Commentary from Dave Durenberger

March 26, 2009

National News

MARCH MADNESS
Usually means the start of the NCAA Basketball Tournament and two weeks of more interesting sports TV than the World Series or the Super Bowl. This year March Madness began in Washington D.C. Finally the public had a chance to blow off steam at bonus bankers and caught a $1 a year executive in the cross-hairs.

Ed Liddy's decision, confirmed by acquiescence by the Federal Reserve, to pay bonuses to executives who stayed with A.I.G. after the Fed took it over (or 80% of it) in order to get rid of bad loans and save the public investment, became an excuse for irrational congressional hubris, a tax bill, and some interesting reactions from the execs that came in with Liddy to do our dirty work for us.

Illustration from St. Paul Pioneer Press
by Lisa Benson

Absolutely no one, including Senator Chris Dodd who knew it was authorized in the stimulus bill, stood by Liddy. Bernanke and the Fed pumped $1.25 trillion of money into the economy and Ben went off to Phoenix to talk about reforming corporate executive compensation. President Obama has been on all sides of the issue and went to another country - California - to do Jay Leno (and put his bowling ball in his mouth) and pick up Governor Schwarzenegger to accompany him back to D.C.

Treasury Secretary Tim Geithner walked out of the annual Gridiron Dinner in D.C. last Saturday after a skit which ripped his performance. Not to be outdone Sen. Dodd informed us at a hearing this week on financial industry regulation, "I for one would be sort of intrigued in looking at alternative ideas." That's reassuring, Mr. Chairman.

MORE MARCH MADNESS
Up here March comes in like a lamb, goes out like a lion. In D.C. March came in with the distraction of congressional earmarks and the president signing the "old business" bill. It is likely to go out with a poorly timed effort by the Democrats to thank organized labor for helping with the 2008 election. This isn't Obama's business, but it is the Majority's. They took enough heat from the GOP/K Street axis in the elections that they intend to deliver card check-off representation for unions without secret ballot of employees.

The announcement this week that Senator Evan Bayh (D-IN) is leading a new group of 16 centrist Democrats says more than words about the changing nature of the Democrats in congress, about the increased support for President Obama's centrist stands, and about the future potential of bi-partisanship in the Senate. Read article in The Washington Post.

AND THE INTERMINABLE ELECTION RECOUNT IN MINNESOTA
Last weekend the Coleman-Franken Senate recount broke the 1962-3 Minnesota recount record set by Governor Elmer L. Andersen (R) and Karl Rolvaag (D) which ended March 21. After Andersen was declared initial winner, the recount process declared his Lt. Gov. Rolvaag the winner. Andersen decline to appeal and Rolvaag took over as Governor. This March 21, Coleman attorney Joe Friedberg was heard to say Coleman is likely to lose the current district court process, but likely to succeed in the MN Supreme Court on "due process" grounds. The 1962-3 result, like the 2008-09 process, was largely determined by interpretations of absentee ballots.

ST. PAUL NAILS GOP CONVENTION PROTESTER
We all remember St. Paul as the host to the 2008 Republican Convention and the place that launched Governor Sarah Palin's meteor. Locally we remember it for 3,800 cops from all over the country surrounding our little downtown to protect the rest of us from 10,000 protesters. The feds gave our city $50 million to pay for protection and the cops responded by setting a national convention arrest record of 878 law-breakers.

That was Sept. 1st. Two thirds of those arrested have been told they won't be prosecuted. On March 20th, after a three hour trial, our city finally convicted its first bad guy. Sean Patrick McCoy, 33, of Missoula, MT, was found guilty of "participating in a public assembly without a permit" and required to pay a $50 fine. No news on the guys who busted windows in cop cars and city businesses. St. Paul police are said to still be working on their after action report. No one can account for the costs of all this. But our mayor did tell us our streets don't get plowed of snow unless the snowfall exceeds 4 inches.

AND RAISES REVENUE FROM LOCAL LAW BREAKERS
The easiest way for a city to raise money is by enforcing traffic laws. 50 in a 40 mph zone is worth a $100 ticket and two St. Paul police cars are stationed on W. 7th Street between the MSP airport and downtown. Starting about noon on St. Patrick's Day, a national holiday for St. Paulites, the St. Paul PD was armed with breathalyzers and testing revelers near the St. Paddy's Day Parade downtown for blood alcohol content.

AN AMERICAN FOR GENERATIONAL EQUITY
"I did not run for president to pass these problems on to the next generation. I ran for president to solve these problems for the next generation" said Barack Obama in Los Angeles. While the Congressional Budget Office was announcing this year's federal budget deficit would be $1.8 trillion (not $207 billion estimated a year ago by Peter Orszag at CBO) and none in the next 10 years will be less than $1 trillion. Obama has not created the generational problems this nation faces. Those who must share responsibility for the reality that financial system, state and local government, and employment bail-outs are complicating his original mission. And they, the Congress, ought to spend less time taxing bonuses and earmarking their own spending programs and more on reforming the cost drivers in our economy and its financing policies.

RECESSION IS OVER
Sweeney's Dale Street Saloon and Wine Bar in my St. Paul neighborhood had been attracting early crowds the last three months with its "Recession Happy Hour" and $2.25 pints of Summit Ale. This week the sign came down. And the stock market was up for the second week in a row for the first time in over a year. And hybrid car sales are way off as the price of gasoline drops below $2.00. Going to make Obama's new energy policy job a whole lot harder.

A VERY IMPORTANT $320 BILLION
Talk about greed. The alacrity with which nonprofit institutions in this country and the wealthy donors with questionable motives for giving descended on the proposal to reduce the 501c(3) deduction to 28% of adjusted gross income was amazing. You can expect the realtors to do so regarding mortgage interest. It's in their genes and their 6% fees. In 1986 we passed a tax reform bill which reduced marginal income tax rates from 50% to 28% by cleaning out "loopholes" created as tax "incentives". It didn't cut into charitable giving or mortgage lending at all. It did affect the sale of high end yachts in Rhode Island. So what? Everyone will make a contribution to generational equity except many of those who helped create the inequity and the "charities" which are more dependent on them than on those like the widow and her mite.

DAVID BROOKS speaks for Washington beltway pundits when he publicly worries the president is trying to do too much. "The president of the United States has decided to address this crisis while simultaneously tackling the four most complicated problems facing the nation: health care, energy, immigration, and education. Why he has not also decided to spend his evenings mastering quantum mechanics and discovering the origins of consciousness is beyond me."

SO WHAT WOULD YOU HAVE HIM DO?
Ignore the fact that an economic crisis like this is caused by decades of poor policy and indecision about changing it? Ignore the fact that pundits like you always buy the notion that we can't do what needs to be done to prevent 9-11-01 or 9-17-08 unless we have a crisis to protect Congress from a poorly informed electorate? If Obama does not act now to put the cost-driving policies high on his agenda, and put top people in place to lead them, and talk to us about what it might be like to live in a better, more responsible America, he won't have time in 2011.

CONGRESSIONAL OVERLOAD
David Brooks does remind us that Obama appears to be overloading the current Congress - House and Senate. That's very clear. It's a problem that's been growing for 20 years. But it's not institutional. It's the members and their leaders. A new kind of Republicans chose during the Bush 41 years to take down Democrats by defunding them with no-new-taxes and tax cuts and opposing them on everything liberal/socialist/bad values. And by attacking their own centrist values and members. They were successful in reaching power for a dozen years from 1995-2007. Now neither body has the bipartisan leadership and the followership to which Ronald Reagan was able to turn in the economic crisis of 1980-82 and the economic recovery, social security rescue, tax reform, national security years that followed.

PRESIDENTIAL AMBITIONS
Hollywood casting of a Republican presidential candidate in 2012 would come up with a tall, dark, handsome, articulate basketball player from the Midwest. Guess what? We already have one and he's polishing his resume. Senator John Thune (R-SD) lost one Senate race before knocking off majority leader Tom Daschle in 2004 and reaching GOP leadership positions just two years later. His colleagues have now chosen him to lead the Republican congressional opposition to The Employee Freedom of Choice Act which removes the legal option of employers to require a secret ballot for union representation after a majority of employees have signed cards favoring an election.

New York Attorney General Andrew Cuomo is positioning himself to be governor of New York as New Yorkers tire of David Patterson. Son of a governor, successor in the AG job to Eliot Spitzer, Clinton HUD Secretary, Cuomo has all the credentials plus the track record to succeed. As the man who best controls public exposure to Wall Street failures, he is now plotting the most appropriate strategy to ensure the success of the Obama economic recovery, the identification and punishment of the malfeasant, and the better future regulatory policy.

SHOULD SPECTER SWITCH?
Democratic heavyweights are telling Pennsylvania Republican Senator Arlen Specter he may get knocked off in the PA Republican primary next year. Of course they'd like that 60th Dem in the Senate. More importantly, a Susquehanna poll of PA Republicans in February have 26% supporting Specter and 66% preferring someone else. PA voters cannot cross over in the primary and Arlen cannot run as an Independent if, like Joe Lieberman in CT, he should be defeated in the GOP primary. I asked him his plans last week and he said, "We need you back here Durenberger."

CHRIS DODD IN TROUBLE AS WELL
There's been a Dodd in the Senate from Connecticut for decades, but Chris is in trouble. A Quinnipiac poll shows former Republican congressman Rob Simmons with a 43-42 lead over Dodd. Things are only going to get worse for the Senate Banking Committee chair and Simmons, who once served on our staff on the Senate Select Committee on Intelligence, is the most likely Republican in an increasingly Democratic

EXPANDING NATIONAL AND COMMUNITY SERVICE
This week the Senate is debating a House-passed bill to expand AmeriCorps from a funded 75,000 volunteers to 250,000, and other volunteer service programs. This is good news to those of us who have been long committed to the potential of voluntarism, to service learning, and a host of other program. I was a chief GOP sponsor of Bill Clinton's AmeriCorps bill in 1993 and recall leveraging my sponsorship to add the words "community" which is where the real work of public service takes place.

Given the problems the world faces today, and given the opportunities for service this presents, I wish the Congress also consider a major expansion of the overseas voluntary service programs as well. Open them up to older and experienced Americans as well as to the young. So our talents and our commitments to service can be shared with people in under-developed or un-developed countries especially in Africa and Asia. Just think of what an army of American service volunteers as large as the 170,000 Americans serving in Iraq (just those in uniform) could make in the Democratic Republic of the Congo (DRC) where 80% of public services today are paid and produced by church groups.

Health Policy

MEDICAL MARKETS AND SOCIALIZED MEDICINE
There are parts of this country where the cost of getting sick or the cost of dying is half what it is in much of the country. Not because medical markets work here. In Hawaii or North Dakota; in Multnomah County, OR or King County, WA; in Billings, Mt, Ogden, UT; Grand Junction, CA; Appleton, Marshfield or La Crosse, WI; or Hershey, PA. They don't work anywhere. But, because community minded physicians, hospital systems and sometimes health plans and employers have decided to change their health and healthcare values.

For Washington D.C. policymakers this is hard to comprehend. They are too busy fighting "government run healthcare" or "socialized medicine" or promoting "private insurance" which isn't (Republicans) or expanding a welfare based Medicaid system which keeps growing in size as the partisan battles go on (Democrats); aided and abetted by planeloads of D.C. bound members of thousands of national associations of every medical stakeholder playing to the lowest common denominator of membership self-interest.

We need the time and attention of a president who can reach all Americans with the message that there is an "American Health System" of high quality care, healthy people, and low cost medical services in the places I've mentioned. Where we can all go to see the future because we're not going to see it in Washington D.C. any time soon.

WHO SAYS MARKETS DON'T WORK?
If medical students are being forced out of family medicine and other primary care specialties and into sub-specialty medicine by the economics of education and the medical marketplace, then try three things that might restore markets to education and medicine. First, create a revolving loan fund in Social Security with the current excess of SS tax revenue over pay-outs. Allow students to borrow against their future income and pay back the SS fund for their medical education at 3% of annual income.

Second, broaden and deepen the pool of Americans eligible for medical education to include those who have a heart for helping, not just a brain for engineering. Third, expand the care coordination function of integrated healthcare delivery systems which link members of all professions with best results for all patients, not just theirs.

Students, not ivory medical towers/specialty practice silos, would shape the nature of medical education. Students, not third party payers, would determine where their talents are most needed and best rewarded. The financial savings that accompany patient motivated behavior change by providers would stay in the community in which every contributor to this new healthcare economy lives. Not be shipped off as tax dollars to Washington or as premium dollars to Minnetonka, MN or as medical education dollars to NY or PA.

LINKING HEALTHCARE COST AND QUALITY
Over the last 10-15 years we've watched as the "consumer directed" health care market has developed in Minnesota. An unlikely place, since we've always prided ourselves as being the home of high quality, low cost health care. But linking consumers of health and health care services with comparative prices in our community for the same service is a step in the right direction. Doing the same thing with health insurance works much less well although it's made hundreds of millions for the owners of Golden Rule and Definity Health. We also gave birth to MinuteClinic and the retail clinic and a variety of urgi-care knockoffs. Now HealthPartners, BCBS of MN and Medica are putting up medical price websites so as to better inform customers with the time to shop and no doctor to help them.

As Roger Feldman, UMN professor and former McCain adviser, informs us, "too many consumers still equate high prices with high quality." The gold standard, says Roger, would be linking price with quality as expressed in various ways by various care quality experts. Therein lies the rub. Until we can come up with an accepted definition of quality all this consumer activity is nice, but not the change agent our systems need.

Illustration from The New Yorker
by Victoria Roberts

BUYER BEWARE
Dr. Joseph Biederman, a Harvard psychiatrist and expert in diagnosing bipolar disorder in children, was director of the Johnson & Johnson Center for Pediatric Psychopathology Research at Massachusetts General Hospital in Boston. He earned at least $1.6 million in consulting fees from Johnson & Johnson between 2000 and 2007 of which he reported only $200,000 to his academic employer. He is also being accused of tilting research on J & J's Risperdal (risperidone) and his opinion (plus company marketing) as better than competitive neuroleptics like Eli Lilly's Zyprexa. Don't know what the naming rights on the center cost J & J, but the kind of research done in Boston and many other academic medical centers with drug company naming rights must be critical to the industry. Then why tilt outcomes. Smells like A.I.G. retention bonuses.

Dr. Charles S. Schulz is head of the department of psychiatry at the University of Minnesota. Schultz has received $112,000 in consulting fees from AstraZeneca between 2002 and 2007 and nearly $450,000 from Eli Lilly. Questions have been raised about his professional judgment in advocating superiority of AZ's Seroquel over Lilly's Haldol, a competing anti-psychotic.

Also at the UMN, medical school dean Dr. Deborah Powell defends a watered down conflict of interest policy as a "work in progress," an effort to "craft a policy that reaches some consensus." Believe this if you can, she defends killing an effort to eliminate drug company funding of continuing education as "the only alternative to raising tuition."

IN A HURRY TO GET OUR MEDICAL MIRACLES
The release last week of the two big studies on the effectiveness of the PSA test in saving lives from prostate cancer tells us there is as yet no solid proof that everyone with highly elevated PSA will benefit from treatment. In fact, most do not and some suffer serious side effects from treatment. The first Senate PSA's were performed on Bob Dole and Ted Stevens and they quickly passed legislation which had the effect of setting national blood testing standards for men at 40 which has resulted in billions of dollars in new income for the medical industry. And got Bob Dole a job selling erection enhancing drugs.

DEVICE/DRUG COMPANIES RETAIN TONY COELHO TO KILL COST EFFECTIVENESS
While Democratic health reformers, and the president, seem well on their way to achieving a long-sought victory to focus a major research effort on comparative effectiveness of medical procedures and technology, the device/drug industry has decided that cost must not be a factor in determining comparability. So they have committed nearly a million dollars and involved some national physician associations to change Democratic minds. They created The Partnership to Improve Patient Care and hired former Democratic house leader Tony Coelho to be its chair. Coelho is a former director of Cyberonics, the troubled device company which has been in Chuck Grassley's sights over its ethics.

MEDICARE DRUG VALUES
When Republicans sold the Part D prescription drug benefit to AARP and, thus, to all Americans, they brought along hundreds of insurance companies, thousands of drug plans, tens of thousands of sales personnel and millions of dollars of marketing, pharmacy benefit managers, special needs plans, benchmarks, bids, and god knows what else. All in the name of medical markets. And they've achieved nothing other than the money they are spending will buy more people into prescription drugs than before. Whether they need them or not. At a cost which may be twice what it would have been had the "socialized medicine, government-run healthcare" program called Medicare been able to buy with the power of 40 million customers. Just the way the VA Health system does. Just the way Wal-Mart buys with the power of 100 million customers.

GOING HOME
Rarely in the policy world are you given the opportunity to return to the place where your seeds were originally planted. Jack Ebeler has that chance today as he returns to work for Congressman Henry Waxman where he started more than 30 years ago. Henry is chair of the powerful Energy and Commerce Committee of the House and Jack is one of the most skilled health policy persons in the country.

Jack is a former Health Partners executive, former RWJ Foundation manager, former Johns Hopkins educator, former HMO council head, and former MedPAC member. Rumor had it that the comptroller general was about to ask Jack to take over as chair of MedPAC as Glenn Hackbarth took retirement from an extended time as its chair, but this was too good to pass up.

DAVID BLUMENTHAL was named last week as the national coordinator of health information technology at HHS. He has been a key adviser of candidate/President Obama as he once was in the U.S. Senate to Ted Kennedy. He's risen to health policy prominence as founding director of the Mass General's health policy institute. David is also writing a book on the role of the president in health policy reform which is most appropriate for the times. His first and most interesting challenge will be to take on the proposal by Dr. Kenneth Mandl and Dr. Isaac Kohane for insuring the government should be a "rule-setting referee to encourage the development of an open software platform on which innovators could write electronic health record applications...If the government's money goes to cement the current technology in place, we will have a very hard time innovating in health care reform."

HEALTH INSURANCE REFORM
"Insurers make money by separating us from one another and charging different amounts to different groups, based on their health risk. That is socially unproductive. Insurers should make money not by excluding the sick, but by helping them get better care," said Len M. Nichols, an economist who is director of the health policy program at the New America Foundation, in an address to the HELP Committee on March 24, 2009.

Ranking Republican Chuck Grassley (R-IA) last week spoke for the GOP in Congress, and for all those who actually think medical markets and insurance markets exist in this country. He told SFC Chair Max Baucus (D-MT) he couldn't support a health reform bill that authorized a public, or government, insurance plan that could compete with private health insurance. AHIP objects to this as "a very short step to a Medicare like program for all Americans in a single payer system." Although he didn't mention it, I'd guess AHIP/GOP will object to the so-called age 55 "buy-in" proposal with Speaker Nancy Pelosi and others are wedded to. It would allow Americans age 55 and older to pay their way into either the Medicare program or the FEHBP.

Here's what Washington doesn't get:
1. There are 1,340 insurance company members of AHIP, but not one of us Americans has the ability to compare one of these plans with another. We don't know what we are buying in the way of risk-assumption or the risks against which we most need to protect ourselves. Most of us don't have a choice of plans because an employer makes that decision. And a majority of us cannot afford to make a choice if we had one because of premium costs.

2. Health insurance companies in America do not play by any national rules so how can we have a national market? They are regulated by the 50 states as to their financial reserve requirements, marketing and occasionally pricing. But not on risk assumption and the related benefits and pricing. That's why some states have suggested "health exchanges" as a forum for sorting out our choices for us. Some suggest a National Insurance Exchange. Why? Because markets that don't play by rules don't foster informed consumer choice.

3. Medicare has been trying for decades to put the "government-run" Medicare program in competition with private health insurance. Initial demonstrations of local competition by HMOs in many parts of the country were hugely successful and could have led to privatization of much of Medicare if medical practitioners had not fought them in other parts of the country where doctors feared working with insurance agents. And they cost a lot less than traditional fee-for-service Medicare where the HMOs were used. In fact they were so good, guys like Bill McGuire starting buying up many of these local plans and building or creating large national companies which, in 1998 beat down Clinton Medicare efforts to get private plans to compete on quality and price. (Ask the new Czarina Nancy Ann Min DeParle)

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