It's Expensive, Yes, But What is the Cost of Doing Nothing?

Coffee Brown, University of New Mexico, Talk Radio News Service

Dr. Peter Orszag, previously the Director of the Congressional Budget Office, currently the Director of the President's Office of Management and Budget, told the Senate Committee on Finance that the cost of doing nothing about healthcare reform would be fiscal crisis, decreased take-home pay, 46 million uninsured Americans, and an increasing burden on state governments which is already cutting into other services, such as increased tuition costs for college.
"Do you know of anyone in either party who wants to do nothing?" Sen. Chuck Grassley (R-Iowa) asked.
Orszag replied, "No, Sir. That's why I am confident that we can get healthcare reform passed this year."
Grassley said there was not yet any conflict between Republicans and Democrats about healthcare reform, but that that was partly because the president's budget, while "bold", was "not very detailed."

Still, $634 Billion is a lot of money.

Sen. Max Baucus (D - Mont.) said, "Would healthcare reform now lead to substantial savings?"
"Yes," answered Orzack.
"Should we accept short term deficit spending to achieve that?" asked Baucus.
Orzack replied, "The president's budget for healthcare reform is designed to be deficit neutral for the first 5-10 years, then we should begin to see savings. If we could cut one percent per year from medical cost growth, we could realize savings of 20 percent of GDP in 50 years. For forty years, medical costs have risen 2 to 2.5 percent faster than inflation."

The hearing, at which Orszag was the sole witness, turned from general costs to specific strategies.

Baucus asked, "Can we incentivize consumers to be more cost effective?"
"25 percent of beneficiaries use 85 percent of the cost. That's the group to target," Orszag replied.
"Would costs come down if everyone were covered? And how could we do that?" Baucus asked.
According to Orszag, we need to reduce consumer costs, reduce complexity, and encourage enrollment. We can encourage enrollment by subsidies, mandates, and automatic enrollment with an opt-out choice. Social norms need to change, so that people would be as shocked if you had no health insurance, as they now are if you don't buckle your seatbelt. the key to that is massive public awareness campaigns, he finished.

Grassley said he was concerned that Medicare Advantage might be cut too sharply under the new budget. Physicians might opt out of Medicare if reimbursement is too low.
Orszag said that Medicare Advantage was targeted because it paid substantially more than basic Medicare.

Expansion of the public sector would place new pressures on the private sector.

"Would a public plan undermine Obama's promise that people who prefer to can stay with their current plan? Would Obama support a plan that would 'crowd' 18 million people off private plans onto public?" Grassley wondered.

Sen. Maria Cantwell (D - Wash.) was also concerned about proposed cuts: "We've found medical homes, home care, and Medicare Advantage to be cost effective, but they face cuts under the new budget."
"Evidence strongly favors integrated care...Long term health care is in the budget...Competitive bidding should reflect local costs," Orszag replied.
He pointed out later, however, that the budget office had found that home care typically had much higher profit margins than other sectors of healthcare, and had been targeted for that reason.

Public funding means public accountability.

Orrin Hatch (R - Utah) said, "A Federal Reserve-style medical board would be a disaster, leave standards of care to the specialty boards. Keep these decisions in the private sector. We should not be be setting prices."
"Those problems are common to all the models. Both public and private systems must change," Orszag said.

Sen. Baucus closed the meeting by pointing out that time is of the essence, and the Senate must move quickly.
"We have our sleeves rolled up; we're ready to go," said Orszag.

Major hurdles remain in patent reform legislation

Senators Leahy (D-Vt.) and Hatch (R-Utah), along with Congressmen Conyers (D-Mich.) and Smith (R-Tex.), today announced the introduction of major patent reform legislation in both chambers of Congress with bipartisan support. The House and Senate Judiciary Committees have been working on patent reform for the last 4 years, and in the last Congress the House was able to pass the legislation, while it stalled in the Senate. The Congressmen today all expressed hope that the legislation would become law this time around, though all admitted there were major issues to be worked out.

Last time the Senate took up the bill, debate deadlocked over how to reform damage calculations and the handling of inequitable conduct, which occurs when a party tries to enforce a patent it obtained without being completely honest with the U.S. Patent and Trademark Office. While these disagreements are large, all parties today expressed hope. Senator Leahy, asked what had changed since the last time the Senate took up the bill, responded that there is "urgency" to get the bill through. The Senators and Congressmen linked the bill to the economic downturn, saying that reforms were important to improving the economy.

The bill as introduced picks up where discussions left off last time. It includes several major changes, including switching the U.S. to a first-to-file system from a first-to-invent system, creating a post-grant opposition system to allow challenges to patents within 12 months after they have been issued, and eliminating the publication of pending patent claims. Further, it streamlines many of the forms and procedures in the patent application process.

Senate Judiciary Chairman Leahy said that hearings on the new bill will begin next week. Because the bill stalled in the Senate last time, the House Judiciary Committee is waiting for Senate action before bringing the bill up for consideration.

Republicans: Democrats “playing politics” over judicial nominee

A group of Republican Senators headed by Sen. Arlen Specter (R-Penn.) chastised Sen. Patrick Leahy (D-Vt.) for what they viewed as “playing politics with a judicial nomination. The nomination of Judge Robert Conrad to be on the fourth district circuit court of appeals is currently being held up by Sen. Leahy who has yet to give Judge Conrad a hearing.

The Senate Republicans which included Sen. Elizabeth Dole (R-N.C.), Sen Jeff Sessions (R-Ala.), Sen. Richard Burr (R-N.C.) and Sen. Orrin Hatch (R-Utah.) all focused their attention on the lack of fairness that they view towards Judge Conrad. Hatch, who has been in the senate 32 years, said that because both Senators Dole and Burr are supporting Judge Conrad that holding a hearing should not even be an issue.

“Judge Conrad has the support of both the senators (from North Carolina) that doesn’t happen all that often.” Hatch added that by the senates judiciary committee not holding a hearing it “denigrates the judicial process.”

A key sticking point that infuriated Republicans was that the hearing has been in limbo for now 338 days, a testament to the strife that is currently on going in the Senate. When asked what she viewed as the reason for the hold up Sen. Dole said that it must have “something to do with politics.”

Judge Robert Conrad was nominated by President Bush 338 days ago to be seated on the North Carolina fourth circuit court of appeals. Conrad has previously been confirmed by the Senate to be a U.S. Attorney in 2001 and has been unanimously rated “well qualified” by the American Bar Association.

Counterfeiters take more than products

Senator Patrick Leahy (D-Vt.), Chairman of the Senate Judiciary Committee, presided over a hearing on protecting intellectual property. He said that the counterfeiting of products has reached a record high in recent years. He said that this theft has cost the American economy almost $200 billion and the loss of 750,000 jobs per year. He said that if the U.S. wants to maintain the position of an economic leader, then it must protect the intellectual property rights of U.S. industry.

Mike Rose, Vice President of Supply Chain Technology for Johnson & Johnson said that according to the World Health Organization 8 to 10 percent of pharmaceutical products outside the U.S. are counterfeit and in some countries over 50 percent of their medications are counterfeit. He said that counterfeiting of pharmaceuticals has become such an epidemic that in 2007 the Pharmaceutical Security Institute seized 24 percent more “bogus drugs” than in the previous year.

Senator Orrin Hatch (R-Utah) said that the U.S. should take the lead in enforcing global piracy. He said that it counterfeiting is not just pirated music or fake designer handbags, it has infiltrated many U.S. industries such as auto parts and electrical accessories. He said that these cheaply made counterfeited products can pose a great danger to American citizens and stopping their production should be a priority.