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The Democratic Party’s Health Plan — a Preview

Stanley Feld M.D.,FACP,MACE

“Critical” What We Can Do About The Healthcare Crisis is a book by Tom Daschle, Scott Greenberg and Jeanne M. Lambrew. It provides a more detailed outline of the Democratic Party’s approach to overhauling American health care than either Mr. Obama or Hillary Clinton has offered on the campaign trail.

“The most important proposal in “Critical” is the creation of a “Federal Health Board,” explicitly modeled on the Federal Reserve Board. Its duties would include “recommending coverage of those drugs and procedures backed by solid evidence. It would exert influence by ranking services and therapies by their health and cost impacts.”

I knew this was the way the Democratic Party and Hillary Clinton are thinking. The thinking is dead wrong in my opinion. Increasing regulation and price control would lead to a more dysfunctional healthcare system.

“The Federal Health Board duties would include “recommending coverage of those drugs and procedures backed by solid evidence. It would exert influence by ranking services and therapies by their health and cost impacts.”

Previous rankings have had errors. I suspect these measurements will have errors also. It sounds as if the government is going to dictate the kind of care patients will have access to. It will not be the care the patients’ physicians think is best. Generic medication will replace newer medications. Innovation and inventiveness will be suppressed. Some medical devices will not be available unless the board says it is cost effective.

This is essentially price control and controlling access to care. Past experience has shown these maneuvers do not work. The creation of incentives generates innovation.

The principles of Mechanism Design would create a system of rules fair to all stakeholders with patients being the most advantaged.

“What about the uninsured? Mr. Daschle wants to open to all Americans the Federal Employee Health Benefits Plan — a menu of private-insurance options now accessible only to government workers. He would offer, in addition to the current plans, a government-run program, presumably similar to Medicare, although he provides few details. There would also be some form of means-tested premium support (or tax benefits) for Americans who couldn’t afford one of the available plans.”

The good thing is access to care will be available to all regardless of preexisting illness. The bad thing is it will not create a competitive market place healthcare system so badly needs. It will create another level of bureaucratic complexity.

“Most of Medicare’s costs are borne by doctors and hospitals that must meet the requirements of a host of regulations; if they do not, they may face federal investigations and lawsuits for noncompliance.”

Tom Daschle’s (the Democratic) vision creates a punitive atmosphere for stakeholders that inhibit innovation and usually leads to higher costs.

“Medicare has employeed a mere handful of mostly generalist clinicians reviewing its coverage and payment decisions.”

There is no way a handful of generalist clinicians are able to understand the nuances of complicated disease processes and enforce the new bureaucratic rules. The only way reform will be successful is if the patients force competition for their healthcare needs.

“Mr. Daschle federal health-board proposal is not exactly a new idea. Mr. Daschle himself proposed it as part of the failed American Health Security Act of 1993.”

This was translated into (Hillary Care) a program that assured the government as a single party payer dictated access to care and choice of provider. It failed because public opinion opposed it before it got started.

“Tom Daschle admits that the board is based on the National Institute for Clinical Excellence in Britain and the Federal Joint Committee in Germany. Both are charged with managing the public’s access to higher-cost drugs, medical devices and procedures. But both are growing increasingly unpopular in their home countries — precisely because they’ve become a triumph of cost-containment over patient access and choice.”

Americans had the same experience with HMOs. They failed because of public disenchantment with the system that eliminated choice and access to care. Public opinion turned against HMOs.

“Mr. Daschle proposes a dozen or so “experts” who would be “chosen based on their stature, knowledge, and experience, ensuring that the decisions they make have credibility across the health-care spectrum.”

I have outlined a system that puts the patients in charge. If Americans are given the appropriate incentives and the correct education they can make wise healthcare choices.

The trick is to not let the politicians sneak a defective system into law in the middle of the night.

I hope if Mr. Obama becomes President he does not fall for the Democratic Party’s folly. So far he has camouflaged his intentions.

  • mike

    “Innovation and inventiveness will be suppressed.”
    My take on the expression of “Innovation and inventiveness” is tweaking a pill so another round of patent protection can be had, and advertising to the public because the drug is not effective and will not otherwise be used.

  • JMesserly

    I need some help understanding the difference you see between a system with an undesirable governmental health entity, and one you see as acceptable. Daschle states his model is David Mechanic’s (“Truth about Health Care”) notion of a Federal Reserve like entity only in the sense of political independence from stakeholders but explicitly states it “wouldn’t be a regulatory agency”. Instead, “… the goal is a Board that is a standard setter that allows a private delivery system to operate within a public framework. A highly regulatory approach is unlikely to succeed.” (page 179). This is not in the model you portrayed, of socialized medicine like those in Europe, and not what Clinton was proposing in 1993. But I don’t want to focus on that- my confusion does not concern whether or not your characterization of what Daschle was proposing was fair.
    I am instead interested in what you are proposing. This is not a hostile query- I appreciate the value of mechanism design, but I am having some trouble understanding how the rules of your proposal are enforced minus some authority charged with oversight, and with ability to probe abuses.
    For example, your Medical Savings Account proposal states that it is mandatory that there be “price transparency”. Does this requirement for transparency cover scenarios when a patient might have had their bill padded with services of questionable medical value? What is the mechanism of enforcement? Is there a person knowlegable in the art who examines complaints, or performs spot checks to insure compliance? If so, what authority does that person operate under?

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