The Ken Thorpe problem

April 24, 2014

 Vermont Digger

Lots of buzzing in political circles the past week or so, regarding the possible existence of a "Plan B" on health care reform. A mysterious Plan... from beyond the limits of our galaxy... threatening the American Way of Life™ with its hideously alien ideas... Who Can Stop This Menace From The Stars?...
Er. Ahem. Sorry.

Word of this Plan B came first from VPR's Pete "Scoop" Hirschfeld, who got hold of a memo written by Ken Thorpe, health care expert for hire, and the Legislature's chosen consultant at a cool 10 G's a month (nice work if you can get it) to explore ways to achieve universal coverage in Vermont. Or a reasonable facsimile, anyway.

For those just tuning in, Thorpe is a nationally established expert on health care policy who worked in Vermont several years ago on the creation of Catamount Health. Thorpe's memo, as reported by Hirschfeld, outlines an idea very different from Governor Shumlin's vision for single-payer health care: doesn't create a single, universal insurance plan; and it doesn't rely on the multi-billion-dollar tax structure Shumlin wants to use to fund his single-payer system.
... The memo details a reform concept that would maintain the premium-based model in place now, and use federal and state subsidies to pay for coverage for uninsured and under-insured Vermonters.

Based on a January report from Hirschfeld, written at the time of Thorpe's hiring, it looks like the guy is definitely not a fan of single-payer:

Thorpe said that if Vermont can't reduce the chronic diseases responsible for skyrocketing health care costs, then financing reforms like single-payer aren't going to solve the problem.
"So at the end of the day, no matter where you want to go in terms of cost containment, if we don't have a statewide capacity to really prevent the growth in chronic disease and more effectively engage and manage chronically ill patients, the only other option you have for controlling costs is just by slashing payment rates," Thorpe said.

That's a pretty stark choice. To judge by this statement, Thorpe sees single-payer as a sideshow. And he views the reform effort as a way to rein in costs, not ensure universal access. Which, y'know, is kinda-sorta the Governor's primary goal.

I don't really care whether Thorpe's memo constitutes a Plan B or not, much as the question seems to fascinate our political media. The question I have is this:

Why did the Legislature hire a single-payer skeptic (if not outright opponent)? Why hire a guy who has one big idea on reform? The qualities you need for this job are (1) expertise and (2) an open mind. Thorpe has the former, but he falls far short of the latter.

Which begs the question: do legislative leaders have an open mind? Or are they searching for a way around the Governor's commitment to single-payer?

Last month, Senate Penitent Pro Tem John Campbell rightly received a lot of grief (some from these quarters) for making statements that seemed to throw cold water on single-payer. He told Hirschfeld (that guy again?) that single-payer "may not be... politically viable in this legislative body, due to the costs involved" and that he wants "to make sure that we have a place to go if this doesn't work out, you know, the single-payer itself."

In a later interview with WDEV's Mark Johnson, Campbell appeared to base his definition of single-payer success entirely on cost: If the total cost of single-payer is equal to or less than the total cost of the current system, then he's fine with it. But if the cost is any higher than that, single-payer is out. (Campbell's answers were so lengthy, circuitious, and downright obtuse, that it's difficult to pin down his exact position. Which, I suspect, is exactly what he had in mind.)

Campbell's statements bear a striking resemblance to the thrust of Thorpe's memo: cost control first, universal access if we can afford it. Which would seem to indicate a meeting of the minds under the Golden Dome, a common ground at odds with Shumlin's vision.

Furthermore: Campbell caught heat for his apparent readiness to throw single-payer under the bus, and make cost control his top priority. But the funny thing is, House Speaker Shap Smith said almost exactly the same thing in January when Thorpe was hired:

... Smith said he'll be looking to Thorpe to determine whether Vermont's current reform programs are reducing the rate of growth in health care spending fast enough. And if they aren't, then Smith said lawmakers need to reassess whether single-payer is such a good idea.

"Everybody agrees that we want to make sure that we have quality health care, we're doing things to bring down the rate of growth for costs," Smith said. "And if we don't have those two things, we don't want to move forward with the single payer."

Game, set, match: If single-payer is no costlier than the current system, fine. If it's not, then it's dead in the Legislature.

Given those statements, the hiring of Thorpe makes all the sense in the world. Top lawmakers have, as Shumlin would say, a laser-like focus on cost.

The problem with this -- aside from the ethical and moral issues of universal access -- is that the cost savings of single-payer will take time to fully develop. We'll (hopefully) see an immediate impact in administrative costs, claims processing and paper-shuffling. In ensuing years, we'd see an impact as the system no longer has to bear the costs of care for the uninsured. And, gradually over time, we'd see the biggest impact in a healthier and more financially secure citizenry.

I can make a very strong argument that, even if the immediate cost is a bit higher, the cost curve will bend down significantly in a fairly brief time frame. To me, it looks like Smith and Campbell are evaluating the whole project on the immediate cost. That's a short-sighted view.

I'm sure that, if you asked Smith or Campbell why they hired Ken Thorpe, they'd say something perfectly reasonable like, "He's a nationally known expert who's familiar with Vermont from his work on Catamount." Sounds like an ideal fit, no?

Well, no. For two reasons. First of all, the situation was very different last time around. Back then, the Dems and Progs were trying to craft a health care reform plan that would do some good for the uninsured, but also pass muster with then-Governor Douglas. There wasn't a snowball's chance of passing single-payer at the time, so Thorpe's position on single-payer didn't matter.

Second, since his last Green Mountain gig, he's established a big, well-connected nonprofit organization to promote his health care bugbear: prevention and management of chronic conditions. The Partnership to Fight Chronic Disease seems to be a vehicle designed to disseminate the brilliant insights of Ken Thorpe, Ph.D., with a little help from a whole lot of deep-pocketed friends. The PFCD's 80-member (!) Advisory Board includes a lot of establishment voices from the health care industry and the business community, plus some names less likely to raise liberal hackles, plus a few odds and ends. A sampling:

The Good: Planned Parenthood, the American Academy of Nursing, the National Latina Health Network, American's Agenda: Health Care For All, the National Patient Advocate Foundation, and a former head of the American Academy of Family Physicians.

(Physicians for a National Health Program, a doctors' advocacy group for single-payer, is conspicuous by its absence.)

The Bad: Two top executives from Pharmaceutical Research and Manufacturers of America (PhRMA), the Naqtional Pharmaceutical Council, the head of the U.S. Chamber of Commerce, the Healthcare Leadership Council ("a coalition of chief executives from all disciplines within American healthcare"), at least two Bush Administration appointees, healthcare conglomerate UnitedHealth, and the National Retail Federation.

A mixed bag at best. And, even with the presence of some worthy individuals, the PFCD Advisory Board has a decidedly establishment smell to it. Plus, as I said earlier, he obviously views health care reform through this single prism. Given all of that, I question the Legislature's choice of him as a consultant.

But apparently Shap and Co. are pleased with their man. Thorpe's $10,000/month contract was originally a four-month deal. But now, Hirschfeld reports...

Smith says the Legislature may decide to extend his contract through the off-session as well.
Which would bring Thorpe's total remuneration to a cool $120,000. For his inarguable, but clearly biased, expertise on the subject of single-payer health care.

Or should I say, for his help in providing a plausible exit strategy for timorous lawmakers?