On the Supreme Court's June 28 decision on the Affordable Healthcare Act.
Supreme Court Ruling on President Obama's 2010 Health Care Law
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THE ASPEN INSTITUTE
TODAY'S SUPREME COURT RULING ON PRESIDENT OBAMA'S 2010 HEALTH CARE LAW
1000 N, Third Street
Aspen, Colorado, 81612
Thursday, June 28, 2012
LIST OF PARTICIPANTS
Anchor, CNN's "Newsroom"
Op-ed Columnist, The New York Times
Columnist, TIME Magazine
Senior Policy Advisor and Member, DLA Pipers Global Board
Co-chairman and Partner, Mercury/Clark & Weinstock and Mercury
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P R O C E E D I N G S
SPEAKER: (In progress) -- a trustee, a 12-year member of the House of Representatives from Minnesota and of course a highly respected strategist and leader of the Republican Party. I think most of you know by now, although interestingly many of the early e-mail blasts were inaccurate, but many of you know that the -- most of the essential provisions, especially the individual mandate were upheld by the Supreme Court this morning in a five-four decision.
This panel obviously will not be a legal discussion. For one thing I'm sure none of them have had a chance to actually read, if not look at the opinion. I've just spend about half-an-hour trying to read it. The majority opinions go to about 59 pages and with the concurring opinions and dissenting opinions about 193 pages. But essentially the chief justice, joined by the four more liberal members of the court upheld the individual mandate and most provisions of the legislation.
But chief justice's view was that was not based on the commerce clause of the Constitution, but rather the tax power, another power under Article I of the Constitution. So that way there were five votes to uphold the legislation, not on the commerce power, but rather on the taxing power.
The four dissenters thought the entire bill should be invalidated. And there were concurring opinions and a leading concurring opinion written by Justice Ginsburg. The only critical -- the only aspect of the legislation that was struck down was a penalty aspect of the expansion of Medicaid bringing tens of millions of lower income people into Medicaid rolls.
The court ruled as far as I could tell from my quick read essentially seven to two that that was not constitutional. The expansion of course is upheld. But the penalty that Congress was -- that the federal government was going to be able to use for states that did not enroll in the Medicaid rolls was declared invalid. So essentially that is what the court decided. It is now up to Suzanne and our panelists to tell us what it all means. Thank you.
MS. MALVEAUX: We will take the next hour to try to sort all of this out. Last night, we had a really good discussion on the eve of the decision looking at whether or not we can even afford to provide health care for our country and for each one of our family members.
Clearly, this was a very big surprise for a lot of people who were watching the Supreme Court that the ruling came down this way. We heard earlier this morning Professor Doris Kearns Goodwin describe this as something that was historic, that something that five presidents had tried to achieve in the past over the last 100 years, that the President -- President Obama has been able to accomplish.
The Supreme Court decided that in fact it was valid and constitutional. So I want to start off with each one of our guests simply giving your point of view the significance of the ruling.
MR. BROOKS: Well, first it wasn't a surprise to me since I predicted all possible outcomes, I also predicted this one.
MS. MALVEAUX: Did you place any wagers, any wagers?
MR. BROOKS: I made a huge killing in Vegas, Roberts for 500.
MR. BROOKS: Yeah, I guess, you know, I'm a Burkean. I'm a minimalist. Washington is filled with people who want to grab power and want to expand their power, who are very aggressive and arrogant. But Roberts proved himself today to be a modest minimalist, someone who believes in restrain. The first thing he did I think is restrain the power of the court, not to use the potential power to overrule the democratic process, not to frankly create an institutional crisis in the court. And so I think that was an act of minimalist restraint.
The second thing he did was the language on the commerce clause in this is also an active restraint, which will restraint future Congresses. Over the years the commerce clause has been distorted beyond recognition. So Congress has the power to regulate all aspects of American life. He gave conservative judicial people everything they could ever want in the language. And as I read on Scotusblog this morning, that will have a serious impinging effect on future Congresses who want to expand.
And so I thought it was minimalist and modest in both regards. And I think that's a healthy thing. What it does essentially is it throws this back into the political process. I called a bunch of conservatives. They were disappointed, you know, it wasn't overturned. But they were pleased with the commerce clause language, but most of all they were energized let's fight this in -- politically. And so I thought it was quite -- I'm cheerful ruling for anybody who believes in modesty and restraint.
MS. MALVEAUX: Joe?
MR. KLEIN: Well, I was really pleased that Romneycare was sustained today.
MR. KLEIN: It would have been a very tough argument for Romney to make that, you know, if his plan had been shown to be unconstitutional. But the thing is that there is an even greater significance, I agree with everything that David just said. But there's an even greater significance here, and it's this, that by upholding the taxing power of the federal government when it comes to health care, the -- Roberts also upheld the constitutionality of Medicare and the constitutionality of Social Security.
If this had been struck down then they would have had to make the argument -- you know, the opponents of the Affordable Care Act would have had to make the argument that it's okay to do socialism in this country -- Medicare -- but not okay to do a free market system that originally came out of the Heritage Foundation. So I think that in that way Roberts very cleverly sustained a much larger status quo.
And I think -- the other thing I really like about this is that the part of the Affordable Care Act that I was least in favor of was the vast expansion of Medicaid. And I think that this gives us a chance to re-look that. What I'd really like to see is a vast expansion of people who are going to be eligible for the exchanges, which for those of you who don't know what kind of like health care superstores where individuals and small businesses can buy insurance, you know, with the same market power that Time Warner has.
I think that when this -- I've been in favor of this plan ever since it came out of the Heritage Foundation in the late '80s. I favored it in 1993 and '94, much to the first lady's dismay. And when Mitt Romney decided he wanted to do it I raced up to Massachusetts to, you know, to check him out and he was doing it for all the right reasons, all the things that he's not saying now.
But I do believe that if you can have a combination of the market power and market choice that we have in the Federal Employees Health Benefits Plan plus giving health care coverage -- and this is the most important part of it -- to 30 million working Americans, remember people who don't work get it through Medicaid now. The tremendous injustice has been people who work in -- you know, corner grocery stores or wherever don't get it. This rectifies that, it rectifies a grave moral injustice we've had in our society.
MR. DASCHLE: Suzanne, I agree with much of what David and Joe have said. I think that if the administration had chosen to use its taxing authority rather than its interstate commerce authority right out of the box, we would have had a situation similar, if not identical, to both Social Security which mandates our retirement insurance and with Medicare Part A today which mandates hospital insurance.
Now, those two mandates have stood the test of time as well as tests in Congress. But they didn't want to be accused of raising taxes so they moved to the commerce clause and therein began the drama. But that now is put to rest. We no longer have a constitutional debate.
And so it provides an extraordinary green light to go forward with implementation on three levels; first, insurance reform with the creation of the exchanges, secondly, with payment reform where we move away from a volume-driven system to a value-driven system, and then delivery reform where we really do a lot to try to improve quality in this country. Quality is going down; 200,000 people a year die because of medical mistakes. Our life expectancy is going down. So we know we've got to address quality in a far more meaningful way. This gives us the chance to do it.
What it doesn't do is to end the debate about health reform and health care in America. And that debate is largely one involving the role of government. I think Republicans and Democrats generally agree that we want a high-performance, high-value health care marketplace with better access, better quality, and lower cost. But they differ on what the role of government should be. That debate will continue regardless.
It will happen in the chambers of both the House and Senate, it will happen in the political campaign between now and November, and it will happen certainly in the states as the states begin to take on the responsibilities of implementation. So those debates will continue, but today was a historic and a very transformational day for everybody.
MR. WEBER: Well, congratulations.
MR. WEBER: Well, it's hard for me to argue with most of that. So I'll just confine myself a little bit. I -- first of all I do think there are a couple -- I haven't read the decision and I don't think most of us have, but I think that federalism has been upheld on the issue of the waivers with Medicaid. I think that's going to be helpful from conservative standpoint going forward. And we haven't said whether or not a mandate can -- is constitutional or not.
Joe, it's not Romneycare because Romneycare was a mandate and we now know that this is not a mandate, this is a tax increase. And I think that President Obama promised not to impose a tax increase. We'll see if Republicans can figure out how to argue against the tax increase for the next four months.
MR. KLEIN: Romneycare was a tax increase the exact same way that Obamacare was. I mean, they're playing off the same book using the same advisers.
MR. WEBER: Okay, well, I'll take that.
MR. KLEIN: I mean, where's the difference here? People who don't buy health insurance in Massachusetts are penalized, you know, there's a tax penalty.
MR. WEBER: Well, except that the President -- the governor never had to go to the Supreme Court of Massachusetts to get them to say that something that he told them was not a tax increase really has to be upheld because it really is a tax increase and that's what happened today.
MR. KLEIN: Well, yeah, it's a political point. But a substantive point is that --
MR. WEBER: It's a political point?
MR. KLEIN: It is a political point.
MR. WEBER: Written by the chief justice and as well as the two appointees of the President.
MR. KLEIN: The --
MR. WEBER: But the President now has to explain why he did indeed raise taxes $0.5 trillion dollars when he said we would have no tax increases. Maybe he can justify all that based on the good things --
MR. KLEIN: He's right, he's right.
MR. WEBER: That's right.
MR. KLEIN: And I think that the --
MR. WEBER: It's undeniably true.
MS. MALVEAUX: We don't need any boos here, we're just --
MR. WEBER: It's okay.
MS. MALVEAUX: -- light conversation that we're going to have here, allow people to disagree.
MR. KLEIN: But you know, Vin's right on the merits here. And I think one of the things that I've most objected to about the way the administration sold this is what Tom said before.
MR. KLEIN: Which is rather -- they've been dealing in euphemisms throughout. You've never heard or rarely heard the President talk about the 30 million people who are going to be covered by this and who are -- are going to pay next to nothing for it because his focus groups tell him that the middle class don't like that, doesn't like that. And you haven't heard him say that this was actually -- well, you could call it a tax increase, you could call it a mandate. Do you call auto insurance a tax increase? I don't know. It's a word game that you can play, but everybody is going to be required to buy-in which means that money is going to come out of their pockets. But that's a good thing.
MS. MALVEAUX: Let me jump in here, Vin, because I know you're probably going to be on the hot seat a little bit on this one. But -- so Mitt Romney he comes out and he says clearly that this is a tax increase as you point out.
MR. WEBER: The courts, the Supreme Court is saying clearly it's a tax increase.
MS. MALVEAUX: Right. And then -- but then also the Republicans say that they're going to immediately take this to a vote to repeal. Is that the only recourse they have at this point is to repeal or do they have some specifics, some suggestions that they believe would actually improve their health care system?
MR. WEBER: Well, we know the repeals is not going to go anywhere in the Senate --
MS. MALVEAUX: Right.
MR. WEBER: -- much less in the front of the President. So it's a political statement. And I -- you know, it's unlikely now that you're going to see an undoing of this law. I think that you're going to see adjustments to this law, but I think that would have happened regardless of how this is -- I never thought -- the President always said -- one of the things I disagreed with the President saying which is a not a political issue, when he said we're going to solve this problem once and for all, we're never going to solve the health care problem once and for all. We're going to be legislating on health care every year probably for the rest of all of our lives. So I think that they'll come back and do some changes.
Republicans, you know, have things that they want to do, but they are relatively minor changes in the health care program overall. Whether or not they can actually repeal this that would -- that's very -- I think that's pretty doubtful given the fact that, you know, you need 60 votes probably in the Senate and a Republican president.
SPEAKER: That's now, not post-election?
MR. WEBER: Pardon me?
SPEAKER: You think that's pre-election. You say it's doubtful?
MR. WEBER: Pre-election, right.
SPEAKER: I think it's -- and if Romney wins it will be repealed.
MR. WEBER: If Romney wins and the Republicans take the Senate it will be repealed.
MS. MALVEAUX: Tom, let's talk a little bit about messaging. Because the recent polls were showing 51 percent of the American people despite so many advantages of the health care plan are not for it. And that does include however 13 percent who say it wasn't liberal enough.
MR. DASCHLE: Not strong enough, right.
MS. MALVEAUX: So how does the administration do a better job, the supports of the administration do a better job in convincing people that this is helpful and beneficial to them?
MR. DASCHLE: Well, if look at the resources spent in favor and in opposition is literally over 10 to one. That is the media -- the media that's been purchased. And so you can't blame the American people first for being confused.
Secondly, most of this hasn't been implemented and so they really don't know what it means for them and they're being told. And in many cases the old aphorism that a lie gets halfway around the world before the truth gets its shoes on really applies to health care. And unfortunately the lies have gotten halfway around the world and people have bought in it.
What encourages me is that the things that have affected them; the elimination of annual limits and lifetime limits and the multiple loss ratio and the closing of the donut hole, all of the things they know, all of the things that have already begun to affect them there is overwhelming support for it. So my outlook is much more positive than you might expect because I think as they learn more they're going to be much more supportive.
MS. MALVEAUX: Joe, you had a very different opinion last night when we talked about this, about the Obama administration's ability to communicate.
MR. KLEIN: Yeah, I think that -- well, as I just said, they -- you know, they never told the 30 million people who were going to get this, that they were going to get it pretty much for free because it didn't fly with the middle class. But also -- I mean in my travels I keep on bumping into small-business people who say, I'm against Obamacare, it's going to be terrible for me. And they don't know about the exchanges, they don't know that they're going to have the same market power as General Motors, Time Warner whatever, and that their rates will go down. I think that that's been on the President.
In area after area after area, people didn't even know about the -- you know, for a long time about the fact that you could have your kids up to the age of 26 on your insurance. I think that the President has -- his major failing has been a political failing. He doesn't explain his stuff. He's the first politician I've ever met who gives people tax breaks and doesn't tell them about.
MR. KLEIN: Including the $250 that they get to close the donut hole on prescription drugs. So you know, I think he has an opportunity now and it's an opportunity to move this in a larger, more bipartisan direction. If I were he, I would propose maybe a three or four point modification to the Affordable Care Act. Number one would be malpractice reform, to try and draw Republicans in.
MR. KLEIN: And also because it's in -- and also because it's entirely justified. Number two would be to give states the option of moving their Medicaid people into the exchanges. Number three would be to pay for this legitimately which we're not doing now. It would be to set a rising scale on the deductibility of health insurance benefits, so that the higher your income, the less you're able to deduct which would pay for this. And the fourth would be to double down on the efforts to move medical care from fee-for-service to salaried doctors who are paid according to salary and performance benefits.
MS. MALVEAUX: David, I'm going to get to you in a minute. But Vin, is there anything that Joe has said that sounds appealing?
MR. WEBER: Well, certainly malpractice reform sounds very appealing. I would want to think about the others a little bit. But you know, I think that approach of talking about some adjustments in the bill and including at least one thing for sure the Republicans think is important is helpful.
As I said I think health care reform is a process. I don't think we passed the bill, solved the problem, and now we can worry about something else. So anything that gets us into a discussion where we can talk about compromises and improvements that might be accomplished in a bipartisan way I think is helpful. I would be very surprised if the President did what you just said. I think it would be smart if he did that, but I don't think it's going to happen.
MS. MALVEAUX: David, you had mentioned you were heartened by the fact that you feel this is modest and restraint in terms of the court's decision today. Do you think that Chief Justice Roberts was reacting to a lot of the criticism over two specific rulings, Citizens United and also immigration, and that he needed in some way to show a different side, that this was not traditional activism? Or do you think we are seeing a legacy of Justice Roberts that does skew more towards the middle?
MR. BROOKS: Both, not middle, but modest. You know, I think clearly he didn't want to provoke an institutional crisis. He's the chief justice. He didn't want to go to war.
Having said that, this is entirely consistent with his record. This court has been generally very modest. The Roberts -- I mean, the Rehnquist court and the Warren court overturned on average about eight laws a year. This court has overturned on average three laws a year. It's much less likely to assert itself to overturn laws. It's much, much less likely to assert itself to overturn presidents. It's been a very modest court.
It's also been a relatively non-ideologically divided court, or at least not more than previous courts. The number of five-four decisions in this court is exactly the same as in the Rehnquist Court, the Burger Court, and the Warren Court.
The number of nine-zero decisions, again, exactly the same. There's been a lot of overwrought coverage of this court as if it's some really aggressive activist court. It's just not. He is a modest minimalist guy and this showed, but I do think the institutional factor played in. If I could leap on the Clinton -- I mean the Obama and the Romney failures, of which I just am bubbling forth.
MR. BROOKS: First, the popularity of this bill is in the future and it always will be. The American people --
MR. BROOKS: -- do not trust government; 19 percent of Americans trust government to do the right thing most of the time. This bill centralizes power in government. They're just not going to like it.
Secondly, I think they understand that this bill is built on rotten foundations. The fee-for-service system is horrible. It creates all sorts of perverse and horrible incentives. The tax exemption on employer health care benefits is horrible. I understand politically why Obama didn't want to touch those things in putting this bill on top of it. But by putting this bill on top of a rotten foundation he pretty much screwed up the funding of it.
And I think it's going to make it extremely expensive, not maybe anymore than the previous status quo, but it's fiscally unsustainable. And when you take out the CLASS Act and some of the gimmicks that were thrown in there to make it look fiscally unsustainable, I think it's fiscally doomed unless you would take Joe's things --
MR. KLEIN: Thanks for endorsing two of my four points.
MR. BROOKS: I absolutely agree with that. And then if I could take on Romney --
MR. KLEIN: Three of --
MR. BROOKS: Romney has a great health care plan which is buried away in a secret chest three stories below his 12 storey garage.
MR. BROOKS: It is a really good plan. I love -- it's based on defined benefits, it's based I think on giving people good tax credits so they can buy their own plan. It gives people a lot of choice how to get consistent with the American system. He doesn't want to talk about it because I guess it's politically -- it would require political courage.
MR. BROOKS: But I think it's quite a great plan. I wish out of all this we would have the debate between the Romney plan which is a defined benefit plan and Obamacare which is what it is.
MS. MALVEAUX: And then you and I talked about this earlier today, maybe one of the reasons why Romney is not offering the specifics is because he's taking a look at next month's jobs numbers and that that's what's going to be the focus of the campaign moving forward. Do you want to explain?
MR. WEBER: Yeah, because -- everybody has been talking for the last couple of weeks first of all on immigration and the huge impact of immigration, today obviously health care, huge impact of health care. Both together are not going to be as significant as the impact of the job report for June which comes out next week which is just to say this -- the main issue in this election has not changed.
The main issue in this election is the course of the economy. Now, there was a good housing number today which is helpful for the President. Maybe the next week's jobs report I think comes out on Friday, I'm not sure, will be positive and show that we've had a couple of months of a blip and that will be very good and he'll be able to put health care as a political issue in the context of an economy that is still improving and recovering from the Great Recession.
On the other hand, if we have a third bad monthly report and everybody can see the last two at least were bad, I think that, you know, a lot of this is swept away and the arguments of the opponents of health care get stronger that this is part of a broad set of policies that are creating a drag and uncertainty on the private economy and preventing it from creating jobs at an acceptable rate.
MS. MALVEAUX: Tom, you want to weigh in?
MR. DASCHLE: Suzanne, I was just going to -- first of all I wanted to agree emphatically with something Vin said earlier that this is going to be an ongoing process and there's every reason to be cynical as David is about this process and the extraordinary --
MR. BROOKS: I'm critical, not cynical.
MR. DASCHLE: Well, I think you're cynical and critical, but justifiably so perhaps.
MR. DASCHLE: I think, you know, Winston Churchill had a great description of the United States and the way it does things, that they'll always do the right thing after they've exhausted every other possibility.
MR. DASCHLE: And you know, we continue to do -- try to do the right thing, but we continue to exhaust every other possibility in the effort to do so. What we all should agree to is that the status quo is simply unacceptable. We should not accept the fact that 51 million people are uninsured and over 30 million are underinsured. We shouldn't accept the fact we pay $8,500 in taxes, premiums, and out-of-pocket expenses today, 40 percent more than the second-most expensive country and get little for it when we consider where we rank in overall quality with the rest of the world. You can't accept that. And you can't accept the fact that we have 200,000 mistakes that lead to death every year in our system. We can't do that.
So what we have to do in a democracy because we're not a dictatorship is try to figure out with conflicting views about the role of government and conflicting views really about the essence of what good health care ought to look like in America to come up with policy that works. And that's a messy, messy process, but that's what we're doing today and that's what I think we're going to continue to do for weeks and months and year to come.
MS. MALVEAUX: Let's --
MS. MALVEAUX: Let's just talk about a little bit about the role of Congress as well because the individual mandate, it was deemed constitutional based not on a commerce clause, but obviously on the taxing clause. Does this limit Congress' ability to regulate business?
MR. KLEIN: I think it will serve. I agree with what David said at the outset. I think it will some and you know, one thing that Democrats should be very mindful of is that there is no creative destruction in government. And that in terms of regulation we get sedimentary layer upon sedimentary layer upon sedimentary layer of regulations. And they just stand there. They just sit there, an ever increasing weight on our businesses.
Now, I'm in favor of regulation, but I'm in favor of sane regulation. And one of the first things that any given Democrat who ascends to the presidency has to do is to prove that he or she will manage the government. And the regulatory apparatus has gotten way out of hand, and one example I'll give that is in the health area is the FDA. You know, I've recently talked to General Pete Chiarelli, who was a wonderful leader especially when it came to the health of his troops.
And he told me that there are -- that there were drugs that are just sitting there in front of the FDA that might -- that might really affect positively the kids who are coming back with traumatic brain injuries. We've really got to streamline this stuff, and so I think it's not a bad signal to send that government can't just regulate everything, that you have to start thinking about which regulations are sane.
MR. WEBER: I really agree with that, but there's a paradox here. I agree very much with streamlining and even reducing the regulatory burden to the extent that we can, but in a lot of cases and FDA is probably one of them, in order to get that we actually have to increase the budget of the FDA.
MR. KLEIN: Oh, too bad then.
MR. WEBER: Having the regulations on the books, but insufficient personnel to work through them is a problem.
MR. KLEIN: Yeah.
MR. WEBER: It could create -- it creates a bigger problem. So you've got one party that wants to increase regulations and the other doesn't want to pay for the enforcement of them and you get the worst of both possible worlds.
MR. DASCHLE: But you also have -- you know, Vin and I've had the experience I know of having to deal with the big question you get from people in the media especially. You've got over $100 billion of fraud and abuse in Medicare today. And until we come up with some alternative to regulation that will help us bring down this extraordinary waste, this unnecessary cost due only to fraud and abuse.
Innovative ways that the private sector uses and I agree that I would love to find ways to bring down the regulatory burden and the onerous implications that it oftentimes has. But somehow we've got to deal with the fact that innovative people find ways to get around the laws, around the regulations to come up with ways to rip off the taxpayer and the federal government.
MR. KLEIN: Right.
MR. DASCHLE: And we've got to address that you can't ignore it.
MR. KLEIN: Tom --
MR. DASCHLE: So we've got to find the right balance there and it's easy to say all regulation is bad, you're not saying that.
MR. KLEIN: No.
MR. DASCHLE: But I think you do have to find balance here.
MR. KLEIN: How much of that 100 billion do you think stems from the fee-for-service system?
MR. DASCHLE: Well, a good deal, but the whole -- (inaudible) in a lot of ways and fraud and abuse is one of --
MR. KLEIN: But there are other things that the fee-for-service system leads to that you wouldn't categorize as fraud and abuse, but I would categorize as waste. And I'll tell a story that I told last night when my mom turned 80 she had a heart murmur from birth and she said to me it's getting worse. And I said why is it getting worse, mom? And she said because I don't have the energy I used to have.
MR. KLEIN: And I said, mom, you're 80-years-old, but she and dad went ahead and they had $100,000 heart valve operation paid for by all of you, but not just by all of you, by all the bus drivers and convenience store clerks in this country. The upshot was that she spent the next 3 years recovering from it and when she turned 84 she didn't have any more energy than she did when she was 80. Now, dad wanted to pay for that, that would be one thing, but asking everybody else to pay for that is an incredible waste of money.
MR. BROOKS: I don't understand your -- what you're saying about fee-for-service. If you change fee-for-service, you're changing the whole thing. It seems to me you're either in Romneycare or single-payer care.
MR. KLEIN: Yeah.
MR. BROOKS: I don't see how you're in Obamacare if you've changed fee-for-service. That -- the whole system is fee-for-service, is --
MR. KLEIN: I don't think that's true. I don't think that's true.
MR. DASCHLE: Now, you don't -- we can move to what they call episodic care and salaried physicians are part of that. Changing our dynamic where we don't pay for every single -- the way we pay for health care today is if you were buying a car, you'd have a line item for every bolt, every nut, every sparkplug in page after page, and that's the way we -- well, you don't have to do that.
You can do it episodically, you can do it globally, you can do it on a capitated way where people are paying for the experience of the health care provided on a monthly annual basis. And they're rewarded actually for reducing the unnecessary care that may have come about as a result of this volume-driven approach we have now.
MR. KLEIN: And by the way --
MR. DASCHLE: It has nothing to do with who pays. The individual or the private sector can pay that just as well as the government can.
MR. KLEIN: There are incentives towards that in the Affordable Care Act.
MR. BROOKS: But they are little.
MR. KLEIN: Number one, in -- number two is that there is a real move in the Affordable Care Act to get toward electronic recordkeeping which can help establish best practices. And when you establish best practices you'll find a lot of the things that we're doing now won't be necessary in the future. Now, the Republicans have a name for this concept, they call them death panels. And you know, you cannot be --
MR. WEBER: Not all Republicans.
MS. MALVEAUX: Do you want to respond? Do you want to respond?
MR. KLEIN: Not all respond -- not all Republicans, but the -- I don't know how Vin feels about this, but -- or David, but Republicans have been very much against the idea of using best practices as a way of determining what care should be given.
MS. MALVEAUX: Vin, how do you feel about it?
MR. WEBER: Well, I think the death panel issue is really unfortunate because it prevented a real discussion of end-of-life treatment that we should have as a serious country.
MR. WEBER: So I more or less agree to -- I just have to say, like, when I talk about death panels, I say we have death panels. My father died when he was 57-years-old. He was diagnosed with cancer in May. They told him they could give him extraordinary treatments and keep him alive perhaps another 8 months. He and my mother sat down and formed a death panel and decided to turn down that treatment and he died in August.
Someone makes the decision, whether it's insurance companies or lawyers or hospitals or doctors or the governments or families, someone makes the decision and as we deal with this incredible problem of the cost of health care which we all agree is a incredible problem, that's got to be talked about.
MR. DASCHLE: Suzanne, one thing that we haven't talked about that I think is so critical to this discussion in particular is simple transparency. Health care maybe the only sector in the economy where at the time of purchase we don't know who's going to pay or what it's going to cost.
And until we know who is going to pay and what it's going to cost and until we have everybody have some skin in the game to make sure that everybody takes some individual responsibility here. We're not going to get our handles or our arms around this big issue.
MR. BROOKS: Now, this brings me back to my other hobby which is the employer tax exemption. Is that key to that problem?
MR. DASCHLE: That's part of the key clearly.
MS. MALVEAUX: So who holds it accountable for being transparent? Where does that come from?
MR. DASCHLE: Well, actually this -- the law is moving us in that direction very significantly as one of the things and there are -- I don't think there's a law against anywhere near the credit it deserves for cost-reduction and we could get into that if you want. But transparency is one of them. And Joe put his finger on the other one, it's the electronic health records and all of the health IT that is now going to be part of our process.
It's going to be a dramatic opportunity that we've never had before to have the kind of transparency for not only cost, but for quality. We're going to be able to rank hospitals, rank doctors. We're going to be able to see records. We have more statistics on every sports figure in America than any doctor in America and that has to change. And I think finally we're going to have some transparency and allow that to happen.
MS. MALVEAUX: We know that Presidents Bush and Obama have both tried to make those records electronic and have not had much success, but they have at least both of them been trying to move that along. I want to open up the floor, the audience for any kind of questions that you might have. We have some microphones.
MR. DAVIS: Hi, I am Ken Davis, the CEO of Mount Sinai Medical Center and -- not Florida, New York. And I just want to comment on what this law has so far meant as a CEO. There has been enormous innovation in the last 4 years, incomparable to anything I've seen in health care in all the years I have been doing it. From the electronic medical records to considering managing care, bundled care, and the accountable care organizations, there have been enormous changes. So it's unfair for David to say, you know, this is built on a foundation that's failing. That foundation is changing and it's changing as a consequence of this law.
MR. KLEIN: Can I ask you -- can I ask you a question going back? I mean here we have, you know, a guy who is in charge of a major excellent hospital, but you know, I've studied the Geisinger system in Pennsylvania. I wrote a piece about it a few weeks ago because both my parents died in a nursing home where the doctors were Geisinger doctors. But when they come up with the kind of electronic best practices as the Geisinger does, the number of hospital admissions plummets. Now, how are you going to deal with that?
MR. DAVIS: If we don't change the way providers are paid, we're going to have a lot of bankrupt hospitals because the system now pays us to readmit people. We've got to find a way to not penalize us for those readmissions, but in fact incentivize us for fewer readmissions.
For instance, we have generated a very expensive program around diminishing the readmissions of our most chronic patients with complex disease. In doing so, we spent over $2 million for that program. We did so to avoid what would be a penalty down the road, but we're losing money net because those patients aren't being readmitted and no one is addressing that problem.
And when you talk about an urban academic medical center where the margins are very small to begin to penalize us without having incentives for doing the right things is destructive to the health care system.
SPEAKER: That gives you a sense of how --
MR. BROOKS: That is what -- I said exactly that earlier though. I don't deny that there's incredible change; you talk to anybody in the industry, they talk about incredible change. I have yet to find people including the Loewen Group (phonetic) or the CBO or anybody who thinks the cost-curve is significantly being altered. I mean, because of the recession it is short-term.
MR. DAVIS: By the way --
MR. BROOKS: Tell me if they're all wrong about that.
MR. DAVIS: You're right; the cost-curve is not being altered because the law doesn't yet address a lot of the issues in the cost-curve.
MR. BROOKS: Right, that's my point. That's my point.
MR. DAVIS: For instance, you talked about end-of-life care, very expensive. We couldn't deal with it because of death panels. Malpractice, very expensive; administrative simplification in the law, but we don't know yet how CMS is going to do anything about it. And we can go -- we can go on and on about the issues that are there that are not there to bend the cost-curve because we don't want to deal with them. There's much work that has to be done.
MR. KLEIN: Just so you know how big a deal this is, the Geisinger system in Pennsylvania which is an excellent salaried system that really works on the basis of electronic records and best practices instituted a new best practices regime for the chronic elderly and over the course of the first 3 years hospital admissions were down 18 percent and readmissions were down 36 percent, a number that would strike fear in the heart of any hospital administrator, but it's good news for the rest of us.
MR. DASCHLE: Well, I was going to say in Mayo in Minnesota is also an extraordinary model as is Intermountain in Utah.
MR. KLEIN: Right.
MR. DASCHLE: They've done some phenomenal work and they're making models, these business models were already working even though as you say so much hasn't been implemented yet. We've already been able to demonstrate these new models can work.
MS. MALVEAUX: Let's take another question.
SPEAKER: One thing that needs to be faced is how is it going to be paid for. You've got maybe $40 trillion of unfunded liabilities in Medicare depending on who does the figuring. When I was involved with hospitals, I used to hear from my doctor friends that the thing that hurt the most was the guilt-stricken child who came in from out of town and said, "Save my parent at all costs."
But the costs are being forwarded to the children and the grandchildren. And I think in working through this whole thing, the policymakers and legislators are going to have to face an issue of how are we going to pay for it and who is going to pay for what.
MR. DASCHLE: If I could just -- maybe I could start by saying I couldn't agree with you more, but I don't think the problem in our system today is that we spend too little. We spend way too much.
MR. DASCHLE: Out of the $2.5 trillion we spend it's estimated that up to -- maybe upwards of $800 billion is misspent, is misallocated in unnecessary care and in waste and in administrative cost that we don't need. So this is like a huge ship having to have to take in a different course. We're not going to do this overnight, but the trick should be to take that $800 billion we're spending now and spend it more wisely, reduce the cost, not spend more, but to take what we've got and spend it smarter. And I think we can do that with the infrastructure we have in place.
MR. KLEIN: You really need a cultural change in the way medicine is delivered. And I think that salaried medicine does that. You know, when I moved my parents from fee-for-service into Geisinger, all of a sudden, the way I was treated by the doctors was entirely different. Those doctors have to go through an orientation session that's called Patients 101, where doctors actually have to learn to look the patients and their family in the eye, shake their hand, introduce themselves and explain.
And then if you make the family member, as I was, I was holding the medical power of attorney, part of the team in the decision-making process, then I won't say, no, no, no, you know, keep my father alive even though his kidneys have shut down and even though he's going to have it come back because his kidneys will shut down a month from now, I'll have more information to make a wise decision.
MR. BROOKS: If I could just say, first I want to -- I feel honor-bound to say I'm writing my column up here as we're speaking --
MR. BROOKS: And --
MR. KLEIN: Not off, not off --
MR. BROOKS: Not off for you, Joe, no, no, no.
MR. BROOKS: If you've never seen it --
MR. KLEIN: I got to write my column too.
MR. BROOKS: If you've never seen a crime committed, you're watching intellectual property theft of a high order.
MR. WEBER: But just on -- it's a point, I mean, one of the things we're getting at is the degree of change that has to happen. And the number that crystallizes for me, I'm not giving you the exact number, I think over the course of one's lifetime, the average American puts about $150,000 into Medicare and takes out about $350,000 -- something on that magnitude. And that illustrates the tremendous gap we're dealing with. And so my problem with Obamacare is that it was too modest and too cautious.
And that's why I like to define benefit plan that Romney in theory supports because it is a little more -- it gets to the foundational incentives. And I can sort of respect the single-payer system for the same reason.
SPEAKER: And those were the two alternatives.
MR. BROOKS: I think in some ways those are the two alternatives to do -- to provide the change as radical as what we need.
MS. MALVEAUX: I think we have a few people in the front row here.
MR. DAVIS: Thank you, John Davis (phonetic), Colorado. When I talk to pharmacists, when I look at doctors, you know, the administrative load because every insurance company has a different form and so on, I know we're not going to single-payer, is there anything in the Affordable Care Act that's going to cut down all this true waste? It's not fraud. It's just a terrible system.
MR. DASCHLE: Absolutely. In fact, in this year -- actually it's in 2013, we go to universal forms for the first time. Every insurance company, every hospital, every provider, is going to be using the same forms for the first time. And that's a huge breakthrough. You know, we have a -- I'd like to say we have a 21st century operating room and we have a 19th century administrative room. And those 19th century administrative rooms cost us three times what they should.
And so with the help of health IT in particular, because electronically -- I don't know about you, but I've had a little bit of experience and I -- a lot with a brother who had a lot of care. The thing that frustrated me the most was having to fill out the same identical information.
SPEAKER: Again and again and again.
MR. DASCHLE: Over and over and over again.
MR. DASCHLE: And with these universal forms and health IT, we're not going to have to do that, at least as much and maybe at all going forward.
MS. MALVEAUX: Do we have another question?
MR. NEIL: Richard Neil (phonetic), Duke University. I want to ask a purely political question which if we think ahead to the presidential campaign, which of the candidates if it becomes clear and people vote on this as an issue and if it's known that Romney would in fact repeal on that that would stick, who benefits more from this issue?
MR. WEBER: Who benefits more?
MR. NEIL: Which presidential candidate?
MR. WEBER: From today's decision? From today's --
MR. NEIL: And what will likely unfold as a result of the decision?
MR. BROOKS: Well, the President won, so I'm very simplistic about this. I think a win is a win. I think the President certainly will get a boost for a while, and we're not sure how, I really mean with all due respect to people who don't like this, they -- the decision did give the -- give Governor Romney the basis on which to argue against it for the rest of the campaign which is on the basis of a tax increase.
We'll see how that all unfolds over the course of the next couple months, if that argument will take hold with people because it could, and it could be helpful to Romney. Certainly in the short run though, it's a victory for the President. One of the things that's going to be interesting to see as we've talked about here the opposition to the Affordable Care Act has been 50-40 against it. And support for overturning it prior to today was more like 60-40. One thing it will be interesting to note, see if those polls change over the course of the next 2 weeks.
In other words, can the Supreme Court just change public opinion, which is very possible. I mean, the court may have affirmed something in people's minds that they were uncertain about that would make today's what I would describe as a short-term victory for the President a longer-term victory.
MR. KLEIN: Of course if Romney makes the argument that Vin just suggested it will be very easy for the Obama campaign to counter with a list of the thousands of people in Massachusetts who're paying tax penalties right now because they haven't bought into that system.
MR. WEBER: And everybody in Massachusetts will be very upset about that I'm sure.
MR. KLEIN: Well, but it will also show that in yet another case and I -- and Romney's really got to be a guy who has to be careful about his mouth at this point.
MR. KLEIN: I mean, you know, and the ultimate answer to your question is it depends on how well each of these guys sell their points, especially when this thing really comes down to it, which is in the debates. Most people aren't like you, they're not tuned into this thing. They come, you know, they come along after Labor Day and they make a decision based on these debates about who they want to have living in their house for the next 4 years, because the presidency is the most intimate office we have, and we'll see how they do. I think Romney is a very good debater. I think the President is a good debater, but not a very good salesman.
MR. WEBER: I just -- just arguing with your political judgment, I just don't understand how if Newt Gingrich and Rick Santorum and Rick Perry and all the rest of those Republicans speaking to a right-wing Republican electorate could never make successful an issue out of Massachusetts' care against Romney, why do you think the President can with the general electorate?
MR. KLEIN: Well, because I think the general electorate is far different, thank God, than the people who vote in Republican primaries.
MR. WEBER: Yeah, they're more --
MR. WEBER: Do you think the general electorate is more likely to be opposed to what happened in Massachusetts?
MR. KLEIN: No, I think that they're more likely to be in favor of it, but they're more likely to be opposed to Romney pretending that he never did it.
MR. WEBER: Well, we'll see.
MR. BROOKS: It's a referendum.
MR. KLEIN: It worked so far.
MS. MALVEAUX: Do we have another question? Yes, in the back.
MS. KERRY: Thanks. Sue Kerry, Legacy Foundation and University of Iowa College of Public Health. I came in late, so I apologize if you've done this, but I haven't heard anybody say anything about prevention in the ACA. I think we over-deliver health care and we under-deliver in terms of health and wellness. So I'd be interested in your thoughts.
MR. DASCHLE: Well, I can start. I've always looked at health care in any society as a pyramid where at the base of the pyramid you have wellness and preventative services and you work your way up and become more and more sophisticated until at the very top you have the most sophisticated applications in health at the technological applications like MRIs and heart transplants. Every society starts at the base of the pyramid and they work their way up until the money runs out.
In the United States we start at the top of the pyramid and we work our way down until the money runs out. The ACA for the first time flips the pyramid and gives us an opportunity to start working at the base of the pyramid where we should.
MR. BROOKS: If I understand the research, we should do preventive care, but it does not save money.
MR. WEBER: That's right.
MR. DASCHLE: That's right. People live longer.
MR. BROOKS: Well, but also there are a lot of visits involved.
MR. KLEIN: Yeah.
MS. MALVEAUX: Somebody else have a question? Okay, right there in the middle.
SPEAKER: You've talked a lot about the policy implications of the decision. I'd love to see you talk about the implications for the Supreme Court. To David's point about the loss of trust in government we've seen a decline in trust in the Supreme Court and the integrity of its decisions, particularly in the wake of the Bush v. Gore decision, and to some extent Citizens United. I have to think that that factored into Justice Roberts' decision that this could have caused a real crisis of confidence in the legitimacy of the Supreme Court.
MR. BROOKS: In Aspen it would have.
MR. KLEIN: Yeah, in Aspen it would have.
MR. KLEIN: You know, that's why I think it's so important that we play our justifiable role. All too often, you know, we are cynical instead of being skeptical and by the way, that's a distinction I would have made earlier. David wasn't being cynical, he was being skeptical.
But if we play this, if we in the press -- and we've done so much to harm American democracy over the last 25 years, if we play this as merely a political balancing act by Justice Roberts, rather than him finding an intellectual way to justify a very modest decision as David said before, then we are doing the public a major disservice. And you could turn on any one of the three cable news networks and you will see our colleagues doing exactly the wrong thing right now.
MR. BROOKS: Yeah, that'd be fair. He's the leader of an institution and you do have to be mindful of the institution you're protecting. And I happen to think it's a great institution. You know, I -- one has a chance if you live in Washington to meet the justices, to have dinner with them, and they as far as I can tell, they ferociously disagree, but they have genuine affection one for another. They conduct themselves in a way one would really want themselves to conduct themselves.
They, to a person, are extremely normal. Well, let's -- I'm exaggerating now.
MR. BROOKS: And they're -- but they live relatively normal lifestyles. And they seem to be good people who function. I mean the fact that this thing didn't leak by itself is impressive.
MS. MALVEAUX: Do you want to weigh in?
SPEAKER: Hi. Okay, it was mentioned by Vin and Tom about process and how that is -- this is something we'll be working on for the rest of our lives, but it was also mentioned how the discussion for end-of-life treatment has been prevented. I'm just wondering, you know, to me life is a process and how do we create a context for the end-of-life treatment discussion, at the same time saying that life is a process and not including that in the process?
MR. DASCHLE: I think that's a great question and it seems to me it ought to start at a much earlier time in life. One of the thoughts that I've always had and I think legislation is even introduced to do it is to say when you're eligible for Medicare that you have a conversation about a living will and that you lay out with your family some degree of certainty with regard to the way you want to be treated at that point in your life.
I think it's also important -- and there's -- Atul Gawande has done a lot of wonderful work in this, the doctor who writes in the New Yorker. He, as you know -- may know is very supportive of checklists, and he has a checklist for end-of-life for physicians now that I think is excellent. But physicians have a role here, to ask the families, have you really thought through this and to really give options. I think hospice does a phenomenal job of providing a single alternative to the technological applications at the end of life that all too often isn't fully described.
And so my family had the benefit of that services last year. So it's -- it is really those are the kinds of things we have to do. And then I also think something I said, and I just repeat for emphasis, everybody has to have some skin in the game. One, physicians have told me that if people -- if families only had a 5 percent obligation, he thinks the end-of-life issue for cost purposes would go away. And so that is something we need to look at as well.
MR. WEBER: I very much agree with that. I don't see any way that you can -- I mean families throughout history have dealt with end-of-life issues, and they were present but they've always dealt with them. It becomes almost impossible if the solutions are dictated by government or insurance companies or somebody else.
So you have to get the families involved this time, talk about -- but I agree if it's just a bureaucratic system that dictates family involvement, that's not going to work. There's got to be some incentive for families to want to get involved in making these decisions and then they will make the decisions that are too difficult for large bureaucracies to make.
MR. KLEIN: And that has to come --
MR. WEBER: It shouldn't be made by large bureaucracies.
MR. KLEIN: That has to come from the doctor's side because most people see (inaudible) doc -- just to, you know, to beat a horse that may be dead on this panel and in this room, but is very much alive in America that as long as doctors have to fear malpractice suits and as long as they get paid by the procedures that they perform, they're not going to have an incentive, the incentive that they really need to tell the families of elderly patients the truth about their relatives.
MR. BROOKS: Also just a pre-hospital point for 30 seconds. I see you're from a monastery. I do think there's a pre-hospital philosophic argument that has to be revived which was once common in American culture that life is defined by its finiteness. And that is defined by its quality and its excellence, not by its length. And as long as it's going to be, we have a very materialistic and unspiritual view of what life is, people are going to want to extend it to infinity. And if you're going to remind them of what it's actually about, I think there will be more acceptance.
MR. WEBER: This is going to be real deep column, isn't it?
MR. BROOKS: I'm getting malpractice reform.
MS. MALVEAUX: I'm told we have something like 2 minutes left, so please go ahead.
MS. SMITH: Hi, I'm Anna Deavere Smith, and this is just an observation that I finished 2 years of performing a play called "Let me down easy," which was about health care and inevitably after over 300 interviews, I had to deal with death in it. And one of the things that fascinated me was that high school audiences loved the play.
And when I had to make it an hour long, I thought I'd leave out everything about death. And one of my colleagues at NYU mentioned to me that adolescents were actually very fascinated with death and they wanted very much to be a part of that conversation. So something happens by the time we turn 40 in the process of maturing that takes us away from that interest and therefore the compensation.
MR. KLEIN: That is so smart. That is so good.
SPEAKER: They are 70 years away from it.
MS. MALVEAUX: I know -- we've just got to wrap up the discussion. It's been a really great discussion. I'm going to give each of our panelists 30 seconds if you can to simply address the one thing you think is most important in fixing the health care system. Vin, start with you.
MR. WEBER: Oh, geez. The one thing that we can all agree on up here is medical malpractice insurance reform.
MS. MALVEAUX: Okay. Tom? That was less than 30 seconds. Tom, you can take his time.
MR. DASCHLE: Oh, goodness.
MR. WEBER: You can take my time.
MR. DASCHLE: Well, I happen to agree that we ought to address it, but we have to also make sure that we don't leave those 200,000 people and millions more who were adversely affected by a mistake in the lurch. We've got to find better balance and that's certainly something we can do. But I think if -- that's a tough question, but I would say if there's one thing, it would be to go back to my pyramid. I hope we can build a better pyramid with far more emphasis on wellness than on illness.
MR. KLEIN: Well, since you've heard me rant about fee-for-service, I'll go cosmic. If we can't -- if we can't begin once again to have reasonable civil conversations in this country about issues this important, we're screwed. And you know, I think that the Supreme Court ruling today for whatever reason moves us a step in the direction away from ideological certainties and toward, you know, a creative center. And you know, as I said before we in the media are an awful lot to blame for this. But we really have to start talking to each other again in this country.
MR. BROOKS: I completely disagree with that.
MR. BROOKS: Yeah. I just want to underline my theme of the day. You know, I covered the start of the European Union -- or not the start of the monetary union, and they built monetary union without fiscal union. And there was a structural problem right at the heart of it. And they did -- it was smart people building a sophisticated system. But it was on the top of a bad structure.
I just think foundationally we still have these problems, fee-for-service, and the tax exemption. And I hope -- and this discussion has sort of encouraged me that this decision far from moving us away from fixing those fundamental issues will move -- maybe accelerate progress towards fixing them. But we need to fix those, and unless we do that, we can have all the reform, but the other stuff, we're still going to have perverse incentives at the bottom.
MS. MALVEAUX: We'll be looking forward to your column as well. You're going to give us the headline there?
MR. BROOKS: You've already just heard it, so.
MR. BROOKS: You've saved yourself $2.50, whatever the TIME costs.
MS. MALVEAUX: I want to thank our panelists. Clearly, it was a provocative and civil discussion.
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