Common Ground

Can we come together on healthcare?

By Ian Morrison

In the wake of the Tucson tragedy, the national political conversation is on the cusp of potential transformation. As I write this, we are in the first stage: a pious truce in which most leaders on both sides honor the dead and wounded and avoid inflammatory rhetoric and analysis. Both President Obama’s oratory and Speaker Boehner’s genuine grief have inspired the country to try to tone down the vitriolic rhetoric. Next, we enter the second stage where we as a country (hopefully) “disagree without being disagreeable.”

But longer term, there are three possible scenarios for the civility of our national discourse and the potential for finding common ground. Each will have an impact on healthcare:

• We go back to business as usual
• We disagree without being disagreeable, on an ongoing basis
• We really search for common ground in policy

Scenario 1: Short Memories

The first scenario is the short national memory alternative. We have largely forgotten the Ninth Ward of New Orleans; the people of Haiti, where only 5% of the rubble from the disaster has been cleared a year after; and, the Gulf Coast Beaches post oil spill. And so with Tucson, we may return to business as usual, and the national conversation resumes its ill-tempered tone, especially about healthcare. I certainly hope this is not the case.

In this scenario, Republicans may try to run out the clock on Obama, and run aggressively against Obamacare by promising to repeal it if elected to control both the Congress and the White House in 2012.

It makes perfect political sense. The major benefits of the bill to lower income folks have not kicked in and will not kick in until 2014, health insurance costs continue to rise in the interim (and some even blame Obamacare for making it so), and the public really don’t understand what is (and what is not) in the law. For example, surveys show that majorities of the public don’t know that provisions that they like, such as tax credits for small business to purchase health insurance, are in the law. While on the other hand, significant minorities (around 30 percent) continue to believe that unpopular provisions such as death panels are in the law when they are not.

In addition, the legal challenges to the individual mandate will make their way through the legal system (and make some state Attorneys General into Republican rock stars in the process) eventually winding up in the Supreme Court. And who knows what a Roberts court would decide?

All of this political theater aimed at demonizing health reform will drag out over the year and then, before you know it, we will all be in Iowa in January 2012 listening to Republican presidential hopefuls argue that repeal of Obamacare is a national priority. In the absence of tangible benefits to voters, Republicans might be successful in persuading the country that Obamacare is a bad idea and that it should be repealed and replaced.

Scenario 2: Civil Disagreement: Repeal and Replace

A second scenario is that the tone of the debate is more civil going forward, but the fierceness of the disagreement remains. In this scenario, “respectful, repeal and replace” will be the clarion cry of the new Congress this spring. Obamacare will likely be the subject of many rounds of congressional hearings. As new regulatory details emerge there will be much to criticize. Any reform so sweeping has lots of crazy moving parts and is a target rich environment for critics, doubters, and outright opponents.

Harris Interactive/Health Day polls taken after the election show that about 40% of Americans want to repeal all or most of the provisions of the bill (only 28% say repeal the whole bill). But, and this is funny, the public wants to repeal most of the key elements of the bill except for the key elements that are in the bill. For example, when asked about specific elements to repeal, only one element, the individual mandate, has a majority (57%) favoring repeal, all the other elements including guaranteed issuance, health insurance exchanges, tax credits for small business, employer mandates, and expansion of Medicaid have either majorities or significant pluralities favoring keeping the provisions rather than repeal. The Harris poll also shows that the basis for opposition among those who oppose is largely ideological (big government, higher taxes, rationing of healthcare, socialism) or fear of higher taxes, higher costs, or lower quality. Those who oppose Obamacare oppose the caricature not the content of the law.

I have been to thirty states (mostly red states) since Obamacare was passed in March, 2010 and I can testify that the new law is not universally adored across the nation. Yet, I also found that everywhere I go healthcare leaders are preparing for a new future when key provisions of the health reform legislation will be in place. Expected features such as expanded Medicaid coverage, new exchange based health insurance expansion, and changes in reimbursement to reward accountable care and patient centered medical homes are all stimulating strategic actions in the field. A lot of people are out there preparing for a future that assumes that repeal and replace does not happen.

Obamacare Repealed: Welcome to the Replace Part

If Republicans were to control the White House and Congress in 2012 (as in Scenario 1 or 2) what would happen to healthcare reform? Well, to fully undo the statute requires an enormous bulletproof majority in both houses, but let’s assume that happens, what would repeal and replace look like.

The best clue to what “replace” looks like is in the proposals put forward by Republicans in the past: tax credits for small business to provide insurance (which is already in Obamacare), high risk insurance pools (also in the law), allowing purchase of health insurance across state lines, Health Savings Accounts and malpractice reform. These initiatives are unlikely to make much of a dent in the 50 million uninsured. (The non-partisan CBO estimated approximately 3 million uninsured would be covered). Nor would they do much to reduce the costs of care (with the exception perhaps of malpractice reform, which I will return to below).

More radical ideas have been put forward by young members of the Republican Party such as Representative Paul Ryan who has proposed a voucher system for Medicare starting in 2021. The Ryan Plan would undoubtedly save Medicare money but cost seniors a fortune, because the value of the voucher would be considerably below the expected costs of care.

Asking seniors to pay ever higher out of pocket costs for healthcare is a little problematic. Senior median income is $22,800 mostly from Social Security and 87% of seniors have incomes less than $50,000 per annum. There is not a lot of leeway for massive cost shifting. Similarly, “affordable health insurance” is code for high deductible catastrophic insurance policies, which are fine if you are rich but don’t work so well for low-income folks. We already have armies of people who are getting inadequate primary care and prevention because of onerous cost sharing.

The other likely part of “replace” is significant reimbursement rate cuts under Medicare and Medicaid. If you are a budget deficit hawk you don’t have to be great at arithmetic to figure out that cutting reimbursement rates for public programs will save the government money.

So there doesn’t seem to be much to the replace part of the “repeal and replace” that would deal with the broader problems of cost, quality, access, and security of benefits. I would like to hear more details beyond the vague promise of a “robust, market-based system where free enterprise and competition produces the best healthcare system in the world.”

The Gathering Storm

While it may be perfectly logical to talk about repeal and replace, it is a policy disaster in the making. Just like climate change, we don’t have time to play chicken.

Healthcare costs are a national security emergency. Lack of coverage and care for low- income people is a national disgrace. Working families are financially devastated by illness. Mothers of children with pre-existing conditions live in fear of being uninsured.

Just last evening, our friends, an affluent couple each with their own small business described the agony of trying to get health insurance for their 13 year old son who because of a heart defect, that he had corrected surgically at birth, is permanently uninsurable. Their fall back plan? Activate Canadian citizenship because the father is a native Canadian.

It seems crazy to me that you have to change countries to get access to health insurance.

Before you say, well let’s just regulate insurers to take all comers at an affordable price, think it through. If insurers have to take all comers you have to mandate that everyone has to have insurance (don’t listen to me, go talk to an actuary). If everyone has to have insurance, then you have to subsidize a lot of lower income people, because health insurance costs the same for everyone regardless of income, and people with below median incomes really cannot afford it. The logical source of subsidy for poor people is rich people. Pretty soon you are at Obamacare, or some variant of it.

I don’t think the law is perfect. I think it is an ugly compromise like every other healthcare system around the world, but I think we should improve it, not waste our time and energy on repeal and replace discussions, however civil.

Scenario 3: Finding Common Ground

A third scenario would be for both sides to come together to refine and refocus the healthcare reform legislation. Early polls after the Tucson tragedy showed increased support for making constructive amendments to the bill rather than outright repeal. In the spirit of finding common ground, Republicans could use their new found political clout in Congress to refine and refresh health reform, not repeal and replace it. Here are some areas of common ground where Republicans might propose and Democrats might accept modifications of the law, particularly focused on making healthcare more affordable for everyone:

• Malpractice Reform tied to Quality and Patient Safety. Republicans and doctors firmly believe that malpractice concerns is the root cause of cost escalation. Policy wonks disagree, but that is irrelevant. So why can’t we have an intelligent, civil debate about changing the malpractice environment? For example, by tying malpractice reform to patient safety and quality improvement efforts and creating safe harbors for medical practice when it is evidence-based. Or what about requiring arbitration before malpractice suits could occur, or changing contingency fee arrangements, as well as the usual discussions of limiting damages? I am no expert in this area but I am sure there are some commonsense things that might actually work.

• Personal Responsibility. Republicans are big on personal responsibility. I agree. Let’s put a little more responsibility on patients to comply with treatment, pay more if they are not participating in their get well program, increase incentives for wellness and so on. What about a tax credit if your BMI is under 25? We have been light on the personal responsibility stuff the last couple of years. Members of Congress could propose something sensible.

• Administrative Modernization. Corporate America has gone through massive re-engineering with standardized information technology solutions to streamline administrative processes. Obamacare contains important steps toward the modernization of eligibility verification systems particularly for Medicaid and in the new health insurance exchanges. Republicans and Democrats could come together behind administrative efficiencies.

• Value Based Purchasing and Reimbursement Reform. CMS and DHHS have shown themselves willing and eager to work with the private sector on value based purchasing and reimbursement reform initiatives. The private sector could benefit greatly if they synchronize their purchasing and reimbursement reform efforts with Medicare in particular. Bring the private sector guys to the table.

• Revitalizing Managed Care in Public Programs. Managed care, whether for profit or non-profit, can be a real force for good. Republicans have historically been managed care’s champions, and ironically there is much opportunity for managed care in Obamacare such as Managed Medicaid, despite the whacks to the Medicare Advantage program. Let’s refresh and revitalize managed care for public programs.

I hope the new Congress comes together to work on the peoples’ business. Searching for common ground on healthcare would be a good start.

Ian Morrison is an author, consultant and futurist based in Menlo Park, Calif. He is also a regular contributor to H&HN Daily and a member of Health Forum’s Forum Faculty Speaker Service.