The Amazing Maze of US Health Care

Surprise, surprise!  The health care industry spent lots of money lobbying Congress in 2009 and 2010.

Last December, the New England Journal of Medicine provided some interesting insights into money and the legislative and electoral process.

Devil Tree

Using data collected by the Center for Responsive Politics (CRP) for the first nine months of 2009, the Journal estimates that the health sector would spend about a half billion dollars in lobbying in 2009.  About half of that came from the pharmaceutical industry and other health care product manufacturers.

The health care sector does not include the insurance industry which added an additional $160 million to that half billion.

The Center for Public Integrity (CPI) arrives at a much bigger number, $1.5 billion, but their report does not indicate whether it includes spending on elections.  Those amounts are reported separately by CRP.

And now?

What has happened since the bill passed in March?  Again, according to the Center for Responsive Politics (CRP), spending by the pharmaceutical industry during the first half of 2010 is lower than at any other similar time period since Obama’s election.  Since the bill’s passage in March, spending both by individual companies and by the industry trade group, PHARMA, has slowed to a relative trickle.

CRP reports that just three drug companies along with the their trade association, PHARMA, spent $30 million to lobby Congress during the first six months of 2010, two-thirds of that in the first quarter.

But CRP points out:

Despite the decreases experienced by these large groups, the health care reform bill’s passage did not mean a universal decrease in health-oriented lobbying. A few health-related groups actually invested more on lobbying last quarter than at any other point of the Obama era.

Between April and June, American Medical Association and its subsidiaries invested more than $8.8 million in lobbying. Since January, the trade group has spent about $15.2 million on lobbying — an increase of nearly 80 percent above its spending during the same period last year.

And the American Hospital Association, along with its subsidiaries, spent more than $4.6 million on lobbying. Since January, it has now spent about $8.7 million on lobbying — an increase of nearly 12 percent compared to its spending during the first half of 2009.

Lobbying shifts to states

Meanwhile, the Physicians for a National Health Plan (PHNP) reports that insurance companies are shifting their lobbying efforts to the states and focusing their efforts on the details of health care reform implementation.  One of those focus areas is the National Association of Insurance Commissioners (NAIC) who have considerable influence on details like the definition of medical loss ratio.

The Center for Public Integrity  also reports that five for profit insurers are considering a front organization to pump $20 million into this year’s Congressional races

Aetna Inc., Cigna Corp., Humana Inc., United HealthCare Inc. and WellPoint Inc. are weighing the new drive in part to shape the government regulations that will implement this year’s sweeping new health care legislation.

The devil is not just in the details.  The devil is trying to shape the details.

Photo Credit: Flickr – Chris Lim

Past efforts by the federal government to reform the health care system offer instructive guidance about future prospects for meaningful reform.

Forgeddaboutit.

Lesson learned – why go for the simple fix when the Rube Goldberg fix will do. Limit the fix to only a small hole in the system. Make sure it has a good story line. Congress gets some political mileage with little down side. In addition, it keeps bureaucrats and lawyers busy figuring out what Congress intended.

Let me illustrate with two examples.

Thirty state legislatures have attempted to address a real problem – health care coverage for young adults. Young adults generally lose coverage as dependents on their parents’ plan when they turn 19. The technical term we in the benefits profession use is “age off.” Young adults who continue as full time students can generally continue on their parents’ plan if they and their college or university jump through some administrative hoops.

These ideas evolved in a quainter world when young people could find jobs at 18 or 19 that offered health insurance. Rarely true today. Read the rest of this entry »

I support a simpler health care system.  That is my number one priority.   Thus I am unimpressed with the health care reform platform of our newly elected president.  I do share the hope and optimism of many that meaningful change can and will happen. 

But getting a simpler health care system means that some of the stakeholders need to be cut lose from the system.  That is a politically daunting task. It is why most health care reform proposals try to add more patches to what is already a shabby patchwork quilt of private and public programs.

One effort does try to simplify a small part of our current system.   Read the rest of this entry »