Commentary by Dave Durenberger, April 12, 2012

THE U.S. SUPREME COURT AND OBAMACARE

We were in Washington during three days of Supreme Court hearings on Obamacare.  My students took time to walk the Court’s roped lines of demonstrators while the media was interpreting the hearings as not going well for the new law.  That was to be expected.  True to its roots in the August 09 “death-paneled” town hall meetings, the law is presumably flawed. 

The House passed one law and the Senate another.  They became one without the usual Senate-House conference committee.   It was by far the most comprehensive change in the nation’s health policy in its history. Health care is incredibly complex to begin with.  Improving it on the ground and then translating those reforms to policy change makes it even more complex. 

While every other developed nation in the world, starting with Bismarck’s Germany in 1881, chose a social insurance model to expand health care access, quality and affordability, the U.S. chose by far the most expensive route to expand quality and access the world has ever seen and made it all unaffordable while leaving 6% of Americans who never have insurance of any kind, and 18% who have it infrequently. Not a single elected Republican anywhere in the country supports it.  So don’t be surprised if the Court asks tough questions which lawyers aren’t trained to answer. I remain optimistic that the Chief Justice will look at the decision as a landmark for the Roberts Court, which, of course, it is. 

As a circuit court or two pointed out, virtually every American requires health care services at some unpredictable time in our lives and we provide those services regardless of ability to pay.  Those Americans who choose not to insure against the odds they face are shifting costs to taxpayers.  Thus creating an economic challenge that Congress may regulate as it did when enacting the Social Security Act and its Medicare, Medicaid and CHIP provisions, and required, for example, that we all buy Medicare hospitalization coverage.

HEALTH PROFESSIONALS AND OBAMACARE

If America’s health professionals, health systems, and health insurance leaders were polled on the future of Obamacare, they would oppose repeal and favor bi-partisan reform.  These are the people who are likely to make a difference in the degree to which the reform law is a decisive issue in the 2012 campaigns.  (More at nihp.org)

For 18 years I’ve taught health policy to health professionals on their way to an MBA in Healthcare at the Opus College of Business at the University of St. Thomas.  I teach 12 hours on campus, three days in Washington DC, and four weeks online.  Scott Kulstad, a graduate, now assists me between gigs as a specialty center administrator at Fairview Health System in Minneapolis.  This year we focused on the ACA health policy reform law, now known as Obamacare.  Student projects in finance reform, Medicare reform, and healthy people/communities will be presented to a public event on campus May 17^th.

Here’s what I know they’ve already learned.  From the Republican Chair of the MN House Health Committee and his Democratic predecessor (now minority leader of the Democrats in the House):  The number of legislators willing to undertake to understand and translate the complexities of healthcare into policy has shrunk to the point you count them on one hand.  In a 202 – person legislature most of the rest, especially the new majority, want policy summarized on one page and, preferably, in sound-bite form for constituent consumption.  Ditto in Congress.

In a three day seminar in DC I have 24 faculty present, most with many years of policy experience and everyone on one side or the other of the debate over the future of Obamacare.  Like Senator John Barrasso MD (R-WY) presented just before Sister Carol Keehan, CEO of the Catholic Health Association.

Before we began, the students ranked themselves on familiarity with the new law on average 2.2 on a scale of 1 to 5.  On Obamacare they were 7 for, 4 against, and 15 undecided.  At the end they were 3.8 on the familiarity scale and 19-1-5 (one left early) for Obamacare.  Why the big change?  (Remember each is paying something like $65,000 for the MBA.)  First, the new law has at least a 20-year tail of Democrat and Republican consensus on it.  While it can be improved, it’s not bad.  Second, if the law is repealed, the political climate in the country is such that system reform will regress and replacing and reforming will not happen in their lifetimes.

Which reminds me, when health policy reformer Cong. Claude Pepper (D-FL) died, he went to heaven and asked God whether health reform would ever be successful in the U.S.  To which God replied with good news and bad news. “The good news is, yes it will.  The bad news is, not in my lifetime.”

REPUBLICANS WANT MEDICAID TO BE A STATE PROGRAM

The Supreme Court heard testimony on the subject, had experts write amicus briefs on it, and justices will argue it is constitutionally vulnerable.  How they do that in light of more than 50 years of history is beyond me.  Republicans and Democrats have always supported federal government assistance to the states to provide care for low income and disabled populations.  It started in 1960 with a Congressional commitment to pay 50% of the costs to counties.  In 1965 it morphed into Medicaid coverage for women with dependent children with a minimum essential benefit (sound familiar?).  Seven years later it was expanded to cover the long term care needs of persons with disabilities. 

One of the reasons Medicaid is a vehicle for coverage expansion to the nation’s working poor is the rising costs for basic coverage.  States can manage the cost containment aspects of coverage in a variety of ways that reflect changes in care delivery generally in their communities.  But they’ll never pick up the tab without our federal income tax.  A majority of the states do not have the tax capacity to finance access to healthcare plus education and all other state needs. A large minority are simply politically unwilling to do so.  Simple block grants of federal taxes to states unwilling to use it for healthcare don’t solve the problem.  Only accountability, as written into current law, will do that.

WILL HEALTH SYSTEM REFORM CONTINUE WITHOUT THE LAW?

Of course, reform will continue in some for form or another.  Some of it aimed at driving value, others simply driving profit on niche marketing access to select services. Most health professions, systems and insurers want/need the former.   It is clear to them that from the debate over the enactment of Obamacare, national policy-makers have chosen to pin our future on private health care and private insurance rather than our current mixed public/private bag or a single payer or all-payer alternative.   Only informed consumers making value-based choices will make private markets work.  Without competitive insurance markets and expanded coverage consumer choice will not have the impact on cost containment that it must have.  Without competitive markets and informed consumer choice, the financial incentives communities and care providers need to reduce the cost of unnecessary care are gone and we regress to the mean old price/cost escalation.

We policy types all know the huge variation that exists in health and health practice in various parts of the country.  What we don’t fully appreciate is the power of information on variation to bring about dramatic change.  When combined with financial incentives to change.  I am told that 10 health insurance companies sell 85% of the private insurance market today.  And five companies sell 75%!  That kind of clout makes a huge difference compared with what can be done out of CMS with traditional Medicare.  For example, in Minnesota already 50% of the Medicare beneficiaries are in private Medicare Advantage.  An even greater percentage of Medicaid beneficiaries have private managed care options.   It’s not a political problem anymore.  But it can’t be left to decisions by one state at a time because companies don’t do business in states, but with people.

I’LL STOP IT ON DAY ONE

It is truly unfortunate that Mitt Romney has drawn the line on Obamacare. He says he will do all in his power, and that of Republicans in Congress, to repeal the health reform law.  Public opinion informs us that neither the Presidential nor the congressional elections will be decided on Obamacare.  President   Obama will make sure of that this fall. My Healthcare MBA students, after three days in Washington recently, came quickly to the conclusion that once repealed; the health law will neither be replaced nor reformed.  A majority of Americans will soon realize that polarized politics,  the influence of rant/slant media, and the difficulty of doing complex policy change in anything but a crisis, makes what they need in coverage and affordability impossible without  Obamacare.  Better to improve the current law than to go back over and re-start the debate.

WHO WILL BE THE HEALTHCARE TRANSFORMER?

News that Newt Gingrich’s nifty little health care transformation empire is filing for Chapter 7 bankruptcy means that when the current campaign is over, the Newt will return to health policy but under another name.  The bankruptcy filing shows just how popular he was as a “mentioner”, motivational speaker, and door-opener to a cross section of the medical industry, many of whom are now creditors left holding his bag.  But some are publicly, and perhaps naively, quoted as say they don’t mind doing so.

What’s this say about the kind of persons we are electing to deal with health policy transformation?  Not much.  It tells us that with the occasional exception of a Paul Ryan, nobody wants to do the heavy lifting of health policy, preferring the “just say yes to Ryan” or “just say no to Obama” approach to decisions that have billion dollar consequences to all Americans.

THE INSTITUTE OF MEDICINE RECOMMENDS WE TAX HEALTHCARE TO PAY FOR HEALTH

I wish I had thought of that one.  Many states seem eager and able to tax healthcare services provided by doctors and hospitals in order to fund expanded access to these same services.  The IOM in advice to the Secretary of HHS and Congress says that such a tax at the national level , on services and on insurance, should be levied to reward the millions more Americans who work at staying healthy and using the healthcare system as little as possible. Click here for more information.

Here’s why it’s a good policy suggestion.  The young and healthy are already paying for the old, the accidents, the ill, and the disabled in large employment groups and in many other ways including the new health insurance rules including the insurance mandate.  Public policy must encourage good health.  Rather than doing everything we can to financially reward poor health, preventable accidents, avoidable chronic illnesses, we ought to start reversing incentives.  This is one important and obvious and encouraging way to do it. There are others.

Republicans immediately attacked the recommendation as “half-baked and absurd”.  Sen. Orrin Hatch (R-UT).  The IOM advisory panel said it would be better than taxing products we don’t like such as sugary drinks.  Health policy expert Ken Thorpe said leaving the rewards for good health to health plan benefit and cost-sharing design is better.  Both make sense, but if we are going to do tax reform in this country, and we can’t do it without bi-partisan cooperation, the more ideas on the table the better.

ROMNEY’S THE ONE

Few people doubted Mitt Romney’s staying power as a candidate in the primary elections.  Most people assume a different Romney will now appear to challenge President Obama.  I doubt that.  So does the Obama campaign which is drawing bright political lines between Democrats and Republicans rather than between the President and his Republican opponent.  The campaign will feature the greatest “shock and awe” marketing war in history, but the ground game will make the difference.  The President must deal with the realities of economic recovery in a world of disruptive influences. 

Romney need only credit the good news to Republicans and bad news to the President.  Then hope the electorate that survives the shock and awe campaign will trust him and his party with the toughest four years this country has faced since the second term of FDR.  Trust requires a belief system and the “walking the talk” of a leader. A D.C. insider recently said of Romney, “he is in danger of becoming Don Draper (of Mad Men) in this campaign – handsome, smart, but very hard to trust.”

PRESIDENT OBAMA THINKS HE’S GOT HIS NUMBER

It’s one, as in 99-1.  The wealth gap is the answer to the spending/revenue gap.   President Obama will compare Romney’s personal 13.8% tax rate on millions of dollars of Romney income and the life style it makes possible, with the rate middle class Americans pay on a fraction of that while struggling to keep one home and a job with decreasing fringe benefits.   I, for one, am sympathetic to the argument that the President hasn’t connected with most Americans on the “I can feel your pain level.”  The Warren Buffet tax is politics, not middle class empathy. On the other hand, who believes Mitt Romney has ever felt pain to say nothing of having learned how to express it. 

DIVIDED WE STAND

It looks as though President Obama has learned how to unite traditional Democrats in a cause that seems quite familiar.  Republicans have only one unifying theme so far:  Beat Obama.   Suppose Romney wins.  Then what?  Who governs? The Tea Party/Freedom Works Armey/Murdoch-Fox News slant and rant crowd have given us a Congress and 26 states of extremist Johnny one-notes that make it impossible for the Romney we’ve seen so far to govern.  Karl Rove and Crossroads GPS say there’s plenty of room in a conservative right of center space for the large number of us independent conservatives.  What evidence does he have that when a pendulum starts to swing to the far right it has to swing back now, just because it’s a Republican pendulum?

 CROSS TOWN HEART ATTACK

 Medtronic is one of the state’s premier corporate enterprises and the world’s largest medical device company.  Its stock has been in some kind of investor “limbo” for many years and the corporate C-suite is in constant turmoil.  Meanwhile west cross-town rival Boston Scientific has been trying to recover from the decision to take on a second-rate Guidant operation.  St. Jude Medical which is its east cross-town rival has been doing very well thank you under the leadership of peripatetic Dan Starks. 

But this week investors are abandoning St. Jude while it tries to fight a public relations battle over which implantable heart-device company headquartered in MN has killed the most patients because of failed device leads.  Minneapolis Heart Institute cardiologist Bob Hauser started the battle with his published research on St. Jude’s Riata leads in The Heart Rhythm Journal.  Hauser is the same expert who blew the whistle years ago on Guidant’s implants which indirectly led to its sale.

WHAT IS THE MARKET TELLING MEDICAL DEVICE COMPANIES?

Something that Minnesota and other political representatives seem unwilling to tell them.  That device companies and device investors can no longer rely on a dysfunctional medical market place, and on fee-for-service and fee-for-product insurance reimbursement policy to be successful with each “improvement” in functional devices. 

Medical specialty organizations, whose members had been absorbed into the financial rewards of a culture that anything new is a life-saving innovation, are beginning to support efforts to strengthen the FDA’s role.  In judging safety and developing improved standards of efficacy and even effectiveness for devices, drugs and diagnostics.  It’s about time that legislators invested our research money into the FDA’s efforts at evolving evaluative science rather than in making start-up investors wealthy off of potential market failures.

COULDA SHOULDA HOUSING POLICY

When President Obama came to office the housing market was crashing under the weight of bad home ownership subsidy policy, private and public.  Obama appointed housing expert Shaun Donovan as Secretary of HUD and I waited for the time he would recommend that state and local government housing authorities be financially supported in their efforts to save their communities from the blight of the over-built and the over-leveraged, using their three decades of experience with administering low and moderate income housing.

The federal investment, I thought, should come from helping to write down loans for qualified borrowers in markets where the prices would fall but ownership could prevent further blight until some rebound occurred.  Nothing happened because the Federal Housing Finance Agency, eager to help sustain Freddie Mac and Fannie Mae, thought mortgage write-downs were a waste of money/time.  Finally, this week the FHFA is reconsidering.  Healthy people and healthy communities depend on healthy housing markets.  State and local governments are in the best position to determine health status, not the guys in Fannie/Freddie and their protectors who made personal fortunes taking down the market to begin with.

MINNESOTA VOTERS TO DECIDE WHO HAS A RIGHT TO VOTE

Much of my life in politics has been spent trying to encourage public participation in the political process.  As a Republican I sought to encourage small contributions to campaigns through tax policy.  As a member of the Senate I sought to break the hold of Political Action Committees on the margin of campaign influence.  I am proudest,  however,  of bi-partisan efforts to uphold the Voting Rights Act in states with a record of discrimination against citizens based on race, and of my leadership in passing and persuading  President Reagan to sign the Voting Rights for the Handicapped Act which required states/local governments to take down physical and other barriers to persons with disabilities.

I broke from my party on issues like election-day registration because I believed that states and local government should develop whatever assurances are necessary to prevent outright fraud.   I supported motor voter legislation which my Senate colleagues from the South hated with a passion because it made it possible for lower income and racial minorities to register at same time/place they registered their motor vehicles.

Why do MN Republican legislators insist that MN join Missouri and Mississippi by changing our constitution to require government I.D. to vote?  Why have Republican legislatures in many states done all they can to discourage voter registration drives by prominent civic organizations?  Not because they and we Minnesotans don’t have bigger problems for them to attend to.  I suspect the same “anti-voters that aren’t like us” sentiment I saw in southern senators is what I feel in the current crop of extremist legislative measures.  Call it the “Obama’s nothing but a community organizer” problem my party has in representing all Minnesotans and in improving representative government in our state.