It’s not difficult to see the political strategy involved here.  With health insurance premium increases in the news as of late, the health reform debate has been cast as a heroes-versus-villains morality play.  A new federal rate commission will save vulnerable Americans from the health insurance industry and its, as one Administration spokesman termed them, “wildly excessive rate increases.”

But, as veteran health policy journalist Robert Pear writes in today’s New York Times, there are serious flaws with this populist initiative.

For one, health insurance premiums are already regulated by the states.  As Sean Dilweg, Wisconsin’s insurance commissioner, said, “The federal proposal would be a huge pre-emption of decisions that states have made over their history.”

It’s important to note here the difference between what states actually do and the new federal responsibilities being proposed.  When states analyze proposed insurance rate increases, they look at the entire picture.  What are overall healthcare costs?  How much of an increase can consumers reasonably absorb?  What is essential to keep health insurers solvent?

In Pear’s story, Kansas insurance commissioner Sandy Praeger put it this way, “You are not necessarily helping the consumer if you keep rates artificially low.  What’s worse for the consumer:  having a premium increase or having to pay the full amount of a medical expense because the company is out of business?”

State insurance commissions work without fanfare, making their decisions on the basis of objective data and analysis.  A federal rate commission would be under a harsher spotlight and under greater pressure to reject rate increases, regardless of their merit and necessity.

This issue is another indicator of how the health reform debate has lost its essential focus.  When we should be discussing how to implement delivery reforms to improve both the quality and cost-effectiveness of care, as well as steps to expand the accessibility of private insurance, instead a disproportionate amount of attention is being devote to excessive hyperbole about insurance companies and proposed “solutions” that could make those companies less solvent and, thus, less available to those who need coverage.  Consumers are not being well served by the direction of this debate.

That’s why I have to give credit to USA Today.  This week, the newspaper devoted more than an entire page to an interview with Abbott Laboratories CEO Miles White, who was speaking at a USA Today-sponsored forum at Michigan State University.  In an interview, Miles gave his views and perspectives on a panorama of issues.  It’s a piece well worth reading because Miles makes important points on, for example, why the differentials on what people in different countries pay for drugs should be treated as an international trade issue.  Among some of the highlights:

Miles White on different pricing for pharmaceutical products around the world…

“In most countries around the world, when we seek licensure of our product, there’s negotiation with the government over the price of that drug.  It’s a government-run health care plan in France, Germany, etc.  And they’ll just impose a price decrease.  We have not much to say about it. 

“People will say to me, isn’t the U.S. consumer subsidizing the availability of drugs in the rest of the world?  You know what?  That’s true.  The issue isn’t something a consumer can manage.  It’s a trade issue that governments have to manage.

On the industry providing medicines to people in need…

“I’ve never sat in a meeting where we looked at a drug and somebody said, ‘But, gee, we can’t make money on it because it’s only for poor people.’ We happen to have one of the leading (anti-HIV) drugs in the States, and we provide it either free or below cost.  And we developed heat-stable forms of it so (in poorer countries), it didn’t have to be refrigerated.  We do have a social obligation to balance with our financial obligations.”

On the next major pharmaceutical challenges…

“I have a particular passion and focus on Alzheimer’s and diseases of dementia.  There’s just so much scientifically that we don’t know, and we can know.  And because so many of those patients are institutionalized for there are, if we can find ways to solve that, we not only (improve) quality of life for the patient, but we also prevent the medical system from being burdened by enormous cost as we age.”

On partisanship in Washington, D.C…

“I’m as disgusted as anybody with what I see as the inability of Washington to be collaborative.  I think, ‘Why don’t you guys put down all of your Republican and Democratic shields and arms and uniforms and think about this on behalf of the American public, setting ideology aside here?”  Because most of us are in the middle.”

As we consider these two views, it’s good to get a little perspective.  That perspective is brought to us from the Times of London.

The Times recently reported an appalling instance.  Cost-cutting to meet government budget requirements took priority over providing hospital patients even basic, decent care.  Doctors and nurses “stopped providing safe care because they were preoccupied with government targets and cutting costs.”  This negligence and maltreatment led to the deaths of between 400 and 1,200 patients at this one hospital alone between 2005 and 2008.

What did British hospital patients face?  They “went unwashed for weeks, were left without food or drink and were even unable to get to the lavatory.  Some [patients] lay in soiled sheets that relatives had to take home to wash, others developed infections or had falls, occasionally fatal.”

The daughter of one of the hospital’s victims has founded a grassroots group that serves as a watchdog over the British health bureaucracy.  “It is time that the public were told the truth about the very large number of excess deaths in NHS (National Health Service) care and the very large number of avoidable but deadly errors that occur every day,” Cure the NHS’s founder Julie Bailey said.

Don’t get me wrong.  We need to be concerned in our own country whenever there are systemic errors that threaten patient safety and diminish quality.  But it’s important to note that the kind of gross neglect that British patients bear up under is quite rare in the United States.  The difference here is that most Americans enjoy the benefits of private healthcare.  Even those in a government health program like Medicare or Medicaid share the blessings of the private health sector’s significant role in U.S. healthcare.

Again, our system has flaws that need fixing, but let’s make sure we keep this discussion in perspective.

Specifically, those of us who signed the ad are emphasizing that there must be two core elements to any health reform measure that becomes law, specifically:

•    Create a cost-effective Medicare payment system by establishing incentives for doctors and hospitals to offer the highest quality care at the most reasonable cost.  This will reduce unnecessary procedures and ensure Medicare is viable for future generations.

•    Coordinate basic, private insurance offerings and provide sliding-scale subsidies to enable all Americans to purchase health insurance.

Many of us have argued for some time now that health reform is indeed achievable if Congress will agree to strip away the political and ideological excesses that lead inevitably to partisan gridlock, and focus on these vital elements – give people of modest means the ability to gain access to the system through private insurance, and then improve the system so that we’re paying for quality instead of simply volume of services.

We’ve signed onto the ad in Roll Call because we believe it’s not too late to get this done.

With the clock running, it’s more than a little dispiriting to see that some politicians and interest groups, instead of trying to craft a middle-ground solution that can gain strong popular and political support, are turning to an old chestnut of a strategy.

Let’s beat up on the insurance companies.

As we head toward next week’s bipartisan White House summit on health reform, a loud refrain is being heard right now.  We need to pass health reform in order to protect Americans from the big, bad insurers.  The linchpin for this chorus is the premium rate increase that Anthem Blue Cross proposed in California.

There’s a problem, though, with this storyline.  Rather than an indictment of health insurers, the Anthem Blue Cross episode is actually a cautionary tale of what can happen when health reform ideas take a wrong turn.

As the Wall Street Journal points out in an editorial yesterday, Anthem had to propose a higher-than-normal rate increase because of policies developed by the state of California.  Where most states have created subsidized high-risk pools for the unemployed and those with health conditions, California requires private insurers to cover the unemployed whose COBRA benefits have elapsed, and then caps the premiums they can be charged.  So, in a state that has been hit hard by the recession, many young, healthy Californians are dropping their insurance coverage, leaving insurers to cover a population with much higher average health costs.

This is exactly what could happen on a national scale if Congress adopts health reform legislation that requires private insurers to take all comers, regardless of pre-existing health conditions, but doesn’t also include a strong requirement that all citizens acquire coverage.  If it’s advantageous for those with low annual health expenses to pay a relatively small fine and wait until they’re sick or injured to buy health insurance, they will do so.  That will leave insurers in the undesirable position of having to increase premiums or go out of business.

What is lost in the current conversation is the fact that health insurers have been advocates of reform.  Company CEOs like Angela Braly of WellPoint and Ron Williams of Aetna have been on record for some time – before health reform legislation was even introduced – calling for an end to pre-existing condition barriers.

That’s why it’s disappointing that some voices in Washington, DC are trying to re-energize the health reform movement by demonizing a sector of the health care industry.  Haven’t we learned from past failures that there is a better chance of success with collaboration than there is with confrontation?

Where might these lawsuits arise?  Writing in the Journal, Curt Levey, the executive director of the Committee for Justice, points toward the legislation’s creation of “new federally enforceable rights and obligations, layers of complex federal regulations, and dozens of new programs and agencies — not to mention 50 brand-new health ‘exchanges’.”  Legal action would contest everything from questions of constitutionality to procedural disputes to individual coverage challenges to contests of bureaucratic decisions implementing the legislation.

Levey emphasizes that “there’s enough vague and ambiguous statutory language to keep lawyers employed for decades.”   For instance, some provisions that call for HHS’s broad rule-making could end up being litigated “as an improper delegation of congressional authority.”  But the number of lawsuits would especially mount from individuals’ case-by-case disputes.  People would exercise their “new-found right to essential health benefits.”  Legally challenging limitless, routine coverage decisions could well spring forth in droves.

Policymakers should take a closer look at the prospective litigation explosion that could come from health reform legislation.  The last thing we need to do is worsen the “culture of blame” in the health system.  This adversarial culture already hinders patient safety gains and quality improvement.  But pending legislation could well cause healthcare to “become even more costly and adversarial, with patients’ concerns crowded out as doctors focus on avoiding lawsuits and federal investigations, and insurance companies and regulators blame each other for every problem,” Levey writes.

Unfortunately, the health bills the Senate and House have passed omit legal reforms that would actually lower health costs.  States like California and Texas have adopted caps on noneconomic, or “pain and suffering,” damages in medical liability cases.  Those caps have helped hold down providers’ liability insurance costs and given a level of predictability in the legal system.  And they haven’t deprived wrongfully injured patients from being made whole when there’s a legitimate claim.  The Congressional Budget Office has estimated that this sort of liability reform would actually lead to health cost savings of $54 billion.  Some have judged CBO’s savings estimate to be on the conservative side.

Recently, the National Healthy Mothers, Healthy Babies Coalition (HMHB) launched Text4baby, a free mobile information service designed to promote maternal and child health.  Text4baby provides pregnant women and new moms with information they need to take care of their health and give their babies the best possible start in life.  Women who sign up for the service by texting BABY (or BEBE for Spanish) to 511411 will receive free SMS text messages each week, timed to their due date or baby’s date of birth.  Since the launch, over 10,000 women from all 50 states have been registered for the program.

According to its sponsors, the text4baby campaign is the first free, health education program in the U.S. to utilize mobile phones.  Among the sponsors are three Healthcare Leadership Council members:  Johnson & Johnson, Pfizer, and WellPoint. 

I would like to commend these three organizations for taking part in such an innovative health outreach program.

But are we moving toward bipartisanship?   Politico reported on Tuesday that a House leadership aide,  in a speech to a national health policy conference, said that a path has been developed to move the current House and Senate bills through Congress and onto the President’s desk.  In essence, the House would pass the Senate health reform bill, and then a package of changes to the Senate bill would pass both houses.  In the Senate, this would require using the controversial budget reconciliation process and evading the conventional 60-vote threshold necessary for most major bills.  Under reconciliation, Senate Democrats could push the health reform revisions through with just 51 votes, over the objection of Republicans and moderate Democrats.

Then, under this scenario, the President would first sign the original Senate health reform bill into law, and then sign the legislation with revisions.

Are the American people receiving conflicting signals?  On one end of Pennsylvania Avenue, the President is talking about the need for Democrats and Republicans to work together and find common ground.  At the Capitol Hill end of the avenue, there is talk of one party going it alone and ramming highly controversial legislation through the remaining stages of the lawmaking process.

So which will it be?  The public has made its views very clear, as exemplified by a USA Today poll last month that shows a majority of Americans want Congress to cease work on the current health reform legislation and develop an alternative that can draw support from both political parties.

The concern here is that erecting barriers – be they legal or political – to prevent an individual health insurance mandate makes essential health reform impossible.  Everyone wants to ensure that every citizen can purchase health insurance regardless of whether they have a pre-existing health condition.  We can’t take that step, though, unless everyone – young and old, high and low healthcare spenders – are in the system. 

If only those with high healthcare costs are in the insurance system, and the healthy low-spenders can hold off on purchasing coverage until they actually need it, then premiums are too high for everyone.

A major problem is that policymakers have done too little to engage in a dialogue with the American people on why a mandate is essential and on the value of having health insurance coverage.  That’s what I discussed in the Disruptive Women piece.  Let’s hope it’s not too late to correct this omission in the health reform process.

He makes important points about the need to emphasize care coordination between physicians and hospitals, the noticeable absence of medical liability reform which leads to rising defensive medicine costs, and the pressing need to make the financially challenged Medicare program more cost effective. 

To watch the full interview go here.