Medical Device DailyWashington Editor
A purported cynic once said "show me the money." Hence, one of the first sessions at this year's edition of the World Health Care Congress was titled "Health and Money," but the panel was stocked with individuals who came off as anything but cynical. On the other hand, their views of the prospects for reform were anything but blindly optimistic.
The session's moderator, Vanessa Fuhrmanns, a staff reporter with the Wall Street Journal, noted that the current healthcare debate is "being driven by a great deal of economic anxiety." She noted that this is largely due to loss of employment and by shrinkage of employers who can afford to offer coverage.
Angela Braly, President/CEO of insurer Wellpoint (Indianapolis), said her company insures more than 35 million Americans, but she hinted that such a large enrollment does not guarantee viability in the face of reforms.
"There needs to be a game-changer" where coverage is concerned, Braly acknowledged, but she exuded less than sunny optimism about more public-sector participation. "We don't think that a government-run healthplan will reach the uninsured" without adding to existing problems, such as cost.
"We should have alignment around tax policy" to avoid penalizing those in the individual market, she said, a reference to the tax-exempt status of healthcare premiums paid through payroll deductions. "We have to focus on cost and quality" if coverage is to be universal, Braly said, adding that the role of industry "is to drive toward that value."
Carl Camden, president/CEO of temp services giant Kelly Services (Troy, Michigan), opened his remarks by noting that "a quarter of the American workforce works in a format that does not fit" into the employer-based system. He said the value of such a fluid workforce to the economy is not rewarded where benefits are concerned. "The very flexibility that makes them so important as workers [also] makes them unimportant" where the insurance market is concerned, he said.
Camden said the proportion of American workers who are thus employed will grow. "The free agent population is going to grow as a component" of the workforce, he said, rising from roughly 26% of the workforce to as much as 35% in the decades to come.
Camden said that the difficulty in finding insurance for these workers parallels that of those who want to start small companies. "We need to understand that it is from this group of individuals that most new businesses start up," he said, adding that innovation in the U.S. is starting to lag. "The greatest impediment to starting up a new business is access to healthcare," he said, positing that at the very least, reform should provide coverage for this population "so that someone is not faced with a choice" of leaving family members without coverage if they want to open a new business.
Camden also said "only 60% of employers are participating in the employer-based system."
The lesson of all this is not lost on businesses. "An increasing number of my global customers are choosing not to start [operations] in the U.S." because of healthcare costs, Camden said, addding, "I've never seen as many companies actively seeking not to site jobs in the U.S."
Former FDA commissioner Mark McClellan, MD, who also served as administrator for the Centers for Medicare & Medicaid Services, described healthcare as "both a challenge and an opportunity" that will be "the engine driving economic growth, or the anchor dragging it down."
McClellan said spending growth was partly "due to new capabilities" that have extended lifespan by about a year per decade over the past half century. "The problem is the kind of inefficiency you hear about," he acknowledged, such as overuse, underuse and misuse of drugs, devices and other therapies. "There's evidence that this [phenomenon] is growing," he said.
McClellan, who is the inaugural director of the Engleberg Center for Healthcare Reform at the Brookings Institute (Washington), also pointed out that recent cost data hint that not only is per-patient cost dependent on geography, so is healthcare inflation. He also threw a cautionary note to any legislators who might be listening. Expansion of public healthcare programs without cost containment is likely to "create pressure on long-term interest rates and downward pressure on growth," he said, asserting that "if we have a big expansion of coverage without doing something about efficiency," the cost problem gets worse, not better.
McClellan said the solution is not to be found by merely "trying to buy more people into our current system," stating that legislators and the White House understand this. "The only way to get to a path to long-term sustainability ... is to reform our healthcare delivery system." He also said that it is "very important to take a bipartisan path" because the voters already "do not trust the politicians, so it's relatively easy to blow up reform proposals."
As for the question of whether government should offer plans that compete with private insurers, McClellan said there are "efforts underway to find bipartisan ground," using a plan such as TriCare as a blueprint. "On the Left, they say 'we really want a plan more like Medicare,'" he noted, whereas the Right worries that insurers will not be able to compete. "My hope is that we don't sidetrack the whole healthcare debate on this one issue," he said, but he offered no specifics about a middle ground that has enough traction to get through both the House and the Senate.
Addressing a question about CMS's statutory authority to use cost as part of the determinant on coverage, McClellan acknowledged that "Medicare does not have that authority explicitly, but has made decisions that take into account the cost." He said the least costly alternative (LCA) approach to reimbursement decisions may constitute an "inevitable direction," but he posited that the story on geographic variability of costs suggests that "the biggest thing that Medicare needs to address ... is capacity issues." He said that the greater availability of hospital rooms and radiographic equipment in some regions seems to correlate very strongly with overuse.