Friday, October 2, 2009
The Uses--And Abuses--Of Transparency
"Transparency," "full disclosure," and "sunshine," all sound good as principles of government--but not always.
Most obviously, national security sometimes justifies secrecy. And healthcare, too, has its own necessary stipulations about transparency. For example, there's the issue of patient privacy. But in addition, there are legitimate concerns about the protection of intellectual property (IP), trade secrets, competitive information, and the like.
Indeed, the economic impact of IP is huge. The DC-based economist Rob Shapiro, a former Undersecretary of Commerce in the Clinton administration, has estimated that perhaps a third of the value of the US economy comes from IP. The creators of that wealth have rights to keep it, here and around the world. If they can't keep it--keep it secret, that is--there won't be a whole lot more of it. And of course, one can't distribute, or redistribute, the benefits of something until that thing is first created. So IP matters.
And thus we come back to the real point of Serious Medicine, which is to find cures. Serious Medicine is not about process, it's about results. Most of us wish to be consumers of Serious Medicine, not students of Serious Medicine. I'll never understand the chemistry of aspirin; but like billions of people around the world, I am glad to know that it's around. That little pill, long ago gone generic and cheap as dirt, has medicinal properties--such as blood-thinning--that make it precious way beyond aches and pains. So I don't spend time reading up on aspirin, and neither do most people.
And that's just aspirin--what about more complicated chemicals? It's hopeless to try to keep up, and so almost of the time, we don't even try, even when we are consuming that chemical as medicine.
As a practical matter, the best that we can hope for is that we take the medical drug--or use the equipment, or undergo the procedure--and we get better. If we don't understand how it works, well, that's fine, so long as it's safe and effective. (And for the most part, we are happy to "outsource" that policing function, as well, to the FDA. Although, of course, the FDA always needs watching, with the proviso, once again, that this stuff is complicated, and it takes years of expertise to fully understand what a clinical trial really says.)
Thus the point: Full disclosure is no substitute for results. Moreover, as Michael Smith of the Gastroparesis Patient Association for Cures and Treatments wrote on September 23 here at SMS, some of the loudest advocates for "full disclosure" are no friends, whatsoever, of Serious Medicine. That is, some activist groups might demand "full disclosure," but in their demanding they are Nader-istically counterproductive to the cause of Serious Medicine.
From an SMS point of view, we don't need talk the theory of "full disclosure," or other process issues--we need the reality of good outcomes.
These thoughts are brought to mind by the Rasmussen poll that I wrote about on Wednesday, showing that 83 percent of Americans think that legislation should be posted online before Congress votes on it.
I don't see the harm in publishing such information (with exceptions, of course, for national security and other kinds of proprietary information), and I see great value in "crowdsourcing" data.
But now, thanks to CNSNews, I am more mindful of the limitations of disclosure. Why? Because of this fascinating video, featuring Sen. Tom Carper (D-Del.), and a brilliant young reporter, Nicholas Ballasy, of CNSNews. I say that Ballasy is brilliant, not because I have read or seen of his stuff--although I certainly look forward to seeing more of it--but because Ballasy was brilliant enough to keep quiet, encouraging, by his simple silence, Carper to keep talking, talking, talking, explaining it was useless for him, or anyone else, to try to actually read legislation the way it's written these days.
Here's the lede from Ballasy's piece:
Sen. Thomas Carper (D.-Del.), a member of the Senate Finance Committee, told CNSNews.com that he does not “expect” to read the actual legislative language of the committee’s health care bill because it is “confusing” and that anyone who claims they are going to read it and understand it is fooling people.
“I don’t expect to actually read the legislative language because reading the legislative language is among the more confusing things I’ve ever read in my life,” Carper told CNSNews.com.
Carper described the type of language the actual text of the bill would finally be drafted in as "arcane," "confusing," "hard stuff to understand," and "incomprehensible." He likened it to the "gibberish" used in credit card disclosure forms.
OK, you get the idea. Once again, hats off to Nicholas Ballasy for just letting Carper talk. But whether he meant to make it or not, Carper has a point that we should heed: If someone were to pass a rule requiring, say, full online transparency for legislation, Congress would respond by making the transparent legislation all the more lengthy and complicated--and thus, in the end, just as opaque. If the legislation-drafters think that they can hide what they want to hide in 1000 pages, they will use 1000 pages. If they think they need 10,000 pages to hide their goodies, they will use 10,000 pages.
One can fight this fight, for full disclosure and transparency, but before we do, we should step back and remember: The real point of Serious Medicine is cures, not transparency. Serious Medicine Strategy is about cures for illness not about legal policy. From an SMS point of view, if we could be truly cured via a black box, we would be smart to take it. The worst mistake we could make is to think that just because we have read the text of a piece of legislation, that thus we understand that legislation. We should be mindful of Alexander Pope's immortal observation: "A little learning is a dangerous thing."
In addition, whatever the legislative language might say, it is subject to interpretation and reinterpretation by the regulators and bureaucrats who write the regs and red tape, and then it is subject to further interpretation and reinterpretation by judges.
I am all for tea-partiers reading as much as they can--and voting against it if they don't trust it, because the conservative in me tells me that the everything-else-being-equal bias should default to "no". But the best of Glenn Beck's army needs to understand that amateurs Googling through legislative-ese are not likely to be a match for legions of highly skilled and massively wired-in lobbyists, the folks who make a career out of interpreting and reinterpreting law and case law.
So is there no hope? Should we just give up?
No. There is another way, going back to the origins of the Republic. And that other way is woven into the Madisonian fabric of our country. It's called checks and balances, or separation of powers, or pluralism--or the cussed slowness of the system. The Founders intended for legislation to move slowly, cooled in the saucer dish, flyspecked by everyone, including lobbyists. (As lobbyists like to say, their function is literally written into the Constitution, in the First Amendment, which protects the right to "petition the government for a redress of grievances.")
Lobbyists and trade associations think through all the angles, bringing interesting issues to light--including the tradeoffs between secrecy and transparency. For example, this article, in Thursday's edition of Roll Call, by Mark Merritt, the president of the Pharmaceutical Care Management Association, detailed a controversy over transparency in drug pricing in pharmacy benefit plans (PBM), operated by large employers:
Under the guise of “transparency” and “disclosure,” proposals under consideration in both the House and Senate would undermine competition and give the upper hand to the drugmakers and independent pharmacists to increase prices.
At their core, these “transparency” measures could force de facto public disclosure of sensitive drug-pricing information, resulting in drug manufacturers being made aware of their competitors’ negotiating strategies. Economists, budget experts and industry officials all agree that the likely result is that drugmakers would raise prices to match their competitors’ highest price for a given drug. The greatest beneficiaries of this type of disclosure are drug manufacturers, not consumers or taxpayers.
With a flourish, Merritt asks, "Does that sound like the right way to make prescription drugs more affordable?" Off the top of my head, the answer would be "no." Again, that's the Aesopian conservative in me speaking: When in doubt, go slow. Measure the legislation twice, cut once.
No less than the nonpartisan Congressional Budget Office and the Federal Trade Commission have weighed in about the effects of public disclosure of drug-pricing negotiations. Since 2003, the CBO has analyzed the effects of pharmacy benefit manager disclosure on Medicare Part D on three different occasions and has never concluded the proposal will result in savings to beneficiaries or the program. For its part, the FTC has warned that PBM disclosure may pose a risk to “healthy competition” and that “higher prices may be more likely.”
Now I confess that I haven't gone and actually looked up the relevant studies from CBO and FTC. But Merritt's argument is worthy of consideration, and no doubt it will be considered, six ways to Sunday, by various factions as the health care bill wends it way to an uncertain fate.
But in thinking of this one instance concerning PBMs--a small instance in the national scheme of things, but plenty big to the many people and companies involved--I found myself thinking back to a basic rule of political science, as well as human nature--fight fire with fire. That is, if one side has a bunch of lawyers and lobbyists, it's a pretty good idea for the other side to have lawyers and lobbyists, too. Of course, there's nothing wrong with having public opinion and votes and money and all that, as well as lawyers and lobbyists, but even if you have all that clout, you still need the lawyers and lobbyists, because at some point a piece of legislation, or a regulation, needs to get hammered out, and such hammering will inevitably occur in a lawyer- and lobbyist-rich environment. So you need yours to go up against theirs, and vice versa. That's not quite Constitutional "checks and balances," but it's something pretty vital in a free country--if criminals get lawyers when they need them, so should everyone else.
And so my thoughts drifted to John Kenneth Galbraith, who always argued that the free market would never work freely, that it would always be disproportionately affected by interests and power-clusters. So Galabraith's idea, which he put forward in the 50s, was to enshrine the idea of "countervailing power," so that one side could effectively negotiate with the other side.
I realize that Galbraith is anathema in conservative and libertarian circles, and that he was mostly a socialist by the end of his life, but his diagnosis of the negotiations of giant corporations with each other--and with the government--certainly seems like a more clear-eyed assessment of the way things work in the real world than the belief that the market will always "clear" and create the optimum result. Perhaps the market should always clear, but it won't, at least not anytime soon. Or if it does, it might clear in a way that leaves shareholders, or subprime mortgagees, or taxpayers, high and dry.
Indeed, my colleague at the New America Foundation, Barry Lynn, author of a provocative new book, Cornered: The New Monopoly Capitalism and the Economics of Destruction, makes a lot more sense to me, these past few years.
So the bottom line for healthcare, and for Serious Medicine, is this: The issue isn't theory or dogma. The issue is what works best for people--what moves us closest to good health care, and to cures. And how to determine what's moves us closest to those goals? We can all have opinions on that question, of course, but the best answer will most likely come out of the welter of faction, in which, for example, Mark Merritt gets to make his case, and everyone else, too, gets to make their case.
In this particular instance, I suspect that the PBMs have the better argument, if for no other reason than that it's unlikely that new legislation, written in haste, is going to improve the status quo.
That's the first rule of medicine, and a good rule for life in general: First, do no harm. And yet it's hard to live by that injunction when you are in a hurry. Which is exactly why James Madison, the genius of our Constitution, wanted things to move slowly.
Posted by James P. Pinkerton at 4:47 PM