Two Health Reform Challenges: Passage and Implementation Walter Zelman Chair, Department of Health Science California State University, Los Angeles University of Michigan (Go Blue) September 24, 2010

Some Systemic Challenges: by the numbers, years 60 $1.4 million a day Several trillion dollars 400% of FPL 9% and rising 28 in 2011

The answers 213; years since the constitutional establishment limited (sometimes stalemated) government. 60: votes in the Senate $1.4 M: amount spent by health related interests lobbying, January-June, 2009; per day Several trillion: Obama spending to date 400% income level that now needs subsidies 9% and rising; unemployment and failing economy 28 in 2011: rough projection of number of Republican governors in office as states implement reform

Reform Challenges and/or Paradoxes: Why is this So Hard? Health reform as legislative redistricting: Reform elements are complex and interrelated. It is impossible to keep it simple or small. the simple becomes the complex and attracts concerns Can’t have reform without cost control: but can’t get reform with cost control Reform needs to reduce costs; but easiest way to get success is to increase spending

Challenges and Paradoxes Reducing costs means changing the delivery system: that, many think, is the most difficult cost control and marketplace challenge Comprehensive reform takes time: but legislative and political calendars and/or attention spans may not allow that time Reform may need to happen in the middle, but the middle lacks energy

Challenges and Paradoxes Public wants change in system, but less in personal circumstances: The incumbency phenomena Public wants reform, but is wary of cost Reformers should have a Plan B, but putting it on the table will make passing Plan A much harder: thus, comprehensive reform may be all or nothing

Challenges and Paradoxes Problems with message: --Hard to sell cost and coverage reforms at the same time; or, how does saving money cost $1 trillion? -- Stability and change: the system needs a shake-up, but you can keep what you like

Challenges and Paradoxes: Messaging Can advocate, but not implement, cost control; public fears too great. Reluctance to make reform about the uninsured Left with: insurance reforms: is this worth $1 trillion? Why not health security for all? WalterZelman Presentations

Why Reform was so hard The Economy: deserves a slide of its own Reform (spending) much harder in difficult economic times WalterZelman Presentations

The Timing of Health Reform Public concerns Regarding health care Costs and/or access HighModerateLow State of The Economy Improving, Healthy Incremental, targeted reform at best Slowing growth, Recession Reform unlikely

Premium Increases v. Inflation:

WalterZelman Presentations Premiums and Poverty Levels: the Rising Costs of Reform Percent Increase 250% of Poverty Family of Four 44,00755,12525 Average Family Premium 5,84413, Premium as % of 250% of Poverty

Clout of the Interests: 2000 v : Total spent by health sector: 237m --15% of total federal lobbying --Most spent by any sector 2008: Total by heath sector: 484 m -- 14% of total federal lobbying --Most spent by any sector Source: Center for Responsive Politics

Lobbying Expenditures, in Millions 2009 Source: Center for Responsive Politics

Top Lobbying Industries: Pharmaceuticals 3. Insurance: includes some health, mostly other 4. Business Associations 10. Hospitals and Nursing Homes 14. Health Professionals 20. Health Services/HMOs Source: Center for Responsive Politics

Percent who say they would support a universal health insurance system even if it… Let’s Not Forget… Public Debates Matter Limited their choice of doctors Meant some treatments currently covered would no longer be covered Meant there were waiting lines for non-emergency treatments Meant they would pay either higher premiums or more taxes Source: ABC News/Kaiser Family Foundation/USA Today Health in America Survey (conducted September 7-12, 2006) Percent who support a universal health insurance system, in which everyone is covered by a program like Medicare that is gov’t-run and financed by taxpayers Percent who support the current system, in which most people are covered through private employers, but some people have no insurance

Key (Apparent) Strategies for Passage Promise cost control: but offer few specifics Don’t emphasize the uninsured: may be necessary to protect against political attack Keep program costs down: means many remain uninsured; alienate the base? Keep major interests out of the opposition camp: conflicts with keeping costs down Getting support of key interests means higher costs WalterZelman Presentations

Reform Passes: But Exposure is Substantial Messaging problem leaves reform goals unclear Those with good insurance may not see the value Necessary absence of visible cost control leaves reform with visible costs, less visible benefit Size and complexity leaves reform open to traditional big government challenges WalterZelman Presentations

Exposure (cont) States left with major implementation requirements; state leadership may not support reform WalterZelman Presentations

Implementation challenges State implementation Early benefits, but not lower costs: premiums likely to continue rising Public Opinion Politics and political opposition WalterZelman Presentations

Some Implementation Challenges: State Exchanges Must be in place by 2014: some issues – Who governs – Strong purchaser v price-taker – Leveling the playing field – Small group and individual market pools – Purchasing/selling in and out of the exchange WalterZelman Presentations

Public Opinion, August, 2010 Kaiser Family Foundation Walter Zelman Presentations

Reform Danger Signs: Governors 2010 Gubernatorial Incumbents 26 Democrats 13 Republicans 1 Independent (Florida) 2010 Elections: 37 Gubernatorial elections 19 Democratic held seats 17 Republican held seats 1 Independent WalterZelman Presentations

2010 Gubernatorial Forecast: 37 Races Cook Political Report: Sept 18, 2010 WalterZelman Presentations

Reasonable Projection: Governors, 2011 Republican: 28 Democrat: 22 (Based on all seats leaning/likely D or R going to that party and split of toss-up races) WalterZelman Presentations