The Junk Food Marketing Debate: A First Amendment Right or Just Making Sure Kids Aren’t What They Eat?

Remember the Omnibus Appropriations Act of 2009 (H.R. 1105) that President Obama signed on March 11, 2009?   No?  Good, me neither, but my excuse is that I was busy applying to law schools.  If you and I had been paying closer/any (take your pick) attention, we would have seen that the Act included, among other things, a provision calling for the Federal Trade Commission, the Centers for Disease Control and Prevention, the Food and Drug Administration, and the Department of Agriculture to create an Interagency Working Group on Marketed Food to Children (“Working Group”) composed of representatives from each agency.  The Working Group would research and recommend standards for the marketing and advertising of food to children age 17 years and younger.   These recommendations would be presented to Congress down the road.

Well, a couple of years passed, but in April 2011 the Working Group released its 26-page “Preliminary Proposed Nutrition Principles to Guide Industry Self-Regulatory Efforts” for public comment (which you can submit by clicking here before July 14). The Working Group notes that

… in the FTC’s 2008 study on Marketing Food to Children and Adolescents, three food categories — breakfast cereal, restaurant foods, and snack foods — represented approximately 70% of food marketing expenditures directed to children under 12. Similarly, three categories of foods — carbonated beverages, restaurant foods, and non-carbonated beverages — represented 69% of the food marketing expenditures for adolescents ages 12-17 year….  [Overall] [t]he categories most heavily marketed to children and adolescents, ages 2 -17 years are: breakfast cereals; snack foods; candy; dairy products; baked goods; carbonated beverages; fruit juice and non-carbonated beverages; prepared foods and meals; frozen and chilled deserts; and restaurant foods. The Working Group is therefore recommending that the food industry focus its efforts on ensuring that any advertising or marketing of food products within these ten categories meet the nutrition principles set out below. (Emphasis added.)

The Working Group focuses on two nutritional principles “that both improve the nutritional quality of foods marketed to children and can be feasibly implemented by industry with sufficient time to accomplish reformulation,” namely, “Meaningful Contribution to a Healthful Diet” (Principle A)  and “Nutrients with Negative Impact on Health or Weight”  (Principle B).  Principle A ensures that foods marketed to children contain two or more of the following food groups: “fruit, vegetable, whole grain, fat-free or low-fat milk products, fish, extra lean meat or poultry, eggs, nuts and seeds, or beans.”  Principle B ensures that foods marketed to children have limited amounts of saturated fat, trans fat, sodium, and added sugars.  The Working Group makes sure to point out (several times in fact) that its recommendation are based on the 2010 Dietary Guidelines for Americans.

Really, this all sounds quite sensible, if not a little over-protective… but considering, as The Washington Post has reported, that Type 2 diabetes has significantly increased among people age 20 years and younger, what else can this country do to curb obesity and poor eating habits?  Even if we could reduce the cost of nutrient-rich and quality foods so that everyone could afford them, how do we neutralize the marketing of junk food to children?  In a report last month, NPR noted how

[the Working Group] broke from the past by seeking to include 12- to 17-year-olds in its guidelines. Traditionally, limits on marketing focused on the very young. But the government sought to expand them to older children, in part because they are heavy consumers of social media, cell phone messages and online games — the new frontier for ads.

That new frontier of advertising to children through online games — also known as “advergaming” (forgive my use of Wikipedia but Merriam-Webster doesn’t list the word) — includes Asylum 626 and Hotel 626, two advergames sponsored by Doritos.  As NPR reported,

“[w]hat we’re talking about are very complicated and very subtle forms of marketing that aren’t always clear as such,” says Kathryn Montgomery, a professor of communications at American University and an advocate for limiting food ads to teens.

[...]

Montgomery says such ads work subliminally and use friends to influence other friends.

But efforts to restrict ads to teens draw lots of opposition from the food and advertising industries. The industries say the overlap between teen and adult audiences makes the proposed restrictions impractical.

Critics, including the U.S. Chamber of Commerce, have questioned the constitutionality and logic of the Working Group’s nutritional proposals.  The Hill’s Healthwatch has reported that some critics see a First Amendment issue because

“[w]hat they’re doing is trying to simultaneously … suppress speech, while insulating it from judicial review,” said Northwestern law Professor Martin Redish, one of the panelists at a Chamber of Commerce discussion Thursday. “Because if these regulations were truly just advisory, there would be no case or controversy.”

[...]

“Industry’s rights are being violated here,” Redish said, “but there’s something deeper and darker that’s going on: The government is treating us like sheep.”

While constrained to commercial speech, Redish said that attitude has broader implications. People, he said, “can’t be sheep in the commercial realm and then all of a sudden, in the political realm, they’re free-thinking adults who can make basic choices.”

NPR has reported that other critics question the logic behind the proposal and the implicated age range.

Elaine Kolish directs an industry-funded program called the Children’s Food and Beverage Advertising Initiative. For the past five years this initiative sponsored its own voluntary standards that focus only on the 12-and-under set.

“You know, we let kids drive and we let them hold jobs when they’re 16. They can get married in some states, and they can join the military with permission, and they can be held criminally responsible for their actions in a number of situations,” she says. “So I think that the notion that you’d have to have nutrition standards that say you can’t let a kid see an ad for a french fry but you can let them join the military doesn’t really make a lot of sense.”

So where do we go from here?  Is industry self-regulation the answer to making products that better fit on MyPlate?  As I’ve noted in a previous post about McDonald’s Happy Meal toys, sometimes the answer can be stricter parenting (just say “no”).  Yet how can parents instill and maintain healthy eating habits in their kids when advertisements for unhealthy food bombard them through television, social media, and online games?

A Doctor Speaks About Healthcare, Big Business and Justice

[Ed. Note: We received today's post from Timothy Shaw, M.D. F.A.C.S. as a comment in response to a post, "Health Care and Disparity in a 'Post-Racial' Era."]

Twenty years ago, upon entering private medical practice for the first time it took me about a month to realize that the United States needed “Health Care Reform.” After serving the previous fifteen years in the US Army Medical Corps, I started my first civilian medical job. I was asked to come to a hospital by another surgeon to perform an ear operation on a 3 year old boy at the same time as he would be performing an eye operation. This would save the child from two anesthetics on two different days. Since I had never worked at that hospital, and apparently in order to set me straight from the start, one of the head doctors at this hospital, came up to me in the preoperative holding area, and boldly shoved the child’s chart in my face, pointed to the child’s insurance (Medicaid (Welfare)) and shamelessly told me, “if all you are going to do, is to bring this “****” in here, then we don’t need you to come here.” The poor little guy sitting in the corner with his Mom, was smiling at us with his cute partially toothless grin, and coke-bottle glasses. He didn’t realize what one of his doctors called him because of his health insurance coverage.

Again, several months later I was called to a different hospital (one that I normally did not work at either) in the same city by an operating nurse who asked if I took Medicaid “welfare patients.” She asked me if I would come to their operating room to take a coin out of a 2 year old child’s esophagus. She informed me that their hospital doctors in my specialty did not take welfare patients and they were looking for someone to do the operation as the child had choked on a coin. “Apparently someone forgot to screen this child’s insurance before he came to the operating room.” I canceled my clinic patients and drove across town, performed an esophagoscopy and removed the coin.

Obviously, the doctors in these above scenarios did not support “the Public Option” (Medicaid).

What had happened to our Health Care System? What had changed? Where was the honor that we had in the Army Medical Corps? We treated everyone from Generals to Privates and their families with the same respect. In accordance with Geneva Conventions, we even treated enemy soldiers during the Iraq War in our Combat Support Hospitals with the same care that we treated our own.

In a significant measure the United States Private Health System had changed into “Big Business.” In some measure the humanitarian emphasis had eroded.

Although spurning the pharmaceutical industry as “conflict of interest” entities, not suitable for proper patient care, surprisingly, doctors saw no apparent conflict of interest in merging with the Health Insurance Industry. Doctors and the Health Insurance Business became so closely aligned that their DNA intertwined to form a new species. This powerful new combined-arms team became the forme fruste of our new United States Health Care Industry. Doctors armed with new found business tactics, and the Health Insurance Industry armed with the legitimacy of the Doctor’s legal authority to limit health care to patients became the de facto United States Health Care System.

The business meeting replaced the medical conference to discuss “patient care” issues. To cope with the ever burgeoning bureaucracy, more and more doctors went into administration. More doctors have their MBA’s then carry black bags and make house calls. Mergers, Acquisitions, Expansions, Contracts, Covered Lives, Marketing Strategy, Demographics, Competition Threat Forecasts, Actuarial Science, and Health Insurance became the focus of many doctors. Time was spent on avoiding insurance business risk, trying to avoid the high risk patients, finding the better payer groups, etc. Hospitals became less hospitable. Doctor’s began to discharge patients so rapidly, that in the mid 1980′s the majority of States passed consumer protection laws (“Drive By Delivery Laws”) to protect mothers/newborns from being discharged from the hospital too soon.

Currently, the U.S. health care system is outrageously expensive, yet inadequate. Despite spending more than twice as much as the rest of the industrialized nations ($7,129 per capita), the United States performs poorly in comparison on major health indicators such as life expectancy, infant mortality and immunization rates. Read more

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.”

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
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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.

Reform Rodeo

1. Sen. Baucus, releases the Finance Committee’s public option-less, co-op-based draft bill that will be marked up later in the month (full draft in PDF here, Baucus’ interpretation of it in today’s WSJ op-ed) .

1(a). Ezra Klein opines about how “BaucusCare” should be improved, and in doing so provides a good overview of some of the draft’s key provisions.

2. The New York Times has a nice primer on one of the most discussed possibilities reforming health care: health insurance exchanges. It is definitely worth following the link the Times provides to the FEHB online comparison tool to see how easy it is for federal employees to shop for health insurance.

3. The Kaiser Family Foundation has released their annual report (summary in PDF format here, full report in PDF format here) the shows the changes in employer health benefits.

4. The Robert Wood Johnson Foundation summarizes a New England Journal of Medicine poll which finds that a majority of physicians support a public option.

5. The Health Care Blog has a nice run-down of HHS’s effort to retake control of EHR certification from CCHIT–and what the not-for-profit CCHIT is doing in response.

6. In Case You Missed It: Professor Nathan Cortez in The Health Care Blog on “Immigrants, Health Reform, & Lies” — originally posted here on HRW.

If You Give a Republican a Cookie…

Senator Charles Grassley (R-Ia), who is seeking re-election next year and is said to have wrested key concessions from his Democratic counterparts in the Senate– including, according to AP, “an agreement to back away from a government plan to compete with private insurers” –dipped his beak in the ignominious trough of the demagogue over the weekend. AP reports that Sen. Grassley

told an Iowa crowd he would not support a plan that “determines when you’re going to pull the plug on Grandma.” The remark echoed conservative activists who wrongly claim a House health care bill would require Medicare recipients to discuss their end-of-life plans with doctors.

In addition, with recent (perhaps hasty) speculation regarding the demise of a Public Option in Health Care Reform, The Wall Street Journal reports that “The number two Senate Republican said Tuesday replacing a public health care option with a nonprofit private cooperative wouldn’t win any more Republican support, saying they are essentially the same thing. Sen. Jon Kyl (R., Ariz.), said Republican objections were more fundamental than simply changing the name of a new national entity to compete with private medical insurers.”

Senator Kyle, who as Whip is said to speak for the Republican Party,  favors a more private market based approach to health care reform–utilizing such means as medical malpractice reform, allowing small businesses to join together to give them more negotiating clout with health insurers, and allowing health insurance to be permitted to be sold across state lines like other forms of insurance. In addition, Sen. Kyle is reported to support federal government encouragement of “individuals to save more for potential health care needs through tax-friendly accounts, which would reduce their reliance on costly insurance.”

Notably, in a 2006 report on the affect of the minimum wage on families in Sen. Kyl’s home state,  the Children’s Access Alliance of Arizona stated that “Arizona has the widest income gap in the nation. The average income of the top 5% of Arizona families is 14 times greater than the average income for the bottom 20% of families.” Also worth noting is that Senator Kyl voted against increasing the minimum wage in 1997, 2005 and 2007.

On Health Care Legislation, according to On the Issues.org, Sen. Kyle voted as follows:

• Voted YES on means-testing to determine Medicare Part D premium. (Mar 2008)
• Voted YES on allowing tribal Indians to opt out of federal healthcare. (Feb 2008)
• Voted NO on adding 2 to 4 million children to SCHIP eligibility. (Nov 2007)
• Voted NO on requiring negotiated Rx prices for Medicare part D. (Apr 2007)
• Voted YES on limiting medical liability lawsuits to $250,000. (May 2006)
• Voted NO on expanding enrollment period for Medicare Part D. (Feb 2006)
• Voted NO on increasing Medicaid rebate for producing generics. (Nov 2005)
• Voted NO on negotiating bulk purchases for Medicare prescription drug. (Mar 2005)
• Voted YES on $40 billion per year for limited Medicare prescription drug benefit. (Jun 2003)
• Voted NO on allowing reimportation of Rx drugs from Canada. (Jul 2002)
• Voted NO on allowing patients to sue HMOs & collect punitive damages. (Jun 2001)
• Voted YES on funding GOP version of Medicare prescription drug benefit. (Apr 2001)
• Voted NO on including prescription drugs under Medicare. (Jun 2000)
• Voted YES on limiting self-employment health deduction. (Jul 1999)
• Voted NO on increasing tobacco restrictions. (Jun 1998)
• Voted YES on Medicare means-testing. (Jun 1997)
• Voted NO on blocking medical savings accounts. (Apr 1996)
• Rated 0% by APHA, indicating a anti-public health voting record. (Dec 2003)

More extensive analysis of the votes may be found at On the Issues’ 18 full quotes on Health Care.

In a statement on Senator Kyl’s own website regarding Health Care, he notes that “The shortage of health care professionals is due, in part, to Medicare’s efforts to control costs.”

Senator Kyl has repeatedly opposed what he terms “government intervention” in the health care and health care insurance market, stating that it will invariably lead to bureaucrats standing in between patients and their doctors and what will ultimately amount to the rationing of health care.

Interestingly enough, on his website Sen. Kyl notes that in his home state of Arizona, “The average wait for a consultation with a gastroenterologist in the Phoenix area is now two to three months. Mesa hospital administrators report acute shortages of both orthopedic surgeons and neurologists, resulting in emergency room and inpatient consult delays.”

Senator Kyl does not seem to equate such waits or shortages with any form of market based “rationing” and states that the long waits for care at present are “partly due to exorbitant medical liability premiums and the lack of physicians willing to practice under the threat of lawsuits,” and, presumably,the above mentioned “Medicare’s efforts to control costs.”

Regarding Medical Malpractice as a means of Health Care Reform, Senator Kyl, as we’ve reported before, according to Bloomberg.com might be be best to look elsewhere. Regarding real Health Care Reform, for those who had entertained the notion of Bipartisan dialogue as a means to passing comprehensive legislation, they too might be best to look elsewhere. I would suggest, for now, while there are still cookies to be had, the House–where a substantial number of Democratic Representatives have insisted that they will not vote for any reform measure which does not include a Public Option.

Jost on Cooperatives: “Are Cooperatives a Reasonable Alternative to a Public Plan?”

[Ed. Note: Considering recent speculation that the Public Option may be "dropped" in favor of adoption of Health Care Cooperatives, this post by Timothy S. Jost which was originally posted to Health Reform Watch on June 15 , along with yesterday's re-post from Tim Greaney, should go some way towards answering some questions about Health Care Co-ops. As the clamor rises to understand the nature and implications of Health Care Cooperatives, this post from Professor Jost has been linked everywhere from NPR's Planet Money to  The Democratic Underground, the Patriot Room and all points in between. The point taken by most is that we've tried Health Care Co-ops before, and, for the most part, they've failed. For those of you who've missed the article, it is re-posted below as originally posted by Editor-in-Chief, Professor Frank Pasquale. You can access Professor Jost's bio by clicking here.]

In the last post, I introduced Timothy S. Jost and his case for a public insurance plan option. Jost has also recently addressed the new “middle ground” between a public option and the status quo: cooperatives. I’m honored to print his analysis below on our blog.

Are Cooperatives a Reasonable Alternative to a Public Plan?
by Timothy S. Jost

First, a word about history. We have tried cooperatives before. During the 1930s and 1940s, the heyday of the cooperative movement in the United States, the Farm Security Administration encouraged the development of health cooperatives. At one point, 600,000 mainly low-income rural Americans belonged to health cooperatives. The movement failed. The cooperatives were small and undercapitalized. Physicians opposed the cooperative movement and boycotted cooperatives. When the FSA removed support in 1947, the movement collapsed. Only the Group Health Cooperative of Puget Sound survived. Over time, moreover, even Group Health, though nominally a cooperative, has become indistinguishable from commercial insurers-it underwrites based on health status, pays high executive salaries, and accumulates large surpluses rather than lower its rates.

The Blue Cross/Blue Shield movement, which also began in the 1930s, shared some of the characteristics of cooperatives. Although the Blue Cross plans were initiated and long-dominated by the hospitals and the Blue Shield plans by physicians, they did have a goal of community service. The plans were established under special state legislation independent from commercial plans. They were non-profit and, in many states, exempt from premium taxes. They were exempt from reserve requirements in some states because they were service-benefit rather than indemnity plans and because the hospitals and physicians stood behind the plans. They were exempt from federal income tax until the 1980s. In turn, they initially offered community-rated plans and offered services to the community, such as health fairs. In some states their premiums were regulated and they were generally regarded as the insurer of last resort for the individual market.

Over time, however, the Blues lost their focus on community service and began to look more and more like their competitors. They abandoned community rating (which, realistically, they could not maintain when faced with competition from experience-rated commercial plans) and began to impose underwriting and cost-sharing requirements indistinguishable from the private plans. Although providers lost control of the Blue plans, the plans never took a leadership role in bargaining aggressively with providers, despite their market dominance in many states. Many of the largest Blue plans became for-profit, and those that remain non-profit are largely indistinguishable from commercial insurers. Although the national Blue Cross/Blue Shield association offers some coordination services to local plans, it has not resisted the move of Blue plans away from a community-service toward a for-profit orientation. Lacking a national focus on public service, state and regional plans have become indistinguishable from their commercial competitors.

Blue plans are not the only non-profit insurers that survive. Many church and fraternal organizations have their own non-profit plans. Although these plans often try to serve their communities, they usually have a small presence and little bargaining power in most communities in which they operate; tend to insure individuals and small groups, the most costly market; are often the victims of adverse selection; usually underwrite much like commercial plans; and tend to offer low value, high cost-sharing policies. They are not a model on which to build national reform. Mutual insurers are also in theory owned by their members. They also, however, are indistinguishable from for-profit insurers in most states.

What can we learn from this history? First, health care cooperatives are, in fact, an American response to health care reform. Cooperatives and non-profit insurers were there before for-profit commercial insurers entered the health insurance business, and we could try to revive the idea again.

But why would state or locally-run cooperatives be any more successful now than they were when we tried them before?

First, it is hard to imagine how they would get underway. Capitalization and critical size were problems before and would likely be problems again. Senator Conrad’s recent draft suggests that members of the coops would elect their boards, and that the coops would then obtain state licensure as mutual insurers, meeting state standards for solvency and reinsurance (with the help of federal seed money). But there is a chicken and egg problem here. Until the coops had members they could not have a board. Until they had a board, how would they meet licensure requirements? The state coops, moreover, would, under Conrad’s proposal be supervised by a national board, but the national board would be elected by the state coops. Again, the state coops would presumably not be able to get underway until the national board provided policy guidance, but the national board could not get underway until the state coops were formed to elect it. None of this makes sense.

Second, there is every reason to believe that small, state run coops would fail like their predecessors did in the 1930s and 1940s. Unless they reached the critical mass necessary to bargain effectively with providers, to accumulate reserves, and to compete with national private insurance plans, they would be doomed to failure. Even if they managed to succeed here and there, they would contribute nothing to a national effort to control costs, drive value, and make affordable care accessible.

Third, if state-run coops in fact, against all odds, became large, successful competitors for insurance business, what would keep them from following the course of the Blue and mutual plans before them? Without strong Congressional direction and a unifying national leadership, what could keep them focused on cost control, quality improvement, transparency, and service rather than simply becoming indistinguishable from their commercial competitors? How would they drive the delivery system change we need?

Fourth, how does setting up cooperatives on a state-by-state basis drive national health care reform? Each state currently can set up cooperatives if it wishes to, but none have done so. Why would states suddenly embrace this concept? And what assurance do we have that they would pursue anything like a common strategy? To approach this issue on a state-by-state basis is simply to surrender on national health care reform. A federal fallback plan to be implemented in the future is also unlikely to work. HIPAA contained a federal fallback plan for states that failed to implement reforms in the individual market, but it was poorly implemented and eventually abandoned. To revert to a state-by-state approach is to surrender on national health care reform.

What Would Make the Cooperative Concept Work?

In fact the cooperative idea in itself is promising. The proposed cooperatives look much like the social insurance funds of Germany and of other central European states. Those funds are governed by their members and do a comparatively good job of keeping health care costs in check. But they operate in a strong framework of national laws and under the guidance of national leadership.

The only viable strategy is Senator Conrad’s Option 2–a federal charter to license and regulate a national non-profit coop, with coop governance prescribed by Congress. Leadership could initially be appointed as directed by Congress to represent consumer, labor, and small business interests, and thereafter be elected by the membership. The federal government could provide seed funding to assure initial solvency, but thereafter the coop could be self-supporting. It would be financed through premiums, and compete on a level playing field with private insurers (although some account would have to be taken of the fact that private insurers, no matter what underwriting rules were imposed, would still dump high-risk insureds into the coop). Some administrative functions could be delegated to the regional level, much as Medicare Advantage or drug plans are administered at the regional level. Regional councils could also be elected by members, who could have a role in selecting the national board and an influence on national policy.

A national cooperative could perhaps compete effectively with national private insurers. It could perhaps bargain effectively with providers, including global pharmaceutical firms and national hospital chains. It is possible that it could drive creative national quality initiatives and provide national data on health care use. It would not be government-run insurance, the great fear of the American right. But it could perhaps provide a national solution for a national problem. It will not happen on its own, however. It will only work with concerted and probably long-lasting support from the federal government.

Dead Center

A lot of attention has focused on attempts by health reform proponents to woo what the press insists on calling “moderate” or “centrist” members of Congress.

But what constitutes a centrist position on health reform issues?

Apparently, opposing fair taxation, consumer protection laws, and regulation to make the health care market more competitive gets you branded a moderate these days. And despite their yelping about fiscal responsibility, neither the Blue Dogs (who seem to have ignored the real benefits of the Obama plan to working folks in their rural districts) or the “gang of six” on the Senate Finance Committee (who collectively represent 2.75 percent of the nation’s population) appear ready to vest real power in the government to reign in Medicare spending but at the same time are demanding more subsidies for providers in their communities.

So to get beyond misleading labels and see where they really stand on core issues, here’s a quick quiz that the press might pose to the putative centrists.

• Do you believe that the health reform initiatives should be funded by a progressive tax? If yes, do you regard a tax placed exclusively on families earning more than $350,000 as progressive? Does taxing health insurance premiums advance the goal of fairness?

• Do you believe that competition among insurers in the private market will control cost and reduce waste? If yes, why have insurers not succeeded over the last thirty years. If no, how would you improve their performance?

• Arguing against a public plan on the Senate floor, Senator Kyle recently offered the following pronouncement “The health insurance industry is one of the most regulated industries in America. They don’t need to be ‘kept honest’ by the government.”
Do you feel that the current regime of regulation of insurance companies provides Americans with adequate competition and consumer protection? Does the ERISA law help or hinder effective regulation?

• Will health insurance cooperatives–your alternative to the public plan–spring up in every market in the country? If not, what will insure competition works well in those markets without cooperatives?

• Is the current system of fee for service payments for doctors under Medicare efficient? Do you agree that payment systems that encourage continuity of care, rewards quality and elimination of waste would save money and produce better outcomes? Are regulations that move Medicare in that direction a move toward “socialized medicine”?

• What is the cost of “affordable health insurance” for a family of four earning $50,000 per year? Will the reduced subsidies under your plan enable them to buy insurance without sacrificing education, housing and other necessities?

The Broken Health Care “Marketplace”

While Mitch McConnell goes on Meet the Press to praise free enterprise in American health care, he ignores the market concentration that gives us vastly more expensive care than comparable countries. As Blue Dogs and other Dems start to tap on the brakes of health reform efforts, they would do well to consider the work of Tim Greaney and David Balto. Both have recently delivered Congressional testimony that indicates just how far health care is from a well-functioning, competitive market.

Balto is hardly a leftist on antitrust matters; for example, he has aggressively defended some Google initiatives now under scrutiny by the DOJ. But even he is alarmed by the extraordinary trends toward concentration in health care:

Few markets are as concentrated, opaque and complex, and subject to rampant anticompetitive and deceptive conduct. As the health care debate progresses, many advocate for limited reform of the health insurance system. Their belief is that it is a fundamentally sound market and with a little dose of additional regulatory oversight, all the ills of the market will be cured. They could not be more mistaken.

As a former antitrust enforcement official, I strongly believe the mission of the Federal Trade Commission and Antitrust Division of the Department of Justice is vital to protecting consumers and competition. However, in the past administration, the priorities of those enforcement agencies were not effectively aligned with the critical priorities in the health care market, with the result that there is substantial anticompetitive and fraudulent activity that raises prices and costs for consumers and the American taxpayer, especially conduct by certain health care intermediaries—Health Insurers, Pharmacy Benefit Managers, or PBMs, and Group Purchasing Organizations, or GPOs.

The full testimony appears here. Balto argues that “the Bush administration did not bring a single case challenging anticompetitive conduct by insurance companies,” while it “spent a hugely disproportionate amount of time, money and effort prosecuting relatively small groups of doctors.” By the end of the testimony, it almost appears that Balto has made his case too well, given the limited resources of current antitrust enforcers. It is hard for me to imagine them investigating even a fraction of the schemes and situations he describes, though perhaps some high profile cases (and partnerships with state attorneys general) would have an in terrorem effect.

Tim Greaney’s testimony before the Senate Commerce Committee paints a similarly grim picture. Greaney notes that, “by 2003, ninety-three percent of the nation’s population lived in concentrated hospital markets.” He quickly identifies the core problem in an increasingly sickly health care antitrust jurisprudence: courts’ short-sighted failure to understand the unconventional economics of medicine:

Legal decisions approving mergers of competing acute care hospitals have been roundly criticized. The judicial missteps can be traced to the courts’ tendency to oversimplify antitrust analysis by adopting plain vanilla, Chicago School assumptions about markets while failing to incorporate the effects of market imperfections in their analyses. Most of these decisions found extraordinarily large geographic markets for basic acute care hospital services as they ignored the heterogeneity of demand for care and the fact that consumers exhibit different preferences for [and ability to] travel.

Other cases refused to recognize supply side heterogeneity, failing to appreciate that mergers of “must have” hospitals may give rise to anticompetitive effects. To right the ship, the FTC has brought two recent hospital merger cases and undertaken retrospective reviews of the outcomes of several hospital mergers. Unfortunately, developing legal precedent takes time and effort and mergers may be attractive to the hospital industry during a period of legal uncertainty and regulatory change. An important priority for the FTC therefore should be to undertake close scrutiny of all horizontal consolidations by hospitals– including joint ventures involving physician-controlled specialty hospitals and outpatient facilities, none of which have been challenged to date.

Greaney also notes substantial failures in antitrust enforcement against physicians, health insurers, and PBM’s.

While Balto and Greaney focus on improving competition policy, I’m left wondering: can this market be saved? Greaney argues that “the nation’s competitive infrastructure — provider and payor markets — is not well designed to produce cost savings if reform proposals simply turn over the job to the private market. . . . [and] this quandary lends strong support to the idea of having a public plan option to nudge private insurers toward more vigorous competition and to serve as a backstop where markets fail.” A highly concentrated health care marketplace has neither the means nor the motive to discipline costs–external competition has to prod it in that direction. Well-designed health insurance exchanges will be key to success here.

Primary Care: Proper Implementation Crucial to Successful Health Reform

In reference to the House Bill, a recent post at The Health Care Blog stated that:

A big reduction in the number of uninsured with no new controls over costs carries its own risk. As Massachusetts–even with only a modest percentage increase in its covered population–discovered, making health care more accessible means a jump in demand, but with no corresponding increase in supply. The predictable results: higher prices and disenchanted consumers unable to obtain care.

This comment raises two interesting points, namely, how will the House bill  affect the demand for, as well as the supply of, health care? The health reform measures in Massachusetts have notably not included a public plan similar to the latest version of the House bill.  Ergo, a comparison of the House bill to the Massachusetts reform measures isn’t exactly comparing apples to apples. In Massachusetts, the private insurers do not have to worry about consumers (who are often simultaneously employers) choosing a public plan. However, in the House bill, this option will, theoretically, increase competition by making the private insurers work to keep their customers from going over to the public plan.  Thus, the addition of  a separate actor–in contradistinction to the MA plan–may lead to decreased cost, a trend I explored in a previous post.  Therefore, Roger Collier’s claim in The Health Care Blog that there will be no cost controls isn’t entirely correct if the public plan fosters competition sufficient to force private insurers to lower the costs of their own plans.

If the price does in fact decrease, demand will then (presumably) increase, and this is when we will encounter the real elephant in the room: supply.  It’s not the relationship between the public plan’s increase in demand that we should worry about, but rather it’s the relationship of it to the present supply. Thus, Collier may be on to something with regard to the inability to obtain care; however, he fails to point out why there may be a supply problem, and the problem is fairly obvious: the massive primary care supply shortage. As the President-elect of the American Association of Family Physicians  noted:

“Primary care has been described as the base of the health care workforce pyramid,” said Heim, who spoke during a hearing on physician workforce shortages. “But the U.S. physician profile is only 31 percent primary care and 69 percent (sub)specialty care.”

The pyramid metaphor has been mentioned by others. It describes a health care system as a pyramid whose base comprises basic health care delivery by primary care, which is the least costly, and which tapers to the more specialized care that is more costly, such as organ transplantation. At this point, our health pyramid is inverted. One need not have taken college level physics to appreciate that  an inverted pyramid’s center of gravity makes it prone to toppling. We also have a second pyramid–a socioeconomic pyramid–with a largely solidified base of lower-income Americans, tapering to the middle class and then rising to the upper income tier at the top– or pinnacle. Imagine these pyramids are side-by-side, yet one is inverted. Congress’s job is to make sure that these metaphorical pyramids co-exist stably. The picture above may be of some help.

The authors of the House bill were not oblivious to the teetering health care pyramid, and added specific provisions that they believed would ameliorate the growing problem. As MedNewsToday pointed out, the bill attempts to combat the shortage by:

• Increased Medicare payments to primary care physicians by 5%
• An additional 5% pay boost for primary care doctors in designated “health shortage” areas
• A restructured formula for calculating Medicare reimbursements each year
• Enlargement of the National Health Service Corps by “an amount sufficient to eliminate 40% of the estimated shortfall in primary care providers”
• New scholarships for medical students who choose primary care as a specialty

Luckily, the House bill has focused to some extent on the most important aspect of the primary care shortage, that of recruiting more students to enter primary care. Enlarging the National Health Service Corps is laudable (notably, Dr. Regina Benjamin, recently named by Obama to the Surgeon General post, is a former participant in the program), and would likely be helpful, but increasing it by an “amount necessary” to reduce a predicted short fall is somewhat amorphous. Also, the National Health Corps and the scholarships associated with them are offered in return for serving in certain areas that have shortages of services but these areas of need will almost certainly expand and alter as coverage is drastically expanded across the nation.

Thus, increasing the number of primary care physicians would in no way be a panacea– a point that is  highlighted by Atul Gawande’s New Yorker article. As the article made clear, health care delivery can be hamstrung after access is provided. I believe this underscores a point that many have noted, that is, that there is a difference between an increase in coverage (i.e. insuring more individuals) and health care reform (making sure that care is delivered effectively and efficiently).

Assuming that medical students are sufficiently enamored by the pay adjustments and scholarships –which is a big assumption–reforming how those new primary care physicians deliver care in response to increased demand is as important as increasing the supply.

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