Thursday, July 30, 2009

Wednesday, July 29, 2009

The Shulmans: The Cost of Serious Medicine vs. The Cost of Dying Young

I have decided to switch "Serious Medicine" to "Serious Medicine Strategy." So this site will remain, but it will no longer be active--it will be an archive only.

So please follow this link to Serious Medicine Strategy.

Thursday, July 23, 2009

Republicans Not Interested in Releasing Their Health Care Plan?

Can't imagine why. Actually I can.

Here's one view, from the lefties at Daily Kos, but the links are all there, to be verified. Scroll down to:

The Republicans Have A Plan ... Or Not
by BarbinMD
Thu Jul 23, 2009 at 03:28:04 PM PDT

Serious Medicine Is Not "Bloodless"

Politico, the must-read publication for DC insiders, offers a daily feature called "Arena," in which various pundits and observers offer brief opinions on the issue of the day. Today, in response to Politico's question, "Did the president advance his cause last night?" Mary Frances Berry, professor of American Social Thought and History at the University of Pennsylvania, a former chair of the US Civil Rights Commission, offered this crisp but devastating assessment of the Obama plan:

The best evidence that President Obama did not advance the cause of health care reform in his press conference is the not unexpected announcement today that the Senate will not pass a bill before the August recess. He failed to excite the American people to insist on immediate action. Perhaps, the President's almost bloodless approach to the issues in the press conference was because he already knew the delay was at hand. Now the opponents of reform have time on their side.

Note her words: "the President's almost bloodless approach to the issues." And that's the problem for Barack Obama, and for liberal, but not far left, health-care crusaders. As noted here at Serious Medicine, "health care policy" is a term deliberately designed to be bloodless; it's a term that engenders emotion among few, other than some self-selected experts.

By contrast, the true essence of health and medicine is literally the opposite of "bloodless." Health and medicine is all about blood, and tissue, and flesh--about ife itself. That's why ordinary people care about health and medicine; because health and medicine are about them, and their families. By contrast, ordinary Americans tend to think of "health care policy" as a bore.

No wonder Obama can't get his health care plan through--because not many people are really in favor of it. On (not up, as of Thursday, but will be up soon) David Corn of Mother Jones wondered aloud to me why the Obamans haven't mobilized the vaunted 13-million-member grassroots network--you know, the folks on Facebook and all who helped elect him last year. Why can't those millions be put to work on behalf of Obamacare? My response to David: Because people don't care passionately about "health care policy," except, perhaps for "the public option," aka "single payer," which does animate the lefty crowd. But single payer is probably too far to the left for Congress to pass; so the Obamans are trying to mobilize on behalf of a plan that is merely liberal, as opposed to far left. (I have never met Ms. Berry, but I suspect that she is for a single-payer plan.)

If Obama wanted to get a plan through with popular enthusiasm, it would have to be much different plan than either Obamacare or single-payer--it would have to be a plan with real appeal. It would have to be Serious Medicine. That is, a plan for dealing with the terrible diseases that Americans fear and loathe and want to go to war against. That's blood-and-guts stuff, and people love it. But that's not what Obama is offering. His plan is "bloodless," and it shows.

Tuesday, July 21, 2009

John Holdren is Serious--But Not About Your Health and Well Being!

Just published another look at John Holdren, Science Czar to President Obama, for Obviously a scary guy to have loose, anywhere in the government.

But nobody should want him anywhere near health care policy, because anyone that interested in reducing population can't be trusted to actually be in favor health care.

Serious Medicine on

This article is a generally Hamiltonian critique of Obamanomics, but I zero in on Serious Medicine herein:

And what of health care? Not only is health care a desirable good in and of itself, but it is also a natural driver of economic activity, as anyone who lives near a hospital knows. There are millions of jobs to be found in medicine, from taking care of patients, to inventing cures, to mass-producing medical equipment.

But what if the Obamans succeed in cutting back on health care, in the name of "controlling costs"? In the eyes of liberal Democrats, the whole point of putting the government in charge of health care is so that planners in Washington will be able to "improve" the system--which, of course, means rationing of one kind or another. In an article summarizing the White House economic report, The Washington Post's David Cho might have been too polite to say the obvious--that Obamacare will constrict job growth in the health sector--and so he confines himself to simply noting, "The projections do not account for Obama's plan to revamp the U.S. health-care system." That is, if Obama gets his way on health care "reform," then rosy scenarios of health-care employment growth will fade to black.

"Health care is a losing issue for whichever party is in charge"

"Health care is a losing issue for whichever party is in charge"--those words were spoken to me by a shrewd and unsentimental former Member of Congress, still a close observer of the DC scene. His point was that the party in charge, the party that feels obligated to "do something" on health care, is likely to find itself on the wrong side of public opinion--the choices to be made are simply too unpopular. It doesn't have to be that way. We could be both healthier and richer, but it will take new thinking to get us out of this rut. In the meantime, that wise old legislator has it exactly right: Whoever wishes to "lead" on health care will have few followers.

One might think that after a while the parties would get smarter about strategy, but apparently not. Instead they simply repeat the same policy process, over and over, like the combatants in World War One, culminating in the British disaster at the Battle of the Somme in 1916, pictured above. Such unimaginative and maladaptive policy-battle plans don't work, of course, but they do seem satisfying nonetheless. Why? Because they meet the injunction of, "Don't just stand there--do something!" So when the whistle blows, it's once more over the top, boys. And if we are mowed down in No Man's Land? Well, at least we tried.

As John Maynard Keynes, who served in the British government during the bloody follies of the Great War, observed, for most people, most of the time, it's better to fail in a familiar way than it is to succeed in an unfamiliar way.

That's what is happening to the Democrats today. They are failing in a familiar way. Sample headline from The Washington Post: "GOP Focuses Effort to Kill Health Bills/ Republicans Seek to Link Issue With Obama's Handling of the Economy."

As Joe Biden says, Barack Obama has mishandled the economy, but even if the administration hadn't bailed out the wrong people, the Democrats would still be pushing health care plans that, for all their variety, are unpopular for two obvious reasons and one not-so-obvious reason. And what are those?

First, they will raise taxes on Americans who won't get better coverage.

Second, they will make health care worse for most Americans. As Newt Gingrich says, "There will be a bureaucrat between you and your doctor."

And third, more subtly--because you can't see an unseen, as Frederic Bastiat said way before Don Rumsfeld--every moment spent haggling over "access" and "equality" is a moment that could have been spent advancing Serious Medicine. That is, use Serious Medicine to make real deliverables for real people. That's a vote-getter.

What if the Democrats could say, "Vote for us and we'll cure Alzheimer's"? Would that be popular? Sure it would. Or, if not Alzheimer's pick another disease or illness and announce a plan to reach a cure, in the way that JFK said we would go to the moon in 1962, seven years before Apollo 11 touched down on Tranquility 1.

During the New Deal, Franklin Roosevelt chose not to push national health care, but starting in 1938, he did push The March of Dimes,to fight polio. That was popular to the point of being uncontroversial; it was simply a winner for FDR, because the tangible beats the intangible. Hey American people! Which should we focus on, advancing a policy abstraction, or helping crippled children?

What's needed, to tangibilize the intangible, to make medicine more helpful to folks, is the application of additional technology. (That's what the British did after the disaster of the Somme; after having failed more than enough--Herbert Asquith's government fell after the battle, and Asquith lost a son, too, in the fighting--prodded by Winston Churchill, got to thinking seriously about the tank as the solution to the stalemate of trench warfare. Which, indeed, it was.)

There's no technology, at least no medical technology, in what the Democrats are pushing--no blood, no guts, no life. So of course most people are detached and disaffected!

So Republicans are in pretty good shape, right? Well, yes, at least for now. Until they find themselves in the position of having to carry out their own version of "do something!" And while the GOP is at least 18 months away of being in charge of the Congress, and at least 36 months of being in charge of the White House, already, one can see distant early warnings of the trouble Republicans will have explaining their health care plan.

Speaking to the National Press Club in DC yesterday, Republican National Committee chairman Michael Steele was pounded in the press for not being able to answer a question about an "individual mandate" for health care. As he said, he is a politics guy, not a policy guy, but the truth is that the Republican Party as a whole could not answer that policy question--there is no GOP position. And maybe there shouldn't be.

But if so, don't expect the Republicans to do any better than the Democrats at putting forward on a health care plan a few years from now, when the GOP is back in power. Indeed, at the rate things are going, intellectually, the GOP has a political Somme of its own in the future.

In the meantime, Democrats, realizing that they are exposed and overextended, having outrun their supply line of support, are hoping that the Republicans will rush up to join them on the political equivalent of Gallipoli, to borrow another grim WW 1 analogy. Here's some more from that front page Post article cited above:

"Instead of doing nothing and using insurance industry talking points to defend the broken health-care system we currently have, Republicans should work with us or at least put forward some new ideas," said Doug Thornell, a spokesman for Rep. Chris Van Hollen (Md.), a Democratic leader in the House.

Sure. Of course. The Democrats had better hope that they can talk Republicans into joining them in the health care killzone. And if Dems can talk Republicans into joining them inside the Kesselschlacht, then Doug Thornell, for example, quoted above, will have earned a promotion.

But neither party, even if they work together in good bipartisan fashion, will get very far without new inputs that are qualitatively different, not just quantitatively greater. Whoever wants to break out of this policy stalemate will need the medical equivalent of the tank.

That is, the history-changing firepower of Serious Medicine.

Monday, July 20, 2009

"The proposed legislation misses the opportunity to help create higher-quality, more affordable health care for patients."

"The proposed legislation misses the opportunity to help create higher-quality, more affordable health care for patients. In fact, it will do the opposite." That's a quote from the Mayo Clinic, an icon of Serious Medicine. Here's the Mayo statement in full:

Although there are some positive provisions in the current House Tri-Committee bill – including insurance for all and payment reform demonstration projects – the proposed legislation misses the opportunity to help create higher-quality, more affordable health care for patients. In fact, it will do the opposite.

In general, the proposals under discussion are not patient focused or results oriented. Lawmakers have failed to use a fundamental lever – a change in Medicare payment policy – to help drive necessary improvements in American health care. Unless legislators create payment systems that pay for good patient results at reasonable costs, the promise of transformation in American health care will wither. The real losers will be the citizens of the United States.

Not only is Mayo an icon, it's also a great brand. So in the meantime, unless and until Uncle Sam puts a stop to it, Mayo continues to expand; it is entering into that citadel of commercialism, The Mall of America.

The "R Word"--Rationing--Spills Into the Health Care Debate

Barack Obama is hitting rough water--maybe shattering rocks--in his quest for health care "reform." Sample headline in The Washington Post: "Poll Shows Obama Slipping on Key Issues/Approval Rating on Health Care Falls Below 50 Percent." That was today's front page, above the fold. Ouch! And then along comes a Rasmussen Poll today, showing Obama and Mitt Romney in a dead heat for 2012, 45-45.

What's going on, of course, is that voters are starting to realize what's happening to them. They are starting to see that the Obama administration made a priority of bailing out Wall Street, and that bail-out-for-billionaires plan took precedence over help for Main Street. Oh, and a "stimulus" package that was mostly a sop to local governments. So now, after all that bad blood--and red ink--has been spilled, Obama is pushing lefty ideas for health care to a scared public and a wary Congress.

Meanwhile, the real intellectual roots of health care "reform" are starting to show--and they don't look good. Peter Singer, the eugenics-minded "bioethicist" at Princeton, probably didn't help the liberal cause when he wrote a piece for The New York Times Magazine entitled, "Why We Must Ration Health Care." Singer is a smart fellow, but his writings on so many topics are so extreme that his "endorsement" of rationed health care is a kiss of death. And so you have to wonder: Why did Singer go public? Perhaps he likes being in the opposition, being a critic, and so he is doing his sly bit to make sure that nothing he might like ever gets done.

The thoughtful blogger Bob Wachter, adds his own liberal take on the rationing controversy, in a post for The Health Care Blog entitled, "A Brief History of the R Word." He agrees with Singer and Uwe Reinhardt that some sort of rationing is inevitable, as a pure function of economics--somebody, somehow, has to allocate resources.

But that puts a pretty huge premium on the "who" doesn't it? That is, do we trust the neo-Platonic Guardians to make these decisions for us? A majority of Americans voted Democratic in the 2006 and 2008 federal elections, so that gives the Dems some claim to leadership. But not even a minority of Americans had ever of John Holdren, whom Obama named as his White House science adviser earlier this year--and whom the US Senate confirmed, obviously because few Senators bothered to read what he had written. But anyone interested in the fate of future US scientific policy--and medicine, after all, is partially a subset of science--should take great interest in what Holdren has written. And here's one detailed look.

It's safe to say that 90 percent or more of Americans would strongly disagree with Holdren's writings on forced abortions, mass sterilizations, and mandatory family-size management. Admittedly, he advocated those policies in the 70s, but he didn't retract them until those words until critics discovered them in the last few weeks. So it's reasonable to ask, and perhaps even accurate to surmise, that Holdren's recantation is less than sincere. (Note to Republicans in the Senate, who had a chance to vote on Holdren's appointment, and to at least raise concerns, even if they couldn't block him: Take the advise and consent function more seriously--use interns, if you have to, to pore through all the writings of these people; no doubt Holdren is not the only extremist that Obama has nominated.)

Thus the big question: Do we want Holdren anywhere near our health policy? And in addition, do we want the people who hired Holdren, and who think of him as a colleague, anywhere near our health policy?

Yes, some kind of system is needed: Hopefully it will be a system that encourages Serious Medicine. But if we are unlucky, then we will get a rationed system in which innovation is stifled, and so not only is health worsened, but the path to lower costs is blocked by short-term stinginess.

As an aside, blogger Wachter makes a good point: Why are so hung up on the "17 percent of GDP for health care" meme? What should the percentage be? Should we spend less on health care so we can spend on... Let's have a national conversation on how best the country should spend the other 83 percent of the economy. Much of it is private property, of course, and it should stay that way, but even conservatives and libertarians want good health care. If someone figures out what we really need, there could be lots of innovative ways to finance such an expansion. In addition, Wachter makes casual reference to ways that countries with Socialized Medicine, as opposed to Serious Medicine, deal with their hard medical cases:

As Singer notes, every society that rations provides a safety valve for the wealthy disaffected. In the UK, you can buy private insurance that allows you to jump the queue for your hip replacement. Canada’s safety valve is called the Cleveland Clinic. We don’t talk about the percent of our GNP we are spending on Starbucks lattes, or on iPods, or on vacations. People pay for these things out of pocket, and receive no tax advantages when doing so. Given the American ethos of self-determination and consumerism, any rationing plan will need to allow people who can afford care that isn’t covered by standard insurance to buy it with their own money (with absolutely no tax advantage). Two-tiered medicine, sure, but I see little problem with this as long as we are using the money in the communal pool to provide a reasonable set of benefits to the entire population.

Sunday, July 19, 2009

What's the Big Issue in Health Care? Is it Health? Or is it Cost?

What's the Big Issue in health care? Is it health? Or is it cost? Those dueling questions were brought to mind watching "Meet the Press" this morning, as David Gregory interviewed, first HHS Secretary Kathleen Sebelius, and then second, Senate Minority Leader Mitch McConnell. The topic, of course, was Obamacare.

Along the way, they helped clarify the choices that the American people face on health care: Do we focus on the quality of medicine, or do we focus on the policy of health-care distribution?

In arguing for the administration's agenda, Sebelius said that "Thirty percent of tests don't make people any healthier." One's immediate reaction is, "Maybe, but how does she know which 30 percent of tests are ineffective?" One is reminded of the famous quip about advertising effectiveness, attributed to 19th-century department-store pioneer John Wanamaker: "They say that half of all advertising doesn't work. But nobody knows which half!"

Indeed. Who should we trust to tell us that one-third of medical tests aren't worth doing? Has the federal government earned our trust?

Sebelius went on to criticize "money that's misdirected." Well, again, who do we trust to make those decisions? Who do we trust to do the re-directing?

Advocates of Serious Medicine understand that priorities must be established, but if so, let's get a closer look at the prioritizers, and what their proposed priorities might be. Then, and only then, will we feel better about putting them in charge of anything. And the right priority--the prime directive of Serious Medicine--is heavy research on critical diseases and problems, with an eye toward victory over those diseases and problems. We might not be able to defeat death, but we sure as heck can defeat, say, liver disease. How can I be so confident? Because, as Steve Jobs reminded us earlier this year, you can always get a new liver. Cost, of course, is an issue, but that's argument for economies of scale, as opposed to rationing. Or I should say, the popular argument is on behalf of driving the cost down through mass production. Unfortunately, the dominant argument is rationing.

Then Gregory asked Sebelius about the swine-flu vaccine. And suddenly, the Health Secretary was all about Serious Medicine. Sounding fully briefed on the status of the pandemic around the world, she said that scientists were working hard on a vaccine, and hoped that it would be ready by October. Well, that's great. But how much will all this cost? A lot, I am sure--but all worth it. And that's the point. Serious Medicine costs money. But it's cheaper than dying.

Next up: McConnell, who said of Sebelius-types, "They don't seem to grant that we have the finest health care system in the world." He's right. But of course, to the bean-counters, the overriding issue is cost. All these Euro-influenced left-liberals share a style of thinking, a style of critiquing. And in their critique is a heavy element of anti-technological romanticism, if not Luddism. That is, sewn into this style of thinking is the sense that enough is enough, that we lose our soul if we rely too much on technology.

This anti-technological argument--masquerading as a health-care-cost-control argument--reminds me of the defense-reforming "neoliberal" Democrats of the 80s, such as Gary Hart and Pat Schroeder, who accused the Pentagon of building "gold-plated weapons." Well, they were sort of gold-plated, cost-wise, but that's the thing about technology--it's expensive, at least at first. Only after awhile does it tend to get cheap on a per-unit basis. But cheap upfront is not necessarily good. I can remember one discussion, from the mid-80s, when the topic was building lighter (i.e. less "gold-plated") tanks for the Army. To which one pro-technology defense expert said, "They expect us to fight in orchards." That is, to fight in places that weren't too rough, that wouldn't require too much horsepower to get around, against enemies who weren't too dangerous. You know, sort of like suburbia, as opposed to Kursk. Well, history shows that the big battles, the Kursks, are the ones that determine the fate of nations and empires. If you come to a battle overprepared, as in too much armor and technology, fine. But if you come to a battle undeprepared, not so fine. Less is more might work for aesthetics, but it does not work for technics.

And the same is true for medicine: Technology is a necessary, albeit not always sufficient condition for good health. The treatments have to work, of course, but the treatments have to exist, first. And somebody has to pay for it. McConnell recalled a recent visit to the M.D. Anderson Treatment and Cancer Center in Houston, where he said that people from 90 countries around the world come to Anderson. And why do they come? For the results, obviously. And so who decides which procedure to do, and which test to run? We can assume that it's the doctors and other clinicians making those decisions. The moment that docs at Anderson have to ask permission from some rationer in Washington DC is the moment that people from 90 countries will stop coming to Anderson. And such a rationing scheme would not only be a loss to the cause of fighting cancer, it would also be a loss to the Houston economy, and, by extension the economy of Texas and the USA overall.

As McConnell said, "We have a cost problem. We have an access problem. We do not have a quality problem." And as we have seen, quality is the key to the economy--you have to make something better than anyone else makes, be it a good or a service. Anderson is obviously a world-class medical facility. So do we want to restrict it--or expand it?

Interestingly, Sebelius tried to make the case that Obamacare would be good for the economy, but she expressed herself in terminology that skipped right past McConnell's argument. Speaking in the "Meet the Press" segment before McConnell, Sebelius said that "reform" of health care "may be the single most important issue to get our economy on track." Well, put me down as doubtful. I think that the fate of the economy, up or down, will be driven by taxes and spending and "cap and trade." But to the extent that health care and medicine are economic drivers, their potential is seen in M.D. Anderson, which competes with the world--and wins--not some plan to recreate the UK's National Health Service here in the US.

That's the economic component of Serious Medicine, which can be summed up in Gompers-meets-Bauhaus precision: "More is more."

Saturday, July 18, 2009

Scott Atlas, writing for the National Center for Policy Analysis, unloads some valuable information about health care in the US vs. health care in Europe and Canada:

Medical care in the United States is derided as miserable compared to health care systems in the rest of the developed world. Economists, government officials, insurers and academics alike are beating the drum for a far larger government rĂ´le in health care. Much of the public assumes their arguments are sound because the calls for change are so ubiquitous and the topic so complex. However, before turning to government as the solution, some unheralded facts about America's health care system should be considered.

Fact No. 1: Americans have better survival rates than Europeans for common cancers. Breast cancer mortality is 52 percent higher in Germany than in the United States, and 88 percent higher in the United Kingdom. Prostate cancer mortality is 604 percent higher in the U.K. and 457 percent higher in Norway. The mortality rate for colorectal cancer among British men and women is about 40 percent higher.

Fact No. 2: Americans have lower cancer mortality rates than Canadians. Breast cancer mortality is 9 percent higher, prostate cancer is 184 percent higher and colon cancer mortality among men is about 10 percent higher than in the United States.

Fact No. 3: Americans have better access to treatment for chronic diseases than patients in other developed countries. Some 56 percent of Americans who could benefit are taking statins, which reduce cholesterol and protect against heart disease. By comparison, of those patients who could benefit from these drugs, only 36 percent of the Dutch, 29 percent of the Swiss, 26 percent of Germans, 23 percent of Britons and 17 percent of Italians receive them.

Fact No. 4: Americans have better access to preventive cancer screening than Canadians. Take the proportion of the appropriate-age population groups who have received recommended tests for breast, cervical, prostate and colon cancer:

* Nine of 10 middle-aged American women (89 percent) have had a mammogram, compared to less than three-fourths of Canadians (72 percent).
* Nearly all American women (96 percent) have had a pap smear, compared to less than 90 percent of Canadians.
* More than half of American men (54 percent) have had a PSA test, compared to less than 1 in 6 Canadians (16 percent).
* Nearly one-third of Americans (30 percent) have had a colonoscopy, compared with less than 1 in 20 Canadians (5 percent).

Fact No. 5: Lower income Americans are in better health than comparable Canadians. Twice as many American seniors with below-median incomes self-report "excellent" health compared to Canadian seniors (11.7 percent versus 5.8 percent). Conversely, white Canadian young adults with below-median incomes are 20 percent more likely than lower income Americans to describe their health as "fair or poor."

Fact No. 6: Americans spend less time waiting for care than patients in Canada and the U.K. Canadian and British patients wait about twice as long - sometimes more than a year - to see a specialist, to have elective surgery like hip replacements or to get radiation treatment for cancer. All told, 827,429 people are waiting for some type of procedure in Canada. In England, nearly 1.8 million people are waiting for a hospital admission or outpatient treatment.

The Hospital of the Future?

Why not? Why couldn't hospitals be like cities? Or even pleasure domes, with apologies to Samuel Taylor Coleridge?

After all, health care is the ultimate consumer good. Ask yourself: Which would most people prefer? To make more money, or to live longer?

Serious Medicine in Action

Innovation is good, and economic growth is good--so if it seems expensive, well, let's just be glad we have the money to pay for it. As noted here at Serious Medicine, health care is a superior good. When you have the money to spend on it--you do!

A third example of U.S. leadership is that many important medical innovations in the past 30 years arguably originated in the United States. This evidence is based on a survey designed to determine the relative importance of a variety of medical innovations developed over approximately the last 30 years. Starting with a review of the medical literature, researchers compiled a list of 30 major medical innovations and then surveyed over 300 leading general internists in the United States concerning the relative importance to their patients of the innovations. Based on the survey, researchers ranked the innovations in order of importance. The first and second columns of Table 10-1 reflect the results for the top ten innovations
. -- From the 2004 Economic Report of the President, page, 192.

Research suggests that between 50 and 75 percent of the growth rate in health expenditures in the United States is attributable to technological progress in health care goods and services. Potential sources of the remaining 25 to 50 percent of the growth rate include: higher demand for health care due to increasing incomes and the aging of the U.S. population; the increased practice of “defensive medicine” (that is, medical procedures with limited therapeutic value that are performed by physicians to avoidlawsuits); and increased use of health insurance plans as a payment mechanism for health care. -- From the 2004 Economic Report of the President, page, 194.

Friday, July 17, 2009

BRAC for Medicare? A Good, But Not Sufficient, Idea

"CRFB Praises Proposal to Create BRAC-Like Commission for Medicare" -- that's the headline atop an important press release that hit Washington Friday night. Forgive the jargon: CRFB is the Committee for a Responsible Federal Budget; and BRAC is the Base Realignment And Closure Commission, created by Congress in 1990 to expedite the process of closing redundant or otherwise wasteful military bases.

The topic is the goal of controlling health care costs--a topic made all the more red hot because Doug Elmendorf, the Democratic-installed director of the Congressional Budget Office, delivered a "devastating" (in the words of The Washington Post, in the first sentence of the first paragraph of its front-page story on Friday) blow to Obamacare; Elmendorf declared, in Capitol Hill testimony on Thursday, that Obamacare, as drafted so far, would increase, not decrease, health care costs.

And the name of the game right now in DC is controlling health care costs. Nobody has any idea what the health care expenditures will be in the far-away "out years," but for the near term, the Democratic politicians who lead Congress and the White House would like to be able to say that they can deliver "universal" coverage to Americans for, say, $1 trillion over ten years. Yet now, thanks to Elmendorf--and earlier studies from the CBO--that particular dream seems out of reach, even in theory.

So back to BRAC. BRAC was a great idea--the brainchild of former Rep. Dick Armey (R-TX), who served as House Majority Leader in the 90s and into the next decade, till he retired in 2003. In a nutshell, the idea of BRAC was that an independent commission would determine cuts in military bases, and present these proposed cuts to Congress. For its part, Congress had to approve or disapprove of the closures as a package--it could not pick and choose. That was the genius of Armey's idea: It was all or nothing for Congress.

And CFRB is a blue-chip outfit run by my colleague at the New America Foundation, Maya MacGuineas, who has long been a leading voice on fiscal-discipline issues. As Maya's CFRB explains:

Today, the White House urged Congress to institutionalize a process of reviewing Medicare changes as part of overall health care reform. The proposal would create an Independent Medicare Advisory Council (IMAC), which would be comprised of technical experts and health care professionals and would make recommendations on payment rates and other policy reforms.

The Committee for a Responsible Federal Budget strongly supports any efforts to bring down health care costs, and believes setting up a BRAC-like commission, or increasing the independence and authority of the Medicare Payment Advisory Commission (MedPAC), as Senator Rockefeller has proposed, would be useful in doing so.

"Given that huge deficits the country faces, slowing the growth of health care costs is the most important objective of health care reform," said Maya MacGuineas, President of the Committee for a Responsible Federal Budget. "Changes to the process to help bring the spending curve down are in order and this proposal would definitely be an improvement over the process we have now. Given what we are seeing come out of Congress so far, policymakers may end up with legislation that would bend the curve, but in the wrong direction!"

Proposals to empower an outside body with making recommendations for cost savings could help reduce political pressures surrounding some of the difficult and controversial health care and Medicare reforms ahead. This, in turn, could lead to both larger and more rational cost-reducing policies - policies which are absolutely necessary to ensure the country's long-term fiscal sustainability.

And so of course, we need to find ways to keep Medicare costs down--just as we should seek to control all health care costs, just as we should seek to make all government spending as parsimonious as possible.

But we have to control health care costs the right way--because, after all, our health and our lives are at stake. (And, as I have argued all along on the Serious Medicine blog, there's a significant economic variable, as well.)

BRAC made a lot of sense back in 1990, when the big push was to downsize the military and finally enjoy the "peace dividend." Of course, the world never became quite as peaceful as people hoped, and so quite a few military bases survive. And, of course, we have built many new bases, in places such as Iraq and Afghanistan. The point here is that a base-closing process makes the most sense when the trendline is down; that is, bases are being closed, or should be closed. But what if defense spending has hit a plateau, or should hit a plateau?

And thus to Medicare. It's worth saying again: health care costs should be controlled. But the problem with a BRAC-like process is that it leaves open the question: Which health care costs will be controlled, and how? Would Medicare BRAC-type authorities cut out empty hospitals--the proverbial waste, fraud, and abuse--or would they seek to squeeze down on medical research? After all, to put it in super-cynical cold language, old people are expensive: Some such as Richard Lamm, the former governor of Colorado, have been happy to say that seniors have "a duty to die and get out of the way." That was an extreme formulation, to be sure, but Lamm was hardly alone in thinking that oldsters are a fiscal burden that could be, uh, lightened somehow. Today, plenty of health care experts and bioethicists spend their time trying to rationalize, or euphemize, various euthanasia schemes.

What's needed for health care is what's needed for anything the government does--a policy and a strategy. We had a policy and a strategy for the Cold War, which could be summed up as "Spend what it takes to contain communism." From the Truman years in the 40s to the Reagan years in the 80s, the voters had plenty of opportunity to assess Cold War policies, and to pass judgment on Cold Warriors. And while plenty of mistakes were made along the way--Vietnam in the 60s, Lebanon in the 80s--the overall policy was a great success. Indeed, the Cold War was vindicated in 1989, with the fall of the Berlin Wall. And after that policy bore its fruit, we could look for ways to cut spending--hence BRAC, which came the following year.

So BRAC was a great approach when the new direction had been set--instead of increases, the new direction was decreases.

Today, many argue that the future direction of health care should be like that of defense spending in the 90s--downward. If so, a BRAC-like approach might make sense.

But what if we should be spending more on health care? Not more money for foolishness, of course, but more for things that save money--most obviously programs for prevention, vaccines, and cures for illnesses that strike people down in the prime of their lives? These are important policy questions, to be sure--and that's the point. These are policy questions, and they haven't yet been resolved.

Until those questions are resolved, BRAC might be too much of a blunt instrument. What we need is a policy debate, over how to proceed on health care. And after that, when we have a policy, when we have a strategy, then it will be obvious what to cut--and what not to cut.

But not until. Right now, we are still formulating--or we should be, anyway--a comprehensive strategy on health care. It is the view of Serious Medicine that the right strategy is to spend more on illnesses and problems that cost American society lots of loss and lost economic output. Those are the natural things to focus on.

Wednesday, July 15, 2009

Virginia Postrel's First-Hand Experience with Serious Medicine

Virginia Postrel, the well-known libertarian thinker and writer, confronts some of the issues of Serious Medicine in her intense piece in The Dallas Morning News. As she says, in New Zealand, they spend less, and they get less:

Consider New Zealand. There, a government agency called Pharmac evaluates the efficacy of new drugs, decides which drugs are cost-effective and negotiates the prices to be paid by the national health care system. These functions are separate in most countries, but thanks to this integrated approach, Pharmac has indeed tamed the national drug budget. New Zealand spent $303 per capita on drugs in 2006, compared with $843 in the United States. Unfortunately for patients, Pharmac gets those impressive results by saying no to new treatments.

The American approach is better, she concludes.

The good thing about a decentralized, largely private system like ours is that health care constantly gets weighed against everything else in the economy. No single authority has to decide whether 15 percent or 20 percent or 25 percent is the "right" amount of GDP to spend on health care, just as no single authority has to decide how much to spend on food or clothing or entertainment. Different individuals and organizations can make different trade-offs. Centralized systems, by contrast, have one health budget. This treatment gets funded, and that one doesn't.

If I lived in New Zealand, I wouldn't be dead, just a lot poorer. But if every place were like New Zealand, far fewer complex new drugs would get developed in the first place. And my odds of survival would be much, much lower.

Of course, the American system could be improved further, with more commitment to tackling Serious Illness with Serious Medicine.

"Playing God: Whose Lives Are These Anyway?"

Posted this piece for Steve Clemons' blog, The Washington Note.

Monday, July 13, 2009

"States Seek Less Costly Substitutes For Prison" Will We See This Sort of Economizing, Next, In Health Care?

"States Seek Less Costly Substitutes For Prison"--that's the headline in The Washington Post this morning. But we might ask: Less costly for whom?

Can the states save money for their own state budgets by letting prisoners loose? Sure. But what costs are imposed on everyone else? What about the "pain and suffering" visited on the rest of us?

Patrick Tracy Burris, the serial killer who recently terrorized South Carolina had 61 previous arrests in five states. No doubt those states and local authorities saved a lot of money by letting Burris go free 61 times in the past, but just as obviously, Burris' chronic criminality cost the American people untold amounts of psychic damage, as well as monetary damage.

So when you look at the chart above, from the WP article, showing how Texas has been shrinking its prison population, you might ask: Would you feel safer if you lived in Texas?

And so the same with health care. Obviously the government can "save" money by doing less, but what will such "savings" really cost? It's easy for the government, or insurance companies, to simply restrict access to health care; and in the short run at least, the accounting for those savings will accrue to the insurers, public or private. Why? Because the costs of worse health will be felt somewhere else, not on the government's books. But in the long run, the fiscal health of the government depends on the fiscal health of the country. And a fiscally healthy country is a physically healthy country.

Obviously waste, fraud, and abuse must be constantly monitored, but we should beware of quick fiscal fixes that cost us more in the long run.

Tuesday, July 7, 2009

Someone Is Bullish on Health Care -- Too Bad It's Not In the US

Fox Business News' Matt Egan quotes investor Rob Lutts, bullish on the Chinese medical system.

Rob Lutts, president and chief investment officer at Salem, Mass.-based Cabot Money Management, said investing in China and health care is a safe bet.

With that in mind, Lutts has been snapping up shares of Shenzhen, China-based Mindray, which he believes could double its stock price in the not-too-distant future.

Lutts says Mindray is uniquely positioned to cash in on China’s growing demand for cheap medical devices to improve its dilapidated health-care system. He said recent visits to the country have underscored how outdated some hospitals there are.

“It’s like walking into a hospital 60 years ago in the United States,” said Lutts, who manages about $400 million.

Of course, the US could enjoy the same enormous amounts of health care improvement, if we wanted it. Yes, we are starting from a higher base than China, but so what? The appetite for better health care is limitless.

Why does China have to be the only place where double-digit growth rates occur? Other than India, maybe, or Malaysia.

And that's the point: Such growth is possible, but the politicians have to get out of the way.

"Obama’s Health Plan Sparks Unease Among Nation’s Middle Class"

That's the headline atop Heidi Przybyla's smart piece on Bloomberg this morning.

She quotes a Clinton White House staffer remembering back 15 years:

“The middle class jumped off the bandwagon, and that’s why Clinton’s plan failed,” said Bennett, 44, a vice president at Third Way, a Washington research group that supports Obama’s plan. Obama “needs to ensure that the middle class remains convinced that they will be the beneficiaries of the reform.”

Indeed, Bennett is right: If you want the middle class to support Obamacare, the middle class has to benefit. But note the disconnect between what Bennett says, above, and what Obamacare press secretary Linda Douglass says below:

White House spokeswoman Linda Douglass said Obama’s “central message” is lowering costs for average Americans.

“He’s fully aware and knowledgeable about what happened in 1994,” she said.

Obama, who is pressing Congress to get a bill to his desk by October, emphasized at a July 1 town-hall meeting in Virginia how his plan will rein in costs. “If we want to control our deficits, the only way for us to do it is to control health-care costs,” he said.

The middle class wants better care, as distinct from DC's vision of lower costs. And so Heidi's headline got it right: "Obama’s Health Plan Sparks Unease Among Nation’s Middle Class"

Saturday, July 4, 2009

The Serious Medicine Argument Debuts In The Washington Note

Steve Clemons, my colleague at the New America Foundation, runs a blog, The Washington Note, that is renowned for its point of view--I would call it liberal-libertarian-realist- internationalism. Since 9-11, Steve's main interest has been foreign policy--TWN probably did more than any other single media outlet to block the Senate confirmation of John Bolton to be UN Ambassador--but he has always had a strong interest, too, in science and technology issues, especially as they result to economic development.

And above all else, Steve is not afraid of an argument, if an important issue is at stake. And since health care is an important issue, he ran this piece of mine, "Why the Health Care Debate Is Boring--And How to Make It Interesting."

Wednesday, July 1, 2009

Getting to a Higher Place on Health Care

A opinion piece by Dee Dee Myers in Vanity Fair throws new light on the health care debate as it affects real people. In this case, a famous person--Myers was White House Press Secretary in the first few years of the Clinton administration and has been a DC fixture ever since--who nonetheless finds herself and her family (including Todd Purdum, the well-known VF writer) on a treadmill. As she observes:

What’s more, by the time we work through our annual deductibles, as well as items that aren’t covered or are reimbursed at only a fraction of their actual cost, our pricey insurance covers about a third of our actual costs. And like so many people with or without employer-sponsored care, we worry that if any of us gets really sick, we’ll lose our coverage altogether. No wonder people hate insurance companies.

Who knew? I mean, first off, most people probably figured that a blue-chip company such as Conde Nast, which publishes Vanity Fair, would surely provide health insurance to its employees. But evidently not--a point confirmed, in passim, by Dan Baum, the ex-New Yorker writer, who Twittered that he had never gotten health insurance either, when he was on staff at The New Yorker, another CN property.

But secondly, it doesn't do families a whole lot of good if they buy health insurance that turns out not to cover very much, and could be yanked, in any case, if it does cover too much.

Thirdly, such a system doesn't do much good for health care, because it takes away the incentives to make health care better. And that's the real problem--we are in a health care rut.

To put it another way, we are on a low Indifference Curve on health care.

Economists have a concept called the indifference curve,to describe consumer preferences, and their tradeoffs. For example, if you like milk and cookies, how much of one or the other makes you happy? What ratio between the two goods? As the above figure shows--thanks, Wikipedia!--anywhere you go on Curve 1, for example, you are equally happy. More milk and less cookies, more cookies and less milk, and so on.

Obviously indifference curves are an artificial construct, but they do get across the point that consumers have different bundles of preferences that yield up different levels of satisfaction. Now of course, you might like more milk and more cookies, in which case, to be happy, you might have to jump to Curve 2, or even Curve 3, as your consumption increases.

And so to health care. Right now, the American people are at a certain Indifference Curve on health care, where affordability of health care, on the demand side, and available care, on the supply side, are fitted on to one curve. So far, at least, I am not making an argument, one way or the other, I am just observing that at this precise moment, consumers, and the government, have access to X amount of health care.

And the point of this blog is to argue that we do not have enough health care. Not that we aren't spending enough, but instead, that we aren't getting enough. Who knows what the true cost of health care would be if we made full use of all the technologies available to us?

So the real goal is not to move up on one Curve, it's to jump to a higher Curve.

To be continued...

In the meantime, Dee Dee and her family are stuck:

So am I for reform? You damn betcha. Major. Comprehensive. Reform. Any plan that is eventually passed by Congress—and signed by the president—will include certain provisions. For starters, it will prohibit insurance companies from denying coverage to people with pre-existing conditions—or raising their rates or dropping them if they get sick. It will also seek to insure many, if not all, of the nearly 50 million Americans who are not currently covered—and that means some kind of government subsidy for those who couldn’t otherwise afford it. It will be “deficit neutral,” meaning that the $1 trillion–plus price tag will be offset with some combination of spending cuts and “revenue” hikes.

Beyond that, the devil is in the details, and he’s still out there dancing. The plan could include an individual mandate, an employer mandate, or both. It could provided subsidies to lower-income individuals, or small businesses, or both. It could tax certain health benefits, or soda and alcohol, or both. It could include a “private option,” or an “insurance exchange,” or both. I’m hopeful that that plan that emerges from all this will make life better for my family. Maybe not as better as it could. But better enough that I will almost certainly support it. And that makes me an easy mark, low-hanging fruit in this ongoing debate.

The trick for the Obama administration will be convincing the not-so-low hanging fruit that reform will be good for their families. At the moment, the public is split down the middle, according to a new report by Democracy Corps, an organization headed by Stan Greenberg and James Carville, both veterans of the Clinton health-care wars. They point out that when the country last took up this issue, 16 years ago, people quickly decided whether the president’s plan would help or hurt them, and their judgement became the “most important predictor of support or opposition to health-care reform. In this round, it is already an important predictor of support for reform, even before the specifics of the plan for reform have been made clear.”

In order to win, then, the president and his allies in Congress need to flesh out the details of the plan, so they can explain to people how, exactly, “reform” will help them. Throughout the campaign, Candidate Obama promised an annual cost savings of roughly $2,500 per family. Will the plan achieve that? And in recent months, President Obama has said that reform will lower costs for consumers and providers, for employers and individuals, and for the government. Substantially, over time. He needs to continue to make the case. Seniors worry that “reform” may come at the cost of the Medicare coverage they count on and trust; they need to be reassured as well.

Team Obama has its work cut out for it. But in at least one important way, the wind of change is at their back: The public is increasingly convinced that the status quo is unsustainable and unacceptable. If we do nothing, health costs will continue to soar, while millions more Americans will lose their coverage. Insurance companies will continue to cherry pick healthy customers, while taxpayers foot the bill for everyone else. Individuals, businesses, and the government will be bankrupted by the unsustainable burden.

Some families might be better off. But they’ll be few and far between.

Economist George R. Newman makes a great point in The Wall Street Journal this morning, knocking down some of the myths of health care "reform" that we hear frequently:

- "A universal plan will reduce the cost of health care."

Think a moment. Suppose you are in an apple market with 100 buyers and 100 sellers every day and apples sell for $1 a pound. Suddenly one day 120 buyers show up. Will the price of the apples go up or down?

A point worth pondering further. If 120 buyers show up, shouldn't we be figuring out how to produce more 100 apples? The existing debate on health care is almost entirely on the demand side--how to arrange for financing in the ideologically correct fashion: Liberals want single payer, currently disguised as "the public option." Libertarians want the free market to finance everything, without ever getting adequately into such questions as who will provide for public health, the health of children, and so on. And stand-pat conservatives want the insurance companies to keep their place, on the presumption that people will be happy having their health care rationed by insurance company bureaucracies, just so long as the rationing is not done by government bureaucracies. Got that? That key distinction?

So what's needed, one might say, is a "supply side" approach to health care: create more supply. And while we're at it, make it better.