job it can do in improving quality of care and only 4% believe it does what it could to control costs. I agree.

But it is not because government-run programs like Medicare can't control costs and finance improved care quality. It is because every effort, by every administrator I've known over 30 years, has been undermined by the resistance of the national associations of health care professionals and providers to measuring quality and cost containment. No more proof than the 2009 reform effort.

The Physician Part B payment formula is ineffectual and costs taxpayers an unnecessary hundreds of billions of dollars every year. But the AMA has no solutions to offer except to trade their support for reform for a $243 billion one-year bailout which will have to be repeated year after year, none of which is paid for in the health reform legislation! Meanwhile, physician leaders in states like Wisconsin and in medical multi-specialty groups across the country have demonstrated better ways to pay for results. Who is listening? Not even their own representatives. Cong. Earl Pomeroy (D-ND), a member of House Ways and Means, is so frustrated he is likely to trade his vote for the bill for an agreement that ND doctors (low pay/high quality) get the same pay as MN docs (not quite as low on cost nor as high on quality).

REGINA BENJAMIN M.D. - THE SURGEON GENERAL OF THE U.S.
I've served with quite a few Surgeon Generals. Starting with the HIV A.I.D.S epidemic in 1981-82, the position became somewhat of a political lightening rod for the newly electrified Republican focus on gay rights, abortion and euthanasia as a political values base of operations. President George W. Bush didn't bother, blending the position with an Assistant Secretary of HHS.

Having known her well for some time, I can promise you that Surgeon General Benjamin (as of October 30) will make quite an interesting difference in how the Obama administration looks at health and health care access and improvement. Regina is the founder and CEO of the Bayou La Batre (AL) Rural Health Clinic, a recipient of a MacArthur Foundation genius grant, and the first African-American woman elected to the trustees of the AMA. Can you believe it? You will. I promise.

RENEWED CONFIDENCE IN DR. CAROLYN CLANCY AND AHRQ
Great news last week that HHS Secretary Kathleen Sebelius has re-appointed Dr. Carolyn Clancy as the Director of the Agency for Healthcare Research and Quality. This fulfills a commitment by the Obama administration made in the stimulus bill to advance the cause of quality and effectiveness science. Dr. Clancy was originally appointed by Secretary Tommy Thompson. She is one of those low-profile, but incredibly effective, leaders that health policy needs, now more than ever.

SURPRISING ELECTION RESULTS…
…this week are also reflected in poll numbers for Democrats in other states. Senate Majority Leader Harry Reid and Banking Chair Chris Dodd have been in serious trouble in Nevada and Connecticut for some time and are fund-raising, spending and ear-marking appropriations like never before. In Pennsylvania, watch for my 79-year old friend Arlen Specter to announce that he may prefer retirement from the Senate to a whipping at the polls by his own new party. Specter has always had tough races and marginal re-elect numbers. But in a recent Franklin & Marshall College poll his approval rating among PA voters is just 29% and his disapproval 64%, with only 23% of Pennsylvanians of the opinion Arlen deserves re-election. His friends also wish he'd get a new life he can enjoy.

by Chris Weyant

THE ENTITLEMENT COMMISSIONS Some of the key players in the Congressional health policy debate are advocating creation of commission(s) to cure us of our costly addiction to entitlement programs. No doubt now that programs like Medicare, Medicaid and the tax policy that underlies private health insurance are entitlements that are difficult to change. It is these programs, however, that drive the over-spending and low value for money in health care. So they must change.

The same can be said of education. The same entitlement programs that masquerade as public education in this country and hide accountability behind inter-governmental decision-making drive costs upward in higher education and, to a similar degree, in private education. Innovation in education delivery (teaching) is unrewarded and stifled and the costs go up inexorably and value declines.

PALIN - PAWLENTY REPUBLICANS
During a long career in the Senate, John McCain has been good for the Republican Party. His presidential candidacy and his nomination proved we're desperate for national leaders that will define us as a party of the future. He wasn't it, but then neither were his opponents. Then he gave us Tim Pawlenty and Sarah Palin. Tim and John were attracted to each other because their political souls were Republican, but they couldn't find a church home in the "base" that southerners and westerners had been building for the party. So Tim couldn't add "base" votes and John's advisers picked Sarah and "wow." All the rest is history.

LOOKING FOR SECOND BASE
Minnesota Governor Tim Pawlenty made his first highly visible appearance in Iowa last week after a round of endorsements of Republicans running in the 2009 elections. Iowa Republicans said they liked the man who got on base as the champion of "Sam's Club" Republicanism and an almost-candidate with John McCain for vice president. Pawlenty also raised almost a half million dollars at a fund-raiser in Minneapolis for a presidential exploratory committee. Back home, where he still spends some time as governor, he reacted to complaints that his cuts from medical assistance programs were crippling hospitals' ability to care for the poor. He proposed a Constitutional Amendment to limit spending increases in Minnesota to the amount of tax revenue from current tax policy. In other words, putting "No New Taxes" into the state constitution.

OWEN FRANKEN
Minnesota Senator Al Franken has an older brother who is a world-class photographer. Last Friday, Al and Franni Franken hosted a reception for brother Owen Franken at the opening of an exhibit of his works at a Washington, D.C., gallery.

The older Franken and his family live in Paris, from where Owen works his skills throughout the world, often with famed French chef Pierre Gagnaire. Al says his brother made money as a kid taking pictures of neighbors and selling them to his subjects. Owen says his real start came when he volunteered in Gene McCarthy's campaign for president and Seymour Hersh hired him as a photographer. He ended up a White House photographer where he caught the famous Richard Nixon "V-for-Victory" departure salute on the day of his resignation.

WARREN BUFFETT BETS ON A MINNESOTA HEIRLOOM
Back in the days when river traffic and stagecoaches gave way to rail overland transport and economic development, James J. Hill came to St. Paul and, over time, circumstance and the failings of others, gave us the Great Northern and the Northern Pacific Railroads. My maternal grandfather was a 15-year-old Polish immigrant when he went to work for the Great Northern in St. Paul. He retired 50 years latter as an executive of the company, before the GN and the NP combined and then merged into the Chicago, Burlington, and Quincy to form BN.

Omaha competed with Minneapolis to be the "west of Chicago" heart of rail transport and eventually became home to the Union Pacific - the other "big" railroad in the west/north central U.S. So Warren Buffett's decision to have Berkshire-Hathaway buy control of the now BNSF (Santa Fe) comes as no surprise to this kid. That he did it in 10 days so he could go to his dentist for a root canal was the only surprise. What Buffett's play says about the future of transportation policy in the U.S. is important.

Highways are a convenient, but costly, transportation system and have been justified by the size and relatively undeveloped nature of this country. But every other part of the developed and developing world informs us that eventually we must rely on rail transportation to move large tonnage and large numbers of people from one point to another in the shortest period of time, at the lowest possible cost, and with the greatest amount of safety and public equity.

ICSI's 2009 James L. Reinertsen Lecture -Evidence-based Medicine for the 21st Century
November 19, 2009
Bloomington, MN, Ramada Mall of America
David Eddy, MD, PhD, Archimedes, Inc. will discuss evidence-based medicine and the role it will play in an age of health care reform, and care delivery and payment redesign.
View Web site for more information

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