Six key questions for Obama on health care reform

(Part of a continuing series of questions for the new administration from a wide range of experts.)

By Rashi Fein
rashi_fein@hms.harvard.edu

Q. There appear two be two contrasting views about health care reform. The first emphasizes a “window of opportunity” approach, i.e. “strike while the iron is hot” -- and presumably it’s hottest at the beginning of an administration. The second argues that one should move slowly, carefully, and deliberately, a sort of “haste makes waste” approach --- and presumably the more discussion, the more viable the proposal. Which approach would you favor and, if the latter, what would you propose in order to move forward in the interim?

Many draw a lesson from the Clinton days: Delay hurt the effort. That may be true, but far more important were the failure to consult with and involve members of Congress, the secretiveness of the huge task force that helped develop the proposal, the complexity of the Health Security Act and, as a result of that complexity, the view espoused by Louise of Harry and Louise that “there’s got to be a better way.” Furthermore, this effort was the ultimate example of a “top down” approach, one in which the public was not involved or mobilized and in which the public was not really educated to the proposed action.

The contrast with the enacting of Medicare -- which came after almost a decade of hard work during which senior citizen groups were developed and helped push the process forward -- is striking. Indeed, that contrast is best illustrated by the fact that after the first attempt, Clinton’s Health Security Act disappeared from the scene while Medicare, though defeated time after time, kept coming back until enactment. A truly universal program is hardly likely to be welcomed by the general public -- which in largest measure still has insurance protection even as it feels a threat of losing its coverage -- if it doesn’t understand the proposed program.

A fast but complex approach will not succeed. Complexity means errors, administrative costs and nightmares. If you can’t explain it you can’t enact it and, for that matter, if enacted you won’t be able to administer it. The administration needs to have a plan as soon as possible and begin building support for it, but it is far more important to get it right than to get it fast.

Q. Health care costs are over 16 percent of the Gross Domestic Product and are increasing at a far more rapid rate than the Consumer Price Index. Some argue that we ought to get costs under control before we dare to move on expanding insurance coverage and moving toward universality. They assert that if Medicare is unsustainable we simply can’t afford to move beyond it to universal coverage. Others argue that we cannot deal with costs in the fragmented financing system we have and that the only way to get a handle on the cost problem requires the kind of program that covers everyone and gives everyone including the federal government a real incentive to share risks and budget and control costs. So which do you think comes first: universal health care or cost containment?

The fact is that until we enroll everyone or are moving over a short period of time to a universal program we will not be able to mount an effective cost-containment program. Cost containment is not the lever or linchpin to universal coverage; universal coverage is the linchpin to cost-containment. The simple fact is that we have talked and talked and waited for cost-containment and still haven’t begun to get there. We ought to understand that there are reasons for that. Among them is that while some people (the payers) would like to contain and even reduce costs, others (the providers and the insurers) pretty much like it the way it is. One person’s costs are the next fellow’s income. Until everyone is in the program the providers are stronger than the individual fragmented payers.

Ultimately the nation will need and will develop a health care budget, but we are not moving in that direction and won’t until all of us are in the same risk pool. To believe that rhetoric or new technology will solve the cost problem -- and to require that solution be in place before we deal with universality --- is to leave millions of folks without coverage, to condemn the US to an ever-increasing proportion of the GDP devoted to health. (And there goes education, infrastructure, and higher wages.) Part of the problem is that many of us don’t have any idea how much we really pay for health care in the form of lower wages. As one listens to folks who have become unemployed and have lost their insurance and want to turn to COBRA and purchase it on their own, one hears the shock of discovering how expensive health insurance is. Yes, it can become less costly through administrative savings – Medicare is much less expensive than privately run insurance – but it will not be cheap. The incentive to develop less costly approaches will not go anywhere as long as many of us don’t understand that it is our money that is supporting this sector and therefore have little incentive to apply cost-reducing pressure on producers and insurers.

Q. Medicare is a federal program in which all beneficiaries are in the same program and risk pool. It works and is popular. Nevertheless, many of the current proposals for universal insurance are based on employer-linked insurance (even as more employers want out), government subsidies for lower-income persons and lower-profit firms (requiring income determination and other administrative chores), and suffer the inevitable problems associated with complexity. What in your view are the obstacles to an easily understood “Medicare for All” program?

There certainly are many folks who would feel threatened by a larger role for the federal government because they deeply believe that government can’t be effective or efficient or fair, or because they are afraid of government power, or because they have grown cynical given the behavior of various public officials. Nevertheless, while decrying government they do believe in public education, in government owned highways and bridges, in Medicare (as long as “government keeps its hands off my Medicare!”) and in regulatory action especially by the FAA, FDA, and similar agencies.

The political problem is not so much the attitude toward health care with government financing; the problem is that legislators are terrified of taxes. We have built up a culture in which our elected representatives are afraid to say that some things have to be paid for and that there is only one way to do that collectively and that is the five letter word, taxes. If people believe that taxes are bad and that premiums are OK and if they don’t understand that when employers pay the premium it is in no small measure what holds their wages and incomes down, health reform will remain in trouble. Instead of trying to make-believe that what divides us are a few small differences among reasonable people, we need to start educating people about some stark realities. An informed electorate is the infrastructure on which health care reform will rest.

Q. If universal coverage cannot be achieved “overnight,” what kind of a “phasing” proposal should we begin with? Some have said begin with children (expand SCHIP to cover everyone up to, say 18 and break the linkage with Medicaid – what LBJ called Kiddycare) and increase the age limit on a predetermined timetable. Others say lower the Medicare age of 65 and keep lowering it until everyone is enrolled. Some suggest doing whatever we do in ten states at a time, until we have all fifty. Still others say you can’t leap over a chasm in two steps and insist that we have to do it in one fell swoop. What is your view and preference?

It is quite reasonable, though disconcerting after all these years of “getting ready” for change, that administrative capabilities and shifts in the flow of funds may require a lot of time. Phasing in a plan may be necessary. But -- and it is an important “but” -- one does not want to fight the reform battle every few years. It is one thing to enact a first step with the timing and the nature of following steps left unspecified. It is quite another to enact a piece of legislation that lays out the subsequent steps and a timetable or “trigger points” at which they would becoming effective – barring action by the Congress to change the timetable. To say something will happen unless you stop it is very different (politically and in the real world) from saying nothing will happened unless Congress acts. So one can accommodate the idea of measured and predetermined steps with an end point and goal well articulated.

There is much to be said for beginning with kids: most of them are healthy, they aren’t expensive (on average), and it really is administratively easy. There is much to be said for lowering the age from 65: these are the folks who really need help because they are expensive. It is not clear which is better and this is just the kind of issue that one should and could negotiate. As for the ten-state “solution:” none of us would have objected to a ten-state demonstration project a long time ago, but we really are beyond that. The issue is no longer not knowing what to do. Rather, the issue is finding the political will to move forward with a comprehensive plan that covers all Americans.

Q. Electronic medical records are today’s “silver bullet.” They are supposed to be a useful part of the economic recovery package, a way to save money and cut health care costs, a way to improve quality of care and reduce medical errors, a way to create a large data base and, thus, improve our understanding of the science of medicine and of prevention. Assuming all that is true, how quickly could such an effort be mounted, how long would it take to yield the desired results, and how much might it cost and how much money might it save? What privacy guarantees can we really count on in a world in which we often read about break-ins to computer and credit care data?

The health sector reflects American values and Americans do believe in technological fixes to intractable problems. But technology, whatever its merits, does not provide an off-the-shelf answer to what ails the health care system. Technology is not the answer to reorganization. Technology does not solve the payment crisis, the shortage of primary care, etc. Are medical electronic records “good”? The answer depends on the question “good for what?” They do offer the potential – if MDs really use them – for better care. They do offer the potential for better epidemiology. But it will be a long time before they “save” money.

We will have a difficult time solving important privacy issues. And the issues are not simply “hackers.” If we continue with an employer-linked insurance system, they also involve safeguards against sharing records with employers. It will be a long time before all physicians adopt them and when they do will they still look at the patient and make eye contact or will they just look at the computer screen while talking to the patient?  That’s a real question! On balance, electronic records will be a plus, but they will not provide a quick answer to our problem. They are not a silver bullet or a magic drug. Less hype would be a useful prescription.    

Q. The public wants increased access to care. Most of the discussion by the policy gurus concerns how to get an insurance card into everyone’s pocketbook or wallet and how to finance it. But insurance and access are not synonymous. What actions do you support to increase access and reduce the potential embarrassment of providing insurance then listening to complaints that the insured person couldn’t find a primary care physician? Should the federal government support a major expansion in medical education? Should it cut down on the payments to train specialists and support more primary care training? Should Medicare start paying more to primary care physicians and less to specialists and sub-specialists and thereby get folks to move voluntarily? 

Rashi Fein is Professor of Medical Economics, Emeritus, at Harvard Medical School, and co-author of The Health Care Mess; How We Got Into It and What It Will Take To Get Out, from the Harvard University Press. E-mail: rashi_fein@hms.harvard.edu

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