Consumer Power Report #250

Published December 6, 2010

In Washington on Friday, the vote on the much-discussed deficit commission report failed. This is irrelevant–the commission’s report already has done its part in terms of shifting the conversation toward cutting deficits and tackling our entitlement issues. Alan Simpson and Erskine Bowles’ bipartisan effort has its critics on the right and left, but I find the report useful merely because it starts conversations that have been far too long coming, about what programs we really need to reform, and soon.

The criticism that has the most weight, however, comes in the arena of health care. Rep. Paul Ryan (R-WI), the incoming Budget Committee chairman and thorn in the side of the White House policy shop, was candid in his announcement that he would vote against the plan. He said the commission “advanced this conversation to the adult level that some of us have been struggling to get it to for a long time,” but added the report “not only did not address the elephant in the room–health care–it made it fatter.”

For comparison’s sake, read this PDF from the Kaiser Family Foundation comparing the different scenarios under the varied policy plans offered by the commission, Ryan, and others with the aim of addressing our burgeoning debt problem. Some of the definitions used are disappointingly vague and allow for a great deal of double standards–such as that seen within this Center for Budget and Policy Priorities analysis of the Rivlin-Domenici alternative proposal, which includes the concept of a premium support system. Apparently, a government-run health plan for those under 65 “would likely spur competition.” It seems the only kind of competition some of these anti-market organizations support is that of government competing with the private sector, which is rather like allowing one football team to play and referee at the same time–see Grace-Marie Turner for more on this.

More disappointing, on the whole, is the fact that Simpson and Bowles did not directly address the problem of President Barack Obama’s namesake health care law, which must be solved before any progress can be considered. But then, it is his name on the letterhead, too.

In any case, what the White House’s deficit commission has achieved is to move the conversation on a handful of items into bipartisan territory, if they weren’t fully there already–items such as “aggressive” medical malpractice reform, which they endorse; repealing the late Edward M. Kennedy’s Community Living Assistance Services and Supports Act, or “CLASS Act”; broad reform of Medicare’s cost-saving rules; tying Social Security dollars to life expectancy; and giving seniors single combined annual deductible and catastrophic protection.

I wonder if the White House and its allies on Capitol Hill will even allow a vote on any of the above reforms, now that they’ve been endorsed by their own bipartisan commission? Won’t that be a story if they don’t? Or, should I say, when they don’t?

— Benjamin Domenech



Some good news about the marketplace: People want consumer-driven health care, even if the government seems focused on ending it as soon as possible. According to a release from the Employee Benefit Research Institute (EBRI): “The ranks of people enrolled in either a consumer-driven health plan (CDHP) or a high-deductible health plan (HDHP) reached 22 million in 2010. … The EBRI report found that enrollment in CDHPs rose to 5 percent of the privately insured population (5.7 million people) in 2010, up from 4 percent in 2009. Enrollment in HDHPs increased to 14 percent of the privately insured population (17.2 million people) in 2010, up from 13 percent in 2009.” Now if only we had a government that was interested in what people want.

SOURCE: PR Newswire


This week Douglas Holtz-Eakin and the helpful folks at the American Action Forum released a series of memos for the new Congress on potential legislative objectives; oversight responses; and defunding strategies for the new Congress to consider in dealing with President Barack Obama’s health law. I particularly liked the recommended hearing format under the oversight memo, which includes this point:

“Prior to the PPACA, 163 million workers and their families received health insurance coverage from their employers. The Obama Administration and congressional proponents of the law insisted that a key tenet of the law was to build on this system of employer-sponsored coverage. To do this, the PPACA included an employer mandate requiring firms with 50 or more employees to offer health insurance or face a federally enforced excise tax. … Since the PPACA’s passage, state governments and major private employers have indicated that the coverage drop rate may be substantially greater than this initial estimate.”

They outline the scenario, then suggest the following questions for inquisitive members of Congress: “In light of the employer reactions to PPACA mandates, should the Obama Administration adjust estimates on the drop in employer healthcare coverage? If a larger employer coverage drop occurred, what would be the impact on the federal budget deficit?”

I think we’d like to hear the White House answer those questions, even if we already know what they’ll probably say.


The previous item assumes, of course, that anyone from the White House would show up to answer such questions. I wrote a “live-blog” two weeks ago for The Heartland Institute‘s blog from Medicare chief Donald Berwick’s first hearing before the U.S. Senate, where he dodged nearly every question of serious import (and there were only a few). Berwick is clearly not interested in answering any questions at all, from anyone–he avoided journalists, rebuffed a reporter on the way out of the hearing, and actually called hotel security to avoid facing questioners at a conference: “NCQA staff told reporters that Berwick was ‘not going to take any questions leaving, and he has asked us to respect that.’ After one reporter protested, he was escorted from the conference room at the Washington Court Hotel, and Berwick’s staff called hotel security to help find an alternate exit for the public official.”

I don’t see why the reporters are so interested in Berwick–it’s not as if he is one of the most important health policy officials in the nation who has expressed controversial views or refused to testify about lingering conflicts of interest.


Leveraging social media has been a topic of much conversation in the drug industry in recent years, but the usual suspects seem dedicated to blocking any such activity, using the power of the Federal Trade Commission. Last week, a Ralph Nader-backed conglomeration of “consumer groups” filed a massive complaint with the FTC according to Thomas Sullivan, who writes that “Although it asks FTC to investigate health media, including WebMD, HealthCentral, Google and AOL, it is aimed also at pharma and pharma marketers and is designed to smear virtually all use of digital media to target patients and professionals. It calls out several digital targeting techniques and asserts that they are unfair and deceptive, thus subject to FTC jurisdiction.” To condense the 144-page complaint down to a more palatable form: Facebook for we, but not for thee.


Writing at Forbes, Merrill Matthews assesses a question several states are considering at the moment: Should the states opt out of Medicaid entirely?

He lays out the attendant challenges: “The best solution–and one most states would jump at–is to allow states to choose a block grant for their federal Medicaid allotment, or some portion of it. But the key to making a block grant work is to give the states more flexibility to meet the needs of their citizens. For example, two years ago Rhode Island sought and received a waiver proposing a capped federal financial obligation for significantly more state flexibility. The state now boasts $150 million in savings in 18 months–a win-win. If a state is convinced it must opt out, it might choose to focus on those with long-term care and nursing home needs and let the poor who need Medicaid for health insurance–mostly children and nondisabled adults–move into the newly created, subsidized health insurance exchanges.”

But this is a steep road, which will require a grant from HHS or Congressional action–or possibly both. We shall have to see about making that road smoother.


On last week’s edition of the Health Care News podcast, I had an interesting conversation with Heartland Institute health policy expert Avik Roy concerning the effect of recent Washington policies on the pharmaceutical industry. Roy has written in the past on the question of why the pharmaceutical pipeline is currently clogged, and he points out the ludicrousness of certain policies being pushed by Washington–including taxes that cost more to administer than they bring in.

For another good piece on this question, read Peter Pitts’ latest on the importance of keeping the United States as a leader in medical innovation from the most recent Health Care News.