12/2001: The Galen Report

Published December 1, 2001

I have been criss-crossing the country and, as a result, I have no idea what—if anything—is happening in Washington on health policy. But I can report on some of the conferences and events I have been participating in.

Los Angeles

In Los Angeles, I spoke for an hour to 100 judges attending Chapman University’s symposium on “Health Care: Economics, Law, and Public Policy.” These judges were tough customers who cross-examined me throughout the presentation, but they seemed genuinely interested in and intrigued by ideas for free-market options to help the uninsured gain access to private health coverage.

One Circuit Court judge from Chicago was skeptical about where people would purchase insurance with a refundable tax credit and how people would negotiate the complex world of insurance coverage.

I explained the market would respond with new group plans qualified under government rules and organized by existing health plans, churches, associations, trade unions, and companies like John Deere that would aggressively market for customers, just as health plans currently do for federal workers during open enrollment. And the plans would figure out how to make their products distinctive, understandable, and affordable to gain subscribers.

Sue Blevins, president of the Institute for Health Freedom in Washington, spoke at lunch, tackling the important issue of the federal medical privacy rule.


Then it was on to Boston, for the Harvard Conference on Strategic Issues in American Health Care. (I’m saving my name tag with the Harvard insignia and the “Faculty” ribbon below my name, along with my speaker badge from earlier this year at the London School of Economics, arranged by CIVITAS in London.)

Jeff Goldsmith, president of Health Futures Inc., gave the keynote speech at the Harvard conference about the innovative idea of actually engaging consumers in the decision-making process about their health care. He suggested bureaucratic structures are breaking down as it becomes more and more difficult to please everyone through a centralized decision-making system. Eureka!

Interesting facts: Goldsmith says Humana covers five million people through its various health plans. How many different health plans does Humana offer? 100,000!

Greg Scandlen, the authority on defined contributions, hosted a morning session to help health plan administrators, doctors, and hospital executives learn about this next wave in employee benefits.

In the afternoon, I also talked about consumer choice initiatives, including a brief discussion of defined contributions and rollover of unspent balances in Flexible Spending Accounts, plus more detailed discussion of refundable tax credits for the uninsured. If you would like to view my PowerPoint slides, please go to www.galen.org/news/HarvardSchoolofPublicHealth1.ppt.

New York

Then I went east to New York for a briefing about prescription drugs and the Galen Institute’s proposal for a Prescription Drug Security Card for Medicare beneficiaries.

One concern about the proposal is that it breaks Medicare’s social contract: Benefits should apply equally to all, regardless of income. The PDS Card is universally available, but the program is subsidized for low-income participants.

Will this satisfy the political concerns? I’d like your thoughts. For the latest version of the paper describing the plan, please go to www.galen.org/news/102601.html.

While in New York, I took a taxi to the Empire State building, where the observation deck has just reopened. It was late afternoon, cold and windy with a drizzle just beginning. Ground Zero is about 30 blocks south, too far to see anything but the hole in the sky where the Twin Towers should have been and the smoke still rising from the ashes. There are two strobe lights somehow elevated to show where the buildings were.

New York felt like a city collectively holding its breath, with President Bush in town for the World Series and Michael Jordan playing at Madison Square Garden with the Wizards. There had been a bomb scare at the adjacent Penn Station and fire trucks, police cars, police dogs, and uniformed officers were everywhere. But the city was safe, and New Yorkers are remarkably resilient and brave in going about life as normal. This still is the world’s most vibrant and exciting city.


I’m writing from a wonderful mountain cabin in Sundance, Utah, outside Salt Lake City, at the foot of snow-capped mountains for the Health Sector Assembly sponsored by the AMA, Pfizer, Johnson & Johnson, Amgen, and Purdue Pharma. About 60 health care leaders will talk about the implications of terrorist attacks on the health care system and work to find common ground on aging and chronic care. More later.
Grace-Marie Turner


The Private Sector’s Quick Response to Bioterrorism
Grace-Marie Turner
Galen Institute 10/24/01

As the anthrax scare has exploded over the past week, modern technology’s solutions have emerged like a quick strike force. Medical treatment was instantly available with the antibiotic, Cipro. The manufacturer, Bayer Corporation, is ramping up production to produce 200 million doses in three months. And now, new technologies are being offered to the U.S. Postal Service to sanitize and kill anthrax or other bacteria before the mail is sorted, delivered, or opened. If the government were to steal these companies’ intellectual property, what possible incentive would they have to continue to make such an investment for the future so they can be ready to respond to the next threat? It is clearly in all of our interest that the government respect the rules of play so the private sector can continue to be a vital partner in the war against terrorism.

Find the article on the Galen Institute Web site at http://www.galen.org/news/102301.html

Rx for a Healthy Drug Industry
Laura Dykes
Pacific Research Institute, 10/31/01

Dykes analyzes the consequences of government attempts to micromanage the pharmaceutical industry both in the United States and abroad. The conclusion: “Government meddling has been shown again and again to reduce innovation and patient access and to increase government spending.”

She warns heavy-handed congressional action in the U.S. threatens to discourage pharmaceutical companies from developing new treatments for anthrax and other bioterrorism threats. Now more than ever, government must not discourage pharmaceutical research and development.

Economic Stimulus and the President’s Proposals for Unemployment Relief and Additional Tax Cuts
Jeff Lemieux
Progressive Policy Institute

The best economic message that official Washington can transmit is its absolute seriousness about protecting America and a commitment to sound, effective government. Lemieux says any economic stimulus should come from improvements in the traditional recession-fighting policy of the federal government: unemployment relief.

He argues Congress should focus on helping workers maintain their health benefits and ensuring that as many unemployed workers as possible receive some benefits and training. “That will boost confidence more than a hastily constructed package of emergency tax cuts,” he concludes.

The Galen Report is a monthly review of health policy matters provided by the Galen Institute, PO Box 19080, Alexandria, VA, 22320, Web site www.galen.org. Grace-Marie Turner is president. The report is complied by editor Elizabeth Lamirand, who can be contacted at 703/299-9550.