“What Has Changed?”: Health Reform in the U. S. A. – David N. Sundwall, MD

We gratefully acknowledge the sponsorship of the Presbyterian Intercommunity Hospital of Whittier, California for funding the transcription and editing of this section of the Proceedings of the Twenty-Fourth National Conference:

The following transcription is of the opening sessions of the 24th National Conference on Primary Health Care Access, held April 8, 2013 at the Grand Hyatt Kaua’i. This session follows: “What Has Changed?”: the 24th National Conference Welcoming Remarks (Haughton).

Dr Bejinez-Eastman, Moderator: [Doctor Bejinez-Eastman is a Senior Fellow of the National Conferences on Primary Health Care Access].

I’d like to introduce our next speaker on policy basis and politics, Dr. David Sundwall. And Dr Allan Wilke will be the reactor.

David N. Sundwall, MD; University of Utah
David N. Sundwall, MD; University of Utah

David N. Sundwall, MD, University of Utah [Dr Sundwall is a Senior Fellow of the National Conferences on Primary Health Care Access]:

Good morning! What an honor it is for me to be the keynote of this conference!

I’m going to get myself in trouble. I don’t come for the speakers or the content. I just love to see you guys. It has been so many years since I’ve been coming to these things. It’s not that I don’t learn something every time, and tjat it’s always provocative and fun. I’m delighted to be here.

I’m going to give you my take or my presentation on the Patient Protection and Affordable Care Act (PPACA) – what I will call Obamacare, because President Obama embraced the term, which was wise.

It was a pejorative initially when the Republicans were trying to disparage the effort and demonize it as a takeover of medicine by the government and socialized care.

But I think it’s fair to call it Obamacare, it’s a nice term actually. So whether, whatever your politics are I’ll call it Obamacare, meaning not to be for or against.

So what I’m going to try to talk about today is give you a historical perspective on health reform, a brief one. I’ll talk a bit about the Act. I’m going to share with you kind of a different view of health reform that we have in the state of Utah, which is of course a federalist view where the states have more responsibility. and more, some ideas that merit being tested.

I’m sure many of you know the history of health care reform, I use a text book for a class I teach on health policy by Doctor Donald Barr at Stanford. In this textbook he nicely illustrates the previous efforts that were significant in health reform, as long ago as the presidency of Herbert Hoover, who had a committee on cost containment and care.

Some argue that there were early efforts in the early part of the century, but actually it was just the Veterans Administration that was created in 1921, after World War I.

By the way my great, my grandfather’s brother, John Sundwall was the first professor of public health at the University of Michigan.

He was on the Hoover committee. Interestingly if you read any of the Hoover committee transcripts, they talk about the need to train more generalist physicians, as long ago as the 1930s. So there’s nothing new under the sun there.

Notice the opposed on the column, whether we talk about Franklin Roosevelt’s effort, Harry Truman, Lyndon Johnson, Bill Clinton; the arguments that were most vocal in opposition were the American Medical Association and the National Medical Association interestingly enough.

We all remember when President Clinton tried to get his health care reform proposals enacted. Remember the Harry and Louise ads; remember them? This was opposed by the Health Association of America, who are primarily the health insurers. They were very vigorous in opposing it and succeeded.

President Barack Obama’s efforts were eventually successful, with the Congressional Republicans clearly the big detractors.

So what I’m going to try to do briefly in my time is talk about the PPACAs, policies, politics and prognosis.

This is a busy but an important chart from the American Public Health Association. This is a very nice, informative illustration of the elements that are in the bill.

The attention to the ACA has been primarily on insurance expansion. That is significant. On the left of the chart are the insurance reforms, and they are significant. The primary goal is to expand health insurance coverage and they do it through a variety of ways.

But the other important things that don’t get as much attention are the health system reforms, improving quality and efficiency, stronger work force, infrastructure, greater focus on public health prevention.

I can tell you as someone who’s a family doctor who “backdoored” into public health and became the Commissioner of Health in Utah for six years. We welcomed many of these changes on public health. They are a bit cumbersome and complex, and somewhat difficult to navigate. But they are certainly helping build the infrastructure of public health that, for a long time, has not been attended to as well as it should have been.

Let’s talk about policies a bit. The number one priority was to expand health insurance coverage.

It was estimated that as many as 32 million more people might have insurance when the mandate kicks in in 2014. It does not strive for universal coverage.

I’m looking forward to hearing John Geyman’s comments on that. I’m sure he’ll have a lot to say, because, in the opinion of many, it falls short of what should have been. But still, 95% of legal US residents would have coverage, theoretically, if these expansions were to be phased in as they’re intended to be.

The primary way to do that is to expand Medicaid up to 138% of the poverty level, subsidized to lower income individuals and families pay for health insurance. Health insurance exchanges are there to keep track of all of those expansions, whether they be in public or private insurance, making it easier for people to buy health insurance.

And while many have misgivings about our present health insurance model, lots of studies have been done to show that having insurance, insurance is healthy. And simply every measure suggests, that, if you have insurance, you’re healthier. Notwithstanding the flaws, or copayments, or problems, it’s a public health factor that’s important.

The next policy is the “mandate” starting in 2014. Almost every American – there are a few exceptions, will need to carry insurance or pay a fine.

The insurance regulations are really important.

I’m not sure if you’re all familiar with the term rescission, but I find that a particularly repugnant practice of private insurance companies where you could, in fact, when someone becomes ill, when it’s time for them to re-up on their insurance they say sorry we don’t cover that anymore. That is ridiculous, it’s just an absurd policy that everybody, Republican and Democrat alike agree couldn’t be sustained, or shouldn’t be.

As soon as the bill was signed into law, it was illegal for children to be denied coverage because of a pre-existing condition and it will no longer be possible after 2014 for adults. Nor can you impose limits on lifetime benefits paid out.

All of these are insurance regulations. I heard a presentation by an insurance lawyer in Utah recently. I hadn’t appreciated how important these changes are to the insurance companies. They apparently are going to change the way they do business in rather profound ways.

Those changes are more significant than I appreciated, When you hear it from their prospective it’s a big deal. But again, all intended to make insurance more affordable and more effective coverage.

The public health provisions in here I want to emphasize are important and I think welcome in most respects.

There’s a focus for spending on chronic illnesses the top killers.

I like that they actually took the things that both the CDC and CMS are working on and wove them into the bill, trying to focus on reducing heart disease, cancer, stroke, respiratory disease, and diabetes.

How are they going to do this? It sounds good to say it, but they did put their money where their mouth is so to speak, with a new Prevention and Public Health Fund.

Its funding increases dramatically. It would be up to $2 billion by 2015; in fact I think they project up to 2.5 billion.

All the years I was the health officer in Utah we scrambled for our share of $100 million block grant in prevention. They were precious dollars and we used them for a variety of programs in chronic disease management, or health education and they are really critical to health departments. To have this real infusion of more dollars is significant.

Now mind you the “sequestration” that was mentioned by Dr Haughton this morning is already affecting that. So, it won’t be as much but it’s still significantly more than it was previously. And that was all administered by my old agency the Health Resources and Services Administration [HRSA].

School based health centers have been given a shot in the arm, something like 180 million. I can’t remember the figure. This is important and something I think needs to be strengthened. I’m not proud of the fact that Utah has the lowest school-nurse ratio to student in the nation. Schools should have some onsite healthcare for kids.

The CDC is trying to build healthier communities through Community transformation grants. They are dealing a lot with the obesity epidemic.

There is increased funding for immunizations, improved capacity and technology for public health labs. That, I believe, is the foundation of public health. I’m a big fan of the public clinical laboratories – the ones responsible for doing the disease surveillance and identifying risks to the public. That line of funding is really important.

Last on the list is a $1.5 billion dollar home visit program added to the $635 million dollar a year Maternal and Child Health (MCH) block grant. This, I think, is an example of rather careless funding. In the enthusiasm to get this bill passed, some things were slipped in it without regard to cost or benefit.

I’m not saying for a minute arguing that home visiting is not wonderful. It’s probably what really put nursing and public health on the map in the 1800s. One of the fair criticisms of the ACA is that there is too little cost containment, if there is any at all. In their enthusiasm to get this bill passed some things were slipped in it, without regard much to cost or benefit.

But I just find it too little attention to ACA’s impact on the federal deficit. I think it’s fair to say that one of the fair criticisms in the ACA there’s little in there to do cost containment; notwithstanding their promise that it would save money.

We will be hearing about the policies relating to the health care workforce later in this conference.

There is an attempt is to increase the number and geographic distribution of health workforce, not just doctors but nurses, dentists and others.

How? Increased payments for primary care services. You know that the Medicaid rate will go up to Medicare rates, for primary care physicians, for two years only.

This is another point I’ll make about the carelessness in the act. One of the hats I currently wear is the Vice Chairman of the Medicaid Commission in Washington, the MACPAC, Medicaid and CHIP, Payment and Access Commission. Our analysis of that is the complexity of implementing it and tracking it then terminating it is going to probably cost more than the bump doctors will get.

It was a careless, yet well intended, effort, of course, to make primary care more attractive. But we think that it was a rather silly thing to do. If they were going to do it they should have done it, not make it temporary and then make it so difficult to define who would be getting it.

There are also some other good things. They are strengthening the National Service Corps. That’s always good, in my opinion. There is a pilot project related to medical homes for pediatrics, special needs and more.

There are lots and lots of things in there on the other side of that busy slide I showed you that aren’t just related to insurance that I think are positive.

Utah’s version of health reform would be less government, but none-the-less not indifferent to the problems of the poor and the needy. We always have to acknowledge that if someone is against a federal program, it’s not that they’re against healthcare services or caring for the poor, but that they have a different view on how that might be achieved. They prefer to rely on the private health insurance market, promote personal responsibility, and ensure transparency in value.

That is something that I think is a positive in our state – that you can go online and get quality and cost data for many things that you can’t get in other places. Wee have one of the all payer databases that includes not only what was charged by the hospital or doctor but what was actually paid. Closing that loop is important, because we all know the gap between charges and what’s paid is extraordinary.

Now I’m going to digress for a minute because some of you know me well enough that you’d want to know that, this personal thing. My wife was in a serious car accident on February 9th. She, coming back from California after a week in Disneyland, she was following our son and his five children, and his wife and family.

She hit an ice patch north of Cedar City, the truck rolled off the rolled, and she sustained seven rib fractures and a very badly broken arm, but no head injury, no leg injuries. She’s well on her road to recovery, which is going to be long with physical therapy. I say this because I’m now learning about costs. I’m blessed in that I personally have enjoyed great health.

I’ve never been hospitalized for heaven’s sakes. I don’t have any chronic illness that I’m aware of, other than chronic obesity. but that’s not been a handicap. In fact I’m going to go hiking with Charles this afternoon, I’ll see if I can handle it.

But the point is the bills that we’ve been getting, the EOBs are now up to 129,000 for her shock, trauma and her care. Of course, we’re grateful for the high quality care and the attention she got, but it’s been an interesting thing for me to see the ka-ching, ka-ching, ka-ching every week as these things come in – a real time lesson in healthcare costs.

We need to know what these costs. I love that Time article [“What Has Changed?”: the 24th National Conference Welcoming Remarks (Haughton)] that Kevin referred to andI agreed with his point that if we get enough public anxiety about this that things will change.

Another thing in Utah that I think is impressive is they’ve maximized the tax advantage so that even if you’re an individual buying health insurance you can do that with pretax dollars. That’s something that used to be reserved for just employers. But individuals can take advantage of that.

When they talk about in Utah about optimizing Medicaid, what that means is they finally, like many other states did some time ago, Utah has gone to risk-based managed care. They’ve actually capitated Medicaid payments to hospitals and individuals. We’ll see how that works out. That’s a popular effort all over the country. Well over half of our state Medicaid plans have capitated managed care.

The “defined contribution market” concept is important. We keep all payments pretax. Employees cannot be penalized for their health status. We don’t support plans that won’t cover preexisting conditions.

We’re a conservative state, but that isn’t a partisan issue. “Guaranteed issue” or community rating is something that the insurance companies hate, but that we think it is important to require. You can’t go “cherry picking” any more.

Companies will not be forced to pay for health insurance, but they are required – if they are going to participate –  to give a certain amount of money to a employee to let them buy coverage. That’s the company’s contribution – not a benefit per say. The employee can choose to add or subtract or get more or less – depending on what they want to pay.

Utah’s health insurance exchange was one of the first exchanges in the country. Massachusetts had what they called the Connector. We had our Utah Health Insurance Exchange, which by the way, has recently been re-named Avenue H. I don’t know why. I guess they thought it’d help with marketing. It’s kind of like Travelocity where you can go online and choose insurance based, tailored to your family needs.

Avenue H connects consumers with information so that they have a single shopping point and can make some personal decisions, all online. I’ve looked at the website. It’s really quite user friendly, and it does take some of the mystery out of health insurance shopping.

These are the policies. You can see a contrast between the federal government’s and that of Utah’s. The state is more personal-based and assumes consumers are going to use data to make informed choices themselves about the costs and benefits of the health care policy they are choosing.

Let’s talk about the politics. That is far and away the most dramatic thing about the ACA.

I will tell you that the ACA is not as it has been portrayed by either party. The Democrats make it sound like it’s the most sweeping, social, legislation for the betterment of mankind since Medicare and Medicaid. Not!

The Republicans would say it’s the end of the world, that the government’s taking over, and that you better watch your wallets – that it’s socialized medicine. Not!

The rhetoric on both sides has just been ridiculous. That’s not a good thing.

I asked at the outset of my presentation, whether we are we on the road to a more fair and affordable healthcare system. I’m anxious to hear Dr. John Geyman.

I don’t think we’re very far, but that we are a little further down the road. Basically, I think ACA IS positive in that if people have insurance. That’s a good thing. If we do some strengthening of public health, that’s a good thing. But it hardly solves the major problems.

Although there are a lot of demonstrations going on in finance reform, there were no requirements in ACA for such. We’ve done demonstrations on this before, and I’m not sure what we’ll learn, but I’m hopeful that maybe Dr Hector Flores and others at this meeting can enlighten me that there’s some light at the end of the tunnel on these payment reforms.

This is a quote “We are in the process of an intense national debate related to healthcare in the United States. What should be divided, and how to pay for it. The outcome will redefine the rolls of governments, federal and state and the private sector in our healthcare enterprise.”

That was my quote. I read it printed somewhere and I thought “That’s cool. I’m going to quote myself”. I really do think the best thing about the ACA is that it has raised the level of debate. We’re not very far down the road. We’ve got miles to go before we rest. And as Betty Davis said “Fasten your seatbelts – it’s going to be a real bumpy road, bumpy ride.”

A few more points: In the recent Supreme Court decision, most of the ACA was upheld. It is the law of the land. I got to go to a wonderful, invitational conference at Princeton in November; just about a week after the election. This conference included all the fanciest folks in health policy that you can imagine, all the economists that you’ve all heard about like Doctors Uwe E. Reinhardt and Mark Pauly; the head of the CBO in Washington; and other very influential people.

What I came away with from the meeting was, “Get over it; it’s the law of the land”.

We have misgivings on both sides about it, but it is the law. As complex and costly as it is, we need to implement it and make it work for the betterment of the people.

Of course, the monkey wrench that they through in was making the Medicaid expansions optional. And that is a fascinating drama being played out now. Utah’s one of the few states where we’re still in a wait and see mode.

Utah has commissioned a study that’s due now. We’ve got a group representing both the Governor’s office and the Congress to look at where the effort is. We should decide by September if we’re going to expand.

Some governors, like Bobby Jindal in Louisiana, have said “Hell no, we won’t go. We’re not going to go with this big federal program.” Others have said we can’t afford not to because of all the money that you can get. You understand that the feds have promised to pay 100% of the expansion for three years and then down to 90% for seven.

Let me close with the current challenges facing us. Regarding Medicaid: to cover, to expand or not to cover, that is the question.

I will give you a prediction on Utah. They will go for it because they’re fundamentally pragmatic.

They are conservative and there’s a lot of the “Tea Party” rhetoric, but in fact my impression of our legislature over time is that they’re very practical and they’ll probably go with the expansion.

We’ve already, by the way, caved in on the exchange and we’re going to go with using the federal exchange to deal with the subsidies. In other words we’ll help individuals buy their market, but we don’t care. We don’t want to get into the business of the subsidy determination.

There is another flaw in the bill that I’ll just throw out for your consideration. I learned this in my work with the Medicaid Commission. The subsidies are to be available to people between 138% and 400% of the federal poverty limit. In Utah a family making about $80,000 a year would still entitled to the subsidy to help them purchase health insurance in the private sector.

Do you know what the ten-year projections for the cost of that subsidy alone? One trillion dollars.

So this sounds fine, it rolls of the tongue. Oh, we’re going to help people buy insurance if they’re not poor enough to get Medicaid, but are still struggling to buy it. Well I don’t think the money will be there. That’s my prediction.

My prognosis of PPACA’s future is guarded. It’s certainly the law of the land, but it will inevitably be modified. People are very afraid in Congress to open it up for amendments before the next election. It is already become a partisan issue again. Whether they amend it in this Congress before the next election in 2014 remains to be seen. It will have to be modified, because there’s a lot of bipartisan feeling that there are parts of it that are just too troublesome.

For healthcare I think it’s good, you know we do wring our hands a lot in this group and we have a lot of compassion for poor and about things that aren’t being done for them, and about cost and complexity.

But I think that I still will stand by my statement – understanding completely that the U. S.’s health status is not good compared to other countries – that most of us get good care in this country and will continue to do so in our current system when we need it.

But we need to revisit how we care for the most vulnerable among us and how do we afford it in the long run?

I will note that Social Security Medicaid trustees voiced doubt that the federal government could maintain its financial commitments to pay for the bulk of the Medicaid expansions as well as the, as well as the subsidy.

We just had the third anniversary of the ACA on March 23rd. The American Public Health Association put out this happy anniversary celebration with all the statistics about how marvelous it is and its great accomplishments. You know about 71 million more people have health insurance and on and on.

The Republicans are already carping and complaining and saying, my gosh, you haven’t taken into account the costs. It’s absolutely flawed in every respect. So it’s still a very much a partisan issue and will be the forefront of our policy debate for years to come.

Thank you very much.

This session is followed by: 24PHCA “What Has Changed” – Sundwall Keynote Reactor (Wilke) and Q/A Session.