The Brutal Reality: Health Care Today = Increased National Debt

In their book "Confronting Reality; Doing What Matters to Get Things Right," Larry Bossidy and Ram Charan put forward a statement that has implications for everyone in our country today. They state, "To confront reality is to recognize the world as it is, not as you wish it to be, and have the courage to do what must be done, not what you'd like to do." Very appropriate to describe the reality of the financial situation in our country.

Last week, Erskine Bowles and Alan Simpson, Co-Chair of the National Commission on Fiscal Responsibility and Reform submitted their "Co-Chairmen Proposal" for tackling the $13.7 trillion dollar debt facing our country. This debt is the result of the policies and entitlement expectations we have accumulated over the years (not just over the past two years) and was exacerbated by the Great Recession of 2008 experienced in the global economy. We are now facing a level of debt that jeopardizes the economic foundation of the country.

We have posted their proposal on our website at http://www.collaborationhealthcare.com/ and you can also look at it by clicking HERE.

We encourage everyone to take a look at it. It's only 50 pages and is mainly a "powerpoint on paper" highlighting the key messages. It has already been blasted for its lack of specifics. I look at it more as a starting point, not the final solution.

Those on the right have been critical because it includes tax and revenue increases. They believe there is already plenty of revenue- just not enough spending discipline.

Those on the left have been critical because it takes on some of the entitlements that have historically been off-limits; Medicare and Social Security.

The brutal reality is that we need some combination of addressing both.

Why is this topic included in my health care blog? Because health care (Medicare/Medicaid) is a major contributor to our debt and our lack of action in the past is impacting our businesses in the private sector and ultimately negatively impacting our economy. It's only going to get worse and it's time to quit arguing about the way to fix what we know needs to be fixed - and just do it. The impact of our debt is going to impact every American sooner or later. To fix our debt problem and our economy we must begin to change the way health care works whether we have laws that require it or not.

Some are still in total denial that the problem is as bad as others are making it out to be (AARP and the Natinal Committee to Perserve Social Security). On the other hand, David Cote, Chairman and CEO of Honeywell International and one of the committee members, was shocked to find out how bad our situation actually is.

The first founding principal of the Debt Reform document states, "We have a patriotic duty to come together on a plan that will make America better off tomorrow than it is today." America can come together when it wants to. Unfortunately it usually some type of crisis or catastrophe to make it happen.

The country has an opportunity to address a real issue before it is too late and becomes a catastrophe. This is beyond politics or ideology. It's time we confront the reality, become informed, and recognize it's going to take some sacrifice from everyone.

We have said before that fixing health care is critical to fixing our economy. Let's quit putting the ideology in front of the actions- as stated by Bossidy and Charan- "we need to have the courage to do what must be done, not what we'd like to do."

Republicans- It's Time For Specifics and Not Just Campaign Rhetoric

The $4 billion the country spent on this last election should be looked at as a little boom for the economy. Political consultants, media buyers, the hospitality industry, and others tied to the various campaigns got a little boost in revenue. So, that's good. You see, we can find money to spend when we want to.

While we had to suffer through the nauseating attack ads that are now part of the norm, we watched a country tell its government it wanted a change in direction. This was by no means an embracing of the Republican Party as the devout Republicans would like to think. It was the independent citizens telling the government they didn't like the direction the country was heading and wanted change. The level of trust in government is at an all-time low- for both major parties. In two years if we're in the same place, the same thing will happen- we'll have another change.

Now that the Republicans are driving the bus (or at least near the front) they now have an opportunity to step up to the plate with specifics on what they intend to do. They have been exceptional in the complaining department (and have brought up justifiable concerns). It's just they have been woefully short on the specifics of their alternatives. They now have the chance to show what they can do.

Repealing the health care reform legislation is becoming a central battle-cry for the "new government." Minnesota Governor Tim Pawlenty is leading the charge as he explores his presidential run for 2012. On CNN he once again denounced the "takeover of health care by the federal government" and instead wants to rely on the "free market" to do its magic- but there are not a lot of specifics beyond that. Michelle Bachmann (R MN) has jumped on the bus as part of the Tea Party movement commenting during her debates that she believes allowing consumers to purchase health care across state lines will solve the problems we have in health care. This is all great political-speak for the free-market purists, but, exactly what are you going to do and exactly how will it work? I guess they haven't got that far yet.

Solving our health care crisis is an economic issue, it is a debt issue. It is no longer simply a campaign debate. Health care (even before the reform legislation) was dragging our economy down. We seem to have lost this fact in all the political talking points we've heard over the past year. Medicare/Medicaid spending are the two biggest components of our growing national debt (along with Social Security) and is only going to get worse as the Baby Boomers create a tsunami within the Medicare system. The same is true for Medicaid as the rolls of recipients expand as a result of our depressed economy.

Regardless of what one thinks about the legislation that was passed earlier in the year (Pawlenty called it "the worse piece of legislation passed in modern times") it brought the issue of health care near the top of the national agenda- where it should be. Our health care system is (and has) impacted the competitive positioning of employers and thus impacts jobs- this is nothing new. It has economically wiped out average citizens and created hardships for many others with the fragmented and costly inefficiencies that are part of it today. Everyone agrees the health care system we have today is unsustainable for the future.

As Republicans assume their new role it's time they move beyond the broad generalities outlined in the Pledge to America and through the campaign rhetoric. They will likely find once again (as Democrats found in 2010 and as Republicans should have learned in 2008) that campaigning and governing are two totally different animals.

Americans are open to new ideas. Instead of focusing on the campaign message of "Repealing Obamacare" let's hear what your specific alternatives might be. The health care crisis is not going away.

Americans are listening and waiting to hear what you have to say. You've got two years.

Another Election- Colbert and Stewart To The Rescue?

I wonder if all the ghosts and spirits of Halloween can stir up some miracle for many of the Democrats on Tuesday. I doubt it.

It looks like the balance of the legislative process is going to shift back to the right- the House and many Governors will likely be Republican when all of this is over. There is still a chance (an outside chance) the Senate may move that way as well. Many of the pundits have speculated that this shift will simply result in a partisan stalemate in Congress we have never experienced before. I suppose you can just add it to the list. We haven’t experienced a lot of this before.

George Will (Conservative columnist from the Washington Post) argues this is the way the Founding Fathers intended things to work; partisanship is natural and the different bodies making up our structure of government were never intended to be bosom buddies. They were intended to provide the checks and balances required to protect our freedoms and the rights and responsibilities outlined in the Constitution. Disagreement is good. Partisanship is simply the result of having political parties with different ideas. He thinks the process is working.

But, I wonder.

I wonder if the Founding Fathers envisioned a legislative process paralyzed by politics when the country needs it most.

There’s enough blame for this to go around to everyone. It's time to fix it.

Yes, the Democratic leadership went too far when developing some of the policies important to its agenda. They didn’t have a choice in some areas- in others they did.

In health care they went too far given the circumstances we were dealing with as a country. They very likely figured they had only one shot at reforming the mess we have today and had to go for all the marbles- and that assumption cost them. The process was ugly and the final product was so complex and undefined almost everyone remains confused about what it is. The responsibility for communicating the “messaging” about the big picture has been assumed by cable news since everyone else has done such a poor job. And, most of the population does not like the content of the messages we’ve been hearing. As expected, the focus on reforming the insurance market and getting everyone covered under some type of coverage has overshadowed the real reform that could save billions of dollars and many lives over time.

While the effort may have been too ambitious for the country at the moment there are still many things included the legislation that make a lot of sense. Unfortunately, we remain focused on all the bad stuff and very few even hear about some of the other positive steps.

Payment reform that rewards value as opposed to volume when setting reimbursement approaches for care delivery is a huge step forward. Coordinating care more effectively between care-givers, improving technology use, enhancing the focus on wellness and prevention as opposed to sickness, and expanding community health initiatives are all critical areas needed to fix what we have. They don’t get much play in the world of politics today but should remain a focus whether in a law or not.

The elections on Tuesday will (once again) shake-up the political make-up of our democracy at all levels. These elections may very well impact whether we can, in fact, be successful in reforming our health care system to protect our economic foundation down the road. I hope and pray that after these elections the two sides can work together toward a common goal of creating the health care system that is accessible and affordable for all citizens whether it’s included in actual law or not. It’s just the right thing to do.

After we digest the results on Tuesday maybe we need to look for an alternative approach. If they can’t do it in Congress, maybe we should ask Jon Stewart and Stephen Colbert to help out.

It seems like they make more sense than anybody these days.

Health Reform- To Repeal or Not To Repeal

The emotions created by the election rhetoric are moving full-steam ahead. One of the mantras of the Republicans is to “Repeal Obamacare.” The Democrats are scared stiff and refuse to discuss anything that hints toward “bigger government”- thus, they aren’t even bringing up health care reform. Word has it that consumers/citizens are fed up with it anyway and have shut down. Big mistake if that’s what happened. Consumers/citizens need to get involved and need to be informed now more than ever. Not fixing health care (with PPACA or not) will only lead to an economic calamity even worse than the housing/mortgage crisis we’re trying to dig out of today.

So, what do American health care consumers want?

We know we need to fix what we have. The costs are unsustainable, the quality is irregular, the access is spotty, and, quite simply, too many Americans are being hurt (financially and otherwise) by the system we have today.

By all measures, we’re divided in our support of what was produced by Congress earlier in the year (PPACA). It’s safe to say most are not really familiar with the “big picture” with what was produced in the first place. The strategy and purpose of what our country needed to fix was overrun by politics and emotions. The fear of “big government” has become the prominent message as opposed to the proper message of fixing one of the major issues facing us as a nation and protecting the economic foundation of this country.

Most Americans are not familiar with the details of the legislation and have been influenced by the loudest talking points (I would argue that most of our legislators are not all that familiar either). And yet, we hear the message to “repeal Obamacare because that is what the public wants". Is it really what the public wants or is it that the Republicans simply want to stick-it to the Democrats?

Kaiser Family Foundation recently completed an informal analysis of eight major polls completed over the past month asking Americans whether they favored repealing the legislation we have today. They found the results were all over the board ranging from a high of 51% in an NBC News/Wall Street Journal poll, to a low of 26% in the September, 2010 Kaiser Tracking Poll. They determined the results were dependent upon how the questions were worded and where the questions were placed (as we all learned in Marketing Research 101).

A Bloomberg Poll completed in early October found consumers support (>70%) protection for high-risk individuals, eliminating pre-existing condition restrictions of insurance companies, and eliminating the Medicare prescription drug doughnut-hole as part of any reform initiative. They would like to get rid of the tax on employers for “generous” benefit plans and are uncertain of the individual mandate requirement.

There is no doubt that the PPACA is cumbersome, complex, and has been communicated extremely poorly. Many, many items in the law could be improved. We would have hoped the legislative process could fix what doesn’t make sense and keep what does. Unfortunately, with the way we are polarized today that’s not going to happen. This is a war between Republican and Democrat, nothing else.

If the Republicans are going to continue to call for a full repeal of the law (Michelle Bachmann) they had better have an alternative to replace it. They are only contributing to the confusion of the individual consumer by promoting their position today- and we need the consumer/public to be on board of anything is going to work.

One alternative is Republican Representative Paul Ryan’s, “A Roadmap for America’s Future; Version 2.0.” Ironically it includes many of the items already included in the Patient Protection and Affordable Care Act as part of his health care solution- there are parts of the legislation where both sides agree.

I guess even if you agree with it, it just depends from which side of the aisle you are on to determine if “Repeal Obamacare” is part of your mantra or not.

And, it’s a sorry state of affairs for the American people and no wonder we’re confused

A New Report Card For Our Government- Stay After School

If my kids would have brought home a report card like that reported in a recent Washington Post/Kaiser Foundation/Harvard University Poll evaluating the consumer perspective of the federal government we would have had a nice long chat. Not surprisingly, we don’t think our government is working very well- and the report card reflects it. This poll was conducted between September 22 and October 3, 2010 and included a representative sample of 2,054 adults over the age of 18. We’ve posted the survey results in our library if you want to dig into the numbers further.

Here’s how we graded our government:

The Military= B+

Our Own Representatives in Congress= C

The Federal Court System= C

President Obama= C

Democrats in Congress= C-

Federal Government in General= D+

Republicans in Congress= D+

Not a report card to be proud of (except the Military where I am extremely proud)

This is no surprise. Our economy remains very fragile and the unemployment created as a result of the Recession of 2008 remains too high. This recession hit hard at a very personal level to millions of Americans. The basic question we are struggling with is how much can or should the government be involved to fix the systemic problem we have created.

While we are stuck in polarizing politics (which will get even worse with the upcoming mid-term elections), nearly 80% of Americans feel our government can be run well. However, most feel it is currently dominated by special interests with a lot of money looking out only for themselves as opposed to the good of society in general.

Economists and citizens are statistically split between increasing government spending (50%) and avoiding deficits (46%) as components of the economic strategies necessary to dig out of the mess we are in. This will continue to be debated and studied for years in the future.

Almost all agree we are not getting the value out of the tax dollars we contribute to make our government work.

When asked whether the government actions threaten our personal rights and freedoms we are surprisingly at the same level we were at in 2000- before 9/11. Fifty-two percent of Americans feel the federal government interventions are not a threat to liberty and personal freedoms both in 2000 and in 2010. But, Rush Limbaugh, Sean Hannity, Glenn Beck and others are making inroads arguing otherwise.

Health care continues to be a primary item of uncertainty for most Americans. While they are skittish about the impact health care reform most remain uncertain and confused by the impact the PPACA will have on their lives.

These results are another indication that we have a long ways to go as a country. However, most Americans still believe that by working together and eliminating the self-interests dominating our political processes today we can make it work. Congress has a long road to climb to get Americans on board. It may take a change in the seating arrangement after the November election as part of the process. Either way, they are going to have to stay after school for quite awhile to improve on the grades they have today.

A Pledge to America- Good Political Move; Not the Solution We Need for Health Care

I can’t remember when politics in this country has been so polarizing. It seems like we’re all pulling in different directions. Thomas Friedman hit it on the head last week when he wrote, “For democracy to be effective and deliver the policies and infrastructure our societies need requires the political center to be focused, united, and energized. That means electing candidates who will do what is right for the country not just for their ideological wing or whoever comes with the biggest bag of money. For democracies to address big problems- and that’s all we have these days- requires a lot of people pulling in the same direction, and that is precisely what we’re lacking.”

All of the name calling, finger pointing, and blaming is not going to solve the big issues we face today. It’s time to pull together and figure out how to pull ourselves out of this mess.

The Republican side came out with their Pledge to America last week. Obviously trying to replicate the success of the Contract with America that was launched by Newt Gingrich in the 90s, the Pledge basically continued the name calling, finger pointing, and blaming that is the standard operating procedure of politics today.

You can't disagree with some of the facts presented in The Pledge. Our government has grown too much and is involved in too many things. The deficit is a huge concern and needs to be addressed. However, the free market (however you want to define it) has also proven that it runs into problems when left on its own. There needs to be a balance. Health care is a prime example.

The Pledge calls for repealing the legislation that is in place today. We do not disagree that the PPACA is confusing, complex, and went too far in some areas. But, that’s what you get when you can’t work together and operate in a partisan manner. That’s how our government operates today. The most recent Kaiser Tracking Poll found over half of the population is confused by the law. Most have not read it and can’t begin to put it into context. Most Americans can only determine their perception of the law by personal experience and by emotions. And remember, most Americans receive the majority of their information about health care reform through cable news- not the most unbiased source in the world.

The Pledge believes PPACA should be repealed and replaced with enacting malpractice reform, allowing consumers to purchase health insurance across state lines, and emphasizing the use of Health Savings Accounts. We’ve heard all of these before. We’re sorry, these will not solve the mess we have with a shortage of primary care physicians, increasing medical technology and pharmaceutical costs, and the tremendous inefficiency in health care delivery we have today. The Pledge does not even address what it would do with Medicare and Social Security- the largest components of the budget and the deficit challenge we are facing.

Repealing PPACA is a nice political talking point as long as American’s remain confused with the broader problems we face in health care. Both sides have done a terrible job of objectively communicating a complex issue to the American people.

If PPACA does end up getting repealed (which it won’t) I hope those who wrote The Pledge can come up with better and appropriate ideas than they have included in this draft. A better idea is to take what we have and work together to make it better- but that ain’t going to happen with the political culture we have today; and that is sad for America.

Our Governor Is Not Going To Play Nice With Health Care

On August 31, 2010 our Minnesota Governor, Tim Pawlenty signed Health Care Executive Order 10-12; Directing State Departments and Agencies Regarding Discretionary participation in the Federal Health Care Law. This was our governor’s attempt to essentially tell the Patient Protection and Affordable Care Act to take a hike.

Now, our governor is probably running for President and he’s made his views very clear concerning any government involvement in health care- and anything else for that matter. This Executive Order was a political statement more than anything else. You can’t object to legally directing those in our government to use some discretion in requesting and using federal funds- if we don’t need it, don’t take it. That’s not the way government works. The only way to filter spending is to hold someone accountable- Pawlenty is assuming that role and I can’t object to that.

It’s the way he did it that bothers me. Instead of a directive focusing on federal and state fiscal responsibility- he used it as a political statement. Here’s a “fact-check” of the reasons supporting his Executive Order:

1. PPACA was signed on March 23, 2010:

True

2. PPACA is a dramatic attempt to assert federal command and control over this country’s health care system and reduces individual freedom for health care decisions.

PPACA establishes the framework at the federal level, and allows the states to implement as they see fit. Pawlenty is free to participate or not. However, the reason the government set some framework is because the private sector could not or would not do it on its own. Somebody needs to take control of health care spending before it breaks the bank.

3. PPACA is unprecedented federal intrusion into the individual liberty including the mandate to purchase health insurance.

This one would be easy to fix- have the health insurance companies eliminate pre-existing conditions for those who can’t receive coverage today and not require everyone to participate. They won’t do it- and we can’t have it both ways.

4. PPACA is funded by taxes and fees coupled with unrealistic assumptions purported for future cost savings.

This is true, to an extent. The only reason the cost assumptions are "unrealistic" to some is because nobody is willing to give. Hospitals, health plans, consumers, and employers will need to realize the old way is not sustainable. The days of $0 co pays are over, fee schedules will be determined by value, and the technology will be dispersed efficiently instead of on every street corner. If everyone embraces the broader need and sucks it up a little the assumptions may not be all that far off.

5. PPACA increases federal spending at a time when the government debt threatens private sector economic growth.

Yes it does- but if we don’t do something, the unfunded liability of our health care debt could bring our entire economic picture down in the not so distant future. Just advocating for more HSAs, competition across state lines, and malpractice reform is not going to cut it. The problems we have created are much deeper.

6. PPACA includes many demonstration projects intended to speed the transition to federally-controlled health care.

This is just silly. The intent of all of this is to organize care better than it is organized today. Once again, if the private market wanted to do it- it should have by now.

Pawlenty’s Executive order would have been much more palatable if he had just stated that since health care represents over 1/6 of our national economy- and since fiscal responsibility is of paramount importance- all requests for funds will need to be directed and approved by his office.

But, he’s running for President, so I guess he felt he needed to create a buzz. That’s the way we do it nowadays.