Obama pursues universal health care – Pacific Research Institute

Obama pursues universal health care

Pittsburgh Tribune-Review, February 22, 2009

President Obama could make health care history, transforming how treatment and services are selected, delivered and paid for, many health care experts believe.

Or, “ObamaCare,” touted as providing higher quality health care to all at a cheaper price, could be 2009’s “HillaryCare,” then first lady and now Secretary of State Hillary Clinton’s 1994 health care overhaul plan that went nowhere, other industry watchers contend.

All parties to the $2 trillion health care industry, including patients, providers, insurers, employers and politicians agree on the need for health care reform. There’s no consensus, however, on the best way to transform a huge, procedure-bound system that doesn’t take well to major alterations.

“Everyone agrees on the need for affordable, quality health care,” said Sally Pipes, president and CEO of the San Francisco-based think tank Pacific Research Institute. “There are two camps: one that favors a market-based plan that empowers physicians and patients, and another that wants to expand government’s role.” The president’s proposals fall under the second camp, Pipes said.

Obama’s plan can be broken down into three parts, according to Bob Laszewski, head of Washington, D.C.-based Health Policy and Strategy Associates LLC:

  • Quality, affordable and portable health coverage for every person.
  • Lower costs and improve quality by modernizing the nation’s health care system.
  • Promote prevention and strengthen public health.

Among Obama’s specific proposals, he would establish a new public program that would resemble Medicare for people under 65 for those not covered by an employer plan or qualify for existing government programs like Medicaid or SCHIP, the State Children’s Health Insurance Plan.

Obama would create a National Health Insurance Exchange, a government-run marketing organization that would sell insurance directly to those who don’t have an employer plan or public coverage.

“Affordability to Obama is more about cost shifting than it is making the system more efficient,” Laszewski said. “Insurance is more affordable because he spends billions of dollars subsidizing access for everyone.”

Some feel Obama could push government involvement in health care to the limit, should he institute health care’s version of the Federal Reserve Board.

The basic idea of what’s known as the Federal Coordinating Council for Comparative Effectiveness Research, is to slow the development and use of new medications and technologies and thus hold down costs. It will be an institution run by health care experts, that answers to the government.

The appointed body reflects the influence of former Sen. Tom Daschle, until recently, Obama’s nominee for Secretary of Health and Human Services.

“I like most of what the president has proposed,” said Beaufort Longest, a University of Pittsburgh Health Policy & Management professor, and director of the university’s Health Policy Institute. “Expanding health care coverage is much needed, particularly with what’s happening with the economy, and simultaneously, he wants to make the system more efficient.”

“The way President Obama’s plan has been crafted, we could embrace it as a program for change,” said Carolyn Scanlan, CEO of the hospital trade group Hospital & Healthsystem Association of Pennsylvania.

“Obama is aiming to get universal coverage, which is good during a time of economic crisis when people are losing their jobs,” said Regina Herzlinger, a Harvard Business School Business Administration professor, and an acknowledged health care expert. “But he relies excessively on the government, the care provider and the regulator.”

The president includes about $150 billion in the $790 billion economic stimulus package for health care-related stimuli, including $86 billion to prop up Medicaid, the federal-state medical program for the poor, another $50 billion for health care-related information technology, and the remaining $14 billion for miscellaneous projects, Herzlinger said.

Employers of a certain size would be required either to provide employee insurance, or pay toward the cost of a public plan. “We’re concerned with the implementation of the Obama plan,” said Lee Taddonio, president of SMC Business Councils, a Churchill-based organization representing smaller businesses in Pennsylvania.

“With health care, cost is everything — everything else is just rearranging the deck chairs on the Titanic,” Taddonio said. “He’s mandating that a small business has to pay if it doesn’t offer coverage, but how much?”

The president’s proposals also include a number of quality initiatives designed to improve health care quality and lower costs, such as disease management programs, transparency concerning costs and quality, improved patient safety, and reducing disparities in health care treatments for the same illness.

“Why will Obama be any more successful with quality initiatives than those who’ve been tackling these things for years, with no new ideas and no ‘silver bullet?’ ” Laszewski asked.

Obama pegs the annual cost of his reform plan at about $65 billion, but Laszewski believes that figure is in the $100 billion range.

Harvard’s Herzlinger added that recent surveys have found up to 42 percent of all physicians once participating in Medicaid have backed out of the program, due to what she called its “terrible pay.”

And what about the Federal Health Board? Herzlinger and the Pacific Research Institute’s Pipes urged extreme caution.

“The federal government will control all expenditures for health care, a board will tell people what they can and can’t buy,” said Herzlinger.

Rick Stouffer can be reached at or 412-320-7853.

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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