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Audio Debate: The 2008 Presidential Campaigns on Health Care

How would John McCain and Barack Obama reform America's health care system? KCBS reporter Doug Sovern moderated a recent debate held at California's Commonwealth Club to learn how each candidate would approach this looming issue. Listen to the debate or read the full transcript below.

San Francisco — September 16, 2008

This event was generously underwritten by the California HealthCare Foundation.

Critical Condition: Doug Sovern

Doug Sovern: We have a lot of questions from the audience here, great stacks of them, and I want to ask you, Professor Kessler, a few people as a variation of what happens when the tax credit runs out — if that's not enough, if that's not sufficient, what will be done for those people?

Critical Condition: Daniel Kessler

Daniel Kessler: Well, what happens when people can't get insurance at present? The tax credit isn't meant to be a plan to purchase insurance for every single person with no contribution. But then Senator Obama's plan is also not meant to be a plan to purchase insurance for every single person with no contribution. Senator Obama's plan is going to retain the tax exclusion benefiting upper-income people and union members. He's going to add on a tax credit, an income-based tax credit. But still, there may be people who can't afford insurance, and so I don't see this as unique to either plan, but as something that both plans have to grapple with: How do you get it so that people can afford their health insurance?

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I'd like to go back to something that Richard [Brown] said a little while ago, that Senator Obama's plan is going to have a public plan like Medicare as an option for people to choose. And when people in the audience are thinking about whether or not that would be a good thing for this country fiscally or a bad thing for this country, I'd just like to refer you back to a recent New York Times article by David Lienhard and in this article David highlighted something that happened in the current Medicare plan a few weeks ago, that Medicare was going to competitively bid contracts for some very simple, durable medical equipment for elderly beneficiaries: walkers, wheelchairs, things like that. And the motivation for this was that Medicare is now paying two to three times for these kinds of pieces of equipment what you or I would pay if we went to Wal-Mart or Kmart or Walgreen's. And so there was a plan, Medicare had a plan to bid out this durable medical equipment, and it would have saved Medicare billions and billions of dollars. What happened to that plan? Well, as soon as word got around to the durable medical equipment manufacturers and the retailers they raised heck with their members of Congress and that plan was killed. And so if you have a public plan like Medicare expanding, we should expect more of this. And that's exactly what would happen when you increase government control of health care is less market forces, less effort on controlling cost and inevitably more of the problem that both sides, that both Senator Obama and Senator McCain have to struggle with, that we all have to struggle with, how to get insurance to be more affordable.

Critical Condition: E. Richard Brown

E. Richard Brown: I have to comment that it actually has been the Republican members of the Congress who have been the biggest supporters and, well, the biggest, let's say those who are most receptive to that kind of industry pressure, as we saw when Medicare Part D, the drug benefit, was adopted by the Congress a few years ago. It was the Bush administration and the Republican members of Congress who insisted on giving higher premiums as a part of this drug benefit, higher premiums — not even to the drug industry, but higher premiums to HMOs that are in the Medicare program — above what it would cost to care for a Medicare beneficiary in the regular fee-for-service program. And it was also those Republican members who supported the provision that bars Medicare from negotiating with the drug industry and with drug companies for the lowest prices. So I think that Senator Obama and his colleagues on the other side of the aisle have been doing exactly the kinds of things that Daniel Kessler was just advocating that Medicare should have accomplished, if not for political interference we might add, primarily by the Republican members of the Congress.

Critical Condition: Doug Sovern

Sovern: There was a review published today in the Journal of Health Affairs that took a look at both of these plans and concluded that neither one of them will work. [LAUGHTER] So I'm wondering if I can get your response. Let's start with you, Professor Kessler. Specifically, it said under the McCain plan, 20 million people would lose coverage. Twenty-one million who don't have it now would get it, but that's essentially a wash. So how do you respond to that?

Critical Condition: Daniel Kessler

Kessler: Well, the Health Affairs debate... is an excellent debate — I think anybody who's interested in this issue should go and read both articles there, one side criticizing Senator Obama's plan, one side criticizing Senator McCain's plan.

Whether or not a credit of this magnitude, what magnitude of increase in coverage you'll get is a matter of some debate. This was written by some of Senator McCain's critics, and so it's not surprising that they would give you a rather low-end estimate for what the net effect on uninsurance of the plan would be. But even this low-end estimate is an increase in coverage. Senator McCain's analysis shows a higher increase in coverage. Now, which one is correct? They're based on different assumptions, and reasonable people can disagree here, but whether or not this is — you know, I don't think there's any room here to argue about those assumptions. I mean, it's just too complicated.

Critical Condition: Doug Sovern

Sovern: And Professor Brown, the review of Senator Obama's plan said that it's biggest fault is that it doesn't control the soaring health care costs, there aren't enough cost controls and the way the system is set up those costs will continue to skyrocket. Can you respond to that?

Critical Condition: E. Richard Brown

Brown: Sure. Again, as Professor Kessler just pointed out with respect to the criticism of the McCain plan, the article that criticized the Obama plan in Health Affairs that just came out today was written by one of Senator McCain's chief advisors [LAUGHTER], as well as others who are known critics. So both sides were being criticized by the other side, and that's a very appropriate intellectual and political and policy debate. [LAUGHTER]

But, what I would note is that, first, Senator — I do want to note that Senator McCain's cost control mechanism is by increasing the costs on individuals that they have to bear in order to get health insurance and to get medical care when they have health insurance, if they have it, and without guaranteeing insurance, and in other ways basically reducing the comprehensiveness of health benefits that people can get in the marketplace.

But Senator Obama's proposal takes a number of steps to try to control the growth in health spending. Will they be absolutely effective, will we be able to bring down the rate of growth in health spending from two to three times the rate of increase in the consumer price index to something closer to the CPI? That's not fully clear, but there are many economists and health policy analysts who believe that Senator Obama's proposals will do that. Just to tell you a few of them, the adoption of electronic health records and health information technology provides a means to begin to control costs. Emphasis on prevention can help stop the growth in chronic disease, which is a major contributor to the growth in our health care costs. Instituting negotiation between Medicare and Medicaid on the one hand and drug companies on the other can help control the growth in costs for those programs. Ending the excess payments to Medicare HMOs above what it costs to care for Medicare beneficiaries in the fee-for-service system is another way to help reduce those costs, and eliminating many of the administrative costs in the health insurance market is one way to help lower the cost, at least on a one-time basis.

So Senator McCain's proposal really does have some significant cost controls — Senator Obama's proposal, and it had an ability to enable those controls to grow over time in their effectiveness.

Critical Condition: Doug Sovern

Sovern: I'm wondering — you know, there are many, many people in this country, maybe a small, but certainly persistent minority, who would prefer single-payer health care. [APPLAusE] And I'm wondering why neither campaign is proposing that. And I know Senator Obama has said in a perfect world he would, but he wants to start somewhere else. Can you explain, why not single payer?

Critical Condition: E. Richard Brown

Brown: Well, you know, I'm not the author of Senator Obama's proposal, but I think it's a very good proposal. When I look around the world at different advanced economies in this world, in Europe, in North America, in the rest of the world, I see many different models of health insurance coverage. I see some that are single payer, like Canada, where there's basically a single government health insurance entity that covers many of the costs of health care, but not all of them, and still has private insurance to supplement that. I see other models in the United Kingdom, where there's a national health service that actually provides the care to people. I see Germany, with multiple plans competing with one another that are basically managed by a coalition of employers and labor unions, and it's a very effective system. I see France, with government sanction, but kind of mostly quasi-public, quasi-private administration of these health insurance programs and a large private sector in health care.

So I see all of these different models. I don't think there's a single terrific one out there that we must adopt to achieve the goals of affordable coverage for all Americans, control over the growth in our health spending and providing quality care that actually improves the health of people who interact with the health care system. I think we can achieve that in many different ways. I think Senator Obama's proposal is a very effective way to set that process in motion.

Critical Condition: Doug Sovern

Sovern: And Professor Kessler, why not single payer in the McCain administration?  
 

Critical Condition: Daniel Kessler

Kessler: Well, I think the reason we don't have single-payer insurance in the United States is the majority of people who live here don't want it.  

Audience Member: No — 60 percent want it.  
 

Critical Condition: Daniel Kessler

Kessler: Well, whatever —

[LAUGHTER]  
 

Critical Condition: Daniel Kessler

Kessler: Whatever our friendly audience members would like to add. [APPLAusE] Unfortunately, the facts are otherwise. If you survey people and ask them, "Are you happy with your medical care the way it currently is?" the vast majority of people respond, "Yes." And were you to replace the current system with single payer, there is some possibility, not necessarily, but there is some possibility those arrangements would be upset. And so the people who currently have employer-sponsored health insurance, the majority of them, do not want to lose that insurance. Indeed, this is something that both Senator Obama and Senator Clinton learned from the experience in 1993, when Senator Clinton, with President Clinton, proposed a massive overhaul to the nation's health insurance system. And the reason it fell down is because people did not want their current arrangements upset.

Critical Condition: E. Richard Brown

Brown: Could I —  
 
 
 
Critical Condition: Daniel Kessler

Kessler: And that's why it's just not in the cards for this country.  
 

Critical Condition: E. Richard Brown

Brown: May I ask Senator — [LAUGHS] Professor, not Senator Kessler [LAUGHTER], but Professor Kessler, a question then?

Critical Condition: Doug Sovern

Sovern: Sure.  
 
 

Critical Condition: E. Richard Brown

Brown: Why is it that Senator McCain is willing to radically change the health insurance system in a way that's far more radical than Senator Obama's proposal and to essentially pull the rug out from under employment-based health insurance, sending 20 million people, an estimated 20 million people who now have employment-based coverage, into the individual insurance market and at the same time essentially eliminate all the regulation that now exists in that market by enabling a health plan to set up shop in any state it wishes, including the lowest-regulated state, and sell to people in every other state? Why is it that Senator McCain would propose something like that if the American people don't want to see their current arrangements upset?

Critical Condition: Daniel Kessler

Kessler: Well, I'm happy to respond to that. I think that's a very substantial mischaracterization of what would likely happen under a plan that had fixed tax credits. The idea that employer-sponsored insurance would somehow magically go away is really not true. People get insurance through their employers for many reasons. One reason is the tax preference, that's true. But employers are also an effective purchasing and pooling mechanism. Indeed, in countries that don't have any tax preference for employer-sponsored insurance, like Canada, that's how people get their supplemental insurance. In the U.K. employer-sponsored insurance is subject to a surtax — you have to pay more to get it than you do in the individual market, and yet people still get private health insurance in the U.K. through their employers. So I think that this idea that shifting to a fixed tax credit is going to somehow dismantle overnight a system that took 50 years to build and that has many merits of its own, independent of the tax system, is just simply incorrect.

And furthermore, I mean, I don't understand why there's such a strong opposition on Senator Obama's side to having a fixed tax credit, which gets rid of what we all acknowledge is the most harmful piece of health policy legislation ever adopted in this country, what's contributed the most to our cost growth, what's contributed the most to our inequity in the tax system — that people who don't pay federal income taxes get no benefit from the current system. Why this is something that should be preserved. I don't understand.

Critical Condition: Doug Sovern

Sovern: Do you want to respond to that?  
 
 
 
Critical Condition: E. Richard BrownBrown: Well, first of all, Senator Obama believes that a tax benefit should be progressively scaled, and his proposal includes a progressively scaled tax credit. So I think that he wouldn't say that we should abandon tax exemption of employment-based health insurance. And I think that you can't deny the multiple independent analyses of the approach of providing tax credits and their effect on employment-based coverage, which have pretty mostly uniformly shown a loss of employment-based coverage as a result of it. The amount of that loss varies, and in fact the authors in today's article in Health Affairs, which we have been referring to, took a middle-road estimate out of that. Some of the estimates are as many as 70 million people might lose their employment-based health insurance. Others are at the lower end. They took a middle estimate of 20 million.

So I think that the expectation that many employers would stop offering and many employees would stop accepting it if the cost went up and they were bearing the full cost is pretty clearly understood.

Critical Condition: Daniel Kessler

Kessler: Then why would Senator Obama's chief economic advisor have, written six months before he became his chief economic advisor, that credits were an efficient and equitable way to transform the country's health and tax policy?

Critical Condition: E. Richard Brown

Brown: Well, you know, I can't speak for him personally. [LAUGHTER] That was before he was a part of the campaign, so —

Critical Condition: Daniel Kessler

Kessler: I suppose. I suppose it was. [LAUGHS]  
 
 

Critical Condition: E. Richard Brown

Brown: I don't know what his rationale was, and frankly I'm not familiar with that article so I couldn't comment on it.  
 

Critical Condition: Doug Sovern

Sovern: Professor Kessler, if can ask you, Senator McCain advocates a free market approach — and this is sort of a combination of several questions from the audience — a free market approach to the health care crisis. Given events of recent days — and now we see the world's largest insurance company, AIG, on the brink of collapse, and it looks like they will accept a government bailout — has that shaken the candidate's faith at all in letting the market [LAUGHTER] run this system?

Critical Condition: Daniel Kessler

Kessler: I can't speak for what Senator McCain may or may not think now, after today's events in the market. But the market for health insurance is really quite different from these other insurance markets. Health insurers are really little more than passthroughs. They charge employers effectively whatever your health care costs right then. There's not any — there's a very minimal investing and financial aspect to health insurance. In fact, most of us who work for big companies don't have health insurance, quote/unquote, at all. At Stanford, for example, at UCLA, for example, Stanford and UCLA are self-insured. Even though we have a Blue Cross card or a PacifiCare card that insurance is just paid month by month, whatever your health costs are, by Stanford. And so it's really not the same thing as this AIG and Financial Instruments crisis. Health insurers really just process the claims, move the paper, from the networks. That's the job that they do.

Critical Condition: E. Richard Brown

Brown: But that would change if we moved 20 million or more people into the individual health insurance market, which is the intent of Senator McCain's plan. That would begin to change, and health insurers would have a great deal more freedom how they operate. Why is it that health insurers are more stable as insurance companies? It is because of state regulation, which requires them to have a certain amount of reserves to pay their claims, it requires them to cover certain benefits, and as a consequence they do that. Without that kind of regulation, their behavior would change dramatically. For example, they might decide that "we don't want to make obstetrical care and maternity care a standard part of an insurance plan and have everybody pay for it." Many young men might feel, "Hey, that's good for me, I can buy cheaper insurance as a result. I'll buy the plan without those benefits; I don't need them." And the cost of providing maternity benefits rises. Health plans would be free to, as many of them are today in the individual market, to turn away a woman who has had breast cancer, who is a survivor of breast cancer, but where there is some risk, even 10 years out, that it could recur. She may not get coverage at all under Senator McCain's plan, and if she does she will pay more for it.

If you have arthritis, if you even have asthma, you are going to pay more, if you can get coverage in the individual market that Senator McCain would create. And I think we need to keep that in mind, that regulation of a market is very important to people who shop in that market, as we do, and to other participants in the market, because one bad player can encourage other players and force other players through gaining market advantage, can force other players to adopt those same kinds of policies. We've seen that happen to Kaiser Permanente, which has had to move from providing comprehensive coverage to just providing plans that have high-deductible coverage even though that's completely contrary to the philosophy of Kaiser Permanente. They had to mimic the commercial market because they were being undercut by other plans that were offering cheap coverage because they had high deductibles.

Critical Condition: Doug Sovern

Sovern: Professor Brown, some people in the audience would like to know what happens if everyone decides they want the government plan under the Obama plan? What's the potential financial burden if millions of people opt for that component of the Obama plan?

Critical Condition: E. Richard Brown

Brown: Well, people would still be paying for that plan. There would be no market advantage to the government plan. There might be an advantage in the way it's operated, in the kinds of benefits it offers, in the speed of payment. If the government plan can operate efficiently and effectively is there a reason why it shouldn't become a very large plan in that system? But there wouldn't be any advantage given to it. There would be no specific subsidies to it. Everybody would still be paying into it in the same way that they would be paying if they were purchasing a private plan with a subsidy, a tax credit subsidy for themselves if they qualify, and if not then they are paying the full cost.

Critical Condition: Doug Sovern

Sovern: Professor Kessler, often that component of the Obama plan is referred to as government health care, socialized medicine. That's the opposition theme. What's wrong with government-run health care, which is what Senator McCain has, not to mention our military and our veterans and thousands and thousands of government employees?

Critical Condition: Daniel Kessler

Kessler: Right. Well, our government employees don't have government health care. They have private health insurance that they select through the FEHBP, through the Federal Employees Health Benefits Plan. I think what's wrong with government-run health care is, I think the Dave Lienhard New York Times article is instructive. What's wrong with government- run health care is that politics, not the quality of care and not cost, becomes the focus of the provision of health care. And that's what's true about Medicare. You can't exclude anybody from the Medicare program, any provider. You can't exclude a doctor, you can't exclude a hospital, even if that doctor or hospital has been proven to be fraudulent, to be harming patients. It's very, very difficult to exclude them.

Another New York Times investigative story recently published is that Medicare fraud, which Medicare has said it's trying to get a handle on, trying to reduce, is rampant. There's billing for services that are never provided, there's billing by phantom providers. Why is this? Why does this happen when we have government-run health insurance programs? And the reason is because programs like Medicare have these interests — doctors, hospitals — who naturally are quite concentrated and quite interested in getting the best they can from Medicare, and they organize and they lobby, and it's not just Republicans, as my colleague Richard claims. [LAUGHS] It's Republicans and Democrats. It's both sides of the aisle that are guilty on this, but that's the way the system works. That's natural. The thing is do we want to expand that system's influence over our health care or not? That's the question?

Critical Condition: E. Richard Brown

Brown: I think we need to ask all Americans aged 65 and over if they would like to get rid of their Medicare plan, which pays their claims or their health insurance bills. That is a public health insurance program. And it works well. Senators on the Republican side of the aisle who at one point voted against Medicare talk now as though they are Medicare's biggest advocates, because it is so intensely popular among people.

I would like to note that, first of all, not everybody's going to go into the government plan. There's no reason why they would. Private health insurance plans probably can compete effectively with a government plan. No reason to think they can't.

Secondly, even Stuart Butler of the Heritage Foundation has said that he thinks having a competing public plan in the marketplace is a good idea. Now, the Heritage Foundation is as conservative a foundation, as conservative a perspective as you can probably get in this country, and yet here's one of the leading health policy and health economics analysts in that institution who is also advocating this. This is not government takeover of health insurance, and it's not government takeover of health care.

Critical Condition: Daniel Kessler

Kessler: I just want to just add, nobody here is suggesting we get rid of Medicare [LAUGHS], neither candidate, no one in this country is suggesting that. But to say that Medicare works well I think is to totally miss the impending fiscal disaster that's going to be coming as Medicare liabilities continue to expand faster than productivity, and the workforce becomes unable to support it. And so to say that Medicare as it currently stands works well is to be blind to the crisis and entitlements and spending that this country is facing and needs to address.

Critical Condition: Doug Sovern

Sovern: You're listening to the Commonwealth Club of California radio program. We are talking health policy today with surrogates from the McCain and Obama campaigns, explaining what a President McCain or a President Obama would do about health care reform. I'm Doug Sovern of KCBS Radio. We are joined by Daniel Kessler from Stanford and the Hoover Institution for John McCain and E. Richard Brown of UCLA for Barack Obama.

Professor Brown, you had something you wanted to add to that [LAUGHS] or should I go on to another question?

Critical Condition: E. Richard Brown

Brown: [LAUGHS] Well, I would just add that Medicare is an extremely effective program. It has not been as comprehensive as it might be, and it has not had all the tools to begin to control health care spending. For example, when Medicare Part D was enacted Medicare was deprived of the ability to negotiate for the best prices it could get for drugs, but Medicare has been a leader in this country in instituting cost control practices that were adopted in the private sector, things like diagnosis-related groups, for example. Now, that term "DRG" may mean nothing to most of us in this room, but it is the way nearly all health plans now pay hospitals for care. That was developed by the Medicare program and first adopted by them.

There are other kinds of cost controls similarly and cost- effectiveness strategies that Medicare has introduced as innovations that have been adopted by the private sector. So I think the public sector has a very strong ability to innovate, to provide value for the dollars we spend. And I would also point out that some of the health insurance fraud that Professor Kessler noted in the Medicare program, which no one has said is a bank breaker for Medicare, also exists in private health insurance, with providers unscrupulously billing private insurance for things that they didn't do, jacking up our rates, but perhaps with less oversight that makes those practices less visible to us.

Critical Condition: Doug Sovern

Sovern: Several people in our audience would like to know how preexisting conditions will be treated or covered under each of your plans. Let's start with you, Professor Kessler. What is the approach of the McCain plan to preexisting conditions?

Critical Condition: Daniel Kessler

Kessler: I mean how we're going to regulate the new individual insurance market is still an open question. I mean what exactly you need to make a market like that function properly I think is a good and difficult question. There's a balance in trying to devise these kinds of insurance regulation. On the one hand, you want people to get a fair shake, to not find it impossible to shop for insurance. On the other hand, you don't want to load up policies with mandated benefits and make it too expensive for people to be able to afford insurance. And the tension between what the right amount of regulation is is a very difficult one and will have to be worked out.

Critical Condition: Doug Sovern

Sovern: Professor Brown?  
 
 

Critical Condition: E. Richard Brown

Brown: Senator Obama would prevent insurers from denying coverage or charging more for coverage because of a preexisting condition, flat out. That's the policy that would be a part of the Obama Healthcare Reform, and it would be enforced by the National Health Insurance Exchange, which he would create, which would regulate health insurers.

I would note that Senator McCain does answer the question of what kind of regulation we should have in health insurance, and his answer appears to be "none," because he wipes out state regulation of health insurance and does not propose any alternative federal regulation. So what would happen to people who have arthritis, who have had cancer or other chronic illnesses? They would find themselves either shut out of health insurance altogether or they would have to pay very exorbitant premiums. Neither practice would be regulated under Senator McCain's proposal. What he does offer instead are what he calls — and I think it's an interesting choice of acronyms — GAPS [LAUGHTER], which are — what are they called? It stands for —

Critical Condition: Daniel Kessler

Kessler: Guaranteed access plans.  
 
 

Critical Condition: E. Richard Brown

Brown: Guaranteed access plans, and these are plans that he says he would work with the governors to encourage states to develop these plans. Well, these are plans that exist today. They're called high-risk plans. Quite a few states have them. They do not talk about operating efficiently and effectively. These are plans that do not operate effectively or efficiently because they are insuring only the highest-risk part of the marketplace, people who were denied coverage by private insurers and who have no place else to turn. But they require very heavy subsidies to operate at all, and government has not been willing to pony up enough of your tax dollars to support these kinds of programs, and so in almost all the states these plans, which are state operated or state run, are either closed or very limited in their enrollment, and the demand for them greatly exceeds the availability of these plans. And everyone knows that to expand them would be to increase the costs of these kinds of plans astronomically, far more, far more than Senator McCain says he would provide to them in his proposal.

Critical Condition: Daniel Kessler

Kessler: I think Richard sort of highlighted an important issue here though. If you're going to give coverage to these very high-cost people, either through a state-assigned high risk pool, though a GAP or through some other mechanism, as Senator Obama might propose, you're going to have to pay for it somewhere. You can't generate the money out of nothing to pay for these people's health insurance, and so whether or not we — we Americans, we our representatives, are willing to pay for the insurance of high-cost people is sort of independent of which approach, which mechanism you choose. I mean you could expand GAPs to do a good job, you could expand high-risk pools to do a better job. You can cover people a whole lot of ways, but the question is, really, are we willing to spend the money to do it or not? And I think that's independent of the debate that we're having here.

Critical Condition: E. Richard Brown

Brown: But I think it's not independent of the debate, because really, when you think about what health insurance is, what is health insurance? Why do we have it? If you're healthy, why do you buy health insurance? You buy it because you know that sometime you're going to be sick. You might be injured. You will need the coverage from such a plan at that time, and so as part of an informal social contract in this country, we pay into health insurance. And what we're doing when we do that, when we're well, is we're supporting our fellow Americans who are at that moment sick because we know we will be there at some point in time. When we're young, we pay in because we know at some point in time we're going to get old, hopefully. [LAUGHTER] And if we do, if we're lucky enough to get old, then we're going to need more medical care. And so we pay into it, and when we do that, we are averaging the costs of those very high-cost patients across a very large population or risk pool, and that makes the cost affordable to all of us, and it provides a security and a guarantee that we look for in health insurance, that we look for in the Medicare program, that Senator McCain's proposal would undo to a large extent. It would certainly reduce that kind of risk-pooling of people, creating smaller pools in which people have to pay for their own risks, and that's the philosophy of President Bush, and it's been the philosophy adopted by Senator McCain and his campaign.

Critical Condition: Doug Sovern

Sovern: Do you want to respond to any of that? I would think you might, but if you don't we can move on to another question.

Critical Condition: Daniel Kessler

Kessler: No, you can move on.  
 
 

Critical Condition: Doug Sovern

Sovern: OK. I'm wondering — why isn't there more focus on prevention in American health care, which after all saves a lot of money and costs very little? What would your man's plan do, Professor Kessler, on the prevention side?

Critical Condition: Daniel Kessler

Kessler: Well, unfortunately I'm going to sort of burst a commonly held bubble that prevention saves costs, which is largely not true. It is not — prevention is largely not a cost-effective thing to do. It's largely not a cost-reducing thing to do, sorry. [LAUGHTER] That doesn't mean prevention is a bad thing to do. Prevention is good for your health, but it doesn't save costs. What's driving up our costs now is not a lack of investment in prevention. It's things like obesity, it's things like diabetes, it's things like increased technology that benefits all of us, but that is what the source of our cost growth is.

And so emphasis on prevention, I think, is an important component of any health reform plan and is a component of Senator McCain's plan, and it will improve quality. But to think that the solution to our cost problem is increased prevention is, unfortunately, not really accurate.

Critical Condition: Doug Sovern

Sovern: So what would the McCain plan do to reduce obesity, diabetes and —  
 

Critical Condition: Daniel Kessler

Kessler: Those are very difficult problems. [LAUGHTER] We have struggled with them all. Private insurers now struggle with them. Senator Obama's plan struggles with it. Anything that anyone could come up with that would reduce obesity and help contain the cost of diabetes would be instantly adopted by all sides. It's a goal that we share. Unfortunately no one, neither Senator Obama nor Senator McCain has a good solution to reducing obesity in this country, which, as you know, is a terrible problem.

Critical Condition: Doug Sovern

Sovern: The one I found is exercise more and eat less. It seems to work for me. [LAUGHTER]  
 

Critical Condition: Daniel Kessler

Kessler: Right.

[APPLAusE]  
 

Critical Condition: Doug Sovern

Sovern: Professor Brown? 
 
 

Critical Condition: Daniel Kessler

Kessler: Now if only we could all do that. Then we'd be in business.  
 

Critical Condition: Doug Sovern

Sovern: Professor Brown, what about Obama and prevention? 
 

Critical Condition: E. Richard Brown

Brown: Senator Obama does emphasize prevention in his proposal, and some of you who were shocked by Professor Kessler's statement, I do have to say that I agree in part with his comment. That is some preventive services are not going to save money. For example, if you provide screening to a lot of people to detect disease early you're going to find more disease and you're going to end up treating that disease, which you might not otherwise have treated. That's not going to reduce costs, but it will improve health. So it's a good thing to do.

Critical Condition: Daniel Kessler

Kessler: Yes, exactly.

[APPLAusE] 

Critical Condition: E. Richard Brown

Brown: And Professor Kessler agrees with that. 
 
 

Critical Condition: Daniel Kessler

Kessler: No, no, I totally agree. 
 
 

Critical Condition: E. Richard Brown

Brown: We agree on that point. 
 
 

Critical Condition: Daniel Kessler

Kessler: If you'll excuse my inartful —  
 
 

Critical Condition: E. Richard Brown

Brown: With respect to obesity I think this is an interesting area of difference, because Senator McCain's proposal talks about getting people to adopt healthful lifestyles. That's important. And Senator Obama would absolutely agree with that and support that. But Senator Obama believes we need to go beyond health education programs that simply teach people that exercising more is good, eating more healthfully and less is good, to actually providing community support in the way of public policy and programs that help people do those things. And that's an important emphasis in Senator Obama's proposal.

And I'd like to give you an analogy of where that kind of prevention action really has paid off in very big ways for the health of people and even for cost reduction, and that is in smoking, because in smoking we've had a campaign, a public health campaign that has used public education to teach people about the dangers of smoking and the importance of quitting, but we've used other mechanisms too. We've used increased taxes on cigarettes to discourage young people from starting to smoke. We have had many kinds of public policies that have made it difficult for people to smoke, discouraged them from smoking by barring them from smoking, first in public places, then even in their workplaces, then in airplanes, then in almost any place you go — in Santa Monica or San Francisco or Berkeley, I'm sure, you can't smoke. In Santa Monica I think you can't smoke on the beach anymore. So we have taken many steps to discourage people from smoking, and we have seen the effect of that in reduced rates of lung cancer, reduced rates of heart disease, and even reduced residential fires as a result of that.

So we reap many benefits from very strong investments in prevention, and I think Senator Obama takes that very seriously.

Critical Condition: Doug Sovern

Sovern: Unfortunately, we have just a few minutes left. I think we're down to our last question, and that's the point we're at in our program, so I'd like to ask — this is a conversation America's been having for 30 or 40 years, if not more, probably before then. Why do you think this issue has proven so difficult for America to solve, and what is the likelihood one of these plans, or some variation of it, will actually be adopted? Professor Kessler?

Critical Condition: Daniel Kessler

Kessler: It's a very difficult issue for some of the reasons that we've touched on, that there's a large bulk of people in this country, the majority, who are pretty much satisfied with the way things are. Now, there's also a lot of people who are left out of this system, the uninsured, and that's a problem. But the fundamental reason why we haven't seen big reform is that the people who have insurance, who currently have the system working for them, are simply not willing to pay the higher taxes and bear the costs of financing something that would be better for the people left out.

Will that change? I think there's opportunity for it to change. I think the tax credit is an excellent start on that. I think there's a whole bunch of ways that it could change, and I'm hoping that it will change because I think that we need something new in health policy in this country. We need to include more of the people who have been left out and change the system so that it works better for everyone.

Critical Condition: Doug Sovern

Sovern: And Professor Brown, for the Obama campaign? 
 
 

Critical Condition: E. Richard Brown

Brown: Well, I certainly agree with Professor Kessler that the reason we haven't had health care reform is because the people who benefit from the current system have prevented that reform. But it's not the people that Professor Kessler was talking about. It's not the people who have health insurance coverage. It's the people who run the insurance companies, the people who run the drug companies. [APPLAusE] These are the people who have financed the opposition and the distortions that have created the fear among people with health insurance that if we adopted even the kinds of reforms that Senator Obama is proposing somehow tomorrow morning you're going to find a government bureaucrat standing between you and your doctor telling you what you can go to your doctor for. None of this is true, of course.

So I think that the reason we ought to be hopeful about reform under President Obama is two things. First, Senator Obama has shown throughout his careers, in law school, as an attorney, in the state legislature in Illinois, and in the us Congress, in the Senate, that he can reach across the aisle, that he can build coalitions among people who really start out thinking they have nothing in common and could never possibly agree. He did that when he was editor of the Harvard Law Review, and he has done it in the legislature in Illinois and in the Senate.

Secondly, he has enormous leadership skills. His leadership skills enable him to reach out to the American people and engage them in this effort to enact health care reform and encourage them to make their voices heard in this process, as he has done throughout his campaign. I think he's demonstrated that in spades in this campaign, and I think that under President Obama we could see at last coverage for all Americans and some better value and quality in our health care system.

[APPLAusE]

Critical Condition: Doug Sovern

Sovern: Well, thank you very much. I'm afraid we are out of time now. I just want to thank our panelists, Daniel Kessler, Senior Fellow at the Hoover Institution, professor at Stanford University's Graduate School of Business, representing the John McCain Campaign, and E. Richard Brown, director of the UCLA Center for Health Policy Research, professor at the UCLA School of Public Health, here for Barack Obama. [APPLAusE]

We also thank our audiences here and on the radio. Thank you for the excellent questions folks. This program [was] generously underwritten by the California HealthCare Foundation.





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