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The promise and perils of health-care reform: A conversation with Jeff Goldsmith

This article first appeared in the St. Louis Beacon, Sept. 17, 2010 - Jeff Goldsmith, head of Virginia-based Health Futures, Inc., is one of the nation's foremost health-industry analysts. Goldsmith was in town to take part in a client roundtable at Advanced ICU Care on Thursday morning at the company's headquarters in Creve Coeur. He serves on the advisory board of the St. Louis firm, which allows critical-care doctors and nurses to monitor hospital ICU patients from a central location through telemedicine technology.

In spite of being a strong proponent of health reforms, Goldsmith regards the Affordable Care Act as an "unfolding tragedy." He was interviewed by the Beacon late Wednesday afternoon. At the end of the interview, Goldsmith shifted to a lighter tone, saying he was about to go see "another tragedy: the St. Louis Cardinals. I'll root for the Cubs." He placed his bet on the right team. The Cubs won, 7 to 3.

The interview with Goldsmith has been edited for length and clarity.

The big news on the health front this week included the first major speech by the new Medicare (and Medicaid) chief, Donald Berwick, who came out strongly against rationing medical care as a way to transform the system. He was appointed without Senate confirmation after some Republicans accused him of being willing to ration care to cut costs. Do you think he cleared the air in his speech on Monday?

Goldsmith: Don Berwick is one of my heroes. This is an extraordinary man, universally respected in health care. The problem is the way they (members of the Obama administration) put him in the position. He has about 16 months to do what he has to do. He really needed to be in place before this (health) legislation was enacted.

So is being a recess appointee going to be a drawback?

Goldsmith: Don basically has been sacrificed in this process. You remember John Bolton, the controversial U.N. ambassador that (President George Bush's) administration put in office? They were anticipating a terrible confirmation fight. They elected not to go through a long confirmation process, and Bolton was out at the end of his recess appointment. He was a political dead man. And that's what they (the Obama administration) have done with Don Berwick.

Given that Berwick was a controversial nominee, what did the administration have to gain by going through the confirmation process?

Goldsmith: Don is a passionate patient and consumer advocate. He's also one of the most articulate people for advocating improvements in the quality of care. I think he would have run rings around his tormentors. I think it was a tragic miscalculation that they did not move through his confirmation in an orderly and thoughtful way and give him a chance to talk not only to the Senate but to the American people about what really needs to happen to our health-care system.

What specifically might he have done under ideal circumstances?

Goldsmith: In his previous job, he was head of something called the Institute for Healthcare Improvement. (Thousands of) people came to the meetings of this organization, literally on fire to improve whatever they were doing. The idea was "well, good lord, if we put him in charge of Medicare, maybe he can scale that up to something that could go on in the entire country." I think he would have built bridges to hospitals and doctors and executed experiments that are contemplated in the legislation to find new ways to pay for and deliver health care. But given the politics of what happened, that's simply not going to happen. Republicans who were vilifying him, saying that he was (for) socialized medicine, were completely off their rockers.

What's your take on the Affordable Care Act? Do you think that the administration will be able to enact most or all of its provisions?

Goldsmith: If it had been done quickly, in the summer of 2009, as the administration had intended, we would have gotten a very different bill. This is an unworkable piece of legislation, and in some very important respects, it's really vulnerable because they have put off the (key) benefits for three years. I think they realized too late that there weren't going to be enough tangible benefits to people to build political support. The legislation has become an albatross politically. You might have seen in Politico that not a single Democratic candidate running for office has used his or her vote (for health reforms) in political campaign commercials. There's a huge mistrust of government out there, and it's not just Republicans.

What's fueling this mistrust about health reforms?

Goldsmith: What really crippled this thing was the three-plus months we lost due to the withdrawal of Tom Daschle (former Democratic senator from South Dakota) as Health and Human Services secretary (following disclosures that he had failed to report and pay his income taxes). (Democrats) had to basically put health reform on the back burner because they didn't have a health and human services secretary and didn't have anyone in the White House running this process. So from early February until May, they were dead in the water. (Daschle) had good relations with Congress and (was co-author) of one of the best books about health care (Critical: What We Can Do About the Health Care Crisis). So when Daschle went under the bus, not only did they lose the linchpin of how they were going to manage this process; they lost the script.

But the administration is rolling out the legislation. Are you suggesting this might stall at some point?

Goldsmith: Well, you've got two elections, and those might convey congressional majorities to Republicans. I don't think it will be repealed. The core of the bill, the changes in health insurance business practices, the Medicaid expansion -- those are things that are going to be difficult to reverse. The Republican agenda for health reform (will likely include) taking out the (health insurance) mandate, if they can. I think they'd take out effectiveness (of care) research; they'll probably take out the independent advisory board, which removes some degree of congressional oversight about how Medicare was going to pay people. A lot of the regulatory restrictions will be watered down if you have Republican majorities.

What about the argument that the economy is the real barrier?

Goldsmith: Implementation of the reforms is dependent on a vigorous economic recovery. The problem will come if we really do get back into a recession. We're not going to find the trillion dollars we need to make this happen. There was a lot of legitimate concern even inside the administration about whether we could afford to do this. The president overruled them. He basically said this was a matter of values, that if we had to, we could cut somewhere else or raise taxes. But the economic reality is what nobody wants to talk about in the middle of an election campaign.

Some people hearing your comments would assume that you're not for health reform?

Goldsmith: I'm absolutely for it. It's inexcusable that a wealthy country has 50 million people, plus or minus, without health insurance. But I despair that our political system is so broken that it wasn't able to do this in a thoughtful, sensible way. Unfortunately, you need a strong government to do things like this, and we don't have one. I've read the bill twice. I've moved way down in the weed of what this bill is intended to do. I can tell you this is an unfolding tragedy. The (millions of) people we're going to help may not get it. This is deeply flawed legislation on both the economic level and the operational level.

What's an example of an economic flaw?

Goldsmith: There is one area where people who wrote this legislation were disconnected from reality. You can't just change what people are required to do and eliminate a lot of business practices that insurers use to try to limit their risk and not increase cost. It's simply a fantasy. The administration is on very shaky grounds for blaming the insurers (for raising premium costs). (When the lawmakers) change all the ground rules to make health insurance a lot more generous-- of course, it's going to cost (the public) more.

Some people have praised the legislation's effort to reduce paperwork.

Goldsmith: (That is an) interesting thing in this bill, the effort to complete digitization of claims. Maybe 40 percent to 60 percent is automated. This is still a paper process, and the cost is staggering. There are 30 billion transactions a year, maybe more. Hundreds of people at hospitals do nothing but talk on the phone all day about claims. There are nurses in doctors' offices that are not doing nursing. They're arguing with someone at an insurance company about whether (the doctors) will get paid. If you could have 24/7 real time internet-based claims adjudication, it would take off a ton of cost.

Funding for health reporting is provided in part by the Missouri Foundation for Health, a philanthropic organization whose vision is to improve the health of the people in the communities it serves.

Robert Joiner has carved a niche in providing informed reporting about a range of medical issues. He won a Dennis A. Hunt Journalism Award for the Beacon’s "Worlds Apart" series on health-care disparities. His journalism experience includes working at the St. Louis American and the St. Louis Post-Dispatch, where he was a beat reporter, wire editor, editorial writer, columnist, and member of the Washington bureau.

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