The ACP Advocate Blog

by Bob Doherty

Thursday, December 8, 2011

Liberal doctors’ wrong-headed critique of the IOM

If conservatives can be faulted for believing that the “free market” alone is capable of making health care more affordable and available —all evidence to the contrary— then liberals must be faulted for believing that the government is capable of offering “free” health care for all, without regard to cost. Case in point: liberal doctors’ broadside against the Institute of Medicine (IOM) for having the audacity to propose that cost be considered in determining health insurance benefits.

The IOM, at the request of the Department of Health and Human Services, convened a panel of experts to advise the department on the benefits to be offered through state health exchanges created by the Affordable Care Act (ACA). The IOM committee proposed a framework that would consider the population’s health needs as a whole; encourage better care by ensuring good science is used to inform practice decisions; emphasize judicious use of resources; and carefully use economic tools to improve value and performance. It recommended that “the initial EHB package be equivalent in scope to what could be purchased by the average premium that a small business would pay on behalf of an employee” writes John Iglehart in the New England Journal of Medicine, because if “a more expansive package” is offered, “many currently uninsured individuals and small businesses would find it unaffordable, which would undermine the overriding goal of the reform law — to make coverage both meaningful and nearly universal.”

This seemingly common sense thinking was enough to make the Physicians for a National Health Program (PNHP) turn apoplectic. In a letter circulated by the PNHP, some 2400 doctors claimed that the IOM’s report would result in “skimpy” and “bare-bones” policies that would “saddle enrollees with unaffordable co-payments and deductibles.” The letter went on to attack the integrity of the IOM’s expert panel, accusing its members of being “riddled with conflicts of interest . . [and] . . .having amassed personal wealth through their involvement with health insurers and other for-profit health care firms.”

(Regrettably, this type of ad hominem accusation has become a staple of what passes for political debate these days, from all across the political spectrum. It is not enough to disagree with someone, you have to say that they are motivated by greed, avarice, or some other reprehensible motive.)

Unlike the PNHP, the American College of Physicians believes that IOM has found the right balance between expanding coverage and keeping it affordable. ACP believes, as does the IOM, that there must be a transparent and publicly acceptable process for making health resource allocation decisions with a focus on medical efficacy, clinical effectiveness, and need, with consideration of cost based on the best available medical evidence. (Click here to read a side-by-side comparison between the IOM’s recommendations and ACP policy.)

I trust that the liberal doctors who signed onto the PNHP letter really want what is best for patients and sincerely worry that the benefits that would be offered under the IOM’s framework would be inadequate for many. Fair enough—although I think the unfair and unwarranted attack on the IOM’s credibility undermines the letter-writers’ credibility more than it does the IOM’s. But I also believe that it is fanciful to pretend that the government can guarantee that everyone will have access to health insurance benefits, to be paid for by taxpayers, employers, and employees, without explicitly taking into account the cost of those benefits and making a determination on what we, as a society, can realistically afford. Guaranteed coverage that does not pay attention to cost will be coverage that no one can afford—not the vision of accessible, affordable health care for all that the PNHP says is its goal.

Today’s questions: Do you agree with the IOM that costs should be considered in determining essential benefits? Or with the PNHP’s view that this will result in “skimpy” and “bare-bones” coverage?

7 Comments :

Blogger Cedric said...

We also believe that PNHP has made the wrong conclusion on the issue of essential health benefits. Practicality, not idealism, should drive what's considered "essential." Our response to the PNHP letter can be found here. http://wp.me/sisX8-2194

Cedric Dark, MD, MPH & Kameron Matthews, MD, Esq of Policy Prescriptions, LLC

December 8, 2011 at 6:41 PM  
Blogger Quentin D. Young, M.D., M.A.C.P. said...

It is disingenuous of Dr. Doherty to assert that "costs should be considered" without acknowledging that today’s "costs" include hundreds of billions annually in health industry profits, private-insurance administrative waste, and outlandishly exorbitant executive pay.

In fact, the United States cannot achieve a universal, high-quality health system unless and until it ends the role of for-profit corporations when "considering costs" in health care.

Far from ignoring cost as a factor, the signers of the PNHP letter were aware that other industrial nations, namely those with some variety of a single-payer system, spend half of what we do per capita and yet achieve better medical outcomes.

What the signers objected to was the committee’s recommendation that cost rather than medical need be the basis of defining the “essential benefits” under the new health law. In doing so, the signers were asserting the crucial role of physicians in health care and rejecting the intrusion of corporate interests. They were certainly not launching a “broadside” against the Institute of Medicine.

Finally, I believe it is in no way inappropriate to point out that some of the IOM committee members have economic interests in insurance firms and other health industry corporations, i.e. the very companies that stand to profit under the Affordable Care Act. This statement of fact is not an ad hominem attack.

Quentin D. Young, M.D., M.A.C.P.
National Coordinator
Physicians for a National Health Program (www.pnhp.org)

December 9, 2011 at 3:31 PM  
Blogger BDoherty said...

I recognize that the PNHP favor a single payer health care plan. The IOM was not requested, though, to issue a report on the merits of a single payer plan versus the reforms in the Affordable Care Act. The fact that the health plans offered through the exchanges will be private insurance plans, for-profit and not-for-profit, not a public plan as the PNHP favors, is a matter of law. The only question the IOM was asked was: How best to determine the benefits that the law requires be offered to consumers and businesses in 2014? And in this case, the IOM got it right: the benefits must take into account the cost, or the premiums for the plans offered will be priced so high that coverage is neither available or nor affordable.

With all respect, Dr. Young is incorrect when he says that the IOM “recommendation [was] that cost rather than medical need be the basis of defining the ‘essential benefits.’” Rather, the IOM called for medical necessity to drive benefit determinations, along with consideration of cost—not cost instead of medical necessity. John Iglehardt writes that “The committee decided not to recommend a single national definition of medical necessity but added: ‘The criteria used for medically necessary services or services that conform to medical necessity are medical services that are (1) clinically appropriate for the individual patient, (2) based on the best scientific evidence, taking into account the available hierarchy of medical evidence, and (3) likely to produce incremental health benefits relative to the next best alternative that justify any added cost.’ These criteria are consistent with best practices and supported by legal precedent.” (Iglehardt, N Engl J Med 2011; 365:1461-1463 October 20, 2011).

Further, the IOM framework also recommends that in creating the EHB package:
- HHS consider the population’s health needs as a whole;
- Encourage better care by ensuring good science is used to inform practice decisions;
- Emphasize judicious use of resources; and
- Carefully use economic tools to improve value and performance.

As far as my view that the PNHP-circulated letter was an attack on integrity of the experts on the IOM committee, well, the letter speaks for itself: “The IOM committee was riddled with conflicts of interest, many members having amassed personal wealth through their involvement with health insurers and other for-profit health care firms. Its recommendations were lauded by insurance industry leaders who have sought to undermine real health reform at every turn. As the Lancet noted on its Dec. 5, 2009, cover: ‘Corporate influence renders the U.S. government incapable of making policy on the basis of evidence and the public interest.’ Sadly, the committee’s damaging recommendations suggest that this corporate bug has also infected the IOM.”

This is more than pointing out a potential conflict of interest—it is an unwarranted and unsupported accusation that IOM members were motivated by “corporate influence” and the “wealth” they “amassed” through their corporate ties, rather than what the IOM felt was best for the public. (Incidentally, although ACP had no role in the IOM report, the chair of the committee was Dr. John Ball, MACP, a former CEO of ACP. Another member of the committee was Alan R. Nelson, MD, MACP, a former deputy EVP of ACP and former EVP of the American Society of Internal Medicine. I know both of them, and they have the highest integrity and assuredly are not carrying the ball for corporate interests.)

Can’t we argue substance policy, without assuming the worst motivations of others?

Finally, although ACP policy holds that a single payer plan should be an option for consideration by the United States, along with pluralistic approaches (like the ACA) that guarantee and subsidize coverage, the fact is that the ACA is estimated to provide coverage to nearly 94% of all legal residents—a historic achievement that should be celebrated, not condemned.

December 9, 2011 at 4:44 PM  
Blogger Steffie Woolhandler MD MPH FACP said...

As one of the 2400 signers of the physicians' letter criticizing Institute of Medicine's (IOM's ) report on the Essential Health Benefits (the benefits that should be covered when the the 2010 national health reform goes into effect) I'd like to clarify a few points.

We were critical of the evident conflicts of interest in the IOM committee, conflicts of interest that violate the IOM's own recommendations issued in a 2009 report. The IOM committee’s members include Sam Ho, executive vice president of UnitedHealthcare; Leonard D. Schaeffer, director of the biotechnology company Amgen and former chairman and CEO of WellPoint (Schaeffer’s family foundation donated $2 million to the IOM in 2010); as well as executives from 3M Health Information Systems, a medical supplier, Milliman Inc., an actuarial consulting firm with close ties to the insurance industry, and The Blackstone Group, a private equity firm with major health care interests. The IOM’s full list of panel’s members, with a partial listing of their affiliations, is available at the Physicians for a National Health Program website www.pnhp.org). Our pointing out that many of them have a major conflict of interest on the subject of health insurance hardly represents an ad hominen attack, as Dr. Doherty's blog posting alleges.

We too are concerned about health care costs. Yet as our original letter states, there is little evidence that skimpy coverage lowers total health care costs. Americans have some of the least comprehensive coverage of any developed nation, and yet our health care costs are the world's highest. Copayments, deductibles, and long lists of uncovered services do not control systemwide costs; they merely let insurance companies off the hook by shifting costs onto sick patients and their families.

Steffie Woolhandler, M.D. MPH, FACP
Professor of Public Health, City University of New York
Visiting Professor of Medicine, Harvard Medical School

December 9, 2011 at 5:00 PM  
Blogger Robert J. Sobel, M.D. said...

I must agree with my colleague Dr. Young on this one. I have never been convinced single payer is the answer, but I do believe eliminating the for-profit entities in health care is an essential step (i.e., publically traded, nationwide, integrated entities). The state is the basis of health care, but Medicare creates a strange intervener on which for profits model their squeeze. The two blues can hash it out, as they already are near monopoly in many states.

Much of the ACA fosters integration. For those of us on the frontline and independent, it can't help us stay in the mainstream.

How I can I be cost-effective in a world where new drug versus old drug price discrepancies are so extreme?

December 10, 2011 at 3:20 PM  
Blogger ryanjo said...

"the fact is that the ACA is estimated to provide coverage to nearly 94% of all legal residents—a historic achievement that should be celebrated, not condemned."

It's now becoming evident that costs will be a major determinant of the basis of "coverage" under the ACA. And we have seen with the Medicaid program what happens to patients when every year legislators battle over budgets.

From 1963 to 1967 thousands of children were "provided coverage" with an ineffective measles vaccine. The result has been dozens of cases in adults thought to be protected.

Bad coverage = bad outcome. No matter what percentage of the population gets covered. Only historic in the "learn from our mistakes" sense.

December 12, 2011 at 10:07 PM  
Blogger BDoherty said...

As Dr. Woolhandler suggested, I reviewed the full list of committee members who were responsible for the IOM report, and I stand by my view that the charge that the “corporate bug has infected the IOM” is unwarranted, as was the implication that committee members were motivated by considerations of personal wealth. The panel represented a diverse and balanced group of IOM members that have expertise in health care and delivery system reforms, employee benefits, government, health services research, and patient care delivery, including some of the most respected experts in these areas. I also think it should be no way disqualifying for someone who has worked for a health insurance company to participate in a study of benefit determinations that will be offered through regulated private health insurance—provided that it is balanced with other perspectives, and all conflict of interest rules are followed, as was the case with this IOM committee.

PNHP’s main issue is that they are opposed to private health insurance and support a single payer public plan—a principled position that I fully appreciate even though I (and ACP) disagree with them that elimination of private health insurance is the “only” way to achieve affordable and accessible coverage for all. But in a system where coverage for as many as 16 million currently uninsured Americans will be through regulated and subsidized private health insurance offered through state health exchanges (the rest will be covered by Medicaid), we should welcome the expertise and perspective of those that come from the insurance world in a discussion of essential benefits, just as we benefit from having the perspectives of employers, consumers, government and health services researchers.

Also, it seems to me that the insurance industry would have done better if the IOM had recommended a richer benefit package, because the greater the benefits, the higher the premiums they could charge, and the greater the subsidies that are pegged to the premiums.

December 14, 2011 at 2:52 PM  

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About the Author

Bob Doherty is Senior Vice President, American College of Physicians Government Affairs and Public Policy; Author of the ACP Advocate Blog

Email Bob Doherty: TheACPAdvocateblog@acponline.org.

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