Fixing an ailing health system – Pacific Research Institute

Fixing an ailing health system

The World Today (Australia), September 10, 2009

ELEANOR HALL: So will this speech by Barack Obama swing policy makers behind the President’s healthcare plans?

The issue was always expected to be divisive but former Republican vice presidential nominee Sarah Palin’s talk of “death panels” ramped up fears about a government takeover of health and rowdy town hall meetings on the question of health reform erupted around the country through the US summer.

Then there those divisions within the Democrats, whom the President may have thought he could count on, about whether the reform proposals go far enough.

So will US citizens soon see major changes in their health system or not?

Joining me now in Washington to discuss this is Lesley Russell – a former policy advisor to Julia Gillard and is now a visiting Professor of Health Policy at George Washington University. She broadly supports the Obama plans.

On the line from California is John R. Graham, the Director of Health Care Studies at the Pacific Research Institute and a vocal opponent of the President’s health reform proposals.

And joining me here in The World Today studio is Professor Geoffrey Garrett, the chief executive of the United States Studies Centre at the University of Sydney.

Thanks to you all for being there.

First I’d like to get just a brief sense from you about whether you agree with the US President that the US healthcare system is now at “breaking point”? Lesley Russell?

LESLEY RUSSELL: Yes, I think that is definitely the case and right from the very beginning Obama set that out. He put the economic framework there about why healthcare reform is needed. And whilst it is true the Republicans say well, how can we afford this, the fact is, how can we afford to go on with the status quo.

ELEANOR HALL: And John Graham, I know that you don’t agree with much of what President Obama is suggesting but do you agree on the need for change?

JOHN R. GRAHAM: Well I Definitely a need for change. Whether we are at a breaking point? I have always said we are at a breaking point but we never seem to break and I think anyone who studies health policy in the United States; you can go back to Teddy Roosevelt as the President said in his speech today who said we needed reform.

So we seem to be in a situation where there is always a demand for change but change doesn’t occur one way or the other; so I am a little, I like to temper claims of a current crisis.

ELEANOR HALL: And Geoff Garrett, now you said on the program earlier this week that today’s speech by President Obama was critical to him regaining control of the healthcare debate. How do you think he went?

GEOFFREY GARRETT: Well, Eleanor on the substance I think it was pretty clear that the President climbed down in large measure from the ambitious agenda he had on the campaign trail and articulated earlier in the year.

But he is going to say he is doing what is pragmatic and the reform he is now proposing would be the biggest change to American healthcare since the Medicare reforms of the 1960s.

So on the one hand we have a triangulating move in the policy terms but as political spin, Obama is going to say that triangulation is worth it because this will still be an enormous reform.

ELEANOR HALL: LESLEY RUSSELL, do you agree that this was a climb-down and President Obama did seem to be trying to find a middle way and yet this very attempt to please everyone seems to have been what caused him to lose control of the debate in the first place?

LESLEY RUSSELL: No, I don’t think it was a climb-down. In fact I think he stuck pretty firmly to the issues that he had outlined in his campaign and since and indeed added a few more things to it.

John Shovelan’s report highlighted that he would pick up parts of Senator McCain’s proposals, some changes on medical malpractice, both of which would go into effect straight away. And I think there is really very little change from what he initially put out.

ELEANOR HALL: Geoff Garrett would like to come back in on that.

GEOFFREY GARRETT: Well, I think Lesley, the thing that will be apparent to most people watching the debate is that Barack Obama instead of talking about a public healthcare option that would be supported with some government dollars, instead talked about a healthcare exchange, a market for healthcare in which a non-profit government supported but wholly self-funded public option would compete only for people who currently don’t have healthcare.

To me, if anyone was looking for a government takeover of healthcare from Barack Obama, it certainly wasn’t in the speech today.

ELEANOR HALL: And I’ll just bring you in John Graham – did the president’s speech today change your mind?

JOHN R. GRAHAM: No. It didn’t change my mind at all but I think he did stick to his guns. I would agree with Professor Russell there but I think he definitely caved in a lot on the public option which is not surprising because Senator Barkus who heads the Senate Finance Committee has never been on board with the public option; and if the President wants to get anything through the Senate Finance Committee he has got to cave in a lot.

But, you know, when you say I want a government public option that is not on perpetual taxpayer bailouts but it is self-sufficient, I mean it is not a credible claim. We are in a, we have come through a year or two of the mortgage companies that are on taxpayer bailout, government-owned automobile companies now and now you are going to set up a new government bureaucracy and so oh the taxpayer is not going to be at risk.

I don’t think the American voters will buy that.

LESLEY RUSSELL: Well, at the risk of using an Australian example, there is the perfect one there which was Medibank Private which does exactly that, very effectively.

ELEANOR HALL: Let’s look at this public option issue. I mean Geoff Garrett, what do you think is the likelihood of significant change if there is not a universal health system like Australia in the US? I mean, if there isn’t a public option which covers everyone?

GEOFFREY GARRETT: It is a very interesting question and you have some experts on the line who maybe could help us with this. But as a bit of an outsider in the debate, what we saw from Obama today was no public option that is going to affect existing insurance but higher demands on healthcare providers, private healthcare provider.

No exclusion of people through pre-existing conditions. No exclusion, a cap on total payments that people would make.
How is that going to work? I don’t think we know the answer to that but it is supposed to happen within the existing framework; that is private health insurance.

Then Obama just cut off, drew a circle around this thing that he said was really only about 5 per cent of Americans where the government option would compete. So that I why I thought it was a climb-down because the changes were regulations on existing healthcare insurance. The new stuff was heavily circumscribed.


LESLEY RUSSELL: Part of doing that though is being consistent with the promise that if you are happy with your current health insurance, you don’t have to change.

ELEANOR HALL: Is he going to satisfy those Democrats though LESLEY RUSSELL, who are very much in favour of a public option if, as he said in today’s speech, he leaves open the option of not including it?

LESLEY RUSSELL: I think if you look at the economics of the public option, it really does make sense but if you are genuinely concerned about improving healthcare in the United States and ensuring that everyone is covered, people are not going to vote against heathcare reform because it doesn’t have one element exactly the way they want it.

ELEANOR HALL: Now John Graham …

LESLEY RUSSELL: I suspect at the end that we will end up with some sort of trigger for a public option.

ELEANOR HALL: John Graham, why are conservatives in the US so concerned about the concept of the Government ensuring universal health coverage? Here in Australia it has been in place for decades.

JOHN R. GRAHAM: Yeah, I think there are a couple of things. One is that it kind of initially coasted along quite nicely. The first hit was the Congressional Budget Office that did an estimate that came out in the middle of July. It said it would cost over a trillion dollars over a ten-year period.

And I think that kind of, and I am not going to say it was the straw that broke the camel’s back but people, even before that, with the stimulus bill, with the auto bankruptcies, a lot of people thought the Government was out of control; and now when they see this big new government program that got people a lot upset.

And then when the summer break was a phenomenon that was very, I had not anticipated when the Congress recessed and they were let out of their cages and went back to their districts and we started hearing, as your reporter said, about death panels

And so in the United States if you do have a religious conservative segment that is very, very influential and certainly in Republican politics and when Sarah Palin started talking about death panels, it really got them motivated and it got the senior citizens motivated.

Now once you get the seniors offside in any democracy, you have lost your initiative completely.

ELEANOR HALL: And John Graham, can I ask …


ELEANOR HALL: Can I ask you there – do you agree with President Obama that what we have been seeing from the Republicans is not honest debate but scare tactics?

JOHN R. GRAHAM: Well, you know. Sarah Palin is one woman who resigned her office and then, you know, people should be scared. I mean I am going to say that in politics, you don’t communicate to people by smoothing things over. You make extreme comments.

Now there is no death panel in the bill but what there is, I think even when normal people read the part of the bill that she was talking about, what she is talking about is the Medicare paying every five years, your doctor to give you a consultation on your advanced planning directive and then it directs the secretary of health and human services to develop quality indicators to determine…

And you are looking at it and you say this is something within the competence of the Government to do? To determine how much to pay my doctor, to give in…

So even if you are not one of these folks who is overly concerned about the Government giving you a death sentence, you are sort of saying good heavens; on one hand Barack Obama is saying I am not going to interfere with your doctor, I am not going to let some government bureaucrat or some insurance company bureaucrat do that.

And then you got 1000-page bill with, this is just one example of 53 new bureaucracies and directives that the secretary is supposed to do to determine how much to pay your doctor to do this, that and the other thing. And you know, his claim that the Government is not going to interfere just doesn’t stand up.

So despite the hyperbole of death panel, you know, it does, I think bring people’s attention to the level of government intrusion in what we are dealing with here.

ELEANOR HALL: And LESLEY RUSSELL, has there, on the other side, been a beat up by Democrats on the problems of insurance companies doing the wrong thing by their members, rescissions and so on?

LESLEY RUSSELL: Well, there are certainly plenty of real life examples out there to use. I think the only people who are satisfied with their healthcare insurance in the United States are people who either have a lot of money who have never actually had to use their health insurance for a serious illness. So, they do set themselves up to be targets.

On the other hand I think are led by Karen Ignagni, the insurance industry have been very keen to be part of the solution rather than part of the problem; so they do deserve some credit that they have been at the discussion table and they’ve been part of trying to make things better and they agree with substantial parts of what have been proposed in the bill.

ELEANOR HALL: Geoff Garrett?

GEOFFREY GARRETT: I think the healthcare industry obviously has been talking a lot with the administration and with congressional officials. My read of the President’s speech today would be that they would be quite happy with what the President proposed because a- there is not going to be a government supported lower cost option that competes directly with the products they provide to most Americans in employment.

ELEANOR HALL: Just very briefly now to all of you – Geoff Garrett, will this bill get passed? Will the President get a health reform bill through?

GEOFFREY GARRETT: I would expect he will get a health reform bill through by the end of the year, the question is whether it is received as a climb-down or a major victory for him.


LESLEY RUSSELL: Yes, there definitely will be a bill. I think the exact scope remains to be determined, but I remain optimistic.

ELEANOR HALL: And what about you John Graham?

JOHN R. GRAHAM: Well, you can’t have a unanimous vote…

ELEANOR HALL: (laughter)…

JOHN R. GRAHAM: So I’ll say no. I think, you know when he offered, the big change in this speech I think was medical malpractice reform which was bait to the Republicans so he clearly wants a bipartisan momentum here.

But I don’t think he is going to get it. My guess is he’ll get bogged down and we won’t get much will happen here.

ELEANOR HALL: Well, we’ll just have to wait and see. Thanks very much to you all for being here.

That is Geoff Garrett, from the United States Studies Centre at the Sydney University. John R. Graham, the Director of Health Care Studies at the Pacific Research Institute and Lesley Russell, a visiting professor of at the George Washington University.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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