Review: 'The Simple Life'

DATE December 2, 2003 ACCOUNT NUMBER N/A
TIME 12:00 Noon-1:00 PM AUDIENCE N/A
NETWORK NPR
PROGRAM Fresh Air

Interview: Chris Butler discusses the health care industry's
viewpoint on rising costs and changes in policy
TERRY GROSS, host:

This is FRESH AIR. I'm Terry Gross.

Many Americans lucky enough to have health insurance are paying a lot more
than they used to. This is the third consecutive year that health care
premiums for families in employer-sponsored plans rose at double-digit rates.
In addition to paying more for your insurance premium, you may also be paying
more for your drug co-pays and your doctors' visits. A little later we're
going to talk about these changes in health insurance with Art Caplan, a
medical ethicist, and Sherry Glied, a medical economist.

But, first, we're going to talk with Chris Butler, the chief marketing officer
of Independence Blue Cross, which is the Blue Cross system that covers
southeastern Pennsylvania. They just announced a change effective in January
that will dramatically change the costs of insurance for many small companies.
Independence Blue Cross is switching from a community rating system to a
demographic rating system. That means that instead of all members of small
employer groups being treated as one population or community and their health
needs averaged out among all of the members of that community, each company
will be billed according to the demographics of its own employees. For
example, a company with older employees will pay more than a company with a
younger staff. Butler says Independence Blue Cross is the last major insurer
in Pennsylvania to move to this rating system. I asked him to explain who
pays more with the demographic rating system.

Mr. CHRIS BUTLER (Chief Marketing Officer, Independence Blue Cross): Well,
for single individuals, women pay more than men in their early years, and then
somewhere after age 45 that line sort of crosses, and the single males
actually pay more than single females. For families it's, again, slightly
different; it's almost a U-shape curve. Young families pay a little bit more
in the early years. Costs drop down around their mid-30s. And after age 45
for families, the costs begin to accelerate again and then become much more in
later years.

GROSS: How will that affect how small companies are charged for their
employees' health insurance?

Mr. BUTLER: Well, that will depend upon the demographic profile for a
particular employer. And approximately half of our customers will see their
rates slightly decrease from what normal trends would be, and approximately
half will see an increase above what the normal trend would have been.

GROSS: I think you've capped it at 35 percent above or 35 percent below.

Mr. BUTLER: That's correct. It's 35 percent above or below what the normal
increase would have been under the old system.

GROSS: So this means that for a lot of small companies, their insurance rates
are going to go up 35 percent in January. That's a lot.

Mr. BUTLER: Actually, since normal trends run around 12 to 15 percent, some
customers could see their rates increase by as much as 50 percent. And the
converse is true, that a younger group could see their rates actually
decrease.

GROSS: What's kind of surprising here--and I'll ask you to explain it--is
that although Independence Blue Cross in southeastern Pennsylvania has just
adopted this system of demographic rating so that companies will be charged
according to the demographics of their employees, you oppose that system. You
support community rating. So why don't you describe the difference between
the two?

Mr. BUTLER: There are currently two bills pending in the Pennsylvania House
and the Pennsylvania Senate that would ban two insurance practices. The first
would be demographic rating, which is rating of a group according to the age
and sex of the individuals in the group, and also another practice called
medical underwriting. And these practices have existed for a few years in
Pennsylvania and other states. Most of the carriers in our region were still
using flat community rating. And once our major competitor here in the
Philadelphia area began to use demographic rating and medical underwriting, we
felt that we could no longer continue just flat community rating. We started
to see a shift in the age profile of our small group block of business. So we
have reluctantly made the decision to begin using demographic rating in
January.

However, despite that, we still are very strongly opposed to the practice and
continue to lobby very hard for passage of these two bills. And
Pennsylvania's, I think, one of only two states in the country that doesn't
have some type of small-group health reform. And although demographic rating
exists in several other states, it's not typically free-form; there usually
are some controls on the use of demographic rating. However, here in
Pennsylvania, we don't have that yet.

GROSS: All employers now are complaining about how much costs of health care
have been skyrocketing. And that's getting passed on, in many cases, to the
employees, or at least part of it is getting passed on to the employees.
What's your best understanding about why rates at Independence Blue Cross are
going up in the way that they are?

Mr. BUTLER: Well, rates are increasing for customers of Independence Blue
Cross as well as all other health insurance carriers, not only here in
Pennsylvania but also across the country. And there are a lot of things that
are driving the cost of health care up at an escalating rate. One of them,
very simply, is just the age profile of the American population. The baby
boomers are getting older, and they're using much more services than they had
in the past, not only medical services but prescription drugs as well.

There's definitely been an increase in cost just due to technology.
Technology advances are wonderful. The challenge with that, though, is that
these services are expensive, and somehow that has to be funded. A third
issue, I think, is that the form of managed care that worked wonderfully in
the mid-'90s is no longer as effective as it is today. HMOs and PPOs aren't
able to practice the same types of care management that they had years ago.

GROSS: Why not? What's changed?

Mr. BUTLER: Essentially legislation, a lot of precedent set by litigation
and really just, I think, public sentiment and expectations toward health
insurance. So in the mid-'90s we had very rich benefit programs that
attracted individuals into the HMO and PPO programs--$2 office co-pays for
office visits, for example. Now that there are less restrictions on medical
care and access to services, the same rich benefits are actually starting to
transition to benefits where there is greater cost-sharing by the individuals.
So there's a big change there.

The use of prescription drugs has taken off dramatically. Direct-to-consumer
advertising of specific drugs has a direct impact on the use of those drugs.
There have been studies that have clearly demonstrated that an advertising
campaign for a specific medication almost immediately results in a spike in
the sale of those drugs. So all these things together sort of drive health
care.

And here in Pennsylvania we have our own fairly unique factors, including the
medical malpractice crisis. The cost of malpractice insurance for physicians,
particularly surgeons, has just reached astronomical proportions. And doctors
will be very honest and admit that they're practicing defensive medicine, and
that if someone says that they have a headache, they're going to wind up
getting a CAT scan or an MRI. And that absolutely affects the overall cost,
and everyone has to wind up paying a portion of that bill.

GROSS: Now I want to get back to something you were saying earlier, which is
that you feel your company has been forced to change its pricing system and to
do it by a demographic system as opposed to a community system because that's
the direction the other insurance companies have headed in where you operate
in southeastern Pennsylvania. But your company controls 70 percent of the
market in southeastern Pennsylvania, so it's a little confusing why they
should be driving you in a direction as opposed to you setting the agenda.

Mr. BUTLER: Well, first of all, we have a very high market share. However,
if you look at the makeup of that market share, a significant portion of the
individuals that we cover are people who are covered in our public policy
programs, our social mission-type programs. We cover people through the adult
basic program, the CHIP program, our special care program. We're one of the
biggest managed care Medicaid vendors in the state of Pennsylvania. We cover
a lot of seniors through our Medicare supplement policies and our Medicare
risk policies. So a huge portion of the individuals we cover are individuals
that no one else is looking to provide insurance for. The commercial health
insurance that we offer, we have a very significant market share there as
well.

We're just looking to try to preserve the risk profile of that group insurance
pool, and that's why we waited for almost two years before reluctantly
shifting to a demographic rating because we wanted to see how that pool might
change. And we were alarmed to see the number of younger people who were
leaving the risk pool and the number of older people who had been priced out
of coverage at other carriers and were coming over to Independence Blue Cross
as customers.

GROSS: From your vantage point, within the health insurance industry, what
would you think of a single-payer plan run by the government that would cover
everybody in the United States and thereby spreading the risk among the whole
population?

Mr. BUTLER: Well, the idea of a universal health insurance has been around
for quite a while. It seems to come and go, and it seems to get a lot of
attention at times when health insurance costs spike up dramatically. And the
health insurance industry is cyclical, and we do go through cycles where costs
increase at a greater rate at certain periods of time. I think the challenge
with the idea of universal health care is: How would it be funded? You know,
for example, today state governments are struggling to find a way to fund,
Pennsylvania included, the cost of the Medicaid program. The federal
government, despite the recent legislation to expand Medicare, struggles with
ways to fund the Medicare system.

Several countries in Europe and other parts of the world who have had
socialized medicine for years, have looked for ways to try to unwind that.
And, in fact, universal health care in several countries is what's led to tax
rates that are dramatically higher than what we have here in the United
States. So I think it would be good for the government to provide some type of
guideline for minimum coverage and tax incentives to encourage employers and
health and welfare funds to offer that coverage. But for the government to
accept the full cost and responsibility for universal health care is a pretty
significant step. And what typically happens in countries that do that is you
wind up with a shadow system. People quickly become disenchanted with the
amount of time they have to wait for services or who they get to see for
services so this secondary or shadow system pops up around it and people wind
up paying for access to that secondary system. So in the end it doesn't
really accomplish the purpose that it was intended for.

GROSS: Couldn't the rates of national health insurance be answered by
everybody paying a certain amount that might even be a lot less than they're
paying now at their workplace? Because if you add up the amount of money from
your salary that's being deducted because the company's paying for your health
insurance and then add on to it the amount that you're paying for your health
insurance, for a lot of people that's a fairly tidy sum. And if people put
that kind of money toward a national health insurance it could, perhaps, cover
the cost pretty handily.

Mr. BUTLER: Well, health costs are health costs and whether they're funded
through insurance premiums that try to spread that risk across a large pool or
if they're paid directly through tax dollars, those dollars are still there.
And, for example, as a Blue Cross plan, we operate on less than a 2 percent
margin which is--you'd be hard pressed to find your neighborhood grocery store
or the person that you might buy your coffee from in the morning who operates
on a margin like that. And that margin just goes toward building up our
reserves. So there's no pot of dollars here. And the cost of care is what's
driving up health insurance premiums and whether that cost is funded through
insurance or through tax dollars, it's still going to be there.

GROSS: Chris Butler, thank you very much for talking with us.

Mr. BUTLER: Thank you.

GROSS: Chris Butler is the chief marketing officer of Independence Blue Cross
in Southeastern Pennsylvania. Coming up, we talk about the rising cost of
health insurance with a medical ethicist and an economist. This is FRESH AIR.

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

Interview: Art Caplan and Sherry Glied discuss health insurance
TERRY GROSS, host:

We're going to continue our discussion about health insurance. I have two
guests. Art Caplan is the chair of the Medical Ethics Department at the
University of Pennsylvania. Sherry Glied is the chair of the Department of
Health Policy and Management at Columbia University's School of Public Health.

We just heard from Chris Butler of Independence Blue Cross in Pennsylvania,
that although Blue Cross in Southeastern Pennsylvania supports a community
rating system, they feel compelled to switch to a demographic rating system so
that other companies don't cherry pick the healthy young consumers. Is that a
trend that we're seeing nationally?

Mr. ART CAPLAN (Chairman, Medical Ethics Department, University of
Pennsylvania): Absolutely. Even in the new Medicare bill, it's pretty clear
that the incentives are there for large for-profit companies to hunt down the
healthiest of the elderly, sell them insurance and leave the sick or the
chronically ill to public programs. If you can run your health maintenance
organization by avoiding the sick, or at least those at high risk of illness,
you're going to make a lot more money.

GROSS: Are either of you concerned that this is going to end up in employment
discrimination, that younger, healthier people will be hired more quickly than
older people or people with medical problems just to save money on the
benefits package?

Ms. SHERRY GLIED (Chair, Department of Health Policy and Management, Columbia
University): We're not seeing that very much to date. There's really been a
concern about that for a long time, but there's actually relatively little
evidence of it and I think in some ways that's surprising. There certainly is
an incentive for employers to do that. We just haven't seen them do it very
much to date.

Mr. CAPLAN: What bothers me about this is I think that it hasn't really been
worthwhile to try and weed out people aggressively in the employment setting
to try and discourage them from having a job at a particular company because
they're more likely to be sick. But if you put in the mix this explosion of
new information from genetic testing and you start to be able to say, `he's
likely to get diabetes; she's likely to be depressed,' there, I think you
could finally get, if you will, enough information going so that companies
would start to say, `well, then, we're not going to hire X, Y and Z because
they're going to cost us too much.'

GROSS: One of the trends in health insurance now is as costs are going up,
companies are cutting back on their medical benefit packages and are offering
less good packages and they're also charging their employees a greater
percentage of the cost. So a lot of employees are understandably really
angry, both with their companies and with the medical insurers that are
pricing more. From your points of view, I'm wondering if this is just a kind
of, like, fact of life that you think employees have to deal with because, you
know, expenses are going up and, you know, somebody's got to pay for it. Or
whether you think that, you know, something needs to be changed in the
equation?

Ms. GLIED: I think it probably is, essentially a fact of life. I mean, I
think the rising cost of health care has to be paid by somebody and it's going
to be split in some ways between employers and employees in terms of who
actually sees the cost in the bottom line. But in the end I think economists
pretty much agree that employees wind up paying the full bill one way or
another. I think the thing that's a little worrisome is that as the employee
costs go up, there's kind of more opportunity for people in the workplace to
drop out of coverage, more potential for that to happen, and I think that's
kind of a dangerous trend.

Mr. CAPLAN: Well, I think the little businesses are getting overwhelmed.
There's no doubt that somebody's got to pay the freight. And so that's going
to fall on the employer's plate; that's how we do health insurance in the
United States for a lot of people. And if the costs keep going up, and they
do, some of the small businesses just say, `we can't play in this system.' So
they begin to pull the benefit back completely; others start to offer some
pretty scanty packages of care. Where I think this goes, though, is it makes
us ask a key ethical question and that is if we're going to saddle business
with the costs of health care, is this the right way to do this? And I'm
starting to think that isn't the right way to do this. No other country in
the world seems to make health care conditional on employment. I mean...

Ms. GLIED: No, but in Germany, for example, most of health insurance still
runs through jobs. And there are actually quite a number of other companies
where health insurance is pretty closely tied to employment.

Mr. CAPLAN: But they're still even taxing those who are employed for the
unemployed, so to speak. There's nobody running around Germany or Holland or
any of those countries, any of the modern developed countries of the world,
including, I might add, South Africa, who falls out of the system when they
lose their job.

Ms. GLIED: Absolutely, I agree, that's a fact that's something that's...

Mr. CAPLAN: That's something that we just haven't fixed. We have to figure
out a better financing scheme then saying, `Well, no matter what size the
business, if you have three employees or have 3,000 employees, you've got to
pick up the freight.' The way costs are exploding, it just doesn't make any
sense to go that way unless we can somehow share out the costs in a more
systematic way among all businesses.

GROSS: Well, you know, health insurance is now called a benefit. It is a
benefit if you work. Sherry G1ied, do you think that health insurance should
be a right or a benefit of working?

Ms. GLIED: I'm not very comfortable with the language of rights just because
I'm an economist and I'm not really sure exactly what those mean in practical
terms. I do think that everybody in our country ought to have some form of
health insurance. I don't think that's completely antithetical to it being a
benefit of working for those people who are working and can get it in that
way, but I do think everybody else ought to have a means of getting it as
well. And the public system is going to have to step in for many of those
people.

Mr. CAPLAN: It's the case that you can't drive around on the American
highways without automobile insurance. And while there's certainly people out
there who don't buy it, the rest of us pay a kind of additional premium to
cover them. So we have this situation where our automobiles are in better
shape than us. It seems to me that health care is a right. Why is it a
right? Well, it's hard to generate it from an economic point of view because
in some sense you're saying, `Is it worth it or do the consequences matter?'

From my point of view, health care ought to be a right for two reasons. If we
are going to guarantee equality of opportunity to every American, then health
is a key part of that equal opportunity. You have to have it in order to
function in a market-based capitalist society. The other reason is it's a
sign of communal solidarity. We care about one another. We're not going to
let our kids who are mentally ill or our elderly just flounder around even if
they can't, so to speak, earn it.

So it means to me society has a stake here in guaranteeing access to a minimal
package of health care. The way to do it then becomes the fight. But we
ought to commit, once and for all, I think, philosophically to saying, `yup,
yup, it's a right and everybody ought to have it.' Then we can at least sit
down at the bargaining table and say, `if your plan doesn't cover everybody,
not a good enough plan.'

GROSS: Art Caplan is the chair of the Medical Ethics Department at the
University of Pennsylvania. Sherry Glied is the chair of the Department of
Health Policy and Management at Columbia's School of Public Health. They'll
be back in the second half of the show. I'm Terry Gross and this is FRESH
AIR.

(Announcements)

GROSS: Coming up, more on health insurance with Art Caplan and Sherry Glied,
and TV critic David Bianculli reviews the new Fox reality series "A Simple
Life," which follows heiress and all-around party girl Paris Hilton as she
relocates to rural Arkansas.

(Soundbite of music)

GROSS: This is FRESH AIR. I'm Terry Gross.

We're talking about health insurance, the rising costs for the people who have
it and the growing number of the people who are uninsured. My guests are Art
Caplan, chair of the Medical Ethics Department at the University of
Pennsylvania, and Sherry Glied, chair of the Department of Health Policy and
Management at Columbia University's School of Public Health.

Now, Art Caplan, you seem to be interested in moving more in the direction of
a national health insurance, a universal health insurance in the United
States. Is there a model that you could look at internationally that you
could say, `This is something we should seriously be considering'?

Mr. CAPLAN: Well, I'm a fan of universal access. I'm not a believer, having
lived through the Clinton health care reform, that you're going to do this by
single-payer, government-run insurance, although I have to say, ironically,
one of the systems that seems to work just dandy is the Veterans
Administration's system, which I have to point out is about a third bigger
than the British national health service. The government runs a gigantic,
government-sponsored, health care program: fixes prices, sets limits on what
you can get. And its staunchest defenders are the free marketeers of
Congress, who refuse to make any cuts or limit its budget in any way.

Ms. GLIED: Absolutely.

Mr. CAPLAN: But that being said, it seems to me the goal is don't let
Americans flounder in economic hard times. That's when we start to squawk
about employee-based health insurance, when things are going bad in the
economy. Don't leave people who can't work out in the cold, those who have
these chronic conditions, particularly mental illness and disabilities that
just make it impossible for them to work. So it seems to me the kind of
programs we want to look to are systems like either Canada or systems like
France or Germany or Holland. These are combinations of predominantly
employee-based systems and then taxes that come in.

I think the middle- and upper-class subsidy in health insurance is such a
golden nugget for the haves that they really don't want to give that up. And
that's one of the great, let's say, regressive public policies...

Ms. GLIED: Absolutely.

Mr. CAPLAN: ...they have put in place for a while.

GROSS: Chris Butler of Independence Blue Cross of southeastern Pennsylvania
was saying if you look at some of the national health plans in other
countries, you'll see that shadow systems emerge; that people end up wanting
to get coverage beyond the basics that you're give in that plan. So you have
all these, like, other basically insurance companies that develop, and people
with money buy into those companies, so that they could get quicker service or
better service than the basic government plan will give you. Sherry Glied,
would you agree with that perception?

Ms. GLIED: Well, I think many systems operate very much and very
intentionally on that premise. England does, France does. Germany has a
private health insurance system. So the question: Is that a failing of those
systems, or is it a success of those systems? I think what you might say is,
look, we want to have some basic level of care that everyone's entitled to,
and those people who want to buy out of that, you know, go ahead and let them
do that. We don't even have that basic level of health care for everyone. So
I don't think that it's legitimate to complain that other people have two-tier
systems when we don't even have a one-tier system for people who are really in
need.

GROSS: Art Caplan.

Mr. CAPLAN: Yeah, I think Sherry's on the right track here. It seems to me
we have the same buyout, if you will. We have people these days selling
boutique medicine. So if you pay an extra fee to your doctor, then your
doctor will call you back or make themselves available to you. If you pay
that extra amount, you can get little e-mail messages and communications.
This whole area of boutique medicine is rapidly growing within our private
sector on top of, if you will, the standard benefits. So we've got some of
that.

All that said, the greatest enemy I think of getting universal health care
insurance is arguments about the ceilings of health care. A lot of people
say, `But if the British have buyouts and the French have buyouts, that isn't
fair. Everybody should be in the same boat.' I think the problem is to agree
on what's the minimum. Let's agree on what's in coach. Let's agree on what
we're going to have in the back of the plane. Then we can argue about first
class.

GROSS: Well, Sherry Glied, you're the economist in this discussion. How
would you fund it?

Ms. GLIED: Oh, that's a tough question, but, again, I think one place to
start looking is the way that we now subsidize employee health insurance
benefits, which is really a very unfair, a very regressive system because the
higher your marginal tax rate, the bigger the benefit you get from health
insurance. And the more health insurance you buy, the bigger the subsidy the
government gives you, which is completely ridiculous. It's entirely
backwards, and it ought not to be that way. So that's one place to start
looking.

Another place to start looking is taxes. I think that to believe that you can
provide health insurance to the uninsured without paying anything for it is
another pipe dream that we're just never going to get to. So I think we just
have to accept the fact that it's going to cost some money and just put up and
decide that we're going to pay for it. And I think it can be done
incrementally. I think it can be done by singling out the people who need it
most and putting your money there and then building up over time. In the
expansion in the late 1990s, actually, some states really did take some
important steps in terms of trying to get coverage through the Medicaid
program, which is, in some sense, a basic benefit plan to a lot of people who
didn't have it before. And I think that's the right way to keep going.

GROSS: Art Caplan, how would you fund benefits for everybody?

Mr. CAPLAN: I'd do the tax reform that Sherry's talk about. It seems to me
this middle-class boondoggle that we have, upper-class boondoggle that we
have, ought to be stopped. There's no excuse for subsidizing the rich to get
better health care. It makes no sense at all. And then I would put in a tax.
I would simply say, `On your income tax you're going to pay a certain amount
of money that's going to be used as a pool to cover those who are uninsured,
unemployed or can't work.' I think we've got to get small businesses pooled.
That was one of the ideas in the Clinton health reform, and it still is one
that has some proponents in Congress. And I think they've got to have group
purchasing power together.

Then I'd probably start to put in two other things to help fund health care
access. I think we need some malpractice reform. We're spending and wasting
a lot of money on unnecessary defensive medical practice. I think it's time
to probably put in some caps. I think it's time to probably agree that we're
going to have mandatory arbitration on some of the malpractice things. I
would like to see a no-fault error reporting system put in place, so that we
could weed out bad docs and weed out poor quality care.

Lastly, I'd probably do away with direct-to-consumer advertising. Now I know
this is fighting words because we're talking free speech here and what you can
say on TV and radio about your products. But having big companies hype their
drugs--anybody who's been watching the recent battle over erectile
dysfunction--Viagra, Levitra, Cialis--can't but help thinking, `My goodness,
what is this costing us, and how are they going to drive prices forward for
something that I wouldn't have as a core part of my medical care package?'

GROSS: Sherry, do you agree with that about medical advertising?

Ms. GLIED: I'm not completely persuaded that medical advertising is bad. One
of the things that we've worked on, for example, for many years is to try and
get people to improve the recognition and treatment of depression. And I
think all the evidence suggests that the massive advertising of the
anti-depressant drugs has really raised people's awareness of depression in a
way that, I mean, we might have been able to achieve if we'd put the same
amount of money in public service ads. But no one was going to come up with a
bill for that. Whatever the benefits or costs to direct-to-consumer
advertising, as a fraction of the health care cost puzzle all together, it's
pretty small potatoes. You know, it sort of hits you in the face, but it
doesn't really hit you in the pocketbook.

GROSS: My guests are Sherry Glied, chair of the Department of Health Policy
and Management at Columbia's School of Public Health, and Art Caplan, chair of
the Medical Ethics Department at the University of Pennsylvania. We'll talk
more after a break. This is FRESH AIR.

(Soundbite of music)

GROSS: My guests are Art Caplan, chair of the Medical Ethics Department at
the University of Pennsylvania, and Sherry Glied, chair of the Department of
Health Policy and Management at Columbia's School of Public Health.

You're both advocating some form of taxes to pay for universal health
coverage. Let's be real for a moment. In the climate that we're in now, with
the huge passage of Bush administration tax cuts, what are the odds that taxes
would be adjusted in such a way as to fund a universal health care system?

Mr. CAPLAN: Well, my view is if you can convince Congress and the president
that we're just going to continue to lose money and it's going to cost the
federal government enormous sums of money to pick up the people who fall out
of the private sector, and if you could convince them that they're not giving
away the keys to the kingdom by talking minimal health insurance, that we're
not talking about programs that are just going to bankrupt the country
eventually, overall you'll be--that's a crucial step, by the way, to
malpractice reform as well. You don't have to worry about who's paying the
costs of harm. You've got everybody in the system. If you could convince
them--and I think you can--that this reform would ultimately save a lot of
money and protect public programs, I think you could have it happen.

Is that likely to happen in the discourse we're having now? Well, I have to
say the biggest debate over the past year was a prescription drug benefit for
the elderly. If you were to make up a list of one to 10 problems that I think
confront our health care system, I would have prescription health care benefit
for the elderly as 11, I mean, so it's not on the agenda. There's no
constituency right now for health reform. There's nobody pushing. The most
powerful forces in Washington are not lobbying to get health reform done.
They're lobbying to extend benefits or keep price controls away or not to
restrict free speech in consumer advertising or not to muck around with
medical malpractice and liability. There isn't much of a constituency there.
So will it happen? I wouldn't be betting on it.

GROSS: Sherry Glied, the economist, do you think that there's any chance that
the American people or the American government would support changes in the
tax system to fund universal health coverage?

Ms. GLIED: I want to be optimistic here. I think maybe the way to think about
this is that we're not going to fund universal health coverage, but what we're
going to try and do is expand health coverage to a few more populations. I
mean, we did S-CHIP during the 1990s. We did expand coverage quite a bit for
kids. If we took small steps like that, eventually we'd get to where we want
to go. I don't think we're about to embark on universal health coverage.
We're not about to do a big program that's going to get everybody coverage. I
wish we were, but we're not going to.

GROSS: Art Caplan, I've got to ask you, you said if you were going to rate
medical priorities one to 10, prescription drugs for the elderly would be 11.
Why?

Mr. CAPLAN: Because you look out there and you look at the system, you say,
`We have no long-term care for the elderly, no real programs that still pick
up solid mental health benefits, 40 million uninsured,' and I could go on.
But on that list, extending drug coverage to the elderly--I'm not against it,
but it's just not what this system needs. We've got prices out of control,
too many people still outside the system, too much waste, too much
malpractice, too much hype of the latest and the newest and the best. That's
a system that needs fixing in other places. And just sort of saying, `Well,
here's this new benefit,' but we're not going to watch the cost of these drugs
for the elderly and we're not going to actually do anything about the fact
that the elderly can't get a nursing home, which I think is a huge problem in
this system, or home care or hospice care or that a lot of them can't even
find their way to a hospice in the final days of life, that doesn't seem to me
to make prescription drug benefit tops.

GROSS: Sherry Glied, what's your reaction to that?

Ms. GLIED: I think, again, I agree with Art. I think that what we really see
here is the political force of the elderly and their ability, even in a
Congress that doesn't want to be doling out any more money, to actually take
their share. Somebody I worked with when I worked on health care reform
suggested that instead of doing prescription drugs for the elderly, we just
buy everybody a plane ticket to Florida once a year, and it would come out
cheaper and everybody would be happy. And I think as a matter of public
policy, it might actually not have been a terrible idea. This is a...

Mr. CAPLAN: You mean give them a vacation instead of a pill?

Ms. GLIED: Give them a vacation. Give them a vacation instead of a pill.
You know, one of the problems with this benefit is that it goes to all the
elderly, not just the low-income elderly. I don't think it's unreasonable for
older people to have to pay more for health care than younger people do.
Health care is very important to older people, and they're not one of the
poorest groups in our society anymore. I don't really see this as one of the
most important places for us to have put public dollars right now.

GROSS: Well, I think you've both taken a very unpopular stand on this issue.

(Soundbite of laughter)

Mr. CAPLAN: Send those cards directly to Sherry.

GROSS: That's right.

Ms. GLIED: Get those letters--yeah. But, you know, one of the things that I
think you really see in this debate is the difference between a group like the
elderly, who can coalesce around an issue that's important to them, and the
group of people whom we refer to as the uninsured, as if they were as well a
monolithic group of people but, in fact, are an ever-changing group of people
with a lot of other priorities on their mind. And I think one of the reasons
that we don't see much being done for people who are uninsured is that people
who are uninsured themselves are not going to be the ones out there marching
on Capitol Hill trying to get legislation passed to help them. So, you know,
they're an inherently politically weak group, especially because they're
ever-changing; it's not the same people from one day to the next. It's really
going to take an effort of generosity, not just of self-interest, to get
coverage for the uninsured.

GROSS: If you're just joining us, we're talking about health insurance. I
have two guests. Art Caplan is the chair of the Medical Ethics Department at
the University of Pennsylvania. Sherry Glied is chair of the Department of
Health Policy and Management at Columbia's School of Public Health.

Sherry Glied, what are some of the other reasons why you think health care
costs have been skyrocketing?

Ms. GLIED: Well, one of the things that happened is that in the late 1990s we
decided that managed care was not really the thing that we wanted as a
society. I guess the labor market was booming, people were doing very well;
they didn't like the restraints on which doctors they could see. People were
getting very fed up with the limitations of utilization review. Doctors were
really annoyed. And what we've seen since that time has been a series of
hospital mergers, increased negotiating clout by physicians and the
dissolution of these tightly managed health care networks that were, really,
fairly successful in containing costs by negotiating with providers.

I think Art is right, the way to get costs down is through using consumer
power. And we were very effective in doing that in the provider market in the
1990s. We were not tremendously effective in doing it in the drug market.
But we've sort of given up even in the provider market, I think, since then.

GROSS: Art Caplan, as a bioethicist, one of the things you've been studying
over the years is rationing--you know, the ethics of rationing and the
economics of rationing. How do you think the American position on rationing
has changed in the past decade?

Mr. CAPLAN: You know, Terry, I don't really think it's changed all that much.
I think that what we do is we do allow money to play a key role in allocating
resources. So if it's lifesaving resources, like transplants, you do see that
people get priority who have insurance, who are able to pay. If you look at
categories of care, again, money seems to be a driver in terms of who has
access. So Americans use money as a core rationing scheme.

The other thing we're in love with, and this is kind of interesting because I
think it's culturally different from most parts of the world, is we like to
rescue people. We don't really like to prevent disease, and we're not all
that hepped up in general about maintaining people at good levels of
functioning who have chronic illness. But if you're at death's door, boy, do
we love to get in there and do something about that.

So access to the emergency room--almost still an open-door policy, regardless
of the ability to play. Plenty of ICUs--you couldn't have a heart attack in
America without getting to a very wonderful acute-care facility in five
minutes. I mean, in the middle of nowhere you can still get that. We like
the moral power of rescue, so we're a culture that loves if you're pulling the
baby out of the well. Capping the wells? Not so enthusiastic. Dragging the
babies out who fall in, yeah, we like to do that.

GROSS: Art Caplan, if you could be like the czar of the medical system and
make a couple of reforms to change the pricing system, to try to bring down
costs, what would you do?

Mr. CAPLAN: Yeah, I'm thinking if I'm the czar of the medical system, costs
are coming down because people are leaving the country at an enormous rate.

(Soundbite of laughter)

Mr. CAPLAN: But I think I'd do a couple of things. First, consumers, you
know, despite all the yacking about this, still don't have good information on
health care. This happens to me all the time: People call up and say, `I've
got a friend who needs procedure X or procedure Y. Could you recommend
someone?' Well, if we're going to have a market-based medical system, then we
need to have information on, `How well does my doctor do with people like me?
How well do hospitals perform?' And despite all the yammering about this over
the years, we still don't have it. We don't have basic consumer information,
and we continue to let the health care system bamboozle us by saying, `Well,
trust us.' My answer to that is, `More information about outcomes in the
hands of consumers.' I think that would lead costs to come down.

Put everybody into the system. Get the 40 million in. Stop having everybody
run away from them and try to spend money to avoid them. Put them all in,
you'll help malpractice, you'll be able also to stop delivering care to these
people at the emergency room door where it's completely inefficient and
expensive. If I'm not going to be able to restrict medical advertising as
it's now booming, I'd at least put some tough strictures on it in terms of
content and say, `You'd better be focused on information and education, not
hyping things all day long.' So I'd like to see more Federal Trade Commission
oversight of what's going over the airwaves.

And I guess the other step I'd take to really try and drive prices down is
build purchasing power into those small businesses. Let them form
collectives. Give them opportunities to work together to buy cheaper health
care. I think small business and part-time employees--we've got to find
mechanisms to get them purchasing power again. So those are some steps.

GROSS: Sherry Glied, if there was any one or two things that you could do to
change the cost structure of the medical system and the health insurance
system, what would you do?

Ms. GLIED: Picking up off Art's point is not only do we need information
about the quality of care that doctors and hospitals deliver, but now that
we've moved away from these tightly negotiated managed care plans, we also
need information about the prices that they charge. I think one of the
absurdities of our health care system is it's really impossible to know what
it's going to cost to have any sort of procedure or care provided to you.
Even if you go out of network in your health plan, you won't know until you
get the bill what it actually cost. And that makes it impossible to even
think about comparing costs or to use consumer power. So I think that's one
element of it.

But I think the other thing to realize is that the cost of the health care
system is not going to come down. As technology keeps improving, we're going
to be wanting to buy more and more health care, and that's a perfectly
reasonable thing for our society to want to do. What we need to be worrying
about is not trying to bring the cost of health care down because I think
that's ultimately unattainable, but making sure that for individual people who
can't afford it we get health care to them.

Mr. CAPLAN: You know, that's a very important point, and I think it's
something I want to underline in terms of ethics power. I don't believe that
the American people are angry that they spend too much on health care. If
there was a pill that said, `It'd cost you each $100,000, but it'll maintain
you in a healthy state for 10 years, and you'll be vigorous if you swallow
this today at age 50,' I think people'd say, `Gosh, I'd love to spend $100,000
to get that pill.' They don't think they get their money's worth. They know
there's waste, they know there's inefficiency, they know that the system seems
to be charging them inconsistently for services all over the place. They even
know that if they go from hospital to hospital in roughly the same part of the
country, they're going to find prices all over the places, they're going to
find people recommending different things all over the place.

So what we need to do is make sure that we are convinced that we get our
money's worth. If we think we get our money's worth, then morally we'll spend
it. If we think people are just ripping us off and profiteering off of our
interest in having health care, then I think this escalating cost just becomes
a kind of club that we use to beat each other over the heads about in terms of
where we could save money in society.

GROSS: Well, I want to thank you both very much for talking with us.

Mr. CAPLAN: My pleasure.

Ms. GLIED: Thank you, Terry.

Art Caplan chairs the Medical Ethics Department at the University of
Pennsylvania. Sherry Glied chairs the Department of Health Policy and
Management at Columbia University's School of Public Health.

Coming up, TV critic David Bianculli reviews "The Simple Life" starring Paris
Hilton. This is FRESH AIR.

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

Review: "The Simple Life"
TERRY GROSS, host:

Tonight marks the premiere of the new Fox reality series "The Simple Life," in
which two wealthy and pampered young women agree to live on a farm without any
special treatment or resources for a month. The participants are Nicole
Richie, daughter of singer Lionel Richie, and the increasingly infamous hotel
heiress Paris Hilton. TV critic David Bianculli has this review.

DAVID BIANCULLI reporting:

In television timing may not be everything, but it counts for a whole lot.
When the producers of MTV's longtime reality show hit "The Real World" pitched
and filmed "The Simple Life" for Fox, it was intended and scheduled as a
toss-away summer diversion. It was supposed to premiere in August and be gone
by mid-September, before the start of the fall TV season and, on Fox,
post-season baseball. But when "The Simple Life" was screened for TV critics
in July, the reaction was so surprisingly positive that the network decided
almost instantly to hold the series back for a later, more high-profile
premiere. That was smart because "The Simple Life" is a very entertaining
show.

The rest of what has happened since, though, is pure dumb luck. Some of the
luck is really dumb, but it could end up making "The Simple Life" the season's
first major, new hit. The initial stroke of luck for "The Simple Life" was
the premiere later that summer of MTV's "Newlyweds," a reality series that
chronicled the daily life of celebrity married singers Jessica Simpson and
Nick Lachey. What it also did was expose Simpson's lack of intelligence to
such a degree that she's become a national punch line. But she's also become
a lot more famous, and that's a Faustian bargain she seems only too willing to
embrace.

And then, of course, there's the recently discovered and Internet disseminated
private sex video starring Paris Hilton and her paramour of the time. Now
with that new scandal still fresh and with Hilton's best friend and "Simple
Life" co-star Nicole Richie making the TV rounds sticking up for her old
sleep-over pal Michael Jackson, Fox couldn't ask for more free press or for
bigger buzz surrounding tonight's launch. And, for once, the curious who tune
in won't be disappointed.

"The Simple Life" knows exactly what it's doing from the very start. First,
it shows Paris and Nicole in their luxurious natural habitat. Then, before
you can say `green acres,' they're off on a private jet and deposited in
Altus, Arkansas; population, 817. Finally, they make it to the farm owned by
the Leding family, where three generations welcome them with open arms but
with raised eyebrows. Paris and Nicole say at the start of the show that they
agreed to do this to prove to their friends that they could. In the first two
episodes previewed, what they really proved is how spoiled, clueless and rude
they are.

The first night they sit down to dinner with the family, a dinner they refuse
to pitch in and help with because the idea of helping to pluck chickens was so
distasteful. There's a lot of laughter at the table, but if you listen
closely, there's also a lot of insults and one amazingly stupid question.

(Soundbite of "The Simple Life")

Unidentified Man: Have you girls ever been to any of this part of the country
before?

Unidentified Woman #1: I only travel, like, to Europe or LA or New York.

Unidentified Woman #2: Oh, really?

Unidentified Woman #1: Yeah.

Unidentified Woman #2: I just can't imagine living in a big city.

Unidentified Woman #1: I could never imagine living here.

Unidentified Woman #3: I couldn't either.

Unidentified Woman #1: I would die.

Unidentified Woman #2: Would you really?

(Soundbite of laughter)

Ms. PARIS HILTON: Now do you guys hang out at Wal-Mart?

(Soundbite of laughter)

Unidentified Woman #4: What?

Ms. HILTON: I've always heard that people hang out at Wal-Mart.

Unidentified Woman #4: Why?

Ms. HILTON: I don't know.

Unidentified Woman #5: What is Wal-Mart?

(Soundbite of guitar music and cricket)

BIANCULLI: That may be the dumbest question asked on TV this year since
Jessica Simpson asked, `Is this chicken, what I have, or is this fish?' At
the time she was eating tuna from a Chicken of the Sea can.

At the press conference back in July, Paris Hilton insisted that she knew what
she was asking and knew what a Wal-Mart was and was just playing to the
stereotype of a rich, dumb blonde for fun. I don't buy that for a second, not
when the premiere episode also has her asking such questions as, `What does
generic mean?' and, `What's a well for?'

In the second episode, the Ledings get them a job at a nearby dairy, but the
young ladies act so bratty that you understand, even if they don't, why
they're fired on their first day. Even then, though, their ex-employer has
some kind parting words: `Whatever it is you girls are looking for,' he tells
them, `I hope you find it.' What they may find, as "The Simple Life" runs its
course, is that they don't like the type of attention it brings. But I don't
buy that for a second either. I think the stars of "The Simple Life," however
unflatteringly they're portrayed, will love the TV spotlight and not just for
the next eight weeks. In some ways, I suspect, we'll always have Paris.

GROSS: David Bianculli is TV critic for the New York Daily News.

(Credits)

GROSS: I'm Terry Gross.
Transcripts are created on a rush deadline, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of Fresh Air interviews and reviews are the audio recordings of each segment.