Karen Davis

The Presidential Election and Americans’ Health Care

VTR Date: March 22, 2008

Dr. Karen Davis discusses the health care proposals of 2008's presidential candidates.


GUEST: Dr. Karen Davis
AIR DATE: 03/22/2008
VTR: 01/24/2008

I’m Richard Heffner, your host on The Open Mind.

And my guest today is economist Karen Davis, whose distinguished career in public policy and research led her to the Presidency of The Commonwealth Fund, a national philanthropy heavily engaged in independent research concerning an overall high performance health system for all Americans.

The Commonwealth Fund frequently has made it possible for us here to discuss such a health system in depth on The Open Mind.

And now I’ve asked Dr. Davis to parse with me the Fund’s recent publication, “Envisioning the Future: The 2008 Presidential Candidates’
Health Reform Proposals”.

I should point out, of course, that in her 2007 “President’s Message”, my guest has already put a lot right on the line … writing, “The last time health care reform was on the national agenda, a fictional couple named Harry and Louise helped ensure its demise with a refrain, ‘there has to be a better way’.”

“The couple, who appeared in advertisements sponsored by the Health Insurance Association of America, decried … [Hillary Clinton’s] 1993 health care reform proposal and urged [television] viewers to contact their congressional representatives to vote against it … [which they overwhelmingly did].

“Now nearly 15 years later, the U.S. health care system … is, if anything, worse off.

“Today,” my guest continues, “Harry and Louise might very well be among the 47 million uninsured Americans who are struggling to pay for needed medical care, possibly bankrupting themselves in the process.”

“Or they might be … [among] millions of Americans unable to obtain the coordinated, quality care enjoyed by residents of so many other countries…

“Or they might already be victims of one of thousands of medical errors that occur in the United States every year – most of which would be preventable with better information systems and more reliable care processes.

“One thing is for certain”, Karen Davis insists, “On the eve of a Presidential election in which health care promises to play a prominent role, Harry and Louise, as well as others like them, still do not have access to a high performance health system”.

All of which leads us to the Commonwealth Fund’s January, 2008 report, “Envisioning The Future: The 2008 Presidential Candidates’ Health Reform Proposals”…and leads me to ask Dr. Davis which, if any, pass muster.

Though, one caveat, first. We’re only nearing the end of January as we record this program.

Our final Presidential candidates haven’t been chosen yet … though those on our screens may well change their health care proposals … and other proposals (even other candidates!) may yet surface. We’ll come back to them later on The Open Mind.

Right now, however, I would ask Dr. Davis how compelling the present Presidential wanna-be’s proposals seem to her. How do you evaluate them?

DAVIS: Well, I think it’s very exciting that all of the candidates are taking health care seriously and they’re all advancing ideas that would put us on the right track. It’s clear we’ve been on the wrong track for a number of years with the numbers of uninsured growing, health care costs going up so much faster than wages. So I think the most important thing is they are talking about health care. They’re not just talking about the problem, they’re talking about solutions and putting those ideas out for public debate as part of the Presidential race.

HEFFNER: And how do you … how do you evaluate them? I know in this Report that the Fund has just put out … there is a balancing of the various proposals. How do you evaluate them?

DAVIS: Well, I think there are a number of principals one wants to look for. I think first of all … does it solve the problem? Will it cover everyone? So that’s very important to me.

Will it have comprehensive benefits and will people be protected financially? Or will they … as they are now … at risk of being bankrupt by medical bills.

But we need to do more than just cover people. We really have to get at the heart of rising health care costs and we have to get at the heart a very variable quality across the United States, where your chances of living are very different depending on where you live, where you’re cared for. So we need to have higher standards of quality, we need to move everybody up to high standards.

HEFFNER: First, elaborate on that point a little, about its depending upon where you live in this great country.

DAVIS: Well, the Commonwealth Fund has a Commission on a High Performance Health System and they issued a state scorecard on health care. And they found that as many as a hundred thousand lives could be saved every year if all states performed at the level of the best states on measures like infant mortality, like mortality that’s amendable to medical care.

The truth of the matter is where you live does matter. Whether you have insurance certainly matters. And insurance coverage varies widely across the US.

For example, in Minnesota 11% of adults are uninsured, compared with 30% in Texas. So it’s not surprising that people aren’t getting preventive care, they aren’t able to afford the medications to control their chronic conditions. So, insurance has a lot to do with that.

HEFFNER: Well, I, I would ask the question then, what’s the result of the difference between 11% and 30%?

DAVIS: Well, it makes a big difference in terms of …

HEFFNER: In those states.

DAVIS: … in those states, yes. Certainly makes a difference in quality of care. And, and it shows up primarily on indicators like preventive care.

Insurance is the single most important determinant of whether people get the care that they need. Whether, whether they can afford to go to the doctor. And that, that’s the big difference between the US and all these other industrialized countries that cover everybody and have for years. In those places there’s no financial barrier to seeing your doctor. Most countries … people have a regular doctor that they’re enrolled with who knows their medical history, is able to catch things early, makes sure they have preventive care.

And the other way other countries are way ahead of us is in the implementation of modern information technology. So they can remind people, “you’re overdue for this.” And it’s, it’s rare in the US for anyone to be reminded that it’s time to have that colon cancer screening exam, you haven’t had it in five years … it’s time to come in again and do that, so …

HEFFNER: Why is it rare? Here?

DAVIS: We can’t seem to get over who’s going to pay for information technology. In some of these other countries the government has provided financial assistance. And in some countries, like Denmark, the physicians buy their own electronic medical records system, but the government at least has set up a non-profit organization that compiles all of that health information. So it’s so much more convenient for the doctor to be able to click and see all the medications their patients are on, to see all of their lab results … they’re not fumbling through a lot of paper trying to, trying to put it together.

So, they find it saves them time and they’re able to, to translate those savings into putting the money forward. But here we don’t even have standards and we certainly don’t have any kind of mechanism for setting up a health information data bank that makes care coordinated, integrated for one doctor knows what another doctor’s done. Where the lab results get back to you quickly, unfailingly get to the patient … so that the right steps are taken.

HEFFNER: One of the figures that relate, I guess, to the most important question for anyone of us … anyone watching. Life expectancy compared … when you compare the US with these other more advanced countries?

DAVIS: Well, unfortunately, a new study shows the US is now 19th, out of 19 countries on mortality amenable to medical care. So you’re looking at something like 70 deaths per 100,000 people …among the best countries. In the US you’re talking about 130 deaths per 100,000 people. So that’s a wide spread again nationally compared to other countries … we’re seeing that we can save … in that study … 101,000 lives a year if we did as well as the best country.

HEFFNER: Karen, do you have any information as to whether Americans have the faintest idea about those statistics?

DAVIS: Well, I think we’ve told ourselves for a long time that we have the best health care system …


DAVIS: … in the world. And because of that we haven’t seen the need to look around and see if there’s a better way of doing things. Whether that’s within the US or looking at other countries.

Like I said, we find those same wide variations within the US from one state to another that we find comparing the US as a whole to other countries. So what we need is to just be honest. Look at the data and quit using scare terms like “oh, they have socialized medicine … we have nothing to learn from them.”

Find out what kind of an information system they have. Find out what methods they have for putting nurses, as they do in the Netherlands in doctor’s practices to work with patients who have chronic conditions like diabetes, like hypertension, to get those conditions under control.

HEFFNER: Is there any indication that our desire … Americans’ desire for a better, longer, healthier life is rising …that we, we’re becoming more conscious of the need to do something.

DAVIS: Well, I think they recognize we’re on the wrong track. Sometimes it’s focused on issues like obesity, which we all know has been increasing … at a pretty alarming rate in the US. Sometimes it’s focused on other health issues, like tobacco use, or mental health problems. But I think what really hits home with Americans is the erosion of health insurance coverage. And a lack of confidence that they’re going to be able to get the care they need when they need it.

All other countries cover everybody … they make it very easy to get into your own doctor for care early on. Here … you’re facing … even if you have insurance … you may be paying $500, $1000 dollars, you think twice before you take a sick child to the pediatrician when you think, “I may have to pay a couple of hundred dollars … I don’t have it in my pocket right now.” Or, “gee I’m having a hard time and in a lot of pain, but I don’t want to go to the Emergency Room … I could walk out of there with a bill of $500, $1000 dollars.” So people put off getting care and we’re not getting care early on before conditions really get very serious.

HEFFNER: Well, now I, I read before from your President’s Message and you took over the coals that fictional couple Harry and Louise. Will they be around this year?

DAVIS: Well, I think if they’re typical of most Americans they are at high risk. They’re at risk of not having insurance coverage. They’re at risk of medical bills. But they’re also at risk, as many Americans are of care that’s not coordinated.

We have a very fragmented, highly specialized health care system. The Commonwealth Fund survey show that American patients are more likely to report experiencing medical errors, having medication errors. Different doctors telling them different things, tests being repeated. Because we don’t have any system for organizing care within the US.

So a lot has to change. Insurance has to change, but the way we organize care has to change. We all need a medical home. We all need to be part of an organized care system that makes sure you’re getting your preventive care, makes sure you’re controlling your chronic conditions. But gets you to specialists when you need to get to specialists … getting to the right place.

Right now people are on their own to figure our how to navigate this health care system without a lot of help making sure they get the care they need when, when they need it. So we’ve got to change a lot.

And as an economist I must say some of that means we’ve got to change the way we pay for heath care. Right now all of the incentives in the US are to do more and more things. Why not repeat the tests? You’ll get paid again. You know, as opposed to really trying to find it or get the records transferred over here, I’ll just, just do it again.

So we need ahh, ahh a more prudent use of resources for one thing. But we’re going to have to change the way we pay to really reward getting top rate results and to use resources sufficiently. And again, this is something we can learn from other countries. We all think of the UK as having a socialized system, and they may have some problems. But they started giving doctors bonuses for managing diabetes. All of a sudden, management of diabetes got a lot better. And I think we’re learning that from some of the experiments in the US as well.

HEFFNER: Yes, but you know, the question I asked about Harry and Louise, I wasn’t really leading in to the matter of whether they’re still around because of our inadequate health system … I was raising the question as to whether the insurance lobby will find others to take their place and will wage as vigorous a campaign against real consideration of the nation’s health as it did a decade and more ago?

DAVIS: Well, certainly that was a major factor, as you’re saying, 15 years ago. There are interests in the health care system and they’re strong interests, whether that’s the insurance industry or the pharmaceutical industry, or doctors, hospitals, you name it … everybody’s got a point of view and has a stake in keeping things the way they are.

On the other hand, we all have a lot to gain as a nation if we work together and subvert some of that, that special interest toward what would lead to better lives, healthier lives, a fairer way of paying for care, steps that would promote efficiency, narrow variations in quality … bring everybody up to the, the top levels of performance.

Now … how do we go about that? I think first of all it’s important that the American public really make their experiences known and make their views known during this 2008 Presidential race. It’s a historic window of opportunity. Candidates are getting the message that the American public thinks we’re on the wrong track.

They are worried about their economic security, they are worried about medical bills and health insurance premiums that are taking more and more out of their paycheck every year.

But it’s time for American voters, the American public to say, “We’ve got to change. Enough of this shaping policy according to the squeaky wheel. According to the interests. We’re not going to be scared by ads that say ‘It’s socialized medicine to do anything differently.’

We really want a new system of health insurance, we want a new system of health care in the US.” But one that builds on the best of what we have. But also incorporates new advances that we can learn from from other countries and within the US.

HEFFNER: All right now … putting it on the table. Which if the candidates have presented health care plans that meet more of those criteria that you set forth?

DAVIS: Well, the first step is to cover every body and truthfully the Democratic candidates have proposals that would cover all of the 47 million uninsured … or nearly all of the uninsured. Some of the details are missing even in those plans so a lot depends on exactly how affordable.

But what they would do, all of the Democratic candidates would … particularly Senators Clinton, Obama, Edwards, would build on the plan that members of Congress now have. And basically open that up to individuals who don’t have health insurance, to the self-employed, to businesses that might find it cheaper to buy coverage through that type of a system.

Doesn’t mean you have to change, if you like what you have, you can keep it, but it offers a new choice. And most importantly, all of the Democratic candidates say “We have a perfectly good system right now … called Medicare.” It covers people over age 65, it covers people who’ve been disabled for two years or more. Why not improve the benefits in Medicare, make some changes to it. But make it available to everybody.

Sure, if you want to go buy private insurance you can. If you want Medicare, you can have that. So they would open up the choices of over 200 different private insurance plans available now to members of Congress, but they would also put on the table a really good public plan offering like Medicare that would be available. So that’s, that’s one step.

On the Republican side, what you’re seeing is a lack of a commitment to covering everyone. A belief in the private market. Giving people tax breaks to go buy health insurance on their own. In fact, removing some of the regulations so you can buy health insurance from any state. If you live in New York you can buy your health insurance from a company in Alabama.

Now that sounds good. You know if I can get a better deal somewhere else. Why not? Well, the problem is there’s a tendency in the individual private insurance market to prefer to cover people who are healthy. They don’t cost as much as covering people who are sick. So some states … let’s take the State of New York, requires insurers that are going to sell policies to sell them to people who are sick as well as well as people who are healthy and to charge them the same premium.

Now other states don’t have those requirements; they let you exclude people who have any kind … have had cancer, had a stroke, even somewhat minor health problems and, of course, they’ve got lower premiums.

So if you could buy in any state, what would happen eventually is that sick people would have to buy it in New York and healthy people would go buy it in Alabama. So, that kind of breaks down the whole point of insurance, which is what’s called “pooling risk”. We all contribute a premium and then if we get sick we get covered. So … that’s at the heart of some of the Republican proposals.

Some … would leave it to the states. Some of the Governors have experienced working on these issues at the State level and they’ve said, “We’re a big country, this should be a State initiative, the States should be laboratories. Maybe the Federal Government should give them some money, or let them have more flexibility to reallocate dollars. That if the Federal government is now spending about … let’s leave this up to the States to figure out a solution.” So I think that’s the basic difference between Democrats and Republicans.

The Democrats are talking about everybody being covered, having new ways of providing health insurance, including the option of getting into Medicare, having premium assistance, so that you never pay over a certain percent of your income. On premiums, when you get coverage, making it affordable.

The Republican candidates on the other hand are, are saying “Let’s give people tax incentives, let’s let them buy what they want, where they want. If they don’t want coverage, that’s, that’s fine, too.” So there’s a big divide across party line. And there’s some small differences among candidates within each party.

You know, another way in which they differ is really how far they would go about changing the health care system and what they would do about controlling costs.

They agree on some things. That’s nice to know. They agree we ought to be moving toward information technology. But they’re very vague about how we would get there, what the role of the Federal government would be in setting standards on information technology, how much money they would put into it.

They agree we ought to have public information on quality and costs so you’d know what a doctor charges and, and what their record is on mortality rates, for example. But they don’t talk as much, on both sides of the aisle about transparency, about what’s going on in the insurance industry, what the price discounts are in the pharmaceutical industry … but at least there’s some agreement there, we need better information, publicly available on quality and costs and that needs to be on the Internet and people need to have, have access to it. So there’s some things that there’s agreement on and we can move forward with.

The more fundamental changes like changing the way we pay hospitals and doctors … that’s a bigger divide, whether we ought to be negotiating pharmaceutical prices … that’s a bigger divide. Whether we ought to let importation of drugs from other countries …

HEFFNER: What is the divide? Will you describe it?

DAVIS: For the most part the Democrats support negotiating prices, prescription drugs with the pharmaceutical companies.

HEFFNER: To lower prices.

DAVIS: To lower prices. The US pays really 40, 50 percent more than other countries for the same drug. And we’ve just said, “Well, let’s leave it to the market and competition.” And, and let insurance companies negotiate with the pharmaceutical companies for price discounts.

So, one, we don’t even know who’s getting what price discount. But we don’t really have a unified way of saying, “We need to get value for what we’re spending on health care.”

So, we’ve tried this now for ten, fifteen years of just leaving it to the market with no role for government on, on issues like what we pay for care. And other countries are different in that respect.

They also set up agencies to really look at the effectiveness of a new drug or a new device. Is it really worth … is it really better? Is it that much better? And, and, and make recommendations whether to cover a new drug or whether the old drug is really just a good and costs half as much.

We seem unwilling to even gather that information much less apply it in our …

HEFFNER: Is that a party divide, too?

DAVIS: There’s starting to be more bipartisan support for mechanisms of looking at comparative effectiveness. But again I think on the Democratic side they’re willing to go a step further and to really look at the cost issue. It’s one thing to say, “Does this new drug work? Does it work any better than the old drug?”

But it’s another thing to say, “How much more does it cost?” And “is it really worth it?” for no change or small change that you might get with that.

HEFFNER: We’ve … ah, Dr. Davis we’ve been talking about these issues all through this century thus far, anyway. For the last eight years or so. You seemingly are a great deal more optimistic at this point about what’s going to happen, what our health care system will be.

DAVIS: Well, I tend to be a person who sees the glass half full. But I do think that we are at a historic moment. That the problems have gotten so bad, we are so far off track with growing numbers of uninsured, and if the economy weakens I think this is going to be a pocketbook issue. Because 160 million Americans depend on their employer for health insurance coverage.

If you lose your job, you’re going to lose that health insurance coverage. And you’re not going to be able to afford the premium on your own, even if, if that company will keep, keep covering you. You can’t afford a premium that today is $12,000 for a family, even under employer plan. If you have to go out into the individual market your pay more than that for, for comparable coverage.

So people are going to be, as they always are in an economic downturn about losing health insurance coverage. You know, the family budget is tight. Even with coverage, with what you have to pay as your share of the premium, as your out-of-pocket expenses for medical care are taking a bigger and bigger chunk of your paycheck.

HEFFNER: Karen Davis, you’re going to have to come back again this election season to see how, how it goes … how it develops.

And I do appreciate your joining me again on The Open Mind.

DAVIS: Well, I’m glad to be here.

HEFFNER: And thanks to you in the audience, too. I hope you join us again next time. For transcripts of today’s program, please send $4.00 in check or money order to The Open Mind, P. O. Box 7977, FDR Station, New York, New York 10150.

Meanwhile, as another old friend used to say, “Good night and good luck.”

N.B. Every effort has been made to ensure the accuracy of this transcript. It may not, however, be a verbatim copy of the program.