March 05, 2008

Speech: Wyden Addresses America's Health Insurance Plans (AHIP) 2008 National Policy Forum

"The Health Care Agenda: an Invitation to Reform"

Senator Ron Wyden (D-Ore.) delivered the following speech before the America's Health Insurance Plans 2008 National Policy Forum on Wednesday, March 5, 2008.

In less than a year, America will watch a new president be sworn into office, and exactly one year from now that new president will be on day 44 of their first 100 days - their so-called "honeymoon" with the public. I don't think that I have to tell you, that for the cause of health care reform, those 100 days will be very important.

I believe, however, that the success of health care reform hinges to a great extent on how your profession responds to the efforts of a new president and a new Congress.

If your profession decides - as it did in 1993 and 1994 - to go out and spend millions of dollars fighting to preserve the status quo, you may delay reform for awhile but you will increase the likelihood of a government run health system with no role for the private sector.

So, this morning, I'm going to make the case for your taking a different approach. I'm going to make the case why a fundamentally different private health insurance market would be good not only for the American people but also for the many responsible persons who work in the private health insurance industry -- many of whom are in this room today.

I don't have to remind you how the public views the private health insurance industry. It's not just "Sicko," Denzel Washington movies and Los Angeles Times investigative reports. Lots of presidential candidates can tell you that the easiest way to win applause is to "go negative" on private health insurance.

Here's the reality as I see it: Many of you are trying to emphasize disease management, quality of care and improved coordination of care. Yet the fact is that in today's broken health system - without everyone covered - to be successful, you have to be good at shedding risk. If you don't excel at shedding risk, you are going to enroll too many people who need too much care. Enrolling too many people who need too much care means that your costs are going to go through the roof. When your costs soar this way, the healthy people that you do business with are going to start looking for another insurer whose costs aren't going through the stratosphere. In other words they're going to look for another insurer who does a better job of shedding risk.

Does this sound perverse? As the kids say: "Hello?" Any insurer who's really good at handling lots of people - who greatly need intensive health care - gets shellacked and their shareholders or fiduciaries start going frantic fast.

On top of this, you and everyone else is being shackled by the employer/employee relationship in health care which isn't much different in 2008 from what it was in 1948. But economic challenges for business and workers today are very different then they were in 1948. Sixty years ago employers weren't operating in a global marketplace and employees who went to work at twenty stuck around long enough to get a gold watch and a steak dinner for retirement. Employers need cost-containment and workers need quality health care within a system that is portable - where they can truly take their insurance from job to job.

My sense is that many of you would prefer to operate in a market where there was a level playing field for all health plans and where every American would have a private health insurance policy. And my sense is, part of the reason your industry has resisted certain insurance market reforms in the past is because you felt that it was unfair to have to take all comers if people could wait and buy coverage until when they were sick. Fair enough.

But I would like to challenge you -in a context where all Americans would have coverage—to move away from some of the old practices of denying coverage and spending buckets of time scouring people's health history. Certainly this can't be the most rewarding part of your job and I am certain you will go home at the end of the day happier if you spend more of your time managing care and promoting prevention.

I'd like to suggest a different model. In this alternative system, everyone who's not in the military or on Medicare, has a basic private health insurance policy. Private insurance companies are on the same footing - each must take all comers.

Competition would be based on price, benefit and quality.

There are substantial subsidies for those who may have difficulty purchasing private coverage; which are specifically paid for with tax reform, administrative savings and real marketplace competition. I'm sure you are shocked to hear that the model I have described is the Healthy Americans Act, which now has the bipartisan support of 12 U.S. Senators - six Democrats and six Republicans

Trying for a moment to put myself in your shoes, here is what I would see are the advantages of such a new system:

1. There would be lots of new subscribers, lots of potential revenue and lots of administrative simplicity such as a private insurance sign-up process that has been described as no more complicated than checking a box on a tax return.

Forty seven million uninsured would all get signed up for private insurance. In addition, the folks on Medicaid, SCHIP and other state programs would also get private insurance - that's another 34 or more million people. The bottom line is health insurance companies would be able to sell a lot more policies. But they would sell a different type of policy.

2. There would be no competitive disadvantage for insurers doing the right thing. The incentives would reward insurers that sell the policies that are best for consumers in the area of price, benefits and quality. There would be risk adjustment mechanisms built in to compensate companies that take on more risks and costs than their competitors. And if this approach sounds like a radical way to do business, I would point out that it's very similar to what many of your companies do when they participate in the Federal Employees Health Benefit Program.

3. Comparative effectiveness analysis is getting better, so insurers will be able to get better information on which treatments and services - and providers who deliver them - offer the most value. I aim to beef up this portion of the bill in order to support increased information and transparency in the health care marketplace and would welcome your thoughts on this.

4. You would be selling a product people want more of: good health and prevention. And by keeping folks healthy you keep their business and you keep it longer.

5. You wouldn't be the political football any longer. Trial lawyers, providers, businesses and others are also asked to accept changes they've resisted in the past. Everybody has to give something - yet everyone gets something in return.

6. Greater focus can be shifted to problems where there is widespread agreement: such as reducing needless medical errors.

In my view, there are a number of reasons to be optimistic about the prospects of health reform in 2009.

1. Bipartisanship. As far as I can tell, in the history of the Senate's debate about universal coverage there has never been an instance where twelve U.S. Senators - six Democrats and six Republicans - have co-sponsored actual legislation to fix American health care. As I meet with fellow Senators I haven't met a one, on either side, who questions the need for serious and systemic action to address the failings of our system. There is widespread agreement that the employer-employee relationship in health care must be modernized.

2. There is a real ideological truce developing between Democrats and Republicans in the Senate on health care. I do believe we have reached a point where Senators of both parties are conceding that each party has had a valid point in the health debate. Republican Senators are saying more and more that everyone needs to be covered from both a moral perspective and an economic one—or the cost shifting and inefficiencies will continue. And the Democrats are willing to recognize that there is a significant role for the private sector in reforming our health care system.

3. If California and other state efforts of the last year have taught us anything it is that the states can't fix health care alone. It's not that they haven't put forth good ideas and made important strides—it is just that they don't have the bandwidth to address the challenges—many of which involve federal laws or programs such as the tax code, ERISA and Medicare and Medicaid.

4. New alliances are emerging where "strange bedfellows" are standing together calling for reform: When the Healthy Americans Act was launched, Safeway CEO Steve Burd and SEIU leader Andy Stern stood side by side. Small and large businesses, physicians, providers, consumers, you name it are speaking out that as a nation, America cannot continue on its current health care course.

So this morning I want to ask you to become a part of the Senate's bipartisan effort to fix American health care. Don't launch another campaign for the status quo like the insurance industry did in 1993 and 1994. Americans don't need a replay of that dismal failure. Americans deserve better and so do the many responsible people who work in your profession. Both Democrats and Republicans in the Senate want to work with you to get health care right in 2009. I ask you this morning to work with us to fix American health care in a way that makes sense for our people and your profession.