Commentary from Dave Durenberger

BACK TO THE FARM – AFTER 150 YEARS
On June 21, Susan and I, with our friends Raimar and Judith Boehlke of Murnau, Germany paid a visit to the Durrenberger farm in Primisweiler village. We spent much of Sunday with Bernhard Durrenberger, 77, and his sister Irmgaard Reber Kornprobst on the farm which has been in our family for more than 400 years. My great grandfather Gebhard Durrenberger left for LeCenter, MN, on May 21, 1859 and none of his many heirs have returned until we showed up to spend a most enjoyable and pretty emotional day with our new found relatives.

Bernhard and his wife Lydja, with the help of son Hubert, farm 30 hectares of pasture and woods, milk 30 cows, raise and race homing pigeons, and operate a little still and bakery. Bernhard is famous in the area for raising Haflinger horses. On Heile Blut (Blood Friday) after Ascension Thursday, it’s Bernhard’s horses that pull him and the parish priest in a procession of 3,000 horse riders. The farm is in Baden-Wurtemburg, maybe 12 km north of Lake Constance (or the Bodensee) where Germany, Austria and Switzerland meet. It’s also about 4 km west of the Bavarian border and right up against the Alps.

VIRTUALLY INTEGRATED HEALTH CARE SYSTEM
Susan and I also found time to enjoy Munich, Salzburg, Regensburg, and Wurzburg on our way to a couple days with doctor friends in the town of Wetzlar. Two hundred and forty doctors in the counties of Land, Dill, and Kleis are linked by electronic health information systems serving 300,000 patients. They use a superb 1,000 bed hospital in Wetzlar and have created a system called ANR which takes the state of Hesse’s version of a 911 number beyond the usual emergency response to link anyone in the area with a doctor who can triage their needs by phone and speed them to emergency care by ambulance if necessary. All of this is the work and the investment of the 240 doctors, not the state or national government or the German insurance companies.

HEALTH REFORM; TWO STEPS FORWARD – THREE STEPS BACK
This week the Senate HELP Committee and the three health committees of the House are reporting reform bills to the floor for action. Only Senate Finance remains. That is two steps forward. The bills, and especially the House, represent at least three steps back on genuine health policy reform.

Giving them credit for expanding coverage, there are a number of policy reasons I wouldn’t support the bills with my vote. The first is the failure to re-align financial incentives for physicians by reforming Part B of Medicare to reflect the quality and cost consequences of practice variation across America. To make matters worse, Congress accepts the notion of across the board Medicare payment cuts which kill incentives in hi quality, low consumption states like Minnesota.

The second is the failure of tax policy. Instead of adapting a decades old bipartisan policy consensus to reform the tax deductibility of employer paid health care, the Democrats bowed to the old union pressure to do nothing and substituted 5.4 percent surtax on the rich. Third are the “play or pay” mandates on employers and on individuals. It’s bad public policy without the assurance of both insurance and substantive care delivery reform. Always has been. Always will be. In a recession it’s even worse.

AMERICANS NOT READY FOR HEALTH REFORM
Take a look at the American Enterprise Institute’s summary of current public opinion. We are in a very uncertain mood right now. About the economy, efforts to improve it, big change and big institutions. The crisis in health care cost, access and quality, which is necessary for deep policy reform, is not as strong as it was back in 1994. As is so often the case, our political leaders have not yet made the case for their legislative specifics. Except for those that require the government to change, or someone else to pay.

SURGEON GENERAL REGINA BENJAMIN
President Obama this week made official his appointment of Dr. Regina Benjamin of Bayou La Batre, AL, as the 16th surgeon general. A better choice he could not have made. I’ve known Regina Benjamin for eight years and can say without reservation I’ve never met a more dedicated and selfless health care professional in all my life. I’ve linked Gardiner Harris New York Times story on her appointment because it comes closest to beginning to describe her.

ROBERT A. DERZON, MHA (UMN), MBA, LLD
One of the joys of acquiring a home in San Rafael, CA, was renewing acquaintances with Bob Derzon who lived in nearby Mill Valley. Bob was the first administrator of the Health Care Financing Administration (HCFA), as it was known from 1977 until Tom Scully changed the name to Centers for Medicare and Medicaid Services (CMS) in 2001. In 1977 HEW Secretary Joe Califano thought combining the Medicare and Medicaid program administrations into one would reduce cost escalation and he called University of California, San Francisco (UCSF) chancellor Dr. Phil Lee and told Phil to get Derzon to come to Washington from the UCSF Medical Center director’s job he’d held since 1970 to get it done.

By his own admission, Derzon disagreed with Califano on more things than they agreed on. But Bob’s pride in his short 18 month stint came from eliminating a backlog of 140 unwritten regulations, reducing the escalation in the End Stage Renal Disease (ESRD) program, creating demonstrations for hospice and, more farsighted even, statewide prospective payment systems. He converted the growing Medicare data bank into useful research in quality assurance, program integrity and policy research.

The last time I saw Bob was dinner at our second home in San Rafael, CA with our neighbors Dick and Dottie Breiner. Derzon had suffered a disabling stroke some 20 years ago. When he heard that Marin County Judge Dick Breiner, suffered a similar stroke mountain biking, he spent weeks with Dick and Dottie teaching them how to recover. Bob’s gift to us was his last bottle of a 1978 Saint-Emilion Grand Cruc imported from Chateau De Lescours by Milt Kronheim in Washington D.C. Ours was an April evening Susan spent driving Bob over to UC Berkeley to see Jack Wennberg receive the annual School of Public Health Heroes award. Bob was preparing to move from the home he loved to a nursing home, which he did just before taking a trip to Orangeville, Canada to be with a friend. It was there he contracted pneumonia complicated by H1N1 and died peacefully on June 17.

DAVE WESSNER WILL LEAVE PARK NICOLLET
…at the end of 2009. His early retirement -at 57 -follows on decisions by other CEO’s in the health systems of this area. This leaves Tim Hanson as the veteran CEO celebrating his 20th year in the job, followed by Bob Stevens at Ridgeview in Waconia (since 1996) and Mary Brainerd at Health Partners (since 2002.)

MASSIVE HEALTH CARE VENTURE POTENTIAL FOR THE DAKOTAS, WESTERN MINNESOTA
Sanford Health of Sioux Falls, SD, is talking to MeritCare in Fargo, ND, about creating a new medical presence in the five states of SD, ND, MN, NE, and IA. Sanford has 23 hospitals and 128 clinics plus ancillary services, a health plan and 9,200 employees. MeritCare operates 583 beds in two Fargo hospitals, 20 other facilities in the Fargo-Moorhead area and a regional hospital in Thief River Falls, MN. It has eight medical clinics in ND, 19 in MN and 7,131 employees.

MeritCare competes with Innovis Health -a hospital and multi-specialty group practice part of the Essentia System out of Duluth in the Fargo-Moorhead area. Sanford Health’s principal competitor is Avera Health System, headquartered in Sioux Falls as well. Since banker and philanthropist T. Denny Sanford made a $400 million gift to Sioux Valley System to change its name and focus on research, hospital campus redesign, and children’s health, Sanford has been well on its way to giving CEO Kelby Krabbenhoft potential for his bragging rights as the next “Mayo Clinic.”

Interestingly, MeritCare’s annual revenue last year was $819 million on 26,638 hospital admissions and Sanford’s was $1.8 billion on only 31,695, suggesting the hospital business is a lot more lucrative in South Dakota than it is in North Dakota. With their potential joint clout that good fortune could spread north, unless Blue Cross Blue Shield of North Dakota has something to say about it.

MeritCare has been in the process of selecting a replacement for longtime leader Dr. Roger Gilbertson. Four internal applicants have been informed the board is looking to candidates from outside the 104 year old organization.

CONSUMER DRIVEN HEALTH CARE
After returning from two weeks in southern Germany, I mentioned to the executive leadership of two of Minnesota’s largest health systems a health care forum in which we participated on social media (or networking or e-health). Simply stated, it showed the potential for tapping into the experiences of millions of people with a variety of medical conditions to improve the decisions of doctors and patients. These well-informed leaders are excited by the potential. Health care leaders in this country seek appropriate ways to build informed experience and clinical research into informed patient choices. Pretty interesting.

JOINT REPLACEMENT – JOIN THE MOVEMENT
New billboard as I enter I-94 from Dale Street in St. Paul, inviting me to use the “Orthopedic Specialty Center” of the Twin Cities to get back in the swing from whatever joint aches. The Dartmouth Atlas reports that Minnesota Medicare beneficiaries rank near the top of the nation in knee replacements. I assumed it related to the shortness of the golf season here. Especially after I found out that the Naples, FL, area, where many Minnesota Medicare beneficiaries golf in the winter also right up there near the volume top. Now I know it’s because there’s not enough legit ortho business for all the orthopedic surgeons in the community. So “replacement joints” are the new “Lasik Surgery.”

HEALTH CARE CO-OPERATIVES
Sen. Kent Conrad (D-ND) has been a member of the Senate Finance Committee for as long as he’s been in the Senate. He currently chairs the Budget Committee as well. He comes from a state which, for the last 20 years or so, benefits from some of the highest quality, lowest cost health care in the country. Its economy grew on the co-operative movement which gave every ND farmer almost as much price clout in international markets as some big agriculture traders like Cargill…with a little help from national farm policy.

North Dakota even has a state bank, which is also a co-op. So, when Republicans were successful in turning the proposed “public plan” competitor in health insurance reform into “government run health care,” Kent suggested a co-operative insurance plan could do the same job as well as government – much like the suggestion from Obama that the Medicare Payment Advisory Commission (MedPAC) was a more appropriate way to set prices for doctor and hospital services than a National Health Board.

The model is an old one and a very successful one in producing high value healthcare results. Group Health Cooperatives were created pre WW II in several states from the Pacific NW to Maryland. There is Kaiser-Permanente as well. In more recent times, health co-ops were called Health Maintenance Organizations, or HMOs, until people like Bill McGuire acquired and merged a bunch of them into United Health and gave “managed care” a bad rap.

Working with Senator Jeff Bingaman (D-NM) back in 1991, I used the co-op as a way to give individuals and small employed groups an opportunity to negotiate health insurance with the power of very large employers, just like the farmer co-ops. When Hillary Clinton included our notion of health insurance purchasing cooperatives (HIPC) in her reform bill, it died an early and undeserved death.

SENATOR CHUCK GRASSLEY AND THE NOT-FOR-PROFIT HOSPITAL
While the American hospital industry was busy last week offering Vice President Joe Biden a $155 billion “savings deal” in exchange for a couple trillions of dollars worth of universal coverage, Chuck Grassley was writing legislation that would reduce the nonprofit tax exemption provisions into the Senate Finance Committee’s health reform bill. About 70% of annual hospital admissions in America are to not-for-profits, which are required to prove “community benefit” in exchange for exemption from state and national income, property and transaction taxes plus tax preference for bonded indebtedness.

In 2006, the Congressional Budget Office estimated that the hospital tax exemption was worth about $45 billion a year to America’s nonprofit hospitals. Grassley, and others, allege that the community benefit most hospitals claim is a small fraction of this. And much of that is expressed in IRS filings as care for the uninsured or poor payers, or is “underpayment” of services below their actual cost by Medicare and Medicaid. Grassley aims to force hospitals to pay excise taxes on the amount they claim in excess of the care they provide for which they are uncompensated.

Hospitals located in suburban and exurban areas, with relatively few uninsured or low income persons, reap a tax bonanza from the exemption, while the inner city hospital, with the low income patients and the more frequent high cost injuries and illnesses, needs the exemption just to break even. This may explain why the hospital industry has been so reluctant to voluntarily expand its definition of community benefit. Preferring to fight off Grassley and others with their national and state industry clout.

Then there is the tax exemptions provided by national and state law to nonprofit health insurance plans.

NOT-FOR – PROFIT BIRTHING HOSPITALS
The most profitable hospitals in metropolitan communities are located in the growing population communities of exurbia. In a community with plenty of heart centers and with a plethora of new-born and pediatric facilities, Ridgeview Hospital Southwest of Minneapolis recently completed a new heart center and snagged a major cardiology crew to staff it. This week, Ridgeview is opening up its new birthing center to applause from young moms and dads from throughout the area. One young expectant mom exclaimed, “They had beautiful tiles, iridescent, and a rain showerhead in the bathroom. It just looked like going to spend a couple days at the spa.” The center is part of a $12 million expansion in women and children’s service. Ridgeview has already raised $2.5 million in philanthropy which, in nonprofit terms, means substantial tax deductions for donors without any demonstration that the “community benefits” by anything other than hospital employment, customer convenience and reputation. Might be interesting if OB-GYNs in the underserved parts of Minneapolis began to refer pregnant moms to Ridgeview!

LOOKING FOR GOOD NEWS FROM MEDTRONIC
One can argue that what passes for “news” today really isn’t. Bad stuff sells and steady success does not. One of Minnesota’s most consistently successful companies appears to be in a bit of a “news” quandary these days. Hardly a week goes by without some bad news on the technology failure front or the over-paid M.D. researcher’s front.

A company known for its commitment to getting it right, has been paraded through the press in conflict of interest cases involving pay for product promotion. Much of this comes from acquisitions – and raises questions about the role large device companies play in promoting small company development and what the latter do to make themselves attractive acquisition targets for the big guys and to make big bucks for their investors.

FOOD IN AMERICA
A friend suggested a couple years ago I read Michael Pollan’s The Omnivore’s Dilemma, saying it “would change the way I think.” I did. It did. I read his follow-up book, In Defense of Food: An Eater’s Manifesto, and recommended it to a General Mills exec who hadn’t read Pollan. General Mills has been asked by the FDA to explain why it makes health improvement claims for some of its food products that can’t be justified by independent research. I am a regular consumer of Cheerios and bought the notion it helped me reduce cholesterol. Until I read Pollan, read the research studies on cholesterol and heart attacks, and then saw Cheerios advertising on the dinner-time TV slot usually reserved for life-style drugs.

This week we saw Robert Kenner and Bill Pohlad’s Food Inc. The movie uses Pollan as a consultant and also features food writer/researcher Eric Schlosser, an investigative reporter by profession. The theatre crowd applauded at the end of the film -and then once more after the suggestions from the producers of actions individuals can take to restore economic equity and good health to the current food chain.

Starbucks features new marketing: “Real food. Simply delicious” and “We’re making a change, so your food not only tastes better, it is better.”

COMMITTEE FOR A RESPONSIBLE FEDERAL BUDGET
Former members of Congress led by Bill Frenzel (R-MN) Tim Penny (D-MN) and Charlie Stenholm (D-TX) have done a superb job in putting together options for reducing the cost of Medicare or of paying for expanded coverage. Most of these recommendations have also been made by others, but gathered here to demonstrate what’s possible if there’s current Congressional will. Read more.

NATIONAL NEWS

NORM COLEMAN
The Coleman-Franken election ended at about the same time two Republican wannabe candidates for president were flunking their marriage vows and another was taking herself out by resigning the governorship that made her famous. I was reminded that little, other than the weather, is as unpredictable as politics.

Norm Coleman is a major political success who served as mayor of St. Paul as both a Democrat and a Republican and never raised taxes. He took the next step to run for governor in a year when voters were ready to sock it to both political parties and flocked to the polls for WWF hero Jesse Ventura. Four years later Norm tried again and this time it was George Bush and Dick Cheney who dragged him out of the ring to make him run for the Senate against popular DFLer Paul Wellstone.

Paul died in a tragic plane crash two weeks before an election that was almost too close to call. Fritz Mondale came out of retirement to take Paul’s place on the card, a nationally televised Wellstone memorial service went haywire, and Coleman was the clear victor over the former vice president. Bush-Cheney were gearing up to fight Iraq to even the score for 9-11-01, Coleman became a valued ally and remained so even when the GOP boat did a Titanic in ‘06. In the year in which Barack Obama carried MN big, Coleman was challenged by the homecoming of famed satirist Al Franken and former Ventura-appointed Senator Dean Barkley and still ended up in a virtual tie.

So if Norm Coleman ignores my advice that 60 is a good age for a U.S. Senator without a savings account and with two kids in college to “get a private life,” he just might end up being governor of Minnesota on his third try. Other than retired Congressman Jim Ramstad, no one in either party appears to have the experience it takes to do the job that has to get done in the economy we face in this state and nation. The only question for some will be, does he have the independence of political judgment it will take to convince Minnesotans that governor is not an impossible job these days?

CIA HIT SQUADS
Democrats on the House and Senate Select Intelligence Committees have gone public about current CIA Director Panetta’s informing them that Vice President Cheney and former CIA Director George Tenent were planning to use agency “hit squads” to kill off known international terrorists. This violates current law in two respects. We don’t use this technique to take out enemy combatants without some checks and balances to protect the innocent. In any case, tasking the CIA to special operations above a certain level without Congressional oversight is also not permitted.

CHRYSLER BOARD RECRUITS TWO MINNESOTA AIRLINE EXECS
The new Chrysler Corporation announced that its new board of directors will include Doug Steenland, the former CEO of Northwest Airlines who engineered the sale of our company to his former colleague Richard Anderson at Delta. In addition, a former CEO of Republic Airlines, Stephen M. Wolf joins Steenland on the board. A current executive of R.H. Donnelly, Steve helped Republic through its transition and did the same for UAL and U. S. Air.

RESTORING CONFIDENCE IN ETHICAL VALUES
President Obama went from his audience with Pope Benedict XVI to Accra in Ghana with a message for the people of the 56 countries of Africa. It is best summarized by this sentence: “No country is going to create wealth if its leaders exploit the economy to enrich themselves.” Those of us who have made it our business to befriend the leaders of African nations as well as their people, know whereof our president speaks. Time after time we have watched well-intentioned candidates for office use the democratic system of elections and the less democratic means of armed revolt, to campaign against corruption and life-time office – only to become the enemy against whom they campaigned.

For as long as I have been involved in national politics, U.S. national security policy has been premised on “you’re either with us or against us.” Our public investments in international and national investment organizations have been premised on this definition of our national security. We have condoned and encouraged “friendly” dictators to devalue family and political values based on tribal and religious traditions. Obama struck a very different chord and it is most welcome. It is time, he suggests, we end the economic partnerships that depend solely on Washington, D.C. interpretations of our national security rather than theirs.

I have watched “foreign aid” and ambassadorial confirmations leveraged on how a Jesse Helms (R-NC) perceived the “attitude” of some African dictator toward us or our adversaries as Jesse defined them. Secretaries of state had no choice but to acquiesce because there were no other voices raised on behalf of a saner policy.

JUDGE SONIA SOTOMAYOR
Republican members of the Senate appear to acknowledge the fact that Judge Sotomayor will be confirmed as President Obama’s first justice of the Supreme Court. Instead of focusing on her character and her ability as a judge over nearly two decades, they are focusing on specific policy issues which play to the GOP “base.” Orrin Hatch (R-UT) has been one of the fairest members of the Judiciary Committee since his election in 1976 and his many years as chair or ranking member of the committee. Even Orrin intends to focus on her views on the Second Amendment to the Constitution, or the gun lobby, which a majority of Americans defend to the death.

Republicans will call as a hearing witness one of the now famous “New Haven Firemen” allegedly denied promotion because of racial bias in the city’s testing policies which the conservative majority of the Supreme Court made an issue in a recent 5-4 decision. I am reminded of the 1990 North Carolina Senate election in which incumbent Jesse Helms, trailing Charlotte’s African-American Mayor Harvey Gantt near the end of the campaign, produced a TV spot featuring the hands of a white man crumpling a job application rejection as a voice-over says, “You needed that job, but they had to give it to a minority.” Gantt supported racial quotas, Helms did not, and Gantt lost the election.

Only one Republican so far has demonstrated just how tone-deaf Republicans have become to the qualifications of legal and constitutional competency. Jim Inhofe (R-OK) has refused to meet with Judge Sotomayor on the grounds he is so certain he will oppose her nomination “he does not want to waste her time.”

YOU MEAN TO SAY THIS RECESSION MIGHT GET MORE DEPRESSING?
It’s wishful thinking to assume that replacing President George Bush with Barack Obama and Republicans with Democrats and one set of Wall Streeters with another can bring the worst global economic disaster since 1932 to an end in six months. Spring 2009 on the stock market gave us an optimism that was undeserved. Much as I hate to at my age, I am planning for another couple years before we realize we are in a very different economy. The 2010 election could be much like that of 1982 and Democrats in moderate districts may have difficulty hanging on to their seats. You can see it already in the cold feet they are walking on to climate and energy policy, health policy, and a variety of other critical reform initiatives.

You can see it in public opinion polls that show declining approval of the president. You can hear it in the way that right wing radio and its political party define and redefine every move the president makes in apocalyptic terms. The Democratic House was very good at spending stimulus money on a wide variety of stimulating public needs. But a really little something happened last week that told me things have changed. House Speaker Nancy Pelosi decided the House would not vote on House Resolution 600 honoring Michael Jackson for his talent and his charity. Having listened to right wing radio question Jackson’s character and excoriate Congressmember Sheila Jackson Lee’s use of HJR 600 in her rambling eulogy in LA, I knew why Pelosi acted as she did. Too many in Congress were eager for a national debate over the meaning of Michael Jackson’s life. This will not be a Congress noted for its political courage.

PAWLENTY V. OBAMA
A Raleigh, North Carolina polling firm – Public Policy Polling-says that as of last week Barack Obama would defeat Governor Tim Pawlenty 51-40 among Minnesotans in an election for president of the U.S. Approval numbers for both have dropped in the last six weeks among Minnesotans from 60 to 54 percent for the president and from 46 to 44 percent for Pawlenty. Forty-eight percent of Minnesotans disapprove of Pawlenty’s performance compared with 53 percent who disapprove of Sarah Palin. Senator Amy Klobuchar is by far the most popular political figure in the state with a 56-30 approval rating.