07/2001: The Galen Report

Published July 1, 2001

The June 4 conference on “Transformative Change through Market-Driven Health Care” was a major success with full attendance throughout the day. Speakers were well prepared, and the audience was filled with experts who are health care leaders in their own right.

The conference succeeded on several levels: First, a diverse and knowledgeable series of speakers conveyed valuable information about the changes taking place in the real world, the policy initiatives that will facilitate further change, and what the new world of a true free market in the health sector would look like.

Equally important, people who are working hard to further market-based reform had an opportunity to see how this community has grown, with experts from as far away as Washington State coming to learn and share their expertise. Finally, it was great to see the U.S. Chamber and the AMA, which have been in high-profile battles over the patients’ bill of rights, come together on the critical issue of new incentives for health insurance based upon a competitive free market.

The conference also made major headlines, somewhat to the dismay of speaker Tom Scully, the new HCFA administrator. The Washington Post led with a report on Scully’s luncheon speech at the conference, saying HCFA plans to issue “detailed ratings of the quality of care” given to Medicare beneficiaries. The story seemed quite a stretch to those of us who heard the speech, and it certainly angered the medical community.

The following day, HCFA issued a statement saying the agency has no plans to “create a scorecard of ratings.” Rather, the statement said HCFA plans only to “improve the state and private information it collects on nursing homes, dialysis centers and other health care providers.”

While the headlines of the conference concerned Medicare, the substance of the conference focused on ways to get more power and control into the hands of individuals to make their own health care arrangements. Scully said he felt refundable tax credits for the uninsured are essential and regretted they were not included in the President’s tax reduction bill. He said they are a priority both for him and for Health and Human Services Secretary Tommy Thompson.

Sally Canfield of HHS and Dean Rosen of the Senate Public Health Subcommittee were cautiously optimistic in an afternoon session that progress on refundable tax credits would be made on Capitol Hill.

AIDS Drugs Not Enough

While modern medicines can perform near-miracles, even the newest and best drugs alone aren’t enough for a crisis as serious and widespread as the tragedy of AIDS in Africa. Health education and a better health care infrastructure are needed in Africa, and public policies that protect intellectual property and lift price controls are needed in developed countries. Notes an editorial in the April 20 edition of The Wall Street Journal Europe, “The hard truth is that the complex, expensive antiretroviral regime is simply not the answer to Africa’s AIDS pandemic.”

The debate about prescription drug availability for AIDS victims in sub-Saharan Africa reached a crescendo after pharmaceutical companies settled a lawsuit over patent infringement by the South African government. The problem is much larger than the need for less-expensive drugs.

The crisis is poised to affect the domestic policy debate in the United States as well: United Nations Secretary-General Kofi Annan has called on “rich countries” to contribute $7 to $10 billion to a “war chest” for a huge global fund to battle AIDS in developing nations. He is challenging the Bush administration to contribute funds that would otherwise go to tax cuts.

World Health Policy Experts Meet

Meanwhile, experts in health care and pension reform traveled from London, Brussels, Stockholm, Germany, Paris, and elsewhere to speak in Washington on April 26 at a conference sponsored by The Heritage Foundation and the Centre for the New Europe. This refreshing assembly of free-market thinkers from Europe and the U.K. explained the chilling details of their coming crises in health care and pension programs.

Dr. David Green of the Institute for the Study of Civil Society in London said the goal of the National Health Service in the U.K. is for health care to be “free at the time of service, have equal service for all, high quality, guaranteed access, and comprehensive benefits. In reality, it is the determination to keep it free at the time of service that has kept it from meeting any of the other goals.”

Paul Belien of the Centre for the New Europe (CNE) in Brussels agreed. “Gradually, health care in Europe is becoming a horror story. Access to medical care, particularly drug treatments, is driven by whether or not your disease is the political favorite of the moment.” He said there are a few bright spots: Germany, the Netherlands, and Switzerland, he noted, allow citizens to cash-out their tax-supported benefits to make their own choices for health care.

Heritage and the CNE plan to publish the proceedings.

Responsible Tax Credits

And speaking of coming publications, Mark Pauly of the Wharton School and John Hoff, health care attorney and trustee of the Galen Institute, presented their new plan for “Responsible Tax Credits for Health Insurance” at an AEI conference on April 20. AEI will publish the plan this summer, but already it is receiving kudos for getting both the vision and the details right.

AEI also hosted a briefing in April for members of the German parliament, in Washington to explore the U.S. health care system. The U.S. health policy analysts who addressed the group did their best to dispel myths about how barbaric we are in the U.S., but their perceptions are very entrenched. When they hear 42 million uninsured, they think 42 million people bleeding in the streets—a perception that leads them to disregard suggestions we might have about the value of market forces.

David Green points out that discussions with European health officials would be made easier if the U.S. were to adopt tax credits for the uninsured. Doing so would show the Europeans we are using the free market to help the uninsured.

Mark Your Calendars

July 31, 2001 Making a Federal Case out of Health Care: Five Years of HIPAA, A Cato Institute Conference. Speakers will include Richard Epstein, Mark Pauly, Fred Cate, Mark Hal, John Hoff, Greg Scandlen, and Health Care News Managing Editor Conrad F. Meier. To register, call 202/218-4633.

The Galen Report is a monthly review of health policy matters provided by The Galen Institute, P.O. Box 19080, Alexandria, VA, 22320. Grace-Marie Arnett is president of The Galen Institute; this report is compiled by editor Liz Turner. Turner can be contacted at 703/299-9550, or visit The Galen Institute’s Web site at http://www.galen.org.