Fascinating ‘insider’ article on the budget process and the Orzag/Obama plan to reduce healthcare costs by building a health IT system ‘wired’ for data mining:
“At the core of both the stimulus bill and the Obama budget is Orszag’s belief that a government empowered with research on the most effective medical treatments can, using the proper incentives, persuade doctors to become more efficient health-care providers, thus saving billions of dollars. Obama is in effect betting his Presidency on Orszag’s thesis.” (See Article)
“Orszag seems more right than wrong about how to bring down health-care costs, but the truth is that, while there is obviously a great deal of waste in the American medical system, nobody knows for certain whether Orszag’s plan—which is now Obama’s plan—will work.”
The plan relies on building HIT infrastructure to obtain the data for “comparative effectiveness” research. Republicans question whether this research approach can reign in healthcare spending enough and also fear it will lead to “vast government intrusion into the doctor-patient relationship”. And the plan relies on building an HIT system to data mine ALL data without informed consent.
Our problems with the plan:
1) Orzag/Obama want ALL health data without informed consent for research, which is unethical, illegal, and destroys patient trust in doctors.
2) Orzag/Obama do not seem to realize that compelling the use of all health data will INCREASE the number of Americans who avoid treatment altogether (already in the millions). Many Americans know that avoiding care is the only way to keep health data private.
3) Millions avoiding treatment means millions delay care or never get care, increasing bad outcomes, deaths, and costs.
4) But worst of all for proponents of research: they won’t get the data needed to learn what works best unless they restore privacy and patient control over data. Researchers cannot get the results all of us want with missing and inaccurate data!
5) To find out what the most effective treatments are for many costly conditions we have to actually have all the data in our systems. Today millions of people with Depression and Addiction have NO data in the system because they pay for private care or attend AA or NA so NO data is ever generated.
6) It will be a tragedy never to find out what treatments are most effective—and a HUGE waste of the billions of stimulus dollars to build an HIT system without privacy.
Key Quotes from the article:
• The deficit spectre has loomed over every major debate. The most contentious issue has been health care.
• Orszag came to the debate with a third option, which combined Summers’s concern about deficits and Daschle’s insistence that Obama tackle health care this year. He argued that health-care reform is deficit reduction.
• At the core of both the stimulus bill and the Obama budget is Orszag’s belief that a government empowered with research on the most effective medical treatments can, using the proper incentives, persuade doctors to become more efficient health-care providers, thus saving billions of dollars. Obama is in effect betting his Presidency on Orszag’s thesis.
• Orszag, despite his image as a number-crunching technocrat, considers himself an activist.
• At Princeton, he wrote his senior thesis on the relationship between the Federal Reserve and Congress. One of his conclusions was that “it is clear that Congress suffers from a lack of understanding of even the most rudimentary economics.” Orszag’s paper won an award for the best thesis that year in international economics or politics.
• At the Congressional Budget Office, Orszag hired specialists in health-care economics and turned the institution into a clearinghouse of information about rising health-care costs. When I asked him whether he was an advocate for policies at a place that was supposed to be nonpartisan, he replied, “I would say I was activist.”
• Kent Conrad, the chairman of the Senate Budget Committee, has made eradicating the federal budget deficit his life’s work. He told me that he picked Orszag to run the C.B.O. in 2007, and repeatedly asked him to testify before his committee, because they shared a concern about long-term spending trends.
• If there was one aspect of the President’s budget that demonstrated Obama’s European sympathies, Ryan said, it was health care. More specifically, it was Orszag’s approach to curbing health-care costs. “He believes you need to set up this über-bureaucracy—the institute of comparative effectiveness—which we’ll put smart people in, and they will design the metrics and the processes on how medicine is to be practiced,” Ryan said. “And then the federal government will impose and enforce those processes. . . . It is precisely what they employ in England. It’s precisely what they employ in Canada.” Rather than celebrate Orszag’s attempt to rein in health-care spending, Ryan seemed horrified by it.
• Obama will spend the rest of this year fighting a war on two fronts. On one are Democrats protecting old-line economic interests: oil, gas, and coal companies; agribusiness; student-loan companies; and pharmaceutical companies and medical providers who fear that Orszag’s ideas for cutting health-care costs will hit them hard. On the other are institutional interests. Obama will be battling committee chairmen who oppose his Pell-grant reforms, and placating senators who resent his willingness to use a feature of the budget process known as “reconciliation,” which limits debate and prevents the use of a filibuster, to pass his health-care plan.
• Orszag’s job is to defend Obama’s budget on all fronts, but he will be most deeply engaged in health care. I asked him how he could be so sure that his ideas about how to reduce health-care costs would work, mentioning that I had been surprised to learn that Paul Ryan and other Republicans had seized on health-care cost controls as the issue they believed would bring down Obama’s health-care plan and, with it, they surely hoped, his Presidency. Specifically, they believed that Orszag’s obsession with “comparative effectiveness,” research about which treatment options work best for a given ailment, will lead to vast government intrusion into the doctor-patient relationship. The research, which received major funding in the stimulus legislation and which was also included in Obama’s budget, had assumed a sinister meaning on the right.
• Orszag dismissed the criticism as a caricature. “I don’t see how it interferes with the doctor-patient relationship to suggest that it would be better if your doctor had more information about what would work for you,” he said. “The best way of putting it is that your doctor shouldn’t have disincentives to give you the higher-quality care, which often happens now.” Far from a huge government bureaucracy, he proposes a simple adjustment of incentives: “You get paid more if the treatment has been shown to be effective and a little less if not.”
• Orszag seems more right than wrong about how to bring down health-care costs, but the truth is that, while there is obviously a great deal of waste in the American medical system, nobody knows for certain whether Orszag’s plan—which is now Obama’s plan—will work.
• As Orszag explained his ideas, I couldn’t help remembering an encounter I had with him one day in the hallway at O.M.B. I told him that I had read his Princeton undergraduate thesis. He looked at me and smiled a little sheepishly. He said that at some point after his arrival at graduate school, in London, he had had a sudden realization: that he had made a mistake, and the crucial formula that he had used in his thesis, the one that had won him the prize, was incorrect. “It was so innovative,” he said, “that it was wrong.”