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**Addressing America\'s Health Care Challenge**

We\'ve reached a unique time in our nation\'s history, where the
political reality of unfettered election year politics meets the
perennial challenge of redefining or reforming America\'s health care
system.

The history of healthcare in America over the past 60 years is that of a
very structured highly ordered scientific process, coupled with a
variety of governmental policies each aimed at achieving a specific
objective.  But very rarely do we re-examine those policies that follow,
in light of how they continue to affect things years and decades into
the future.

Case in point would be the Supreme Court decision in the mid-1940s which
allowed health and pension benefits to be paid as a pretax expense by an
employer during the U.S. Government's imposition of stringent price and
wage controls during the Second World War.  Couple that with the
decision by the administration and the Congress to provide a system of
public financing for care of seniors and the indigent with the Medicare
and Medicaid programs in the mid-1960s and all of a sudden the
government was in a position to finance a large portion of health care
provided in the U.S.

Prior to the Second World War, most health care was paid at the time of
service and was a cash exchange.  With the advent of employer derived
health insurance, and with the interposition of a large governmental
program, most health care now is administered through some type of
third-party arrangement.  While useful in that it protects the
individual who is covered from large cash outlays, there is a trade-off
in that the covered individual is generally unaware of the cost of his
care, as well the provider who may remain insensitive to the cost of
care that is ordered.  This arrangement has created an environment that
permits rapid growth in all sector costs.

America\'s challenge then becomes evident.  How do we improve the model
of the current hybrid system which involves both public and private
payment for health care and which anesthetizes most of the involved
parties as to the true cost of this care?

It is also perhaps wise to consider that any truly useful attempt to
modernize the system, the primary goal must be to protect people instead
of protecting the status quo.

We must also ask ourselves if the goal is to protect a system of
third-party payment or to provide Americans with a reasonable way to
obtain health care, and allow physicians a reasonable way to provide
care to their patients. 

Remember that the fundamental unit of production in healthcare is the
interaction that takes place between the medical professional and the
patient in the treatment room.  That fundamental interaction is the
"widget" which is produced by this large healthcare machine, and
sometimes that concept gets lost in the process.

The current situation subsidizes and makes payment to those indirectly
involved in the delivery of that "widget" and ultimately drives up that
cost.  Currently, U.S. GDP spending on health care equates to 15 percent
of GDP, about \$ 1.6 trillion.  Within that total amount of spending the
government accounts for roughly half of that amount, the commercial
market, self-pay, HSAs, for another major percentage and charity care
also factored in.  Clearly, a lot of money is spent on healthcare, but
only a fraction on direct patient care and too much on an inefficient
system and/or outright theft.   

The test before us: protect people instead of special interests.  Define
that which ought to be determined by market principles and that which
must of necessity be left in the realm of the government provider.  And
how, in all of this process, we preserve individual self-direction
versus establishing supremacy of the state.  Additionally, we must
challenge those things that result in distortion of market forces in
health care, and acknowledge that some of that distortion is endemic and
hidden and not readily changed, while some is easily amenable to change.

The key here is how to maximize the value at the production level i.e.
the provider-patient interaction in the treatment room.  How do we place
a patient who exists on that health/disease continuum more in the
direction of continued state of health?  Do we allow physicians an
appropriate return on investment, which opens up a host of questions
relating to the future physician workforce issues?  How do we keep the
employer, if involved, to see value in the system i.e. a quicker return
to work, increased productivity, and better maintenance of a healthy and
more satisfied workforce?

In regards to health insurance how to provide a predictable and managed
risk environment remembering that insurance companies of necessity are a
natural monopoly and seek that condition if left unchecked.

And finally, how do we balance the needs of hospitals, ambulatory
surgery centers, long-term care facilities and the needs of the
community as well as the needs of doctors and nurses and administrators?

Individual legislation such as H.R. 2583, H.R. 2584, and H.R. 2585 deals
with the medical workforce.  H.R. 2203 introduced in the 109^th^
Congress would provide low-income Americans with a direct subsidy to
help pay for their health care, and many others that would chart a path
toward true reform of our health care system.

**Republican Principles**

***Freedom of choice:* ** We want to see who we wish to see, when we
wish to see them.  When hospitalization is required, no one objects to
incentives, but freedom of choice must remain.

***Ownership:*** The whole concept of having a \"health savings
account\" or an \"medical IRA\" and being allowed to accumulate savings
to offset future medical expenses is a fundamental desire of many
Americans and should be encouraged.  These dollars dedicated to
healthcare should be owned by the individual and not proceed to any
governmental body upon the death of the individual.

***Independence:***  Preservation of autonomy (the patient or the
patient's designee) should ultimately be responsible for their care or
the ability to decline medical intervention.

***High Standards:*** One of the underpinnings of the American medical
system has always been high standards of excellence, and nothing in any
future change should undermine that and in fact pathways to facilitate
future growth in excellence should be encouraged.

***Innovative Approaches:*** American medicine has always been
characterized as embracing innovation and developing new technologies
and treatments.  Clearly this must be preserved.

***Timeliness:*** Access to a waiting list does not equate to access to
care.  This was the message delivered by the Canadian Supreme Court to
its medical system in the year 2005.We must diligently seek to not
duplicate the most sinister type of repression as can be involved with a
nationalized health care.

***Market Based Instead of Administrative:*** Pricing should be based on
what is actually indicated by market conditions, not that assumed by
administrators.

***Mandates in general lead to a restriction of services:** * State
mandates cause more harm than good and impede competition and choice and
drive up the cost and can limit the availability of health insurance. 
Employer mandates and individual mandates are likewise restrictive.  A
discussion of mandates should include an accounting of cost AND whether
those mandates limit availability of insurance for those that may
operate small businesses, be self employed, or self-insured.  Remember: 
Medicare Part D achieved a 90 percent enrollment rate with education,
incentives and competition, not mandates.

***Premium Support:***  Premium support is a far more useful
governmental tool than an outright tax credit.  Our tax code is too
complex as it is.  Exploring how the federal government subsidizes the
individual low-income, such as through the Earned Income Tax Credit
(EITC) it may become evident linkages to providing for health care
security are good policy options.

 

***Balance Antitrust Enforcement and Treatment Under the Law:***
 Exemption or enhanced enforcement is only likely to further distort the
market such that the desired results are in fact never attained. 
Creating winners and losers via anti-trust law actually erodes the
viability of the American health care system.

**Republican Policies**

For health care within the public sector-model, the transformation after
the experience with Medicare Part D has been instructive.  The six
protected classes of medication which were required of all companies who
wish to compete within the system allowed for greater acceptance by the
covered population and greater medical flexibility when treating
patients.  At the same time the competitive influences brought to bear
in that part the program managed to control costs.  In fact the
projection is \$130 billion less cost over the 10 year budgetary
window.  This is solely the result of competition, and the benefits from
more efficient treatment of diseases will necessarily appear later in
the timeline.

One of the most important points of the lessons learned in the Medicare
Part B program is that coverage can be significant without the use of
mandates.  Ninety percent of seniors now have some type of prescription
drug coverage and this was achieved by creating plans that people wanted
and providing means to incentives to sign up in a timely fashion.  This
emphasized the personal involvement and responsibility to maintain
credible coverage.  There was a premium to pay if individuals signed up
after the initial enrollment cycle.

Employer derived insurance will continue to be a significant player in
the American healthcare scene.  This is because it adds value to the
contract between employer and employee.  It rewards loyal employees and
builds commitments within the organization.  Businesses can spread risk
and help drive down cost, a feature of proposed association health plans
that would even allow businesses to band together to drive down cost
even further. 

Regardless of whether the system is public or private, vast changes in
information technology are going to occur and need to be facilitated. 
We\'re coming up to a time of rapid learning because of improvements of
healthcare technology and the ability to manage databases and retrieve
data in a timely fashion are going to be critical for the delivery of
healthcare and protection of patients.

Voluntary quality reporting will continue to be important.  These
programs need to be generally available and accessible to the medical
personnel who desire to participate.  Currently state quality
improvement organizations, organizations which provide a medical home
and the accumulation of utilization data are all available for the
benefit of physicians and patients alike.  This approach was a component
of a Medicare physician update proposal by Mr. Barton he offered in 2006
and it should be revisited.

Within the individual market, which would include both self-pay and the
owner of a health savings account, transparency of information must
continue to evolve rapidly.  This is going to require adequacy of the
reports that detail information about cost, price and quality.  This
information must also be linked to data detailing complications and/or
infection rates.

Web-based programs such as www.txpricepoint.org will begin to build
databases and the familiarity of the consuming public so that these will
become useful for the future.

Crafting a readily affordable basic package of insurance benefits
perhaps modeled after the benefits required under the Federally
Qualified Health Center (FQHC) program is another important opportunity
for reform.  FQHCs are required to provide a basic level of primary
care, dental and mental health services.  Providing a basic package of
benefits along this line that is affordable and available with the
option of adding on additional benefits at additional cost could be a
powerful option for many Americans.  This could remove some of the
influence of special interests and of course allow a functioning
business model to replace the draconian and institutional standards
which are now required.  Providing a truly affordable basic coverage
which insurance companies would want to market to segments of the
uninsured population could make a significant impact to coverage for the
uninsured. 

For the truly charitable:  Organizing and providing a tax credit for
donated services.  Provide additional protection under the Federal Tort
Claims Act, or perhaps a legal safe harbor from lawsuits where in good
faith charitable care is provided, would allow many other providers to
fill the vacuum for indigent care.  This could also provide for a
national standard for credentialing so that in national emergencies,
facilitate a response and medical professionals would be willing to
volunteer in these times and not avoid providing needed services out of
fear of a lawsuit.  Also, we need to shift our priorities to make
important investments in our public health system.

Trust but verify.  Trust the market to make the correct decisions, to
the extent that federal distortions can be removed.  But remember some
guidance for market principles will always be required whether public or
private.

Finally as part of this discussion there must be a rational breakdown of
the numbers of the uninsured so we understand in greater detail how to
attack specific problems.  We should never accept a blanket number of 47
million people uninsured and expect to be able to come up with rational
policies when this number obviously represents a very diverse
demographic.

Finally a point of contrast---Democrats wish to expand culture of
dependence on the state while Republicans want to expand the number of
individuals who can direct their own health care.

**Advancing American Exceptionalism**

The American healthcare system has no shortage of critics at home or
abroad.  It is the American system that stands at the forefront of
innovation and new technology.  These are precisely the types of
system-wide changes that are going to be necessary to efficiently and
effectively provide care for Americans into the future.

Consider an article in the New York Times published 5 October 2006 Tyler
Cowan, who writes, \"When it comes to medical innovation the U.S. is the
world\'s leader.  In the past 10 years, for instance, 12 Nobel prizes in
medicine have gone to American-born scientists working in the United
States, three have gone to foreign-born scientists working in the United
States and the seven have gone to researchers outside of this country."

He goes on to point out that five of the six most important medical
innovations of the past 25 years have been developed with and because of
the American system.  Now comparisons with other countries may be
useful.  It is important to remember that the American system is always
reinventing itself and seeking improvement.  But it is precisely because
of the tension inherent in a hybrid system that creates the impetus for
change.  A system fully funded by a payroll tax or other policy has no
reason to seek improvement, and as a consequence faces stagnation.

And indeed in such a system if there becomes a need to control costs,
that frequently comes at the expense of the provider.  Witness the
difficulties faced by providers within the Medicare system on an ongoing
basis.

The fact is the United States is not Europe.  American patients are
accustomed to wide choices when it comes to hospitals, physicians, and
pharmaceuticals.  Because our experience is unique and different from
other countries this difference should be acknowledged and embraced when
reform is contemplated in either public or private health insurance
programs within this country.

One final point is illustrated a recent news story in covered by a
national Canadian television broadcaster about a Canadian member of
Parliament who sought treatment for cancer in the United States.  The
story itself is not particularly unique but the online comments that
followed the story I thought were particularly instructive.  To be sure
a number of the respondents felt that it was unfair to draw any
conclusions because, after all this was an individual who was ill and
was seeking treatment.  No one could argue that point, but as one writer
summed it up, \"She joins a lengthy list of Canadians who go to the
United States to get treated.  Unfortunately, the mythology that the
state run medicine is superior to that of the private sector takes
precedent over the health of individual Canadians."  The comments of
another individual:

> \"The story here isn\'t about those who get treatment in the states. 
> It\'s about a liberal politician that is part of a political party
> that espouses the Canadian public system and vowed to ensure that no
> private health care was ever going to usurp the current system.  She
> is a Member of Parliament for the party that relentlessly attacked the
> Conservatives for their \"hidden agenda" to privatize health care. 
> The irony and hypocrisy is that position supports the notion that the
> rich get health care and the rest of us wait in line, all because
> liberal fear mongering that does not allow for a real debate on the
> state of the healthcare system in Canada.\"

One final note from the online postings:   \"It\'s been sort of alluded
to but I hope everyone reading this story realizes that in fact we do
have a two tiered health care system.  We have public care in Canada and
for those with LOTS of cash, we have private care in the United States,
which is quicker and in many cases better.\"

This is a discussion that will likely consume the better part of the
next two years of public dialogue.  The United States is indeed at a
crossroads.  It is incumbent that every one of us who believes in the
private sector involvement in health care in the United States of
America to stay educated and involved and committed to being at the top
of our game on every single day.  This is one of those rare instances
where in it is necessary to be prepared to win the debate, even though
we know we may lose the vote in the House of Representatives.  If we
adhere to these principles, we may ultimately post a win for the health
of the American people, for today and for generations yet to come.