Well, every politician for the past 100 years has known that health care reform is the “third rail” of politics. And, if they didn’t know before Massachusetts, they know it now. So, why did health reform fail this time? Is it for the same reasons it has in the past or is there something unique about this moment or this president’s strategy for health reform that seemed to get so off track? While the history of health care is fascinating and the commonality of failure can make it seem that there is a hex over health reform that has infected everyone who tries, each failure of the major efforts at reform actually has its own unique set of causes. What is common about all of them is that the public cares a lot about health care — it is truly a personal issue. What is also common is that the public generally is more comfortable with systems that are known — even if largely disliked – than with approaches that are unknown or unclear. That is, the public generally has a fear of change. Opponents have always had an easier time engendering fear among Americans about what is proposed than proponents have had in helping people see the advantages of proposed changes.

Beyond these commonalities, what was it about this current health reform proposal that led to such a negative view in a state like Massachusetts? Is it because the policies that have been proposed by either the House or Senate are so radical that they are inconsistent with American values? Is it because there really isn’t support for changing how we finance health care in this country? I don’t think either of these are the case.

Indeed, one of the great ironies of the vote in Massachusetts was that the bills in Congress are, in large measure, patterned after the health care reforms that were enacted in Massachusetts in 2006. Those reforms were bi-partisan and are still strongly supported by the citizens of Massachusetts. And they are by no measure considered a radical departure from the structure of health care that exists in the rest of the country. The current bills in the House and Senate are similar and were also designed to build on the current system not replace it (to counter a criticism of earlier national reform efforts).

So, if it is not that the proposed bills are so radical or even so different from what is already in place in Massachusetts, what was it that set off the voters such that many of them told pollsters that their vote was all about stopping national health reform? I believe the issue at its core was not the substance of the legislation, but rather the process of legislating.

Health care accounts for one sixth of the U.S. economy. As such, virtually every interest group has a stake in what happens and all want to be at the table. The process of legislating anything requires dialog and compromise. And, legislating something as complicated and sweeping as health reform means that dialog and compromise will involve a lot of moving parts.

So is that bad? Not necessarily, but for something this big, it is ugly, visible, and takes time. And through this process, provisions that are not very savory often find their way into the bill (exhibit A: the special deal for Nebraska on Medicaid payments).

Also, the bills in Congress are trying to change — all at once — many elements of the health care insurance, financing, and delivery system. Because there are so many components in play, the legislation is complicated and the change hard to communicate in simple terms. That means that media coverage is often focused on the process rather than content of reform — and certainly, the process and its ugly side is a lot easier to understand than many of the detailed changes in tax structure, subsidies, independent quality review commissions and the like.

This process has always been the way Congress gets things done. But, we live in an era of 24/7 news coverage, instant analysis and approaches to filibusters that have helped increase the partisanship in Congress. Indeed, if the Medicare negotiations were occurring today, I think it unlikely that that bill would have passed either, despite President Johnson’s prodigious legislative skill.

So, where does all this leave us? Can the current effort at health reform go forward as is? If not, what is the message about the political reality of tackling anything this big — now or in the future? While these proposals got awfully close to the finish line — so close that nearly everyone in health care had already started talking about implementation issues “when” health reform is done rather than “if” health reform is done — I am guessing these proposals will have to be scaled back greatly to reflect political realities. I do think something will pass — and it will be something meaningful: the Democrats and the President have made this issue too central to their agenda for nothing to move forward. But, given today’s world, whatever is ultimately passed will need to be more easily understood and be smaller in scope than what many had hoped.

I know that a lot of advocates and those who worked so hard on these bills are in deep despair about the prospects for this reform legislation. But, maybe it is better to recognize the reality of today’s environment and take it as a lesson for the future on how to deal with important issues. After all, Winston’s Churchill’s view of democracy is as important today as when he said it in 1947: “Many forms of government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time.”

During the debate about health care reform, there has been much discussion about the need for a public option. The advocates for that option talk about the need to assure real competition in health care. About the public option, Robert Reich said, “…without a public option, the other parties that comprise America’s non-system of health care — private insurers, doctors, hospitals, drug companies, and medical suppliers — have little or no incentive to supply high-quality care at a lower cost than they do now.” Other advocates have made similar statements about why a public option is a necessary component of health care reform. But, is this a true statement? How important is the public option to achieving an environment that is conducive to improving the cost effectiveness and quality of health care?

I contend that the public option is one mechanism that can help achieve improvements in cost and quality but it is only one — and by no means a proven strategy to achieving these ends. In the debate about the public option, there seems to be an underlying “given” that concentrating power in a limited number of health plans in a region is a bad thing. But again, there is no data to support that conclusion. In fact, there is data to support the opposite conclusion. Medicare and Medicaid have most of the market for the populations they cover (approximately 78 percent of the Medicare population remains enrolled in Medicare traditional rather than in a privately run Medicare Advantage products; state Medicaid programs remain the predominant policy making entity covering the categorically eligible poor – even if they deliver services through private contractors). And, these programs have shown that they consistently offer their services at lower cost than many private health plans. The advocates for a public plan say that that shows that government is the more cost effective alternative. But the fact that Medicare and Medicaid have delivered services more cost effectively doesn’t necessarily mean that that is because they are government entities. Something else could be going on in this regard. In fact, the real issue may be not that the programs are run by a government entity but rather that these programs have enough concentrated market share that they have considerable leverage when it comes to negotiating with providers of care.

A picture of the leverage argument can be seen by looking at data for the state of Michigan. Blue Cross and Blue Shield of Michigan covers just about half of the state’s population or approximately 70 percent of the state’s private market. Data for Michigan shows that for more than 20 years, the rates of increase in state health care costs has been less than the national average and per capita health care spending in the state is ranked 36th in the country (CHRT Issue Brief “Health Care Spending by Country, State and Payer”). The fact that Michigan health care trends have been lower than the U.S. overall and that there is a predominant health plan in the state is not necessarily a constant conjunction. However, there is little question that BCBSM enjoys negotiating leverage that is not matched by other, smaller health plans. And, that negotiating leverage has certainly produced cost competitive benefits to the purchasers in the state of Michigan. Does that mean that there is no need for competition in health care? BCBSM still enjoys healthy competition in the state despite its predominant market share. And, it is likely that competition does have value in encouraging health plans to look for innovation. However, pressure for innovation and competition can come in many forms. One of the most powerful is the pressure to contain costs that is exerted by purchasers of health benefits.

My guess is that whether or not there is a public option in health reform is largely going to be irrelevant to creating the kind of market pressure that would produce innovation (witness the value ascribed to the public option in the House bill by the CBO!). Rather, the biggest force for change is one that is sorely underestimated in most of the commentary about the health care reform bills being considered in Congress right now: the insurance exchange. Done right, the insurance exchange will have the kind of market power and will exercise the kind of leverage over private carriers to create a mandate for cost effectiveness and quality enhancement. It is that new entrant into the health care mix that will be most interesting to watch over time. How it affects the market will be an exciting part of the new “health reformed” world.

Health reform is exciting and both the House and Senate bills have elements that could greatly improve the way care is delivered for millions of people. But, with all those great things, you have to know that there are lots of things in those more than 1,900 pages of the House bill and more than 2,000 in the Senate bill that will be an unhappy surprise for those of us who would like to see some fidelity to the idea that we should be advancing the cause of delivering health care based on research and evidence. Fortunately, there are folks who are delving into the bills to raise the visibility of issues of the greatest concern. In its Nov. 18 issue, the New England Journal of Medicine has done a great service in profiling just such an important issue (Industry Influence on Comparative-Effectiveness Research Funded through Health Care Reform).

The article’s authors, Selker and Wood, note that in the Senate Finance Committee health reform bill, there are some major problems with the proposed entity that would perform comparative effectiveness research. First, lobbyists for the medical device manufacturers advocated for and were successful in getting three seats out of the 15 on the governing body. And, second there is a provision of the bill (pages 1138-9) that says that the entity may “withdraw federal funding for five years from any investigator who publishes a report on research funded by the proposed institute that is not ‘within the bounds of and entirely consistent with the evidence.’ Determinations regarding such consistency would be made by the newly created research entity, which would have industry involvement both in its governance and in study design.”

Whoa! The idea behind comparative effectiveness research was to have an independent body add to the evidence and help inform practitioners and the public about what works in health care. Advocates for this kind of research thought of it as a place to get “The Truth” — to provide fair and objective research. It was, of course, never intended to be a shill for the industry. We already have one federal agency (the FDA) whose review of the effectiveness of new devices is limited. This new group was supposed to make progress in assessing the value of both devices and procedures. With the American approach to interest based politics, it is not surprising that the industry would attempt to capture this newly developing entity. Indeed, I suppose given how much industry is interested in this new approach comparative effectiveness research, it says something about its potential for impact. If we really want to make progress on delivering medical care based on the evidence, however, this is one devil that needs to get removed from the detail.

“Breast-screening advice is Upended” (Wall Street Journal, November 17, 2009)

For years, we have been told that we should have a mammogram every year after age 40 and in 2002, this advice was repeated by the same folks who now are recommending that most women can wait until 50 for routine mammograms. Does it make anyone think about the margarine vs. butter debate? I don’t want to debate the merit of these new guidelines – that’s another topic that has generated a lot of buzz in the blogosphere. Rather, I think this change in guidelines is illustrative of an important issue related to health reform: what is the role of each of us as consumers of health care?

When some health reformers talk about the need for personal responsibility in health care, they sometimes liken it to the way an informed consumer should take care of their car. But, I am sorry, I think we know a lot more about when and how we need to change the oil in our car engines than we know about the way the body works and what works best in taking care of ourselves. Yes, there are some certainties. Tobacco is bad for you. Too many calories result in obesity and that is also bad. But, guidelines are just that – they give advice but don’t give definitive answers. And science is ever changing and illuminating new understandings that are not immutable.

Do consumers have a role in health care – is there personal responsibility? Yes, of course, consumers have to be part of the equation. Indeed, consumers are the ones who suffer most directly from the effects of poor health choices. But we also can’t be so quick to judge the role consumers need to play when they are confused about what they should and shouldn’t do. We all want simple and easy answers to the health care cost dilemma. So, we often turn to things that sound good – like personal responsibility. But, when guidelines change after years of sounding so certain, it’s no wonder consumers are just confused.

I was having a debate the other day about whether the health reform bill going through Congress was a good or bad thing and whether it went too far or not far enough. This dialog is occurring with my friends and colleagues who are strong European model supporters – let’s put all docs on capitation/salary – and my friends who are fearful that the public option will be the end of private insurance as we know it. The perspective from these discussions is interesting because on one hand, those on the “fear” side of the equation are saying that they believe the legislation will be too dramatic and those on the “disappointed” side feel that the proposed legislation isn’t dramatic enough. In fact, I think it’s probably about where it needs to be. While there are certainly quite a few specifics that I would change, overall I think what is being proposed is good and meaningful and will make substantive change.

For my friends and colleagues who think the legislation doesn’t go far enough, I would simply say that the political process is unlikely to produce a bill that does what anyone who has spent years in the trenches believes needs to actually get done to substantially reduce health care spending or even the rate of increase in health care spending. But, I don’t think that is so important – this time around. What is more important is to have a structure and foundation for making policy decisions around health reform. Both the Senate and the House bills include such structures and simply having most Americans covered by some kind of insurance allows for that policy intervention to occur.

For those who think that because the House included a public option, the health insurance market is doomed, take heart. What has really been proposed in these bills is unlikely to make a major impact in the market, one way of the other. As proposed in the House bill, this public entity is not like Medicare and Medicaid, which have the leverage to all but require participation. Rather, this entity will have to negotiate contracts with providers of care as a new entrant in the market place, with a fairly limited primary market that won’t give it huge leverage in provider negotiations. And, it will take some time for the public entity to get up and running, so the private market will have an opportunity to adjust to new insurance regulations and the like before that happens. So, while many on the more liberal end of the debate feel strongly there must be a public option in the final bill, the reality is that this piece of the legislation is probably going to have a modest effect, if any. All the attention being paid to the public option really misses the far more significant changes that the legislation will really produce on rating and underwriting practices.

So, to all my friends who are passionate about health care reform, it’s time to be happy. After years of pessimism that any substantive change is possible, it looks like we have a chance that this time around, something really will happen. And, while it will have lots of warts rather than being that perfectly formed jewel, it will move us forward greatly from where we are now. And, if that isn’t enough to make you happy, just think – health reform will undoubtedly produce full and long term employment for those of us who are true health care junkies…