British Hospital to face second inquiry after damning report

An NHS hospital is to be scrutinised in a second official inquiry after a report found that “appalling” emergency care led to patients dying needlessly. Andy Burnham, the Health Secretary, said that current and former staff would be expected to co-operate with the independent inquiry into Stafford Hospital.

In March an investigation by the Healthcare Commission condemned “appalling” and “shocking” standards of care at the hospital, run by Mid Staffordshire NHS Foundation Trust. Between 400 and 1,200 more people died than would have been expected in a three-year period, and a lack of nursing staff was said to have contributed to poor patient care.

Despite two additional Department of Health reviews, campaigners and nursing unions have called for a public inquiry to analyse what part Government targets played in the failings. Mr Burnham said that the new inquiry would be chaired by Robert Francis, QC, a leading clinical negligence lawyer, who will hear evidence from patients and families and identify lessons for the future.

The inquiry was announced as part of measures to tackle “exceptional failures” in foundation trusts, which have a degree of independence from the Department of Health and control most NHS hospitals in the country. The Government said that if the chairman considered it necessary to require witnesses to attend, the Secretary of State would take the necessary steps to ensure this happened.

Andrew Lansley, the Shadow Health Secretary, said that the inquiry would not go far enough. “This independent inquiry could play a part in renewing public confidence but not to the same extent as a public inquiry,” he said. “While I welcome the acknowledgement that individual cases have not been given a sufficient hearing, other critical issues have been sidelined. The terms of reference neither scrutinise the role of the Department of Health nor the impact of the Government’s policies.”

Last week Antony Sumara was appointed as chief executive of Mid Staffordshire NHS Foundation Trust, while Sir Stephen Moss was appointed as chairman. Former chief executive Martin Yeates resigned in March, along with the chairman, Toni Brisby, before the damning report was published. [They should both be prosecuted for murder]

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Obama to hit airwaves as health care plan wanes

President Obama will take to the bully pulpit tonight as his signature ambition to remake the health care system reaches a tipping point on Capitol Hill, his poll numbers are slipping, and the health care debate moves into open-throttle political warfare.

A scathing assessment of the House legislation by the Congressional Budget Office has fueled public skepticism and a rebellion among conservative Democrats. The reports pronounced the legislation, produced last week by Speaker Nancy Pelosi, D-San Francisco, and three liberal committee chairmen, to be short on reform and likely to make things worse.

A flurry of negotiations consumed both ends of Pennsylvania Avenue on Tuesday. Obama met with renegade House Democrats while negotiations continued in the pivotal Senate Finance Committee, where a handful of moderate Republicans remain at the table.

Pelosi stuck with her drive toward a full vote in the House next week, brushing aside the deep divisions among her troops. "We're right on course to take up the bill before the break," Pelosi said. "That is our hope. That is our plan."

The Mayo Clinic, which Obama has hailed as an innovative delivery model, welcomed new discussions of an independent Medicare commission focused on reining in cost inflation. House majority leader Steny Hoyer, D-Md., indicated that Democratic leaders are open to other ways to raise revenue besides a 5.4 percent surtax on high-income earners that opponents have slammed as a hit on small business.

Hoyer suggested next week's timetable may slip, too. "If we can get to consensus, we're going to move," Hoyer said. "If we can't get to consensus, we're going to continue to work on creating consensus."

Energized Republicans, calling health care Obama's "Waterloo," are unabashedly maneuvering to send what they call "Obamacare" to the doom that "Hillarycare" met in 1993, followed in 1994 by landslide GOP victories that toppled Democratic House and Senate majorities.

Drawing parallels with the disappointments of the $787 billion stimulus package, Republicans are seeking to brand Obama as a tax-and-spend liberal. Conservative publisher William Kristol reprised his fatal attacks on the Clinton plan, urging Republicans to "go for the kill" against Obama's efforts.

Obama stepped into the Rose Garden to blast the tactics as "a familiar Washington script" by opponents who "would rather score political points than offer relief to Americans who've seen premiums double and costs grow three times faster than wages. They would maintain a system that works for the insurance and the drug companies, while becoming increasingly unaffordable for families and for businesses."

Seeking to avoid former President Bill Clinton's mistakes, when then-first lady Hillary Rodham Clinton spent critical early months of that administration devising a complicated health overhaul behind closed doors only to see congressional Democrats reject it, Obama has left the negotiations to Capitol Hill, much as he did with the stimulus package.

Pelosi and Democratic chairmen spurned many administration recommendations to contain costs and raise revenue.

Now the White House and Democratic leaders are scrambling to address the concerns of conservative "Blue Dog" Democrats from swing districts that gave Democrats their majority. The concerns include budget deficits, low Medicare reimbursement rates to rural physicians and especially soaring health care costs - a concern the White House has made its reason for reform.

Obama's national address arrives as a series of polls this week show waning public confidence in the administration's health care reform efforts, especially among independents. A USA Today/Gallup poll Tuesday, mirroring Monday's Washington Post/ABC News poll, showed half the nation disapproved of Obama's handling of health care.

It is becoming increasingly unlikely that the Senate could complete committee action before Congress leaves for its August recess. The White House fears that postponing action to the fall will only allow the opposition to gather strength.

Sen. Kent Conrad, a moderate North Dakota Democrat and key player on the Senate Finance Committee, downplayed the rush. "We've got plenty of time," Conrad said. "The critical test is: Will it be right? Will it stand the test of history?"

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Mayo Clinic calls House plan bad medicine

A world-renowned clinic that President Obama held up as an example of good medicine said Monday that the American people would be "losers" under the House's health care proposal, joining the growing chorus of critics the Obama administration is trying to fend off as the debate intensifies from Capitol Hill to Main Street.

Minnesota's not-for-profit Mayo Clinic, which Mr. Obama has repeatedly hailed as offering top quality care at affordable costs, blasted the House Democrats' version of the health care plan as lawmakers continue to grapple with several bills from each chamber and multiple committees.

The Mayo Clinic said there are some positive elements of the bill, but overall "the proposed legislation misses the opportunity to help create higher quality, more affordable health care for patients."

"In fact, it will do the opposite," clinic officials said, because the proposals aren't [R]patient-focused or results-oriented. "The real losers will be the citizens of the United States."

All day, Republicans took aim at Mr. Obama's weak spot as surveys showed that his poll numbers were slipping on the issue. Republican National Committee Chairman Michael S. Steele charged that the president's plan amounts to a "reckless experiment," dubbing it [JUMP]"socialism."

"He's conducting a dangerous experiment with our health care," Mr. Steele said at the National Press Club as the RNC started an ad campaign, which will run in Arkansas, Nevada and North Dakota using similar language.

In the Senate, Sen. Charles E. Grassley, the Iowa Republican considered key to grabbing some bipartisan support, warned that the House call to raise taxes on wealthier citizens and, therefore, some small businesses to fund the $1 trillion overhaul is a non-starter.

House Speaker Nancy Pelosi, California Democrat, is floating an idea that could make proposed tax increases more palatable to the more fiscally conservative members of her party. She would like to limit income-tax increases to couples making more than $1 million a year and individuals making more than $500,000, Pelosi spokesman Brendan Daly said Monday. The bill passed by the House Ways and Means Committee last week would increase taxes on couples making as little as $350,000 a year and individuals annually making as little as $280,000.

Mr. Obama is going all out to keep the national conversation focused on the need for reform and the political forces at play. He hit back at Sen. Jim DeMint, South Carolina Republican, for suggesting that health care should be the president's "Waterloo."

Without naming Mr. DeMint, Mr. Obama offered the Republican's quote in a brief statement after a visit with health care providers at the Children's National Medical Center in Washington.

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Repealing Erisa

If you like your health plan, you won't be able to keep it

One by one, President Obama’s health-care promises are being exposed by the details of the actual legislation: Costs will explode, not fall; taxes will have to soar to pay for it; and now we are learning that you won’t be able to “keep your health-care plan” either.

The reality is that the House health bill, which the Administration praised to the rafters, will force drastic changes in almost all insurance coverage, including the employer plans that currently work best. About 177 million people—or 62% of those under age 65—get insurance today through their jobs, and while rising costs are a problem, according to every survey most employees are happy with the coverage. A major reason for this relative success is a 1974 federal law known by the acronym Erisa, or the Employee Retirement Income Security Act.

Erisa allows employers that self-insure—that is, those large enough to build their own risk pools and pay benefits directly—to offer uniform plans across state lines. This lets thousands of businesses avoid, for the most part, the costly federal and state regulations on covered treatments, pricing, rate setting and so on. It also gives them flexibility to design insurance to recruit and retain workers in a competitive labor market. Roughly 75% of employer-based coverage is governed by Erisa’s “freedom of purchase” rules.

Goodbye to all that. The House bill says that after a five-year grace period all Erisa insurance offerings will have to win government approval—both by the Department of Labor and a new “health choices commissioner” who will set federal standards for what is an acceptable health plan. This commissar—er, commissioner—can fine employers that don’t comply and even has “suspension of enrollment” powers for plans that he or she has vetoed, until “satisfied that the basis for such determination has been corrected and is not likely to recur.”

In other words, the insurance coverage of 132 million people—the product of enormously complex business and health-care decisions—will now be subject to bureaucratic nanomanagement. If employers don’t meet some still-to-be-defined minimum package, they’ll have to renegotiate thousands of contracts nationwide to Washington’s specifications. The political incentives will of course demand an ever-more generous “minimum” benefit and less cost-sharing, much as many states have driven up prices in the individual insurance market with mandates. Erisa’s pluralistic structure will gradually constrict toward a single national standard.

Yet a computer programming firm, say, and a grocery store chain have very different insurance needs, and in any case may not be able to afford the same kind and level of benefits. Innovation in insurance products will also be subject to political tampering. Likely casualties include the wellness initiatives that give workers financial incentives to take more responsibility for their own health, such as Safeway’s. Some politicians will claim that’s unfair. High-deductible plans with health savings accounts are also out of political favor, therefore certain to go overboard. If you have one of those and like it, too bad.

The new Erisa regime will be especially difficult to meet for businesses that operate with very slim profit margins or have large numbers of part-time or seasonal workers. They may simply “cash out” and surrender 8% of their payroll under the employer-mandate tax. A new analysis by the Lewin Group, prepared for the Heritage Foundation, finds that some 88.1 million people will be shifted out of private employer health insurance under the House bill. If those people preferred their prior plan, well, too bad again.

The largest employers—though not all—may clear the minimum bar, at least at first. But in addition to the “health choices” administrative burden, the cost of labor will rise because the House guts another key section of Erisa. Currently, lawsuits about employee benefits are barred under the law, allowing large employers to avoid the state tort lotteries in disputes over coverage. No longer. As a gratuity to the trial bar, Democrats will now subject businesses to these liabilities in the name of health “reform.”

So when Mr. Obama says that “If you like your health-care plan, you’ll be able to keep your health-care plan, period. No one will take it away, no matter what,” he’s wrong. Period. What he’s not telling the American people is that the government will so dramatically change the rules of the insurance market that employers will find it impossible to maintain their current coverage, and many will drop it altogether. The more we inspect the House bill, the more it looks to be one of the worst pieces of legislation ever introduced in Congress.

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The fatal conceit of health care reformers

It’s easy to get distracted by the details and crushing cost estimates of “health-care reform” while losing sight of the key question: Can a handful of congressmen, most of whom probably have never even run a small business, design an entire market for medical services and insurance?

A few moments’ thought should be enough to see is the answer. Markets are unbelievably complex, and the details are beyond the grasp any individual. They consist of hundreds of millions of people making countless judgment calls, tradeoffs, and transactions with respect to a huge array of services and products. Each person makes these choices within his personal situation, which no one can know as well as that particular person can. Providers of medical services, insurance, and products undertake those activities after calculating that such work is their best opportunity for income and other forms of satisfaction.

Given this complexity, only someone lusting for power or incredibly conceited would presume to design a market. An appalling ignorance of economics is also a prerequisite for such a conceit.

As a way to coordinate supply and demand, economize resources, and create wealth, markets are simply unmatched. They do so well precisely because they use the critical knowledge scattered among all the participants. This is one reason central planning never works. No planning board could possibly know what everyone put together knows. Individuals contribute their partial knowledge to the market process through their decisions about what to buy, how much to buy, and what not to buy. Those decisions, based on subjective often unarticulated information, send signals through the price system, guiding entrepreneurs who buy resources and turn them into usable products and services according to consumer demand.

The process constantly rewards those who serve consumers well and penalizes those who don’t. That is the economic function of profit and loss.

When politicians arrogantly attempt to design a market — specifying services, setting terms, controlling prices — they undermine precisely those features that make markets perform effectively. Planning a market is a contradiction in terms. When it’s the medical market that’s being designed, the politicians are playing with people’s lives. The philosopher and economist F.A. Hayek called the belief that institutions such as markets can be consciously planned “the fatal conceit.” In the case of the medical market, the term is highly appropriate because those who vote to overhaul the medical industry rather than let the market work spontaneously will be responsible for the death and suffering of a great many people.

But, the advocates of “reform” say, people are dying and otherwise suffering now because of the deficiencies of today’s medical system. That is no doubt true, but it is not the free market that is doing it. There is no free market in medical care. On the supply side government controls the production of medical services and insurance through licensing and comprehensive regulation. On the demand side, more than 80 cents of every dollar spent on care is paid for by government — Medicare and Medicaid — or employer-based insurance, which most people neither choose nor pay for directly. The upshot is that most people’s medical care, even routine services, seems to be paid for by someone else. As a result, they do not act like cost-conscious consumers, which is key to efficient markets. (Unlike other medical services, the price of elective services not covered by insurance, such as cosmetic surgery, has been falling.)

In contrast, people in a free market would typically buy high-deductible catastrophic insurance to protect themselves financially in case of serious illness, while paying for cheaper routine services out of savings. The analogy with homeowner’s insurance is obvious.

Competition and innovation, unmolested by bureaucrats, would bring down the price of medicines and medical devices, as they have brought down the price of cell phones and computers.

What about low-income people? This question dissolves when one understands that it’s government that inflates prices by stifling competition and stimulating demand. In a free market and an ever more prosperous and generous society, no one need go without medical care. If the egotistical medical czars on Capitol Hill get their way, lots of people will go without. I predict the politicians won’t be among them.

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