Walking the Blue Dogs

In the House, the deal reached yesterday with the Blue Dogs allows mark-ups of the Tri-Committee Bill to continue in the Energy and Commerce Committee, where hopefully a bill will pass before the August 7th recess and provide some needed momentum. For more on the recent developments, one can go to this article in the Washington Post or the always trustworthy Kaiser Health News. Additionally, the Post also has a nice write-up on Rep. Mike Ross, a leader in the Blue Dog Coalition, as part of its continuing Voices of Power series.

Things are moving to the middle on the health reform front and usually, this is a good thing. Personally, I subscribe to the wisdom of “he/she governs best that governs from the middle.” But, as usual, things are not so simple. As stated before, we do need some fundamental changes in health care that swing the pendulum back toward consumer protections, health system development, simplicity, and common sense. What we do not need is a whole scale health care makeover or at the other extreme, a package of tweaks packaged as reform. In essence, any reform bill needs to be a bit “in your face” but at the same time build off what works…kind of like Aerosmith. [Yes, it is a weak lead-in but I had to find a way to bring in the Aerosmith video below]

Industry leader Bob Laszewski sums of some of the concerns about compromise in a recent post where he states:

And, as I have posted here before, I am concerned that in their efforts to find compromise they are headed for a health care bill that is based on a formula of cost containment “lite,” minor paring of Medicare and Medicaid provider payments, and at least $500 billion in new taxes. I don’t see much changing fiscally if that is the final result in a health care system that is already unsustainable and on the way to spending upwards of $35 trillion to $40 trillion over the next ten years as it goes to 22% of GDP by 2018.

From what we have heard, their bill would hardly "bend" any curves.

Yes, we could well cover tens of millions more people and that alone would be a noble accomplishment. But just loading all of these people onto a system that we can’t now afford seems to me to be ultimately a fool’s errand. The number of uninsured we have in this country isn’t the fundamental problem—it is the most aggravating symptom of our real problem, which is unsustainable cost.

Being good guys and bipartisan doesn’t necessarily lead to the best policy!

Now, this gets me to my point “What are Blue Dogs?” and “Why do they matter?” Interestingly enough, this is all rooted in the complex psyche of the South – the same part of the country that to this day, pays homage to the thought of secession and the boll weevil.

[Two quick asides. First, the picture above is of the famed “boll weevil” statue in Enterprise, Alabama. I passed it last month and honestly, expected it to be much bigger. It is only about 10 feet tall and is plopped smack dab in the middle of an intersection. Second, in my local paper today, writer Bill Cotterell noted that members of the Florida legislature want to put forth a state constitutional amendment that reinforces the 10th Amendment to the U.S. Constitution, “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." Although interesting to think about, I believe Andrew Jackson solved this issue about 200 years ago and anyway, Florida has little to carp about when it comes to health care. Outside of the exceptions I wrote about last week, the state largely provides high-cost care and is usually ranked in the bottom 10 percent of states when it comes to public health measures.]

Now, back to my point. The Democratic Blue Dog Coalition was first formed in 1995 and refers to a group of 52 moderate and conservative Democratic party members in the U.S. House of Representatives. And yes, the logo at right is their official logo – to me, it kind of looks like a very depressed Clifford, from the popular children’s books, but so be it. The group’s lineage follows the “Boll Weevils” of the 1980s and the “states’ rights” Democrats of the early 1900s. Even though the group has its roots in the southern politics, today its members span the entire country.

The phrase “blue dog” basically follows from the term “yellow dog” Democrat. Yellow dogs historically refer to southern voters who voted democratic down the line in defiance of Abraham Lincoln, a Republican president. Now, it generally refers to someone who votes the party ticket. When former Texas Democrat Rep. Pete Geren explained that his group of conservative Democrats had been "choked blue" by Democrats on the far left of the political spectrum, the phrase was coined.

Also interesting is that Blue Dogs are giving the Democratic party a chance in the typically Republican South. For example, in 2006, a former Tennessee quarterback named Health Shuler was elected in a conservative district of North Carolina. That brings me to my favorite Blue Dog of all, Smokey, the blue-tick hound (see picture).

From the Blue Dog Coalition’s press release yesterday:

Blue Dogs believe fundamental reform of our health care system is needed to control rising health care costs, increase quality and value, and improve access to coverage and care.
Comprehensive health care reform must be deficit-neutral and bend the cost curve in the long run. We also believe health care reform must preserve patient choice of provider and maintain
competition within the marketplace.

So, where does this leave us? Well, Blue Dogs matter because they are often a link for bipartisanship…a stated goal for the American public and the Administration. They also give the Democratic party a chance to regain a foothold in the South. The deal reached yesterday with the Blue Dogs in the House provides some needed momentum but we still have a long way to go and the emerging coalitions are fragile. Furthermore, there is a growing concern in some circles that as the bills water-down in the name of compromise (e.g. moving from “sticks” to “carrots”), they will not fundamentally change the incentives in the system and thus, the status quo will continue.

To me, chances are still 50-50 whether a bill is passed. If one passes that includes: expansion of the opportunity for affordable coverage to nearly all legal residents, insurance market reforms (e.g. consumer protections and insurance exchanges), Medicare payment reform (e.g. a strong IMAC and move toward episodic, value-based payment), and incentives for health system development (e.g. ACOs), then we should mark the bill’s passage a success. ~BAA

Recent Medicaid presentation

Someone asked me the other day to share one of my recent presentations on Medicaid. I save my best for the interactive portions of my sessions but for anyone who is interested, you can reach the presentation by going to Aggressive Analytics or clicking the graphic at right. ~BAA

Balance is the Key to Life (Part II): Politics vs Policy

One of the only specific tenets of health reform that the White House has put its weight behind is an Independent Medicare Advisory Council (IMAC), which is basically the existing “MedPAC on steroids.”

The Medicare Payment Advisory Commission (MedPAC) is an independent advisory body to the U.S. Congress whose thoughtful reports are widely read in policy circles yet summarily ignored by Congress. The basic thinking with this proposal is to model the new IMAC after numerous successful independent commissions that oversee state Medicaid programs and the successful Base Realignment and Closure Commission (BRAC).

Like the BRAC, this new entity would be staffed by knowledgeable nonpartisan experts and would make a set of recommendations to the U.S. Congress that it could either approve or disapprove in their entirety…this way, individual members of Congress could not stand in the way of larger, needed reform efforts. Last Saturday, the Congressional Budget Office (CBO) issued an initial score on the IMAC proposal and confused the policy world by attaching an initial score of a paltry $2B in savings while stating that it really did not know how the IMAC would affect future finances. Additionally, Merrill Goozner at the GoozNews blog points out that the CBO has some concern that the new entity could be dominated by providers. For more discussion on the IMAC, Ezra Klein has two nice posts here and here.

The BRAC has been very successful at taking the unnecessary politics out of difficult equations and MedPAC is universally accepted as an “earnest arbiter” when it comes to Medicare policy - but when one reads the comments submitted after any article on MedPAC, the responses usually go like this:

Just say no to Congress delegating its authority to a bunch of unaccountable and unelected bureaucrats!!!

Truth is, it does not matter whether one is elected or not…bureaucrats (e.g. CMS’ handling of the DME competitive bidding) and members of Congress alike make numerous mistakes on health care policy (e.g. also see DME competitive bidding). For those that think elected representatives are the only ones that can make thoughtful decisions on health policy, I submit as Exhibit 1, Gary Elkins, an eight-term member of the Texas House of Representatives and member of the Health and Human Services Committee. In a committee meeting on 03/24/2009, Rep. Elkins stated,

What's Medicaid? I know I hear it ... I really don't know what it is. I know that's a big shock to everyone in the audience, Okay?

For Exhibit 2, I submit the recent Wall Street Journal article on OMB Director Peter Orszag:

The battle heated up in June, when Mr. Orszag visited Capitol Hill to discuss health care with a small group of House Democrats. The meeting started well, with one lawmaker after another echoing his message that spending controls were critical to any health-care overhaul, according to two administration officials.

Then one member said her top priority was winning higher payments for oxygen suppliers, the officials say. Mr. Orszag was taken aback. Officials had been trying for years to cut payments to suppliers of oxygen and other medical equipment, which critics say are inflated. Yet when a new competitive bidding process was set to take effect last year, industry supporters in Congress were able to delay the plan. They are still fighting to block changes.

"One of the reasons we currently have such disjointed and skewed incentives is that we have an excessively political process," Mr. Orszag said in an interview.

For my last exhibit, I submit the Agency formerly known as the Agency for Health Care Policy and Research (AHCPR). In the 1990s, AHCPR was trying to evaluate the evidence behind various medical procedures and summarize this evidence in recommended “practice guidelines” to assist clinical decision-making. The Agency made the mistake of taking on one of the most overutilized services in all of health care…surgery for lower back pain. After its independent panel concluded that there was little evidence to support surgery as a first-line treatment and rather, nonsurgical options should be tried first, back surgeons were enraged and went to the new Speaker of the House, Newt Gingrich. Shannon Brownlee summarizes the history in the Washington Monthly:

Their arguments found a sympathetic ear in Newt Gingrich's newly elected Republican majority in the House. The back surgeons' anger at the AHCPR's efforts to discipline medical practice resonated with the Republican fervor for reducing government, and with the party's ideological antipathy for federal interference in what they imagined as a free market. The agency's name soon appeared on a House Budget Committee "hit list" of 140 federal programs targeted for elimination. (The list also included the congressional Office of Technology Assessment, which evaluated the effectiveness of medical technology.) The Republicans saw the AHCPR as a wasteful government agency, and in 1995 the House voted to eliminate its funding, calling it the "Agency for High Cost Publications and Research."

Eventually, the agency was rescued with the help of a handful of Republican supporters in the Senate, but it suffered a 21 percent cut of its already meager $159 million budget. Sensing the agency was still vulnerable, its director worked with moderate Senate Republicans to protect the agency by downshifting its mission. Now, the AHCPR would merely be a "clearinghouse" for data, which meant it could no longer offer Medicare explicit guidance when it came time to determine which tests, treatments, and procedures to cover. The word "policy," which smacked of the failed Clinton health care plan, was expunged from its name, and the AHCPR became the Agency for Healthcare Research and Quality (AHRQ).

As far as “bureaucrats” go, after experience in both the private and government sectors, I have learned that the 80-20 rule applies in government just like everywhere else in that eighty percent of government employees are professional and committed to improving care. The problem with government decision-making is just like health care at large…the system is way too complex and encourages short-sighted, silo-oriented, political decisions as opposed to thoughtful, broad-based, long-term investments in care. For reference, Health Affairs has recently published two enlightening interviews (here and here) with former Administrators of the Centers for Medicare & Medicaid Services (CMS).

In order to make the difficult, yet necessary changes to improve Medicare and Medicaid, we do need to take some of the politics out of the equation. But we also should not give CMS or other government agencies a “blank check.” Both of these branches of government often mean well but do not always do well.

Some sort of IMAC may provide the balance we need to make better Federal policy but as they say, the devil is in the details. Merrill Goozner over at GoozNews blog, sums up by stating: “If a MedPAC on steroids makes it into the final bill, it will be interesting to see how much money Congress gives the newly empowered agency, not just how much power. It's going to have to become a lot bigger with more expertise than it has now if it is going to do a credible job.”

The IMAC can provide a valuable tool to help improve our health system work but only if it is independent, thoughtful, funded, and supported. It should focus more on aligning current Federal policy with high quality, low cost care and reducing barriers to innovation and teamwork than it does on recommending new policies that often increase the complexity of health care administration. Additionally, it should be given primacy over both Medicare and Medicaid matters and it should meld existing resources and functions as opposed to just adding another layer of bureaucracy and more government.

After all is said and done, this proposal is one of the few under consideration that may actually bend the cost curve and lead to a more simple and sustainable Medicare program. But as usual, it will take some sacrifice, commitment, faith, and a good dose of leadership to make it work. ~BAA

Seeing the Sunny Side of Health Care

Over the past few months, we have heard a lot about what is wrong with health care.  Specifically in my home state of Florida, we continually hear that we are mediocre, expensive, and fraught with fraud. Well, all of this is true - in the aggregate.  What we have is a system problem, not a person problem. The health care system encourages organizations and people to do certain things that lead to low quality and high cost care. But luckily, some have the courage to swim against the stream and even more luckily for me, this characterizes the health care community of Tallahassee, Florida.

Locally, two of our leading health care organizations, Tallahassee Memorial Healthcare and Capital Health Plan are consistently regarded as industry leaders. TMH is a private, not-for-profit, integrated health care system that was one of 13 international participants in the Institute for Healthcare Improvement’s successful Pursuing Perfection initiative.  CHP is a private, not-for-profit mixed model HMO that is consistently ranked among the best managed care plans in the country.

Earlier this week, at a one-day conference titled “How Do They Do That? Low-Cost, High-Quality Health Care in America,” some of our nation’s most thoughtful health leaders convened local leaders from 10 communities – including Tallahassee - to share their success stories. The event did not get as much national media attention as it deserved, especially given that Congress is busy remaking 20% of our national economy, but it did get very nice coverage from the dependable Kaiser Health News, NPR’s Morning Edition, and the New Health Dialogue Blog. Additionally, it is comforting to know that but White House Budget Director Peter Orszag was an active participant.

Dr. John Lumpkin, the Director of the Health Care Group at the RWJF and a former colleague of mine, provided an excellent summary at RWJFs health reform blog, The Users' Guide to the Health Reform Galaxy. When it came to lessons learned, he noted:

Each team spoke about the cultures, delivery structures and accountability mechanisms that underlie their success. No two are alike – but the way they practice medicine is far more "systemlike" than we are used to seeing in our fragmented U.S. health care “system.” Some patterns: a culture of collaboration to put patients first; considering finances as a constraint, not a goal; the importance of physician leadership; the real or virtual integration of delivery systems across the continuum of care; the importance of strong primary care; the value of electronic health records and the information-sharing it makes possible; and an emphasis on measuring and reporting data on quality and utilization…

I walked away persuaded more than ever that while we are a nation in search of reform, reform will actually happen one community at a time.  We need these lessons about collaboration that were on display at the symposium, the types of lessons that are also emerging from Aligning Forces [for Quality – AF4Q].  These communities show us collaboration on reforming health care is not only possible, it’s happening.  We need to clear the obstacles in their path and stand back and learn.

This last paragraph is echoed by Mr. Orszag, who stated:

"I guess the way I would put it is even if I was a benevolent dictator for a day, I wouldn't feel comfortable at this point, given the state of knowledge, completely overhauling the Medicare payment system," said White House Budget Director Peter Orszag, who has been studying the issue for several years.

These two statements and the comments from the participants are interesting in that they focus more on simplifying the current system (e.g. anti-kickback, Stark, and Medicare payment rules) than they do on creating new programs and complexity. The participants stressed the need for payers, especially Medicare, to mature their payment systems from the current fee-for-service or provider-specific prospective payment systems (e.g. DRGs) to a system based on paying for episodes of care or care for special populations over time. And finally, an interesting take-away from the conference was that local communities control their fates more than they imagine. Of the 10 high-performing communities, half of them used to have high costs and transitioned to low cost over the past decade.

As the old saying goes, all health care is local. Thus, we need to spend less time thinking about national government solutions (insurance system reform is another matter) and more time incentivizing local communities to perform their own performance improvement. There is an extremely helpful role the Federal government can play in improving health care and that is to clean up its own house by not doing many of the things it is doing today and by setting expectations, reforming its payment system, and promoting the spread of knowledge. In this way, hopefully we can bend, without breaking, the cost curve in health care. ~BAA

Health Wonk Review: Carnival Edition (07/23/09)

Come one, come all to the carnival of health reform. I can hear the elephants now with all their "trumpeting." It must mean that the carnival edition of the Health Wonk Review (HWR) is here. 

The HWR is a summary of the best health blogs in the country during the previous 2 weeks and the current edition is hosted by Paul Testa of the New Health Dialogue Blog. Enjoy. ~BAA

The Pottery Barn Rule of health care

[Note: my wife challenged me to write a post with no links…here goes]

One of the things I have struggled with over the past year is there is no nice, clean solution to improve health care. Another thing I have struggled with is that Medicare and Medicaid are a large part of the problem in health care.

Yes, it is heresy to criticize two programs that filled huge vacuums for vulnerable populations neglected by the private sector. But it is true.

The acceleration of health care costs basically started a little over forty years ago (i.e. when Medicare and Medicaid came to be). Now you ask, “How can this be if Medicare and Medicaid pay so low compared to the private sector?” Well, to answer this question, I ask you to go through two thought experiments.

First, imagine starting a new business. One of the main things to do when starting a new business is to manage uncertainty and to do so, one often accepts some clients that pay less but give long-term arrangements with minimum hassle. This allows one’s business to cover its capacity costs (i.e. fixed costs like turning on the lights, rent, insurance, etc.). Once the company’s basic costs are covered, they can negotiate from firmer ground for higher-margin clients. This is basically what happened in health care…the money from the government for Medicare and Medicaid gave a lot of thrust…like pouring fuel into an afterburner.

Second, imagine you own an apartment building where half of the apartments are rent-controlled and paid for by the government. Furthermore, imagine that the fixed rent is not by apartment but by tenant. As any rational person, you have certain financial expectations and to the extent the revenue from the rent-controlled apartments fall below your expectation, you make up for it by adding more people into the rent-controlled apartments and you charge more to the other tenants. Additionally, since you are prohibited from treating tenants differently whether or not they are in a rent-controlled apartment, you also add more tenants to the non rent-controlled apartments. This is basically what is going on in health care – fee schedules are like rent controls and providers respond to price controls by increasing utilization and cost-shifting to the private sector.

This cost shift constitutes, in large part, a hidden tax on families with private insurance amounting to about $1000 per year. The graph below from the American Hospital Association and Avalere Health is about as clear an example of the relationship between government payment and cost-shifting that I have ever seen. As Medicaid/Medicare go up, commercial goes down, and vise versa.

An example of what I talking about that is specific to Medicaid is its managed care program. When Medicaid FFS pays a hospital in Florida, it typically pays about 60 percent of costs. For special hospitals that get an exempt rate, they receive about 97 percent of costs. But when a Medicaid managed care plan tries to negotiate with a hospital on behalf of Medicaid beneficiaries, the Medicaid rate does not apply. One hospital system in Florida demanded 150 to 200 percent of cost for a Medicaid managed care contract. That is some serious cost-shifting within the Medicaid program itself.

This is what I mean by the Pottery Barn Rule. - once you break PART of it, you are responsible for ALL of it.

Thinking back to the apartment building example, once the government perturbs the market with its rent-control subsidies, the only way it can stop a spiral that raises rates for all tenants is for it to get more involved in regulating the entire building. That is kind of scary when you think about it…

There are only two real “clean” solutions to health care reform and by clean, I mean that the policy is neat and consistent. One is government all-in and the other is government all-out. Pretty simple huh? By all-in, I mean the VA for all and by all-out, I mean capitalism featuring high-deductible plans, full quality and price transparency, etc. Now, neither of these is going to happen because we either unwilling from a public standpoint or unable from an infrastructure standpoint. So that leaves us in the messy middle, so to speak.

In this messy world, health care policy is like the proverbial balloon…squeeze on one side or even two sides, it just bulges elsewhere. That is why most of the potential reform legislation being discussed will have little effect in that they do not address cost, quality, and access all at the same time and all across-the-board (i.e. the Pottery Barn Rule).

So, we all need to admit that government is both part of the problem and part of the solution in health care. Furthermore, since government is part of the problem, it has to be the guiding source for the solution. Harkening back to our apartment example, the only way to control total costs is for the government to regulate the entire building. As they say, in for a penny, in for a pound. Thus, we are counting on the same legislative system that helped make this mess now get us out of it. That is kind of defeatist but it is real.

Since I refuse to end on a sour note, let me note that health care is so big, that it does not take a lot of “bending the curve” in order to make a significant difference. We need to recognize that even though we are not going to get fundamental change, we do have an opportunity to address cost, quality, and access all at the same time and slow the balloon’s growth just a bit. Let’s hope that any resulting legislation meets these criteria. ~BAA

House unveils the America’s Affordable Health Choices Act (aka Tri-Committee Bill)

Yesterday marks our crossing the [starting] line of potential health reform. It marked the first time a complete health reform bill was released by Congress this session - not a summary, talking points, or pseudo-bills with large holes – a complete bill. Up until this time, everything has been “talking head soup.”

[FYI, the image at right is a crossing the line certificate typically given to sailors when they cross the equator.]

First, I must admit a bit of surprise. Many of us expected the Senate Finance Committee to lead health reform as they invested a significant amount of time and effort over the last year with listening sessions, roundtables, and the like. The House was almost an afterthought – except for the fact that revenue bills have to originate in the House. The basic thinking was that the House would just put forth a bill, any bill, and that the Senate bill would dominate the conference where the Houses meld the two bills, and voila, we have health care reform. Regardless of where one stands in the political spectrum, the House deserves some credit - their three committees worked together in a short amount of time to put forth a strong bill. On the other hand, reading the policy options from the SFC was depressing…a lot of expansion and tweaking with little focus on fundamental change that brings costs to a manageable level. In defense of the Senate, they tend to be more compromising since they have the filibuster but with knowledgeable persons like Senators Baucus (D-MT) and Grassley (R-IA) at the helm, many of us expected better.

The House bill’s impact on Medicaid (see House Medicaid summary) is substantial and may mark a shift toward increased Federalization of Medicaid (another post on this is forthcoming). Basically, the bill has the Federal government foot the entire bill for expanding all Medicaid state programs to cover individuals with family incomes at or below 133% of poverty ($14,400 for an individual in 2009). It would also allow individuals with incomes at or below 133% of poverty who lose health insurance coverage, the choice of enrolling in Medicaid or enrolling in a Health Insurance Exchange product with premiums-assistance. Finally, it has the Federal government foot the entire bill for increasing Medicaid rates for primary care physicians and practitioners for primary care services from 80% of Medicare rates in 2010, to 90% in 2011, and 100% in 2012 and thereafter. Thus, in many ways, this bill removes much of Medicaid’s stigma and moves it toward being more of a vital safety-net. But, to my disappointment, it does not addres many of Medicaid's many weaknesses and like one observer said, "it merely splashes another coat of paint on top of a rusted shell."

The bill includes other numerous measures that will affect the uninsured and underinsured. For example, it increases funding for Community Health Centers and the National Health Service Corps above and beyond the additional $2.8B included in the Recovery Act (ARRA 2009). It also includes a health insurance exchange with a public plan option, consumer protections, and insurance market reforms. And finally, it institutes price controls on drugs purchased by low-income seniors and incorporates the drug industry’s $30 billion deal with the White House and the SFC to plug the infamous “doughnut hole” in Medicare Part D.

Also yesterday, the Congressional Budget Office released an estimate on the bill’s impact. They CBO stated in its preliminary estimate:

…enacting legislation that embodied those specifications would result in a net increase in federal budget deficits of $1,042 billion over the 2010–2019 period. By 2019, CBO and the JCT staff estimate, the number of nonelderly people without health insurance would be reduced by about 37 million, leaving about 17 million nonelderly residents uninsured (nearly half of whom would be unauthorized immigrants). It is important to note, however, that those estimates are based on specifications provided by the tri-committee group rather than an analysis of the language released today. For that reason and others outlined below, those figures do not represent a formal or complete cost estimate for the coverage provisions of the draft legislation.

The House bill is primarily financed with Medicare cuts and new taxes on the wealthy. For example, a married couple making more than $350,000 and less than $500,000 would be hit with a 1 percent tax, those making between $500,000 and $1 million would be assessed a 1.5 percent tax and those making more than $1 million would see a 5.4 percent surtax added to their tax bill. This funding mechanism of significant new taxes would be my only qualm with the bill.

In “budget world” (kind of like Disney World), the decisions of budgeteers (kind of like mouseketeers) rule because everything needs to be measured and scored. That is not to denigrate the CBO - they have some of the toughest jobs around. Trying to take squishy policy in a complex system and make predictions is no easy task. But we need to remember that there are different types of savings:

• Possible savings (not scoreable because of lack of evidence but believed to lead to savings – e.g. EHRs and medical homes),
• Probable (i.e. scoreable) savings (which tend to be those things that are more easily measured like cuts and taxes),
• Behavioral offset (this is the real tricky one and is kind of like culture change), and finally
• Real savings (this is the REAL outcome, in terms of lives, quality of life, and our country’s financial health).

For a good read on the current evaluation of these various options, CBO’s boringly titled Budget Options: Volume I is a thorough reference.

There are two important things to note. First, just because it is scoreable, does not mean it is meaningful. This is kind of like Einstein’s famous quote:

Everything that can be counted does not necessarily count; everything that counts cannot necessarily be counted.

For example, the Sustainable Growth Rate used to determine physician payments looks good on paper and is scoreable but is not meaningful policy because it is not practical (or even followed). The other important thing to note is the counter-intuitive nature of health care costing…i.e. the cheapest beneficiary is the one who dies.

Thus, a good bill is a balance between the art and science of policy that leads to fundamental change (and thus, behavioral change). That is pretty much what the House tries to do in this bill and where the SFC misses the mark. The delicate part is the balance. For example, if one focuses too much on the savings that are easy (e.g. taxes or cuts), we will neglect the hard work necessary to truly transform the health care system for the better.

This leads to my to my qualm with the House bill. The Democrat in me believes that time is ripe for top earners (who have fared very well over the past 10 years, either fairly or unfairly) to sacrifice more for the greater good but the economist in me has a natural aversion to significant new taxes, especially when they fall on those who did not cause the problem in the first place. In this way, I fall in the Bob Laszewski camp (kudos Bob for your recent NBC news appearance, which is available at this link). Bob basically points out that using the tax system to drive people to more efficient health plans could be good policy but that:

It appears we are on our way to a $600 billion to $800 billion tax increase for a health care bill because we can’t find that amount of money in a system that will waste $10 trillion over the same period. I don’t think these guys could find a John Deere in a hay stack.

Thus, it appears that the first bill out of the gate is a good start in that it moves Medicaid closer to being more of a true safety net (i.e. insurer of last resort) and it tries to address access by paying primary care providers more but it still has a ways to go to address many of Medicaid's structural deficiencies.

Let's hope that as this bill moves down the production line, it addresses more of Medicaid's weaknesses and draws more financing from those who benefited from this mess in the first place. Also, let’s keep our focus on transforming health care delivery so that any “crutches” needed for scoring (i.e. taxes) are only temporary. ~BAA

Update (7/14/09)

Things have been pretty hectic for me over the past few weeks but I have not forgotten about the new site and expect to put out a regular stream of catch-up blog posts in the next few days.

Additionally, in an effort to continually improve the site, I included a poll on the right side of the page where you can identify your areas of interest.

Thanks for your loyalty and the many kind words you have sent over the past few months. ~BAA