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The Politics of Healthcare

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from healthleaders magazine- cover story ( free registration required)

august 2002

the politics of healthcare

byhoward isenstein

as washington power players gear up for the fall elections, many healthcare concerns are on the agenda. among them, a medicare prescription drug benefit, the patients' bill of rights and medical malpractice insurance reform. the only question is, will anything get done?


it's beginning to look a lot like election time in washington. regardless of their stripe, house politicians are gearing up for the november elections and honing messages in an attempt to hold on to their seats. the stakes are huge. republicans hold a slim majority in the house and decisions in 15 to 20 races could determine whether they lose control to democrats, who already command the senate.

midterm elections normally have lower turnout than presidential elections, which means that those groups who manage to get out the vote in large numbers will exert more influence than usual. and the group with the highest expected turnout by far happens to be seniors. it is no accident, then, that those house members up for reelection are trying to find issues that appeal to those voters over the age of 65.

front and center for this population: prescription drugs. while seniors generally have good healthcare coverage under medicare, they must pay out of pocket for their drugs, buy a medigap policy or join a dwindling number of medicare+choice health plans. as drug prices skyrocket many seniors are either forgoing their medications entirely or rationing their drugs-both dangerous prospects.

washington has considered helping seniors pay for drugs for years. but pharmaceutical companies have fought tooth and nail against wholesale drug coverage fearing that the government would then be in a position to control prices.

this year, immediate concerns over the war on terrorism meant the usual medicare drug benefit debate took a backseat. in fact, serious debate about the size and scope of coverage didn't really begin until early summer, with democrats and republicans starting the debate far apart on funding. in late june, after a marathon session, house republicans succeeded in getting a medicare prescription-drug bill passed in the house, by a near-party-line vote of 221-208. the house bill would spend $320 billion over the next 10 years, providing seniors a prescription-drug benefit and relying chiefly on private insurance to oversee the plan.

the measure has yet to be taken up in the senate, but many optimistic lawmakers are confident that president george bush will sign some kind of medicare prescription-drug benefit into law by november.

other key healthcare legislation will have to wait until after november 5. lawmakers say that the issues are too complex or that there isn't enough political will to get them passed.

healthleaders recently interviewed five political insiders active in the healthcare debate to get their take on the most pressing healthcare issues facing the country as we head into the fall elections. the responses were varied, but some common undercurrents are clear.

rep. james c. greenwood (r-penn.) would like to lower medical malpractice insurance rates by capping economic and punitive damages in lawsuits and trying to get medical devices approved faster. for sen. john kerry (d-mass.), reform means doing something about the nation's 42 million uninsured and getting a patients' bill of rights passed. for rep. fortney "pete" stark (d-calif.), one of his top concerns is preventing the republicans from taking steps to privatize medicare.

it's not just capitol hill lawmakers pushing particular agendas. the white house's point man on healthcare, mark mcclellan, is working to overhaul medicare, provide a drug benefit to seniors and cover some of the uninsured with tax credits. meanwhile, former house speaker newt gingrich is formulating a vision of what healthcare should be in the 21st century, including using technology to improve quality.

it's by no means clear what ideas, policies and bills will actually survive the cacophony of interests competing for 14 percent of nation's gross domestic product. about the only thing that is certain: right after the november elections, lobbying will begin anew.

rep. james c. greenwood (r-penn.)

like other house members up for reelection this year, jim greenwood's number one goal is passing a prescription drug benefit for seniors.

"it was the issue raised most frequently during the primary, given how expensive medications are," he says. greenwood predicts that the house will pass a "fairly comprehensive" medicare bill before the end of this summer, which will include prescription drug coverage, better compensation for health plans that participate in medicare+choice and a reimbursement increase of 2 percent to physicians participating in the federal insurance program for the elderly.

yet greenwood is less comfortable predicting what may happen in the senate this fall. after all, he says, democrats have a narrow senate majority and some of them, including senate majority leader tom daschle (d-s.d.), have opposed republican proposals for giving seniors drug coverage, arguing that they are too skimpy to do much good.

"democrats could decide to simply howl...with the line that the bill is too stingy" and prevent anything from passing, greenwood says. he says he hopes the president can "use the bully pulpit" to press democrats and get a senate bill passed, after which it would then go to a conference committee where lawmakers will try to hammer out a compromise version based on the house and senate bills.

as a member of the house energy and commerce subcommittee on health, greenwood has also taken a keen interest in medical liability reform. his state's struggles are a case in point.

"in pennsylvania, we have a severe crisis: a growing array of physicians are leaving the state or retiring early, and before this year is out, many will have to abandon their practice," greenwood says. many doctors in pennsylvania and around the country can't afford or can't get access to malpractice insurance, he says. as a result, he contends, washington must create national liability limit standards so insurance becomes affordable and available. as sponsor of a key bill on the topic, greenwood would cap liability at 100 percent of economic damages and $250,000 for noneconomic damages. punitive damages would be capped at either two times the economic damages or $250,000, whichever is the greater of the two.

"it's plenty of dough and it gives some certainty," greenwood says. as for passage, greenwood says he feels pretty good that the votes are there in the house for passage before the summer recess, although matters are less certain in the senate. physicians are keen and powerful supporters of the legislation, he says, and medical associations are hard at work lobbying those who are undecided or opposed to the legislation to vote for it, he says.

greenwood is also seeking to get a medical device bill through the house. device makers complain that the fda approval process is slow and cumbersome and that the agency needs more resources. some device makers are seeking to attach user fees to applications for fda approval, which would help the fda hire more examiners, though smaller makers are worried that they won't be able to afford that, greenwood says.

chances are good for the bill's eventual passage in the senate, he says, considering that sen. ted kennedy (d-mass.) is in favor of a user fee.

sen. john kerry (d-mass.)

expensive healthcare, particularly drugs, will be a key issue in the fall elections, according to sen. john kerry.

"americans are clearly deeply frustrated by the cost of healthcare...and they are tired of the fact that even as politicians talk and talk about the issue, little seems to change," says kerry. "that reality, affected in ways we've yet to see by the power of money spent primarily by defenders of the status quo, will be expressed one way or another at the ballot box in november."

that frustration won't, however, cause lawmakers to act on key issues before the elections, kerry says.

"we're in the middle of another disappointing season of delay when it comes to so many of the big issues in healthcare before the country," kerry says. "the bipartisan patients' bill of rights has come under partisan attack, and there are a number of senators using sham prescription drug bills to try and duck the real question of passing comprehensive prescription drug benefits under medicare." kerry is more hopeful about capitol hill passing stopgap measures to increase medicare reimbursement to home healthcare providers and teaching hospitals this year.

as a member of the senate finance committee's subcommittee on health care, kerry is concerned about many areas of health but sees the need for holistic reform.

"if you touch one part of the system, weed out inefficiencies in one area, it has unintended consequences across the system," kerry explains. among the key issues that washington must address are covering the uninsured, making sure there are enough qualified nurses, a population now "being crippled by retirement and burnout" and expanding home healthcare for senior citizens, who are living longer.

kerry says that 65 percent of the 42 million americans who lack healthcare coverage are the poor and near-poor and that 25 percent of those uninsured are children. while congress has made incremental progress toward extending healthcare coverage to the uninsured, by creating the state children's health insurance program in 1997, it covers only about 2.3 million children.

"we need to embrace a new debate about how we move beyond a discussion that tinkers at the edges of broader reform," he says.

kerry is also concerned with medical privacy and opposes the bush administration's proposed changes to hipaa privacy regulations. the administration is seeking to eliminate the requirement that patients give written consent before their medical records are disclosed, kerry says. instead, medical providers would simply be required to post a notification to patients explaining their rights.

"this proposal would make it more difficult for patients to determine in advance who uses their health information and for what purposes," kerry says. "i was very disappointed."

as for a patients' bill of rights, kerry contends passage of comprehensive legislation is being "jeopardized by partisan politics and its opponents are using delay and political scare tactics." the major sticking point centers on liability. democrats and republicans simply cannot agree on whether there should be punitive damage award caps, what they should be and in which courts patients should seek redress.

rep. fortney "pete" stark (d-calif.)

democrats will have a field day this fall "reminding seniors that the republicans are bound to privatize the medicare system," says rep. fortney "pete" stark.

stark says that ultimately, republicans want to turn over medicare to private insurance programs, whereas democrats and most seniors want it to remain an insurance entitlement program. while medicare won't be the central issue in all of the fall political races, it will be important in many of the tight elections, stark argues. although it's difficult to predict the elections' outcome, stark says that democrats surely will have an edge over republicans with this issue.

stark is pessimistic about the chance of a prescription drug bill passing congress. both houses are likely to pass measures despite the efforts of drug companies, which are spending millions to defeat any changes to the status quo. but there will likely be no agreement in a conference committee where the bills will die, he predicts. stark contends that republicans and some democrats are "woefully unwilling" to call for increased taxes to fund a full drug benefit.

"there's no such thing as the pill fairy," stark says. "it's preposterous." the country can pay for a hospital stay or a doctor's visit but can't pay for drugs, he says.

stark, senior member of the powerful ways and means committee, and ranking minority member of its health subcommittee, like kerry, also sees low chances for passage of a patients' bill of rights. covering the uninsured is also off the radar screen given that population's lack of political muscle and differences between democrats and republicans, he says.

mark mcclellan, member, white house council of economic advisers

mark mcclellan, m.d., the white house's point man on healthcare, is "somewhat optimistic" that capitol hill will pass a drug benefit for seniors in the coming legislative session. mcclellan, who also holds a ph.d. in economics, says that some democrats are being "much more reasonable" in terms of the price tag they put on drug coverage. he notes that as recently as a year ago, some democrats considered $300 billion to be about the right figure. he also says he has been "encouraged" in talks with daschle.

while some policy-makers, consumer groups and others have called for legislation to allow the importation of drugs from canada, mexico and elsewhere-where government regulation keeps prices substantially lower than in the united states-mcclellan says he is no fan of that idea. he notes that neither the bush nor the clinton administrations found ways to guarantee the safety of imported drugs and that the inspection process "would offset much of the savings that this method would allegedly bring." far better is president bush's plan to create a discount drug card for medicare enrollees, mcclellan says. while pharmacists thwarted the plan last year, they won't do so again this year because the bush administration is properly giving notice of the regulation and a final version of it will be out soon, mcclellan says.

as to the question of why drug prices are so high to begin with, mcclellan says that he strongly supports the federal trade commission's decision to investigate whether drug companies are abusing patent law and whether there have been unnecessary delays in getting drugs off patents and into production by generic pharmaceutical makers.

"there's a lot of heat on this issue but i'm not quite sure how many abuses there actually are," mcclellan says.

the white house also continues to pursue fundamental medicare reform, which had been a key campaign issue for president bush, mcclellan says. seniors need a range of coverage choices, including comprehensive coverage under medicare+choice, he says. the house is likely to pass a medicare bill, which includes drug coverage, better reimbursements for health plans under medicare+choice and other measures, he says.

as for expanding coverage to the uninsured, mcclellan says that he and president bush continue to believe in the power of tax credits for the uninsured. president bush proposes that single americans receive a tax credit, to pay for health insurance premiums, of up to $1,000, with families receiving up to $3,000. if such a plan were enacted into law an additional 6 million americans, who would otherwise be uncovered, could become insured. moreover, 9 million low- to middle-income americans who are buying individual insurance policies would receive help, he says. although comprehensive tax credit legislation won't likely be passed in the short term, mcclellan notes that in recently passed legislation by both houses, workers who lost coverage due to increased trade were given the ability to take tax credits. the bills are now in a conference committee.

mcclellan says that the white house also wants to help the uninsured by expanding medical savings accounts and allowing individuals to roll over money they've put into medical flexible spending accounts. "rising out-of-pocket costs are one of the biggest trends in moving away from old-style hmos," mcclellan says. allowing americans to roll over money will help them contend with this, he says.

in terms of a patients' bill of rights, there is not much room for compromise, at least from the administration's perspective. the white house plans to hold firm on reasonable liability caps, mcclellan says.

newt gingrich, senior fellow, american enterprise institute and ceo, the gingrich group, a strategic consulting firm

after time away from the political spotlight, former house speaker newt gingrich has reentered the public debate in recent months, and has taken up the mantle of healthcare reform. gingrich says he is confident that a medicare drug benefit will pass both houses and be signed into law in october.

he notes that in off-year elections, 20 to 25 percent of all voters are seniors and that there will be "overwhelming" pressure to pass a bill. gingrich says that democrats and republicans will narrow their differences on the size of coverage because polls indicate americans want a reasonably priced bill. moreover, the aarp is actively pressuring the white house and lawmakers to come to some agreement, he says.

gingrich argues that to some extent, pharmaceutical companies are getting unfair treatment: "the more successful they've become at solving problems, the more tragic it is for them" in terms of being singled out for criticism. if the nation had a unified health budget, he argues, it could figure out whether drug companies were saving money by lowering overall hospitalization.

"you have to have a lot more knowledge," gingrich says. for example, physicians should be equipped with devices that allow them to compare a number of drugs for a given condition, including price, efficacy and side effects. if the situation is not life threatening, the doctor could start the patient off on the generic drug and then move toward more expensive patented drugs if need be. "you can't today find that information," gingrich says.

the second issue likely to be of concern in the fall is medical malpractice liability reform, he says. "when you learn that it costs $11,000 per bed per year to insure a nursing home, people think that's crazy," gingrich says. "that level of malpractice is a sign that things have gone totally out of control." he argues that congress will have to find ways of lowering liability, which in turn will lower healthcare costs in general.

no longer in office, gingrich is free to ponder the best way to create an affordable, high-quality, patient-centered healthcare system. as a senior fellow at the american enterprise institute, he released in may a draft of his vision for healthcare in the 21st century. at its core, the document seeks to apply the same improvements in quality and information technology from which other industries have benefited. in gingrich's vision, a modern system will be patient centered, values driven, "knowledge intense," "innovation rich," and centered on informed patient choice and accountability.

"it is scandalous the number of people we allow to die rather than change the system," gingrich says. he admits that there are many competing interests in healthcare. but that doesn't mean fundamental change is impossible, given the power of seniors. "there is no group in america that has a greater interest than senior citizens," gingrich says.

reform, gingrich contends, needs to go hand in hand with the implementation of new technologies. for example, doctors could have lower malpractice rates if they implemented electronic records and reduced paperwork, he says.

"'it does not have to be like this,'" gingrich says in his strategic plan for designing more modern healthcare system. "any sector of the economy that is not providing more choices with greater quality at lower cost will be symptomatic of systemic problems that need to be reformed."

washington healthcare policy power players

sen. bill frist, m.d. (r-tenn.)

member: health, education, labor, and pensions committee, subcommittee on public health

interests: bioterrorism, patients' bill of rights, increasing access for the uninsured, women's health, biomedical research

up for reelection this fall? no

newt gingrich ®

former speaker of the house

interests: forging a new healthcare system for the 21st century, including using technology to improve quality and lower costs

rep. james greenwood (r-penn.)

member: house energy and commerce committee, subcommittee on health

interests: liability reform, cloning

up for reelection this fall? yes

rep. nancy johnson (r-conn.)

member: ways and means committee, chairwoman of health subcommittee

interests: medicare reform, prescription drug coverage, women's health, children's health

up for reelection this fall? yes

sen. ted kennedy (d-mass.)

member: chairman of health, education, labor, and pensions committee

interests: children's health, patients' bill of rights, prescription drugs for seniors

up for reelection this fall? no

sen. john kerry (d-mass.)

member: senate finance committee, subcommittee on health care

interests: home healthcare reform, affordable health coverage and healthcare access

up for reelection this fall? yes

mark mcclellan, m.d., ph.d.

member: white house council of economic advisers

interests: tax credits to expand coverage, overhaul medicare

rep. charlie norwood (r-georgia)

member: committee on commerce, subcommittee on health and environment

interests: patients' bill of rights, veterans' health, mental health, prescription drugs

up for reelection this fall? yes

rep. pete stark (d-calif.)

member: ways and means committee, subcommittee on health

interests: preserving and expanding medicare as a public entitlement

up for reelection this fall? yes

howard isenstein is a washington, d.c.-based freelance writer and a frequent contributor to healthleaders.

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