Healthcare overhaul: The good news

March 22, 2010

Peter_Pitts– Peter J. Pitts is president of the Center for Medicine in the Public Interest and a former FDA Associate Commissioner. The views expressed are his own. –

After a feisty year of debate, Congress has passed healthcare reform legislation. Once enacted, it will increase the number of Americans with health insurance as well as both the size and scope of government.

And the numbers?  Staggering when you consider they are absurdly under-scored. According to Douglas Holtz-Eakin (director of the Congressional Budget Office from 2003 to 2005), if you strip out all the gimmicks and games and rework the calculus, a wholly different picture emerges: The health care reform legislation would raise, not lower, federal deficits, by $562 billion. Even with readjustment, it will make the Social Security trust fund look like Fort Knox.

So here’s the good news — the solution is innovation.

We have to embrace innovative technologies for medical records and prescribing. We need innovative clinical trial designs and molecular diagnostics so that we can develop better, more personalized medicines faster and for far less than the current $1 billion plus delivery charge. We need innovation in access and reimbursement policies that reward speed-to-best-treatment rather than more lower-cost patients per hour.

Will more people have access to health insurance? They will, and that’s a good thing. But, let’s be honest, we’re not talking about erasing the word “uninsured” from the American healthcare dictionary — we’re just redefining what it means.

We have to embrace the fact that we will all pay more in taxes (yes, all of us) eventually. And, ultimately, we will be okay with that. Americans are always willing to do what’s right for their fellow citizens. As Winston Churchill said, “Americans always want to do the right thing — after they have tried everything else.”  Even so, many of our fellow Americans will receive less comprehensive healthcare benefits than they are receiving now.

So we’d better start taking innovation — of both the incremental and discontinuous varieties — seriously. And that means both spending more on harder developmental R&D (with concomitant higher investment risks). In this regard, the new legislative language on the development of FOBs (follow-on biologics or, if you prefer, biosimilars) is a good thing.

There’s lip service to the need for more robust comparative effectiveness — although this is a battle yet to be either defined (comparative effectiveness or cost effectiveness or clinical effectiveness?) or fought (do we need a U.S. version of NICE?). And a battle royal it will be. In addition, there’s as yet-to-be reconciled language on a Medicare advisory board that could very well morph into a national formulary body.

Of course we bid adieu to the infamous Medicare Part D Doughnut Hole. The Medicare prescription drug benefit is coming in hundreds of millions of dollars under budget already and consistently has 90-percent-plus approval ratings by America’s savvy seniors. Medicare Advantage programs? Don’t ask.

Now insurance companies can’t turn anyone down because of a pre-existing condition (bravo!) but they can’t charge higher premiums for people who have them? This isn’t an elegant or economically viable solution and will have to change. Otherwise it’s just a slow march to a single-payer system.

Over the past year, we spent a lot of wasted time throwing around terms like “death panels,” but at the end of the day, we didn’t even begin to address the elephant-in-the-room issue of how much of our national treasure we spend on end-of-life care. We will have to address this highly volatile and divisive issue — and sooner rather than later.

The legislation doesn’t do anything really significant about driving young, healthy people into the insurance pool. The anemic penalties (which don’t even kick-in right away — the demographics and politics aren’t too hard to figure out) actually disincentivize youthful participation. After all, why not pay the monthly penalty (which is less than even a very affordable monthly insurance premium) if, when you do face a medical emergency, you can’t be turned down or charged more?

Some of the best things about the bill are what is does not do.

No drug importation. (Sorry! Senator Dorgan. Hooray! Peggy Hamburg.) And the Non-Interference Clause remains the law of the land. When originally drafted (wisely by then-Senators Daschle and Kennedy), we knew then what we need to remember now, that (1) direct government negotiations for Medicare drug prices won’t (according to numerous government studies and leading economists) lower Medicare drug prices and (2) it is the next slippery step towards even broader price controls. And price controls equal choice controls.

So let’s keep our eye on the prize: better access to health care for all Americans and innovation that focuses on prevention and prophylactic care. We will not survive as a nation of obese, hypertensive diabetics. Rather than wasting time on spin, let’s redouble our efforts on innovation. Then, when we succeed through brainpower and teamwork (and hopefully some civil bipartisanship), the circus surrounding this vote and the past year’s partisan political warfare will be but a footnote in American political history.

3 comments

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My God! A piece that presents thoughtful insights into what is now the law of the land. We probably could have embraced everything that’s suggested will happen, but, Americans seem to need a hammer to the head to move off our stubborn positions.

Posted by MEspud | Report as abusive

When is “the solution” not innovation?

Posted by HBC | Report as abusive

Small businesses with less than 50 workers are smiling after both the jobs and health bills

Posted by Story_Burn | Report as abusive