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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech discuss the departure of Don Berwick from the Center for Medicare and Medicaid Services, his controversial views on government controlled healthcare, and how his legacy will be impacted by the fate of Obamacare.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Ben: Consumer Power Report: Farewell, Don Berwick
Don Berwick, Martyr for Socialized Medicine
Medicare chief steps aside in political impasse
Don Berwick Online

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Rep. Tom Price (R-Georgia) took the time to chat with us for a brief podcast today regarding his impressions of Don Berwick’s fractious testimony before the House Ways and Means Committee. A physician himself, Price pressed Berwick, the controversial head of the Centers for Medicare and Medicaid Services, on questions regarding the rationing of care, whether it was a falsehood for the White House to claim “if you like your health care plan, you can keep it” and other key matters.

This line of questioning led to a side-by-side moment that is really made for TV — Berwick today saying: “I abhor rationing. My entire life has been spent fighting rationing.”

Compare that to a quote from Berwick in 2009: “The decision is not whether or not we will ration care — the decision is whether we will ration with our eyes open.”

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Today is the six-month anniversary of the passage of President Obama’s signature legislation, what has come to be known as ObamaCare.  The White House is feting this semi-anniversary, but few Americans are in a mood to join the celebration.

Obama, who can be thin-skinned when people disagree with him, was downright irritated when the early polls showed that a majority of Americans opposed his health care “reform” bill.  On April 1, he criticized the polls as premature, saying “So before we find out if people like health care reform, we should wait to see what happens when we actually put it into place.  Just a thought.”

The problem with his argument is that the more Americans find out what is actually in this monstrosity of a bill, the less they like it.  Polls conducted by Rasmussen Reports show that 55 percent of the public supported the repeal of ObamaCare on March 25, just two days after its passage.  Today, a half-year later, the number of those favoring repeal has grown to 61 percent.

I am not one to call the President a liar.  I have too much respect for the office held by giants like George Washington and Ronald Reagan for that.  But I do believe that much of what Obama has said about his own health care bill is simply not true.  He claimed in Maine that people could keep their own health insurance, in Maryland that people could keep their own doctors.  In Washington, DC, he promised that his plan would cut costs but would not lead to the rationing of care.  He has consistently claimed that it would not fund abortions, and that its “end-of-life visits” would not lead to euthanasia.

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Now that elections are around the corner members of Congress who voted for the healthcare reform bill are spending a lot of time back-peddling, avoiding the topic all together or digging themselves in a deeper hole by claiming that Americans will have better healthcare with choice of doctors, and expanded coverage at an affordable price.

Let’s look at the facts:

• The bill was written by and for Big Pharma and the medical insurance industry. Senator Max Baucus a member of the congressional brain trust who brought us the healthcare reform bill admitted he never fully read it and has no idea what is even in it. Now he admits to having no clue what was in the bill he helped shove down our throats…. Unbelievable? Surprising? No just business as usual.

• Those on Medicare were told that they would see no change in their benefits and would be able to keep their physician. In fact, 11 million senior citizens will see premiums go up because of cost cutting including the removal of Medicare advantage. Furthermore, since there has been a decline in the number of physicians who currently are accepting new Medicare patients or who take Medicare at all, it is likely that seniors will not be able to keep their doctor and will pay more for less.

• The nomination of Donald Berwick to head CMS means a philosophical shift of our healthcare system to the British model of medicine that puts a premium on cost and not the needs of the individual. An example of this is the decision by the FDA remove Avastin from the medication available to treat advanced cancer because it is deemed that the good of extension of life is outweighed by the cost of the medication. Medicare has already stopped covering the use for Avastin to treat  ovarian cancer in Colorado.

It is clear that the relentless drive to reform the health care system was a cynical political push for a win at all costs. We were told what we wanted to hear and there was no attention paid to the consequences. Every single card was played – from the class card to the race card, and getting us to fight among ourselves achieved the goal of distraction. Now that the smoke has cleared it is pretty obvious that in the name of expanding healthcare to approximately 30 million more people, we have sacrificed what is best about our healthcare system – individualized patient care, the doctor patient relationship, and the drive towards innovation. However, the costs have not changed.

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On this week’s Health Care News podcast, Avik Roy, one of the most insightful writers about health care policy today, took the time to discuss with me the White House’s decision to bypass the nomination process of the U.S. Senate to recess appoint Donald Berwick as head of the Centers for Medicare and Medicaid Services (CMS). Listen to it here:

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People have asked me this week why this recess appointment is such a bad thing. Well, this video clip shows why, in an honest expression of the anti-market views Berwick holds from the man himself. Here’s what he says:

“Please don’t put your faith in market forces. It’s a popular idea that Adam Smith’s invisible hand would do a better job of designing care than leaders with plans can. I do not agree. I find little evidence anywhere that market forces, bluntly used, that is, consumer choice among an array of products with competitors’ fighting it out, leads to the health care system you want and need.”

These two paths run in opposite directions: the path toward market based solutions, where people direct their own care with their doctors, making decisions for themselves, and the path toward bureaucracy based solutions, where unelected experts — “leaders with plans” — determine people’s care, making decisions for them. Berwick is clear about which path he believes America must follow.
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Aside from breaking her word to the AMA and physicians across the country, Democrat House Speaker Nancy Pelosi has effectively demolished doctor reimbursements for most of the healthcare industry.  The 21.2% Medicare fee schedule cut has taken effect, but what most do not realize is that the Medicare fee schedule is the gold standard for provider reimbursement fee schedules across the nation.

Essentially, where Medicare goes, insurers follow for the guidelines in covered services and baseline physician fee schedules for private payers as well as worker’s compensation and automobile insurance companies in most states, as well as Medicaid and Medicare itself.

What Pelosi has effectively done is saved the insurance companies who use the Medicare fee schedule millions of dollars of payouts to physicians on their claims–regardless if the patient is a Medicare patient.  I’m not seeing the insurance lobby out there right now, are you?  However, on the provider side, the doctor’s lobby groups are outraged at Pelosi’s failure and the damage this inaction will cause physicians–especially private–and force them to layoff employees to make up for the loss in reimbursements to cover their enormous monthly overhead costs.

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President Obama’s nomination of Donald Berwick as the head of the Centers for Medicare and Medicaid Services (CMS) is a gathering far less attention than a certain other nominee — but it will be getting more attention in the weeks to come, given his particularly radical agenda when it comes to health policy — an agenda that includes support for massive government rationing and his support of using health care bureaucracy to redistribute wealth.

Berwick is a leading Ivy League academic and technocrat – he’s graduated from Harvard not once, but three times – and is the founder of a Cambridge-based think-tank, the Institute for Health Care Improvement. Yet the job of running CMS is hardly the same as running a small think tank or talking in broad terms about the nature of health care – CMS is essentially the world’s second largest insurance company after the United Kingdom’s NHS, covering over 98 million people and overseeing roughly $800 billion annually in taxpayer-funded health care expenditures.

Berwick is a great fan of the NHS, and worked as a consultant on the project under Tony Blair. Berwick will have the opportunity to apply the ideas he gained through that experience with the power of the CMS position, which means that his nomination holds massive ramifications for Medicare and Medicaid recipients, hospitals and doctors and, under Obama’s law, all Americans.

Berwick: Health Care Must Redistribute Wealth

Key to understanding Berwick’s views on the NHS is a speech he gave as part of a presentation offered two years ago, in which he shared his thoughts on the NHS and health care generally. You can watch the full speech here. The full video shows several lines from Berwick that are notable. He decries private sector solutions to health care problems, dismissing the “invisible hand of the market” as an “unaccountable system.” He also states:

“I am romantic about the NHS; I love it. All I need to do to rediscover the romance is to look at health care in my own country.”

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Here we go again. Harry Reid intends to force a vote at 5pm on Monday in a desperate attempt to push yet another bloated bill that will do more harm than good.

This time, the Democrats seem to have zeroed in on reforming the entire American finance system without bothering to read, or even consider, the many, negative, unintended consequences to our economy (and especially to small businesses) that this legislation will unleash.

Once again, the Democrats are keen to push a flawed agenda to capitalize on the remarkably convenient timing of the ever-so-welcomed, SEC fraud charges levied against Goldman Sachs.

Once again, Democrats are keen to push long standing, left-wing, ideological dreams that Americans have long resisted.  But, pity the poor small business community that will, once again, be forced to pay a disproportional cost of the 1336 page monstrosity of a financial reform bill.

Embedded deep within the Democrats’ financial bill is an inexplicable assault on Angel Investors who help drive small business expansion and entrepreneurialism.  Sections 412 and 413 (p.380-381) adjust (i.e.increase) the “Accredited Investor” dollar threshold to $1 million dollars—which could affect the amount of angel investing, especially those that invest in small businesses.

If that isn’t enough bad news, in Section 740B“Small Business Loan Data Collection”, (p.1219-1224), Congress requires the collection of proprietary data, and storage for three years of data that must be obtained from any small business attempting a loan.

Then, Congress stipulates that this information about the small business must be made available to the public upon request.  These are the kinds of intrusive requirements that could only be drafted by persons who have no experience in what it takes to start, maintain and grow a business.

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The Centers for Medicare & Medicaid Services (CMS) released their annual report this week on total healthcare spending in the U.S. for 2008. To the limited extent that this release was even reported, the headline was that the growth in healthcare spending “slowed” from the prior year. From a growth rate of 6% in 2007 to only 4.4% in 2008. This in fact represented the lowest rate of growth since the CMS first started reporting this data in 1960. Given all the hyperbole about exploding healthcare costs this past year, this would seem to be wonderfully good news, worthy of national media attention. Might the cost curve be bending down (gasp) without government intervention?

Not surprisingly, media coverage of the report – and even the press release from the CMS itself – convey a less positive interpretation of the underlying data. By focusing on the fact that healthcare spending as a percentage of GDP continues to rise (if only slightly), from 15.9 percent in 2007 to 16.2 percent in 2008. And by attributing the decline to the economic downturn, implying that it is only temporary, even though the co-author of the report acknowledged that “health-care spending is usually somewhat insulated from the immediate impact of a downturn in the economy”.

Why the glass half-empty view? I believe the answer can be found in this accompanying statement from CMS Director Jonathan Blum (emphasis mine):

This report contains some welcome news and yet another warning sign. Health care spending as a percentage of GDP is rising at an unsustainable rate. It is clear that we need health insurance reform now.

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The good folks at Let Freedom Ring pass on this news:

Let Freedom Ring today submitted a Freedom of Information Act (FOIA) request demanding answers after The Centers for Medicare and Medicaid Services launched a massive investigation into Humana’s role in influencing the healthcare reform fight.  Senate Finance Committee Chairman Max Baucus (D-MT) called for the investigation, slamming Humana for inciting fear among its beneficiaries.  

The FOIA letter requests “access to and copies of all correspondence, notes, emails, faxes, telephone logs, office visit logs, records of meetings and related documents exchanged between United States Senator Max Baucus’ office and the Centers for Medicare and Medicaid Services of the U. S. Department of Health and Human Services (CMS) directly or indirectly related to a letter that Humana, Inc. sent to its Medicare Advantage policyholders suggesting that proposed health-care legislation could lower their benefits.”

 “We filed the FOIA letter today to dig deeper into the possible political pressure that was applied to CMS, and what implications that could have in the middle of a pitched fight over the future of healthcare,” said Let Freedom Ring President Colin Hanna.  “Our letter requires the government to provide timely and complete information that could shine some sunlight on what is driving the investigation.

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