JOURNAL EDITORIAL REPORT

Iran nuclear deal faces skeptical allies, Congress

Historic agreement or historic mistake?

 

This is a rush transcript from "Journal Editorial Report," November 30, 2013. This copy may not be in its final form and may be updated.

PAUL GIGOT, HOST: This week on the "Journal Editorial Report," the White House launches a push to sell its Iran nuclear deal to a skeptical Congress and angry allies in the Middle East. Is it a first step towards peace or a historical mistake?

Plus, with all eyes on the healthcare.gov re-launch, another ObamaCare crisis is waiting in the wings as thousands of Americans discover you really can't keep your doctor.

And a life-saving court decision now being undermined by the Obama administration. Should the feds ban payment for bone marrow donors?

Welcome to the "Journal Editorial Report." I'm Paul Gigot.

Facing sharp criticism from allies in Saudi Arabia and Israel and deep skepticism from some members of Congress, President Obama this week defended last Sunday's deal with Iran, praising the diplomacy he says is responsible for halting the progress of their nuclear program, calling the accord an important first step towards peace.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: Huge challenges remain but we cannot close the door on diplomacy. And we cannot rule out peaceful solutions to the world's problems. We cannot commit ourselves to an endless cycle of conflict. And tough talk and bluster may be the easy thing to do politically but it's not the right thing for our security.

(END VIDEO CLIP)

GIGOT: Joining the panel this week, Wall Street Journal columnist and deputy editor, Dan Henninger; foreign affairs columnist, Bret Stephens; and editorial board member, Matt Kaminski.

So, Bret, the president says this plan freezes the enrichment. It reduces the stockpiles that they have that are capable for nuclear weapons. Freezes the plutonium reactor. And subjects all of the program to inspections. What's wrong with that?

BRET STEPHENS, FOREIGN AFFAIRS COLUMNIST: None of that is really true. Construction at the plutonium reactor at Iraq continues. It's just that they're not allowed to operationalize the reactor. Iran continues -- has the right to continue to enrich uranium to a low --

(CROSSTALK)

GIGOT: Five percent instead of 20 percent.

STEPHENS: Five percent grade. But the tough part of enrichment is actually the early stages of enrichment, not the later stages of enrichment. And, by the way, the West still doesn't have access to some of the most critical sensitive Iranian military sites where we suspect they have been conducting tests relevant to creating a nuclear weapon. So just the very terms on which this deal is being sold is misleading. The real problem with this deal is it allows Iran to keep its nuclear infrastructure intact and even continue to grow it while we enter into a process of endless negotiation with the Iranians that will --

GIGOT: But here's their response to that, Bret: At least this slows it down. They were making hell-bent progress to getting the bomb. This slows them down, right? We have six months to negotiate a final deal.

STEPHENS: The way I see it, Iran is at mile 23 of its nuclear marathon and we're saying, you know what, guys, don't sprint to the finish line, let's bring it down to a jog. If you really wanted to halt the nuclear program, you would actually ratchet up sanctions. You would increase the pain on the Iranians. People keep talking about how much they're hurting but there's more that can be done in terms of freezing Iran's access to currency reserves, blocking their oil exports.

By the way, U.N. Security Council resolutions insist that Iran cease enriching uranium. This deal essentially violates those very Security Council resolutions.

GIGOT: Matt, is there a better argument to be made than I'm trying to make on behalf of the administration, playing devil's advocate?

MATT KAMINSKI, EDITORIAL BOARD MEMBER: I think to see what happens in the next six month. There is a deal that I think we can live with if they do close at least one of these enrichment plants, really do dismantle a significant amount of centrifuges, and allow inspections of the military sites. This regime has given no indication over the last 20 years that it is ready to do that, nor by the price that it paid by this deal that it will be forced to do that. That's the real danger here is that we've given away a sanctions regime -- started to unravel a sanctions regime --

GIGOT: Right.

KAMINSKI: -- that took years to put together and has been very effective.

GIGOT: But here's the other argument the administration makes, Dan, which is, well, what's the alternative, you critics? There isn't one. It's only war. You've got to take this or you get nothing at all.

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Well, two things. One, Bret has already mentioned the sanctions regime, which took 10 years to build and was working. They were in a lot of economic pain. So the president is wrong on that score.

On endless conflict, the president is doing something very unique here. He is essentially taking the military option off the table and saying he's going to pursue diplomacy only. That is almost a unique circumstance in our relationship with countries like this, that they do not have to worry any long that the U.S. might take military action. That is going to have implications for alliances all over the Middle East because they've always relies on the U.S. being there when they need them. If it's diplomacy only, we're in a new world.

STEPHENS: There's also -- by the way, I think it's important to stress, I actually think taking the military option off the table makes a conflict in the Middle East more likely, not less.

(CROSSTALK)

GIGOT: To Israel principally?

STEPHENS: That's exactly right. Because the Israelis for a long time were biding their time, thinking when the chips are really down, this president is not going to allow Iran to become a nuclear weapons state. The president has said that many, many times. After the capitulation in Syria, the Israelis are looking at this in a whole new way. I've been having conversations with Israelis. They simply don't think that America is a credible security guarantor.

GIGOT: But there's an argument that the Israelis are boxed in now. They can't do anything for the next six months because they would isolate themselves if they acted.

KAMINSKI: That's true. I think things are much harder now for Israel to act. But Israel has acted in the past when the whole of international opinion was against it, including to bomb the Iraqi nuclear sites 33 years ago.

The element other element here not only Israel but the Sunni Arab states, principally Saudi Arabia but also Turkey and Egypt.

GIGOT: Right.

KAMINSKI: We have essentially, through the capitulation in Syria and this move, said, Iran, you are now the regional hegemon. We are ceding to you this Shia cresent --

GIGOT: And they -- the Sunnis will react by getting the bomb themselves?

KAMINSKI: By getting the bomb and doing more freelancing on foreign policy by themselves because they cannot trust the U.S. to be engaged.

GIGOT: Dan, briefly, what about the U.S. domestic reaction? Is Congress likely to do anything to intervene here, to counteract this deal? Or does President Obama have a free hand?

HENNINGER: I think he has largely a free hand. Paul, they've taken polls that show that the people are -- the American people are tired of these engagements. I think the Senators themselves read the same polls and that is going to make them be very reluctant to push hard against what the president is doing.

GIGOT: All right, Dan. I'm afraid I agree with you.

When we come back, all eyes are on the re-launch of healthcare.gov. But those website woes may be the least of your problems. ObamaCare marches on, why keeping your doctor will be increasingly hard to do, despite the president's promises.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: This isn't about putting government in charge your health insurance. It's about putting you in charge of your health insurance. Under the reforms we seek, if you like your doctor, you can keep your doctor.

(END VIDEO CLIP)

GIGOT: Another now-famous promise from President Obama in the run-up to the passage of the Affordable Care Act. But as many Americans are about to find out, keeping your doctor may not be as easy as he made it sound.

Dr. Scott Gottlieb is a practicing physician and former deputy commissioner of the Food and Drug Administration. He's also a resident fellow at the American Enterprise Institute.

Welcome back.

DR. SCOTT GOTTLIEB, PRACTICING PHYSICIAN & RESIDENT FELLOW, AMERICAN ENTERPRISE INSTITUTE & FORMER FOOD AND DRUG ADMINISTRATION DEPUTY COMMISSIONER: Thanks for having me.

GIGOT: We're now hearing these reports about people not being able to keep their doctor, even if they keep their insurance or get new insurance. Why is this happening?

GOTTLIEB: Right. Because the networks that these ObamaCare plans are using are extremely restrictive, narrow networks, meaning they're not contracting with a lot of doctors. They're doing that to try to hold down costs.

GIGOT: How does it hold down costs?

GOTTLIEB: First of all, it impedes access. You might just not be able to get an appointment. And second of all --

GIGOT: Long waiting lines?

GOTTLIEB: Right. And the plans are also going out and trying to contract with the lowest-cost providers, which typically are Medicaid provides. That's why many of the plans in the exchanges are actually Medicaid HMOs.

GIGOT: They're called Medicaid Plus --

GOTTLIEB: Right.

GIGOT: -- in the industry, which is the lowest level of care. That means they're low reimbursements by the federal government?

GOTTLIEB: Right. The plans are not paying the doctors a lot. In fact, they're actually going back and renegotiating the contracts now and cutting what they're paying the doctors.

GIGOT: We are also hearing anecdotes that this is happening in the Medicare Advantage program --

GOTTLIEB: Right.

GIGOT: -- a private form of Medicare. Is that happening there, too?

GOTTLIEB: Right. Remember, there were $158 billion worth of cuts to the Medicaid program. The administration papered over those cuts with some money that they gave to the plan before the election.

GIGOT: This is part of the Affordable Care Act?

GOTTLIEB: Right. It was part of the Affordable Care Act, to pay for the Affordable Care Act. Now those cuts are coming due. And what the plans are doing is instead of raising premiums, they're cutting access to doctors. They're basically skinnying down their networks as well. This does save money.

GIGOT: Give us a sense of the magnitude here. Are you talking about thousands, tens of thousands? Are you really talking about millions of people who are going to have their access to physicians restricted?

GOTTLIEB: Anyone who goes into ObamaCare is going to have their access restricted, no question about it.

GIGOT: So it's millions?

GOTTLIEB: It's millions. You might be able to keep your G.P. if you're lucky but you're not going to be able to keep your full complement of doctors because these networks are too small. I found one practice in Florida that only has seven pediatricians for a county that serves 260,000 kids. Seven pediatricians, not seven practices, seven doctors.

GIGOT: Seven -- seven --

GOTTLIEB: Right.

GIGOT: Seven doctors?

GOTTLIEB: I found a plan in New York that only has a single oncology practice in it.

GIGOT: Wow.

GOTTLIEB: And if you go outside your network, you're forced to pay the full bill. It doesn't count against your out-of-pocket maximums or your deductible in most cases.

GIGOT: Is it always the full bill or is it sometimes just the reimbursements are less?

GOTTLIEB: Right. Sometimes it's partial payment and sometimes it's 100 percent.

GIGOT: What does this do -- let's say, I get really sick and I have cancer and I want to see a specialist outside of my network, maybe somewhere else in the country. A lot of people I know, you know, will get cancer and they might say, you know, I want to see a specialist at M.D. Anderson in Houston or I want to go to the Mayo Clinic if I live in the upper Midwest. Is that kind of access going to be restricted here?

GOTTLIEB: That's exactly what's going to be restricted. It really puts a disadvantage to people who have rare conditions who want to go to a specialty institution or even get a second opinion. You're not going to be able to do that. You know, the Memorial Sloan-Kettering Hutch in Seattle --

GIGOT: Right.

GOTTLIEB: -- those aren't going to be accessible.

GIGOT: Those are great institutions --

GOTTLIEB: Yeah.

GIGOT: -- with great doctors with great care. People from all over the world, go to those hospitals. Are you're saying that if I want to go to one of those and it's not in my network, I'm going to have to pay substantially out of my pocket for my cancer care? Is that really what's happening?

GOTTLIEB: Substantially. And since it's expensive in the first place, it will be prohibitively costly for people. They just won't be able to do it.

GIGOT: Well -- woo. Now, there's another thing that's happening as part of the result of this law and that is the integration of medical networks, hospitals and physicians.

GOTTLIEB: Right.

GIGOT: Tell us what's happening there. You described it as the death of Dr. Marcus Welby, M.D. --

(LAUGHTER)

-- the so-called family physician, the three or four-doctor practice. Why is that happening?

GOTTLIEB: Right. Well, doctors are becoming owned entities of hospitals and large health systems. And this is for a couple of reasons. It makes it easier to regulate the physicians if they're part of systems where you can regulate the system rather than regulating down to the level of the doctor. That's primarily why they're doing it.

Also, because they want to transfer risk to physicians. They want physicians to be bearing the risk for the cost of the care they're delivering.

GIGOT: But what is the incentive for doctors to sign up with these big, big networks?

GOTTLIEB: Well, there really is no incentive other than the fact that their overhead costs are going up and their reimbursement is going down, so their real income's declining. By signing up with these big networks, they effectively become salary, and they at least know what they're going to earn next year.

GIGOT: And you've written that there's an awful lot of evidence to suggest that when doctors do sign up for these networks, their productivity goes down.

GOTTLIEB: That's exactly right.

GIGOT: Why so?

GOTTLIEB: Well, they do less. They become shift employees so they become less entrepreneurs.

GIGOT: They work 9 to 5, 9 to 5'ers?

GOTTLIEB: Exactly. And where you lose productivity is in the "handoff." Doctors effectively do shift work and they don't take care of their own complement of patients in many case. They just hand it off to the next physician. And you lose productivity in the form of that shift, that handoff, if you will.

GIGOT: Some of the architects of ObamaCare would respond to what you're saying and say, look, the model we're pursuing is something called accountable care organizations --

GOTTLIEB: Right.

GIGOT: -- and those have proven to be successful at Mayo and Geisinger and some of these other big institutions, which know how to manage themselves very well. So what are you worried about? This is going to save money for everybody and still deliver quality care.

GOTTLIEB: Well, if you believe someone has to ration -- the government can ration through boards, which they're doing in ObamaCare. The patient can self-ration by being exposed to some of the costs of their decisions. Or the doctor can ration care by having -- being capitated effectively, having to bear responsibility for the cost of the care they're delivering. They're favoring the doctor being capitated and the doctor--

GIGOT: Capitated means individual payments?

GOTTLIEB: They get a lump sum --

GIGOT: A lump sum.

GOTTLIEB: -- for taking care of a whole population of patients. If they do more for those patients, they'll lose money. I think that's the least transparent place for the nexus of cost consideration to reside, with the doctor, because, as a patient, you might not know what wasn't offered to you. At least if the government is doing it, you see what the government is doing. And if you're forced to make those considerations, you know the choices you're making.

GIGOT: All right, Dr. Gottlieb, thank you so much being here.

GOTTLIEB: Thanks.

GIGOT: All right. Still ahead, if the ObamaCare rollout isn't a big enough mess, now the HHS is seeking to undermine a federal court decision and control who can donate bone marrow. What that could mean for the 14,000 Americans waiting for a life-saving match, next.

(COMMERCIAL BREAK)

GIGOT: For many victims of cancer and other deadly blood diseases, it was a new lease on life, a 2012 federal court ruling that overturned the decades-long ban on compensating bone marrow donors. But now the Department of Health and Human Services is threatening to override that landmark decision and jeopardize this life saving treatment, even as nearly 14,000 patients wait for a match.

Wall Street Journal senior editorial page writer, Collin Levy, joins us with more.

So, Collin, let's try to give context to people and go back. This is a 1984 law that banned compensating for organ donations, things like livers and kidneys. And bone marrow was included in that because, at the time, that kind of transfer was very difficult technologically. But that's changed over the years and now it's much easier. Tell us how.

COLLIN LEVY, SENIOR EDITORIAL PAGE WRITER: Right. At the time, it was a relatively complicated procedure that required sedation. In the 30 years since, it's become something not much more difficult than donating blood. It's a process called aphaeresis, where a donor can go in and get hooked up to a machine, have some blood taken out, and that's essentially how it works. So in 2009, the Institute for Justice sued on behalf of a woman named Doreen Flynn, who's a Maine mother who has three children who have a blood disease that may require marrow donation. And they basically said, look, blood donation can be compensated. This is essentially the same. So it's an arbitrary distinction to be banning this.

GIGOT: And the Ninth Circuit, which is one of the most liberal circuits, appellate circuits in the country, sided with the family and said, look --

LEVY: Right.

GIGOT: -- given the progress that's been made, for this kind of transplant, it no longer was -- the intention of the Organ Act was -- no longer to apply for this and so they can go ahead. Now, the administration didn't appeal that ruling, did it?

LEVY: No, it didn't. Instead, it turned to HHS and had HHS basically write a rule that redefined bone marrow, even donated through this much simpler process, as an organ. That's sort of ridiculous when you think about it, because organ is a word in the English language, and it means a distinct group of cells that perform a purpose. And it's also something that not naturally regenerates. Like blood, bone marrow regenerates. So a bone marrow donor, who donates, will then again have their marrow regenerate, and be just fine within a period of days and weeks, right back to normal.

GIGOT: This is the Health and Human Services Department, federal Health and Human Services Department. What about the argument they make in the rule making that this will prevent the transmission of disease, and if they don't regulate this, you'll see more transmission of disease?

LEVY: Again, this is really a straw man that they're putting out here. These people, who need these donations, need them urgently. By the way, Paul, 3,000 people a year die because they don't get the bone marrow donations that they need. Those people would certainly be more than willing to take whatever small risk might be there in order to actually get a bone marrow match. This isn't like blood, where you can easily get a match.

GIGOT: Right.

LEVY: Bone marrow requires a much higher of donor match complexity. So you need more donors. You need a broader base.

GIGOT: Dan, the other argument they make is something, well, this is going to lead to the commodification --

HENNINGER: Yes.

GIGOT: -- of organ transplants. There's a kind of an ideological justification in the mind of these regulators that somehow if you have a market for this sort of thing, you're going to lead to the rich getting it and the poor not.

HENNINGER: Well, that is essentially it. I mean, this is an example of being the perfect being the enemy of the good. The thing we have to make clear, as Collin has, is the status quo for bone marrow transplants does not work.

GIGOT: It creates shortages.

HENNINGER: It creates shortages. And not compensating people will continue to create shortages. They're afraid if they allow compensation for bone marrow, it will work, and then there will be pressure for other organs like liver, kidneys and hearts. But --

GIGOT: But you don't buy that?

HENNINGER: I don't buy that at all. I mean, I think it should be possible to try out alternatives to the status quo that doesn't work. See if they work or don't. If they don't, we can go to another way of trying these things. But to continue the status quo, it reminds me of the AIDS patients in the 1980s who finally had to storm the FDA building in Maryland to get access to new drugs.

GIGOT: All right.

Well, thank you, both.

And thanks, Collin, for alerting us to this.

We have to take one more break. When we come back, our "Hits and Misses" of the week.

(COMMERCIAL BREAK)

GIGOT: Time now for "Hits and Misses" of the week.

Bret, start with you.

STEPHENS: All right, get ready for this, Paul. I'm going to do it. I'm going to say something nice about the Obama administration, and because it's Hanukkah, about Chuck Hagel.

GIGOT: You often do that.

STEPHENS: The United States responded to a unilateral Chinese move to create an air defense zone over the Japanese islands, Senkaku Islands, by sending two B-52 bombers over these islands unannounced, letting the Chinese know that these kind of provocative aggressive acts on their part are not going to go unchecked. It strengthens our alliance with Japan and it shows that there is substance to the pivot. So good for the Obama administration.

GIGOT: The Obama pivot to Asia.

Matt?

KAMINSKI: Paul, fresh off the scandal with the IRS and Tea Party groups, the IRS and treasury are now proposing rules to curtail the activities of tax-exempt political groups in campaigns. These groups somehow didn't sway the election last time for Mitt Romney. But the administration is still trying to limit their right of free speech.

GIGOT: All right, Matt.

Collin?

LEVY: Paul, I have a hit to all the people who ate a little too much on Thanksgiving. Everyone's feeling guilty now. But as it turns out, studies have actually shown that dieters who do indulge once in a while in high- calorie foods are more likely to be able to lose weight, keep weight off, than people who deprive themselves entirely. So it's good news for your grandmother's advice, which is everything in moderation.

GIGOT: So the "all you can eat" weight-loss diet, Collin, that's what you are suggesting works?

LEVY: That's my way.

GIGOT: Every so often. Great to hear it.

Thank you.

That's it for this week's show. Thanks to my panel and to all of you for watching. I'm Paul Gigot. Hope to see you right here next week.

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