KFF Health News’ ‘What the Health?’
Episode Title: The New Speaker’s (Limited) Record on Health
Episode Number: 320
Published: Oct. 26, 2023

[Editor’s note: This transcript was generated using both transcription software and a human’s light touch. It has been edited for style and clarity.]

Julie Rovner: Hello, and welcome back to “What the Health?” I’m Julie Rovner, chief Washington correspondent for KFF Health News, and I’m joined by some of the best and smartest health reporters in Washington. We’re taping this week on Thursday, Oct. 26, at 10 a.m. As always, news happens fast, and things might have changed by the time you hear this, so here we go.

We are joined today via video conference by Alice Miranda Ollstein of Politico.

Alice Miranda Ollstein: Good morning.

Rovner: And Rachel Cohrs of Stat News.

Rachel Cohrs: Hi, everybody.

Rovner: Later in this episode, we’ll have my interview with Michael Cannon, noted libertarian health expert, about his new book called “Recovery: A Guide to Reforming the U.S. Health Sector.” But first, before we get onto this week’s news, a small correction from last week’s podcast. In talking about just how confusing open enrollment for Medicare is, I misstated the open enrollment dates. It runs this year from Oct. 15 to Dec. 7, not to Dec. 15. See, I said it was confusing.

All right, now to the news. Hey, we got a speaker of the House again! Mike Johnson is in his fourth term from the 4^th District of Louisiana. He’s not strictly a backbencher; he was in the lower levels of House leadership. But I think it’s fair to say that a lot of people, including me, had no idea who he was until this week, other than that he was involved kind of heavily in trying to overturn the 2020 presidential election. And also, as far as I can tell, he’s not been active in health policy in Congress other than opposing abortion. What have you found out about Mike Johnson? Alice, you wrote about him, right?

Ollstein: Yeah, so I wrote about his anti-abortion record, and that’s just one facet. There has been a lot of good pieces this week on his opposition to gay rights and, on a lot of levels, trans rights, etc. But I focused on his anti-abortion record because that’s my beat. And so, yes, I think it’s worth noting that he used to work for the Alliance Defending Freedom, which is the conservative legal powerhouse that was behind the case that overturned Roe v. Wade, and is now spearheading the case trying to restrict abortion pills nationwide. They’re a part of a lot of other anti-abortion legal battles, as well. And, since coming to Congress, he has co-sponsored a lot of anti-abortion legislation, including bans at 15 weeks and six weeks, and none of those have gone anywhere, but that record has anti-abortion groups stating high hopes for his speakership.

But as we know, with such a narrow majority, House Republicans have been hesitant to really take big votes in anti-abortion space this year. And so, it will be interesting to watch how he navigates that.

Rovner: So, Rachel, we know he’s not on any of the major health committees. Has he done or said anything about any other parts of health care other than his Christian conservative lane?

Cohrs: Well, I think he actually has, and he has a more clear, I think, stance on health care reform more generally than a lot of the other candidates we saw because he did lead the Republican Study Committee. I think his term started in 2019, so he actually did sign on to a health care plan.

Rovner: How rare for a Republican.

Cohrs: Yeah, really. We don’t see many of those that are really spelled out. And there’s a whole white paper, it’s still on the internet, but I think it includes some policies that aren’t terribly surprising. It includes scaling back subsidies for ACA [Affordable Care Act] plans, empowering HSAs [health savings accounts], converting Medicaid funding into block grants for states, and also removing some of the ACA’s preexisting condition protections, and creating high-risk pools in states. So, it is substantive ideas about coverage and costs.

Rovner: It’s also Republican health care orthodoxy that goes back like 25 years, at this point.

Cohrs: Exactly, so nothing crazy, but we do have at least sort of a marker of where he’s at a couple of years ago. But again, I think there’s no reason to believe that he would pursue any of that anytime soon. He has a very full plate with a lot of other things.

Rovner: That’s what I was going to say, which is that Nancy Pelosi came to the speakership as one of the most liberal members of the House. That is certainly not the way she ran the speakership because, basically, her job was to find the votes for things and she had to please both the left wing of her party and the right wing of her party, and that’s hard enough for Democrats. It seems to be even harder these days for Republicans. So, no matter what his personal goals are, I guess we’re about to find out if he can actually bring together this unbelievably fractious Republican caucus.

Ollstein: And I just want to note, too, that it’s not just about the struggle to find the votes, which we saw in the very speakership debacle itself, but also, he has spoken about the need to protect their most vulnerable swing district members who are up for reelection next year. These are Republicans who are elected in districts that voted for Biden. And so those people do not want to vote on red-meat, controversial bills. We’re already hearing some issues coming up in appropriations, which is the first major hurdle he has to confront as speaker to avoid a government shutdown in just a few weeks, potentially.

And so not only is it about just getting enough votes to get bills through, but not putting these people in a position where Democrats will run a bunch of ads saying, oh, so-and-so voted for this anti-abortion thing, to try to knock them out.

Rovner: Well, while we are on the subject of abortion, there’s a lot of news there. I want to start with an update to something we talked about last week: the lawsuit in Colorado challenging the state’s new law banning medication abortion “reversals.” I put reversals in quotes. Over the weekend, a federal district court judge ruled that the law is likely unconstitutional and blocked the state from enforcing it. I imagine this is not the last we will hear about this case, right, Alice?

Ollstein: Oh, certainly. So as we discussed before, this is an issue that’s in multiple courts, potentially designed to create some sort of split that could go up to the Supreme Court and require them to weigh in. But this, in addition to the current case pending before the Supreme Court about abortion pill access, it really presents new territory, in terms of how courts could intervene in the practice of medicine.

Rovner: And as we mentioned in California, we have the opposite case going forward with the state suing a string of crisis pregnancy centers for false advertising for suggesting that they could reverse medication abortions, which, of course, is trying to give large doses of progesterone between the taking of the two medications that create a medication abortion. And it’s turned out to be that there is not a lot of scientific evidence suggesting that this is a thing. And when they tried to do a clinical trial, they had to stop it because women were having serious problems.

We also have an update from Ohio, whose November ballot measure we also talked about, and it’s right around the corner. It seems that the governor, who’s also a former senator, Mike DeWine, is going around saying that the constitutional amendment protecting abortion would allow for “partial birth abortions,” a controversial procedure that Congress actually banned in 2003 and that the Supreme Court upheld in 2007, and it’s a law that DeWine worked on when he was in the Senate. Are these scare tactics? Do we think he really believes that this is what this Ohio ballot measure would do?

Ollstein: This is among the greater arguments that are being made in Ohio around this amendment and saying it’s very similar to the arguments that anti-abortion groups and officials made in all of the states that held their own referendums last year. Basically that, should this pass, it’ll just be a complete abortion-palooza, no regulations, no nothing. And that has not panned out in those other states, and it’s especially unlikely to pan out in Ohio, given the makeup of the state legislature and Republicans controlling the state Supreme Court, all these levers of power, the governorship, etc.

And so this is not Michigan, where Democrats won control of the governorship and the Statehouse and are moving, although it remains to be seen how far they move to unwind some abortion restrictions. But that is not likely to happen in Ohio. I think these groups are parsing language in the amendment, itself, and extrapolating from that and saying, oh, this is a code word for this, and this is a code word for that, but it’s not in the text of the amendment, and because of the balance of powers in the state, it’s not likely to pan out that way,

Rovner: Although they do seem worried. Alice and I, we were both on this call the other night about all of the anti-abortion groups together trying to light a fire under their forces over this Ohio ballot measure, noting, of course, that there have been six votes since Roe was overturned in various states and that they have lost all of them. So Ohio will be a big deal in how this goes into next year.

Ollstein: Yeah, absolutely. It’ll be a big deal for Ohio. Of course, we have a six-week ban in that state that has been on hold. It has been blocked in court, but it very well could be unblocked and put back into effect if this amendment doesn’t pass. That’s the most immediate thing. So it’s a big deal for Ohio, but both sides have also made the case that it’s a big deal beyond Ohio. It really shows what kind of strategies and messaging are effective in these redder-purple states. If we can even call Ohio purple, at this point, it’s quite red.

Rovner: It is very red with one Democratic senator, basically.

Ollstein: Exactly, who is up for reelection next year. So that is going to be interesting, as well. He and other of the remaining endangered Democrats in the state are vocally supporting this, and so that should have an influence, as well, on their races.

Rovner: So we got an interesting study this week that found that abortions have actually increased in the year since Roe was overturned, although, not surprisingly, in the states where abortion was banned, where they dropped dramatically. Do we know, obviously, women are going to other states, but one would not have assumed that it would’ve gone up because we’ve talked about all the places where there were not enough slots, basically, for women wanting to terminate pregnancies and for women who were not able to travel. I was a little bit surprised by this. What did you make of it?

Ollstein: So first I want to give some big caveats. A lot of this data is guesswork. They acknowledge that a lot of the providers they reached out to for data just refused to respond, so they had to model it out based on what they were able to get. Also, this does not count any abortions that are happening outside the formal medical system. So people ordering pills from groups like Aid Access or whatnot, delivered to their home. We know that’s happening. We know that’s a very common thing, and so this doesn’t count any of that. But I think even given all these caveats, there’s some interesting things in there.

I think that what really caught my attention is not just that states like California that really moved to expand access massively, the people taking advantage of that are not just people traveling from red states. It is also reaching people who were in those blue states who struggled to access abortion even in those blue states before. And so they mentioned parts of rural California on the call announcing the data, specifically. So I found that interesting, too.

Rovner: So, well acknowledging, obviously, that more women are traveling to get abortions, abortion opponents are stepping up their efforts to make that illegal, too. This week, Lubbock County in Texas became the fourth Texas county to make it illegal to use its local highways to assist someone in traveling out of state for an abortion. On the one hand, even some anti-abortion lawyers doubt that this is constitutional. But on the other hand, a lot of these laws are more intended to chill behavior than to punish it, right, particularly in Texas?

Ollstein: Yes, like a lot of state laws and now municipal laws that are being passed in the post-Roe era, enforcement and the practicality of enforcement is not, necessarily, something that folks are very focused on because the chilling effect is the main goal. And I think this is true for bans on receiving abortion pills by mail. Unless you’re going through everyone’s mail, you wouldn’t really know. And so these travel bans, travel restrictions, as well, there has been a lot of heated rhetoric about, oh, are they going to set up checkpoints and give pregnancy tests to people? No, they’re not. If they were, please message us and tell us so we can report on it, but we haven’t seen that.

And I think the idea is that people are already scared. People are already confused about what’s legal and what’s not. We know that from polling. And so this just adds to that confusion, and if somebody is already unsure of what they’re allowed to do, this could be a further deterrent from them even pursuing the possibility of an abortion.

Rovner: Well, this will obviously continue. Let’s move on to Medicaid for a minute. Six months into the “unwinding,” an estimated 9 million Medicaid recipients have been removed from the rolls, some of whom are no longer eligible, but most of whom might still qualify, but either fell through the cracks or states were unable to locate them. Meanwhile, a new report from the Robert Wood Johnson Foundation finds that if the 10 states that are still holding out from expanding Medicaid under the Affordable Care Act were to go ahead and expand, nearly 2.5 million more low-income adults would be added to the rolls and the uninsurance rate would drop by 25%.

One of those holdout states, Georgia, is trying to expand using a pilot program with work requirements for those who want to enroll. But so far, three months in, only about 1,300 people have enrolled out of an estimated 100,000 that are potentially eligible. Why is this off to such a slow start?

Cohrs: I think the story that you highlighted from The AP gave some reasons about just the paperwork having to be filed. And honestly, having looked at some safety-net programs, it is a lot to pull together if you’re pulling financial records and all of that. So I think there’s also just the bureaucratic issues that we see with these kinds of programs that are designed to keep people out almost. And I think it’ll be an interesting test case as it continues to move forward, whether uptick increases, whether outreach catches up, and whether nonprofit groups, grassroots organizations in the state can help people navigate the process. But certainly, the paperwork burden isn’t to be underestimated here.

Rovner: Alice, you covered when Arkansas tried to implement this for everybody and it did not go well because even the people who were working, the people who were technically able to fulfill the work requirements, had trouble reporting the fact that they were fulfilling the requirements. Do you think that’s going on at the beginning of the process here, in Georgia, whereas in Arkansas, everybody was suddenly required to do it?

Ollstein: Yeah. I think it’s definitely something to watch because, well, first of all, we know from years of data that the people within Medicaid who can work, are already working. The breakdown of those who are not employed, it’s children, it’s the elderly, it’s people with disabilities, it’s people caring for people with disabilities or an elderly relative, and so this is a massive effort that could, maybe, increase the workforce by a very small number of people. And so some of this is ideological about these kinds of benefits and who is deserving and undeserving and different opinions about that. But in terms of economics and cost-saving, we do not expect this to have a big benefit. And so it’s definitely worth watching if people are falling through the cracks, because in Arkansas people didn’t even know about the requirement or they didn’t have the internet access to be able to report their hours. Lots of different ways.

Rovner: And, of course, in Arkansas, people lost their coverage. Here in Georgia, it’s a matter of people not getting the coverage who are potentially eligible. So yeah, I think we will watch to see how this goes.

Well, back here in Washington, the National Institutes of Health appears on the road to having a Senate-confirmed director for the first time in a year and a half, as the Senate Health, Education, Labor and Pensions Committee voted 15 to 6 on Wednesday to elevate National Cancer Institute chief Monica Bertagnolli to the top spot. Interestingly, one of those no votes came from committee chairman Bernie Sanders, which is pretty much unheard of for a committee chair of the same party as the nominating president. Rachel, what is he trying to prove here, and might it threaten her nomination on the Senate floor, or do we think this is a relatively done deal?

Cohrs: With your first question, I think he, for months, delayed even having this hearing, having this confirmation vote because he wanted to use the only lever he has, which is holding up nominations to pressure the Biden administration to take a more hard-line stance at the NIH and include language in contracts with drugmakers to require some sort of fair pricing or ensuring the U.S. gets the best price when the NIH is investing money in various stages of drug development. So I think that has been his goal. And I think the Biden administration, specifically HHS [Department of Health and Human Services], threw him a bone with a covid therapeutic that’s in the works from Regeneron, but it’s not what he was hoping for. And I think he put out a letter criticizing the NIH granting an exclusive license to a company where a former employee of the NIH works who worked on the medication.

And so I think he is just trying to continue to use what leverage he has, but I think the vote — that this week was a very good vote for her because we saw several Republicans join Democrats in passing her through. Again, nominations only have a 50-vote threshold in the Senate, so they don’t need a whole lot of Republicans, and Sanders, I think, was the only Democrat to oppose her in committee. So it looks like smooth sailing for her whenever they can find floor time for her.

Rovner: Yeah, and I should point out that it is a time-honored tradition in the Senate to hold up a nomination for something that’s unrelated to the person who’s being nominated, for a senator to try and get something out of the administration. What’s odd is when it’s a senator of the same party. Usually it’s somebody from the opposite party of the president trying to stall a nomination in order to get something else that they want. So this was very unusual, I must say.

Cohrs: It was, and I will say, too, that given how politicized the NIH has become with unifunction[al] research or there’s a million things that Republicans could have chosen to take an ideological stance on. We saw this with FDA Commissioner Robert Califf’s confirmation, with CMS chief Chiquita Brooks-LaSure; John Cornyn came out of nowhere and was trying to make demands of her. So we just haven’t seen the full extent that we could have seen from the GOP and trying to hold up her nomination or extract something from the Biden administration.

Rovner: Well, it does still have to get through the floor, so there is time, yet, although I agree with you, it doesn’t look like it’s going to be a huge problem.

Well, finally, this week we are launching a new segment that I’m calling “This Week in Health Misinformation.” Our first featured story is from my KFF Health news colleague Liz Szabo, and it’s called “Suzanne Somers’ Legacy Tainted by Celebrity Medical Misinformation.” It turns out that Somers, who died earlier this month, spun her sitcom fame into an entire career pushing questionable medical treatments and forgoing chemotherapy when she was diagnosed with breast cancer. Basically, in the words of one doctor quoted in this story, “She became an influencer on menopause before being an influencer was even a thing.” And lots of people who believed her were probably worse off because of it.

This is obviously something that continues to this day. We see lots of celebrities pushing dubious things. It used to just be those who were rich enough or who worked for a company that was wealthy enough to advertise on TV, even if it was in the middle of the night, but now we have social media, and this kind of misinformation is pretty rampant, right?

Cohrs: It is. I thought Axios actually had an interesting piece this week, as well, about anecdotal reports of doctors where patients are interested in getting off of birth control pills, even with everything that we’re seeing with the overturning of Roe v. Wade. And I think, again, that story you mentioned, the influencer space where people are trying to sell apps, trying to sell alternatives, spreading information about how it affects your hormone levels. And I think patients don’t have a primary care doctor where they can ask some of these questions in an evidence-based place. I think, certainly, people of all ages are getting information from these influencers on social media, and I think that it is a very interesting trend to see how that’s going to play out from doctors’ side.

Like you said, we’ve seen drug companies advertise on TV for a long time trying to influence the care that patients are getting in the office. But I think we’re seeing these other sources start to influence the choices that patients are making. It’s a really interesting trend.

Ollstein: And I think these influencers and purveyors of misinformation, they’re really taking advantage of real frustrations with the formal medical system and how it has cared for women and our needs over time and ignored people’s complaints and dismissed them, and the fact that technology has not advanced on a lot of these fronts for a long time. So I think that leaves an opening for folks to come in and take advantage of that frustration and confusion and offer a solution that may possibly be even worse.

Rovner: All right, well that is this week’s news. Now we will play my interview with my favorite libertarian health policy expert, Michael Cannon, and then we will come back with our extra credits.

I am thrilled to welcome to the podcast Michael Cannon, who’s director of health policy studies at the Cato Institute, the libertarian think tank here, in Washington. He’s the author of a new book about how to fix our broken health care system and one of my favorite people to argue with about health policy. Michael, welcome to “What the Health?’” It’s great to have you here.

Michael Cannon: Great to be here.

Rovner: So we’ll get to the book in a minute, but first, tell us the difference between the libertarian view of health care and the traditional Democratic or Republican view. I think a lot of people don’t understand that.

Cannon: Well, that actually is a good intro to the book, because the book provides a broad overview of health care, but it starts from the very simple principle that you have rights when it comes to your health care, and the most important right you have is the right to make your own health decisions. That’s where libertarians start, and that means that libertarians end up agreeing with Republicans on some things, and Democrats on other things, because neither party really takes that principle and carries it throughout all aspects of the health care debate. So we might end up agreeing with Republicans that states should not expand the Medicaid program, but we end up agreeing with Democrats.

I would say that people end up agreeing with us that women should get to make their own decisions when it comes to contraceptives, and the government should not be requiring women — if you’ve got a willing seller of oral contraceptives and a willing buyer, the government has no business stepping in between them and requiring women to get a permission slip from a government-appointed gatekeeper, what we call a prescription from a doctor, in order to buy oral contraceptives. In 100 other countries around the world, women can purchase oral contraceptives without a permission slip from a government-appointed gatekeeper without a prescription. But in the United States, the government takes away women’s right to do that. And so Democrats uphold that principle that people should give to make their own health decisions in that realm, but not in others.

Rovner: And should there be an FDA? Should there be a government referee to decide what’s safe?

Cannon: So there should be referees and there should be better referees than the one we have, and that’s actually something that I cover in the book. When you give the government the power to decide whether drugs can come onto the market or not and use the criteria of whether they are safe and effective before they can come onto the market, what ends up happening is the government imposes its values on people, its values about what is safe enough and what is effective enough. And while it does keep some unsafe drugs off the market, and that’s good, it saves lives that way. It also keeps a lot of safe and beneficial drugs off of the market in ways that harm people.

Another example of this is, again, contraceptives. Not just how the government is requiring women to get a prescription in order to buy oral contraceptives, but for a long time, the government was prohibiting emergency contraception, then prohibiting it without a prescription, and then prohibiting it unless you were of a certain age, and there was this huge fight. You covered this story.

Rovner: For many years.

Cannon: To get the government out of the way here, but it’s even worse than that. If you look at the original introduction of the oral contraceptive pill in 1960, there were other countries that had approved the pill earlier. And so when the FDA delayed the introduction of that product onto the market, that had a huge impact. Not only did it violate people’s rights, which is really important — it violates the principle of equality when the government does that — but keeping that beneficial product off the market had tremendous costs. The most recent winner of the Nobel Prize in economics, Claudia Goldin, did a lot of research showing that when the pill finally came onto the market, women were able to delay marriage. They were able to delay conception and marriage and invest in education, and we saw huge gains in women’s equality as a result of that. But when the FDA kept that drug off the market, it delayed the cause of women’s equality.

So do we want someone to provide safety and efficacy assurance? Absolutely. And if we left this to people outside of the government, not only would that system be consistent with your right to make your own health decisions, but we would get better safety and efficacy certification. And I talk about one of the ways that would happen in the book using the example of Vioxx. This is a non-steroidal anti-inflammatory drug that the FDA pulled off the market years ago. Most people, when I ask this question, don’t know the answer, but I bet you do, Julie. Do you remember where they got the evidence showing that Vioxx led to adverse cardiac events, that it was killing people?

Rovner: I do not remember.

Cannon: It was Kaiser Permanente. Kaiser Permanente, which has been investing in electronic health records since the 1960s. Once there were questions about whether Vioxx was causing heart attacks, they said, “Well, you know what? We’ve got all these records. We’ve got lots of people who’ve been taking Vioxx. Let’s do a retrospective observational study, trying to control for everything that we can, and we’ll see if there’s an impact.” And they found there was one, and that convinced the FDA that this drug that the FDA had led on the market, was, in fact, killing people. And so here you have a market-generated way of testing drugs and certifying safety and efficacy that beat the FDA, that did a better job than the FDA did at keeping unsafe drugs off of the market.

Rovner: The FDA will argue that the whole point of the way they approve drugs is that you’re supposed to test them after they get on the market, when they’re in a bigger population, in case there were things that were not seen in the original studies.

Cannon: But there’s definitely a flaw in the FDA’s model is they do randomized controlled trials, or they require randomized controlled trials, that have a few thousand patients in them that will not, cannot detect effects like those of Vioxx because the effects are so small and you will not be able to detect it until hundreds of thousands or millions of people are taking that drug. And so that is a flaw in the FDA’s model.

It’s a flaw in the whole idea of giving government the power to make these decisions and relying on government for safety and efficacy certification because if the government had never gotten involved, if we had left this completely to market forces, then I argue in the book that institutions like Kaiser Permanente, that have the motive and the means and the opportunity to test drugs … all along the way, they would not stop, like the FDA does, at testing it a few thousand people, they would keep monitoring drugs throughout, as the population taking those drugs increases, and they would catch the harmful side effects of drugs a lot faster than the FDA did. But we only have one Kaiser Permanente right now. And the reason we do is because a raft of things that the government has done to violate people’s rights to choose that sort of health plan.

Rovner: And also, we have a vast market in electronic medical records. They were all supposed to be able to talk to each other and they can’t, but let’s not go there. I don’t want to get too far off track.

Cannon: But the electronic records we have right now are there because government spent so many years suppressing them, by suppressing plans like Kaiser, that naturally invested in them, and then woke up one morning and said, well, gosh, we spent decades suppressing electronic health records, and I do talk about this in the book. Why don’t we subsidize them, now? And so now Medicare is subsidizing meaningful use of electronic medical records and they’re still not doing what the Kaiser records do because they’re not interoperable and they don’t focus on a defined patient population so that you can monitor them over time and detect these sorts of effects. That’s another wonderful illustration, electronic health records are, of the things that go wrong when you let government make these decisions for people.

Rovner: So, and I think you’ve already gotten to this. One of the biggest complaints about our health care system now is how ridiculously complicated it is for the average patient to navigate. How would what you’re supporting make that easier?

Cannon: So every economic system, whether we’re talking about socialism and communism on one of the end, and totally free markets on the other end, and things like mixed welfare states or crony capital, it doesn’t matter what economic system you’re talking about, it’s going to serve whoever controls the money. And so if you want a system that is simpler for consumers to understand, then you have to set up a system where nobody gets any money unless consumers understand, unless they’re providing consumers what the consumer wants.

The U.S. health sector consumes about $4.6 trillion, at this point. It’s about one-sixth of GDP on its way to six-sixths of GDP. And most of that money, the consumers don’t control it. One of the things that I write about in the book is I include some OECD [Organization for Economic Cooperation and Development] data that shows that in the United States, government controls, directly or indirectly, about 85% of health spending. That’s the eighth-highest of all OECD countries. Is just two or three percentage points behind the No. 1 country, which I think is Norway or Germany. It keeps changing from year to year. But that’s a larger share that, in countries like the U.K. and Canada that have explicitly socialized systems. So here we have the government compelling people to spend 85% of what we spend on health care the way the government wants, or the way that employers want, and that the industry ends up capturing those decisions about how people have to spend those resources, and we wonder why the system isn’t serving consumers very well.

So what I propose in the book is a number of things, a number of changes that would return that $4.6 trillion that we spend every year on health care to the consumers so that the system would serve them. You have to change the tax code to do that, you have to change the Medicare program and other things to do that, but I think that’s the only way to make things simpler for consumers. And there’s evidence in the book that when consumers are in control of the money, the system does become simpler for them. It provides them the price information they want and becomes easier for them to navigate.

Rovner: So transparency, which I know is a linchpin to a lot of this, and that you’ve been talking about for many more years than, I think, before it even got trendy. It’s one of the few things that Republicans and Democrats have agreed on for years, but it’s been much harder to make happen than I think anybody expected. Even with the power of government, we’re seeing, for example, hospitals pretty flagrantly ignoring the rule that they’re supposed to post prices in a consumer-accessible way. If the government can’t make it happen, how can consumers make it happen?

Cannon: I’m so glad you asked, Julie, because there’s evidence in the book on that. There’s this, what I call the most important chart you’ve never seen in health policy. It collects the results from a series of studies that employers like Safeway and the CalPERS system, for health benefits for California state employees, they did a series of experiments that put the patient in control of the money that they were going to be spending on — things like lab tests and colonoscopies, a knee and shoulder or arthroscopy, MRIs, CT scans, hip and knee replacements.

Rovner: Shoppable services, right?

Cannon: Yeah, what we call shoppable …

Rovner: They’re not emergencies, right?

Cannon: What we call shoppable services. Because the insurance companies and these employers could not get the prices down for these services, try as they might. They had hospitals charging them $60,000 for a hip and knee replacement when others were charging 12, and there was no difference in quality. The hospitals were just exploiting their market, or monopoly, power.

So what CalPERS did in the case of hip and knee replacements was they said, “Look, the hip and knee replacement candidates can go to any hospital they want, but we’re going to pay $30,000 no matter where they go. And if they go to a hospital that charges more than that, then they have to pay the balance.” As soon as the consumer had an incentive to care about price, an amazing thing happened. Not just with hip and knee replacements, but with everything else. They started demanding price information from hospitals. The hospitals began giving them the price information, making prices transparent, and then the consumer started changing their behavior by switching from the high-priced hospitals to the low-priced hospitals. And then the most amazing and glorious thing, and it’s why this is, that chart is the most important chart in health care, hospitals began dropping their prices.

The high-priced hospitals dropped the price for hip and knee replacements by $16,000 per procedure. On average, that was a 37% reduction in just two years. When do you ever see prices falling like that in health care? And if you care about universal health care, then that chart is the most important chart you have ever seen because if you care about your universal health care, nothing is more important than falling prices. But that series of experiments also illustrates that if you care about price transparency, then you want to change who controls the money so that it’s the consumer, so that health care providers have to provide transparent prices and other information that consumers want, or else they’re not going to make any money.

Rovner: So, we’ve both been around Washington for a very long time, and we know that, with very few exceptions, things only happen extremely incrementally. That’s the only way anything gets through either the Congress or the administration or, God forbid, both. So what would be one thing that you think we could do to put the system on a path to where you think it would work better?

Cannon: So in the book, you will not find Michael’s perfectly ideal conception of what a health care sector would look like. I do try to — and I should mention, the book takes that principle that you should be able to make your health decisions, and it applies them throughout the health sector. It looks at clinician licensing at the state level, state health insurance, licensing and regulation laws, health facilities regulation, medical malpractice, the tax code, Medicare, Medicaid, veterans’ benefits. And I would love to have a conversation about that sometime because that’s particularly topical, nowadays. But in each case, I don’t try to present what is the perfect libertarian idea. I try to put out there what I think is the biggest step that people would be willing to talk about, and then some incremental steps that we could take along the way. And in some cases, those incremental steps are actually pretty small, but in other cases, the incremental steps are a little bigger because it wouldn’t make sense to make them any smaller.

And well, let me give you an example. The tax code imposes a payroll tax and an income tax on every dollar of cash that you earn from your employer, up to a point, to be technically accurate, Social Security tax ends at a point. But it does not tax that dollar if your employer provides it to you in the form of health insurance. And what this arguably does is it creates what is, functionally, a mandate. Either you take some portion of your money of your compensation as health insurance, or if you want to take that money as cash and buy your own health insurance, you have to pay higher taxes, and that’s effectively a penalty if you don’t enroll in the kind of health plan the government wants you to enroll in. And I call this the original sin of U.S. health policy because that one mistake, which is an accident that Congress and the Treasury Department stumbled into, has caused just about every form of dysfunction that you will find in the U.S. health sector, and what it doesn’t cause, it made worse. And so the worst part might be that it separates workers from a trillion dollars of their earnings and lets employers control that trillion dollars year after year.

So what I propose is to change the tax code in a way that lets workers control that trillion dollars, lets them choose their health plan, and that levels the playing field between employer-sponsored insurance and other forms of insurance so they’re able to purchase health insurance that doesn’t disappear when their job does. And that might sound like a pretty big step, and I think that, kind of, it is, but it’s not as big as most people would think, I imagine, because the way I propose doing this would, I think, cap the exclusion for the first time, which is something that appeals to Democrats. They tried to do that in the Affordable Care Act. It didn’t work because it was just pure austerity, if all you do is tax health benefits. But what this proposal would do is return that trillion dollars to workers, which is, in effect, a tax cut and a progressive tax cut because it would mean more to low-income workers than high-income workers.

The average amount that employers spend on family coverage for their workers is $17,000 per year. The most recent [KFF] report just came out said, now, up to $17,000 per year, and that’s $17,000 of the worker’s earnings. So returning that money to the worker so they can control it, that’ll mean a lot to someone making six figures, but it’s going to mean a hell of a lot more to someone making $50,000 a year. They get to control a much larger share of their income. So it’s a progressive tax, but it also benefits people with expensive medical conditions more because they would get a bigger cash out than the average. Women, people with obesity, and so forth, that the economic research shows us they are actually losing control over a larger share of their earnings.

So the approach that I propose to reform the tax code might seem like a big step. I don’t think it’s going to happen in this Congress, but I think once people get their heads around how it actually serves both Democratic priorities and Republican priorities that may not only happen, but happen on a bipartisan basis.

Rovner: I can’t resist asking this question because economists love the idea of doing something about the employer tax exclusion for — I think it’s the largest single tax expenditure in the federal budget. But in the past, they’d always said, but what will consumers do if you give them back this money? There’s no market for them. Well, thanks to the Affordable Care Act, now there is a market for them, but you hated the Affordable Care Act. Would you not acknowledge, at some point, that now at least it’s more doable because if you give them back that money, there’s someplace for them to go and spend it on?

Cannon: So if people know me for anything, the role I played in trying to roll back or eliminate the Affordable Care Act. And so if folks who love Obamacare want some reason to dismiss what I have to say, there’s that. That’s there. I still think there’s a lot in the book for fans of Obamacare, but I gladly concede your point, Julie. One of the hardest parts about reforming the tax exclusion for employer-sponsored insurance is that if you do that, if you level the playing field between the employer market and the individual market for health insurance, there is a risk that some employers might drop their health plans and leave people with expensive medical conditions high and dry. That was the fear that Barack Obama exploited to great effect against John McCain in the 2008 presidential campaign, when John McCain proposed a universal tax credit. I think that was a bad proposal, and I’m not sorry that it failed, but listeners who don’t recall should look up “Barack Obama yarn commercial” and they’ll be able to see that 30-second television spot.

But as much as I do not like the Affordable Care Act, or Obamacare, as much as I think it has increased the cost and reduced the quality of health insurance, for everybody, I must concede that, now that it exists, it makes reforming the tax exclusion for employer-sponsored health insurance a lot easier. Because if someone says to me, Cannon, why should we go along with this plan of yours? What if employers drop coverage? I would say, well, first of all, employers are not likely to drop coverage. The Affordable Care Act has taught us that. Everyone thought that after Obamacare passed, employers would drop coverage. They really haven’t in the numbers we expected. But even if they do, there is that heavily regulated, heavily subsidized market that we call the exchanges that will be there for people whose employers do drop their coverage. So that becomes one less reason not to reform the tax exclusion.

Rovner: Such a good example of how it’s going to take everybody’s ideas to actually make all of this work. Michael Cannon, thank you so much. This has been fun. I could go on, I know you could go on, but we should stop now. We’ll have you back soon.

Cannon: That’d be great. Thank you so much, Julie.

Rovner: OK, we are back. It’s time for our extra-credit segment. That’s when we each recommend a story we read this week we think you should read, too. As always, don’t worry if you miss it. We will post the links on the podcast page at kffhealthnews.org, and in our show notes on your phone or other mobile device. Alice, why don’t you go first this week?

Ollstein: Sure. So I chose a piece by my colleagues on our technology team about a massive set of lawsuits filed against Meta, which owns Facebook and Instagram. So this is challenging them for lying about their practices regarding children on their platforms, and not doing enough to prevent mental health problems for those children. And the massive array of lawsuits here, from state attorneys general, is being compared to the tobacco lawsuits that resulted in massive settlements and policy changes. And so it remains to be seen if this will result in the same, but I think there’s just been a lot of focus, especially recently, on how these platforms are designed to be addictive, are designed to push content that is outrageous, upsetting, etc., just to keep people scrolling and scrolling and scrolling, and especially how that’s impacting children. We’ve had a lot of concerns about mental health during the pandemic where kids were out of school, and thus, getting sucked into these sort of apps even more. So definitely something to follow.

Rovner: It is. Rachel.

Cohrs: So my story this week, the headline is “Ozempic and Wegovy Don’t Cost What You Think They Do,” from The New York Times and Gina Kolata. I thought this story was interesting. It essentially is a writeup of a study by the American Enterprise Institute just pointing out that net prices for these popular weight loss drugs are lower than their list prices, which may be true. And I think that she points out this interesting historical precedent with hepatitis C medications where they were really transformative, and initially …

Rovner: And crazy expensive.

Cohrs: Yes, very expensive. Also curative, which these drugs are not. But once more competition came on the market, prices did eventually go down, was the example of competition working, how, in theory, it should in this space. And certainly, we could see a similar dynamic play out with these medications. But one thing I think that just personally frustrates me as a reporter is the pharmaceutical industry likes to talk about how net prices are so much lower than list prices, and they’re so frustrated with the focus on list prices, but they never want to tell us what the net prices are. And I think that just puts reporters in a really difficult position where we don’t really know what truth is. And obviously, insurance companies are trying to spin things their own way, and pharma companies are trying to spin stuff their own way and nobody wants to show us the numbers. So I think that puts us in a difficult position.

Also, just would like to point out that a lot of employers’ insurance plans don’t necessarily cover these medications. It has been an uphill battle. Certainly there’s been progress, some state benefits plans, but there are cost concerns with these medications and I think there’s just some counter-programming here, with a new argument about the cost effectiveness long term. I thought it was an interesting point, not one that necessarily is new. And if insurance companies are covering these drugs, then patients are still stuck paying the out-of-pocket price. So interesting thought and would be good to include in cost-benefit analyses going forward. But again, if insurance companies, if pharmaceutical companies aren’t going to give us the numbers, then it just makes it really difficult to crunch those.

Rovner: I was actually interested in this story because one of the big things that I feel like people keep missing with these drugs is that they’re making these long-term assumptions that these drugs are always going to cost what they cost now. And there’s no — which is a lot of money, and would be prohibitively expensive if everybody who’s eligible for them were to take them. Obviously, we can’t afford that, but at some point, there is some competition and if they keep developing drugs, the cost will come down, and then it will be a whole lot easier for people to afford things. And then the cost-benefit analysis changes. So …

Ollstein: It might.

Rovner: Yeah.

Ollstein: We don’t really know.

Rovner: I get frustrated at people who assume that the price is what it is and that’s what it’s going to be going forward, because I suspect that is not the case. But I think you’re right. It will be high as long as they can keep it a secret.

All right, my extra-credit story is from The Washington Post this week by Greg Jaffe and Patrick Marley, and it’s called “The Pandemic Has Faded in This Michigan County. The Mistrust Never Ended.” It’s a long and beautifully written chronicle of just how enough people in Ottawa County in Michigan were convinced that public health is the enemy to result in, basically, a taking apart of the county’s health department. It is well worth reading the whole thing. It’s really heartbreaking.

All right, before we go this week, I have a sneak peek at some of the finalists for our KFF Health News Halloween Haiku Contest. The winners will be unveiled on Halloween, Oct. 31, but here’s one finalist from Michael Lisowski:

A trick or treatment,
prior authorization,
a fright to patients.

And here’s another, from Meg Murray:

Open enrollment,
watch out for ghosts, goblins, and
junk insurance … [boo!]

OK. That is our show. As always, if you enjoy the podcast, you can subscribe wherever you get your podcasts. We’d appreciate it if you left us a review; that helps other people find us, too. Special thanks, as always, to our tireless engineer, Francis Ying. Also, as always, you can email us your comments or questions. We’re at whatthehealth@kff.org, or you can still find me at X, @jrovner or @julierovner at Bluesky and Threads. Alice, where are you these days?

Ollstein: I am @AliceOllstein on X and @alicemiranda on Bluesky.

Rovner: Rachel?

Cohrs: I’m @rachelcohrs on X.

Rovner: We will be back in your feed next week. Until then, be healthy.