Consumer Power Report #248

Published November 19, 2010

Yesterday’s Finance Committee hearing on Capitol Hill marked the first time the U.S. Senate has had a chance to ask questions of Centers for Medicare and Medicaid Services Director Donald Berwick, whose controversial recess appointment earlier this year remains an item of much frustration among Senate Republicans. Health Care News played a key role in forcing that recess appointment, as an investigation turned up video of Berwick’s remarks in the United Kingdom, which led to a dramatic increase in attention for his views. You may have seen these clips before – if you haven’t, you can see one of them here: Donald Berwick Comes to Capitol Hill

I was in the room for Berwick’s hearing – it was a packed house, with a massive overflow room – but for all the attention, little was said of note during the shortened session. The Republicans on hand spent much of their time complaining about how little time they had – an accurate criticism, but hardly a good use of the limited opportunity.

Sen. Orrin Hatch and Ranking Member Charles Grassley asked decent questions, mostly regarding statements in Berwick’s testimony which conflict with the analysis of CMS Actuary Richard Foster and the Congressional Budget Office. When it came to criticisms of double-counting savings, Berwick testified that he understood it to be a “standard accounting practice” (for who, Bernie Madoff?). Grassley brought up Berwick’s broken promise to hand over information regarding his conflicts of interest – read more about questions about Berwick’s financial interests here – and the CMS head gave the answer that he could no longer request such financial info because conflict of interest regulations prevent him from requesting it from his own organization. (The technical term for this among Capitol Hill staffs is “bull.”)

Other than that, Senate Republicans failed miserably in their questioning of Berwick. Sen. Pat Roberts left early, Sen. John Ensign asked three similar questions about Safeway’s methodologies, and Sen. Bunning’s remarks mostly consisted of warning Berwick that he’d have a lot to answer for on the House side in the coming months. Not one single member brought up Berwick’s past statements. They did not find the time to ask him about his “romantic” feelings for the NHS. They did not ask him about his statement that “I cannot believe that the individual healthcare consumer can enforce through choice the proper configurations of a system as massive and complex as healthcare. That is for leaders to do.” Or his view that we shouldn’t “put [our] faith in market forces. It’s a popular idea: that Adam Smith’s invisible hand would do a better job of designing care than leaders with plans can.” Or his stated opinion that “Any health care funding plan that is just, equitable, civilized, and humane must, must redistribute wealth from the richer among us to the poorer and the less fortunate. Excellent health care is by definition redistributional.”

As for Chairman Max Baucus, who had publicly decried the recess appointment when it happened (though privately, staff assured me he approved of the tactic), he refused to commit to another hearing with Berwick at any point in the near future. All told, Senate Republicans had fewer than 30 minutes to question the man referred to as the most important health policy figure in the country, and perhaps five minutes touched on matters of true importance. Sen. Hatch said, “This is pathetic.” Yes, it is.

I fully expect Berwick to spend time before the House of Representatives almost exclusively next year – and when he does, I hope they will ask the questions the Senate ought to have asked yesterday.

– Benjamin Domenech



The New York Times has noticed the trend: “As Obama administration officials put into place some of the new rules that go into effect under the federal health care law, they are issuing more waivers to try to prevent some insurers and employers from dropping coverage and also promising to modify other rules because many of the existing policies would not meet new standards. … Concerned about the potential disruption that would be created by enforcing the new rules, the administration has granted dozens of additional waivers and also made clear that it would modify other rules affecting these policies.”

Every time the administration issues a waiver from its health care law, questions come to mind. Why is the waiver necessary? Is it merely a delaying tactic, or a legitimate need? As the number of organizations receiving waivers climbs, one wonders how many organizations are not being approved for waivers, and are keeping silent about it at the moment? And how many of these waivers are simply a form of political repayment? As the Times notes: “Last month, federal officials granted dozens of one-year waivers that were aimed at sparing certain employers, including McDonald’s, insurers and unions who offer plans that sharply limit the coverage they provide.” Note that third category – unions – and for a partial list of unions which have received waivers thus far, read this entry from Labor Union Report. For a full list of approved waivers, which ought to be updated regularly in the coming months, head to the HHS OCIIO site.

SOURCE: New York Times


Here’s an interesting study from Robert Kneller on the pathways drugs take toward approval, demonstrating the need for further innovation in this space. Of the 252 drugs approved by the Food and Drug Administration over a period from 1998 to 2007, Kneller finds that 58 percent came from pharmaceutical companies, 18 percent from biotech companies, 16 percent from universities transferred to biotech, and 8 percent from universities transferred to pharma. Of the 252, 49 percent were for what he classifies as an “unmet medical need,” 46 percent were scientifically novel, and 21 percent had an orphan designation. Of these last, 60 percent were attributed to U.S. inventors. Small established pharma companies produced only 3 percent of all the new drugs in this time period. The whole analysis is full of interesting information.

SOURCE: The Heartland Institute


Politico reporter and friend of Heartland Sarah Kliff has a story this week on the first significant tweak to President Barack Obama’s law that might actually get signed: a planned amendment to the package sponsored by Sens. Scott Brown (R-MA) and Ron Wyden (D-OR) to allow states to opt out of the individual mandate sooner than they would under the original legislation (under the original language, which Wyden helped assemble, states must wait until 2017 to do so). There are quotes regarding transparency and battling one-size-fits-all solutions – which is all good, of course.

But is this really a significant step? By merely changing the date, Brown-Wyden leaves intact the restrictive requirements states would have to meet to obtain the temporary waiver, which really does not answer the problems of many states. In fact, as I have argued repeatedly, the only reform I see that could meet the waiver requirement is a single-payer system.

I propose a solution to this problem in the upcoming release from Heartland, which includes Seven Big Ideas for the new Congress (a tease, I know – more on this in a few weeks). You’ll have to wait for the release of the booklet to read the whole argument – but I believe someone will be beating Brown and Wyden on this tactic, taking the approach to a larger level than just a change in the date when states can buck the individual mandate. States deserve more than a one-size-fits-all solution, and Washington should allow states to return to their roles as pro-market laboratories for democracy even as we work towards overall repeal.

SOURCE: Politico


Minnesota Gov. Tim Pawlenty had a piece on repealing Obamacare state by state in the San Diego Union Tribune this week. It’s a timely reminder that the fight over this law is not confined to Washington, or to the progressing cases brought by state attorneys general across the country, but is in the statehouses as well. As new legislators and new governors take on their roles, they should be mindful of the responsibility they have to push against this policy, and not merely adapt to it. Pawlenty notes “The great tragedy of Obamacare is not only that we know it will fail, but that we have not implemented health care reforms that we know will succeed.”

Policy innovators at the state level need to work to implement what can be implemented, finding the areas where reforms can still be applied, and, if necessary, defying Washington outright. Health policy reform should not stagnate simply because of this sweeping, ill-thought step – and it’s our responsibility to be sure it does not.

SOURCE: Sign On San Diego


Andrew J. Rettenmaier and Thomas R. Saving share this report from the National Center for Policy Analysis: In the next decade, Medicare is slated to go from paying doctors 18 percent more than Medicaid reimbursement today to paying less than Medicaid. A few of their major points: “Prior to the new law, Medicare spending per beneficiary in 2010 dollars was expected to rise from $11,000 to just over $13,000 by 2019. Under the new law, Medicare spending is projected to be only $11,571 in 2019. … The lower Medicare spending mostly reflects a reduction in payments to health care providers,” which will fall to an average of almost a third less than what private insurers pay. As Rettenmaier and Saving point out, “This could lead to an increasing number of providers who are unwilling to treat additional Medicare patients and may opt out of the program.”

The burden and cost of Medicaid is, of course, so substantial that states across the country – Texas, Washington, Nevada, and others – are considering dropping out of the program entirely. Could the Medicare of the future look more like the horror show of Medicaid? It’s a shame we couldn’t spend more time asking the head of Medicare and Medicaid (who emphatically supported President Obama’s legislation) what he plans to do under this situation. Perhaps Congress ought to send a note to see if he’s available sometime.

SOURCE: National Center for Policy Analysis