Looking beyond collegial academic debate toward the actual chaos enveloping policy issues in Washington, three top health economists took the stage at LDI’s 50th Anniversary Symposium to discuss how best to proceed. But members of that “Future of Health Care” panel pointed out more quandaries than answers.

Former Centers for Medicare and Medicaid Services (CMS) chief Andy Slavitt, MBA, noted that middle class people who are above the 400% of poverty income line are being priced out of the market.

I’m not optimistic about saying we can find some limp-along equilibrium to take us forward.

Andy Slavitt

“The government helps most people buy their health care,” he said. “If they’re veterans or in Medicaid or Medicare, or are employed and getting a nice tax exclusion, or are under the 400% of poverty line, they get a break. But if they’re over 400%, they’re in a population that isn’t protected; a population that pays actual health care costs plus 15% markup. So, you end up with a very politically isolated, important group of people who are increasingly angry and upset and demanding that something be done.”

“I’m not optimistic about saying we can find some limp-along equilibrium to take us forward,” Slavitt said. “I think we end up with a middle class population that is quite challenging.”

Former White House health care advisor and current University of Pennsylvania Vice Provost Ezekiel Emanuel, MD, PhD, pointed out that the big concern of everyone involved in the national debate is affordability. 

“Whether you’ve got private insurance or Medicare or are part of the above-400% people who are being price out of the market, the issue of affordability is a place where there is some very solid left/right overlap where you could convince the middle class that we can do something about it,” Emanuel said.

The issue of affordability is a place where there is some very solid left/right overlap where you could convince the middle class that we can do something about it.

Ezekiel Emanuel

Drug prices
“You have a President who really liks to regulate drug prices; he doesn’t know how he really wants to do it but the vast majority of people in the country would love to see that,” Emanuel continued. “You’ve got some other big pricing issues and some good levers that could pretty reliably bring down some of those prices. It befuddles me that (Congress and the White House) haven’t embraced it because the affordability issue has so much broader appeal. It confuses me because that path seems so clear.”

Wharton professor and national renowned health economist Mark Pauly, PhD, said that one of the land mines on Emanuel’s proposed path is “the substantial coterie of ideologues in the Republican Party who, as soon as you say, ‘price fixing,’ will go ballistic.” Pauly did, however, note that a price fixing approach had ultimately helped control costs in Medicare.

Cost of elections
Slavitt said he could agree with Emanuel and Pauly about such a path “if we had a hundred academics and economists in the Senate. But we have a hundred politicians. The real issue with drug costs has nothing to do with ideology. It costs eight or nine million dollars to run a competitive House race in a district and a similar amount for a Senate race. Nobody can raise that locally. Everybody needs that money to come from a party leadership that has a couple of important places where it gets money. Pharma has a $485 million annual lobbying budget. That’s their simplest path.”