President Obama has said repeatedly that he favors a government-run health plan option because it would increase competition and help keep private insurers “honest.” What the president and many others don’t realize is that soon we may actually need private insurers to keep the federal government honest.

Right now the federally-funded Medicare program carries more than $30 trillion (yes, trillion – and counting) in unfunded liability. That essentially means that Medicare has promised over $30 trillion in benefits that it does not actually have the money to fund. There are two ways the government can make up that shortfall: by directly raising taxes or by shifting costs to private insurers. In either scenario, consumers will ultimately foot the bill. Medicare obviously provides essential benefits to millions of Americans, and has for a long time. But clearly, promising $30 trillion in benefits that you can’t actually pay for, and then expecting taxpayers to make up the difference…well, that’s really no way to run a business.

When it comes to unfunded liability, perhaps the government could learn a lesson from private insurers, who don’t have any. Yes, parts of the private insurance industry are profit-driven, and it usually enjoys billions of dollars in earnings or surpluses each year (a very small percentage of revenue when compared to other industries), all of which is subject to review by state insurance commissioners empowered to intervene. Sure, that aspect of the system may warrant increased scrutiny, but we have many very healthy insurers (which are also required to build up reserves so as to eliminate unfunded liabilities) that are not-for-profit, community-minded entities. And there is no denying that the health care system itself is in dire need of comprehensive reform. But it is disingenuous and downright hypocritical for the federal government to lay the brunt of the blame for the crisis at the feet of the “greedy” insurance industry when federal programs themselves are operating with staggering amounts of unfunded liability. One has to ask which is worse: a private industry turning a profit, or a government program rolling up mounds of debt it will ultimately ask the American people to pay off?

It is unfair and diversionary for the administration to continuously characterize the private insurance industry as a sinister force responsible for all of the nation’s health care problems – especially when the government and its trillions in unfunded liabilities are as much a part of the problem as anything. In fact, given that Medicare will run out of money in about nine years if it continues on its current trajectory, I would say the unfunded liability issue needs to be a much larger consideration in reform discussions. The only way to achieve true and honest change in our health care system is by having a true and honest debate about all of the relevant issues, not just those that conveniently support one side’s agenda.

I’ve been reflecting on the death of Senator Edward Kennedy today and thinking about how the Kennedys have always been part of my political landscape. My earliest recollection of politics is being a child in Puerto Rico and seeing euphoric crowds celebrating the election of JFK to the presidency. My earliest encounter with real tragedy came just a few years later with his assassination. Bobby Kennedy raised my hopes as I approached voting age, but his death — so soon after the killing of the Rev. Martin Luther King — affected me as it did many of my generation.

Needless to say, Teddy Kennedy had a very difficult time living up to his brothers’ respective legends. His various challenges — most often of his own doing — made the late 60s and 70s a time of trial for him, his family and his constituency. Many of us probably had periods in our own lives that were just as challenging, but we didn’t have John and Robert Kennedy’s legacies and the public spotlight following us everywhere we stumbled. Many of us were simply “children of the ‘60s,” and Teddy was like us in certain ways: he came of age in the same period, emerging from behind his brothers chronologically older, but was still as immature as we were.

In my opinion, Teddy became “Senator Kennedy” only decades after being elected to the Senate. Although I grew up and remain a staunch Democrat, most of Teddy’s views were far to the left of mine. Senator Kennedy and I had much more in common in recent years, especially when it came to two things: improving access to and affordability of quality health care in America, and the need for bi-partisan solutions to major initiatives.

Now, I suspect that many heard his passionate speeches for causes like “economic justice” and assumed that he was such a fundamentalist “progressive” that he’d happily tell his opponents across the aisle to go pound sand, as the saying goes. But, from what I’ve read and heard from others, that was very, very seldom the case. He succeeded as the leader he clearly became by working doggedly to craft legislation together with his Republican colleagues, not by staying within the confines of his own party.

If the U.S. Senate wants to live up to the legacy that Senator Kennedy has left us, its leaders will gather once again in quiet meeting rooms and work out a reasonable compromise around the (relatively few) issues causing passionate disagreement. Everyone – and I mean everyone – knows that our country needs true “health care reform,” not the “health insurance reform” that the Democrats are now touting by demonizing for-profit, not-for-profit and self-funded company insurers, or the “let’s-deregulate-and-let-the-free-market-decide” policy that the Republican fringe elements are pushing upstream.

Sixty-three percent of Americans who receive traditional insurance through their employers (about 55% percent of whom are actually insured by their employer directly, not a third-party “private insurer”) are either “extremely satisfied” or “very satisfied” with their current coverage. But we know we can do better, and the insurance industry has already accepted many of the proposed changes. We know that fee-for-service medicine has twisted the way doctors and hospitals must treat patients, and most physician groups and hospital associations agree that we need to change reimbursement to better reflect outcomes, not just services rendered.

Consumers, on the other hand, are still the wild card in the game. We want it all, at essentially no cost to us or our families. We want to be able to dictate what treatments we get, whether or not they’ve been proven to work, and we want to use other people’s money to pay for them. We want to be able to ask for unlimited care at the end of our lives, even if it will extend our lives (often in pain or in a coma) for only a few days, and we expect to use other people’s money to pay for that, too. We still refuse to seriously consider “comparative effectiveness” and what that might mean for the choices we and our doctors ought to make about how we spend other people’s money. We want no limits placed on us at all, even as we grow more obese and less healthy with every passing survey. No insurance reform, no reimbursement reform will help us control costs if our demand for care, regardless of efficacy, keeps accelerating.

A compromise reform bill will need to do the best we’ll allow it to do, but we can’t count on it to cure all of our ills. Even Senator Kennedy recognized, in middle age, that he needed to take accountability for his life and his legacy. He changed his lifestyle, he changed the way he worked, and he changed the institution around him. As consumers and as participants in OUR health care system, we should look at that lesson and take heed.

The Obama administration’s apparent willingness to withdraw its insistence on a government-run health insurance plan is not only the right move but may ultimately prove to be the single thing that jumpstarts actual health care reform. It’s time now for the health insurance industry, which has been admirably quiet to this point, to come forward and reinforce its genuine interest in cooperating on mutually agreeable and amenable reform initiatives. The industry needs to try to ensure that the more liberal wing of the Democratic Party doesn’t succeed in once again making the “public option” mandatory.

Replacing a government-run public plan with regional co-ops certainly should be a more palatable idea for the majority of the president’s opponents and coalitions of currently self-insured corporations that might be willing to be the “lead tenants” of new, member-owned not-for-profit health plans. In addition, a substantial number of the existing 1,300 or so commercial insurers are already not-for-profit, including many of the most powerful. Adding a series of regional non-profit cooperatives that would have to play by the same rules as private health plans isn’t a drastic departure. And it would spur the competition the president desperately seeks to “keep insurance companies honest” (although my experience would suggest that their executives are at least as honest as anyone in our society). We should all note that the insurance industry has long endorsed the notion of doing away with pre-existing conditions restrictions and age- and gender-based pricing as long as there is an enforceable mandate that everyone in the U.S. must have basic health insurance. 

With the public plan option slipping off the table, I think we’ll see an even greater spirit of cooperation than we may have anticipated just a few short days ago.

In one of its “Fact Check” segments earlier this week (linked here), ABC News examined whether or not there was any truth to the notion that health care reform legislation could ultimately put health insurance companies out of business and whether consumers would be forced to change health plans. The report deemed these claims false, based on the fact that there is simply no language in the proposed plans that explicitly calls for the demise of private insurers or that mandates consumers to switch plans. In this very limited sense, the ABC piece is correct, but that conclusion is highly misleading.

ABC’s report ignores the fact that the proposed legislation creates a number of strong incentives for employers to drop employee health care coverage to gain certain economic advantages and to simplify their own operations. Given that 70 percent of insured Americans maintain coverage through their employers, incenting those employers to change plans or curtail health insurance altogether means that, in fact, people will not be able to keep their current coverage. So while current proposals don’t necessarily contain a clear-cut directive to abolish private insurers or force individuals to change coverage, it certainly is a very likely secondary effect.

So, would current legislation itself force those currently covered to change plans and/or doctors? Perhaps not, but the incentive structures it creates will effectively compel some employers to change, which will require their employees to either change their plans or their employment.

I’d suggest that ABC News failed as a “fact checker” in this instance.

(By the way, the segment also failed to address the advantage that a public health plan would have in mandating reimbursement rates, which is something I addressed in an earlier blog.)

Given their recent sniping, it seems as if fundamentalists on both sides of the health care reform debate are girding themselves for war. What the Obama administration intended to be an inclusive, bi-partisan endeavor appears to be devolving into same-as-it-ever-was, us-versus-them Washington politics. It’s time for one side to either draw a line in the sand or extend an olive branch and find some common ground before the delicate structure of health care reform that’s been assembled to this point collapses into a useless pile of scrap.

For starters, the administration needs to demonstrate that its efforts are about health care reform, not health insurance reform.  In many respects, this is what’s at the heart of the opposition’s ire. For their part, insurance companies are actually pro-reform and painting them as the dastardly enemy is both unfair and unproductive. Insurers truly believe, and rightfully so, that a government-run health care option will run them out of business. Contrary to what the administration would have us believe, the insurance industry is more concerned about survival at this point than profits. Additionally, insurers worry that the absence of a private insurance industry will stifle innovation, since it is from the private sector that virtually all medical advancements arise.  Again, a very credible concern. The health insurance industry would be more likely to back the president’s reform ideas if there was willingness to compromise on certain issues. Insurers merely want some assurance that they’ll survive in the “new” health care system.

Obviously the whole reform issue is massively complex. And as the partisan bickering heats up, the American people, as one writer put it, are becoming terrified. Both democrats and republicans need to step back and contemplate whether an environment of supreme fear is one in which anything worthwhile can be accomplished, least of all something as intricate as health care reform. It’s time to abandon the antagonistic rhetoric and return to a spirit of rational compromise that seeks fairness for all.

The meaningful use issue has been attracting a lot of attention in health care reform efforts lately. In very broad strokes, the debate stems from a provision in the American Recovery and Reinvestment Act (ARRA) that allocates funding for physicians who are deemed to be meaningful users of electronic health records by 2011. Since ARRA doesn’t spell out exactly what qualifies as meaningful use, defining the concept has become a source of great discussion. Things got a bit clearer in June, however, when the Health IT Policy Committee of the Department of Health and Human Services (HHS) released its preliminary definition of meaningful use. In essence it says that meaningful use involves implementing EHRs to enhance health care quality, safety and affordability and to foster better patient engagement, increase security, advance care coordination and generally improve the health of the entire population.

In July, the Health IT Policy Committee published its final recommendations for the definition of meaningful use, as it were. Some of the committee’s more interesting proposals include: a recommendation that incentives be paid according to an adoption year rather than a calendar year framework; reduction of initial adoption year objectives to permit hospitals and eligible providers to implement one clinical decision rule and still qualify; a mandate that providers and hospitals check insurance eligibility electronically from public and private payers; and a mandate that providers and hospitals submit claims electronically. The last two can be accomplished easily using technologies long ago implemented by most major payers.

The proposed meaningful use definition recognizes that it is simply too much to expect physicians to go from using little or no EHR technology at all to a full-blown, highly complex and technical system virtually overnight. The workflow disruptions alone would be extraordinary, as would the necessary up-front investment. A more streamlined approach would be to slowly and steadily raise the meaningful use bar over a period of time so users can familiarize themselves with technology and build it into their practices a piece at a time. The behavioral and organizational change necessary for successful EHR implementation needs to be facilitated, not forced. Taking this route will spare the process lengthy delays and outright resistance among adoptees, and still make President Obama’s goal of creating EHRs for all Americans by 2014 a very realistic one.