Will Obama's Bold Vision End the Myth of Entitlement Reform?

As President Obama begins his second term, he does so with an expansive vision for America.

“America's possibilities are limitless,” he said in his inaugural address, “for we possess all the qualities that this world without boundaries demands:  youth and drive; diversity and openness; an endless capacity for risk and a gift for reinvention.   My fellow Americans, we are made for this moment, and we will seize it - so long as we seize it together.”

There are many potential roadblocks toward achieving that bold vision.  One is the myth that entitlement reform must be a part of it.

The reason that entitlement reform is at the top of some political agendas has nothing to do with the growth in entitlement programs today.

Some people with these agendas don’t like any government-run programs and won’t listen to the facts about them. 

Those who do look at the facts see the rapid growth in Medicare and Medicaid spending through 2009.  According to the Center for Medicare and Medicaid services, Medicare spending increased by an average of 10.9 percent per year between 1967 and 2009, and Medicaid spending by an average of 10.7 percent per year between 1975 and 2008.

They believe that this rate of growth is not sustainable.  But since the beginning of President Obama’s first term, we haven’t sustained a growth rate even close to this.

A report from last September and two more reports released in the last couple of weeks – one from the Department of Health and Human Services (HHS) and another from the Bureau of Labor Statistics (BLS) – show just how far the myth is from today’s reality.

The new HHS report found that per capita Medicare spending increased by just four-tenths of one percent in 2012, following increases of only 3.6 percent in 2011 and 1.8 percent in 2010.

And according to some new BLS data, the overall medical inflation rate last year – which should tell us something about Medicare and Medicaid growth in the coming year – was 3.2 percent. 

There is a much more immediate health spending problem about which policymakers should be worried – one that entitlement reform could make worse. 

High health costs may burden state and local governments.  But they burden people who rely on Medicare and Medicaid far more.

In an article entitled the High Cost of Out-of-Pocket Expenses published in September by the New York Times, Judith Graham summarized from a third recent study.  The study found that during the last five years of life:

• People on Medicare spend $38,688 on medical costs.
• People with Alzheimer’s spend $66,155. 
• The top quarter of spenders spend a whopping $101,791.

Some policymakers love talking about the unfairness of the “death tax.”  How about the unfairness of this hidden “pre-death tax” that gets bigger every time elected leaders cut entitlement spending? 

Entitlements are not the problem.  The cost of health care is.  Entitlements are – and always have been – the solution to the problem of a middle class forced into poverty by high health care costs near the end of life. 

And while entitlement reform may reduce government expenditures, it will only do so at the expense of those who need Medicare and Medicaid the most.

President Obama said it well in his address. 

“We must make the hard choices to reduce the cost of health care and the size of our deficit.  But we reject the belief that America must choose between caring for the generation that built this country and investing in the generation that will build its future.  For we remember the lessons of our past, when twilight years were spent in poverty, and parents of a child with a disability had nowhere to turn.  We do not believe that in this country, freedom is reserved for the lucky, or happiness for the few.  We recognize that no matter how responsibly we live our lives, any one of us, at any time, may face a job loss, or a sudden illness, or a home swept away in a terrible storm. The commitments we make to each other - through Medicare, and Medicaid, and Social Security - these things do not sap our initiative; they strengthen us.  They do not make us a nation of takers; they free us to take the risks that make this country great.”

Contact Paul Gionfriddo at gionfriddopaul@gmail.com. Twitter: @pgionfriddo.  LinkedIn: www.linkedin/in/paulgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.

The Tragedy of Sandy Hook

The entire world is in mourning over the senseless and horrifying massacre of innocent children and adults in Sandy Hook, Connecticut. 

This hit so close to home for me, about forty miles from where I grew up.  So many of my former legislative colleagues are among those trying to help the state through it. 

I can’t even pretend to imagine what this must be like for the families of Sandy Hook. 

On the first day of the tragedy, too many politicians trotted out their tired old line that “today is not the day to have the debate” about gun control.  Thank God their tone-deaf voices were silenced by the outcry of reasonable people.

Connecticut Congressman John Larson (D-1) said that “Congress should be prepared to vote on requiring background checks for all gun sales, closing the terrorist watch list loopholes, and banning assault weapons and high capacity clips. Those measures don’t solve all our problems, but they’re a start.”

Senator Joseph Lieberman (I-CT) and Senator Richard Blumenthal (D-CT) also called for an assault weapons ban.  

But does our nation have the will to do this and more?

I hope so, because if the images of six and seven year olds staring down the barrel of an assault weapon in their last split seconds of life do not motivate us, then nothing will.

And there are two big things that it is past time to do. 

This first is to get lethal firearms out of the hands of people who are not defending us.  The second is to reverse the damage we’ve caused by neglecting and discriminating against people with mental illness because we mistakenly think that they are the cause of all the violence.

According to data reported in July by the Manchester Guardian, we are by far the most gun-toting of all of the most civilized nations in the world.  If the population of Newtown, Connecticut, is just average, then among them they already own 24,513 firearms. 

Adam Lanza’s mother owned the three of them used in the Sandy Hook massacre.  A self-described gun enthusiast, she was reported to feel she needed all this weaponry for safety and self-defense.  In the moment before her life was taken, did she feel safer, or better defended?

A member of Congress from Texas, Rep. Louie Gohmert (R-1), thinks we need even more. Does he really believe that the other 24,510 Newtown firearms made the children of Sandy Hook any safer that day?

Perhaps the horror of this massacre might open our eyes to something else – every day, an equal number of our sons and daughters die in our towns and cities because someone shoots them to death.

In 2007 alone, over 9,000 people in our country died because of gun violence, far more than the 6,656 Americans who have died in both the Iraq and Afghanistan wars since their beginning. 

We can do much better than this.  And, as President Obama declared in Newtown, “we will have to change.”

But making real change is not just finding someone to blame.

After tragedies, we often find at least hints of mental illness in the people using the guns.  But when we do, we miss the point. Violence is not a mental health problem, it is a public health problem.

Today, we are too quick to equate violence with mental illness, too quick to send people with serious mental illnesses to jail, and too quick to balance our state budgets by neglecting the people with the greatest service needs.

Connecticut’s Governor, Dannel Malloy, has shown leadership in his response to the massacre.  But another test of that leadership will come soon.  He recently ordered the rescission of up to $9.5 million in mental health services funding in Connecticut.  This funding is desperately needed to prevent and mitigate mental illnesses.  Governor Malloy is not alone in this regard – in all fifty states $4.6 billion has been cut from state mental health services during the last four years. 

Will Governor Malloy rescind that rescission now, and call on his colleagues around the country to do the same, so we can re-build our nation’s mental health services infrastructure, and better detect and treat mental illnesses early?  Will he help de-stigmatize those with mental illness, who are more often the victims of violence than its perpetrators?

Will the nation have the will to raise the money we need for prevention?

Because only if we do will we be able to say that protecting all of our children from harm is our highest priority.

Addendum:  There are news reports that Adam Lanza’s mother may have, for behavioral reasons, removed him from school at some point for home schooling.  I believe that voluntary or involuntary removal from school is often one step in a years-long chain of events that leads to bad outcomes. 

This time might therefore become a critical intervention point to change a bad trajectory and prevent future tragedies of all sorts – if we were to change our special education policy as follows:

Whenever a parent or a school believes that a special education student needs to be removed from his school for behavioral reasons, either via suspension, expulsion, or voluntary removal, for at least five consecutive days or for at least ten days in the course of a school year, there must be a mediation scheduled within 10 days with the school district, the parents, and the state education department as a mandatory third party.  The purpose would be to develop a new IEP with additional services.  The new IEP must have the input of a child’s regular health and mental health providers, if there are any.  If not, health and behavioral evaluations should be done to inform the mediation, with the state picking up the cost.  If any two parties agree to the additional services, then the services must become an immediate part of the IEP, with the state picking up the additional cost.  If the parents are not one of the parties in agreement, they still reserve their right to go to due process.  If the student is not yet admitted to special education, then the same event should trigger an immediate outside evaluation for eligibility for special education services.

Let’s assume that all parties would act in good faith.  But just in case one were concerned that a local district would low-ball a set of services from the start to shift more costs to the state, then a district could be made responsible for the costs of either its existing plan or the average cost of plans for comparable students in other districts, whichever is greater.

We’re all searching for answers.  This is just one suggestion.

Note: This column was published early this week because of the timeliness of the issue.  My prayers are with the people of Newtown.  Our Health Policy Matters will be return to its regular publication on December 26 and January 2.

President Obama and Governor Christie: A Model of Cooperation for Protecting Public Health

It took Super Storm Sandy to remind us how much we need our government. And how rarely we see government leaders truly cooperate.

Cooperation has been a dirty word in politics for close to two decades.  But in responding to the crisis caused by Sandy, President Obama and Governor Christie showed us that political adversaries are at their best when they work together to meet our needs.

It took an environmental holocaust for this to happen.  But as the pictures of destruction in state after state circulated throughout the media, no one talked about privatizing FEMA.  No one complained that the government was spending too many taxpayer dollars rescuing people from death. 

It was a fine way for the President to end his first term in office – one that may ultimately have won him his re-election.  And also won him a new opportunity to collaborate with the states.

In the storm’s aftermath, we understand that one of the prices of having the freedom to live where we desire – Queens or Greenwich, Staten Island or the New Jersey Shore, Hoboken or New Orleans, the West Virginia mountains or the central plains – is that we must protect our living environment.

We understand that no place is safe from sudden destruction.  So we need all levels of government – and they need our support – to build better flood berms, hire more first responders, and put in place pumps and sewers to get polluted water more rapidly out of streets, subways, and homes.

And to prevent such catastrophes in the future.

God only knows if Sandy itself was caused by preventable climate change.  And it’s not really worth arguing anymore with people who deny what they see with their own eyes – that our weather has changed dramatically over the past few years.

What no one can deny is that we have been lax in our preparation for catastrophe.  We have been lax in investing in the infrastructures needed to clean up and repair the devastation.  And we have been lax in investing in the infrastructures that can prevent such catastrophic damage in the future.

This time, the crisis was in the northeast.  In recent years, the central plains and gulf coast have experienced similarly horrifying environmental catastrophes. 

No one knows who will be next. But we all know someone will be next.

So we need to prepare.  And this means strengthening our public health infrastructure.  That infrastructure:

• Prepares for and organizes our response to natural disasters.
• Makes certain we have access to emergency services.
• Handles pollution control and abatement, decreasing our negative effect on our environment.
• Enforces our building codes.
• Prevents environmental and health disasters every day.

We have let this infrastructure go during the last few years, with deadly consequences.

• Local and state health departments have lost over 55 thousand workers to budget cuts.
• In New York and New Jersey alone, over half of local health departments lost jobs due to budget cuts in 2011.
• Almost one-quarter (23%) of local health departments nationwide have reduced or eliminated emergency preparedness functions. 

Robert Pestronk, Executive Director of the National Association of County and City Health Officers (NACCHO), predicted what would happen  almost a year ago, when he said “at this critical juncture of dwindling funding and difficult choices, health departments are now doing less with less.  Budget cuts and a declining public health workforce challenge their ability to protect the health and well-being of all people in their communities.”

How well the people of Staten Island and scores of other communities understand this now!

Despite the closeness of the election, Barack Obama has a mandate as he enters the next four years.  It is to continue the bi-partisanship that served us so well at the close of the campaign season.

And governors like Chris Christie have a new mandate, too – they need to rebuild public health infrastructures in partnership with the federal government, no matter what their Congressional representatives may say or do. 

As we continue to pray for our most recent victims, let us hope – for the good of all – that in the coming years our leaders heed these needs, and tackle together all the real crises that command our attention as a nation.

And let us hope that rebuilding the infrastructure that has been devastated as much by budget cuts as it was by Sandy will be at or near the top of the list.

If you would like to arrange for Paul Gionfriddo to speak to your group or organization, or have questions about this column, please send an email to gionfriddopaul@gmail.com.

President Obama's New Health Policy Road

Newly re-elected President Barack Obama may now have a new road to health policy-making after three years of defending the Affordable Care Act.  And even if the Congress does nothing to help in the months to come, his road may be a whole lot easier than it has been.

Even with the Affordable Care Act in place, our health policy debate has been dominated by the belief that health care Armageddon is just around the corner.

But some recent data suggest that Armageddon may still be down the road.

Just how far may well determine how our health policy debate shakes out over the next two years.

First, let's look at the Armageddon scenario.

The candidates accepted the scenario that health care costs are out of control when they made the future of Medicare and Medicaid a centerpiece of the campaign.  Governor Romney’s proposed solution was to clamp down on federal funding for these programs.  President Obama advocated managing state and local costs by expanding the federal role in both programs.

But neither strategy leads to lower projected Medicare and Medicaid spending in the near future.  Both will become trillion dollar programs in the next few years.  There’s no turning back; this is already written in stone as the baby boomers age.

The $716 billion Medicare rate cut in both the Affordable Care Act and the Ryan Budget will help.  But it won’t be enough to stop Medicare from growing to 6% of GDP over the next generation.  And at least part of that cut – the physician payment cut – is likely to be overturned by the new Congress. 

So if policy leaders want to save Medicare, they will have to do more.  But there is no consensus about what this should be.

Medicaid spending is even more contentious, because the program is so expensive for the states. 

Romney’s solution – to change it to a block grant – only addressed this problem on the surface.  This is because the increase in projected Medicaid costs represents the actual projected costs of the actual projected Medicaid-eligible people using today’s eligibility standards. 

To put this more simply, there will be a trillion dollar bill to pay, no matter what.  Block grants will only change who pays that bill. 

Obama’s choice – to have this burden shouldered equally by everyone through the federal government – will help states immensely, but won’t make the program any cheaper.

The cost of healthcare for returning veterans will also drive health care costs upward during the next few years. 

In 2010, the CBO estimated that this could mean another $30 billion in VA spending over what we are paying today.

In this Armageddon scenario, all the pressure on governmental health care spending pushes upward.  And we have no clear policy solutions.

Limiting the growth in Medicare spending to 5% per year, instead of 5.7% is something for which most of the members of both parties have voted during the last two years.  That is already in place through the Affordable Care Act, and one potentially bipartisan option. 

But we need to go much lower than this to reduce the GDP burden of health care, and more aggressive rate-setting and regulation may do irreparable harm to certain safety net providers.

So President Obama’s hands may be tied – unless our healthcare future is tied to the second scenario.

In this scenario, healthcare inflationary growth declines rapidly.  And the information from 2010 and 2011 suggests that this is exactly what is happening.

Health care inflation was under 4% per year for two straight years in 2010 and 2011 for the first time in fifty years.  This may well have been recession-related.  But if health inflation stays low for even a little while longer, this will change the trajectory of health spending projections for years to come.

That may be why President Obama and Vice-President Biden made this a centerpiece of their campaign message in the closing weeks of the campaign. 

Even if the new Congress does nothing, low inflation changes the health policy picture dramatically.

Low health care inflation will add years of life to Medicare, absorb the 2.8% projected increase in state Medicaid spending attributable to the Medicaid expansion, and eventually drive down the price of health insurance even as Affordable Care Act consumer protections remain in place.

That puts the President in a position of strength for the next two years.  President Obama just won a tightly contested re-election.  The next few months will decide with just how easily his health policy agenda moves forward now.

Ending the Medicare Debate

If you care about Medicare, then who lost last week’s Presidential debate?  Perhaps we all did.

That’s because both candidates favored some cuts in the Medicare program.  And cuts translate into a real impact on real people.

But no cuts could mean something even worse - unsustainable levels of spending in the Medicare program.

The question is what’s the lesser evil – a cut in payments to providers or a cut in benefits to individuals?  That’s the choice President Obama and Governor Romney gave us.

President Obama favored cuts in payments to providers.  Governor Romney favored cuts in benefits to individuals.  The difference in their positions became clear as Romney pressed his point about the $716 billion in “cuts” that Obama supported in the Affordable Care Act.

The “cuts” Obama favored actually fell into two categories that are built into the law – provider rate reductions and cuts to private insurers offering Medicare Advantage plans. 

The provider rate reductions arguably hit doctors the hardest, because ACA presumed that the so-called “doc fix” won’t happen anymore beginning next year.  The “doc fix” has had bipartisan support every year since 2002, because it corrects a provision in the Medicare reimbursement formula that would immediately reduce reimbursement by around 30%. 

The other provider cuts are realized by limiting the increase in future Medicare reimbursements to 5% per year – less than the 5.7% health care costs are expected to grow.

Romney was emphatic during the debate that as President he would restore not just these provider dollars, but the private insurers’ administrative dollars, too.

But Obama pointed out that these savings were used in part to finance the closing of the Medicare donut hole and new Medicare prevention benefits.

More significantly, they also change the trajectory of Medicare spending significantly over time.  According to the 2012 annual report of the Medicare Trust Fund trustees, even with the savings the overall cost of Medicare will grow from just under 4% of GDP today to just over 6% in around thirty years, and then grow a little higher through 2085 (those are the green lines in the chart). 

So Obama just cuts away at the increase.

Romney’s position is more extreme.  Because without the savings, the cost of Medicare will grow to 7% of GDP by 2040, and then skyrocket to over 10% (those are the red lines in the chart) by the time babies born today hit retirement age.

If we had to borrow to cover that, it could bankrupt America.

Romney obviously doesn't want to bankrupt America.  But he did say that he favored leaving Medicare alone for people age 60 and above. (Note: The Ryan plan says 55, but Romney said “60” in the debate.)

For everyone else, Romney wants to reduce the projected cost of Medicare by changing it to a voucher program. 

He would give a health insurance voucher to everyone when they turn 65, and let them use it to purchase either “traditional” Medicare or private insurance through a federal Medicare exchange. 

The value of the voucher will be tied to the second-cheapest plan available, and won’t keep up with health care inflation.  The Medicare recipient will have to pay the difference out of pocket, negotiate with a doctor to accept less, or ration their own care.

Romney made a good argument for at least doing the “doc fix” again by arguing that many doctors won’t be able to absorb a huge rate cut, and will drop out of Medicare if the rate reductions are put into place.  But Obama made an equally valid point that the vouchers could be even worse for recipients. 

If the arguments are left standing there, as they were in the debate, then something has got to give, and everyone's going to lose.

So why not give voters a different choice – one that could end the debate with everyone a winner?  Because there is another option that could save Medicare for our grandchildren without resorting either to borrowing or to huge provider cuts or to Medicare vouchers. 

We have all enjoyed a 2% payroll tax “holiday” for the last couple of years to help stimulate the economy.  When this holiday comes to an end, all we need to do is to dedicate 1.33% back to the Medicare Trust Fund.

If we did this, then Medicare would be solvent for the next seventy-five years.

That's a choice about taxes we all should be offered.  Maybe we’d vote no, but at least we’d be voting with our eyes open.

If you have questions about this column or wish to receive an email notifying you when new Our Health Policy Matters columns are published, contact gionfriddopaul@gmail.com.

Confused and Confusing

President Reagan gave his first speech on the AIDS epidemic almost twenty-five years ago on May 31, 1987.  This was after 36,058 Americans had been diagnosed with AIDS, 20,849 had died, and over a quarter of a million had been infected with HIV.

For years, he had been criticized for ignoring and underfunding the worst public health crisis of the late 20^thcentury.  

So he began his speech with a joke:

“A charity committee approaches the wealthiest man in town for a contribution.  ‘Our book shows that you haven’t contributed any money this year,’ they tell him.  ‘Does your book also show that I have an infirm mother and a disabled brother?’ he replies.  ‘Why no,’ they say, ‘we didn’t know that.’ ‘Well, I don’t give them any money.  Why should I give any to you?’”

The bad joke was an inadvertent punctuation mark on a presidency too fondly remembered by both republicans and democrats today.

On matters of health, Reagan took us backwards.  He was neither in touch with the nation’s growing needs nor successful in addressing them.

His inattention to the AIDS catastrophe in particular and public health in general were just two examples.

He also helped create a new generation of chronically homeless people when he significantly cut federal mental health funding as part of the Omnibus Budget Reconciliation Act of 1981.  During his two terms as President, he also cut funding for safety net community health centers by over 25%.

Suggesting that Reagan would be too liberal by today’s GOP standards – as both some progressives and conservatives have done – is too liberal a stretch where health policy is concerned.

It was the Bushes who were progressives by today’s standards. 

Both delivered on campaign promises to expand the government’s role in health.

“Compassionate conservative” George W. Bush doubled funding to community health centers during his term and added a prescription drug benefit to Medicare.

And George H.W. Bush significantly expanded the federal Medicaid program.

Long before blogging, those of us who wished to express our opinions publicly used the “Letters to the Editor” forum in our local newspapers.  When I was in the Connecticut Legislature in the 1980s, I communicated regularly with my constituents through my local newspaper.

Here’s something I wrote about presidential health policy in October 1988: 

“When health insurance is necessary to pay for health care, how do we ensure that everyone has access to affordable insurance?  Both presidential candidates talk about this.  Governor Dukakis believes that the answer lies in the private sector, in all employers providing health insurance to their employees.  Vice President Bush believes that the answer lies in the public sector, in expanding the state and federal financed Medicaid program.  I know this looks like a classic role reversal, but solutions to health care dilemmas defy ideology.”

You can read the full text of what I wrote here.  If you do, you’ll be either fascinated or fatigued by how little health policy progress we have made in the last 25 years. 

Today, Mitt Romney, another former governor from Massachusetts, has a position on health care more similar to Michael Dukakis than to either Reagan or Bush.

Dukakis wasn’t very persuasive arguing for the private sector solution then, and Romney hasn’t been very persuasive arguing for it now – possibly because both headed a state with a long and solid reputation for making significant public investments in health.

At least President Barack Obama, the most vocal Democratic opponent of the individual mandate in 2008 who is now its leading proponent, recognized the importance of government funding for health when he said this past weekend:

“I refuse to pay for another millionaire’s tax cut by eliminating medical research projects into things like cancer and Alzheimer’s disease.  I refuse to pay for another tax cut by… eliminating health insurance for millions of poor and elderly and disabled Americans on Medicaid.”

But this hasn’t stopped President Obama from initiating or agreeing to multiple raids on public health funding.

Are you confused by all this?  You should be.  Presidents and presidential candidates have long taken confused and confusing positions on health policy with dire consequences for the public’s health.

Need some evidence?  Connecticut had over 250,000 uninsured people when I wrote my letter back in 1988.  Today, it is one of the states with the lowest percentage of uninsured people.  It has 384,000 uninsured.  Mental illness prevalence is up, autism is epidemic, obesity and its related effects have skyrocketed, and HIV still infects over a million Americans.

And our children, we all know by now, could be the first generation to live shorter lives than their parents.

An additional note on three sources:  I took the Reagan speech anecdote from the book And the Band Played On by Randy Shilts (1988 Penguin edition). My constituent letter was published in the Middletown (CT) Press on October 7, 2008. Kaiser Health News provided the Obama quotation on May 7, 2012.  

A Dime's Worth of Difference in 2012

With the Iowa caucuses finally behind us, the Presidential campaign of 2012 now begins in earnest, and will dominate our news and lives for the next year.  I predict we will hear words like "Obamacare," “Romneycare,” “government takeover,” and “individual mandate” (usually in sentences following the word “repeal”) until we can’t stand it anymore.

If this is to be our fate in the New Year, then perhaps we can take some comfort in knowing that the debate probably won’t make a dime’s worth of difference about where most of us get our health care over the next few years or how we pay for it.

This is because the 2010 Affordable Care Act and the individual mandate were not really health reform.  They were efforts to preserve health insurance as we know it, by getting more people who can afford it to purchase private insurance, and more who cannot onto the Medicaid public insurance program.

So maybe we should take a minute between caucuses, primaries, and the general election to imagine what real health reform in America would look like in 2012.

It isn’t hard.  We just have to keep in mind a few facts.

First, governments already pay approximately $1.8 trillion of our roughly $2.5 trillion annual national health care bill.  Individuals pay another $300 billion out-of-pocket.  These numbers aren’t going down, whether the Affordable Care Act is upheld or repealed by the Supreme Court in June.

Second, there is plenty of money in our health system to delivery high quality health care to everyone who needs it.  We just need to target it to prevention as well as treatment.

Third, for the relatively small amount of money they put into the system, insurance companies have been given an outsized role in determining when, where, and how our health care is delivered.

Fourth, we woefully underfund our most important health services.  Public health and prevention activities have accounted for half of the gains in life expectancy during the last century, but receive far less than 5% of health care funding. 

And fifth, we criminalize instead of preventing and treating much of mental illness, and have made jails our nation’s largest mental health institutions.

With those facts in mind, we should acknowledge what real health reform isn’t.

It is not Romney’s or Obama’s “individual mandate” to buy private health insurance people don’t want and won’t trust.

It is also not Ron Paul’s notion of leaving people to fend for themselves in some non-existent “health care marketplace.”  No civilized nation does this and we are not going to be the first.

Here’s what a true American health reform – one that would result in healthier citizens, better access to care when it is needed, lower long term costs of care, and better quality – would look like.

1.       We would rebuild our health care delivery system around the federalized funding that already dominates health financing.  Medicare would be our basic national health insurance program, and be available to everyone.

2.       Medicaid would become a federal program like Medicare, and cover only long term care needs including chronic mental illnesses.  There would be no means-tested eligibility. States would not have to pay for it or administer it, so they could lower their state taxes accordingly.

3.       Private insurers, which are already such a small part of the overall health financing market, would play a role to which they are more suited.  They could offer supplemental insurance products covering first-dollar deductibles, co-pays, and additional, discretionary consumer services (like private hospital rooms and gourmet meals) at whatever prices they could get, for whatever profit they could make. 

4.       The Medicaid program could still require that people spend down a considerable portion of their own resources before it covered the remainder of long term care costs.  But we should allow everyone to set up tax-deferred long term care savings accounts to use for themselves, members of their families, or anyone else they designate.

5.       We would double the percentage of health dollars in public health and prevention over the next ten years.

How could we finance such as system of care?  The reality is that this system probably wouldn’t cost us any more than the current one does, and would probably cost less.

Of course, we won’t get this reform, but we can dream.  And I’d much prefer such a real policy debate about health reform in 2012 to the one we’re scheduled to receive – Mitt Romney attacking the individual mandate he invented and Barack Obama defending the individual mandate he opposed. 

If you have questions about this column or wish to receive an email notifying you when new Our Health Policy Matters columns are published, please email gionfriddopaul@gmail.com.

Making Health Services Our Priority

Are essential health and behavioral health services a priority for our elected officials?  We got a clear picture when House leaders offered their 2011 continuing resolution and President Obama proposed his 2012 budget this past week.   

Both the continuing resolution to fund federal agencies for the current fiscal year and the President’s budget proposal for next year cut billions of dollars from the federal budget.  Some essential health services are surprising targets.

Cost Per Person to Restore Proposed Health Cuts

For a total savings of $2 billion, or just over six dollars a person, would we choose to slice what they chose to slice, or would we make health services a bigger priority?

The continuing resolution proposed to cut $1.3 billion from community health centers.  These centers are located in every state.  They provide comprehensive primary care to everyone, regardless of their ability to pay.  They employ doctors, dentists, nurses, counselors, and other health professionals. 

They treat a lot of elders, people with disabilities, and lower income working families because they accept Medicare and Medicaid in addition to private insurance.  They provide high quality services, and meet a significant consumer demand.  According to the National Association of Community Health Centers (NACHC), they served 20 million Americans in all income ranges last year. 

NACHC responded that the proposed cut would cost 3.3 million Americans their care during the next few months, worsening the health care crisis in our country and driving up costs for everyone.

The continuing resolution also proposed a $500 million cut to mental health and substance abuse services, reducing the federal Substance Abuse and Mental Health Services Administration (SAMHSA) budget from $3.7 billion to $3.2 billion.  This is a 10% reduction from actual FY2010 funding.  It affects hundreds of thousands of children and adults with serious behavioral health problems. 

Elected leaders are betting that reducing services won’t backfire and leave more people with behavioral health problems without any treatment.  However, in providing the justification for her budget request, SAMHSA Administrator Pamela Hyde noted that over 10 million Americans already have unmet mental health needs and mental illnesses cost our economy over $100 billion per year, making this at best a risky, pound-foolish bet. 

Essential health services weren’t spared by President Obama in his proposed 2012 budget either.   

The President proposed taking $133 million from prevention by eliminating funding for the Preventive Health and Health Services Block Grant and halving funding for the Healthy Environment program aimed at preventing asthma and other chronic conditions. 

Though asthma has become one of the most common chronic conditions in our country, the President’s budget seems to be throwing in the towel on asthma prevention.  In justifying the cut in his proposed budget, his budget office writes “there are currently limited proven means of asthma prevention. In asthma care, the key intervention is to increase use of inhaled corticosteroids...” This is an uncharacteristic and remarkably one-sided rationale for emphasizing treatment at the expense of – instead of in concert with – prevention.

Each state decides how to allocate the prevention dollars it receives through the Preventive Health Block Grant, choosing 265 programs of local importance to support. 

In Florida, for example, the block grant has been used for chronic disease prevention programs, water fluoridation activities, and services for victims of sexual violence.  In Connecticut, it has funded childhood lead poisoning prevention, youth violence prevention programs, older adult fall-related injury prevention, and cardiovascular disease prevention.  In Texas, it has been used for sanitation services in rural border counties, support for a trauma registry, and support for local public health services.

While the President argues that there are other prevention services available, the long-standing problem in this country is not that we fund too many prevention services, but too few.    

Funding for this block grant is already $50 million less than it was in 1994, and it should come as no surprise that our health status as a nation has declined across a number of indicators since that time. 

What if we said no to cuts to these community health centers, behavioral health services, and prevention programs?  The $2 billion this would cost would add up to approximately $6.19 per person for the year.  Spending this $6.19 would result in the retention of hundreds of prevention programs across the country, up to 11 million physician visits, and services to over 200,000 adults and children with behavioral health problems. 

Have our nation’s resources really become so scarce that we can’t afford $6.19 a person to buy all this?

Maybe so, but I suspect the real answer lies in our priorities.  They spend this much every week on the war in Afghanistan, and both the President and Congressional leaders have made Afghanistan their continuing priority.  It’s past time for some new ones.