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Deadlines are necessary - Health Care Rx Panelists

Deadlines are necessary

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I know deadlines seem completely arbitrary, but the reality is that deadlines are often necessary to get work done. How many of us wait until April 15 to pay our taxes? Without a deadline, we would probably wait even longer.

The same is true for health-care reform. Like taxes, it is a painful process. There are potential winners and losers. Politicians are making many difficult decisions as part of reform, and people typically don't like change, especially if they don't think it will benefit them. The strategy is then to delay. Delay can often weaken reform, or when there are competing priorities, delay can shift focus elsewhere. A deadline forces all parties to come together to make a decision. It is true that too early a deadline can result in a bill that isn't ideal. But let's face it...no one bill is going to address all the problems with our health-care system. There are going to be many bills necessary over many years to continue to refine the changes. We need to start somewhere, and making people take action by an imposed deadline is an effective strategy to get work done! For those who say the deadline is not feasible, I say let's go ahead and see!

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Improving health in the shorter term - Health Care Rx Panelists

Improving health in the shorter term

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Some of the relatively low-cost, high-return ways to improve health and reduce health care cost increases are relatively unglamorous and do not involve big government programs. For example, at Pitney Bowes, we reduced the rate of seasonal influenza and other infectious diseases by having an aggressive outreach on seasonal immunizations and on hand-washing and other hygiene-focused practices, such as more frequent cleaning of surfaces on which viruses or bacteria reside and spread. The rate of hospital-acquired infections, which cost our health care system dearly, could be reduced significantly if all hospitals focused similarly on infectious disease prevention.

Another relatively low-cost area of focus, which pays both significant short and long term dividends, is more aggressive outreach on prenatal counseling and lifestyle modification. Today, government programs are predominantly focused on the medical interaction required close to the time the mother delivers. However, the real benefit of prenatal counseling is at much earlier points in the pregnancy, at points during which an intervention can reduce the incidence of low birth-weight, premature babies. At Pitney Bowes, we used a program called Great Expectations, which provided financial incentives to get expectant mothers to participate, and we achieved lower incidence of premature births.

Any investment in getting children and adolescents to adopt better living habits pays back handsomely. For example, increasing the price of tobacco products by 10 percent reduces the percentage of teenagers who start smoking by 4 percent as a number of studies summarized in 2004 by Professor John Taurus of the University of Illinois at Chicago shows.

We have to refocus our efforts on improving health, as opposed solely to increasing insurance access. If we do not solve the health and health care access problems, and only give everyone an insurance card, we are effectively rearranging the deck chairs on the Titanic.

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Certainly one quick way to fix the health care system is to compare apples to apples. It is my understanding that the U.S. and Europe calculate infant mortality differently and in a way that skews comparisons in favor of the old world.

In the U.S., an infant is counted as "dead" if they die in the first 24 hours. In Europe, they are not counted as "dead" if they die within the first 72 hours. I guess they're just in limbo. This makes infant mortality, which is one of the important components of health care measures, seem higher in the U.S. than in Europe; creating the misconception that our health care ranks lower.

If you're going to compare systems to justify a major overhaul of our health care, then we should get the figures right.

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Cadillacs are in the eye of the beholder - Health Care Rx Panelists

Cadillacs are in the eye of the beholder

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The intent is pure. The execution, however, may have the opposite of its intended effect. All week we've heard about the many working class Americans who've given up raises and instead taken more generous coverage from their employers, making them members of the so-called Cadillac club. Speaking as a member of America's cancer community, I can't help but wonder whether survivors may have even more difficulty finding an insurer to cover them and being able to afford that coverage. If their insurers pass along the cost of a 35 or higher percent tax with higher premiums, then reform has not achieved its desired outcome - consumers with reliable, affordable insurance. And, judging by recent trends, there's little doubt that insurers would pass that cost along post haste. Sen. Baucus deserves due credit for seeing a difficult process through to the end and for trying to put forth solutions. We're certainly learning as a result of his efforts, regardless of the final outcome. Hopefully, we'll see more of that spirit of solution-seeking in Congress as we draw nearer to the hoped-for Thanksgiving deadline.

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Needs Some Work - Health Care Rx Panelists

Needs Some Work

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Sen. Baucus' proposal to impose a tax on high-end insurance plans is not too far from Obama's proposal early in the health-care reform discussion to tax the wealthiest income earners. I did not support that original idea and I am not very excited by the current proposal, either, but for different reasons.

According to the senator's proposal, insurance plans with premiums that reach a certain dollar threshold would be subject to a tax. One of the challenges with this idea is that the cost of medical care varies significantly from one region of the country to another. What might be a "Cadillac" plan in one area would provide only basic coverage in another region. The proposal would need to account for the disparity that exists.

Additionally, some people with higher premiums are not actually wealthy. In some areas of the country, unions have negotiated insurance plans for their members that have richer benefits and, as a result, higher premiums. The senator's plan would need to allow for these as well.

From the surface, taxing plans above a certain level would produce a needed revenue. After all, we have to pay for health-care reform somehow. However, the tax revenue would not be paid by the insurance companies but would be passed on in the form of higher premiums to businesses and employees--in some cases, to employees who can not afford it.

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Call It a Punishment - Health Care Rx Panelists

Call It a Punishment

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Imposing a huge tax on expensive insurance plans is simply a punishment for those who want the best for their families. This isn't health-care reform, it is a money shift. The huge profits that insurance companies now realize through high cost of coverage may be reduced, but for the individual it is in essence just giving your money to a different bank.

There is another major problem with this concept: it infers that there will be a huge difference in coverage being offered to high income earners and the rest of Americans who will simply be given a plan to make do. The middle class will undoubtedly feel the pressure of increased taxation and settle for less than they have now through high co-pay employer plans.

I believe everyone can take on some ownership of health care through a number of considerations. Some suggestions could be a small tax imposed on everyone, retail taxes on non-essential goods, small office co-pays, a yearly co-pay for families. The sum of any of these or even all of these would amount to far less for an individual than any taxes Senator Baucus is suggesting. In the end, his proposal will simply make health care less affordable, fail to meet the goal of coverage for all Americans and ensure that no one has the best coverage. Let's face it: even wealthy Americans are pinching pennies these days.

This is tantamount to total failure of health-care reform efforts unless, of course, balancing the books is the only objective. We didn't need Baucus for that. Any high school economics student could have come up with this plan.

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Empowering Consumers - Health Care Rx Panelists

Empowering Consumers

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We should have faith in consumers to make the right choices for their health -- only then will we reduce costs, expand coverage and drive value.

The motivation driving this tax is that health insurance plans (Cadillac or not) are another form of compensation -- something your employer provides for you with pre-tax dollars versus your paying yourself with after-tax dollars. The employer's ability to use pre-tax dollars creates a misalignment. Rather than tax a small percent of plans, it would seem better to correct the core problem. Until consumers are educated and empowered about how their health-care dollars -- both pre-tax and post-tax -- are spent, real reform won't happen.

One of the big snags in reform conversations is the idea that employment and health insurance are inextricably linked. Health insurance should be portable so that it can be taken from one job to the next and will cover you when you're temporarily unemployed. Labor mobility is one of the underlying strengths of the U.S. economic system, and health benefits connected to employment unnecessarily weakens labor mobility.

Moreover, the concept of health insurance should be more focused on 'major medical' needs like other insurance where you pay into a system to prepare for a catastrophe. But the norm of the current system is first dollar coverage which pays for every routine procedure. The fact that employers can use pre-tax dollars and ostensibly provide greater benefits for each dollar spent has led to this situation. This has driven up total health costs through misaligned incentives, extra administrative costs and limited provider innovation (e.g. packaging of services to meet routine needs). If there were a consumer-driven market, consumers would understand how their dollars are spent and there would be a more innovative insurance market.

The Wyden-Bennett Act provides this foundation. Consumers would receive cash from their employers equivalent to what the employer spends on health insurance. They'd have the option to buy the insurance they considered most appropriate, based upon need and determined by behaviors, through a health insurance exchange, which would be regulated by the government and encourage insurers to compete for their business.

Consumers make health choices every day, so why shouldn't they decide the coverage they need and the amount they will pay for it? People don't need the government to help them pick their car insurance. Let's give people the right information to make the right decisions.

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Insanity? Or Just Politics? - Health Care Rx Panelists

Insanity? Or Just Politics?

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As I have mentioned previously, there is near-unanimous agreement that our current tax subsidy for the purchase of employer-sponsored health care insurance is an inefficient one. It encourages the purchase of more insurance than we need (as any subsidy would), and it ultimately is inequitable, as the poor receive a much smaller subsidy than the rich -- or none at all. Some effort to reverse this policy and redistribute the benefits to the poor and near-poor would have been quite desirable and maintained the effort toward budget/deficit neutrality.

Instead, in an effort to, perhaps, be politically thoughtful, the Baucus bill seeks to tax health plans so that it will not seem as though the consumer is being taxed. Economically, this tax will be passed along to the consumer and it will have little or no impact on health plan profitability. There is no economic advantage to this approach -- and one can already assume that a new cottage industry will arise to minimize this tax, with little or no benefit to the consumer or the federal budget.

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I'm sorry, but how does taxing something that was previously excluded from taxation not equate to removing the exclusion on taxation.

It can't be both. If removing the exclusion from taxation would prevent market inefficiencies, it seems to me that the same would hold true by adding a tax to the excluded health care to compensate for the exclusion.

If this isn't the case, I would appreciate a clear explanation what the difference is, because I can't tell from what I've been reading.

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Well-Designed Plans Produce Results - Health Care Rx Panelists

Well-Designed Plans Produce Results

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I support taxes on "Cadillac" plans as long as we adjust the cost for plans that enroll a higher percentage of less-healthy patients. Research shows that a richer plan does not produce better health or health care.

The "Cadillac" plans typically have bad plan designs that provide 100 percent reimbursement for hospitalizations and outpatient surgeries, and close to 100 percent reimbursement for expensive and overused diagnostic tests. When plan participants are paying little or nothing for the most expensive components of care, they have no incentive to manage their health or the quality of their care. They also are less likely to adhere to chronic disease treatment plans because they implicitly know that their hospitalization is completely covered.

It is inconvenient and challenging for many people to change their behaviors to better manage their health or diseases. There has to be some degree of cost sharing for the most expensive and technologically-intensive treatment to get them to alter their behaviors.

By contrast, those plans that align the plan participants and payers by giving incentives for high-quality care and healthy patient behaviors should be rewarded. In those plans, because there are cost-sharing arrangements and differences in premiums and payments to providers, there are opportunities to affect both doctor and patient behavior for the better.

For example, we should give discounts for patients with chronic diseases like Type 2 diabetes who do everything they are supposed to do to maintain or improve their health, since we know that Type 2 diabetics can actually improve their condition. We should use workplace-based clinics that deliver convenient, lower-cost care, and an exceptionally high degree of employee satisfaction. We should aggressively promote preventive screenings that save on health care costs.

As I saw at Pitney Bowes, an intelligently-designed health plan produces better health and health care at a significantly lower cost than these "Cadillac" plans.

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I agree with Mr. Critelli 100%. Most Cadillac plans are of zero cost to the patient. Therefore, they have no idea what their healthcare costs, and therefore no incentive to shop for price.

If patients/employees had to share in the cost of their healthcare, they would be much more discerning in their selection and use of healthcare.

I'd also add that employer-based care and individually purchased healthcare do not share the same tax advantages. Equity should be added...either tax the employer plans or give a tax break to those who buy their own care.

As the President and I are probably the last two smokers left on earth, I'm going to need his help on this one. A tax on "Cadillac" Health Plans is just like the taxes on cigarettes in that it taxes in the direction of diminishing returns. That is not what you want in Health Care, where occasionally a better treatment comes along that is cheaper too.

The "Cadillac" Plans are already "taxed" by virtue of a higher price traded for waste in the Health Care system. To be fair, all plans are "taxed" in this manner, and simple accounting conventions dictate whether the "tax" is levied first or last. "Cadillac" plans buy more procedures so they buy more redundant and wasteful procedures and therefore are "taxed" more.

I'm waiting for an MBA to tell me you don't need an MBA to see that Employers should not be in the Health Care business unless they want to compensate (rent) 24/7 of the Employee's time. Unions too. I live in Texas where we pay for Education with the Lottery, sending kids to school to make them smarter than to play the Lottery and proving that the Baby Boom will never be over.

Tax Policy needs to work, not just on paper and for just under initial conditions, otherwise, it's just taxes.

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More Problems Than Solutions - Health Care Rx Panelists

More Problems Than Solutions

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Taxing "Cadillac" health insurance creates more problems than solutions.

Let's follow the "rationale":

--The president says that runaway health-care costs are destroying American businesses.
-- Some American businesses offer health insurance with high benefits. Presumably, this approach has a sound business rationale in recruiting and retaining the workforce.
--Despite "free market" economics, the government taxes these benefits. This action will then provide revenue as well as disincentives to these "Cadillac" plans.

There are many problems with this proposal:

1. It is inequitable. Retiree benefits earned over decades could be savaged by high taxes. Americans with self-funded insurance plans would have the same vulnerability.

2. It will not reduce health-care costs. The generous plans are not the problem. Among the many factors driving up cost are: poor consumer price sensitivity; no curb on technology or pharmaceutical costs; no incentives for providers to practice cost-effective care. Medicare is not a "Cadillac" insurance plan and yet its costs are running out of sight.

3. High-benefit plans are self-correcting. With global competition and escalating medical costs, such benefits are disappearing. The auto companies and their unions were the first victims and municipalities with their rich benefits will be next.

4. What is the real goal? If the "Cadillac" plans are taxed, why not tax all the other plans? Most health insurance exists because of employer tax advantages. Is this proposal a signal that this tax advantage will end? Or is this just an expedient way to secure revenue?

Americans want health-care reform with understandable solutions. If we must raise taxes to provide appropriate health care, let's not disguise that reality with proposals like this.

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Four wrongs don't make you right.

Your point #1 is just wrong. No one is proposing a tax on benefits already paid for. I'm willing to bet you can't articulate a clear story how this would retroactively "savage" retiree benefits that are contractually agreed upon .(p.s That said, I'll admit it is inequitable in the same sense that a progressive tax system is inequitable.(ie in a fair and just way)

Your point #2 is almost certainly wrong. (At least the CBO thinks so.)

Generally, what makes a plan a 'Cadillac' is the guarantee of 100% or near 100% compensation for the cost of medical procedures, hospital stays, and diagnostic tests.

This is a broken incentive. If consumers end up with plans where they have to pay a reasonable percentage of the cost, they'll be much less likely to get unnecessary procedures. (This is much like Medicare/Medicaid, actually, where the people receiving benefits aren't actually paying much for them. )

Your point #3 is beside the point. They are self correcting over scales of twenty to fifty years. Union industries like automobiles are failing today because of bad promises on health benefits made by their fathers. A functional system needs feedback to be more immediate, because business just doesn't plan for a half century in the future.

I'll answer your #4. Incremental reform, a small step in the correct direction. Yes, a Wyden style proposal is closer to ideal, but conservatives are trying their darnedest to make it improbably that more sweeping reforms will be successful.

Let's just sign over our paychecks to His Royal Highness. Then, we can go to the White House with our begging bowl and ask, as we bow low and kiss his feet, that we just need a little bit so we can eat. We all know that His Royal Highness has all the answers and knows what is best for us! After all, he has been telling us that now of months.

I can hardly wait to sign over my next paycheck. Just seeing His Royal Highness eyes light up when he sees that I gave my all, will be reward enough.

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The Inequity of a Health Plan Tax - Health Care Rx Panelists

The Inequity of a Health Plan Tax

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Whether a plan's considered a Cadillac or a Honda, taxing health plans is an inequitable strategy for bringing down health care costs. In the short run, the excise tax may seem like a useful way to generate funds to cover health reform. But such a tax perverts the marketplace and creates inequities for both workers and the employers who sponsor health insurance.

Workers' wages have been relatively flat for the past several years, as employees have traded off cash compensation for benefit compensation - in particular, health benefits. The difference between workers' earnings and health benefit costs has increased 150 percent over the past eight years while wages have increased only 37 percent, according to Towers Perrin's 2009 Health Cost Survey.

As Helen Darling, President of the National Business Group on Health, has said, "Workers have been giving their raises to the health care industry." Taxing a high-cost health plan could negatively impact middle-class workers who have increasingly traded off cash for benefits over the past eight years.

The other side of the coin is employers, who need to attract and retain a talented workforce. Benefits are a key tool in an employer's arsenal for building a skilled team.

The health benefit tax may be aimed at Cadillacs, but it could backfire and create a Corvair of a health plan. And that was one dangerous automobile.

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I swear, every one of these opinions sounds like it is straight from the mouth of a lobbyist.

To your particular argument: We can't make an omelet without breaking a few eggs.

Or to apply a health care metaphor...This provision might not taste good to Organized Labor but if they don't take their medicine, they're soon going to be back at the doctor in much worse shape.

In other words, which is worse,(1) That they lose some benefits earned in the past, (2) or that they keep giving away their raises for no benefit?

"The other side of the coin is employers, who need to attract and retain a talented workforce. Benefits are a key tool in an employer's arsenal for building a skilled team."

__________________

With the glut of workers created by the latest economic downturn, this statement is no longer true. We can expect a further depression of wages.

I've considered Cadillac plans given to autoworkers to be a tax dodge. You don't need attractive benefit plans to hire autoworkers,as they are people who are minimally educated and a dime a dozen. But by giving expensive benefits, companies currently avoid all of the taxes they'd otherwise be paying on wages(FICA, federal, state, futa, etc. taxes). Since unions often take care of the benefits, it's no wonder they're fighting this idea of taxing benefits....but it would be fair. Individuals purchasing insurance aren't afforded that same tax break.

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