Brian Klepper

Is Meaningful Health Care Reform Possible?

Those who wait, ever hopefully, for real health care reform might want to take a deep breath and take stock of a few realities.

First, think about the fact that when the Democrats retook Congress, they tweaked but did not fundamentally change the lobbying rules that trade money for influence over policy. In fact, most contributors have now adjusted their contributions to favor the current, rather than the past, majority party. As it turns out, Democrats, like Republicans, are only too eager to allow special interests to trump the common interest, as long as the transactions fetch a good price.

Take a long, hard look at the chart below, taken from an April 15 report published by OpenSecrets, which tracks the impact money has on politics and policy, put together by the Center for Responsive Politics. In 2007, the health care industry spent $445 million lobbying Congress, providing 16 percent of the total $2.8 billion spent to sway Congressional actions, more than any other economic sector for two years running.


Fifty-one percent of that $445 million -- $227 million -- came from the drug, device and medical products sector. General Electric alone spent almost $24 million courting our senators and representatives. PhRMA, the drug industry association, contributed another $22.1 million. The American Medical Association also spent $22.1 million.

These dollars are spent to obtain specific results. David Beier, Amgen's head lobbyist and formerly Vice President Al Gore's chief domestic policy adviser, explained his company's 2007 $16.3 million lobbying expense very nicely in a Washington Post article in April. "We face a lot of legislative and regulatory issues. We resourced our advocacy to match our challenges."

Anyone watching the lobbying frenzy leading up to last month's vote, the president's veto, and Congress' rejection of that veto, pitting funding for Medicare Advantage plans against funding for physician reimbursement -- the blow-by-blow was eloquently described by Bob Laszewski -- could only marvel at the resources that can be brought to bear when money or other perceived interests are on the line.

Of course, there's nothing new here. For decades, the health care industry has leveraged its money and influence, shaping policy to its own ends. Last December I recounted that, upon hearing that the U.S. Department of Health and Human Services had appealed a court ruling calling for the Centers for Medicare and Medicaid Services (CMS) to release Medicare physician data, American Medical News quoted the AMA's board chairman, Ed Langston, M.D., as saying, "The association is pleased that HHS is taking its advice." (This quote has since been expunged from the online version of the article.)

Or remember when the Employers' Coalition on Medicare, a powerful business interest group, teamed with PhRMA and the Republican Congress to pass Medicare D? The resulting legislation provided for a significant portion of the largesse to be allocated to large firms (in the form of retiree prescription subsidies) in exchange for their support for the program. Retirees and taxpayers, of course, didn't fare quite as well in the deal.

Then there is the long-standing sole-adviser relationship between CMS and the AMA on the issue of physician reimbursement, in which the specialist-heavy society has continually called for, and CMS has continually delivered, increased reimbursements to specialists at the expense of America's primary care physicians, who are now in deep crisis as a result.

There are endless examples, all of which beg a couple of important questions. Let's take the health care question first:

In a policy-making environment that is so clearly and openly influenced by money, how likely is it that Congress will be able to achieve health care reforms that are in the public interest?

There is broad expert consensus that one-third to one-half of all health care expenditure is waste. Talk privately with most health care professionals -- physicians, hospital execs, health plan administrators, benefits managers, supply chain execs -- and there is reasonable agreement on critical principles that are necessary to re-establish the system's stability and sustainability: some form of universal coverage for at least basic health services; a comprehensive and compatible IT infrastructure; a transition from fee-for-service to some form of performance-based reimbursement; pricing and performance transparency; and much more.

Such changes could drive tremendous savings for individual, corporate and governmental purchasers, but at significant cost to health care firms and professionals. Revenues and profitability would plummet. As the struggles over health care resources intensify, the efforts to protect and enhance each interest's position through policy will intensify as well.

It isn't as though there aren't credible and influential people sounding the alarm. Take this comment from Peter Orszag, director of the Congressional Budget Office, while testifying to the U.S. Senate Finance Committee in June 2007:

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