Federal Reserve Chairman Ben S. Bernanke entered the health care reform debate recently.  Bernanke, speaking at a health care summit organized by the Senate Finance Committee, told attendees “Improving the performance of our health care system is without a doubt one of the most important challenges our nation faces,”  according to an account by the AP.

Bernanke said the challenges facing the country fall into three categories: improving access to health care for the uninsured; improving quality, and; controlling costs.  On these points he described well the current environment in the debate.  Unlike a decade or so ago, when we last had a national debate on health care, instead of focusing on just the uninsured, the current debate has expanded and is now about cost, quality and coverage.  This change is important, beyond obvious policy reasons, because a broader debate creates a wider constituency, which can translate into improved odds for success.

He laid some of the blame for costs on new medical technologies and treatments that allow people to live longer and more productive lives.  This he said, coupled with an aging America, creates an ever increasing percentage of budgets, both personal and governmental, spent on health care.  He pointed out the obvious in that if not addressed growth rates and other problems would only get worse.

A healthier, older population has long been blamed for rising costs.  However, what’s missing in this charge is the added productivity a healthier and longer living population adds to our economy.  For an economist it is surprising he did not acknowledge this reality.

However, few make the economic/financial connection between a healthier, longer living population.  Instead, several recent studies and news accounts have tried to make the point that preventing disease may actually cost money.   The problem with the assertion that prevention does not reduce costs is two-fold.  First, it does not acknowledge the broader economic gains attributed to prevention through greater productivity and lower absenteeism and presenteeism.  It only looks at the narrow issue of health care costs, and in that, generally only direct costs.  A recent study by the Milken Institute demonstrated the tremendous economic cost that chronic disease has on the US economy, but also provided a pathway to recover those costs.  According to the report, the annual economic impact of the most common chronic diseases is calculated to be more than $1 trillion.  Seven chronic diseases – cancer, diabetes, hypertension, stroke, heart disease, pulmonary conditions and mental illness – have a total impact on the economy of $1.3 trillion annually.  Of this, $1.1 trillion represents the cost of lost productivity.  Assuming modest improvements in preventing and treating disease, they determined that by 2023 the nation could avoid 40 million cases of chronic disease and reduce the economic impact of chronic disease by 27 percent or $1.1 trillion annually.  The most important factor is obesity, which if rates declined could lead to $60 billion less in treatment costs and $254 billion in increased productivity. [Milken Institute]

Second, some prevention policies do cost money, especially if applied very broadly (Many screening tests for example).  However, more broad based community-wide policies (Many of which are more recent) clearly save money such as smoking reduction strategies, diabetes management programs and weight reduction for the obese (often a gateway to other morbidities such as diabetes, heart disease, asthma and even depression).  In a Rand study, they estimated that an obese or overweight person entering Medicare at 65 will cost the program 34 percent more.  (The Health And Cost Consequences Of Obesity Among The Future Elderly by Darius N. Lakdawalla, Dana P. Goldman, and Baoping Shang Health Affairs, Web Exclusive. Posting date: September 26, 2005.)  Another in a University of Florida study it was shown that for overweight or obese men they would have 6-13 percent more in lifetime health costs than men who were not obese and for women it was 11-17 percent more in costs.  (The Financial Burden of Overweight and Obesity among Elderly Americans: The Dynamics of Weight, Longevity, and Health Care Cost, By Zhou Yang and Allyson G. Hall Health Services Research. Volume 43 Issue 3, Pages 849 - 868, Published Online: 29 Oct 2007.)

Not to completely reject Chairman Bernanke’s assessment, he did make a very important point that I hope policymakers heard clearly.  While not suggesting solutions, he thought those best left to the policymakers, he did say that due to the complexity of our health care system he thought it may be best of lawmakers to consider an “eclectic approach” rather than a single or one-size fits all solution.

“We may need to first address the problems that seem more easily managed rather than waiting for a solution that will address all problems at once,”  he said as reported by the AP.

Next time – what might those “more easily managed” problems be?

With those words, Senator Hillary Clinton pushed the Democratic nominating process into another day of speculation….and, maybe more.

Tonight served up some unusual moments.

First, I returned home from an afternoon of flying to find Senator John McCain on both Fox and CNN when I expected to sit down for an update on the day’s political events.  What’s this all about?  This could be the fastest forgotten political speech in history….and, hopefully, the fastest removal of a green backdrop in history.  Someone should have asked how could anyone compete with the crowds and backdrops available tonight for Clinton and Obama….oh well.

Next, we were offered the Hillary Clinton address.  But, what was the message?  News organizations were calling the night historic declaring that Barack Obama had the delegates necessary to capture the nomination.  And, suddenly discussion shifted to what Hillary Clinton was trying to the accomplish with a defiant speech.  Why did she ask her 18 million supporters to go to her Web site and share views about what she should do?  Didn’t they do that at their respective ballot boxes?

One might suspect that some kind of negotiation is underway…but, if that is or was the case, this speech cannot help. 

So, as the evening ends, Barack Obama has achieved an historic victory and captured the delegates necessary to be one of two people who will the next President of the United States.  It is an historic moment in time.  But, for awhile longer, “Clinton time” still remains an element in the contest.  Amazing!

Senator John McCain just wrapped up a speech in a small town near New Orleans where he used the word “reform” more than a half-dozen times and deployed his presumed general election campaign themes “right change versus wrong change” and “that’s not change we can believe in.” He thanked Senator Hilary Clinton for inspiring his three daughters in her campaign for the nomination then launched immediately into a discussion of the differences between himself and the man he called “my opponent.” He scored points, in my opinion, when he talked about the fact that the American people are well aware of his great ability to work in the spirit of “bipartisan cooperation” on a host of issues and he ticked off a list of reforms he believes government must undertake – as well as a long list of issues upon which he has not seen eye to eye with President Bush. A few observations: The speech was lined with some memorable lines and, because I’ve always liked him and because I believe it’s true, the bipartisan piece resonated with me. But the crowd was small, predominantly white, noticeably older (with all due respect) and lacked any real thunder. Contrast that to the ageless, enthusiastic, rainbow crowds Senator Obama draws everywhere he goes and it’s just that – quite the contrast. One other thing: John McCain knows he’s up against an incredible orator in Barack Obama. At times, the speech seemed strained, as did the grin he forced into every applause line. I’ll check in with you later…

I just sent a text to my husband and my 19 and 17 year old sons to give them the Obama delegate countdown. As I write, the Senator is just 7 delegates shy of clinching the democratic nomination for President of the United States. I received replies within a minute, per usual. From my oldest son: “I knew he would win :).” That line is far more profound than most who read this post could ever imagine. For my sons, this will be one of those “Where were you when…” moments. History in the making. I did not know he would win; I’ve used this space to expose my early doubts. By the time they finish voting in South Dakota, he may be across the line; certainly the last primary – in Montana – will put him over the top.

60% of Clinton voters in Montana say they will vote for Senator Obama in November, 25% for McCain. I’ll be back in touch as the tote board gets lighter.

In what is most interesting, while doctors are blogging about health care, they are not talking about costs.  Arguably, they more than any group, should be talking about costs with great intensity since they provide the care and are at the very point of delivery.  Evidence is mounting as to why they really need to pay more attention to the issue.  A recent Dartmouth study showed the impact doctors have on cost.  Dartmouth researchers looked at the cost of care over the last two years of person’s life and found a wide variance depending on where the person lived.  A big part of the reason for the difference was the intensity, number and kind of physician visits patient received.  What gives the study extra credibility was that they only looked at folks who died, so the interventions did not make a difference in the end.  If doctors want to become more credible in the debate this is an issue they are going to have to confront.

Why cost and health care reform is now so important is that in the 1993-94 debate we really only talked about the issue of the uninsured and how to finance/refinance our system to cover the uninsured.  As is famously known, that debate ended in a heap of political acrimony and finger pointing.

We now call the uninsured issue universal coverage, but now we also include cost because the reality is that in a time of economic stress – such as we are experiencing now – people are much less altruistic, which is a big driver of the universal coverage debate, while in tough economic times we are much more self-driven, which is the cost debate.

The other reality is that we all know we spend enough on health care – perhaps too much – so the question is not that we need to spend more, the question is how we spend our money better.  And if we pass universal health care without cost reform what we’ll have is a health care system that is even more costly and unaffordable that what we have today.

What will be interesting to watch in the Presidential race is how the two candidates address the two pillars of health care reform.

Look for Obama to focus on the universal coverage issue because of its altruistic tone – a strong and traditional Democratic position, while McCain will take on the cost issue, the more self-driven position, which is a strong and traditional GOP position.

May the battle be joined.

It’s been a while since I visited the blogs to see what they are talking about on health care.  With the Democrats about to finally settle on a candidate, now seems the right time.

It’s no surprise that the health care policy blogs continue to be most active on the key topics of health care reform and costs. This tandem is important and is driving the national debate.  I’ll come back to this in my next post.

The national conservative and liberal blogs are not active on either topic. Hopefully this will change and they will include the issues in their conversations as the candidates more directly engage.

However, the Political Moms are blogging about health care, which as I’ve previously written is not a surprise. I suspect their intensity and breadth on the topic will increase and expand as the campaign moves deeper into the political year.

Interestingly, the California-based conservative and liberal bloggers are also following the issue, though the liberals are doing so more intensely and in a subtle difference in tone, they are also talking about reform, while conservative are only talking about health care.  So goes California so goes the country?