Health care reform


The amendment, or altering for the better,
of some faulty state of things,
esp. of a corrupt or oppressive political institution or practice;
the removal of some abuse or wrong.


Everybody desiring change seems to want to bill their change as reform;
who can oppose reform?
So a major part of seizing the propaganda war high-ground
is to get the changes that you desire
accepted by the general public as reform.
So it is with health-care “reform.”

But I want to propose what I view as real reform:
a return to the health-care practices and costs
at a time in the past when the nation could afford its health-care;
i.e., when health care was affordable.
You may want to argue about how far back we should go,
but for the sake of argument I will propose the 1950s,
when health-care ran below five percent of GDP.
And what was wrong with health-care back then?
As I remember it, the major health-care issue people worried about was polio.
But that has, thankfully, been vanquished by a very cost-effective vaccine.

Sure, people lived a few years less on the average, but so what?
Is adding, say, five years of life worth ten percent of the GDP?
most of the extension of life was realized with relatively cost-effective measures,
including changes to our life-style
(good-bye, tobacco smoke; hello, cleaner water and air).

So let’s make health-care affordable again
by ditching most of the high-cost things
that have cropped up over the last decades:
All those drugs that people pop now
(how much did the nation spend on drugs and medications in the 1950s?)
and all those high-tech operations that doctors and the elderly
seem so enamored with.
And by the way:
just how much do all those drug cocktails consumed by those with AIDS cost?
Is society really obliged to pay for the problems people bring on themselves
by their willful and deliberate choice of well-known high-risk behaviors?

The bottom line:
cut health-care spending from sixteen percent of GDP to five percent
and see the economy really improve.
The money saved could be used by compnies to lower costs,
making America more competitive,
and by workers to spend on whatever they chose.

Miscellaneous Articles


Democrats Address Race Issues In Debate
By Anne E. Kornblut and Dan Balz
Washington Post, 2007-06-29


A question about the soaring rates of HIV and AIDS among black teenagers
provoked some of the liveliest replies.
Several of the candidates, including Edwards and Obama, said
a universal health-care system is needed
to treat people across the economic scale.
Edwards drew applause with a three-point plan for AIDS:
searching for a cure,
funding treatment for all patients, and
guaranteeing that HIV and AIDS treatments are covered by Medicaid.
[Hillary Rodham] Clinton
drew an enthusiastic response from women in the audience
when she said that,
if AIDS were afflicting young white women at the rate
it is affecting black women,
“there would be an outraged outcry in this country.”

“If we don’t begin to take it seriously
and address it the way we did back in the ‘90s,
when it was primarily a gay men’s disease,
we will never get the public services and the education that we need,”
Clinton said, eliciting a loud round of applause.



Health Reform’s Savings Myth
Washington Post Op-Ed, 2009-05-31

“Health-care reform is entitlement reform”
has become a mantra of the Obama administration.
The idea is that
Congress can add a massive health-care program this year --
covering the uninsured
use the same measures that pay for the health reform
to fix the broader budget problems.

If that sounds too good to be true, there’s a reason.

Expanding insurance to cover the 46 million Americans who are uninsured
would probably cost more than $100 billion a year --
more than the federal government spends on
education, training, employment and social services combined.
It is an immense undertaking
at a time when the budget is under terrible strain.
So it’s no surprise that
Democrats and the Obama administration do not want to portray it
simply as another big entitlement program.

Some argue that universal coverage would decrease costs
by expanding the risk pool
(bringing healthy young people into the system)
by decreasing emergency room costs,
because more people would get care before their illnesses become acute.
There’s truth to both, but
the savings are vastly outweighed by
the costs of treating so many people who today get little or no care.
Expanding insurance coverage would
increase health-care spending by those who acquire insurance
and add to overall health cost inflation.

Well, then, perhaps expanding coverage can be justified as
the necessary “sweetener”
in a package of tough measures to control costs?
It’s true that Congress doesn’t much like all-pain-and-no-gain policies.
But the administration’s proposal, even before Congress gets to work,
is to spend $100 billion more on coverage
while finding cost-saving measures worth only about a third as much.
Another third would be paid for by tax increases.
The last third, so far, isn’t paid for at all.
That’s three times as much sweetener as medicine, in other words --
and Congress will be tempted to jettison some of the savings
and all of the tax increases.

You doubt Congress would pass a bill that isn’t fully paid for
and that would make the fiscal situation drastically worse?
Just remember the Medicare prescription drug bill,
for which Congress and the Bush administration teamed up
to add a huge new entitlement
without fixing any existing problems in the Medicare system.
Even if Congress paid fully for this latest entitlement,
it seems exceedingly unlikely
that it would do much to improve the longer-term deficit situation.
Health-care costs grow at a faster rate than the economy
by two percentage points per year.
So it’s true that
if we could get them back in line with overall economic growth,
government spending on health care
would be so much lower than projected over time
that long-term budget woes would ease.

Unfortunately, though many ideas are tossed around,
no one really knows how to slow that cost growth.
Health information technology,
better disease management and
preventive care
are all good ideas
that would almost certainly improve the quality of health care,
but they are less certain to slow cost growth.
In fact, the Congressional Budget Office has pointed out that
each of these would either drive up government costs
or have to be paired with other policy changes to create any federal savings.

Two cost-saving measures hold the most promise.
First, what’s known as comparative effectiveness research,
which tracks what works and what doesn’t,
would also require outside boards
directing doctors and hospitals about
what procedures they could and couldn’t use.
Policymakers have tended to dance around the second part of the equation.
eliminating the tax break for employer-provided health care
could generate a good deal of savings
and help bring down health-care inflation.
But, again, there’s a political challenge;
President Obama would have to admit that Sen. John McCain,
his GOP opponent in the presidential campaign,
was right on this idea.

Here is the bottom line:
Most health-care inflation is the result of new technologies.
Bending the curve enough to help balance the budget means
walking away from some of the new technologies and devices
that people want when they are sick.
It also means improving consumer cost-consciousness through insurance reform
and higher deductibles and co-payments.
For most of us, that means paying more, not less.
Even then, it is unlikely to be enough to get costs under control.

Health-care reform will have to be an incremental process:
Try some things now, and try more in a few years.
Maybe we will choose to spend a good deal more on health care,
but if so, even more will have to be done to fix the rest of the budget.
As much as we might wish it were so,

creating an expensive plan to expand coverage,
with some measures to get us started on bringing down costs,
will not be sufficient to improve America’s fiscal health anytime soon --
let alone fix the federal budget.

Wrong Way on Health ‘Reform’
By Robert J. Samuelson
Washington Post, 2009-06-15

It’s hard to know whether President Obama’s health-care “reform”
is naive, hypocritical or simply dishonest.
Probably all three.
The president keeps saying it’s imperative to control runaway health spending.
He’s right.
The trouble is that
what’s being promoted as health-care “reform”
almost certainly won’t suppress spending
and, quite probably,
will do the opposite.

A new report from Obama’s own Council of Economic Advisers
shows why controlling health costs is so important.
Since 1975, annual health spending per person, adjusted for inflation,
has grown 2.1 percentage points faster than
overall economic growth per person.
If this trend continues, the CEA projects that:
  • Health spending,
    which was 5 percent of the economy (gross domestic product) in 1960
    and is reckoned at almost 18 percent today,
    would grow to 34 percent of GDP by 2040 -- a third of the economy.

  • Medicare and Medicaid,
    the government insurance programs for the elderly and poor,
    would increase from 6 percent of GDP now to 15 percent in 2040 --
    roughly equal to three-quarters of present federal spending.

  • Employer-paid insurance premiums for family coverage,
    which grew 85 percent in inflation-adjusted terms from 1996
    to $11,941 in 2006,
    would increase to $25,200 by 2025 and $45,000 in 2040
    (all figures in “constant 2008 dollars”).
    The huge costs would force employers to reduce take-home pay.

The message in these dismal figures is that
uncontrolled health spending is almost single-handedly
determining national priorities.

It’s reducing discretionary income,
raising taxes,
widening budget deficits
and squeezing other government programs.
Worse, much medical spending is wasted, the CEA report says.
It doesn’t improve Americans’ health;
some care is unneeded or ineffective.

The Obama administration’s response is
to talk endlessly about restraining health spending --
“bending the curve” is the buzz --
as if talk will suffice.
The president summoned the heads of major health-care groups
representing doctors, hospitals, drug companies and medical device firms
to the White House.
All pledged to bend the curve.
This is mostly public relations.
Does anyone believe
the American Medical Association can control the nation’s 800,000 doctors
or that the American Hospital Association can command the 5,700 hospitals?

The central cause of runaway health spending is clear.
Hospitals and doctors are paid mostly on a fee-for-service basis
and reimbursed by insurance, either private or governmental.
The open-ended payment system
encourages doctors and hospitals to provide more services --
and patients to expect them.
It also favors new medical technologies,
which are made profitable by heavy use.
Unfortunately, what pleases providers and patients individually
hurts the nation as a whole.

That’s the crux of the health-care dilemma, and Obama hasn’t confronted it.
His emphasis on controlling costs is cosmetic.
The main aim of health-care “reform” being fashioned in Congress is
to provide insurance to most of the 46 million uncovered Americans.
This is popular and seems the moral thing to do.
After all, hardly anyone wants to be without insurance.
But the extra coverage might actually worsen the spending problem.

How much healthier today’s uninsured would be with that coverage is unclear.
They already receive health care --
$116 billion worth in 2008, estimates Families USA, an advocacy group.
Some is paid by the uninsured themselves (37 percent),
some by government and charities (26 percent).
The remaining “uncompensated care” is either
absorbed by doctors and hospitals
or shifted to higher private insurance premiums.
Some uninsured would benefit from coverage, but others wouldn’t.
Either they’re healthy (40 percent are between ages 18 and 34)
or would get ineffective care.

The one certain consequence of expanding insurance coverage is that
it would raise spending.

When people have insurance, they use more health services.
That’s one reason Obama’s campaign proposal
was estimated to cost $1.2 trillion over a decade
(the other reason is that the federal government would pick up some costs
now paid by others).
Indeed, the higher demand for health care might raise costs across the board, increasing both government spending and private premiums.

No doubt the health program that Congress fashions will counter this reality
by including some provisions intended to cut costs
(“bundled payments” to hospitals, “evidence-based guidelines,”
electronic recordkeeping).
In the past, scattershot measures have barely affected health spending.
What’s needed is a fundamental remaking of the health-care sector --
a sweeping “restructuring” --
that would overhaul fee-for-service payment
and reduce the fragmentation of care.

The place to start would be costly Medicare,
the nation’s largest insurance program serving 45 million elderly and disabled.
Of course, this would be unpopular,
because it would disrupt delivery patterns and reimbursement practices.
It’s easier to pretend to be curbing health spending
while expanding coverage and spending.
Presidents have done that for decades,
and it’s why most health industries see “reform” as a good deal.

Health Care Rationing Rhetoric Overlooks Reality
New York Times, 2009-06-17


More to the point: Rationing!

As in: Wait, are you talking about rationing medical care? Access to medical care is a fundamental right. And rationing sounds like something out of the Soviet Union. Or at least Canada.

The r-word has become a rejoinder to anyone who says that this country must reduce its runaway health spending, especially anyone who favors cutting back on treatments that don’t have scientific evidence behind them. You can expect to hear a lot more about rationing as health care becomes the dominant issue in Washington this summer.

Today, I want to try to explain why the case against rationing isn’t really a substantive argument. It’s a clever set of buzzwords that tries to hide the fact that societies must make choices.

In truth, rationing is an inescapable part of economic life. It is the process of allocating scarce resources. Even in the United States, the richest society in human history, we are constantly rationing. We ration spots in good public high schools. We ration lakefront homes. We ration the best cuts of steak and wild-caught salmon.

Health care, I realize, seems as if it should be different. But it isn’t. Already, we cannot afford every form of medical care that we might like. So we ration.

We spend billions of dollars on operations, tests and drugs that haven’t been proved to make people healthier. Yet we have not spent the money to install computerized medical records — and we suffer more medical errors than many other countries.

We underpay primary care doctors, relative to specialists, and they keep us stewing in waiting rooms while they try to see as many patients as possible. We don’t reimburse different specialists for time spent collaborating with one another, and many hard-to-diagnose conditions go untreated. We don’t pay nurses to counsel people on how to improve their diets or remember to take their pills, and manageable cases of diabetes and heart disease become fatal.


Health Reform: Who Holds the Reins on Care?
Washinton Post Letter to the Editor, 2009-07-07

That the health-care industry
is spending obscene amounts of money
on lobbying against the public interest
[“Familiar Players in Health Bill Lobbying,” front page, July 6]
demonstrates the need for at least a strong public option,
if not a single-payer system, in a national health-care bill.
These companies and their executives
are getting rich at the expense of ordinary Americans.

There are a number of lessons to be learned in the American health-care crisis,
but surely one of them is not to be dependent upon organizations in business for private profit (this includes those legally organized as not-for-profit but designed to allow their organizers to get rich). Health care does not lend itself to the kind of private competition that can benefit consumers. I hope members of Congress will refuse to be swayed by these high-powered lobbyists and all the campaign money they can generate and instead legislate in the interest of their constituents. These companies are part of the problem, not part of the solution.

Silver Spring

Before we reinvent the wheel with health care
[“Obama, Party Tout Lower Figure for Health Reform,” news story, July 3],
let’s look back a generation.
When I was growing up,
nearly everyone had Blue Cross/Blue Shield.

Blue Cross covered doctor’s visits and
Blue Shield covered hospitalization.
I don’t recall anyone not receiving treatment
or complaining about the high cost of premiums
or denial of care.

Then in 1973 along came health management organizations.
HMOs were a well-intentioned experiment
but quickly turned into the cash cows
that we now recognize them as being.

Our health-care system became the best in the world
because there was no profit motive.
Blue Cross/Blue Shield was a not-for-profit business,
and, yes, doctors made house calls.

Today we have no health-care system.
What we have is a patchwork of profit-making businesses leaching off society
for the benefit of a handful.
If the marketplace won’t return us to a successful model,
then let government deliver one.
Only when the profit motive is taken out of health care
will we again be able to boast of the best health care in the world.
If private companies won’t change,
it’s time to give them the proper incentive.
I, for one, have no faith in the current system,
and I suspect the majority of Americans feel the same way.

The handful of those screaming about socialized medicine
must have never used their health insurance,
or they might feel differently.


In Health Reform, a Cancer Offers an Acid Test
New York Times Business Column, 2009-07-08

[T]he fundamental problem with our medical system [is]
the combination of
soaring costs and mediocre results.

Some doctors swear by one treatment, others by another.

no one really knows which is best.
Rigorous research has been scant.

Above all,
no serious study has found that the high-technology treatments
do better at keeping men healthy and alive.
Most die of something else before prostate cancer becomes a problem.


The current health care system
is hard-wired to be
bloated and inefficient.

In Retooled Health-Care System, Who Will Say No?
Questions About Cost And Limits Linger
By Alec MacGillis
Washington Post, 2009-07-08

[An excerpt.]

[R]eformers are clearly spooked by
the notion that they could be accused of
denying, for example, hip surgery to an 80-year-old.

[(I presume the author means “hip replacement surgery.”

And just what is wrong with such a denial?
Hip replacement surgery is a creation of the last fifty years.
It is hardly necessary to lead a full and active life;
people led long, full and active lives long before this surgery was invented.
And when a person is 80,
society hardly owes him (or her) a huge investment in
the declining years of his or her life.

What we seem to have now is a bizarre notion of
ever more expensive health care procedures
trying to prolong the vigor of youth ever longer and longer,
at the expense of those who are really youthful.

And note well: those now claiming that
society needs to spend so much on their medical “needs”
in their declining years
made no such gargantuan per-capita expenditures on their predecessors.
Medicare, for example, did not exist before the 1960s.

Truly, what we have now is not the “greatest generation”,
but the “entitlement generation.”]

Give Up A Benefit, Gain Jobs
By Leonard E. Burman
Washington Post Op-Ed, 2009-07-09

With union membership shrinking and wages strained,
it might sound crazy to argue that
labor should voluntarily give up a huge fringe benefit:
tax-free health insurance provided by employers.
But it should.
In the long run,
capping the amount of health insurance that employers can provide tax-free would
raise workers’ wages,
partially protect them from layoffs and
speed rehiring after a downturn.


Whip Inflation Now
New York Times Op-Ed, 2009-07-10

Over the past few decades,
health care inflation has exceeded the general rise in prices
by about 2.5 percent a year.

These inexorably rising costs are
bankrupting the nation,
walloping businesses and
squeezing middle-class salaries.

Fortunately, the country now has an excellent opportunity to change that.
We have a president fervently committed to reducing health care inflation.
We have a budget director
who is perhaps the nation’s leading expert on the issue.
We have a fiscal crisis staring us in the face, just to focus the mind.

And what is the result so far?
Failure. Overwhelming, amazing failure.

The health care bills now winding their way through Congress
would cover many of the uninsured.
They would pay for most of the costs associated with that expanded coverage.
they would do little to
change the fundamental incentives that drive health care inflation.

Health care providers would still largely rely on a fee-for-service system.
They could still ignore cost-benefit analyses
when deciding what treatments to provide.

As Alec MacGillis reported
in a front-page piece in The Washington Post this week,
“All signs in Washington suggest that
cost considerations will be kept at arm’s length
as health-care legislation moves forward.”
As my colleague David Leonhardt wrote in his column this week,
“The current health care system is hard-wired to be bloated and inefficient,”
and health care economists don’t see the current bills doing enough to fix that.

The basic problem is that
the American people have gotten used to high-tech, all-everything health care,
under the illusion that they don’t have to pay for it
and that it’s always better for them.
[And who is to blame
for allowing Americans to continue to labor under that delusion?]

Politicians are unwilling to force voters and donors
to give up that sort of system,
even the parts that are ineffective.

There are several ideas floating around that could reduce inflation,
but they are neutered in the current bills.
For example, many people believe that
comparative effectiveness research would bend the cost curve.
The current bills would pay for that research but negate the effects
by allowing everybody to ignore the findings.

Many people believe that ending the tax exemption on employer health benefits
would reduce costs and make consumers more conscious of cost considerations.
But the House has rejected that,
and the Senate is walking away from even capping that tax exemption.

Many people believe that a public plan
would save money through lower administrative costs
and because a government-controlled system
would allow the government to ram through cost reductions.
But lower administrative costs, even if they materialized,
would not affect the fundamental incentives driving inflation.
And the current public plan wouldn’t really change the system.
A Congressional Budget Office analysis of the public plan provisions
in the bill from the Senate committee on Health, Education, Labor and Pensions (HELP)
projected that they would neither increase the total number of people insured
nor substantially affect costs,
“largely because the public plan
would pay providers of health care at rates comparable to
privately negotiated rates.”

Then there are all these mysterious deals
the White House is cutting with industry groups.
They sound good, but it’s not clear what industry is getting in return,
and they, too, would not alter the fundamental incentives.

Keith Hennessey, the former chief of the National Economic Council,
studied the HELP bill and wrote on his blog that aside from one provision,
“I can find nothing that would provide information and incentives
to consumers, medical professionals, health plans, employers or government
to slow the growth of long-term private health care spending.”

Wait, it gets worse.

The bills not only fail to reduce health care inflation,
they make it harder to fix the larger fiscal mess later.
They do that by

taking the chits we could use to balance the overall budget
and using them
to cover the $1.3 trillion in new federal health spending.

To get our overall fiscal house in order,
we’re going to need to raise taxes on the rich.
The House bill would use that chit to pay for expanded coverage.
We’re going to have to take a bite out of Medicare spending.
The administration plan does that to pay for expanded coverage.
We’re going to have to tax people in the middle class more.
The Congressional bills effectively do that by mandating coverage
and then failing to subsidize middle-class consumers.
But that burden, too, is to pay for new coverage.


Instead of brightening the fiscal picture,
these bills make it immeasurably worse.

Health care inflation is not some optional side issue
that can be left out of reform.
It is the core problem that undermines the viability of
the health care system,
the federal budget
and the economy as a whole.
Maybe the administration
will provide some last-minute solution in conference or somewhere else.
But right now the prospects don’t look good.

[The ugly truth:
Health care is a cancer, that is destroying America's fiscal health.]

A 9-1-1 for Health-Care Reform: Send Leadership Now
By Steven Pearlstein
Washington Post Column, 2009-07-15

Why We Must Ration Health Care
New York Times Magazine, 2009-07-19

Challenge to Health Bill: Selling Reform
New York Times, 2009-07-22


What’s in it for me?

On the subject of health care reform,
most Americans probably don’t have a good answer to the question.
And that, obviously,
is a problem for the White House and for Democratic leaders in Congress.

Current bills would expand the number of insured —
but 90 percent of voters already have insurance.
Congressional leaders say the bills would cut costs.
But experts are dubious.
Instead, they point out that covering the uninsured would cost billions.

So the typical person watching from afar is left to wonder:
What will this project mean for me,
besides possibly higher taxes?

Barack Obama was able to rise from the Illinois State Senate to the presidency
in large measure
because of his ability to explain complex issues
and then to make a persuasive argument.
He now has a challenge worthy of his skills.

Our health care system is engineered, deliberately or not,
to resist change.

The people who pay for it — you and I —
often don’t realize that they’re paying for it.
Money comes out of our paychecks,
in withheld taxes and insurance premiums,
before we ever see it.
It then flows to doctors, hospitals and drug makers
without our realizing that it was our money to begin with.

The doctors, hospitals and drug makers use the money to treat us,
and we of course do see those treatments.
If anything, we want more of them.
They are supposed to make us healthy, and they appear to be free.
What’s not to like?

The immediate task facing Mr. Obama —
in his news conference on Wednesday night and beyond —
is to explain that the health care system
doesn’t really work the way it seems to.
He won’t be able to put it in such blunt terms.
But he will need to explain how a typical household,
one that has insurance and thinks it always will,
is being harmed.

The United States now devotes one-sixth of its economy to medicine.
Divvy that up, and
health care will cost the typical household roughly $15,000 this year,
including the often-invisible contributions by employers.
That is almost twice as much as two decades ago (adjusting for inflation).
It’s about $6,500 more than in other rich countries, on average.

We may not be aware of this stealth $6,500 health care tax,
but if you take a moment to think, it makes sense.
Over the last 20 years,

health costs have soared, and
incomes have grown painfully slowly.
The two trends are directly connected:
employers had to spend more money on benefits,
leaving less for raises.

In exchange for the $6,500 tax, we receive many things.
We get cutting-edge research and heroic surgeries.
But we also get fabulous amounts of waste — bureaucratic and medical.

One thing we don’t get is better health than other rich countries,
whether it’s Canada, France, Japan or many others.
In some categories, like emergency room care, this country seems to do better.
In others, like chronic-disease care, it seems to do worse.
“The fact that we spend all this money
and don’t have better outcomes than other countries
is a sign of how poorly we’re doing,”
says Dr. Alan Garber of Stanford University.
“We should be doing way better.”

So far,

no one has grabbed the mantle as
the defender of the typical household —
the opponent of
spending that
creates profits for drug companies and hospitals
at no benefit to people’s health and
at significant cost to their finances.

Republicans have actually come out against
doing research into which procedures improve health.
[I used to believe the GOP could do no wrong,
but this position seems impossible to justify.
What is the GOP, just the party of the health-care industry?]

Blue Dog Democrats oppose wasteful spending but until recently
have not been specific.
Liberals rely on the wishful idea — yet to be supported by evidence —
that more preventive care will reduce spending.
The American Medical Association, not surprisingly,
endorses this notion of doing more care in the name of less care.

Mr. Obama says many of the right things.
Yet the White House has not yet shown that
it’s willing to fight the necessary fights.
Remember: the $6,500 tax benefits someone.
And that someone has a lobbyist.
The lobbyist even has an argument about how he is acting in your interest.

These lobbyists,
who include big names like Dick Armey and Richard Gephardt,
have succeeded in persuading Congress to write bills
with a rather clever feature.
They include some of the ideas that would cut costs — but defang them.

One proposal would pay doctors
based on the quality of care, rather than quantity,
but it’s a pilot project.
Doctors who already provide good care may well opt in;
doctors providing wasteful but lucrative care surely will not.
The bills would also finance research on which treatments are effective.
But Medicare officials would not be prevented from
continuing to spend taxpayer money on ineffective treatments.

In reaction,
some people who should be natural supporters of reform have become critics.
The Mayo Clinic — one of Mr. Obama’s favorite models of care —
says the legislation fails to
“help create higher-quality, more affordable health care.”

On Thursday, Mr. Obama will visit another example he likes to cite,
the Cleveland Clinic.
Its successes capture what real reform would look like.
Like Mayo,
the Cleveland Clinic pays its doctors a salary, rather than piecemeal,
and delivers excellent results for relatively little money.

“I came here 30-some years ago,” Delos Cosgrove,
a heart surgeon who is the clinic’s chief executive, told me.
“And I have never received any additional pay for anything I did.
It never made a difference if I did five heart operations or four —
I got paid the same amount of money.
So I had no incentive to do any extra tests or anything.”

This is the crux of the issue, economists say:
the current fee-for-service system needs to be remade.
The administration has made some progress,
by proposing a powerful new Medicare overseer
who could force the program to pay for good results
and stop paying for bad ones.

But even a strong Medicare plan won’t be enough.
Reform will need to attack the piecemeal system in numerous ways.
Among the most promising, which Mr. Obama has resisted,
is a limit on tax subsidies for the costliest health insurance plans.
This limit would give households and employers
a reason to become smarter shoppers.

Above all, reform can’t revolve around
politely asking the rest of the medical system
to become more like the Cleveland Clinic.

In recent weeks, polls have shown that a solid majority of Americans
support the stated goals of health reform.
Most want the uninsured to be covered
and want the option of a government-run insurance plan.
Yet the polls also show that people are worried about
the package emerging from Congress.

Maybe they have a point.

Forget Who Pays Medical Bills, It’s Who Sets the Cost
New York Times, 2009-07-26

Health Care Reform and the Unpopular T-Word
New York Times, 2009-07-29


The numbers show there is only one sure way out of the problem,
and, after months of roundabout discussion, that solution has re-emerged:
It’s a tax on health care.

If Congress taxes health care,
the revenue has a chance of rising with health spending.
A health tax will also create an incentive
for workers and businesses to slow the growth of health spending —
thus reducing the amount of taxes needed to pay the nation’s health bill.

Health Reform Collides With Labor's Cadillac
By Charles Lane
Washington Post Opinion, 2009-09-27

[An excerpt.]

Organized labor’s tooth-and-nail fight to protect union health benefits
is a significant -- but underreported -- obstacle to sensible health-care reform.

Practically every serious analyst of U.S. health care says
the tax exclusion for employer-provided health benefits
distorts the system.

Valued at $250 billion per year, this break

encourages more consumption of costly care
by those with employer-provided plans

while denying the government money to insure the uninsured.

Wall Street executives and other rich Americans benefit disproportionately --
but so do union workers,
who extract tax-free health benefits from their employers in lieu of wages.
This is especially true for politically influential public employee unions,
such as McEntee’s American Federation of State, County and Municipal Employees (AFSCME).

In New Hampshire, state employees contribute just $720 a year
for coverage that costs $20,400 per family,
according to the Boston Globe.
They get free MRIs, free prenatal care and $450 a year for a gym membership.
All told, it’s more than twice as much coverage
as the average family receives through work.
And it cost New Hampshire’s taxpayers $234 million last year.

At General Motors -- now taxpayer-owned --
active United Auto Workers members make no monthly contribution
and pay no deductible for their health insurance coverage.
They face no co-insurance costs for in-network physician services
and an annual out-of-pocket maximum of just $500 per family
for out-of-network doctors,
according to the company.
No wonder they call them “Cadillac” plans.

And so labor defends the tax exclusion
with every ounce of its considerable clout....

Imperfect as it is,
Baucus’s proposal forces modest redistribution of health-care resources
from those who have more
to those who have less -- or none....

The third-best reform
How Congress ducks the problem of tax-free health insurance
Washington Post Editorial, 2009-10-25

[Thought I’d include this to show that
there are some Post editorials that I agree with;
also because I think this is an important issue,
but one where the political climate seems entirely on the wrong side.]


If there is one thing on which economists across the political spectrum agree when it comes to health-care reform, it is the unfair and counterproductive effect of the special tax treatment given to employer-sponsored health insurance.


Employer-provided health insurance is tax free, no matter how generous. This is an artifact of World War II-era wage controls; employers attracted workers by offering insurance in lieu of pay increases. It has grown into the largest single preference in the tax code and the second largest -- after Medicare -- federal cost for health care: some $250 billion annually.

The impact of treating these forms of compensation differently is to shift money that would have gone to workers in the form of wages into health coverage. This in turn encourages people to consume more health care than they would have without the tax preference, driving up health costs. It is regressive because it represents a bigger benefit to earners in higher-income tax brackets. It is unfair because it gives those with employer-sponsored insurance a tax break not enjoyed by those who purchase coverage on their own with after-tax dollars. In short, it is the single most sensible source of financing for health reform.

The best approach would be to eliminate the tax-free treatment and use the money to provide tax credits.

This is anathema to labor, which explains the House Democrats’ revolt. One argument is that it is unfair, as the House Democrats’ letter put it, “to middle-income Americans that have forgone wage and salary increases for strong insurance benefits.” But most existing collective bargaining agreements will have expired by the time the provision takes effect, so that mix can be renegotiated; if that is not enough, why not simply exempt existing union contracts? Another argument is that this approach penalizes workers in high-cost states and high-risk industries, along with older workers. However, the finance committee bill sets thresholds 20 percent higher in the 17 most expensive states for the first few years. Similarly, it sets a higher cap for retired workers 55 and older and for those in high-risk jobs.

Labor’s answer is that these exemptions are not generous enough. But its basic position seems to be that its members should continue to forgo wage increases to obtain increasingly costly insurance -- and, more fundamentally, that union members should not have to ante up a dime from their generous benefits to ensure that others get basic coverage.


Health bills too timid on cutting costs, experts say
Proposals make only trims where broader changes are needed, critics argue
By Ceci Connolly
Washington Post, 2009-11-04

Half done on health reform
By David S. Broder
Washington Post, 2009-11-13

[Some excerpts:]

[T]he House bill simply

postpones the cost controls needed to finance
the vast expansion of insurance coverage and Medicaid benefits

envisaged by its sponsors.


Just as [Congress] did under Republican control in the George W. Bush years,
when it passed but did not pay for a Medicare prescription drug benefit,
it is about to

hand out the goodies
leave it to the next generation to pick up the bill.

Obamacare: Buy now, pay later
By Robert J. Samuelson
Washington Post, 2009-11-16

There is an air of absurdity to
what is mistakenly called “health-care reform.”
Everyone knows that the United States
faces massive governmental budget deficits as far as calculators can project,
driven heavily by an aging population and uncontrolled health costs.
As we recover slowly from a devastating recession,
it’s widely agreed that,
though deficits should not be cut abruptly
(lest the economy resume its slump),
a prudent society would embark on long-term policies to
control health costs, reduce government spending
and curb massive future deficits.
The administration estimates these at $9 trillion from 2010 to 2019.
The president and all his top economic advisers proclaim
the same cautionary message.

So what do they do?
Just the opposite.
Their far-reaching overhaul of the health-care system --
which Congress is halfway toward enacting --
would almost certainly make matters worse.
It would create new, open-ended medical entitlements
that threaten higher deficits and
would do little to suppress surging health costs.
The disconnect between what President Obama says and what he’s doing
is so glaring that most people could not abide it.
The president, his advisers and allies have no trouble.
But reconciling blatantly contradictory objectives
requires them to engage in
willful self-deception, public dishonesty, or both.

The campaign to pass Obama’s health-care plan has assumed
a false, though understandable, cloak of moral superiority.
It’s understandable because
almost everyone thinks that people in need of essential medical care
should get it;
ideally, everyone would have health insurance.
The pursuit of these worthy goals can easily be projected as
a high-minded exercise for the public good.

It’s false for two reasons.
First, the country has other goals --
including preventing financial crises
and minimizing the crushing effects of high deficits or taxes
on the economy and younger Americans --
that “health-care reform” would jeopardize.
[I.e., the opportunity costs.]
And second, the benefits of “reform” are exaggerated.
Sure, many Americans would feel less fearful about losing insurance;
but there are cheaper ways to limit insecurity.
Meanwhile, improvements in health for today’s uninsured would be modest.
They already receive substantial medical care.
Insurance would help some individuals enormously,
but studies find that, on average, gains are moderate.
Despite using more health services,
people don’t automatically become healthier.

The pretense of moral superiority further erodes before
all the expedient deceptions used to sell Obama’s health-care agenda.
The president says that he won’t sign legislation that adds to the deficit.
One way to accomplish this is to put costs outside the legislation.
Doctors have long complained that their Medicare reimbursements are too low;
the fix for replacing the present formula
would cost $210 billion over a decade,
estimates the Congressional Budget Office.
That cost was originally in the “health reform” legislation.
Now, it’s been moved to another bill
but, because there’s no means to pay for it (higher taxes or spending cuts),
deficits would increase.

Another way to disguise the costs is to count savings that,
though they exist on paper,
will probably never be realized in practice.
The House bill is credited with
reductions in Medicare reimbursements for hospitals and other providers
of $228 billion over a decade.
But Congress has often prescribed reimbursement cuts that,
under pressure from squeezed providers, it has later rescinded.
Claims of “fiscal responsibility” for the health-care proposals
reflect “assumptions that are totally unrealistic based on past history,”
says David Walker, former U.S. comptroller general
and now head of the Peter G. Peterson Foundation.

Equally misleading, Obama’s top economic advisers assert that
the present proposals would slow the growth of overall national health spending.
Outside studies disagree.
Three studies
(two by the consulting firm the Lewin Group for the Peterson Foundation
and one by the Centers for Medicare & Medicaid Services, a federal agency)
conclude that
various congressional plans would increase national health spending
compared with the effect of no legislation.
The studies variously estimate that the extra spending, over the next decade,
would be $750 billion, $525 billion and $114 billion.
The reasoning:
Greater use of the health-care system by the newly insured would overwhelm cost-saving measures
(bundled payments, comparative effectiveness research, tort reform),
which are either weak or experimental.

Though these estimates could prove wrong,
they are more plausible than the administration’s self-serving claims.
Its health-care plan is not “comprehensive,”
as Obama and the New York Times (in its news columns) assert,
because it slights cost control.
Obama chose to emphasize the politically appealing path of expanding benefits
rather than first attending to
the harder and more urgent task of controlling spending.
If new spending commitments worsen some future budget or financial crisis,
Obama’s proposal certainly won’t qualify as “reform,”
as the president and The Post (also in its news columns) call it.
It’s more like malpractice: a self-inflicted wound.

Health ‘reform’ that burdens our young
By Robert J. Samuelson
Washington Post, 2009-11-23

Budget Hawks Have a Buffet of Options With Health Bill
New York Times, 2009-11-25

I Am a Death Panelist. I Am Not the Problem.
New York Times Economix Blog, 2009-12-09


[W]hy can’t Congress write a bill that really saves money?

The answer lies in an unwillingness to come to grips with
the need to limit access to some treatments.
We continue to develop expensive technologies — which is good, not bad —
but then we apply them to broader swaths of the population
without any evidence they will work.
The current uproar over mammograms for women under 50
is a particularly poignant example.

Yet both sides in the health care debate refuse to do anything about this.

Everyone from Michael Moore to Sarah Palin agrees that
limiting access to any beneficial care,
no matter how cost-ineffective,
is unequivocally immoral.


Admittedly, coverage panels don’t always get the decisions right. The panels often undervalue the benefits of treatment, especially for end-of-life care when there is no cure. But the alternative — covering every beneficial treatment, no matter how expensive and no matter how small the benefit — is a recipe for unaffordable health insurance.

Clearly the policy goal should be to get the right drugs and treatments to the patients who need it. But it also sometimes means withholding treatment in cases where it might do little good.

It is here that politicians drop the ball, unwilling to accept any rationing of care.

The irony is that rationing is not unique to health care.

Suppliers who can sell televisions more cheaply are rewarded with more market share, and consumers decide whether they want to purchase a television. So televisions are rationed based on market prices.

The problem with using prices to ration health care is that insurance completely insulates the patient from the full price. There is little incentive for the supplier to lower costs. But there are ways to make the patient more sensitive to price.

For example, we could restructure health benefits so that consumers are asked to pay more out-of-pocket for services providing little clinical benefit. Patients who insist on an MRI for their headache will think twice if they have to pay several hundred dollars for it.

The alternative approach is to ration upstream — that is, the government decides what makes it to the market in the first place. The Food and Drug Administration is responsible for approving many new treatments and medical devices. Right now it makes this decision solely on the basis of medical necessity. So if your drug is even slightly better than standard care, it gets approved regardless of whether it costs $100 or $200,000 a year.

So what could we do?

In an ideal world, we would give Medicare and other government payers the authority to explicitly take cost-effectiveness into account when making coverage decisions. Unfortunately, both major political parties are adamant that Medicare — which everyone loves because patients can get whatever their doctor wants, regardless of cost — should continue to cover everything.

In the absence of such fundamental reforms, there are worthwhile (albeit smaller) steps we can take to encourage greater consciousness of health care costs. And these steps do not require government panels making health care decisions.

Most importantly, we should stop providing a tax subsidy for the purchase of health insurance.

Doing so encourages people to buy the most generous plans, which tend to cover all services regardless of clinical need or cost-effectiveness. In the long run, this leads to higher costs for everyone. At the very least, we should impose a binding “Cadillac tax” on unusually expensive health insurance plans. Over time, we would see more cost-conscious spending on services.

Second, we could tilt the drug- and device-approval process to encourage cost savings.

This could be done by offering expedited F.D.A. approval — and immediate coverage by Medicare — if manufacturers could demonstrate their innovation will reduce overall health care costs. This judgment would be made by independent experts, as the F.D.A. does now, and would be monitored through post-marketing studies. Such decisions are made routinely in other countries with national health systems.

Third, we need to let managed care do its job, which means, well, managing care.

Patients and doctors don’t like H.M.O.’s because they say “no” or put up barriers to care — unlike Medicare, which pays for everything. But in world of finite resources, people should be able to choose plans that have a wide variety of cost controls to ensure both expensive and inexpensive plans.

Fourth, we need legal reform.

When managed care restricts access, patients complain, and it is often arbitrarily disputed in the courts. The Congressional Budget Office rightly points out that tort reform by itself, in the form of liability caps, will do little. But more fundamental reform — including moving malpractice into experienced specialty courts where court-appointed experts decide the standard of care — could save more.

Without such reforms, health insurance will become so expensive that Americans may end up being forced to accept “death panels” — just as they have in virtually every other industrialized country. Until then, a better choice is to nudge the health care system in the right direction.

Long-Term Care Stirs Health Care Debate
New York Times, 2009-12-14


Embedded in sweeping health legislation passed by the House and being debated on the Senate floor is a major new federal insurance program for long-term care intended to help people like Anne M. Rader.

Ms. Rader, 45, works at Booz Allen Hamilton as a consultant to federal agencies on emergency preparedness. Even though she has cerebral palsy and multiple sclerosis, she leads a full, active life. But she worries that she will lose her independence if her conditions grow worse.

“Having two disabilities, two disabling conditions, I can’t predict what will happen in the future,” said Ms. Rader, who lives alone in a condominium in Arlington, Va.

Advocates for older Americans and people with disabilities see the program as a long-overdue effort to address needs that will explode as baby boomers age. It is meant for people with severe disabilities who want to live in the community, though the benefits could also be used to help pay for nursing home care or assisted living.

But critics say that the program is unsustainable and that it could ultimately create serious fiscal problems for the government.


Robert J. Samuelson on health reform's ghost savings
By Robert J. Samuelson
Washington Post, 2009-12-14

We are witnessing a determined counterattack
by the Obama administration and its political allies
on the matter of health-care costs.
Many critics (including me) have argued that
President Obama’s “reform” agenda
wouldn’t control rapidly rising health spending
and might speed it up.
The logic is simple.
People with insurance use more health services than those without.
If government insures 30 million or more Americans,
health spending will rise.
Greater demand will press on limited supply; prices will increase.

The best policy:
Control spending first, then expand coverage.


Writing in the Wall Street Journal,
Dr. Jeffrey Flier, dean of the Harvard Medical School,
gave the various health bills a “failing grade” and said
they wouldn’t “control the growth of costs or raise the quality of care.”
Quoted in Newsweek,
Dr. Delos Cosgrove, head of the Cleveland Clinic, said much the same.
Richard Foster,
the chief actuary of the federal Centers for Medicare & Medicaid Services,
doubts the cost-saving provisions touted by CAP would save much money.
He’s also skeptical that Congress,
facing complaints from hospitals and a squeeze on services,
would allow all the Medicare reimbursement cuts to take effect.
True, Congress has permitted some reimbursement reductions to occur,
but it has repeatedly blocked the Sustainable Growth Rate adjustment for doctors,
which most resembles the new proposals.

Health cost increases might spontaneously recede,
but history suggests skepticism.
The relentless advances reflect an open-ended insurance and delivery system
that gives neither patients nor providers any reason to restrain spending.
To attack costs first would be politically challenging.
It would require admitting
that all good things are not possible simultaneously and
that the uninsured already receive much medical care.
It would require genuine bipartisanship,
not just a scramble for a few Republican votes.
And it would require stronger measures
to dismantle a fee-for-service delivery system
that now rewards more, not better, care.
That’s a demanding and realistic approach;
Obama’s is wishful thinking.

Passing health reform could be a nightmare for Obama
By Robert Samuelson
Washington Post, 2009-12-21


What to do before spending more on health care
By Robert J. Samuelson
Washington Post Op-Ed, 2010-02-01

The Cost of Doing Nothing on Health Care
New York Times Week in Review, 2010-02-28


Nearly every mainstream analysis
calls for medical costs to continue to climb over the next decade,
outpacing the growth in the overall economy
and certainly increasing faster than the average paycheck.
Those higher costs will translate into higher premiums,
which will mean fewer individuals and businesses
will be able to afford insurance coverage.
More of everyone’s dollar will go to health care,
and government programs like Medicare and Medicaid
will struggle to find the money to operate.

[Not if they refuse to pay for ever-more-costly procedures, drugs, and treatments,
and stick to paying for only the procedures and treatments
that they have paid for in the past.]

Policy makers, in the end, may be forced to address the issue.

“It will break all of our banks if we do nothing,”
said Peter V. Lee,
who oversees national health policy for the Pacific Business Group on Health,
which represents employers that offer coverage to workers.
“It is a course that is literally bankrupting the federal government and businesses and individuals across the country.”

Even those families that enjoy generous insurance now
are likely to see the cost of those benefits escalate.
The typical price of family coverage now runs about $13,000 a year,
but premiums are expected to nearly double, to $24,000, by 2020,
according to the Commonwealth Fund.
That equals nearly a quarter of the median family income today.

While some employers
will continue to contribute the lion’s share of those premiums,
there will be less money for employees in the form of raises or bonuses.

“It’s also cramping our economic growth,”
said Frank McArdle ...
Spending so much on health care
is “really a waste of people’s money,” Mr. McArdle said.


Sen. John Barrasso makes remarks on coverage at White House health summit
CQ Transcriptions
Washington Post, 2010-02-25

Six Ideas for America!
New York Times Week in Review, 2010-02-28


When Aunt Minnie back in the district
has a hip replacement (her second) and gets a bill for $90,000,
the challenge is not to find someone other than Aunt Minnie to pay.
The challenge is to deliver hip replacements for less than $90,000,
or tell Aunt Minnie she can’t have one.

[You tell her! :-)
And get the AARP on your back.]

Buffett: Health Care "Tapeworm" Drags on Economy
New York Times reprinting Reuters, 2010-03-01

NEW YORK, March 1 Reuters) -
Warren Buffett said “out of control” health care costs are
a “tapeworm” limiting growth
in an economy recovering only fitfully from the financial crisis.

The world’s second-richest person called on Washington policymakers
to adopt fundamental reforms on such costs
to address what he called a “national emergency.”

He said health care eats up 17 percent of U.S. gross domestic product,
at a time when many other countries pay only nine or 10 percent of GDP
but have more doctors, nurses and hospital beds per capita.

“It’s like a tapeworm eating at our economic body,”
Buffett said on CNBC television.


Is Pelosi right on health care and jobs?
by Charles Lane
Washington Post PostPartisan Blog, 2010-03-01

Obama's empathy meets the politics of governing
By Fred Hiatt
Washington Post, 2010-03-01

President Obama’s true nature --
radical or pragmatist, partisan or conciliator --
is a subject of endless debate.
No doubt it will be still a century from now.

But for a moment in the health-care summit last week,
he offered as clear a view as we are likely to get --
not only of his reasons for sticking with health-care reform
but also why he wanted to be president,
maybe even why he became a politician.
It came in his response to Sen. John Barrasso (R-Wyo.),
a physician who had argued (to oversimplify) that
the United States already offers the world’s best care and that
people should have to save and pay for it
rather than depend entirely on the government.

“Would you feel the same way if you were making $40,000?” Obama asked.
“Because that’s the reality for a lot of folks . . .
because the truth of the matter, John, is
they’re not premiers of anyplace, they’re not sultans from wherever.
They don’t fly into [the] Mayo [Clinic] and suddenly decide
they’re going to spend a couple million dollars on the absolute, best health care.
They’re folks who are left out.

“And this notion somehow that for them the system was working
and that if they just ate a little better [cf.]
and were better health-care consumers
they could manage is just not the case,”
Obama continued.

[Let me just say this:
If the American public made more health-conscious choices about their diet,
they would need a lot less health care.]

“The vast majority of these ‘ million [uninsured] people
or 30 million people that we’re talking about, they work every day.
Some of them work two jobs.
But if they’re working for a small business, they can’t get health care.
If they are self-employed, they can’t get health care.

“And you know what? It is a scary proposition for them.”


[A full transcript of this discussion is linked to here.]

What Obama 'left out' about the uninsured
by Charles Lane
Washington Post PostPartisan Blog, 2010-03-02

The Emotion of Reform
New York Times Op-Ed, 2010-03-09

[This column is much more than its title implies.
It contains a long list of reasons why
the Democrat’s proposed healthcare bill
will add far more to future federal deficits than is advertised.
Here is the germane last half of the column.]


Small business owners have been screaming about the health care bill
that forces them to offer coverage or pay a $2,000-per-employee fine
but doesn’t substantially control rising costs.
Democrats hear their concerns,
but push ahead because getting a health care bill is more important.

Then there is the larger issue of exploding federal deficits.
A few Democrats are genuinely passionate about this,
President Obama among them.
He has fought tenaciously
to preserve a commission that might restrain Medicare spending.
But 90 percent of the people in Congress
have no emotional investment in this issue.

They’re going through the motions.
They’ve stuffed the legislation with gimmicks and dodges
designed to get a good score from the Congressional Budget Office
but don’t genuinely control runaway spending.

There is the doc fix dodge.
The legislation pretends that
Congress is about to cut Medicare reimbursements by 21 percent.
Everyone knows that will never happen,
so over the next decade
actual spending will be $300 billion higher than paper projections.

There is the long-term care dodge.
The bill creates a $72 billion trust fund
to pay for a new long-term care program.
The sponsors count that money as cost-saving,
even though it will eventually be paid back out
when the program comes on line.

There is the subsidy dodge.
Workers making $60,000 and in the health exchanges
would receive $4,500 more in subsidies in 2016
than workers making $60,000 and not in the exchanges.
There is no way future Congresses will allow that disparity to persist.
Soon, everybody will get the subsidy.

There is the excise tax dodge.
The primary cost-control mechanism and long-term revenue source for the program is
the tax on high-cost plans.
But Democrats aren’t willing to levy this tax for eight years.
The fiscal sustainability of the whole bill rests on the naïve hope that
a future Congress will have the guts to accept a trillion-dollar tax
when the current Congress wouldn’t accept an increase of a few billion.

There is the 10-6 dodge.
One of the reasons the bill appears deficit-neutral in the first decade is that
it begins collecting revenue right away
but doesn’t have to pay for most benefits until 2014.
That’s 10 years of revenues to pay for 6 years of benefits,
something unlikely to happen again
unless the country agrees to go without health care for four years every decade.

There is the Social Security dodge.
The bill uses $52 billion in higher Social Security taxes
to pay for health care expansion.
But if Social Security taxes pay for health care,
what pays for Social Security?

There is the pilot program dodge.
the bill includes pilot programs designed to help find ways to control costs.
But it’s not clear that the bill includes
mechanisms to actually implement the results.
This is exactly what happened to undermine previous pilot program efforts.

The Democrats have not been completely irresponsible.
It’s just that as the health fight has gone on,
their passion for coverage has swamped
their less visceral commitment to reducing debt.
The result is a bill that is fundamentally imbalanced.

This past year, we’ve seen how hard it is
to even pass legislation that expands benefits.
To actually reduce benefits and raise taxes,
we’re going to need legislators who wake up in the morning
passionate about fiscal sanity.
The ones we have now are just making things worse.

[Easy as it is to bash politicians,
I think that politicians almost uniformly respond to
a combination of voter pressure and lobbying group pressure.
The reason that Congress isn’t reducing the deficit is that
the American people are not yet passionate about it.]

Obama’s illusions of cost-control
By Robert J. Samuelson
Washington Post Op-Ed, 2010-03-15

One job of presidents is
to educate Americans about crucial national problems.
On health care, Barack Obama has failed.
Almost everything you think you know about health care
is probably wrong or, at least, half wrong.
Great simplicities and distortions have been peddled
in the name of achieving “universal health coverage.”
The miseducation has worsened as the debate approaches its climax.

There’s a parallel here: housing.
Most Americans favor homeownership, but uncritical pro-homeownership policies (lax lending standards, puny down payments, hefty housing subsidies) helped cause the financial crisis.
The same thing is happening with health care.
The appeal of universal insurance --
who, by the way, wants to be uninsured?
[I do. I’ll be damned before I have to be put in a risk pool
with all those fat asses who are too lazy and/or glutinous
to perform their individual responsibilities to keep themselves healthy.
Who wants to be paying for Bill Clinton’s and Richard Cheney’s
obvious lack of attention to fitness?]
justifies half-truths and dubious policies.
That the process is repeating itself suggests that
our political leaders don’t learn even from proximate calamities.

How often, for example, have you heard the emergency-room argument?
The uninsured, it’s said, use emergency rooms for primary care.
That’s expensive and ineffective.
Once they’re insured, they’ll have regular doctors.
Care will improve; costs will decline. Everyone wins.
Great argument. Unfortunately, it’s untrue.

A study by the Robert Wood Johnson Foundation found that
the insured accounted for 83 percent of emergency-room visits,
reflecting their share of the population.
After Massachusetts adopted universal insurance,
emergency-room use remained higher than the national average,
an Urban Institute study found.
More than two-fifths of visits represented non-emergencies.
Of those, a majority of adult respondents to a survey said
it was “more convenient” to go to the emergency room or
they couldn’t “get [a doctor’s] appointment as soon as needed.”
If universal coverage makes appointments harder to get,
emergency-room use may increase.

You probably think that insuring the uninsured
will dramatically improve the nation’s health.
The uninsured don’t get care or don’t get it soon enough.
With insurance, they won’t be shortchanged; they’ll be healthier. Simple.

Think again.
I’ve written before that
expanding health insurance would result, at best, in modest health gains.
Studies of insurance’s effects on health are hard to perform.
Some find benefits; others don’t.
Medicare’s introduction in 1966 produced no reduction in mortality;
some studies of extensions of Medicaid for children didn’t find gains.
In the Atlantic recently,
economics writer Megan McArdle examined the literature
and emerged skeptical.
Claims that the uninsured suffer tens of thousands of premature deaths
are “open to question.”
Conceivably, the “lack of health insurance
has no more impact on your health than lack of flood insurance,” she writes.

How could this be?
No one knows, but possible explanations include:
(a) many uninsured are fairly healthy --
about two-fifths are age 18 to 34;
(b) some are too sick to be helped or
have problems rooted in personal behaviors --
smoking, diet, drinking or drug abuse;
(c) the uninsured already receive 50 to 70 percent of the care of the insured
from hospitals, clinics and doctors,
estimates the Congressional Budget Office.

Though it seems compelling,
covering the uninsured is not the health-care system’s major problem.
The big problem is uncontrolled spending,
which prices people out of the market and burdens government budgets.
Obama claims his proposal checks spending. Just the opposite.
When people get insurance, they use more health services. Spending rises.
By the government’s latest forecast, health spending goes
from 17 percent of the economy in 2009 to 19 percent in 2019.
Health “reform” would probably increase that.

Unless we change the fee-for-service system,
costs will remain hard to control because
providers are paid more for doing more.
Obama might have attempted that by proposing health-care vouchers
(limited amounts to be spent on insurance),
which would force
a restructuring of delivery systems to compete on quality and cost.
Doctors, hospitals and drug companies would have to reorganize care.
Obama refrained from that fight and
instead cast insurance companies as the villains.

He’s telling people what they want to hear, not what they need to know.
Whatever their sins, insurers are mainly intermediaries;
they pass along the costs of the delivery system.
In 2009,
the largest 14 insurers had profits of roughly $9 billion;
that approached 0.4 percent of total health spending of $2.472 trillion.

This hardly explains high health costs.
What people need to know is that

Obama’s plan evades health care’s major problems
and would worsen the budget outlook.

It’s a big new spending program
when government hasn’t paid for the spending programs it already has.

“If not now, when? If not us, who?” Obama asks.
The answer is: It’s not now, and it’s not “us.”
Pass or not, Obama’s proposal is the illusion of “reform,” not the real thing.

Some quick questions:

  1. What demographic group has the highest rate of infection
    of the ultra-expensive-to-treat disease AIDS?
    [As of 2006:
    HIV patients will spend $600K for lifetime care,
    the average annual cost of care is about $25,200.]

  2. What ethnic group has the highest rate of obesity?

  3. What gender incurs, by far,
    the highest per-capita health care costs?

  4. What ethnic group stands to profit the most, financially,
    from providing health care services?

  5. What (with labor) are the four pillars of the Democratic Party?

A battle won, but a victory?
By George F. Will
Washington Post Op-Ed, 2010-03-23

Obamacare's next trick: the VAT
By Charles Krauthammer
Washington Post Op-Ed, 2010-03-26

Health Care Cost Increase Is Projected for New Law
New York Times, 2010-04-24

A government analysis of the new health care law says
it will not slow the overall growth of health spending
the expansion of insurance and services to 34 million people
will offset
cost reductions in Medicare and other programs.

The study, by the chief Medicare actuary, Richard S. Foster,
provides a detailed, rigorous analysis of the law.

In signing the measure last month, President Obama said
it would “bring down health care costs
for families and businesses and governments.”

But Mr. Foster said,
“Overall national health expenditures under the health reform act
would increase by a total of $311 billion,” or nine-tenths of 1 percent,

compared with the amounts that would otherwise be spent from 2010 to 2019.

In his report, sent to Congress Thursday night,
Mr. Foster said that some provisions of the law, including
cutbacks in Medicare payments to health care providers and
a tax on high-cost employer-sponsored coverage,
would slow the growth of health costs.
But he said the savings “would be more than offset through 2019
by the higher health expenditures resulting from the coverage expansions.”

The report says that
34 million uninsured people will gain coverage under the law,
but that 23 million people, including 5 million illegal immigrants,
will still be uninsured in 2019.

Republicans said the report vindicated their concerns about the law,
which was approved without a single Republican vote.
The White House pointed to bright spots in the report
and insisted that the law would help bring down costs.
In 2004, when Mr. Foster raised questions
about cost estimates by the Bush administration,
Democrats lionized him as a paragon of integrity.

Mr. Foster says the law
will save Medicare more than $500 billion in the coming decade and
will postpone exhaustion of the Medicare trust fund by 12 years,
so it would run out of money in 2029, rather than 2017.
In addition, he said, the reduction in the growth of Medicare
will lead to lower premiums and co-payments for Medicare beneficiaries.

But, Mr. Foster said,
these savings assume that the law will be carried out as written,
and that may be an unrealistic assumption.
The cuts, he said, “could become unsustainable”
because they may drive some hospitals and nursing homes into the red,
“possibly jeopardizing access to care for beneficiaries.”

Nancy-Ann DeParle, director of the White House Office of Health Reform,
said that fear was unfounded.

Mr. Foster’s report, which analyzes the effect of the law
on national health spending of all types,
has a different focus from studies by the Congressional Budget Office,
which concentrated on federal spending and revenues
and concluded that
the law would reduce budget deficits by a total of $143 billion over 10 years.

In his report, Mr. Foster made these points:

¶The government will spend $828 billion
to expand insurance coverage over the next 10 years.
Expansion of Medicaid accounts for about half of the cost.
The number of Medicaid recipients will increase by 20 million,
to a total of 84 million in 2019.

¶People who go without insurance
and employers who do not provide coverage meeting federal standards
will pay $120 billion in penalties from 2014 to 2019.
Individuals will pay $33 billion of that amount,
while employers pay $87 billion.

¶The law will reduce consumers’ out-of-pocket spending on health care
by $237 billion over 10 years, to a total of $3.3 trillion.

Cuts in federal payments to private Medicare Advantage plans
will “result in less generous benefit packages,” the report said.
By 2017, it said,
“enrollment in Medicare Advantage plans will be lower by about 50 percent,
from its projected level of 14.8 million under the prior law
to 7.4 million under the new law.”

The price problem that health-care reform failed to cure
By Alec MacGillis
Washington Post Outlook, 2010-10-24

[This is a good, candid look at
some of the key issues that were swept under the rug
in the snow job our "elite" ran
to push "health care reform" through Congress.]

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