Healthcare Policy and Healthcare Politics – Summer 2009

As Congressional Committees appear to be steadily walking towards the starting line for considering health care reform legislation next week, I’ve been thinking about various healthcare policy and political events and activities that will influence the substance and process for these efforts over the coming months – and perhaps years.

Because a complete examination of all the important events and documents from the last several months and years would be too long for a single post, summarized below are some of my observations and thoughts about the meaning of 5 touchstones that people will likely reference in the coming months as part of the health reform dialogue:

  1. Massachusetts’ health coverage and reform initiative
  2. The Senate Finance Committee’s 3 Policy Option Papers
  3. Frank Luntz’s health care talking point paper for Republicans
  4. The May 11th letter from 6 national groups to President Obama
  5. The Democratic Party’s development of Organizing for America

As discussed below, each of these activities and documents has dual (or dueling) policy and political goals, (i.e. changing policy to improve the healthcare system, or designed to win political points), that may be aligned or in conflict.

1. Massachusetts Health Coverage and Reform Initiative

  • The original legislation was a political compromise that included:
    • The use of private insurance to expand coverage
    • An individual mandate
    • An employer penalty for not having all their workers insured (a.k.a. play or pay)
  • Single payer is discussed and supported in Massachusetts, but wasn’t part of the state’s health reform initiative
  • The state’s Commonwealth Connector insurance exchange doesn’t include a public plan choice/option
  • Despite not being a single payer system, nor including a public insurance plan option, the state’s initiative expanded insurance coverage to more than 97%
  • With the success of increased insurance coverage has come expanded demand for primary care services and subsequently longer waiting times for those services
  • The state is looking at various processes for controlling costs as a second outcome to be achieved
  • The state’s ability to control health care spending will likely require Federal regulatory and/or legislative cooperation from programs such as Medicare, Medicaid, and ERISA

2. Senate Finance Committee’s Policy Option Papers

  • Between April 29 and May 20th the Senate Finance Committee released 3 papers describing options for health delivery system transformation, expanding coverage, and cost savings and revenue raising.  (The Committee also held hearings on these papers.)
  • The overarching theme in these papers is transparency and accountability
  • Several issues are notable for their absence from the papers:
    • Discussion of a single payer option for overall reform
    • Cost savings estimates for a public plan option
    • Changing or repealling Medicare Part D’s “Non-Interference” provisions as a source of revenue
  • The only mention of ERISA is in the savings and revenues paper – It is not discussed in the context of health delivery transformation or expanding coverage
  • Medicare’s physician payment formula problem is discussed, and the cost of a 10 year freeze is cited as $285 billion
  • Accountable care organizations (ACOs) and care coordination are frequently mentioned goals, but the papers generally only propose demonstrations or pilot projects rather than definitive programmatic changes

3. Frank Luntz’s “The Language of Healthcare 2009” Paper

  • This paper advises Republicans how to talk about healthcare in a purely political context.  It doesn’t substantially address policy aspects of health reform issues, and it is all about winning as many Republican and moderate hearts without considering their minds
  • The goal of Luntz’s talking points are to paint Democrats’ health reform plans as leading to government bureaucrats making health care decisions, rationing of care, and denying access to necessary care
  • The paper builds upon the premise that patient-doctor relationships are good and that government bureaucrats are bad.  It specifically states that the Democrat’s “government takeover” of the healthcare system will result in a bureaucrat putting “himself between you and your doctor, denying you what you need”
  • Luntz’s paper leverages people’s fear about loss of control and autonomy, but it doesn’t address people’s immediate and real concerns that high costs are denying people access to the insurance or care they need – in effect rationing based upon the ability to pay for the ~49 million people in the US without health insurance and the millions more who are underinsured because they can’t afford their co-payments or deductibles

4. May 11th Letter to the President from 6 National Groups

  • The 2 page letter from AdvaMed, AHA, AHIP, AMA, PhRMA, and SEIU is mostly political posturing
  • The letter uses all the right phrases:
    • “access to affordable high quality health care”
    • “transform the health care system”
    • “transparency that supports effective markets”
    • “aligning quality and efficiency incentives”
    • “encouraging coordination of care”
    • “adherence to evidence-based best practices”
  • Karen Ignagni deserves big kudos for pulling together the other 5 groups and getting agreement for the letter, but herding their collective seagull-like members into agreement for specific reform proposals – other than an individual mandate to have insurance – will be a much bigger challenge, as Paul Krugman recently discussed in his recent column
  • Getting all these groups to the same side of the same table is a success of process, but not a successful outcome.  A collective meeting of minds of similar groups was necessary for the enactment and implementation of Massachusetts’ coverage expansion law, and it is also being used in the state’s efforts to control the growth of healthcare spending

5. Organizing for America (OFA)

  • The Democratic National Committee (DNC) is working to develop OFA as a program to capture the grassroots energy and organization of the Obama campaign, with the goal of using OFA to support the Administration’s policy initiatives – the first of which is healthcare, to be followed by energy and education
  • On May 16th I attended an OFA-MA organizing meeting – along with about 500 other people from around the state. The open Q&A and my discussions with individuals made it clear that single payer has strong and wide support in this group, despite candidate and President Obama’s consistent message that if we were designing a system from scratch, single payer would be an attractive option, but given our immediate needs and problems, other significant targeted changes are needed to improve people’s lives by increasing coverage and controlling costs quickly and effectively.  (Not too mention that such targeted changes face much lower political hurdles than a single payer reform option.)
  • OFA is gearing up for Congress’ consideration of heatlhcare legislation by organizing house parties across the country on June 6th to gather individual stories and prepare the OFA grassroots rooters to engage their elected representatives, the media, and whoever else they can reach on healthcare reform


  1. How to pay for health reform still hasn’t been determined, and this summer Congress will also have to “fix” Medicare physician fee schedule – which will cost about $20 billion/year
  2. The most difficult aspects of health reform, (outside of paying for it), are how to do risk/severity adjustments for payments and quality analyses, how to measure the success of initiatives using a blend of process and outcome measures, and how to estimate, (or “score”), costs or savings from many of these initiatives – particularly for those that involve behavior change, disease prevention or health promotion, or are expected to act synergistically with other initiatives, such as patient-centered medical homes or other care coordination intensive models
  3. Agreement on principles is easy, but agreeing to specific proposals is difficult because one person’s waste is another person’s income
  4. ERISA is the 500 pound gorilla-issue sleeping in the corner
  5. Massachusetts is different than most other parts of the country – both in terms of policy and politics – but its experience presents valuable lessons about the process for bringing stakeholders to the same table and for creating a health insurance exchange with low-income subsidies
  6. Politics will be required to enact national health reform legislation, but the specific policies put into new laws will be important for determining their success or failure upon implementation, because a disconnect between politics and policy can result in legislation that produces outcomes different from what are intended.  For example, the Balanced Budget Act of 1997 changed the Medicare managed care program, (and renamed it Medicare+Choice), with the goal of expanding managed care options for people enrolled in Medicare.  However, following BBA ’97 Medicare+Choice options decreased rather than increased.  In addition, success or failure of one initiative sets the environment for the next, e.g. the failure of BA’97 to expand Medicare+Choice enrollment created the context for the development of the Medicare Part D prescription drug program in 2003.  Similarly, the success of Massachusetts’ expansion coverage law has enabled the state to explore options for controlling overall health spending as a next step – something that would not have been possible if the expansion law had failed or been derailed…… as it had been twice before.


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