The Dog Days of August

It is hot and humid in New York City. After an unseasonably cool summer, the natural order has reasserted itself.

So, too, it appears in the nation as a whole.

The Republicans have now pretty much embraced their alternative to Obama's politics of change. To "Yes, We Can" they shout "No, We Won't". The issues are more or less irrelevant. When the Administration proposed the stimulus package earlier in the year, the GOP rediscovered its hatred for deficits and opposed it. Never mind that the country was rapidly traveling down the slippery slope to Depression. Or that they themselves had inherited Clinton's trillion dollar plus surplus only to squander it on tax cuts for the top 1% and an off-budget war without rationale (at least one based on fact) in Iraq. The party of one and a half regions (the old Confederacy and some Plains states) would rather oppose than propose.

A few years ago, I wrote an email to to E.J. Dionne of The Washington Post. I told him that Republicans and conservatives run on the platform that government can do no good, and once elected, try to prove it.

Now they are doing that even when they are out of power.

The issue du jour is health care. Progressives already have given up on their preferred reform -- Medicare for all, which is a form of single payer. Instead, as the Clintons did in the '90s, they have accepted the notion that health policy must be fashioned on the dysfunctional foundation created by insurance companies. I suppose there is some market based mechanism that might provide reasonable care for all at costs that do not bankrupt the country. Hillary certainly tried to craft one in 1993, only to be told that her combination of employer mandates, community based rating, and regulatory oversight was government run amok. Her proposal never even made it out of committee. It just became a battering ram for Gingrich's revolution.

Now, in this potential summer of his discontent, Obama is running into the same buzz saw that killed health care reform in the last Democratic Administration. The President, of course, did not march blindly down the path trod by his predecessor. Where the Clintons created first a task force and then an enormous legislative package, sent to the Hill on a wave of "You will pass and I will sign" inspiration from the Presidential bully pulpit, Obama has allowed the Congressional committees to do their work, proposing only broad principles that had to be respected for him to get on board. For him, in truth, there are only two sine qua nons -- all must have access to quality health care and costs must be contained.

So much, however, for differences that don't matter.

This GOP is no different from Gingrich's.

Which was no different from Goldwater's.

Which was no different from Herbert Hoover's.

They do not believe in health care reform. They believe in the profit motive and pretty much nothing else, at least when it comes to domestic economic policy. Applied to the current health care crisis, that results in what for them are a number of ostensibly fundamental principles.

First, for them, there is no crisis. They note that three quarters of the country claims it is satisfied with their current health coverage. What counts as "satisfied" in this context is, of course, more than somewhat loaded. People who have health insurance are "satisfied" only because they have it. If they lose their jobs (and hence their insurance), actually get a serious illness (which then becomes a pre-existing condition, precluding insurability in the future absent later employment based coverage), have a chronic condition like diabetes (in which case, they are forever hostage to being lucky enough to have continuous employment with firms that provide insurance lest they too become uninsurable), or run a small business where they actually have to pay the premiums for everyone else (in which case, they know that premium costs have skyrocketed by more than 80% over the past eight years), they aren't all that "satisfied."

Lucky to be insured, yes.

Satisfied?

Not on your life.

Second, conservatives believe that profit motivated competition actually works in the health sector. Though this is more an article of faith than an empirical reality, it is nevertheless a fundamental element of their economic religion. It ignores, however, a number of salient facts. One is that, for those 65 and older, Medicare already has lopped off the highest risk category of insured, i.e. , those most likely to get sick. Given that the largest proportion of our health care dollars are spent in the last days of life, this is no small point. Put bluntly, we already have socialized well more than half the health delivery system. There really should be nothing wrong in principle with socializing the other half.

The right wing's politics of loud, however, will have none of this. They have now transformed Medicare -- a program the Goldwater Republicans of the 1960s opposed and voted against -- into a government program that no one who has wants in any way to lose ("Keep Your Hands Off My Medicare" said the sign at one of those euphemistically named "Town Hall" meetings where the screamers wouldn't even let the legislators speak), but no one who doesn't have can in any way propose getting (which is what the screamers are saying when they yell about "socialism" or "communism" or anything remotely "European").

The rest of us are left to trust that the benighted insurance companies will take care of us as they run up their profits. This, unfortunately, is a non sequitur for two reasons -- (1) the surest way to higher profit for the insurance companies is less coverage for all of us, whether by exclusions or higher co-pays or the managed "denial" practiced by insurance company bureaucrats under the rubric of "managed care," and (2) in an unregulated environment, the insurance companies can and always will pass the (high) cost of gold-plated care, emergency room treatments for the uninsured, and their bloated administrative budgets (26% of every insurance dollar goes to administrative cost; the comparable amount under Medicare is about 3%) onto us consumers, which is why premium costs have skyrocketed in the last decade.

So much for competition working.

Obama and the Democrats have proposed a sensible solution to these basic problems. To rein in health care costs, they contend that a publicly funded insurance option should be available for those who want it. This is a form of Medicare-lite. If you can't get health care because it is either too expensive, your employer doesn't provide it, or the private sector will no longer give you it, you get to enroll in the public taxpayer financed plan.

Everyone will be legally obligated to have insurance (just as anyone who has a car is obliged to carry auto insurance), so the pool of available premium payers will increase by the 45 million who are now uninsured (minus those who can't afford to pay). Employers who don't insure will pay a small tax, so no one gets to be a financial free loader on the public option plan. (Like the Hoover Republicans who opposed Social Security in the '30s, the right wing today claims that this feature will cost us jobs in the small business sector. It won't, largely because employers who do not now insure are doing so not because they once couldn't, but rather because they no longer can given the quadrupling of insurance premium costs in the last decade.)

And the public plan will keep the insurance companies honest. They won't exclude, or deny, or bloat their administrative budgets because, if they do, they will lose policy holders to the public alternative and eventually go out of business. For the same reason, they won't increase their charges at rates five times that of inflation, which is what they are doing now. The GOP claims that the the public option will rapidly deteriorate into a form of rationing, though the basis for this charge is impossible to ascertain. The screamers who love their Medicare apparently aren't worried about rationing now, and the public option won't be any different. If consumers enrolled in the public option want to buy supplemental plans, they can, just as is the case with current Medicare recipients. In addition, the present system already rations. It gives gold plated care to those who can afford it, and something less to everyone else.

The right wing calls that market based competition.

The diabetic who can't pay for her insulin knows she is being rationed.

Back in the '90s, policy wonks proposed all sorts of competitive solutions to the problem of government waste in general and the assumed (but never proven) lack of productivity of union workers in particular. Osborne and Gaebler wrote a book about it called Reinventing Government. In it, they gave example after example of how competition could make government more efficient. They even pointed out how, in one example that refutes a whole host of conservative shibboleths, unionized sanitation workers in Phoenix agreed to compete with non-unionized waste haulers in that city. The winners were the citizens. Sanitation costs went down.

And, oh, by the way, the union delivered the less expensive product.

Lots of folks on the right embraced this formula when it gave them a perceived cudgel to use on organized labor. Now, however, that the tables have been turned, and public agency competition has been proposed to make health care affordable and accessible to all, the free marketeers are screaming about uneven playing fields and socialism.

They are even showing up at their health care rallies and Town Halls with guns strapped to their legs.

I hope one doesn't accidentally go off during one of their screaming fits.

The resulting injury . . .

Probably won't be covered by their insurance company.

Comments

[Beltane]

HiThe reform plan for universal health care in the US is at risk in part because of the powerful medical insurance lobby and right-wing propaganda machine spreading lies about the Canadian health care system.I have just signed a petition urging the US Congress and American people to ignore the propaganda about the health system in Canada and to turn the debate away from fear and lies -- I thought that you would want to help set the record straight too!Click the link to sign the petition.

http://www.avaaz.org/en/reform_health_care/96.php?CLICK_TF_TRACK

[Neil McCarthy - Huffpost Blogger]

Erkel argues that Canada and the UK prove rationing is the necessary consequence of the proposed public option. But the Democrats aren't proposing systems similar to theirs. They are proposing to create a Medicare like option to compete with the private sector. And in that system (supplemented as it is with private competition), there is no rationing. As for the notion that Econ 101 teaches basic notions of supply and demand such that, if you incease demand without increasing supply, rationing follows, Erk should apply that tenet to reality before he announces it will lead to rationing. As we all know, the current system does not fail to provide health care to the uninsured (those are the 47 miilion he claims constitute the "increased demand" under Obamacare). Rather, the current system provides the most expensive care, usually in an emergency room at a point where the health problem has become worse. Under a reformed system with the public option, those people will be treated earlier and in less costly settings. So, embracing Econ 101, the demand will be statisfied at a lower cost.

In claiming that a public option will not reduce health care costs, Erkel also tells us that student loan programs refute the claimed savings. In fact, however, there are enormous disparities in the cost of public and private universities, and students have been flocking to the former to avoid the high costs of the latter. If anything, the "public option" in higher educatuion is bringing costs down.

[rad21]

Comprehensive healthcare should empower physicians and medical science to be the driving force. Current cost-drivers are health-insurance, pharmaceutical, bio-tech, and bio-engineering companies, led by management interested in their bottom-line; hospital and nursing home administrators; medico-legal system, and consultants. Many doctors claim patients, directing their own treatment options that are not indicated, contribute to higher costs; as do families reluctant to provide basic-care and support to their sick relatives. These cost-drivers contribute to the steep and unsustainable cost-curve. None of these cost-drivers are addressed in the current debate in Congress or town-halls.

The current debate adds to the fragmentation. Complex formulary of insurance and funding only makes the healthcare system more cumbersome and inefficient, adding further irrationalities and alien motivations within the system. And good patient care is lost in the shuffle.

It is the front-line of medical care (physicians, nurses and allied medical professionals) that will make-or-break the new comprehensive healthcare. The old medical adage of "captain of the ship" is an important principle, even in the 21st century; and the one who should be held responsible to "bend the cost-curve."

Short-term, significant savings (i.e no additional dollars needed) can be achieved through reforming payments to insurance and drug companies; as well as providers (doctors and hospitals) by using "Best Practice" paradigms. For more info write to glawrenc@m­­vnhealth.­c­om

[Erkel]

We'll never have real dialog on health care reform with garbage like this article out there. It reinforces stereotypes of the right, just like the right is doing w/'death panel' discussions.

And this article distorts some facts as well.
Take the 3% Medicare admin cost # -- that's a myth. It's been debunked (see here --- http://realclearpolitics.blogs.time.com/2009/06/27/busting-the-administrative-cost-benefit-myth/ ) but the fact that Paul Krugman mentioned it in the NY Times means that most liberal bloggers have taken it as gospel. I guess faith-based medicine is making a comeback?

Some more statements, "The GOP claims that the the public option will rapidly deteriorate into a form of rationing, though the basis for this charge is impossible to ascertain"

With a knowledge of economics 101 you can ascertain this -- keep the supply of medical providers constant, and increased the demand for medical services by 47M people. To check and see if this is rational, look at Canada and the UK (18-24 month wait for hip replacement surgery in CA, etc.).

"To rein in health care costs, they contend that a publicly funded insurance option should be available for those who want it."

This is economic nonsense. Look at university loan programs. Simple supply and demand shows that if you increase the demand (patients covered via some plan - public or private) and provider supply stays the same, cost goes up (or you have rationing, or both).

[Neil McCarthy - Huffpost Blogger]

Medicare is more efficienct. The study Erkel cites asserts that because administrative efficiency is measured as a percentage of overall health care costs, and Medicare treats the aged and therefore those on whom more health care dollars are naturally spent, Medicare's lower administrative percentage is merely a "statistical quirk." Instead, the Heritage Foundation says we should measure administrative costs on a per beneficiary basis, at which point the private sector does better.
To be fair, administrative costs must be measured as a percentage of total health care dollars spent, rather than merely spread over persons deemed beneficiaries. Most people covered by private insurance never make a claim, and the non-Medicare population is itself less likely than the Medicare eligible population to require any medical care. So, sure, if you measure admininistrative costs as a percentage of eligible beneficiaries, the rate will be abnormally low for private insurance companies and conversely higher for the Medicare population. All of which, however, is beside the point. What we need to know is how much of any dollar actually being spent on health care is being siphoned off to cover administrative costs. And when we ask that question, the answer is a low single digit percentage for Medicare and a much higher double digit percentage for the private sector.