Why Angela Braly, CEO of the WellPoint Insurance Co., Deserves a Raise

Angela Braly, CEO of  health insurance giant WellPoint, deserves a raise. As regular readers of this column know, Ms. Braly did not make as much as Aetna’s Ronald A. Williams in 2008.

In a post written back in May of 2009 I noted of Insurance Company CEO Total Compensation:

Aetna’s Ronald Williams received $24,300,112 last year. That’s $467,309.85 per week. That’s a house. Maybe not a house that Mr. Williams would live in, but a house nonetheless. The man makes a house a week. And interestingly enough, if Mr. Williams were to eschew the purchase of a house on any given week and instead look to deposit the money in a bank– in order to remain FDIC insured (up to $250,000)– he would actually need to open more than one account–every week. Lest we lament the fate of the other CEOs on the list, in 2008 Ms. Braly had to get by on $189,311.76 per week….

Less than half of what Mr. Williams brought in, in 2008 Ms. Braly was forced to make ends meet on $9,844,212.

In 2007, her first year on the job: $9,094,271. Which, for those keeping score at home, is $174,889.83 per week. Her predecessor at Wellpoint, Larry Glasscock, received  $23,886,169 in total compensation in 2006. Again, in 2008 Ms. Braly had to get by on $189,311.76 per week. True, it was $14,421.93 more per week than she had made the year prior, but that won’t be nearly sufficient for this year.

So why does Angela Braly deserve a raise? Pay so high that the  FDIC limits on insurance (yes, it’s somewhat ironic) won’t work for her weekly paycheck? Because WellPoint subsidiary Anthem Blue Cross of California has found the audacity to raise individual insurance premiums in that state 39%. That’s right, 39%. This, according to Secretary of Health and Human Services Kathleen Sebelius, “as WellPoint Incorporated, has seen its profits soar, earning $2.7 billion in the last quarter of 2009 alone.”

Profits “soar,” raise rates. What more could Wall Street want?

Secretary Sebelius has demanded “justification” for the increase. In a letter sent to the Wellpoint subsidiary Anthem Blue Cross, she writes:

One of the biggest pressures facing families, businesses and governments at every level are skyrocketing health insurance costs.  With so many families already affected by rising costs, I was very disturbed to learn through media accounts that Anthem Blue Cross plans to raise premiums for its California customers by as much as 39 percent. These extraordinary increases are up to 15 times faster than inflation and threaten to make health care unaffordable for hundreds of thousands of Californians, many of whom are already struggling to make ends meet in a difficult economy.

Your company’s strong financial position makes these rate increases even more difficult to understand. As you know, your parent company, WellPoint Incorporated, has seen its profits soar, earning $2.7 billion in the last quarter of 2009 alone.

And there you have it, profits soar, raise rates, the stock soars–as will, presumably, Ms. Braly’s stock options. She won’t have “to get by on $189,311.76 per week” for all that much longer. With that kind of move it’s only a matter of time before she finds herself in Mr. Williams’ neighborhood.

Now that the healthcare reform debate awaits its Summit, from the vantage point of its nadir, one might imagine other Insurance Company CEO’s to embark upon a similar strategy. Good thing we jettisoned all those proposed pesky insurance regulations contained in the House & Senate bills.

Because it never gets old to me, here’s the list of Insurance Company CEO Total Compensation:

Res Ipsa Loquitur.

Ins. Co. & CEO With 2007 Total CEO Compensation

• Aetna Ronald A. Williams: $23,045,834
• Cigna H. Edward Hanway: $25,839,777
• Coventry Dale B. Wolf : $14,869,823
• Health Net Jay M. Gellert: $3,686,230
• Humana Michael McCallister: $10,312,557
• U.Health Grp Stephen J. Hemsley: $13,164,529
• WellPoint Angela Braly (2007): $9,094,271
  L. Glasscock (2006): $23,886,169

Ins. Co. & CEO With 2008 Total CEO Compensation

• Aetna, Ronald A. Williams: $24,300,112
• Cigna, H. Edward Hanway: $12,236,740
• Coventry, Dale Wolf: $9,047,469
• Health Net, Jay Gellert: $4,425,355
• Humana, Michael McCallister: $4,764,309
• U. Health Group, Stephen J. Hemsley: $3,241,042
• Wellpoint, Angela Braly: $9,844,212

See Nonprofit Health Related CEO Compensation Here.

An Overview of Exchanges under the House and Senate Bill

On January 8th, 2010, the Alliance for Health Reform and The Commonwealth Fund  co-sponsored and moderated a panel discussion on the health insurance exchanges that are being proposed in both the House and the Senate health reform bills. The panel consisted of Washington and Lee professor Timothy Jost, John Kingsdale of the Massachusetts Commonwealth Health Insurance Connector Authority, and Philip Vogel of the Connecticut Business and Industry Association (CBIA), which runs the non-profit CBIA Health Connections, a health insurance exchange for the state of Connecticut.

The co-sponsors have uploaded all of the event’s materials, including a webcast of the entire event, as well as all of the powerpoint slides and papers. All of this information can be found here.

Professor Jost and the Commonwealth fund created detailed charts comparing the differences between the two bills. Below is a reproduction of Professor Jost’s chart, which can be viewed by clicking on the thumbnails.

Both the House and the Senate bills would create new health insurance exchanges that would help consumers and employers navigate the purchase of health insurance. Though the common thread of a regulated marketplace runs through both bills, all three panelists noted the stark difference in the vision and implementation of the exchanges under the respective bills.

Below are some of the key distinctions between the two bills.

The House Bill — Public Option with Opt-Out Possibility

The House’s bill, H.R. 3962 (click here for entire pdf) provides for a federal exchange that would essentially eliminate the individual marketplace for health insurance going forward. A public plan would be offered that would reimburse providers at negotiated rates between those of Medicare and commercial rates. The applicable section of the House’s bill is Title III, entitled Health Insurance Exchange and Related Provisions.

Title III of the House Bill would create the Health Choices Administration with a Commissioner who would oversee the exchange. Citing Section 301 and 308 of the Bill, Professor Jost notes on page 17 of his paper:

The exchange operates at the national level, established within a new Health Choices Administration. The Commissioner of the HCA can, however, permit individual states or groups of states to administer an exchange within their territory in place of the national exchange if specific requirements are met, subject to revocation if the state ceases to meet the requirements of the bill. Even if the HCA delegates exchange authority to a state, the Commissioner retains enforcement authority and can further specify functions retained by the Commissioner and not delegated.

Thus, the House’s bill would create an exchange system that is fairly centralized and regulated, but with added flexibility. If the states fail to implement their own exchange then HHS will implement an exchange for them. Only those policies considered “grandfathered” could be sold outside of the exchange, and such “grandfathering” can only occur in the individual market. (See Section 202). Insurance offered inside the exchange would fit into one of four tiers: basic, enhanced, premium, and premium plus. (See Section 303). These tiers would correspond to different actuarial values of the plans. Subsidies would be provided on a sliding scale that is determined by the purchaser’s income.

The House bill would also limit the medical loss ratio of plans offered in the exchanges to 85 percent, largely prohibit the rescission of contracts, eliminate lifetime coverage limits, eliminate pre-existing condition exclusions, as well as require guaranteed issue and renewal of plans. Variations in premiums based on the age of the insured could only vary by a maximum of 2:1.

Not all of the panelists agreed with every provision. For example, Mr. Vogel took issue with the dependence on the medical loss ratio in regulating the market, instead arguing for a greater reliance on the “claim dollar” as a guide post.

Whether offered inside the exchange or grandfathered, all plans must meet certain requirements in terms of essential benefits, which would be determined by HHS, and would be based on the recommendation of the Health Benefits Advisory Committee–a public/private hybrid entity.

• Click here to jump to section 223 outlining the Health Benefits Advisory Committee

These benefits would include hospitalization, outpatient care, prescriptions drugs, equipment, and a host of other benefits.

• Click here to jump to the section 222 which details the essential benefits.

The House bill would also impose rules regarding the transparency of the plans offered in the exchange by requiring certain information about the plans to be disclosed.

The Senate Approach — No Public Option; Multistate Substitute Would Exist

For whatever reason, the Senate crafted a more complicated framework of exchanges.

A crucial point of divergence from the House bill is the Senate bill’s lack of a federally financed public plan offered through the exchange. However, as discussed below, part of the Senate plan attempts to act as a substitute. Another area of divergence is that existing individual and group plans may continue alongside newly created exchanges, in addition to any grandfathered plans. This is in stark distinction to the House bill that would eliminate some existing policies. Though as noted, the House bill would allow for some grandfathering.

The Senate’s exchange framework is based on section 1001 of the bill which provides that HHS will, with the help of the National Association of Insurance Commissioners (NAIC), craft standards regarding the minimum benefits and other aspects of the plans sold through the various exchanges.

In terms of the Senate’s framework for exchanges, it is as follows. The Senate bill will allow for a number of exchanges that would exist on variety of different governmental levels. Whereas the House bill envisions a more federal exchange system, the Senate bill would instead allow for state-based exchanges, multistate exchanges (i.e. regional), or substate exchanges.

• Click here for a pdf version of Senate bill, as passed.

State-based Exchanges
For the individual and the small group markets, the Senate bill would require each state to create a American Health Benefit Exchange for individual purchasers of insurance, and a Small Business Health Options Program (SHOP) for small businesses purchasers. HHS would regulate these exchanges (See section 1321(a)(1)). These exchanges would be governed by regulations promulgated by HHS, unless the states adopt alternative standards that the HHS finds acceptable.

The state may combine the individual market exchanges with the small business (SHOP) exchanges. Additionally, states have the flexibility to establish regional exchanges or smaller subsidiary exchanges that target specific geographic areas within the state. (See Section 1311(f)). If the states do not create a system of either separate exchanges for individuals and small business, or some combination, HHS will establish an exchange or utilize a non-profit insurer to fill the void. See 1321(c).

The multistate exchanges are important, as they may mollify those who have been touting the idea of interstate health insurance offerings as a panacea for the woes of U.S. health insurance.

Regardless of how any states’ exchange(s) plays out, many of the important provisions of the Senate’s bill such as certain minimum benefits, the ban on lifetime or annual dollar limits, the ban on rescission, and medical loss ratio requirements would apply across the landscape of exchanges.

State Opt-Out Possible
Under the Senate bill, the states would be eligible in 2017 to opt-out of the federal requirements listed above if they can demonstrate that they are providing affordable coverage that is at least as affordable and comprehensive as the Bill requires. Alternatively, the state may be allowed to create a “public health plan” for those under 200% of the federal poverty level. Under this arrangement, the federal government would compensate the state for 95 percent of what would have been provided through premium tax credits as well as cost-sharing reduction payments. (See Section 1331).

Multistate plans: A Compromise?
One major amendment passed on December 24th was section 1334 which amended section 1333 which dealt with multistate exchanges. Under section 1334, The Office of Personnel Management (OPM)–the agency that governs the federal employees health benefit program (FEHB)–will enter into contracts with insurance carriers to offer at least 2 multistate plans through each exchange in each state. (See 1334(a)(1)). These plans will cover the individual and small group market. At least one of those plans must be a non-profit insurance plan, and must be in accordance with the general standards set forth for health insurance plans.

Though there would be a minimum level of benefits and protections required for all plans, the States would be entitled to offer multistate plans with more substantial benefits. However the state will have to defray the costs of the additional benefits.

Unlike the House bill which eliminates the state-based individual market, the Senate bill envisions exchanges that would co-exist with both the individual and small-group markets, and operate under the same rules. Though the Senate bill allows for flexibility, the subsidies provided by the federal government could only apply to insurance plans sold through the exchange.

One of the most important and controversial sections of the amended Senate bill is section 1334(a)(4), which specifies that, in administering the multistate plan, OPM will have the same bargaining power as they currently have for plans offered in the FEHB. Thus, OPM would be able to negotiate for a specified medical loss ratio and profit margin, as well as specified premium rates and any other terms in the “interest of the enrollees.” The goal is for these plans to be offered nationwide. Whether the OPM-run exchange will succeed is obviously yet to be determined, but some like Professor Timothy Jost are worried that the Senate’s plan to allow some plans to operate outside of the exchange complicates the federal government’s job in risk adjustment.

John V. Jacobi on Health Reform & Care for the Chronically Ill

In case you missed it: Health Reform Watch regular, Professor John V. Jacobi, interviewed by Lester Feder for Legal Issues in Health Reform, a publication of The O’Neill Institute for National and Global Health Law at Georgetown University. In part:

Covering the Chronically Ill: An Interview with John V. Jacobi

John V. Jacobi is Dorothea Dix Professor of Health Law and Policy at the Seton Hall University School of Law. The O’Neill Institute’s Lester Feder spoke with him about health reform and covering those with chronic illness.

Lester Feder: Generally speaking, what do you think of what it is looking like we’re going to get out of Congress?

John V. Jacobi: I think that there are two big clusters of issues: one is covering the uninsured, which has gotten most of the attention, for good reason. The other issues, which I’ve been most concerned about is access for the most vulnerable: people with chronic illness and disabilities. On the first part it’s anybody’s guess on how well we’re going to do at covering the uninsured. On the second part, there are lots of interesting structural pieces in the bills that will help people with chronic illness, but I think that the overall structure of the reform may end up undercutting that quite a bit.

The pieces in the bills that are helpful are the ones that create medical homes, or chronic care management, or assure coordination of care for people with chronic illness. It is the sort of change that our delivery system and our finance system really need to be looking at. The problem with getting those innovations to actually work is that much of the coverage under the plans for the chronically ill will be provided through the private marketplace.

And here’s the problem with that: Private insurance companies are more or less profitable  depending on the risks that they accept. They are much more likely to be profitable if they are good at risk selection than if they are efficient and provide good service in other ways. There is such a dramatic concentration of cost in any actuarial pool that if an insurance company can avoid the 10 percent of the sickest people it is going to be doing quite well, whether it’s good or bad at delivering its services. And the ones that attract those 10 percent of the sickest are going to be in trouble unless there’s quite a good risk-adjustment program for premiums, which doesn’t seem to be available yet.

Read More

Ringing in a New Year in Health Reform: For Whom the Bell –Still– Tolls

As we come upon this new year and the prospect of House and Senate Bill reconciliation,  I find myself taken by the process. The length of it–the depth of it–or perhaps more precisely, the lack of depth thereof. Back in the dog days of summer I wrote this:

The debate wandering to and fro and fueled by hyperbole, the desire for “victory” (whatever that may mean), and lobbyist dollars descending upon the corridors of Washington until they have become, in the words of T.S. Eliot,  ”Streets that follow like a tedious argument / of insidious intent.”

The words, unfortunately, seem as apt now as they did then. The passage of time harboring more of the same as the process “followed” into the need for 6o votes and the compromises (if not betrayals) necessary to garner the same.

“Had we but world enough and time/ This coyness, Lady, were no crime”

This article published back in September is worth considering

Research released this week in the American Journal of Public Health estimates that 45,000 deaths per year in the United States are associated with the lack of health insurance. If a person is uninsured, “it means you’re at mortal risk,” said one of the authors, Dr. David Himmelstein, an associate professor of medicine at Harvard Medical School.

The researchers…determined that the uninsured have a 40 percent higher risk of death than those with private health insurance as a result of being unable to obtain necessary medical care. The researchers then extrapolated the results to census data from 2005 and calculated there were 44,789 deaths associated with lack of health insurance.

Last New Year’s Day I wrote this in anticipation of the continued economic meltdown as it regarded Health Reform:

As we ring in the New Year and begin to contemplate the inter-relatedness of the macro-economy and commence what may well be the “fall into a ‘death spiral’ of unemployment, disfiguring ailments, and a tendency to be underemployed due to such ailments,” it might be worth a moment to consider the often sudden and unexpected nature of both job loss and catastrophic illness– and John Donne.

The bell which John Donne refers to in his most famous quote is “the passing bell,” tolled by the Church for those who are dying. As Donne lay very ill in his bed and heard this bell being tolled, he wondered if he were, in fact, sicker than he thought. And that perhaps that bell was being rung for him personally. He came to realize, however, that whether that was the case or not was largely irrelevant because

“No man is an island, entire of itself; every man is a piece of the continent, a part of the main. If a clod be washed away by the sea, Europe is the less, as well as if a promontory were, as well as if a manor of thy friend’s or of thine own were. Any man’s death diminishes me, because I am involved in mankind; and therefore never send to know for whom the bell tolls; it tolls for thee.”

In the midst of the year long “tedious argument / of insidious intent,” that bell tolled for thee another 45,000 times.

Senator Joseph Lieberman “Regrets Any Misunderstanding”

Senator Joseph Lieberman says that he “regrets any misunderstanding.” Lieberman, who according to NPR’s All Things Considered “has angered a lot of people,”  also said  “I thought I made myself clear all along.”

All Things Considered characterized Lieberman’s rejection of the Senate’s Gang of Ten Compromise as follows: Lieberman “rejected both an expansion of Medicare to cover uninsured people down to age 55, as well as its revamping of a Public Option so that users would be covered by private rather than government insurance.”

Joe Lieberman “regrets any misunderstanding.” All Thing Considered noted “But as critics were quick to point out, this was the same Joe Lieberman who told the Connecticut Post just three months ago that he’d been a supporter of expanding Medicare to age 55.”

Lieberman said, regarding the video we posted yesterday,

“I finally got to see that on TV last night and it looked to me like I was referring back to things I had supported in the past to make the point that though I was against the Public Option, I was not against health reform.”

And there you have it– just a big, “regrettable,” misunderstanding.

In addition, Senator Lieberman said: “I haven’t received any pressure from Insurance Companies. I mean it!”

And I believe him. One rarely pressures a man who does everything one wants.

Maybe Instead of a Dollar We Should Send Joe Lieberman Instructions on How to Use YouTube

A little while back Senator Joseph Lieberman stated that, seemingly contrary to his prior positions, he would not–and could not– support a bill which contained a public option–nor would he join in a vote to end a filibuster against the same. Relying heavily on the underlying analysis of Tim Noah, I opined at the time that perhaps we all needed to send Joe Lieberman a dollar so that he could vote his conscience as opposed to the will of Private Insurers: that the financial constraints involved in being an Independent (i.e., little or no infrastructural help from either the Democratic or Republican Parties) meant that Senator Lieberman, if he wished to continue being Senator Lieberman, would have to curry favor among donors to finance a bid for re-election.

I also noted that Chris Dodd, by virtue of his support for a public option and health reform in general, had alienated said Private Insurers and seemingly vacated his seat as “the Senator from Aetna.” I also noted that, as one might imagine, considering the sudden advent of available Aetna money, that a man (or Senator) from Aetna’s home town seeking money (such as Mr. Lieberman) might, somewhat understandably, look to align himself with the will and desires of that money. As much as it pains me to say, my antidote–sending Joe Lieberman a dollar with the words “Public Option” written on it– did not work. Sadly, the efforts of Yale students, who took a concilliatory approach in beseeching Senator Lieberman to back health reform, have seemingly not worked either.

Since then, Mr. Lieberman has come out in opposition to the plan to allow  people from 55-64 years old to buy into Medicare. Unfortunately for Mr. Lieberman, he seems to be unaware of YouTube as a means of chronicling statements made on video. Back when he was attempting to explain his desertion of the Public Option he said (thank you Merril Goozner) this:

Convergence on Health Reform (Death of the Public Option)

Thomas (Tim) Greaney

Saint Louis University School of Law

So maybe the two parties are coming together on health reform after all.   Last night we learned that after days of “secret talks” among the “gang of ten” the Democrats have reached agreement to restructure their health care proposal.  The changes are significant:

• ditch the already-watered-down public option plan;
• create a new insurance exchange “option” for individuals and small groups consisting of a nonprofit plan as negotiated by the Office of Personnel Management;
• expand Medicare eligibility to cover uninsured individuals aged 55-64.

What does the Democrats’ “public option ultralight” compromise have  in common with Republicans’ alternative universe?  Well, consider the latter’s proposal to open interstate competition for all health insurers–a move they promise will immediately lower health care costs.   Besides being shameless attempts to offer simple solutions to complex problems, the two proposals are guilty of the same fundamental misunderstanding of health insurance. Simply put, they both ignore a critical economic truth of health insurance today: insurers require a provider network of hospitals and doctors or must have market leverage in order to negotiate for lower provider prices and for controls on excessive volume.

How, then, would a nonprofit insurer not presently competing in one of the concentrated markets succeed in putting competitive pressure on the incumbents?  As one insurance industry observer put it ,

So, Kaiser Permanente, which operates with highly organized and capital intensive networks in its markets, would now come into a state where it has no networks and offer a plan? Blue Cross of Nebraska might offer an individual and small group plan in Rhode Island? Tufts Health Plan out of Boston might offer a plan in Oregon?

Based upon what network of providers in those places where they do not now do business?

Likewise, in expanding Medicare, the Dems are taking a page out of the Republican playbook. For the last several weeks,  Senate Republicans have been loudly touting the benefits of Medicare.  By their lights, not only does the program produce unmatched (and untouchable) health care services in terms of quality of care and beneficiary satisfaction, but any cost-cutting constitutes a betrayal of our commitment to seniors.  As far as one can tell, the expansion proposal will do just that: offer the now-sacrosanct program to a few million almost-seniors.  As to the other 20 million citizens, forced to shop for insurance through an exchange flawed by inadequate competition and inadequate subsidies? Well, maybe the Democrats will borrow the rhetoric of Republican National Chairman Michael Steele: this is no time for a “government-run health-care experiment.”

Micro-Chipping (and then pulling the plug on) Grandma as part of HIT and the Public Option

I had the opportunity to speak with one of our Health Law professors from private practice the other day (some professors teach full time, others teach only part time in addition to working full time as attorneys or judges), and he had been practicing (and teaching) health law for decades. He was both amazed and incensed: at our inability as a country to have a reasonable discussion about health care; that a provision to remunerate consultations regarding end of life issues somehow turned into “pulling the plug on grandma” and “death panel” sound bites–from people who should (or do) know better; and that people somehow believe that “rationing” doesn’t exist right now in the for profit health insurance system. “They speak as though their insurance policies are unlimited. They are not. There are insurers denying coverage all the time.”

This article in the New York Times’ Prescriptions won’t make him feel any better. It regards a recent chain email which tells of the impending forced implantation of microchips into patients as part of a government sponsored health plan.

Prescriptions reports:

…fears of death-panel bureaucrats voting to euthanize elderly Americans may pale in comparison to the latest fright point: according to a widely forwarded chain e-mail, the Democrats’ health care bill would require anybody who enrolls in a new government-run health insurance plan “to have a data-receiving microchip implanted in their bodies.”

The assertion would seem to tie together policy points from both the House-passed health care measure, which would create a government insurance plan, or public option, and the economic stimulus measure earlier this year, which approved billions of dollars for health information technology.

The widely distributed email is said to have prompted House Speaker Nancy Pelosi to issue a Myth Buster fact sheet:

Myth: People who enroll in the public health insurance option will be forced under the law to have a microchip implant.

Fact: The Affordable Health Care for America Act does not have any provision requiring any person to have a microchip — or anything else –implanted on their bodies for any reason.

The Times also notes that “Ms. Pelsoi’s office also noted that “PolitiFact — the Pulitzer-prize winning Web site — labeled this claim a ‘Pants on Fire’ lie, its highest degree of untruth.”

Senator Michael Bennet; He Said “Yes”

More than enough ink on these pages (and others) has been devoted to the influence that money and political aspirations has had on the health reform debate. In a recent post, “Why We All Need to Send Joe Lieberman a Dollar,” I beseeched Senator Joseph Lieberman to vote his conscience (as opposed to the will of Private Insurers) and, acknowledging the dominant role of money in both politics in general and the Senate in particular, I wrote

Senator Joe Lieberman is an Independent. As romantically autonomous as that may sound, it also means he can count on support from neither the Democratic nor Republican Parties. It takes money to maintain a Senate seat. Why is this germane to health reform? Because a) money always is; and b) Mr. Lieberman by virtue of his Independent status presumably does not have enough– and has recently announced that he will not vote for cloture (to end a filibuster) on Harry Reid’s opt-out Public Option plan.

And

Tim Noah over at Slate covers the question very well in an article well worth reading. Noah posits that because Lieberman can no longer count on Party Politics, he’s attempting to curry favor among the Insurers. Noah writes:

Why would Lieberman want to sink health reform? Klein points out that in the pretty recent past, Lieberman has supported the general goal, if not the specifics, of Obamacare. But consider Lieberman’s political situation. He is no longer a Democrat. That means he no longer has a political base. In the future, he will have to rely more on constituencies and on cash. The White House suggests that Lieberman wouldn’t dare alienate voters by opposing health reform. But what’s the most cash-rich constituency in the Nutmeg State? The insurance industry, which is headquartered in Connecticut and employs 64,000 people.

At the moment, insurers probably aren’t too pleased with Connecticut’s other senator, Democrat Chris Dodd, because Dodd is a prominent advocate for the public option. As I’ve noted previously, Dodd, during the past 20 years, received $2.3 million in contributions from insurers-more than any member of the House or Senate except John McCain, R-Ariz. During that same period, Dodd collected $774,000 from health insurers, ranking second only to House Minority Leader John Boehner, R-Ohio. Lieberman, even though he’s from Connecticut, has during that same period had to settle for 14^th place in both insurance-industry contributions and health-insurance-industry contributions. Blocking the public option might allow Lieberman to displace Dodd as “the senator from Aetna.”

Bismarck’s law and sausage quote comes to mind; it is after all politics. In that post on Lieberman and the political process I also wrote:

So it seems we’ve come to this: “Independence” means “in search of the highest bidder.”

But every once in awhile the process, or more directly, people, can surprise.

Senator Michael Bennet, (D-Colo) has done just that. Colorado’s Grand Junction Sentinel reports

Bennet answered “Yes” when asked Sunday on CNN, “If you get to the final point and you are a critical vote for health care reform, and every piece of evidence tells you, if you support that bill, you will lose your job, would you cast the vote and lose your job?”

He said “Yes.”

Senator Bennet is said to face challenges this next year for his Senate seat from “within the Democratic Party from former Colorado House Speaker Andrew Romanoff. [Jane] Norton, a Grand Junction native, faces two other Republicans on her side of the aisle: Weld County District Attorney Ken Buck and former state Sen. Tom Wiens of Douglas County.

The Sentinel reports that “Bennet’s response drew fire from Jane Norton, one of three Republicans jockeying to run for Bennet’s Senate seat next year.

Bennet’s response “shows he’s very out of touch with Colorado,” Norton said.

On the contrary, I would suggest to Ms. Norton that what Senator Bennet’s stand has shown is an understanding of the duties inherent for a representative in a republican form of government: to vote his best judgment and his conscience– despite personal consequences.

This country is informed by a grand tradition of such. And it may be worth noting that not so unlike the health reform debate,  the road to our Constitution was filled with bitter debate and disagreement. The Declaration of Independence was likewise hotly debated. For Pennsylvania five delegates cast their votes regarding independence. At the final vote on July 2, 1776 Pennsylvania delegates were deadlocked: two for, two against. John Morton, a farmer and a surveyor, despite what he knew would be the disapproval of his district, voted “Yea,” and the rest as they say is history. Pennsylvania approved the Declaration, 3-2. Independence.

In the book, “Signing their Lives Away,” the authors note:

Back home in his district, Morton was unpopular because of what he’d done. A sensitive man, he was said to have been deeply affected by his neighbors’ ostracism.

About nine months after signing he became sick and died.

On his deathbed he dictated a message intended for those friends and neighbors angered that he had ignored their wishes by voting for independence. “Tell them,” he said, “that they will live to see the hour when they shall acknowledge it to have been the most glorious service I ever rendered my country.”

The words are engraved on the obelisk over his grave.

Good job Senator Bennet. I feel privileged to be eating some of my words.

Mammography, Cervical Cytology Screens, and Rationing

The recent recommendations on mammography and cervical cytology screens by the US Preventive Services Task force and ACOG (American College of Obstetricians and Gynecologists), respectively, have added a new dimension to reform discussions.  Some are inclined to say “gotcha,” suggesting that the recommendations are evidence of a creeping denial of needed care that would follow governmental insinuation into health finance and benefits design.  Others see the reports as serendipitous irrelevancies, unconnected to reform discussions.  The truth is, not surprisingly, more complex.  The irony is that consumers will be more represented in health technology assessment in a public plan than they have been in private insurance.

It seems inevitable that any future health finance system will rely on evidence-based assessments of new (and old) technologies for both quality and cost purposes.  Our experience with the widespread use of affirmatively harmful (e.g., hormone-replacement therapy) and apparently useless treatments (e.g., knee arthroscopy for osteoarthritis) points to the possible risks of rapid  or uncritical adoption of new technologies.  As Sara Rosenbaum and others have pointed out,  (subscription required) we don’t want to confuse population data with individually-applied diagnostic and treatment judgment.   Both reports, to their credit, got this part right, and advised individual patients and physicians to assess each case in context, notwithstanding the general population-level guidance.  But evidence-based population data on the efficacy and comparative benefit of new and expensive interventions will be of enormous assistance in future treatment and funding decisions.

How should such health technology assessment be done, if not by expert panels?  As Bill Sage has observed, private health plans were opaque and inconsistent when they were in the technology assessment business.  (They have pretty much gotten out of that field, leaving cost control to others.)   One criticism of the mammography and cervical cytology reports has been that they should have included a more public process before issuing recommendations.  As the reports are merely advisory, it is not clear that post-publication comment doesn’t get the job done.  Where, as may be the case in the future, such expert analysis has instrumental effect, pre-implementation public process is essential.   Two guides for public health technology assessment advise as much.  The Institute of Medicine, in guidance issued earlier this year for comparative effectiveness analysis funded by the stimulus bill, observed that,

Clinicians and patients do not always consider the same factors when weighing the tradeoffs posed by important health care alternatives.  To ensure that the fruits of CER support consumers’ health care decision making, the CER Program should focus on the questions of patients as well as their health care providers.

Similarly, a health technology assessment guide created by the European Observatory on Health Systems in 2008 describes well-functioning technical assessment as consultative and transparent:

Social accountability permeates the whole knowledge production and is reflected not only in the interpretation and diffusion of results but also in the definition of the problem and the setting of research priorities.

We don’t want a health system — public or private — that is blind to either sound evidence-based technology assessment or the particular health needs of individual patients.  One advantage to a public system is that the assessment of technologies can and should include a robust public process.  We didn’t get that with private managed care.  The mammography and cervical cytology reports should call our attention to the opportunity for public process in decision making in publicly-funded coverage, and the need for close attention to the implementing regulatory processes if and when a bill is signed.

Reform Rodeo

1. Kaiser Health News discusses the details of the House’s latest iteration of their Health bill.

2.  Ezra Klein analyzes whether the public plan will cost insureds more than private insurance.

3.  The New England Journal of Medicine circles back to a reform issue that is often overlooked: primary care and accountable care.

4. Jonathan Cohn at The New Republic looks at how two of the biggest players in the U.S. health care system–the medical device industry and the pharmaceutical industry–are affected by the House bill.

5.  The Healthcare Economist reports on a study released by the Urban Institute that breaks down how the House Bill will affect the number of uninsured.

6.  Wild Card: Eugene Volokh highlights on a case involving one company’s desire to patent a physician’s thought process.

7. In Case You Missed It: The Cost of (Not) Implementing Chronic Care Management by Professor John V. Jacobi.

Why We All Need to Send Joe Lieberman a Dollar

Senator Joe Lieberman is an Independent. As romantically autonomous as that may sound, it also means he can count on support from neither the Democratic nor Republican Parties. It takes money to maintain a Senate seat. Why is this germane to health reform? Because a) money always is; and b) Mr. Lieberman by virtue of his Independent status presumably does not have enough– and has recently announced that he will not vote for cloture (to end a filibuster) on Harry Reid’s opt-out Public Option plan. Lieberman stated: “if the bill remains what it is now, I will not be able to support a cloture motion before final passage.”

And:  “I can’t see a way in which I could vote for cloture on any bill that contained a creation of a government-operated-run insurance company.”

Hearing this, I naturally began looking at the Insurance Industry contributions to Mr. Lieberman’s coffers. I expected to find Ronald A. Williams’ picture on Lieberman’s desk. I was wrong. According to Open Secrets.org Lieberman ranked only 14th in contributions from Insurers and Health Insurers (links below). Not shabby, but not exactly prime for a Senator who represents the State of Connecticut– home to a thriving  Insurance Industry.

Why then? Tim Noah over at Slate covers the question very well in an article well worth reading. Noah posits that because Lieberman can no longer count on Party Politics, he’s attempting to curry favor among the Insurers. Noah writes:

Why would Lieberman want to sink health reform? Klein points out that in the pretty recent past, Lieberman has supported the general goal, if not the specifics, of Obamacare. But consider Lieberman’s political situation. He is no longer a Democrat. That means he no longer has a political base. In the future, he will have to rely more on constituencies and on cash. The White House suggests that Lieberman wouldn’t dare alienate voters by opposing health reform. But what’s the most cash-rich constituency in the Nutmeg State? The insurance industry, which is headquartered in Connecticut and employs 64,000 people.

At the moment, insurers probably aren’t too pleased with Connecticut’s other senator, Democrat Chris Dodd, because Dodd is a prominent advocate for the public option. As I’ve noted previously, Dodd, during the past 20 years, received $2.3 million in contributions from insurers-more than any member of the House or Senate except John McCain, R-Ariz. During that same period, Dodd collected $774,000 from health insurers, ranking second only to House Minority Leader John Boehner, R-Ohio. Lieberman, even though he’s from Connecticut, has during that same period had to settle for 14^th place in both insurance-industry contributions and health-insurance-industry contributions. Blocking the public option might allow Lieberman to displace Dodd as “the senator from Aetna.”

Noah proffers a number of other supports for his hypothesis, and makes a great deal of sense. And in the twisted world of American Political Reality, unfortunately, Lieberman’s play is an understandable one– given the desire to hang on to his Seat.  So it seems we’ve come to this: “Independence” means “in search of the highest bidder.” I don’t live in Connecticut, and there’s no accounting for electorate taste. But how ’bout this: if we all took a single dollar, wrote “Public Option” on the bill itself and sent it to Joe– maybe he could vote his conscience and heed that moral imperative I heard so much about when he was running for Vice-President. In his rebuke of Bill Clinton

He likened Clinton’s failure as a moral authority for children to the role of the entertainment industry in undermining ”the stability and integrity of the family,” observing that children are quick to perceive a ”double standard.” The word moral appears half a dozen times in the address.

I would suggest that few things can so quickly undermine the stability and integrity of the family as a lack of health care; and children are not the only ones who can perceive a double standard.

Senator Joe Lieberman

706 Hart Office Building
Washington, DC 20510
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For TTY Call 711

One Constitution Plaza
7th Floor
Hartford, CT 06103
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Why Resurrect the Public Option? The Competition Canard

Dan Balz of the WaPo asks “What brought the public option back to life?” Balz argues that while “liberal advocates of the public option . . . [see] it as the holy grail of the debate . . . [f]ew experts see it that way.” While the 39+ academics and others listed at Campaign for America’s Future Health Experts Bureau may not consider the public option akin to a chalice of eternal life, most of us are comfortable calling it a key element of reform. So while Balz focuses on the chess game of Washington politics to explain the public option’s resurgence, I detect deliberative democracy at work here.

As Congressional committees have begun to specify exactly how “competition” among insurers would lower costs, they’ve realized that we need to do a lot more than up the regulatory ante and add more insurers to the mix. Rather, just as Medicare took care of elderly persons unlikely ever to be profitably covered by private insurers, a new option is needed to address the needs of impoverished or sick citizens unlikely ever to pay profitable premiums to Aetna, Cigna, and their ilk.

Why wasn’t this apparent earlier? I think that closer scrutiny for a proposal to repeal the “antitrust exemption” for insurers has led to more serious consideration of what competition can and cannot do in the health care industry. As co-blogger Tim Greaney explains, “the Supreme Court has narrowly interpreted McCarran-Ferguson requirement that only the ‘business of insurance’ is exempt; hence insurers’ actions vis a vis providers is not exempt.” Lack of antitrust enforcement–and the market competition it’s supposed to bring–can’t fully explain insurers’ failures here. Even more alarmingly, enforcing antitrust laws aggressively against insurers, while failing to balance that effort with similar scrutiny of providers, could lead to even higher health care costs. Do we really expect piecemeal antitrust enforcement, played out in fragmented and uncoordinated courts, to manage such balance? It is often the case that both providers and insurers are concentrated, powerful, and earning supracompetitive profits–whatever “supracompetitive” means in a realm so thoroughly marbled with regulation, subsidy, and barriers to entry.

Moreover, insurers are competing in many markets–but they’re doing so in ways that are socially unproductive. As I have noted before, there are effective competitive strategies that produce no (or negative) value for society as a whole. Insurers who put hurdles in front of preventive care, or scramble to drop diabetics or CHF patients, are doing just what a competitive marketplace rewards. They also exacerbate the coverage crisis that necessitates health reform in the first place.

Genuine health reform will provide incentives for insurers to do things that actually improve individual and public health–programs such as transparent physician rating, preventive and chronic care programs, and intensive data analysis to promote evidence-based medicine. Like the V.A., a public option can be ordered to do such things. Moreover, it can be required to cover the costly or unprofitable individuals that private insurers won’t touch. The government might “require” private health insurers to do the same, but I would not count on overwhelmed regulators to enforce such laws adequately.

Sadly, even when competition is exposed as an empty vessel, our language of discussing health care tends to gravitate back to it as an ideal. Fortunately, Daniel Callahan’s recent essay on the “common good” as a justification for health reform provides a richer vocabulary of evaluation. Callahan has no illusions about transforming the current debate, but his words are worth pondering:

I have not painted a hopeful picture about the common good in American health care. That simply does not seem possible. An abiding suspicion of government, a belief in the free market as an engine of prosperity (and thus, by an illogical leap, as an engine of good health care), and the majority’s fear that they may lose the benefits they already have—all this leaves little room for an embrace of the common good. Solidarity, the value behind European health-care systems, seems to me the best basis for universal care, better than justice or rights. But the sense of solidarity required for serious health-care reform cannot be wished into existence. It was the solidarity of the British people in defense of their country during World War II that afterward helped get the National Health Service off the ground in 1946: they had all been in it together during the war, and now they needed to be together in insuring health care for all. We do not have that kind of history, and it shows.

Suffering, disease, and death are our common lot. They ought to be dealt with as our common problem. It is a shame that the kind of empathy and mutual support that Adam Smith understood to be a requirement of morality have not, in our culture, been extended to health care—extended to one another in the recognition that we all have bodies that go awry and fail. Instead we are offered a consumer model, a national Walmart of medical choice where we are all sharp-eyed purchasers getting the best possible deal for ourselves. A construal of the common good as the freedom of consumers to get what they want, indifferent to the fate of others, is a cheap substitute for the real thing.

Callahan here is too pessimistic about the viability of an appeal he’s helped craft. As Catherine Arnst has argued, a moral case for health reform–as either compassion for others or self-interest properly understood–is essential in current debates. Even the most self-centered person can imagine losing a job, a spouse, or other sources of insurance. It seems paradoxical to expect the very companies that deny such coverage to offer it under government fiat. A public option is a logical response to our market–and moral–failure to separate the experience of illness from anxiety over financial ruin. As the band Muse might put it (in the closing track of their album The Resistance) “let’s start over again” — “this time we’ll get it right.” Hope springs eternal.

Public Option Faring Better Among the Public than the Republican Party

A couple of polls just released are well worth considering– prefaced perhaps by Senator Baucus’ having just said, according to Kaiser Health News, “that the Senate is unlikely to approve major health care legislation this year that includes a pure form of the controversial government-operated insurance program…” and that “it is highly unlikely Democrats could muster the 60 votes needed to overcome a GOP filibuster and pass health care legislation that includes a public option.”

‘There are various versions of the public option bandied about … [and] we’re trying to see what makes the most sense,’ Baucus said. ‘The goal is health care reform … that can get 60 votes. … I don’t know if there are 60 votes for the pure kind of” public option proponents are demanding.’

In response to reporter questions about Sen. Thomas Carper’s (D-Del.) plan–which would leave it up to the states to decide whether to establish a public plan or not (an idea said by KHN to have been “embraced” by  Sen. Chuck Schumer (D-N.Y.)), Senator Baucus replied: “That’s new, that’s interesting … We’re trying to figure out what some of the unintended consequences [of it] will be.”

According to a recent Washington Post/ ABC News poll, a rather overwhelming number of Americans find such a state by state approach–when coupled with availability to only those who lack affordable private options– more than interesting. The Washington Post reports that:

If a public plan were run by the states and available only to those who lack affordable private options, support for it jumps to 76 percent. Under those circumstances, even a majority of Republicans, 56 percent, would be in favor of it, about double their level of support without such a limitation.

As for a Public Option on a national level– without the affordability limitation– WaPo reports that

On the issue that has been perhaps the most pronounced flash point in the national debate, 57 percent of all Americans now favor a public insurance option, while 40 percent oppose it. Support has risen since mid-August, when a bare majority, 52 percent, said they favored it.

In what may well be a related note, ABC News reports that the Republican Party is experiencing some difficulties as of late:

Only 20 percent of Americans now identify themselves as Republicans, the fewest in 26 years. Just 19 percent, similarly, trust the Republicans in Congress to make the right decisions for the country’s future; even among Republicans themselves just four in 10 are confident in their own party. For comparison, 49 percent overall express this confidence in Obama, steady since August albeit well below its peak.

The Republican Party’s difficulties are shown in another result as well; in an early assessment of preference for congressional candidates in 2010, the Democrats lead by 51-39 percent.

Public Option Alternatives

The public option has had a difficult time making its way through Senate Finance Committee mark-up sessions.  In the past week, two separate proposals for including a public option in health care reform were nixed.  Rejection of the plans, one proposed by Senator Charles Schumer of New York and the other by Senator John Rockefeller of West Virginia, is said to be indicative of a further adoption of the middle-of-the-road approach.  Still, some are optimistic that because Obama has the de facto final say on health reform legislation, he will work hard to include a public option; others debate whether the President is willing to compromise the public option for overall reform.

Instead of approving of Schumer’s or Rockefeller’s proposals, the Senate Finance Committee voted to include a proposal by Senator Maria Cantwell of Washington.  Cantwell’s amendment is said to be a compromise between Democrats and Republicans on the public option.  The plan, which would be federally-funded, would be available to those individuals who earn too much to qualify for Medicaid but are below 200% of the federal poverty level.  At present, an implementation cost analysis for the plan is still unavailable, but Cantwell says that the plan, which also give states the power to negotiate down the price of insurance, would be able to cover 75% of the uninsured population.  The plan would mirror the current health care system of Washington State.

Though many important Committee members like Sen. Baucus have approved of such an amendment, others like Senator Olympia Snowe of Maine have voted against it.  Keep in mind, Snowe has been labeled “the key to health reform.”  For Snowe, a public option would only be provided in states in which 95% of the population is deemed to not have access to “affordable” insurance through an Insurance Exchange.  Senator Tom Carper of Delaware has proposed a similar plan; however, his version leaves it up to the states to decide what it deems best for its constituents.  Under Carper’s version, states would get to choose between opening up state-funded health care plans for government employees to all residents, or creating a health insurance provider or a co-op to compete with private insurance companies.

The proposals of Carper, Cantwell & Snowe have their respective positives and negatives and are subject to, and seemingly born of, the political process. They smack of compromise.

What will it take to get any one of these proposed bills passed during the full Senate vote? The ongoing divide between liberals and conservatives on the issue of providing a public competitor to private insurance companies has created a fissure which has echoed through the common landscape now for months. But we are getting close– as the NY Times  put it– “tantalizingly close,” to sweeping Health Reform.  Floor debate will ensue shortly. Predictions abound. But in the words of Lamar Alexander, the number 3 Republican in the Senate, “There is nothing predictable about the Senate floor.”

Compromise. President Lyndon B. Johnson, key to passage of both Medicare and the Civil Rights Act famously declared: “I’m a compromiser and a maneuverer. I try to get ’something.’ That’s the way our system works.” As evidenced by the two aformentioned Johnson successes, however, Johnson also knew when to expend enough political capital to make that ’something’ meaningful. I would suggest we stand at the precipice of one of those times.

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