Washington Post business columnist Steven Pearlstein was online to discuss health care insurance legislation now moving through Congress. He writes in a column today that reform is, once again, likely to go nowhere.

A transcript follows.

About Pearlstein : Steven Pearlstein writes about business and the economy for The Washington Post. His journalism career includes editing roles at The Post and Inc. magazine. He was founding publisher and editor of The Boston Observer, a monthly journal of liberal opinion. He got his start in journalism reporting for two New Hampshire newspapers -- the Concord Monitor and the Foster's Daily Democrat. Pearlstein has also worked as a television news reporter and a congressional staffer.

His column archive is online here

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Centreville, VA: The Dubin/Lincoln alternative (S2510) to the Enzi legislation (S1955) seems much better in terms of protecting health care coverage. What do opponents not like about S2510?

Steven Pearlstein: Yes, the alternative approach you mention is probably a better starting point, although I think it concedes too much to state mandates and state regulation, as opposed to federalizing this industry, which seems to me the way to go. Many of the things I suggested were included in the Durbin/Lincoln bill. The insurance industry opposes the alternative because they don't think it "levels the playing field" enough. And I suspect that NFIB feels the alternative won't really lower premiums enough for enough of its members to make it worth it. The question is really this: if the Republicans cannot get the votes in the Senate necessary to defeat a filabuster, which is what they are looking at, would they be willing to make enough modifications to get something. Right now, it is not clear that they are willing to do that, possibly because Republican leaders in the House have told them that a compromise won't fly with them. In other words, the usual explanations for getting nothing done on Capitol Hill.

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Reston, VA: Since the Democrats and Republicans don'twant to develop effective health insurancefor the uninsured, is it time for a newpolitical party in the United States?Do we need a new political party for thedisadvantaged or strong political protests?

Steven Pearlstein: Probably not. One of the two parties will figure it out before long.

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Baltimore MD: On the MA bill for mandatory health insurance. I have insurance through my employer (but have sometimes gone without between employers) but given the fact that people change jobs so much now it seems unfair to tie affordable coverage to an employer. But, having said that, I feel that the government mandating health insurance by forcing me to purchase or to pay a tax means that I will have even less disposable income. I only make about $41K per year, already by mandate pay taxes, social security, medicare, etc. leaving me with about 65% of what I'm working for left for me to decide how to spend it. It just doesn't seem right. Meanwhile, employers who choose not to offer insurance get a free ride (unless that special session has been called).

I don't believe that making the consumer bear the burden without fixing the healthcare system (out-of-control costs, for-profit insurance companies, nonprofit hospitals acting like forprofits, etc.). Once again the government solution is to make the lower middle class pay.

Steven Pearlstein: If we were starting over, we might have a system based on the individual rather than the employer, I agree. But we aren't starting over, we have a system that is way to expensive but works for large numbers of people. So I'm in the camp that wants to build on it and reform it. Obviously, what we are talking about today won't solve many of the other big problems with the system having to do with rising medical costs and utilization and uneven quality and the lack of information technology, etc, etc. But its a start.

By the way, there are some advantages to employers acting as intermediaries and going out and getting bids for health plans for their workers. They do this pretty efficiently now, collect payment for premiums, and bargain pretty well for the best available rates. The other model is to have the government do this on behalf of all citizens, and make a limited number of plans available to the individual and small business market.

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Princeton, NJ: Look. Steve we been through this before. Our system is terrible and your proposals are nibbling around the edges. Other countries get much better health care (we are ranked 37th (between Slovenia and Bolivia, I think) by the WHO) and they pay much less because they have a single payer system. We waste over 200 BILLION a year on physicians' paperwork and over 100 BILLION a year on the 15-20% overhead of private insurance (Canada has a 1.3% overhead). In addition, we waste a huge amount which I do not know because of excessive drug prices. (Big Pharma spends 11% on research and 34% on marketing.) The complaints about single payer systems are because these other countries spend so much less per capita. (See www.pnhp.org for references to the appropriate studies.)

To be practical, we could give everyone a version of Medicare with no deductibles, no co-pays, no limitations with 100% drug coverage and it would cost LESS than we are paying now. As Senator Kennedy said on MTP, it could be phased in by age.

I can't understand why you can't treat this as a simple business decision. We are digging a ditch with a teaspoon; other countries are using a shovel. We are spending so much we could afford to use a back-hoe. Just suppose you are a CEO and you want to deliver health care efficiently. You would look to your competition, and if they have a vastly better way, you would learn from them. Just do that here.

Len Charlap

Steven Pearlstein: Is that Uwe Reinhardt? Look, we can debate this until the cows come home, but I think we're a long way from the American public accepting a government-run health insurance plan. I can see the gains you refer to. I can also see the downsides over the long run in terms of quality and availability of expensive, or new, treatments. Call me a fool, but I'm a centrist and a tinkerer and a builder-upon what we already have.

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Brooklyn New York: Do you consider the Massachusetts recent law change requiring health insurance to be a viable approach, and if so, why can't Congress encourage and support this kind of state driven initiative rather than try to come up with a "national" solution?

Bob

Steven Pearlstein: I'm a big fan of the Massachusetts initiative, obviously. And it is disappointing that the Republican Congress has not embraced the political and policy compromises that lay behind it. But this is really a national problem we have with the health care system, involving big national companies at this point, and lots of national government funding by way of Medicare and Medicaid. I just think it is time to find a national model.

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Pipersville PA: Comment: A medicare-only senior can search through a multitude of Part D plans for appropriate coverage and cost. A senior with HMO coverage must buy into that carrier's drug plan; signing with another plan means being dropped from the HMO's health plan. The HMO piously says, ...it's not us, the federal government made it law.

Who wrote this legislation? The elected officials who are supposed to care for the public good, or the corporations and their lobbyists for their bottom line? What happened to "...by the people, for the people....?

Steven Pearlstein: You are right in saying the industry has a big hand in writing this legislation, which is a shame. But I think you are wrong about wanting to have separate HMO and drug coverage. We need to get over this bugaboo about managed care and realized the future lies in GOOD managed care, as the only way to hold down costs and improve quality and rationalize the use of resources. And separating the drug part of medical care from the rest doesn't make sense. If we are heading toward a system that reimburses providers on the basis of how well they keep people healthy and how well they do in getting them better when they are sick, then it makes no sense to separate out the drugs. You want to give them the right incentives to use all the drugs needed, but no more, and to bargain hard on your behalf for the best price.

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Santa Clara, California: Why continue to jigger with a complex and failing market-based system when a single, publicly-funded, government based system that covered everyone would be simpler, more effective and cost far less?

Steven Pearlstein: The single payer crowd is out in force today. Getting bigger, too. Maybe there is a message there. I know one of the things I've noticed over the years is the number of doctors who are coming around to this conclusion. In the old days, the AMA was the main opponent to a national health plan. But now the dislike or dealing with insurance companies has apparently convinced enough doctors that a national plan could restore their independence and reduce hassle. What I don't think they are figuring is how meddlesome a national system could become over time.

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Dayton, OH: Isn't a lot of the health-care problem a classic "Crisis of the Commons" situation? How do we incentivize ourselves to use the "right" amount of health care?

Steven Pearlstein: The Porter and Teisberg book, Redefining Health Care, really is about answering your question. The idea is bascially to use the competitive system, but to get the competition arranged on the right terms, which is to compete to provide the best value and best medical care -- not the cheapest, or the one with the most procedures or drugs -- just the best overall value and the best health care outcomes. The system is moving in this direction, as the technology improves and research on health outcomes and best practices improves. But we've got a long way to go. And you are right -- in the meantime, we have a big commons problem, where it is in everyone's individual interest to consume as much health care as they can, but in our collective interest for everyone not to.

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Hbg, PA: What is your take on all the state attempts at "Wal-Mart" bills pertaining to health care? Is there a fed equivalent? Should there be? How powerful do you think these can be in mandating large employers who otherwise would not make any contribs to healthcare to really contribute?

Steven Pearlstein: Why just large employers. Every employers, in my opinion, should be required to offer a high-end and low-end health care plan to all employees, and to pay for half of the cost of the individual plan. Some will obviously do more than that. But the idea that small businesses can't afford it, but big business can, doesn't make much policy sense. You want to make sure small business has access to the same insurance programs at the same price as big business, which is what these bills we are talking about attempt to do. But once you accomplish that, there is no moral, political, economic reason for letting small businesses be free riders.

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Princeton, NJ: Come on Steve, you say "I can also see the downsides over the long run in terms of quality and availability of expensive, or new, treatments." As I have said, the reason other countries have these difficulties (which are greatly exaggerated) is because they are spending less than half per capita as we are. An yet, in spite of their so-called difficulties they provide much better health care by any measure.

You want to dig your ditch with a Tablespoon instead of a teaspoon while that back-hoe is waiting.

Americans love Medicare. Give it to all of them

Len Charlap

Steven Pearlstein: Americans love Medicare, but if you look down the road, you realize that Americans as taxpayers won't be able to afford even the program we have now. And you also neglect a big point: Medicare basically costs shifts against private payers, who effectively subsidize the program by paying higher rates for medical services. If everyone is in Medicare, Medicare will have nobody to cost shift against after the one-time administrative saving is absorbed.

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Toronto, Canada: I read recently that the US spends 15% of GDP on health care even though 46 million people have no health coverage versus Canada and other western countries that spend about 9% and everyone is covered. So my question is: What are the factors that contribute to US health care being so expensive and/or inefficient?

Steven Pearlstein: That's a good question with a very long answer. It is, as you say, the biggest economic question facing us, with implications for our health, our budget and the competitiveness of our companies in global markets. Adminisrrative costs and insurance industry profits are factors. Greater utilization of medical services is another. Higher drug costs is another. Higher doctors salaries and profits of hospitals and labs is another.

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Bowie: Steven, I'm in my don't-use-much-health-care years because I was born in the 70's between the boomers and the echo.

Due to population demographics, there's a strong political consensus today (as you mentioned in your column) not to let health providers cherry pick healthier clients and not to let prices get too disparent.

But when I'm in my health-consuming years, and there are more people younger than me than older, will the politics turn around and the new consensus will be to charge me a lot?

Steven Pearlstein: No, I don't think so. The politics of health care isn't as rational as all that.

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Long way from the American public: Isn't that a bit disengenuous? I'm sure you and other folks working for the Post have a very nice health care plan. And your coverage shows it (along with NYT, The networks, etc...). After getting innundated with this perspective morning, noon, and night, most folks would be opposed. Most people don't have the time and inclination to look up the facts on their own.

So you, being part of the feedback loop, point at the loop while to justify your position, which in turn become part of the loop. Please stop pretending you aren't aware of that.

Steven Pearlstein: I am very aware of that, actually. But it is one of the great fallacies in the blogosphere that the mainstream media actually control what Americans think about things. We have a role, to be sure. But in the long run, we respond to the public more than they respond to us. So the feedback loop you talk about is not as dispositive as you think. The press didn't kill the Clinton health care plan, for example -- the special interests may have, using advertising and lobbying--but not the press.

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Baltimore MD: Re your last comment that we may not realize how complex and out of control a single payer system could become. Well, things are so out of control now that it's hard to imagine anything worse developing. And it would take many years to get as bad as today's situation where most people are unhappy with our system. Given the current situation versus the hypothetical of a single payer system gone bad, I vote for the hypothetical. I see no reason that if it failed in 50-100 years why we couldn't come up with yet another sweeping change.

Steven Pearlstein: I didn't think I was going to convince you.

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Rockville, MD: How can you possibly expect to see "the downsides over the long run in terms of quality and availability of expensive, or new, treatments," when the evidence is already in on all other developed (and some less-developed countries)where health-care outcomes outrank the U.S.? The rankings are based on the fact that people in those countries have better health outcomes, and better rates of satisfaction with their health care. And, they are spending much less money to get that care. What more could you want?

Steven Pearlstein: I don't know of a major industrial country with a national health plan that doesn't consider that plan in trouble to some degree and unsustainable as now financed and organized. Britain and Canada are good examples. As a matter of observation, I'd say things would have to get a good deal worse here, in terms of cost, availability, quality, administrative costs and industry profits, before the country would be ready to take such a big leap. Look, we can't even get consensus on what are relatively minor tweeks to the small business and individual insurance market. Can you imagine the stalemate that would develop over a government-run national health system?

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Fairfax, VA: What are the possibilities of having a private sector version of the government's Federal Employee Health Benefits plan that everyone says is the perfect model for health insurance?

Steven Pearlstein: Look, that's just what we are talking about here -- letting national companies offer the same insurance plans across state lines, under a competitive system in which plans compete on the basis of quality, price, etc. But its not just as easy as you claim. The pool of people in a federal employee program are different than the pool of people in the current small business and individual market, so the price would be higher. And if you put everyone in the same pool -- say government employees with these others -- then the cost to government employees (and the government as employer) will go up for them.

There is also the problem that government employee insurance is pretty comprehensive, making it more expensive than many workers and employers can afford.

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not as dispositive as you think: Perhaps. But you folks seem to believe its less dispositive than it is.

Steven Pearlstein: Fine.

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not as dispositive as you think: Whoops. Also, it would be nice if media folks would just say _I_ don't like or want something, instead of saying "the public". Too often you folks try to hide your own views, or give them greater credibility with that canard.

Steven Pearlstein: Because that's wrong. If I thought it was a realistic choice, I might well be in favor of it. The problem with your position is that if we keep holding out for it, and don't participate in any reforms of the existing system, we may wind up with the status quo for decades to come. You got to know when to hold fast and when to accept a half a loaf.

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Princeton, NJ: Private payers? Who are these private payers? Are you talking about the rich uninsured? How many people pay retail for health care?

Even if there are problems in the future with every system, why wouldn't you want to have an efficient one now?

Len Charlap

Steven Pearlstein: Private payers are those of us in private industry with private insurance. The private payers are the insurance companies that bargain for rates with hospitals and labs.

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Alexandria, VA: All I can see, from the perspective of someone who, in the DC area, isn't even mid-level in income at $50K/year is that the system is broke and no one, not even MA can seem to make it fair and work so those who need get covered. My brother is currently suffering from severe cataracts, has had no health insurance because he could only get two part-time jobs instead of one full-time job so now those cataracts have almost blinded him. Even though he only made $10K last year in the DC area (he lives with my mother), he still made too much to qualify for any aid. How did we get to this place?

Steven Pearlstein: That's not a pretty story. What does the operation cost?

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Boston, Mass.: Although the Mass. plan is a step in the right direction, you can add me to the list of people in the "single payer crowd." A growing number of docs are coming around to this view, and big business will surely latch on once they realize they can shed billions in employee fringe benefit costs.

A story came out recently describing a study that found that, ceteris paribus, people in England are healthier than their American cousins. The wire stories described this as "shocking," but really it just shows what a lifetime of low-cost, preventative care can do. And the UK spends about 1/2 what we do.

Steven Pearlstein: As I said, the single payer option seems to be gaining support,if this crowd is any indication.

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Washington, D.C.: How is it that Medicaid and Medicare as well as traditional health insurance companies, are somehow allowed to exclude Dental health issues (such as infection, particularly infection of a mercury filling hidden under a crown) which are known to present significant risk of heart disease, as well as other conditions, from health insurance policies? Can there be no meaningful health insurance reform until the body is insured as a whole and dental health is connected back to the body as viewed an an ephemeral non-health insurance entity?

Steven Pearlstein: You know, your question assumes that if insurance doesn't cover something, nobody could or would pay out of their own pocket to have the care. I just don't accept that. Insurance ought to be just that -- insurance against a really bad even. A cavity or a checkup twice a year isn't a really bad event. Having said that, I agree -- there is no reason to exclude a really bad event having to do with teeth from insurance coverage.

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Woodbridge, Va.: The Health insurance debate always seems to come back to how to insure the uninsurable (ie the individuals that everyone knows will consume much more in services than they pay in premiums). It would seem to make sense to treat these individuals as charity cases and provide for them through a straight forward taxpayer funded subsidy rather than mess up the insurance industry but every time this idea is proposed, the opponents bemoan the fact that charity insults the dignity of the target groups. The same dynamic plays out in housing, pensions etc. I do not mind paying reasonable taxes to provide for the less fortunate but why should I pay higher health insurance premiums, payroll taxes etc to protect their dignity? Provide charity where needed, let insurance companies focus on the reasonable risk market and premiums will soon stabilize at affordable levels.

Steven Pearlstein: The problem is you get into a cycle where, over time, more and more people are in charity care, which also scrimps on preventive care and only takes care of them after they get sick. It also encourages healthy people to forego insurance, and paying premiums, until they are sick. And having an insurance pool just made up of sick people will make insurance prohibitively expensive, and lead more people to drop insurance.

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Washington DC: any chance you'll get to my suggestion about private retiree health benefit annuity plans rather than this back & forth with folks outside the reading area that isn't getting anywhere?

Steven Pearlstein: I'm sorry to have skipped over that. But now I don't recall it.

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Boston, MA: Why shouldn't states have the flexibility to mandate certain coverage schemes for their workers? If obesity is more of a problem why shouldn't they be allowed to mandate extra preventative measures? Similar with environmental effects like asthma, or to address increased diabetes levels. Or perhaps extra mumps coverage for Iowa...

Steven Pearlstein: We let buyers in almost every other category of goods and services decide what they want to buy. Why should this be different. If the public wants coverage of obeisity, the insurance companies will figure that out and offer it in a competitive market. I reject the too-frequent notion that markets don't work and consumers and worekrs are hopeless pawns in a system controlled by big corporate interests. There is a little truth to that, but its hardly most of the story.

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Boston, MA: The Times recently had a very interesting article about the sorry state of state run dental care in Britain. You read similar accounts about long waiting times and poor service in many other countries as well. We may pay more and have some inefficiency, but doesn't it say something about our system that everyone in the world has to come here all types of major surgeries? When was the last time someone sent a pair of conjoined twins to Slovakia for treatment?

Steven Pearlstein: Thanks for that reminder.

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Washington, DC: There is a huge gap in the market for people who are unlikely to work for a single employer for long enough to get retiree health benefits (not toe mention many of these employers are abandoning the idea of paying retiree health benefits), but will likely have too much retirement income from savings and investments to qualify for medicare (or who just don't want to deal with the ridiculously cumbersome system). It seems to me that the right answer is to have a retirement healthcare annuity system, where you pay in every month of your working career, regardless of who you work for, and then are guaranteed health care coverage once you retire. This could be administered through private insurance providers like Aetna, Blue Cross and MetLife. They would get the current value of the dollars invested and could pool the risk, to minimize losses. And at least a section of the American population would be moved away from medicare (which ought to be a goal of any legislation). To make this truly work, persons who make such health care contributions should get a tax deduction, but it wouldn't free them from having to pay into medicare. That way medicare isn't abandoned, and middle class Americans will have affordable reasonable health care benefits when they retire. What do you think?

Steven Pearlstein: I don't think it such a good idea. One reason why Medicare is necessary for old people is because they are the ones who get sick the most and consume the most health care, and in a private system they would be almost uninsureable. As for a plan for supplemental care to Medicare, that might work.

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Steven Pearlstein: That's all the time we have today, folks. Thanks for joining in. See you next week.

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