Those who opposed the President’s health care plan called these agencies “death panels” and worried the panels would allow people to die rather than provide costly treatments at government expense.

The President’s supporters called this “fear mongering” and assured Americans the legislation would not establish government agencies to make life and death decisions for us.

It is true the new national health care law does not specifically create a new agency that would dictate patient treatments. It does, however, establish a private nonprofit bureau to carry out comparative effectiveness research (CER) that will affect the medical care we all receive.

CER does several things. It studies the clinical effectiveness of a particular treatment or test and then compares that treatment to alternatives to measure clinical results and cost effectiveness.

It is estimated that up to 30 percent of all health care spending in the United States is wasteful or not effective. CER would theoretically reduce this wasteful spending and would standardize treatments for patients with the same diagnosis.

Supporters of the new law say it specifically prohibits using CER for clinical decision-making or for health guidelines.

CER has been used by the federal government since 1989 and by Washington state since 2006. The purpose at the federal level is to establish clinical guidelines for “best practices” that can be used in both private practice and government programs like Medicare.

Expanding CER via the new legislation will undoubtedly increase the list of the government’s clinical guidelines.

CER rules represent a real threat to the day-to-day practice of medicine. Doctors spend four years in medical school and then four to six years in specialty training.

A large part of that education is learning how to interpret medical treatment research and how to apply those treatments to individual patients. Very few physicians want to practice “cook book medicine” and treat all patients the same.

Much of our superb health care is based on the development of new drugs and medical devices. Using CER, bureaucrats will pick “best” drugs and devices and refuse to pay for alternatives, which will stifle innovative research into newer and better treatments.

During the debate, the country was assured the reform legislation would bend the cost curve down. After passage, even the chief actuary for the Administration estimated the new law would increase health care costs from 17 percent to 21 percent of our gross domestic product by 2020. Cost will still be the main problem with health care in the United States.

Consequently, government officials will search for ways to control costs within the next ten years. The enlarged CER will be established by 2013 and will decide what patients benefit most from what treatments.

The next step will be to reimburse providers for using only approved treatments. CER, therefore, will become the mechanism for rationing health care in this country.

Great Britain has had socialized medicine since 1948. The country has an agency that uses CER to ration health care – the National Institute for Clinical and Health Excellence (NICE).

The new Director of our country’s Medicare and Medicaid services, Dr. Donald Berwick, says he is a “big fan” of the British system in general and of the NICE program in particular.

Recently the Federal Drug Administration (FDA) banned the use of a cancer drug, Avastin, for patients with breast cancer in the United States. Avastin does not cure breast cancer, but has allowed women the possibility for a longer life. Provenge is a new cancer drug developed in Seattle that the FDA did approve for use. However, Medicare officials have disallowed the costly drug saying Medicare patients don’t need it.

“Death panel” is an inflammatory term. However, under pressure to control costs and by the use of CER, government officials already have a mechanism in place to decide who will receive treatment, which in some cases will mean who lives and who dies.

The Administration’s enthusiasm for the British NICE program and recent bans imposed by the FDA and Medicare should make all Americans worried about the direction our government is taking in managing our health care.

Dr. Roger Stark is a retired physician and a health care policy analyst with Washington Policy Center, a non-partisan independent policy research organization in Washington state. For more information visit washingtonpolicy.org.

This column first appeared in the July 2010 issue of Inside ALEC, the official magazine of the American Legislative Exchange Council.

In a far away corner of the land, a long time ago, a health care battle took place. The place was Washington state, the year was 1993, and the debate centered on a controversial measure modeled on HillaryCare called the Washington Health Services Act.

Now, from ground zero of HillaryCare, a new movement of consumer-based health care solutions in Washington state has emerged led by a coalition of state lawmakers, the non-partisan Washington Policy Center, and ALEC.

President Bill Clinton recognized early in his first term that his national health care plan needed a state incubator. First Lady Hillary Clinton went on to say “features of the Washington plan will be features of any plan that comes out of Congress.”

Washington Governor Mike Lowry reciprocated by emphasizing he was “pleased that President Clinton’s reform proposals so closely resemble Washington state’s new law.”

Rep. Ericksen

With pressure from the White House, the legislative process was top-down as bill revisions came across fax machines from Washington, D.C.

By the time the final vote was taken, few state lawmakers had actually read the entire bill.

The Washington Health Services Act passed on a near party-line vote by a liberal legislature and was signed by the governor in May 1993.

As their policy compass—Hillary-Care—lie in ruins in the other Washington, those responsible for the state legislation were left to nervously watch the implementation of new taxes, bureaucracy, premium caps, insurance regulations, mandatory health insurance coverage, and government-sponsored purchasing cooperatives.

While provisions of the Washington Health Services Act would be phased in over a six-year period, negative effects appeared in the first year.

By 1995, many of the state’s private health insurers had pulled out of the market. From 1994 to 1997, the state’s six largest private health insurers lost more than $116 million in the individual market.

Those insurers that stayed had to raise premiums—by 40 percent in some instances. Rising costs prompted many consumers to drop their coverage, thus increasing the state’s uninsured rate.

By 1999, the individual market had fallen apart—with individuals and families in 30 of Washington’s 39 counties not having any private health insurance options.

Dr. Stark

Washington state also became a magnet for patients from around the country who had serious and expensive medical conditions because they knew they could get immediate health insurance coverage.

Many people took advantage of the new system in other ways. For example, some women would enroll in a health insurance plan after becoming pregnant and drop their coverage following the births of their babies.

People would also change from a low-cost health insurance plan with a high deductible to a high-coverage health insurance plan with a low deductible, receive major medical procedures or treatments, and then change back or drop their coverage.

The Washington Health Services Act led to rising health care costs and fewer options for consumers. These outcomes were generated by the legislation’s centralized financing and delivery of health care, including the rationing of health
care, limiting consumer choices for doctors, and consumers paying for coverage they did not need or necessarily want.

The health care issue was on the minds of Washington state voters in the 1994 general election. The state House of Representatives went from 65 Democrats and 33 Republicans to 61 Republicans and 37 Democrats. The Democratic majority in the state senate was downsized to just one seat.

Post-election analysis revealed that as voters learned more about the radical health care changes made by their citizens’ legislature, the greater their opposition grew.

While many provisions of the Washington Health Services Act were repealed in 1995, remaining issues caused private health insurers to leave the state.

The state went from having 19 private health insurers in 1993, to only having three remaining today. The aftermath continues to hurt families, individuals and small businesses.

The story of Washington state should serve as a cautionary tale for those making decisions on health care reform in Washington, D.C., but the message has not yet been received. To understand where our country is going, all we have to know is where Washington state has been the last 17 years.

Doug Ericksen represents the 42nd District in the Washington House of Representatives and is the ranking Republican on the House Health Care and Wellness Committee. Roger Stark is a retired surgeon and a health care policy analyst with Washington Policy Center, a non-partisan public policy research think tank in Washington state.

Liberals and conservatives agreed on one thing during the health care debate: the cost of health care in the United States is not sustainable.

Last year we spent $2.2 trillion, or 17% of the United States’ gross domestic product (GDP), on health care.

Without some type of reform that number will rise to an unrealistic 30% of GDP by 2030. From an economic standpoint, this could never happen.

We were assured by the Obama Administration over the past two years that federal health reform would bend the cost curve down and actually decrease the federal deficit.

Based on those assurances, Congress passed legislation with narrow partisan support and over the objections of substantial bipartisan opposition.

The original cost estimate of the new law was $940 billion over ten years, which we were told would decrease the deficit by around $100 billion.

Over half of the funding would come from Medicare cuts and around $400 billion would come from new taxes.

Paying for the Medicaid expansion and funding the government subsidies in the new insurance exchange would each account for roughly one half of the expenditures in the legislation.

Unfortunately, but not surprising, the number $940 billion turned out to be wrong. The Congressional Budget Office (CBO) re-examined the legislation after it passed into law. The bill is filled with unclear language and on further review, CBO analysts found additional costs of at least $115 billion. This wipes out any deficit reduction promised by health reform and puts its cost over $1 trillion.

Richard Foster, the federal government’s chief actuary, also examined the legislation after it passed. He reports health care costs will increase from 17% to 21% of GDP in ten years and that spending would go up by at least $311 billion.

He further says the legislation will cause net federal spending to rise. The new taxes on drugs and medical devices as well as the excise taxes on insurance premiums will simply be passed on to patients.

Foster estimates that 14 million people, mostly from small firms, will lose their employer-sponsored health insurance. At least two million of these employees will be forced to enroll in Medicaid, bringing the total of new Medicaid recipients to at least 18 million.

However, no one knows the actual number of new Medicaid enrollees or the number of people who will receive taxpayer subsidies in the insurance exchanges. Government estimates are notoriously on the low side and as these programs expand, costs will explode.

The cuts to Medicare include $271 billion in lower doctors’ reimbursements over ten years, starting this year. Virtually everyone agrees that Congress will pass a “doc fix” in the next few months and will reinstate this $271 billion.

As soon as this goes into law, the budget for the new health care reform will go into the red by another $271 billion. This is the kind of dilemma that arises when doctors are employed by the government, instead of being allowed to practice medicine in a normal, functioning marketplace.

By any measure, the true cost of the health care legislation is well over $1 trillion for the first ten years and in no way will it reduce the deficit.

The legislation allows for ten years of taxes and Medicare cuts to pay for the first six years of benefits. Cost estimates for the second ten years, 2020 to 2029, run as high as $2.4 trillion, which will most certainly add to the federal deficit.

Unless it is repealed or drastically amended, the new federal health care law will cause costs to soar to unsustainable levels, will lead to price controls and benefit cuts, and will lead ultimately to government rationing of our health care.

Dr. Roger Stark is a health care policy analyst with Washington Policy Center, a non-partisan independent policy research organization in Seattle and Olympia. You can reach Dr. Stark at rstark@washingtonpolicy.org.

by Roger Stark, MD
Health Care Policy Analyst

The U.S. House of Representative has passed a 1,910 page health care bill essentially along party lines. The Senate is now considering its own 2,074 page bill, again along party lines.

The President’s failure to gain bipartisan support for his health care overhaul is disappointing. The country wants and deserves a bipartisan effort on reform, since health care represents one sixth of our economy.

Responding to public concern, the Republicans have offered well over fifty amendments and over thirty health care bills, yet none has receive even a simple congressional hearing.

The Democrats seem driven to pass health care legislation regardless of the concerns of the American public.

Americans are understandably worried. People are suspicious about the high cost of the proposed reform. The House-passed bill would cost $848 billion in the first ten years, while the Senate bill would cost $1.05 trillion over the same period, according to the non-partisan Congressional Budget Office (CBO).

The Senate bill alone creates 70 new programs, and gives the IRS up to $10 billion more to enforce new mandates on citizens.

Both bills would supposedly cut the deficit over the first ten years. Although these huge numbers are breathtaking enough, the real concern is the bait-and-switch of revenue vs. expenses. The two bills are written so that revenue, i.e. taxes, is calculated to begin in 2010, while the expense, i.e. spending, doesn’t start until 2014.

Hence, the CBO’s calculations are based on ten years of taxes but only six years of spending. This manipulation was key to gaining the votes of senators who didn’t want to appear to be adding to the federal deficit.

The real cost explosion will occur after 2019, outside the period covered by the CBO’s cost analysis, and will extend indefinitely into the future.

We can compare this to Medicare, a government entitlement with nearly forty-five years of history. Medicare cost nine times more than its original budget estimate within the first twenty-five years of enactment.

Today Medicare is slowly going bankrupt. Most people agree that adding significantly to the federal deficit during this current major recession would be foolhardy.

Next, the American public has been told that major health care reform and upheaval will provide universal coverage. Yet the House-passed bill would leave 12 to 15 million people uninsured and the proposed Senate bill is even worse, leaving about 24 million uninsured.

These numbers argue against passing any health care reform at all, since today the number of chronically uninsured is only eight to ten million people.

Also, people are worried about laws that would require them, for the first time in history, to buy something simply because they live in the United States. Both the House and Senate bills make Americans buy health insurance or else pay a fine or go to jail.

Although states require automobile insurance for drivers, there has never been a federal mandate imposed on all American citizens.

An individual mandate may not only be unfair, it may be unconstitutional.

The President assured Americans that if they like their current health insurance plan, they can keep it. One of the funding mechanisms for both the House and Senate bills is a $465 billion cut in Medicare. One of the major proposed cuts would be in the elimination of Medicare Advantage. In Washington state alone, this would mean over 205,000 seniors would lose their current health insurance plan.

People are also concerned about the government competing again private insurance companies through the federally-run “public option.” The backers of the public option say they would like to use the government plan as the first step toward universal, socialized health care in this country.

Since almost 85% of Americans like the health care they have now, it is understandable that people are worried about losing their current insurance. They realize that private firms won’t be able to compete against the government and will likely go out of business.

Many people remember that Medicare began in 1965 as a form of public option for seniors, but by 1970 private insurance for seniors, except for some co-pays and deductibles, was gone.

There are dozens of votes yet to take in Congress on the health care bills. The American public can only hope that Congress starts listening to their concerns, and protects people’s right to buy private health insurance.

Dr. Roger Stark is a health care policy analyst with Washington Policy Center, a non-partisan independent policy research organization in Seattle and Olympia. You can reach Dr. Stark at rstark@washingtonpolicy.org.

By Roger Stark, MD

Health Care Policy Analyst, Washington Policy Center

The U.S. House of Representative has passed a 1,910 page health care bill essentially along party lines.  The Senate is now considering its own 2,074 page bill, again along party lines.

The President’s failure to gain bipartisan support for his health care overhaul is disappointing.  The country wants and deserves a bipartisan effort on reform, since health care represents one sixth of our economy.

Responding to public concern, the Republicans have offered well over fifty amendments and over thirty health care bills, yet none has receive even a simple congressional hearing.

The Democrats seem driven to pass health care legislation regardless of the concerns of the American public.

Americans are understandably worried.  People are suspicious about the high cost of the proposed reform.  The House-passed bill would cost $848 billion in the first ten years, while the Senate bill would cost $1.05 trillion over the same period, according to the non-partisan Congressional Budget Office (CBO).  The Senate bill alone creates 70 new programs, and gives the IRS up to $10 billion more to enforce new mandates on citizens.

Both bills would supposedly cut the deficit over the first ten years.  Although these huge numbers are breathtaking enough, the real concern is the bait-and-switch of revenue vs. expenses.

The two bills are written so that revenue, i.e. taxes, is calculated to begin in 2010, while the expense, i.e. spending, doesn’t start until 2014.

Hence, the CBO’s calculations are based on ten years of taxes but only six years of spending.  This manipulation was key to gaining the votes of senators who didn’t want to appear to be adding to the federal deficit.

The real cost explosion will occur after 2019, outside the period covered by the CBO’s cost analysis, and will extend indefinitely into the future.

We can compare this to Medicare, a government entitlement with nearly forty-five years of history.  Medicare cost nine times more than its original budget estimate within the first twenty-five years of enactment.

Today Medicare is slowly going bankrupt.  Most people agree that adding significantly to the federal deficit during this current major recession would be foolhardy.

Next, the American public has been told that major health care reform and upheaval will provide universal coverage.  Yet the House-passed bill would leave 12 to 15 million people uninsured and the proposed Senate bill is even worse, leaving about 24 million uninsured.

These numbers argue against passing any health care reform at all, since today the number of chronically uninsured is only eight to ten million people.

Also, people are worried about laws that would require them, for the first time in history, to buy something simply because they live in the United States.  Both the House and Senate bills make Americans buy health insurance or else pay a fine or go to jail.  Although states require automobile insurance for drivers, there has never been a federal mandate imposed on all American citizens.  An individual mandate may not only be unfair, it may be unconstitutional.

The President assured Americans that if they like their current health insurance plan, they can keep it.  One of the funding mechanisms for both the House and Senate bills is a $465 billion cut in Medicare.  One of the major proposed cuts would be in the elimination of Medicare Advantage.  In Washington state alone, this would mean over 205,000 seniors would lose their current health insurance plan.

People are also concerned about the government competing again private insurance companies through the federally-run “public option.”

The backers of the public option say they would like to use the government plan as the first step toward universal, socialized health care in this country.

Since almost 85% of Americans like the health care they have now, it is understandable that people are worried about losing their current insurance.  They realize that private firms won’t be able to compete against the government and will likely go out of business.  Many people remember that Medicare began in 1965 as a form of public option for seniors, but by 1970 private insurance for seniors, except for some co-pays and deductibles, was gone.

There are dozens of votes yet to take in Congress on the health care bills.  The American public can only hope that Congress starts listening to their concerns, and protects people’s right to buy private health insurance.

Dr. Roger Stark is a retired surgeon and a health care policy analyst with Washington Policy Center, a non-partisan independent policy research organization in Seattle and Olympia.  For more information visit www.washingtonpolicy.org/healthcarereform.