Much attention has been focused on the ongoing efforts in Washington to pass a health care reform bill. Comprehensive health care should reduce the use of ineffective and suboptimal medical interventions and investigations in order to improve medical care and reduce wasted expense. To do that effectively, we need data on the comparative effectiveness of therapies and medical tests, which unfortunately we currently lack.

Recognition of this lack of data has resulted in the inclusion of increased funding for comparative-effectiveness research (CER) in current versions of the health care reform legislation. However, there are significant differences between the approaches taken by the bill that emerged from the Senate Finance Committee, on the one hand, and the bills that came out of the Senate Health, Education, Labor, and Pensions (HELP) Committee and the House of Representatives, on the other. Although all versions include a trust fund that will provide approximately $600 million per year for CER, there is considerable controversy over how that money will be allocated and, most important, whether industry will have a part in controlling the allocation of the funds, the design of the studies, and decisions about which results can be published.

Although most observers agree on the value of funding CER, many are unaware that embedded in the legislation are provisions ceding substantial influence to the medical products industries that have a major interest in the outcomes of such research. In the currently proposed legislation, there are two general constructs for the conduct of CER. The Senate Finance Committee bill mandates the creation of an entirely new private–public research entity and, owing to industry lobbying, guarantees industry three seats on this entity’s 15-member governing board, as well as representation on its methodology committee (the relevant portion of the bill, which may be found at http://finance.senate.gov/press/Bpress/2009press/prb101909.pdf, begins on page 1129). This approach contrasts with that generally taken by science agencies in the United States, such as the National Institutes of Health (NIH) and the Agency for Healthcare Research and Quality (AHRQ), which have strict conflict-of-interest rules to ensure that science is free of inappropriate commercial influence. Unlike the Senate Finance Committee bill, the bill from the Senate HELP Committee and the versions developed in the House make the AHRQ responsible for CER, thereby recognizing and preserving the independence of the scientific process.

The Finance Committee bill also includes language requested by industry lobbyists (pages 1138–1139) that threatens to withdraw federal funding for 5 years from any investigator who publishes a report on research funded by the proposed institute that is not “within the bounds of and entirely consistent with the evidence.” Determinations regarding such consistency would be made by the newly created research entity, which would have industry involvement both in its governance and in study design. To allow scientists — and their institutions, which receive the support for the conduct of research — to be punished for the publication of work that is not approved by this entity is essentially to cede authority over the dissemination of government-funded research to a body that is at least partially controlled by persons with a potential commercial interest in its outcome. This move would be a major retrograde step that would both inhibit the conduct of CER and call its integrity into question. In addition, because researchers and their institutions will seek to avoid such punishment, this provision is likely to result in prolonged arguments, taking place out of public view, regarding which data are acceptable to publish, thereby impeding and delaying publication. The American public, which would be paying for this research, deserves better.

CER that is performed carefully, with integrity, and free of commercial control is key to informing future health care decisions that will be important to all patients and their families. The results of such research must therefore be published freely and without intimidation or threats. Given the impediments built into the Finance Committee bill, it is important to clarify what we see as the minimum requirements for CER legislation.

First, funding for CER should be awarded by means of the peer-review system that has served U.S. science so well in the past. To substitute a commercially driven review process is dangerous, irresponsible, and likely to endanger public trust.

Second, the creation of a new, untested agency to oversee CER is likely to increase the administrative burden and cost and to delay the implementation of this initiative while a new agency and its infrastructure are created. Such a delay would be particularly unfortunate, given that other existing agencies, such as the AHRQ and the NIH, have shown expertise in both research review and funding. For some areas of research, other existing federal agencies, such as the Centers for Disease Control and Prevention and the Food and Drug Administration, have relevant expertise that could be tapped without the need to create a new agency.

Finally, the governance, design, and publication of CER must not be ceded to the industries that have a commercial interest in its outcome. Moreover, the responsibility for determining “medical appropriateness” for the purposes of insurance coverage should not be made by the same agency that is responsible for designing and funding CER.

If health care reform legislation does not promote CER that is free of the potential taint of commercial and political meddling, the public will have little confidence in the results of such research. This outcome would be extremely unfortunate, since such research has the potential to improve patients’ lives by leading to more effective medical care. The U.S. biomedical research enterprise has a long and storied history that has made it a model for other countries. It would be a tragedy if we were to squander its achievements for political expediency, in the service of short-term commercial interests. The current proposals for controlling CER in a manner unlike anything we have seen in federally sponsored biomedical research therefore should be rejected.

Financial and other disclosures provided by the authors are available with the full text of this article at NEJM.org.

Source Information

From the Tufts University Clinical and Translational Science Institute and the Tufts Medical Center Institute for Clinical Research and Health Policy Studies — both in Boston (H.P.S.); and Weill Cornell Medical School and Symphony Capital — both in New York (A.J.J.W.).

This article (10.1056/NEJMp0910747) was published on November 18, 2009, at NEJM.org.

In the next few weeks, Congress will determine the fate of health care reform. An early and important objective of the Obama administration, reform once carried an air of inevitability. But a spirited anti-reform effort and concerns about the legislation’s cost have raised doubts about its prospects.

Congressional Republicans are united in opposition to the current reform bills. Although the Democrats hold commanding majorities in both chambers, they also face defections from within their ranks. The House bill passed with a razor-thin majority; Senate action is far from certain. Articles about reform have largely focused on various implications of the House and Senate bills. But if history is a guide, equal scrutiny should be given to another legislative possibility — a “no” vote that preserves the status quo.

Recently, a committee of the Institute of Medicine (IOM) analyzed the current trajectory of our health care system. It studied the dynamics driving downward trends in insurance coverage and examined the health consequences of the lack of insurance for individual adults, children, and communities. The committee’s report,¹ released earlier this year, built on and updated the work of a previous IOM committee that issued six reports on this topic between 2001 and 2004.² Collectively, the reports of these committees (which we chaired) paint a compelling picture of the harmful health and financial effects of the status quo — not only for people without coverage but also for people who have health insurance.

Health care costs and coverage are tightly intertwined. For more than four decades, health care costs have grown faster than our national economy. As a result, health care consumes a steadily growing share of federal and state budgets and the budgets of American families. Relentless cost growth threatens employer-sponsored insurance, undermines publicly funded programs such as Medicare and Medicaid, and renders individual insurance policies inadequate or unaffordable.

Most Americans get coverage through their workplace, but the proportion is falling. Between 2000 and 2008, the fraction of nonelderly Americans with employer-sponsored health insurance declined from 66.0% to 59.7% (see graph). The recession will push the proportion even lower.

Percentage of Nonelderly Americans Covered by Employer-Sponsored Insurance (ESI), 2000–2008.

The Census Bureau revised the methods for its Current Population Survey in 2004, as shown in the graph. Data are from the Kaiser Commission on Medicaid and the Uninsured and an Urban Institute analysis of the Annual Social and Economic Supplements to the Current Population Survey for 2001 through 2009.

Several factors are driving this decline. Fewer workers, particularly among low-wage earners, are being offered health insurance. Manufacturing jobs, which traditionally provided generous benefits, have been replaced by service jobs such as those in wholesale and retail trades that typically cover fewer employees. Rising premiums are encouraging employers to hire more part-time workers and contractors who don’t receive benefits. More employers are dropping coverage; others are shifting a larger share of insurance costs to their employees through decreased wages, higher premiums, and steeper copayments. As a result, fewer workers can afford employer-sponsored insurance.

The economic forces driving these trends are unlikely to ease up any time soon. Between 1999 and 2009, the average annual cost of family coverage increased by 131%, from $5,791 to $13,375.³ It could double again in the next 10 years.

In addition, the recession has cost 7 million Americans their jobs. The effect on coverage has been mitigated, so far, by rapid expansions in public insurance, mainly for children in low-income families. The American Recovery and Reinvestment Act (ARRA) allocated $87 billion to boosting the federal share of Medicaid through December 2010. It also offered subsidies to help laid-off workers maintain private coverage through COBRA (the provision of the Consolidated Omnibus Budget Reconciliation Act that allows eligible people to purchase coverage through their former employer’s group insurance plan for a limited period).

Unfortunately, the job market is unlikely to rebound before these programs expire. And because every state is struggling with budget problems of its own, many states will cut their Medicaid programs as soon as the ARRA funding ends. The Urban Institute predicts that in the absence of reform, the costs of uncompensated care will double in 45 states over the next 10 years, and the number of uninsured could grow by more than 30% in 29 states.⁴

There is clear evidence that the way we pay for health care stimulates cost growth. A “no” vote in Congress will leave these policies undisturbed. The Congressional Budget Office (CBO) projects that under existing approaches to payment, federal spending on Medicare and Medicaid will exceed $10 trillion over the next decade. In 2017 — the year the Medicare trust fund is expected to be exhausted — the CBO estimates that Medicare and Medicaid will drain $1.2 trillion from the federal budget.

Adults who can’t get coverage through work, are too young for Medicare, and don’t qualify for Medicaid have only one option — individual health insurance. Consumer Reports describes the individual insurance market as a “nightmare” for consumers: “more costly than the equivalent job-based coverage, and for those in less-than-perfect health, unaffordable at best and unavailable at worst. Moreover, the lack of effective consumer protections in most states allows insurers to sell affordable plans whose skimpy coverage can leave people who get very sick with the added burden of ruinous medical debt.”⁵ In recent years, several states have attempted to reform the individual health insurance market, with little success.

Coverage matters. On average, uninsured Americans get about half the preventive services and medical care that insured Americans receive. Studies have shown that uninsured people with cancer, heart disease, stroke, lung diseases, and other conditions are more likely to have poor health and to die prematurely than similar people with coverage. Existing safety-net services are insufficient to overcome the gap between those who have health insurance and those who do not.

The economic consequences of a lack of insurance are equally grim. If even one family member lacks coverage, the entire family is exposed to the financial burden of severe illness or injury. In 2009, 20% of uninsured adults used up all or most of their savings paying medical bills.

When many people lack insurance, everyone’s access to care is compromised. University of Pennsylvania economist Mark Pauly and colleagues have found that in communities with high proportions of people who are uninsured, insured people are more likely than those elsewhere to have difficulty obtaining needed care and to be dissatisfied with the care they receive.¹ In such communities, emergency services are strained, access to trauma care is diminished, and a growing number of specialists are unwilling to take emergency department call.

If states cut their Medicaid programs when ARRA funding runs out, uncompensated care will increase sharply. The burden that this increase will impose on health care providers will be more than some can bear. If many safety-net clinics and hospitals close their doors, the patients these institutions serve will have nowhere else to go. When they end up in private hospital emergency departments and inpatient beds, it could trigger additional facility closures. Access to care will be diminished for the insured and uninsured alike.

Voting for the status quo may be politically tempting, but it won’t stop the steady erosion of coverage in the United States. The authors of the 2009 IOM report were blunt: “There is no evidence,” they wrote, “to suggest that the trends driving loss of insurance coverage will reverse without concerted action.”¹ Six years ago, the IOM Committee on the Consequences of Uninsurance was equally direct.² It recommended “that the President and Congress develop a strategy to achieve universal insurance coverage and establish a firm and explicit schedule to reach this goal by 2010.” That deadline is less than 2 months away.

Financial and other disclosures provided by the authors are available with the full text of this article at NEJM.org.

The opinions expressed in this article are those of the authors and do not necessarily represent those of Emory University or the Institute of Medicine.

Source Information

From the Emory School of Medicine, Atlanta (A.L.K.); and Chevy Chase, MD (L.S.L.). Dr. Kellermann cochaired the IOM Committee on the Consequences of Uninsurance from 2001 to 2004; Mr. Lewin chaired the IOM Committee on Health Insurance Status and Its Consequences from 2008 to 2009.

This article (10.1056/NEJMp0910138) was published on November 18, 2009, at NEJM.org.

References

1. Institute of Medicine Committee on Health Insurance Status and Its Consequences. America’s uninsured crisis: consequences for health and health care. Washington, DC: National Academies Press, February 2009.
2. Institute of Medicine Committee on the Consequences of Uninsurance. Insuring America’s health. Washington, DC: National Academies Press, January 2004.
3. Kaiser Family Foundation and Health Research and Educational Trust. Employer health benefits: 2009 summary of findings. Menlo Park, CA: Kaiser Family Foundation. (Publication no. 7937.)
4. Garret B, Holahan J, Doan L, Headen I. The cost of failure to enact health reform: implications for states. Princeton, NJ: Robert Wood Johnson Foundation and the Urban Institute, September 2009.
5. Hazardous health plans: coverage gaps can leave you in big trouble. Consumer Reports. May 2009. (Accessed November 18, 2009, at http://www.consumerreports.org/health/insurance/health-insurance/overview/health-insurance-ov.htm.)

The health care system has serious problems. Costs are rising at three times the inflation rate. Many Americans are uninsured. Millions more fear losing their insurance in a weak economy or because of preexisting conditions. Doctors are ready to close their doors because of high malpractice insurance costs and low government reimbursement rates.

Everyone agrees that something has to be done. But the reform proposals pending in Congress would make a bad situation worse. These bills would cause us to slide rapidly down the slippery slope toward increasing government control of health care. They contain the biggest expansion of Medicaid since the program’s creation. They impose an unprecedented federal mandate for coverage backed by the enforcement authority of the Internal Revenue Service. They will increase government spending by nearly $2 trillion when fully implemented. They give the secretary of health and human services the power to define benefits for all private plans and to redefine those benefits annually. From a new health-choices commissioner to a center for comparative-effectiveness research, these bills create dozens of new bureaucracies, increasing the federal role in health care. All of this amounts to a lot of power over people’s lives.

The House bill includes a government-run plan; the Senate’s bill may yet. A government-run plan would eventually drive private insurers out of business and lead to a government takeover of the health care system. A government-run plan is not necessary for health care reform unless your goal is to use the government’s power to drive down costs by rationing care and slashing payments to providers. In addition to limiting health plan choices and infringing on the doctor–patient relationship, a government-run system would guarantee U.S. taxpayers a staggering tax burden for generations to come.

Even worse, the bills fail to solve the fundamental problems in health care. They take no serious steps to reduce costs, either for the health care system or for individuals. The bills will cause insurance premiums for scores of people, especially those who are relatively young and healthy, to go up, not down. They tighten the allowable price variation for insurance rates, so that millions of people who are expecting lower costs as a result of reform will end up paying higher premiums.

The bills also impose new fees and taxes that will be pushed directly onto the consumer. Totaling about a half-trillion dollars over the next few years, these fees and taxes will cause premium increases as early as 2010, even before most reforms take effect. Then, after forcing premiums to go up, the legislation makes it mandatory to buy health insurance.

The bills also make problematic changes in Medicare. According to the Congressional Budget Office (CBO), the legislation imposes higher premiums for prescription-drug coverage on seniors and the disabled. The Senate Finance Committee bill creates a new, permanent Medicare commission with broad authority to make further cuts in Medicare. The damage that this group of unelected people could do to Medicare is unknown, although the top actuary at the Department of Health and Human Services recently concluded that cuts of this magnitude will limit benefits and decrease access to care for Medicare beneficiaries.

These points are good examples of the philosophical difference between the two sides. Some of us want to reduce the overall cost of the legislation, try to reduce the government’s role, make it harder for illegal immigrants to get benefits, allow alternatives to the individual mandate and harsh penalties, and reward states with extra Medicaid dollars if they pass medical malpractice reform. Instead, the prevailing plan is to move millions of people from private coverage into public coverage and create new taxpayer-funded subsidies for families making close to $100,000 a year. Yet even with all the changes, after raising billions of dollars in new taxes, cutting a half-trillion dollars from Medicare, imposing stiff new penalties on people who don’t buy insurance, and increasing costs for those who do, 25 million people will still not have health insurance under the Senate Finance Committee bill, and 18 million people will not have it under the House bill, according to the CBO. I don’t think this is what the American people had in mind when the President and Congress promised to fix health care.

It’s not too late for bipartisan legislation that builds on common ground to improve coverage and affordability, increase quality, and decrease costs. I’ve worked for years on bipartisan legislation that would change Medicare so that it paid not for the volume of services provided but for the quality of the care delivered. There’s also widespread support for health insurance exchanges and for ending discrimination based on preexisting conditions to make coverage more affordable and accessible. Allowing individuals to purchase insurance across state lines and enabling small businesses to band together when shopping for insurance are also proven methods for reducing costs and should be included as part of comprehensive reform.

Tort reform is another necessary component, since it would reduce abusive lawsuits that drive up costs and limit access to doctors. The CBO estimates that comprehensive medical liability reform would reduce federal budget deficits by roughly $54 billion over the next 10 years. The Democratic Congressional leaders have shown little interest in creating an environment in which doctors don’t have to engage in defensive medicine just to keep their practices open. The medical community should continue to argue for reasonable reforms that would cut down on unnecessary medical tests that serve no purpose other than to reduce malpractice premiums.

On several occasions, Republicans tried to take the legislative substance in a different direction. We tried to ensure that the President’s pledge not to tax middle-income families, seniors, or veterans would be carried out. We were rebuffed every step of the way.

And amendments offered by Republicans on the Senate Health, Education, Labor, and Pensions (HELP) panel and the Finance Committee to provide consumers with a lower-cost coverage alternative, similar to the high-deductible health plans and health savings accounts sold today, were consistently defeated. Those alternatives would have allowed more people to keep their existing coverage. The defeat of these amendments and the forthcoming pressures on employers and individuals mean that despite the President’s promises, a lot of people aren’t actually going to be able to “keep what they have.” In fact, given the long list of new benefit mandates and strict new actuarial-value requirements, a lot of people are going to end up paying more to meet the government’s new definition of health insurance.

Congressional Democratic leaders are advancing their extremist health care reforms with the bare minimum of votes. I disagree with that approach. Health care is one sixth of our economy — as large as the entire British economy. The legislation Congress is considering will affect every American, at every level of health and at every stage of employment. When the debate began, interested legislators of both parties set forth benchmarks that were no-brainers: Health care reform should lower premium costs, reduce the deficit, and bend the cost curve the right way. The bills before Congress don’t do any of these things.

It’s not too late to step back and start again. If both sides can set aside some philosophical differences and refocus on the principles that brought us to the table months ago, we can implement health care reform that improves the quality of life for those Americans who are suffering under the current system and that doesn’t degrade the quality of life for everyone else.

Financial and other disclosures provided by the author are available with the full text of this article at NEJM.org.

Source Information

Senator Grassley, an Iowa Republican, is the ranking member and former chairman of the Senate Finance Committee, which has jurisdiction over most federal health care programs.

This article (10.1056/NEJMp0911111) was published on November 18, 2009, at NEJM.org.

With health care reform in the air, interest groups are spending huge sums of money to influence the final legislation and other matters pending in Washington. Since 2006, the health sector has spent $1.7 billion lobbying Congress and federal agencies — more money than any other sector of the economy. Between January and September 2009, health care interests spent $396.2 million (see Figure 1), according to federal data collected by the Center for Responsive Politics (www.opensecrets.org), a nonpartisan organization that researches the influence of money on politics.

Figure 1. Top-Spending Sectors and Organizations Lobbying Congress and Federal Agencies, January to September 2009.

Panel A shows the five top-spending sectors and spending by the health sector and the insurance industry. (The breakdown in health sector spending does not include that classified as miscellaneous health.) Panel B shows the six top-spending organizations overall and additional top-spending organizations in the health sector. The total amount of money spent on lobbying Congress and federal agencies was $2.5 billion. Data are from the Center for Responsive Politics and include all data made available by the Senate Office of Public Records through October 2009. HMO denotes health maintenance organization, and PhRMA Pharmaceutical Research and Manufacturers of America.

If current trends continue, the health sector is likely to spend more than a half-billion dollars on lobbying in 2009. Pharmaceutical and health care products companies alone are likely to spend more than $250 million, and the insurance industry, which is part of another sector, more than $160 million. In all cases, these would be record annual expenditures.

The U.S. Chamber of Commerce, which represents businesses, invariably spends more on lobbying than any other single organization. Many of the other organizations whose lobbying expenditures are among the highest in the country are members of the health sector. Although some groups are spending about the same amount as in recent years, others are spending more. For example, the Pharmaceutical Research and Manufacturers of America (PhRMA), which represents pharmaceutical and biotechnology companies, has already spent $20.2 million in the first 9 months of 2009 — just $55,000 less than in all of 2008 — and ranked fourth among all organizations in spending on lobbying. Blue Cross Blue Shield, including the national association and local companies, ranked fifth (spending $16.7 million during the first 9 months of 2009, about $500,000 more than in all of 2008), and Pfizer, the pharmaceutical company, ranked sixth (spending $16.3 million, about $4.2 million more than last year). A spokeswoman for Pfizer said the company “wanted to make sure our voice is heard in this conversation.”

The Center for Responsive Politics notes that “a special interest’s lobbying activity may go up or down over time, depending on how much attention the federal government is giving their issues.” Of course, the billions of dollars that health care interests stand to gain or lose because of health care reform and other federal actions dwarf their lobbying expenditures. As the Obama administration has focused on health care, it has engaged in discussions with drug and medical device companies, health insurers, physicians, hospitals, business groups, labor groups, and many other parties. Dozens of contentious issues have kept interest groups busy, including the role of comparative-effectiveness research in coverage decisions, government negotiation of Medicare drug prices, the targeting of additional Medicare savings, and the size of the program’s payments to doctors. There has also been debate on many other topics, including mandates for obtaining health insurance, the creation of a national public health insurance plan that would compete against private carriers, coverage of abortion, other specifics of health insurance reform, the market-exclusivity period for biologic drug products, and new fees, taxes, and tax credits.

Many interest groups support some aspects of reform but not others. The Obama administration has struck deals with the drug industry and hospitals that it claims will save the federal government and Medicare beneficiaries billions of dollars over the next decade. It has pursued such strategies in order to appease critics and gain endorsements from key groups.^1,2 AARP (formerly the American Association of Retired Persons), which represents people 50 years of age or older, and the American Medical Association endorsed the Affordable Health Care for America Act (H.R. 3962), which was passed by the House of Representatives on November 7, 2009. America’s Health Insurance Plans (the health insurers’ lobbying organization), PhRMA, the Chamber of Commerce, and other employers’ groups opposed it. Lobbyists for Genentech, a subsidiary of Roche, and two Washington law firms ghostwrote at least part of the statements issued by more than a dozen lawmakers; an estimated 42 House members — 22 Republicans and 20 Democrats — used some of the talking points.³

The health sector has historically spent substantially more money lobbying Congress and federal agencies than it has on campaign contributions.⁴ These expenditures complement each other; whereas lobbying is directed at government officials and often involves specific matters, campaign contributions are for elections and may be sent to any candidate, not just incumbents. Nonetheless, as health care interests have increased their lobbying expenditures, they have also reversed their long-standing pattern of favoring Republican candidates in federal elections.⁵ During the first 9 months of the 2-year 2010 election cycle, the health sector — as well as the insurance industry — contributed more money to Democrats than to Republicans (see Figure 2). In some races, this shift could make a difference.

Figure 2. Contributions from the Health Sector (Panel A) and Insurance Industry (Panel B) to Federal Elections, January 2004–October 2009.

The health sector consists of health care professionals, pharmaceutical and health care product companies, hospitals and nursing homes, and health services and health maintenance organizations. Election cycles represent 2-year periods; the 2010 election cycle runs from January 1, 2009, to December 31, 2010. PAC denotes political action committee. Data are from the Center for Responsive Politics and include all data made available by the Federal Election Commission through mid-November 2009.

Campaign contributions represent the combined total of individual contributions and those from political action committees (PACs). The federal limit for an individual is $2,300 per candidate per election; primary and general elections are considered separate elections. The Center for Responsive Politics examines the campaign finance data reported to the Federal Election Commission and categorizes contributions of $200 or more from individual donors or PACs into 13 sectors of the economy.

In the 2008 election cycle, the sector comprising the finance, insurance, and real estate industries ranked first in campaign contributions, and the health sector ranked sixth. For all federal elections, the health sector donated more to Democrats (54%) than to Republicans (46%), and the insurance industry donated more to Republicans (55%) than to Democrats (45%). Before 2008, the last time that Democrats raised more than Republicans did from health care interests was 1992, when Bill Clinton was elected president, and the last time they raised more from the insurance industry was for the 1990 Congressional elections.

So far in the 2010 election cycle, the Democrats’ fund-raising advantage has increased. The health sector has sent 59% of its contributions to Democrats and 41% to Republicans; the insurance industry has split its contributions 54% for Democrats and 46% for Republicans. The Democrats have a broad advantage; they have received 57% of the contributions from the pharmaceutical and health care products industries, 71% of those from hospitals and nursing homes, and 55% of those from health care professionals (including physicians and nurses).

The early data for 2010 primarily reflect donations from PACs, which account for about half of contributions from the health sector and about two thirds of contributions from insurers. Notably, the health sector has contributed more than any other sector to House Speaker Nancy Pelosi (D-CA) and to House Majority Leader Steny Hoyer (D-MD), most of which is from PACs. In the Senate, Majority Leader Harry Reid (D-NV) has been the top recipient of contributions from health care professionals as well as from hospitals and nursing homes.

There are many possible explanations for the Democrats’ fund-raising advantage. They include Democratic control of the White House and Congress, the extent to which federal funding and regulation of health care and health insurance are in flux, the efforts of health care interests to maintain their access to and influence with Congressional leaders and the White House, and the health care reforms that the Obama administration has — and those that it has not — pursued. Of course, donors often hedge their bets by contributing to both parties. And the 2010 Congressional elections are a year away; more individual contributions are likely, and the distribution between the parties could change.

Even with the House’s approval of its bill, we are still early in the health care reform process, with major battles ahead. There will be ample opportunities for the health sector and health insurers to continue spending large sums for lobbying and campaign contributions. As Yogi Berra memorably observed, “It ain’t over till it’s over.”

Source Information

Dr. Steinbrook (rsteinbrook@attglobal.net) is a national correspondent for the Journal.

This article (10.1056/NEJMp0910879) was published on November 18, 2009, at NEJM.org.

References

1. Kirkpatrick DD. Lobbyists fight last big plans to cut health care costs. New York Times. October 10, 2009. (Accessed November 16, 2009, at http://www.nytimes.com/2009/10/11/health/policy/11cost.html.)
2. Kuttner R. Harry, Louise, and Barack. American Prospect. October 27, 2009. (Accessed November 16, 2009, at http://www.prospect.org/cs/articles?article=harry_louise_and_barack.)
3. Pear R. In house, many spoke with one voice: lobbyists’. New York Times, November 14, 2009. (Accessed November 17, 2009, at http://www.nytimes.com/2009/11/15/us/politics/15health.html.)
4. Steinbrook R. Election 2008 — campaign contributions, lobbying, and the U.S. health sector. N Engl J Med 2007;357:736-739. [Free Full Text]
5. Steinbrook R. Campaign contributions, lobbying, and the U.S. health sector — an update. N Engl J Med 2008;359:1313-1315. [Free Full Text]

I could not spend the amount of time necessary to provide appropriate care to my general internal medicine patients if I depended on Medicare fees. And sadly, the care that I provide to dying patients on my palliative care service is essentially pro bono if the patient is on Medicaid or another government health care program for the indigent.

A single-payer system completely controlled by the government would be a variant of the slowly failing systems in the United Kingdom and Canada. It seems appropriate to recall the aphorism “those who do not learn from history are doomed to repeat it.” We have learned from history. I believe that the majority of my colleagues would agree that, though it was initially fair, Medicare is now driving medical students away from primary care through foolishly unfair reimbursement.

The sustainable growth rate (SGR) formula, which is scheduled to reduce Medicare’s physician fees by 21.5% one week after Christmas, will (because the overhead percentage for family practice physicians and general internists is, on average, 55 to 60%²) result in a cut in net income of at least 43%. The SGR is illustrative of what we could expect under a single-payer system. Given our required yearly attempts to repeal this absurd denial of the economic realities of medical practice, I find that my students have little interest in primary care. And indeed repeated studies have shown a dramatic decline in the proportion of students who choose careers in primary care.^3,4 Tragically, since we depend on internists and family practitioners to provide the increasing number of palliative care specialists that our aging population requires, that specialty will be the next domino to fall.

The citizens of Britain and Canada are increasingly dissatisfied with their single-payer systems and are straining, with some success, to break the bonds of their tightly regulated, government-controlled health care. Grafting the British single-payer system with salaried doctors onto our current system is the wrong answer to a serious problem and is doomed to be rejected by U.S. physicians and patients; we should instead devote our energies to finding the right answer.

Melvyn L. Sterling, M.D.
1310 West Stewart Dr.
Orange, CA

Dr. Sterling reports receiving lecture fees from Wyeth. No other potential conflict of interest relevant to this article was reported.

This article (10.1056/NEJMopv0909479) was published on November 18, 2009, at NEJM.org.

References

1. Relman AS. Doctors as the key to health care reform. N Engl J Med 2009;361:1225-1227. [Free Full Text]
2. Medical Group Management Association. MGMA cost survey: 2009 report, based on 2008 data. Englewood, CO: MGMA, 2009.
3. Bodenheimer T, Grumbach K, Berenson RA. A lifeline for primary care. N Engl J Med 2009;360:2693-2696. [Free Full Text]
4. Colwill JM, Cultice J, Kruse RL. Will generalist physician supply meet demands of an increasing and aging population? Health Aff (Millwood) 2008;27:w232-w241. [Free Full Text]

No issue has dominated the health care reform debate as much as whether the U.S. government should offer a health insurance plan to compete with private insurers — the so-called public option. Congress has discussed two approaches to the public option, one of which would have the public plan pay providers at rates close to Medicare rates (generally, substantially below those of private insurers). Opposition by insurers, providers, and the business community, as well as fears that such a payment structure would lead to a single-payer system, has pushed this “robust” public option off the table. Instead, both the House bill and, presumably, a final Senate bill will call for the public plan to negotiate rates with providers. There is little reason to expect that such a plan would bring much, if any, competition to the market, since anticipated enrollment levels would give the public plan less negotiating clout than private insurers boasting many more enrollees. Clearly, whatever decision is made about a public option is much less important than decisions about the level of subsidies for expanding coverage, as well as details of the regulatory reform of the individual insurance market (including enforcement of an individual mandate), reform of the delivery system, and financing of reform.

Despite all the distracting rhetoric about the public option, congressional consideration of reform appeared to be nearing a climax until Senate Majority Leader Harry Reid (D-NV) recently signaled that the Senate may not vote on a bill until next year. As of early November, the full House had narrowly passed a reform bill, while Senate leaders had reportedly combined two committees’ bills into a single proposal. Although details of the combined Senate bill were not yet public, the House and Senate proposals are likely to be broadly similar but to differ in important details. Each will have four major components: expansion of the number of people with insurance, reform of the individual and small-group insurance markets to provide more people with affordable options, changes to the health care delivery system to encourage high-value care and slow the rate of cost increases, and tax increases and spending reductions to finance reform.

The proposals have followed the Massachusetts approach to expanding coverage — a blend of Medicaid-eligibility expansion for the lowest-income people and subsidies for purchasing insurance for those with somewhat higher incomes. Medicaid expansion would have the largest effect on low-income people, such as young adults and the near-elderly, who do not qualify for Medicaid today because they have no dependent children or disability. The federal government would fund a much higher proportion of the costs for the newly eligible than for the currently eligible, but states, overwhelmed by existing fiscal responsibilities for Medicaid, are resisting. Subsidies for private insurance would be provided on a sliding scale, but the Senate bill is likely to be less generous than the House bill. And the desire to keep the cost of reform down has led to questions about whether insurance will really be affordable for those targeted for assistance.

Both proposals would revamp regulation of the individual and small-group insurance markets, with the House favoring a national insurance exchange and the Senate presumably supporting state exchanges in which at least those Americans receiving subsidies would have to purchase insurance. Carriers would offer a limited number of products standardized by actuarial value (a measure of the comprehensiveness of coverage), a step intended to increase competition by facilitating comparison and choice for consumers. Medical underwriting — denying coverage or varying the premium on the basis of the enrollee’s medical history — would be banned, and insurers would have to accept all applicants. Rates could vary with the enrollee’s age but only by a prescribed ratio that is less than the expected age-related variation in claims.

Individuals would be required to carry coverage. As compared with continuing the voluntary coverage system, mandating coverage will lead to an increased number of insured people — for any schedule of federal subsidies. But it is also essential to insurance-market reform. Without a mandate, many people would buy insurance only when they got sick, as they have in states that require insurers to sell to everyone at the same premium regardless of health status. Subsidies for low-income people will limit the magnitude of adverse selection, which will be influenced by the size of the subsidies — a factor that will also affect Congress’s willingness to support strong enforcement of the mandate. The House bill probably has larger subsidies and stronger mandate enforcement than those that will be included in whatever bill emerges from the Senate. Both chambers would require that employers over a certain size offer employees coverage and pay a portion of their premiums. The House bill would require employers who do not offer such an option to pay taxes amounting to as much as 8% of their payroll; the final Senate bill is expected to require much smaller payments.

Policies that are designed to improve the efficiency of care delivery are related to expanding coverage and reforming the insurance market mainly in the sense that if spending continues to increase much faster than incomes, declining affordability of insurance will undo much of the gain in coverage, and costs will exceed the fiscal capacity of government. Many observers believe that the delivery system is inefficient enough that spending growth can be slowed without sacrificing quality. But it will not be easy.

Provider-payment reform and changing the tax treatment of health insurance probably hold the greatest potential for slowing cost trends. Proposed payment reforms would affect only Medicare directly — but with the expectation that other payers would follow — and would consist primarily of piloting broader reforms that would introduce elements of capitation and payment per episode. How much of a difference such changes would make depends on the degree to which Congress grants authority and resources to the executive branch or an independent board to implement successful approaches more broadly. But even with full support, success will also depend on whether the ideas for payment reform turn out to be worthy.

The reform bills include provisions for advancing health information technology and supporting comparative-effectiveness research. Many experts believe that both efforts will improve the quality of care, but it is hard to predict whether the gains will be substantial and whether costs will rise or fall as a result. The reform proposals would also expand prevention efforts, but Congress now recognizes that even though prevention may improve health outcomes, it is unlikely to reduce costs.

To avoid increasing the federal deficit, both chambers rely on a combination of tax increases and reductions in the growth of Medicare spending and other cuts — reductions in the growth of payments for providers other than physicians and payment cuts to Medicare Advantage plans. Although some observers have criticized these reductions for diminishing Medicare benefits, a more important criticism is that in the absence of reform, these policies would probably have been enacted to address the budget deficit but will no longer be available for that purpose. The House has emphasized tax increases for high-income families, and the Senate has emphasized taxing health insurance plans costing more than $21,000 per year for family coverage. The Senate approach is likely to have a powerful effect on health care costs by inducing people to shift to less-comprehensive insurance.

If combined House–Senate reform legislation makes it to the President’s desk for signature, enactment would be only a start to the reform process. Regulations will need to be written, organizations (such as exchanges) will need to be built, and midcourse corrections will need to be legislated to deal with unforeseen consequences. And since only tentative steps will have been taken to reform care delivery, policymakers will inevitably have to return to battle on that front.

Financial and other disclosures provided by the author are available with the full text of this article at NEJM.org.

Source Information

From the Center for Studying Health System Change, Washington, DC.

This article (10.1056/NEJMp0910678) was published on November 11, 2009, at NEJM.org.

Less fanfare attended the July 2009 release by the Centers for Medicare and Medicaid Services (CMS) of data on risk-standardized 30-day mortality and readmission rates among Medicare patients with acute myocardial infarction, heart failure, or pneumonia (www.HospitalCompare.hhs.gov). These data show that the mortality rate among patients with heart failure at one of the four “model systems” was significantly worse than the national rate, putting the system in the bottom 2% of U.S. hospitals. Two of the four systems demonstrated lower mortality due to heart failure. None achieved a survival rate among patients with pneumonia that was significantly better than the national rate. In contrast, both Cedars-Sinai and NYU had mortality rates for all three conditions that were significantly better than the national rates, a performance level achieved by less than 1% of the facilities included in the CMS comparisons.

Moreover, though lower mortality rates mean that more patients were at risk of being rehospitalized, the rates of readmission within 30 days at Cedars-Sinai and NYU were no different from the overall national rate. One of the model systems had significantly worse readmission rates for all three of the conditions. The Dartmouth Atlas cannot reveal these important outcome differences among hospitals because its analysis is limited to Medicare beneficiaries who died.

The Dartmouth Atlas approach purports to eliminate the need to adjust for severity of illness — all the patients were equally at risk of dying, because they all died. However, not all Medicare beneficiaries with chronic conditions are at the same stage of their disease. For some, aggressive treatment may extend their lives. A recent study of six California teaching hospitals found that the 6-month mortality rate among Medicare patients with heart failure was significantly lower at the most-resource-intensive hospital than at the least-resource-intensive one.³

The need to improve efficiency is urgent, but we must consider meaningful outcome measures if we are to avoid the unintended consequence of cutting resources that are used to save lives.

Michael L. Langberg, M.D.
Jeanne T. Black, Ph.D., M.B.A.
Cedars-Sinai Medical Center
Los Angeles, CA

No potential conflict of interest relevant to this article was reported.

This article (10.1056/NEJMopv0908995) was published on November 11, 2009, at NEJM.org.

References

1. Orszag PR. Increasing the value of federal spending on health care. Washington, DC: Committee on the Budget, U.S. House of Representatives, July 16, 2008. (Accessed November 10, 2009, at http://www.cbo.gov/ftpdocs/95xx/doc9563/07-16-HealthReform.pdf.)
2. Pear R. Researchers find huge variations in end-of-life treatment. New York Times. April 7, 2008. (Accessed November 10, 2009, at http://www.nytimes.com/2008/04/07/health/policy/07care.html.)
3. Ong MK, Mangione CM, Romano PS, et al. Looking forward, looking back: assessing variations in hospital resource use and outcomes for elderly patients with heart failure. Circ Cardiovasc Qual Outcomes, October 13, 2009. (Accessed November 10, 2009, at http://circoutcomes.ahajournals.org/cgi/rapidpdf/CIRCOUTCOMES.108.825612v1.pdf.)

With Democrats wielding their sizable majority to fend off strong Republican opposition and survive the defection of 39 members of their own party, the U.S. House of Representatives voted 220 to 215 to approve health care reform legislation after a day of contentious debate. On November 7, as midnight drew near, 219 House Democrats and 1 Republican (Representative Anh “Joseph” Cao of Louisiana) approved a measure that would extend insurance coverage to virtually all Americans by 2013. The 1990-page bill would also restructure private insurance, bolster primary care, and make countless other policy changes — but would not eliminate the scheduled 21.2% reduction in Medicare’s physician fees, a problem that Democrats plan to tackle in separate legislation before the cuts take effect January 1, 2010. Meanwhile, the action on a health care overhaul moves to the Senate, where Majority Leader Harry Reid (D-NV) has crafted a bill as a compromise between two committees’ measures and floor debate awaits only a cost estimate from the Congressional Budget Office. And President Barack Obama has weighed in, urging senators to “take up the baton and bring this effort to the finish line.”

Persuading at least 218 of 258 House Democrats to support that chamber’s reform bill took all the political skill that Speaker Nancy Pelosi (D-CA) could muster. And even those numbers were not assured until she made an 11th-hour decision to allow a vote on an amendment that would prohibit coverage of abortion by any health plan, whether public or private, that is purchased with the help of federal subsidies through newly created insurance exchanges. The cochairs of the Congressional Pro-Choice Caucus — Representatives Diana DeGette (D-CO) and Louise Slaughter (D-NY) — took strong exception to the amendment, asserting that it would “effectively ban abortion coverage in all plans, both private and public.” Yet 64 Democrats voted for the amendment, which passed 240 to 194, and then, to conclude the 12-hour debate and move reform forward, other Democrats who favor abortion rights reluctantly voted in support of the broader bill.

Making a rare weekend appearance on Capitol Hill hours before the vote, Obama urged legislators to “answer the call of history and vote yes for health insurance reform for America.” The dialogue on the House floor was expansive, both in favor of and in opposition to reform. Representative Paul Ryan of Wisconsin, the ranking Republican on the House Budget Committee, declared that the vote on reform would be “the most consequential vote each of us will take in our service here.” Asserting that the bill would create “a European welfare state,” he asked his colleagues, “What side of history do you want to be on?”

If winning House passage of a reform bill was more difficult than expected, following suit in the Senate may prove at least as challenging, given that some Democratic senators seem uncertain about how they will vote, Republicans are solidly in opposition, and independent Senator Joseph Lieberman of Connecticut has said that, as “a matter of conscience,” he will join a filibuster to block any bill that includes a public insurance option. To win cloture and defeat a filibuster, Democrats must secure 60 votes. The composition of the Senate is 58 Democrats, 40 Republicans, and 2 independents, and it is widely believed that Senator Olympia Snowe of Maine is the only Republican who may vote for the Democrats’ bill.

The bill just passed in the House would, at a cost of $1.05 trillion, extend coverage to an estimated 96% of the U.S. population (excluding undocumented immigrants), up from 83%. Expanded coverage would become available through insurance exchanges — where eligible people would receive subsidies to purchase their choice of plans — and through an expansion of Medicaid. The bill also prescribes a heavy set of regulations that would limit the ability of private insurers to deny coverage, barring them from discriminating against applicants on the basis of health status, denying coverage because of a preexisting condition, or imposing annual or lifetime limits on coverage. Through the creation of a national health insurance exchange (or possibly state exchanges), the bill would hold private carriers to greater account and require them to offer standardized benefit packages.

The House-passed bill and the measure that will soon be considered by the Senate differ in many respects. Among the most contentious questions are how to structure a public insurance plan that would compete against private carriers and what sources to tap to pay for reform. House Democrats favor a more robust public option but, succumbing to pressure applied by conservative legislators, organized medicine, and the insurance industry, Democratic leaders agreed to require the plan to negotiate its rates with providers rather than apply the administered and undoubtedly lower rates paid by Medicare. Although Reid announced that he plans to include a public option in the Senate bill, he also agreed that payment rates should be negotiated rather than imposed and said he would grant states the option of not participating in the public plan.

Unlike the Senate Finance Committee’s bill, which would tax high-end insurance plans, the House bill would raise most of its new revenue through a surtax of 5.4% on individuals earning more than $500,000 a year and couples making more than $1 million, which would yield an estimated $440 billion over 10 years. Like the Senate Finance Committee bill, the House bill relies heavily on permanent reductions in the annual updates to Medicare’s payment rates for most services other than physician services, yielding savings of about $229 billion over 10 years.

House Democratic leaders have introduced a separate bill that would replace Medicare’s current physician-payment formula and institute a policy allowing Medicare spending on physicians’ services to grow at the rate of the gross domestic product (GDP) plus 1% per year — or the GDP plus 2%, in the case of primary care and preventive services. The bill would also make permanent the current 5% bonus payment for primary care services delivered to Medicare beneficiaries and increase it to 10% for services delivered in underserved areas; it would require that Medicaid payments for primary care services at least equal Medicare payment rates and would prohibit the imposition of patient cost-sharing on recommended preventive services. Reflecting the influence of House Democratic leaders who represent urban districts and strongly support Medicare’s investment in the advanced training of new doctors, the bill does not reduce the indirect medical education payments per resident that Medicare makes to teaching hospitals. Past administrations (both Democratic and Republican) and the Medicare Payment Advisory Commission have repeatedly recommended that these payments be substantially cut.

An array of analysts, legislators, and private stakeholders have criticized the House-passed bill as well as the Senate measures for their failure to slow the rate of growth of health care costs, but the bills contain no shortage of ideas for reforming the delivery system, enhancing the quality of care, and slowing spending. Pretty much every proposed innovation found in the health policy literature these days is encapsulated in these measures. The laundry list includes the promotion of accountable care organizations, bundled payments for hospitals and physicians, incentives to reduce hospital readmissions, pay for performance, comparative-effectiveness research, gain-sharing by doctors and hospitals, and escalating the fight against waste, fraud, and abuse.

The list underscores the conviction that the status quo is unsustainable, but because the ideas are mostly offered up in the form of pilot projects, they also highlight policymakers’ uncertainty about which cost-constraining paths to pursue in search of a more efficient system. Moreover, legislators recognize that Americans have only so much tolerance for disruptive change, and they know that these limits are already being tested by the stresses of a weak economy, a mounting federal deficit, and wars in Afghanistan and Iraq. Given their diametrically opposed positions on health care reform, both political parties cannot be right, but which one will emerge triumphant is difficult to predict at this stage of the contentious debate.

Source Information

Mr. Iglehart is a national correspondent for the Journal.

This article (10.1056/NEJMp0910927) was published on November 11, 2009, at NEJM.org.

The market is about maximizing profit, and it encourages predatory behavior by participants who have an advantage, as the stakeholders in the health care system do. Because of the asymmetry of knowledge between providers and consumers, if doctors tell patients that tests or procedures are needed, patients overwhelmingly acquiesce. And perverse incentives in the fee-for-service method of compensation encourage physicians to increase the volume and intensity of their services. This is the primary driver of unnecessary care, which, according to the Congressional Budget Office,¹ accounts for up to 30% of health care spending — possibly as much as $800 billion of this year’s $2.5 trillion expenditures.

The market-based system of health insurance coverage keeps administrative costs high — consuming 15 to 25% of the nation’s health care dollars.² Behind these administrative expenditures are labyrinthine pathways for approval of services, post hoc rejection of claims, difficulties in obtaining reimbursement, the multiplicity and opaqueness of the plans offered, and the cherry-picking of policyholders — the ways in which insurance companies have made health care a nightmare for many Americans. They also use a strategy called “recission” to cancel coverage of sick policyholders by finding loopholes in their contracts. And they write policies providing inadequate coverage without explaining the limitations comprehensibly.

Insurance companies also engage in illegal conduct in their quest for profits. In January 2008, UnitedHealthcare and several of its subsidiaries were charged by New York’s attorney general “with defrauding consumers by manipulating reimbursement rates for patient visits to out-of-network doctors”³ — and other insurance companies used the same rate schedule.

The inability of private Medicare Advantage plans to deliver care less expensively than regular Medicare is another indication of the market’s failure in the health care arena. These private plans have required subsidies from the government of 13 to 17% above Medicare payment rates in order to continuing operating.⁴

Though many politicians believe that market forces and insurance companies are the best therapy for the current crisis, using them to reform the system is like putting the foxes in charge of the henhouse. It is not that market-based measures should be totally ignored in any reform proposal. They simply should not be the mainstay of our corrective efforts.

Robert A. Levine, M.D.
Norwalk Hospital
Norwalk, CT

This article (10.1056/NEJMopv0909194) was published on November 11, 2009, at NEJM.org.

References

1. Orszag PR. Opportunities to increase efficiency in health care: statement at the Health Reform Summit of the Committee on Finance, United States Senate, June 16, 2008. Washington, DC: Congressional Budget Office, 2008.
2. Himmelstein DU, Woolhandler S, Wolfe SM. Administrative waste in the U.S. heath care system in 2003: the cost to the nation, the states and the District of Columbia, with state-specific estimates of potential savings. Int J Health Serv 2004;34:79-86. [CrossRef][Web of Science][Medline]
3. Samson K. UnitedHealth charged with data manipulation scheme. Neurology Today 2008;8(6):1, 10-1.
4. Medicare’s much-too-hard sell. New York Times. May 21, 2008:A28.