Town Halls, Emotions, and Doing Nothing

Well, we've certainly made it interesting again. The health care debate has moved out of the realm of practicality, and right to the emotional. Any discussion or debate about changing the health care system is inevitably going to have some emotional charge to it. But, as we've said in previous posts- the emotions are now driving the decision-making, instead of doing what is right.

So far, over $57 million has been spent on ads both for and against health care reform. As expected, and as good advertising is supposed to do, some of them went right to the gut. And, also as expected, some cross-the-line to achieve what they intend to achieve; to scare the public. The advertising buzz-words of "Death Panel", "Pulling the Plug on Grandma", and "Rationing" have hit the mark with the general public (whether true or not) creating the scenes we've seen at the Town Hall meetings. And, quite honestly, those defending the ideas have not done a very good job in defending them.

The Center for Responsive Politics indicates just 5 health-care related organizations dumped another $8 million into the lobbying effort in 2008 to influence (or nudge) the legislative process. In 2006, the combined spending for health care lobbyists was the largest of any of the industry segments spending almost $200 million. We're sure that's going to double at least for 2009.

The result- We have an angry public, a partisan country, and a health care system that continues to deteriorate financially.

We honestly don't know what is going to happen with reforming our health care system. Public support has deteriorated, the economic outlook (deficit) has not surprisingly deterioriated, and we have a partisan divide in this country that has grown bigger instead of smaller. As we've said in the past, Obama has lost control of the message and the process.

We're hearing from one side that reform may not happen at all. We're hearing from the other side that they may start to use the legacy of Senator Kennedy as the platform to revive the public support for health care reform. We'll know more when Congress returns next week. From what we've seen so far, it's not going to be pretty.

It's pretty obvious that the structure of the current legislation (HR 3200) is not where the country wants to go. But, as we said in our HR 3200 Cheat Sheet, the legislation does address most of the structural challenges facing the health care system today. We're hoping the Senate can come up with some bi-partisan compromise that makes sense and starts to address the challenges facing our system and ultimately the challenges facing our country.

We need a solution that maintains the individual liberties our country is founded on and still protects the economic foundation of the country for all. We're on the wrong trajectory today. Quite frankly, I'm tired of hearing "we have the best health care system in the world and should just leave it alone." We may have the best health care- but we absolutely do not have the best health care system. Doing nothing is really not an option- we've got to strike a balance.

We need to remember (and the real message should be): This isn't about where we are today- this is for our children and our grandchildren- they are the ones that will be really paying the bill.

Let's Not Blow It

Last March we wrote a newsletter outlining 6 things we felt President Obama would need to master in order to move our country toward real health care reform. Back then he was positioned pretty well. He’s gone downhill since then.

We closed the March newsletter with the comment, “He’ll need to execute flawlessly with his team to make it happen, and he’ll need to maintain the public support to come up with a plan that balances our individual freedoms with the social responsibility that is expected in our country today.” He hasn’t delivered on this one.

It’s obvious that Obama’s health care discussion is in shambles. We’ve read the House Bill and can’t agree with it (you can see our summary by clicking here). It was too expensive, complex, and confusing in our view (especially regarding the Public Option). There was a logic behind it that made some sense and there were some ideas included that are worthwhile to explore further in the context of what is needed to fix some of the structural problems existing in the system today.

When we reviewed the language we based our interpretations on our views of the challenges facing our system from our years of working in it. We did not interpret “Death Review Committees” the same as “Comparative Effectiveness Research”. We did not interpret “Encouraging Euthanasia” the same as “Advance Care Planning”. But, it’s obvious that these other interpretations and messages have hit home (despite whether they reflect the intent) and HR 3200 is not the direction the country wants to go).

We’re in the process of reviewing the “most visible” Senate bill (Kennedy Bill) so we’ll post our summary on it when we’re finished.

So, what’s the strategy going to be?

In absence of some Divine Intervention to consolidate whatever comes out of the Senate with the House bill that meets the needs of everyone, we’re going to need to (as much as I hate saying it)- slow down. Politics and the loss of public support have won this round. Ramming through a health care reform package that is not at least perceived as somewhat bi-partisan and is not supported by the American people would be political suicide for those doing or supporting the ramming. We’re certain that taking this kind of action in the hostile environment we have will also minimize the chances of success. We need to succeed on this for our country- the right way.

We need to step back, take a breath, take a look at what we have, and determine where we go from here. While deadlines are good, they shouldn’t be met at the sacrifice of achieving the overall goal. But, we also shouldn’t put this on the back-burner again. The health of our economy is going to depend on this.

The Democratic Party is now in “defense mode” and the Republicans have a wonderful opportunity to present other options. But, I honestly haven’t heard what the Republican solution would be. I’ve heard a lot of talk of MSA’s, tax credits, more competition, free market, etc. being thrown around as components- but these ideas are not going to correct the structural changes that currently exist in the system we have today. If someone has the Republican “plan” out there it needs to be more visible.

It’s already ugly and, unfortunately, will probably get uglier before we’re all done unless something changes. As we had hoped would occur from the beginning, both sides need to reach across the aisle to develop a solution that respects the principles maintained by the other and produces the result that is right for the American people for now and for the future.

We’ll say it again, “He’ll need to execute flawlessly with his team to make it happen, and he’ll need to maintain the public support to come up with a plan that balances our individual freedoms with the social responsibility that is expected in our country today."

Health Care Reform- A Classic Marketing Challenge

Let's say you are in your basic Marketing 101 Course and your instructor gives you the following statistics and scenarios:

1. 70% of the market feels your product (widgets) needs to have a major product overhaul with how it is produced. The market feels that sometimes it's a pain to buy your widget when they need it, it's confusing to use on occasion, and is starting to think your widget costs too much. But, in reality it really doesn't know for sure because in most cases somebody else is paying for it.

2. 80% are generally satisfied with the widget(s) they have purchased or have used over the years.

3. And, you (as the maker of widgets), have more than enough information to acknowledge that the way you produce and deliver your widgets today is not sustainable under your current business model and you know that you are going to have to pass more of the expenses on to your customers (the 80% that is satisfied) in order to survive; the 80% number is going to decline over time.

What do you do?

The items above provide a pretty basic view of what we're dealing with in health care. A new CNN/Opinion Research Corp. poll of Americans provided the statistics for #1 and #2; we added #3 as a pretty safe assumption.

The "marketing answer" on how to spin your position is going to depend on which side of the debate you are on.

For those who feel the health care debate is a "non-issue" and only requires some minor adjustments, you're strategy is going to be focused on relying on the "80% Satisfied" as your foundation. Why try to reform something that 80% of the market is satisfied with? Why go to all of the expense of revamping when your customers are satisfied. They like the widgets they have. You might try to keep Items #1 and #3 in the background. You'll have to acknowledge they exist to some extent, but most customers like what they have so we won't rock the boat.

For those who feel a total revamp of our system is required, you'll be focusing on Items #1 and #3. You'll have to acknowledge item #2 but the main message is going to point to all of the flaws in the system of today, probably some bad guys to pin it on, and trying to get some of the "80% Satisfied" to move in your direction.

The marketing effort of the health care debate is about to take off. The "Harry and Louise" initiative in the 90's proved that marketing can have a dramatic influence in the public policy debate of health care. And, we've all seen from the political ads of the past how far some are willing to go to get their point across, truthful or not. Whether we acknowledge it or not, the basic consumer still does not fully understand how this system works and is looking for information. The general public will be very vulnerable to the marketing messages that are created over the next few months.

We've got our views on where we think this should end up. But, we've been following it daily and studying and evaluating all of the options on the table. We believe we have come to an "informed conclusion" on health care reform based upon our views of the relevant information and research. We will listen, but won't be as vulnerable to the marketing strategies that are about to be launched from both sides.

Let's hope that the messages that are about to hit the airwaves are informative, truthful, and present all of the facts so individuals can make their own "informed conclusion" on health care reform. We hope the outcome doesn't once again boil down to who has the most money or can scare the audience the best. We hope the messages focus on the real health care issues facing our country to help the market understand and comprehend the realities we're facing.

This is too important an issue to only focus on "spin". We can't forget the substance behind the ideas.

The Economic Realities of Health Care

Adam Smith is credited as being the father of economics. He introduced the idea of the "invisible hand" where (as his thinking went) people pursuing individual self-interests simultaneously served the interest of society. He also introduced the initial thoughts related to "perfect competition" which has provided the basis for our own free-market thinking today. Perfect competition, however, had several key components required before a real free-market existed. These components included: 1. No single participant can influence prices, 2. a free-flow of information exists among all market participants, 3. There are no barriers to entering a market, and 4. There are a large number of buyers and sellers.

As our health care debate continues, and despite our preference for free-market approaches, it is fairly apparent that our health care economy isn't operating by any "invisible hand" and doesn't include any of the components of "perfect competition" so some level of intervention is likely needed. The level of that intervention is at the center of the debate today and the key is going to be striking the right balance between the two. This idea has been the centerpiece of the Collaborative Health Care System principles we established three years ago.

A study completed on behalf of the American Medical Association found that out of 314 metropolitan markets across the country, 94% are controlled by one or two health insurance companies, or fewer. In 15 states, one insurer has 50% or more of the entire market. While the insurance industry questions the methodology used in this study, other studies have supported the fact that limited competition exists in most markets for the delivery of health insurance services. And, as the consolidation of the health care market continues, these numbers will likely continue to increase. That's the reality.

On the other side, a 2006 study of hospital systems found that one or two hospitals controlled the market in 88% of the nation's largest metropolitan areas. When you have dominant carriers going up against dominant delivery systems, it's no wonder we have a difficult time in coming up with a "free-market" pricing structure that benefits the system as a whole. We're lacking the invisible hand.

We honestly don't know if a "public option" is the answer. Those supporting this approach are using the idea of introducing more competition into the marketplace as the reasoning behind it. We question whether a government injected solution is the right approach.

Once again, it's all about the message. It's not about whether we have a public option included or not. The real issue is about the need to change the basic economics of a system that desparately needs to change. Monopolies dealing with monopolies just don't work. So, if we're going to strive more closely toward a free-market, perfect competition approach, the free-market supporters had better come up with a better solution than what is being thrown around today.

We haven't heard it so far.

Health Care Reform- Public Opinion Is Changing

A new Washington Post/ABC Poll shows that public opinion on the health care reform debate is starting to change. The public's approval of Obama's efforts has dropped from 57% in April, to 49% today. Disapproval has increased from 29% to 44% during the same time period. Most of the change is the result of the change of view of the independents who make up a significant portion of our electorate today.

We now expect the "p.r. machines" on both sides to start to work to try to influence the numbers- just like in the 90's. And, it's quite sad. It is very likely that whoever comes up with the best marketing gimmicks (whether truthful or not) will get their way.

We understand that this is all part of the democratic process. We welcome the dialogue and debate that should occur between ideas to come up with a compromise solution that is best for our country. We too are concerned with the deficits that are being built-up that will be left to our children, our grandchildren, and our great-grandchildren to get us out of the mess we are in today. But, we are even more concerned with remaining with the "status-quo". The numbers speak for themselves- reforming the way health care is delivered in our country is key to our economic stability in the future.

A recent Harvard University study found that in 2007 over 60% of the bankruptcies in our country were in some way related to medical/health care issues. Numerous studies predict the out-of-pocket costs paid by individuals will continue to increase and at some point will become unaffordable. Savings built during a lifetime of participating in the work-force are being wiped-out by a single medical event. Employers will continue to struggle with the costs of healthcare as they continue to be a significant competitive disadvantage when competing in a global marketplace.

The public needs to understand that health care reform isn't about whether we have a "public plan" option or not. In many respects, it's not about the "uninsured". The public needs to understand that the model we have today will very likely lead to economic disaster in the future. The public needs to understand that we are already rationing care with the system we have. The public needs to understand that the system we have today is simply not sustainable for the future. And, the public needs to understand that there are less costly options to really reforming our health care system than some of the options being promoted today simply due to politics.

It is wonderful that public opinion carries the weight that it does in the democracy that we have. We only hope that the public is provided the truthful information it needs to be able to make an informed opinion in the first place.

At this point in the debate, we don't think it does.

Health Care Reform- Keeping The Big Picture In Mind

Last March we published a newsletter outlining our “Obama Score” of where health care reform stood from a public policy perspective. In it, we highlighted the 6 basic principles that are going to be required to make meaningful (not incremental) changes to our health care system. Obama had done relatively well up to that point and he still carried significant public support as his Administration was still new. But we had some important “wild cards” that needed to be addressed before we felt true health care reform would become a reality.

Now, we’re at the really messy part of the process. Since March, things have moved along quickly and we are glad to see that health care reform has remained near the top of the domestic agenda. But, as expected, the other significant issues our country faces have now become part of the debate and the public support, while still there, is tenuous now that we put the dollars with the ideas. In our view, the primary principle we were concerned about in March (Mastering the Legislative Process) has become weaker instead of stronger. This single principle has killed most initiatives before, and we hope Congress (and the private markets) can come up with solutions that are good for the country as a whole, and not just continue to protect self-interests as has occurred so many times before.

We’ve posted a side-by-side comparison on our site of 11 of the major initiatives currently making their way through the health care reform debate. This was put together by the Kaiser Family Foundation and you can grab it here if you want to look at it. This will likely be changing quite frequently but we believe everyone should have a basic understanding about what is being discussed with the best information available.

Unfortunately, the public perception of health care reform has become centered on whether we have a “public option” included or not. While this is an important delivery component, the average consumer should also understand the broader need for transforming the way health care is delivered in our country before making any judgements. For those that have health care coverage, and for those that do not, we need to understand and accept that the way our health care delivery is structured is not sustainable, especially when significant numbers of our population (Baby Boomers) begin to access the model we have today.

Payment reform, transparency, administrative efficiency, clinical effectiveness, wellness/prevention, and care integration are also critical elements that need to be understood and considered by the public before making any judgments.

Whether we realize it or not, the health care market is already changing. The reform outcome will certainly have an impact on the speed in which it changes, but all stakeholders (health plans, providers, and consumers) will need to appreciate these changes for participation in the future.

We believe that access to care high-quality health care for all Americans is a critical factor of the final solution and is part of what our country stands for. We just hope the real transformation we need isn’t derailed due to the politics or economic philosophies that have proven not to apply in the health care market we have created. And, let’s make sure the general public has a good understanding of all aspects of what the debate is all about in the first place- not just what we want them to hear.

Health Care Cooperatives- We're Missing the Point

We shouldn't have been surprised.

The primary focus of the health care debate is now centered on what level of government involvement is justified to deliver health care in our country. It's the same debate we've been having for the past 100 years.

While the lines-in-the-sand are now very visible, Senator Kent Conrad, D. ND; Chair of the Senate Budget Committee threw out a new idea to try "bridge the gap"(chasm) that has evolved between the two sides of the health care public policy debate. His effort was obviously a compromise in an attempt to make certain the reform efforts continue to move forward.

On the one side we have those in support of a "public option" that is supposedly built on the principles of improving availability, improving quality and efficiency, and challenging provider consolidation (read driving down prices). On the other hand we have those that feel any (and I mean any) involvement by the government is on the road to single payer/socialized medicine.

Neither side is willing to move- and we believe both sides could use some real bi-partisan compromise in their positions.

Conrad's idea is based on the concept that instead of a national public option, states could set up independent "cooperatives"; non-profit entities owned by their members to deliver health care services to the community or population. The idea was based on his personal experience with cooperatives in his home state of North Dakota, and was one idea submitted to bridge the gap that exists today. It's generated a lot of discussion in the political camps- and Chuck Grassley (R, Ia) has indicated some intrigue with the idea as a public option is out of the question and a show-stopper from his perspective.

Unfortunately, we're missing the point again. Our health care system is in the mess it is in because of the way it is organized and paid-for. It has evolved into a fragmented mess and until there is some level of organization and collaboration between doctors, hospitals, health plans, and yes, our political leaders, its going to continue to be a fragmented mess that costs a lot of money.

There are many economic arguments against introducing 50 new health care cooperatives into a landscape that is already fragmented. There are many social arguments against introducing a broad-based public option into the health care market. And, there are many more economic and social arguments against leaving the system alone and let it continue to operate the way it is today.

The debate should not deteriorate (as it has done before) into health plans vs. the world, doctors vs. the world, or government vs. everyone else. We cannot let this deteriorate into a public relations message with the winner being whoever has the most money- or screams the loudest. This is a social issue that needs to be resolved for the good of our economy and the legacies we will leave our children. The discussion should be about what is best for the American people. And, the outcome should a solution- not a compromise based upon political strategies.

Get with it guys and gals. You may only have one shot at this. Let's do it right.