Outgoing CMS Administrator Donald Berwick, someone who once romanced rationing, is stepping down from his post. While some in the media may portray him as a martyr given his inability to obtain Senate confirmation to the post, Avik Roy puts the situation in proper perspective. Roy states that contrary to MSM myth that Berwick was "done in by Republican intransigence. He was done in by presidential cowardice. And therein lies a microcosm of everything that’s been wrong with Obamacare."

Read Roy's full article at National Review Online, here.

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The Heritage Foundation details how ObamaCare relied on Accountable Care Organizations (ACO) to curb costs and how that regulations that the Administration has issued have been met with a lukewarm reception among the medical community. Read more here. 

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On August 2, 2011, Senator Lisa Murkowski (R-AK) was joined by Senator Lamar Alexander (R-TN) and Mike Enzi (R-WY) in introducing a new bill - S. 1500 - to allow for the sale of child-only policies across state lines. One of the consequences of ObamaCare is that many insurers have stopped selling child-only policies (COP) in many states because ObamaCare prohibits the denial of coverage for any pre-existing conditions.

At first blush, one might think that the Murkowski bill is a good thing because it advances the Republican idea of allowing insurers to sell across state lines. That is a short-sighted view of the legislation.   In fact, Murkowski's legislation is horribly misguided for the following reasons:

1. It addresses a symptom, rather than fixing the problem. The problem is ObamaCare and the way it bans denial of coverage for pre-existing conditions (it lets people wait to get sick before buying coverage rather than limiting the guarantee of coverage only to those who maintained continuous coverage). The way to correct the problem would be to repeal the offending provisions of ObamaCare, including those related to denial of coverage for pre-existing conditions in child-only policies (the fact is that the pool is too small for these policies to bear this kind of risk).
   
2. Rather than expand coverage for child-only policies, it will likely have the opposite affect leading to fewer COP policies being available.  How? Assume a scenario where an insurer in Tennessee is still selling COPs but there are no insurers selling these policies in the states surrounding Tennessee.  Parents of a child with a pre-existing condition from Mississippi, Alabama, Georgia, North Carolina, Kentucky, Arkansas and Missouri will rush to Tennessee to buy a COP as the only affordable source of insurance for their very sick child. This will negatively affect Tennessee's risk pool, leading to increased premiums, parents of healthier kids will drop out of the pool, leaving only the very sick.  This will lead to a death spiral for COP policies as insurers in TN would stop offering the COPs altogether.  End result: fewer, not more, kids would have insurance.   
3. It signals a capitulation by moderate Republicans that ObamaCare is here to stay. Murkowski and Alexander are often the first among Senate Republicans to cave in to Democrats and Enzi has worked regularly over the past decade, including with the late Teddy Kennedy (D-MA), to advance big government policies.
4. S. 1500 fails to understand the intended purpose of allowing for the sale of insurance across state lines.  The idea is intended to reduce the impact of state government regulations and mandates that drive up costs. Letting consumers buy across state lines let them migrate from high-cost, high-regulated insurance policies in their home state towards more affordable policies in another state that are free from heavy government regulation.  So allowing for the sale of insurance across state lines will effectively encourage competition to help reduce costs in the face of oppressive state regulation.  Murkowski-Alexander is misguided because they are trying to use the sale of insurance across state lines to circumvent the impact of onerous federal regulations, something that will ultimately prove impossible as long as the federal law remains in place.  
5. Politically, it gives Democrats a chance to play politics.  If the Democrat-controlled Senate holds a vote on the bill, Democrats who support the law would be able to  say they "fixed" the problem (the same one they created) - despite the fact these Democrats know this fix would only lasts for 2 years until ObamaCare fully kicks in.  After two years, child-only policies will die off as people will rush to the exchanges at a tremendous cost to taxpayers. 

Ultimately, Murkowski and Alexander would let the Democrats off the hook so that they never have to face the consequences of the Democrats' misquided ObamaCare policies.  All Americans will suffer in the long run.  This is the Republican version of the Obama Administration's waiver policy - politically motivated and horribly misguided - it fails to address the real problems in the insurance market that were created by ObamaCare in the first place.

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The Department of Health and Human Services has released proposed regulations for the how states must establish health insurance exchanges.  These regulations are a result of Section 1311 of ObamaCare.  In addition, HHS released a set of proposed regulations related to how states can reinsure risk.

Notable from the proposed regulations related to health insurance exchanges are the following:

1. States must submit a plan for how it intends to operate the Exchange and receive written approval of that plan from HHS "not later than January 1, 2013."  Section 155.105.  Any changes to the plan, must be approved by HHS prior to those changes taking effect.  Section 155.105(e).  In this respect, the federal government will control each state Exchange much like the feds currently control the states under the Medicaid process.
2. The Exchange cannot issue any "rules that conflict with or prevent the application of regulations promulgated by HHS under subtitle D of title I" of ObamaCare.  Section 155.120.
3. Existing Exchanges must come into compliance with federal rules and "must work with HHS to identify areas of non-compliance with [federal] standards."  Section 155.150.
4. The regulations provide that an Exchange must make eligibility determinations (Sec. 155.200) but does not specify the process for making such determinations (it looks as if the details will be forth coming in other regulations).  This raises the question of whether the determination process will be so weak as to allow illegal aliens to participate in the Exchange.    

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The Manhattan Institute has published a new analysis on the fallacy behind comparative effectiveness research (CER).  The analysis was produced by Tomas J. Philipson of the University of Chicago and Eric Sun of Stanford University.  President Obama has implied that CER, which looks to the most effective treatment for the "average" patient, can be an effective tool to reducing government spending on healthcare.  There is only one problem with this, it isn't true.

President Obama suggests that if the "blue pill" is as effective for the average patient as the "red pill" but cheaper then that should figure into the course of treatment.  The suggestion is also that it will factor into what government will be willing to pay for. But the average patient is not the same as an individual patient.  Just because 51% of patients respond "as well" to one therapy does not mean that such therapy is the best course of treatment for the other 49% of the population. In fact, the 49% may have another complicating condition that would state the "blue pill" is the exact wrong course of treatment.

The human body is complex but Obama and supporters of ObamaCare want to reduce the practice of medicine to a mechanical exercise that ignores the individuality of patients and the variety of response each person may have to a specific treatment.  As Philipson and Sun state: "Declaring a treatment most effective based on an average is a medical and an economic error...."
 
The Executive Summary and a link to the full analysis can be found here.

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On June 24, 2011, CQ's HealthBeat News reports on recent statements by Obama Administration OMB head Peter Orszag. Orszag left the Administration and now is a VP at Citibank and has published a new article in Foreign Affairs magazine about ObamaCare.

In the article he suggests that the "biggest substantive shortcoming" of ObamaCare was its lack of medical liability reform. Orszag suggests that med-mal reform should have taken the form of providing "safe harbor for doctors who follow evidence-based guidelines" in treating patients.  This of course ignores the reality of medical practice. Guidelines are just that - guidelines.  In some cases, they may be the best course of action and in other cases not.  To suggest that doctors follow a bureaucratically developed timeline and course of treatment as the only way to avoid a malpractice claim would not serve patients well.  Once again, Orszag gets its wrong.

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Sally Pipes writes for Forbes about the perils of a single payer system which includes government prices controls.  While ObamaCare moves the U.S. rapidly in that direction and Massachusetts and Vermont are adopting similar policies, Canada is moving in the opposite direction. 

According to Pipes, the father of socialized medicine in Quebec has embraced a return to the free market saying: “We are proposing to give a greater role to the private sector so that people can exercise freedom of choice.”  Pipes concludes here article by saying: "Here in America, federal and state officials have promised to lower health care costs — and right quick. But forcibly regulating prices won’t do the trick. Americans — and Vermonters in particular — should hope that these experiments in health care reform are mercifully short."

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Kevin Williamson at National Review Online writes about HHS Secretary Kathleen Sibelius' efforts to implement price controls on insurance premiums.  Despite the fact that ObamaCare will impose a series of costly mandates on insurers but Sibelius will cap premium increases.  These factors will drive insurers out of the marketplace, creating fewer consumers choices, leading to scarcity and eventually, in the absence of market alternatives, a public option (as the only option).  

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One of the "cost saving" measures contained in ObamaCare are the provisions related to Accountable Care Organizations (ACO) which will create an HMO like program in Medicare.  Seniors will not have a choice if they are assigned to an ACO but will be assigned based on their previous year's use of the health care system.  Critics have noted that the ACO regulations issued by the Obama Administration earlier this year will cause doctors to violate the Hippocratic Oath by putting cost containment above patient care (this will occur because doctors who are part of an ACO will get paid based on costing savings).

The Heritage Foundation has issued a new document detailing some of the specific problems of the ACO regulations, among these problems:  "The only way ACOs can work to reduce costs is to become a more integrated and closed network of providers who follow data-driven protocols for care. That means they can’t let their beneficiaries go to see just any specialist. The ACO needs patients to see only the ACO’s preferred list of specialists. But that will be nearly impossible to enforce if beneficiaries never agreed to become part of the managed care environment of an ACO in the first place.”

This is a big price for seniors to pay when the ACOs are likely to save 0.05% (yes, 5/100ths of 1%) of all anticipated Medicare spending during the first three years of the ACO program.

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The Obama Administration has failed to properly submit  a copy of proposed ObamaCare regulations to enable the Senate to perform its necessary oversight role.  HHS delivered a copy to Vice-President Joe Biden's office in November 2010 but the Vice President's office failed to deliver a copy to the Senate Parliamentarian, a fact confirmed by the Parliamentarian's office.

Senator Mike Enzi (R-WY), who serves as the Ranking Member of the Senate Health, Education, Labor and Pension Committee, sent a letter to the Vice-President asking him to submit the proposed regulations to the Parliamentarian.  In the letter, Enzi stated the failure to submit the regulations: “denies senators their right to file Resolutions of Disapproval and utilize procedures established under the Congressional Review Act to review new regulations.” Senator Enzi continued:  "This is especially troubling, since this rule has the potential to eliminate hundreds of thousands of U.S. jobs, undermine efforts to detect and prevent health care fraud, and discourage investments that could improve health care quality and reduce costs. I was disturbed to see recent press reports indicating that that the Administration may disregard the law and not submit this regulation to the U.S. Senate. I would urge you to determine why this regulation has not been formally submitted to the Senate and take all necessary steps to rectify this problem immediately.”  

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