Perhaps Kathleen Parker's Problem is That She Doesn't Understand Honesty

At least if you're a Republican. Penning yet another childish screed about President Obama, Parker whines,

Moreover, people don’t like being insulted and misled, as many feel they have been by this administration. This is not just a feeling but a demonstrable fact, especially vis-a-vis the Affordable Care Act. And it’s not just the far-right fringe who object to the strategic misrepresentations along the way.

If Parker thought you had even a smidgen of intelligence, her next paragraph might cover some of the most outrageous lies about the PPACA. You know... like death panels. Or even some of the lesser Republican lies, like arguing that Obamacare would cover illegal immigrants, cause massive budget deficits, cause massive increases in insurance premiums, or involved the government taking over the insurance industry. Heck -- she, herself, is lying even as she writes about public sentiments toward the PPACA -- she knows that the key elements of the law, save for the mandate, are in fact supported by clear majorities of Americans, that it's the label that drags the law down. She probably giggles about the voters in Kentucky who praise Kynect and express their gratitude that it's not Obamacare, even though... it's simply the name Kentucky gives the exchange through which its residents can enroll in Obamacare.

What are the horrible lies that Parker attributes to Obama?

These obfuscations include telling the American people that they could keep the insurance they had if they liked it and also writing the law in such a way that the ACA’s mandate to purchase government-approved insurance was not a “tax,” despite the Internal Revenue Service’s role in policing its compliance.

Oh, the horror. An overstatement that was made in good faith, and run-of-the-mill machinations designed to get a better CBO rating. Politifact, the "fact-checking" outfit that made the declaration upon which the "lie" accusation is premised initially rated the statement as "true", making me wonder if they're producing a reliable analysis or if they're channeling an Arnold Schwarzenegger movie. Dean Baker has capably responded to those who want to hang their hats on the third (yes, in between declaring the statement "true" and "false", Politifact also rated it as half-true) analysis of the statement.

If Obama's pledge was understood as ensuring that every plan that was in existence in 2010 would remain in existence, then it would imply a complete federal takeover of the insurance industry. This would require the government to tell insurers that they must continue to offer plans even if they are losing money on them and even if the plans had lost most of their customers. This would at the least be a strange policy. It would be surprising if many people thought this was the meaning of President Obama's pledge....

On closer inspection, the claim that President Obama lied in saying that people could keep their insurance looks like another Fox News special. In the only way that the pledge could be interpreted as being meaningful, the pledge is true. The ACA does not eliminate plans that were in existence at the time the bill was approved.

Parker, of course, knows all of this, but anticipates that her intended audience does not.

Similarly, anybody who was following the debate over the PPACA knows that there was an absurd insistence that the law be revenue-neutral. They know that many compromises were built into the law, including significant delays in its implementation, to keep the books nominally balanced. Parker knows that the Republicans she serves would have shrieked like banshees had the mandate been explicitly enforced through a tax, as opposed to a penalty. Parker knows that the penalty is based on income and enforced by, you guessed it, the IRS. Within that context, her feigned surprise that the penalty could be characterized as a tax is quite revealing.

But wait -- there's more. Parker knows that her party and its supporters spent two years and spent vast sums of money litigating against the PPACA, and insisting through that litigation that the penalty was not a tax. If it was so obvious to everybody that the penalty was a tax, why spend years litigation the case, causing taxpayers to pour millions of dollars into its defense, only to reach the inevitable conclusion that it is a proper exercise of Congress's power to levy taxes? Why did the political right attack and vilify Chief Justice Roberts for joining the majority on that issue? What are we supposed to make of the refusal of Scalia, Alito, Kennedy and Thomas to join what Parker tells us was, at all times, a known and obvious fact? Parker later lectures,

This ruling, indeed, was the reason the ACA was able to go forward, which is why so many Republicans were apoplectic with Roberts’ siding with the liberals in a 5 to 4 ruling. In other words, Obama’s obfuscation was simultaneously revealed and rewarded by the court. And the American people were smacked with a health-system overhaul many more would have rejected had they known the truth.

If it is so blindingly obvious that the penalty is a tax, and if Parker truly believes that lying by politicians is a bad thing, why does she implicitly applaud the Republicans for lying about the mandate in order to perpetuate costly and divisive litigation? Why does she implicitly defend attacks on Roberts for accepting what she tells is is an obvious truth, rather than embracing a partisan lie in order to take down the law?

What inspired Parker's attack on the President? If you've been following the headlines, you already know. An economist who worked with the Obama Administration in developing the PPACA made an off-the-cuff comment that has been demagogued into the suggestion that the Obama Administration thinks voters are stupid. As a reference, Parker links to an idiotic screed against the PPACA, but fastidiously avoids introducing the facts -- that the statement she wants to attribute to "the White House" was made in an off-the-cuff manner by economist Jonathan Gruber, a non-politician who is long out of the Obama administration, and who most people wouldn't know from Adam.

Parker follows that absurd attribution with a sentence that starts, "Punditry aside...." It would appear that Parker believes that "punditry" and "demagoguery" are synonyms. Incredibly, after having linked to a diatribe that relies upon Gruber to suggest "", Parker then explicitly invokes Gruber,

Those who feel defrauded by their own government got third-party confirmation recently when remarks by one of the ACA’s chief architects, MIT economist Jonathan Gruber — invoking the stupidity of voters and lauding the political advantage of a lack of transparency in government — went viral.

Parker appears to believe that her readers are too stupid to click the links and find out that there's only one story.

Now, it is no surprise that Parker and her ilk feign deep offense at the most trivial impropriety, real or imagined, by a Democratic President. But really?

We also know that once trust is gone, it’s very hard to restore. Over time, and not just during this administration, we have lost trust in one institution after another. But when we have lost faith in our government, we have lost faith in ourselves.

At their core, the midterms were really about restoring that trust.

To Parker, it seems, having somebody once associated with the Obama Administration suggest that, as many voters aren't always informed on the issues and are inclined to latch onto labels instead of substance (you know, like "death panels"), it can be necessary to construct legislation that avoids certain "trigger words", is on par with Watergate. Parker, it seems, has no problem with such robust honesty as proposing something as a Social Security privatization plan, then objecting to any use of the term "privatization" as an unfair distortion. Or proposing a Medicare voucher plan then objectin to any use of the term "voucher" as an unfair distortion. Because, you know... that's her party. Let's ignore the $millions earned by Frank Luntz, coaching Republicans on how to mislead voters on issues ranging from the "death tax" to "climate change". When it comes to healthcare reform, Luntz kind of takes us full circle:

In the spring of 2009, a Republican strategist settled on a brilliant and powerful attack line for President Barack Obama's ambitious plan to overhaul America's health insurance system. Frank Luntz, a consultant famous for his phraseology, urged GOP leaders to call it a "government takeover."...

PolitiFact editors and reporters have chosen "government takeover of health care" as the 2010 Lie of the Year. Uttered by dozens of politicians and pundits, it played an important role in shaping public opinion about the health care plan and was a significant factor in the Democrats' shellacking in the November elections.

Yeah, that Kathleen Parker is horrified by dishonest politicians, and does nothing but overestimate the intelligence of her readers.....

Yes, Yes, Becoming an M.D. Involves Traveling Down a Long, Expensive Road

Still, I would feel more sympathy for this guy if he hadn't forgotten to tell us his starting salary when he completed his residency and got his first gig at full pay.

First, I was 32 when I began training and I now had over $230,000 in debt. Had I invested my talents in other pursuits such as law school, I would not have built up this level of debt.

True, but you also might not have a job. So there you go.

Here's the thing: If your first job as a full-fledged M.D. pays, say, $250,000.00 per year,¹ you can live very comfortably while paying off your entire student debt load in five or six years. If you're already used to surviving on the "salary of $39,000" that you earned as a resident, even with that type of rapid pay-down it should be a very comfortable transition.

Also, as I did not start saving when I was younger, financially speaking, I have lost the past 10 years without the ability to save and invest to earn compounding interest.

You traded one type of investment for another, and ended up in a career that (I hope) you love. Do you have any regrets?

In addition, as physicians, though we make more money than many others, we are not reimbursed for many of the services that we provide.

That could mean a lot of things, but I suspect that he's saying that when you agree to accept insurance you're often going to end up being paid by a scheme other than straight fee-for-service, such as a D.R.G., and thus you may not (technically) be paid for the full scope of services you provide to a specific patient because you've agreed to accept a specific fee for any treatment that falls within the D.R.G. That's not the same thing as going unpaid, and obviously you think it's a good deal on the whole because you continue to accept insurance and continue to make a large salary. Most businesses could only look with envy upon such a definition of "not reimbursed".

I want to make it clear that this letter is not just another story about the difficulties of becoming a doctor and being successful in medicine. I do not want you to think I am complaining about how hard my life is and used to be. In fact, I love my job and there is no other field I would ever imagine myself doing.

In other words, on the whole you got a very good deal for your investment of time and money.

My true wish is to illustrate the sacrifices doctors do make because I feel we are not represented when laws are made. These sacrifices include a lack of quality family time....

That's going to vary with specialty. There are highly paid specialties with regular office hours, for those who choose that path. Some doctors choose to become administrators. Some choose lower-paid specialties that allow them to spend lots of time with their families. These are the choices we make.

Let's be clear here, other well-paid professions have the same or greater demands. The lawyers you complain about may be working 80 hours per week, and virtually all of them make less money than you did on your first day of full-fledged practice. Some accountants can barely come up for air during tax season.

Yes, it would be ideal if everybody could earn a massive paycheck without their work ever impinging upon family time, but if you look around you'll find that a great many people sacrifice family time for their jobs while collecting a pretty meager wage. Next time you stop by a 24-hour big box store, grocery store, pharmacy or gas station at midnight, ask yourself - how many people working at that store have families?

...our large student loan debt...

Large, but easily manageable. Many other graduates with high debt loads would find your position enviable - and with cause.

...the age at which we can practically start saving for retirement...

Median household income in Michigan is around $50K per year. Typical compensation for a gastroenterologist is about $330K per year. So in the space of six or seven years, you'll earn roughly the same amount as a pretty typical U.S. family will earn over a career, perhaps more. So tell me again, how hard it is to save for retirement.

...and the pressure we face with lawyers watching every move we make.

Sorry... I'll try to avert my eyes next time.

No, seriously, I recognize that nobody likes to be accused of malpractice, and acknowledge that doctors feel some pressure from the fact that they can be investigated and sued for malpractice if things go terribly wrong for one of their patients, but what does that have to do with the cost of a medical school education? Besides, bringing malpractice into the picture belies your prior argument that doctors "are not represented when laws are made" - states have for the most part bent over backwards to create legal environments in which it's exceptionally difficult and costly to pursue malpractice litigation, and where damages are artificially capped even when it's beyond dispute that a patient has suffered catastrophic injury from the most egregious malpractice. What more do you want?²

I'm not going to argue with you, that the cost of obtaining a medical degree is high, and that there are significant burdens on those who enter the medical field. You want the public to subsidize medical schools and residencies, so that you graduate with a lower debt load and, after your initial medical education, have a more comfortable lifestyle? I'm listening - if we give you that, what are you offering in return? How about we reduce compensation for medical care to an amount more in line with the amounts paid by the rest of the world? Do we have a deal?
----------------
1. That's on the low side for a gastroenterologist.

2. The implied answer is "absolute immunity". One of the things that "tort reform" advocates gloss over is that with low "pain and suffering" caps on malpractice verdicts, the big exposure is for economic damages - largely future medical care. One of the reasons our malpractice costs are higher than the costs in nations with comprehensive national health insurance is that a national health plan will cover much, sometimes all, of that future cost. I would happily take the trade.

The High Personal Cost of End of Life Care

According to Ezekiel J. Emanuel,

IT is conventional wisdom that end-of-life care is an increasingly huge proportion of health care spending. I’ve often heard it said that people spend more on health care in the year before they die than they do in the entire rest of their lives. If we don’t address these costs, the story goes, we can never control health care inflation.

Wrong. Here are the real numbers. The roughly 6 percent of Medicare patients who die each year do make up a large proportion of Medicare costs: 27 to 30 percent. But this figure has not changed significantly in decades.

It seems reasonable to infer that by "figure" Emanual means "percentage", as it is implausible that the dollar figure expended on care during the last year of life has not changed significantly "in decades". So what does that percentage figure mean in terms of dollars?

The Medicare program provides subsidized medical insurance for the elderly and for some disabled people. Spending for Medicare totaled about $555 billion in 2012, providing coverage for about 50 million people.

Let's use the low-end figure, 27%. Emanuel is instructing us that 6% of Medicare recipients consumed 27% of $555 billion - let's round that off to $150 billion for 3 million Medicare recipients, an average of $50,000 per person. That, in contrast to $8,617 on average for everybody else. Let's not forget, also, that many of those patients will be in long-term care facilities for much of the year, subsidized by their savings and, once those are depleted, by Medicaid. While the proportion may not be rising, the dollar amount is rising - faster than inflation - and while the numbers bear out the position that people don't, on average, spend "spend more on health care in the year before they die than they do in the entire rest of their lives" the numbers do suggest an enormous expenditure on medical care for patients who receive little benefit from that care - and perhaps pay an enormous personal price on top of the financial cost.

And the total number of Americans, not just older people, who die every year — less than 1 percent of the population — account for much less of total health care spending, just 10 to 12 percent.

Given that younger Americans are much more likely to die from traumatic injury, it's not really a surprise that when they're included in the picture the percentage declines. But as Emanuel surely knows, although care for traumatic injury can be phenomenally expensive, people are not actually talking about car crashes when they are talking about the high cost of end-of-life care.

Emanuel makes a better point about cost reduction,

The more important issue is that just because we spend a lot on end-of-life care does not mean we can save a lot. We do know that costs for dying patients vary widely among hospitals, which suggests that we can do better. And yet no one can reliably say what specific changes would significantly lower costs. There is no body of well-conducted research studies that has proved how to save 5, 10, much less 20 percent.

That's true in part. There are patients who are clearly terminal, but whose families insist upon additional treatment (sometimes overruling the wishes of their loved one) at significant cost. Also, if you think through the logical implications of a typical voucher plan, there appears to be a significant population of people who would "save" money simply by cutting off payment for treatment. While it remains correct that there's no good way to define, in advance, when the last year of life begins and what approaches to treating a specific medical condition will save money without compromising care, if you're willing to be sufficiently mercenary to ration care and make that $50K figure impossible for the average elderly person to reach, you'll "save" money.

If you want to try to identify means of saving money - approaches to end-of-life care that avoid the cost of hospitals, skilled nursing facilities, and the like - it's necessary to engage in the analysis of available data on approaches to patient care, costs and outcomes. If you want patients to be informed of their options, including the fact that by foregoing the aggressive treatment of what is likely to be a fatal disease they may both live longer and have a better quality of life, you have to actually educate the patient - and as Emanuel notes the last effort to introduce that sort of education on a widespread basis collapsed under Republican hysterics about "death panels".

Emanuel is correct that doing nothing to improve the quality of care for the dying is not an acceptable approach to end-of-lie care, but at the same time he suggests that we're doing very little. Emanuel supports end-of-life counseling for patients (the so-called "death panels"), increased availability and use of palliative care, and revised criteria for admission to hospice care. But we can also do some comparative outcome research, which might help us create better criteria for who truly is approaching the end of life, and what treatments that might represent top notch quality of care for a younger patient may undermine quality of life and perhaps even shorten the remaining lifespan of an elderly patient.

The Elderly Cannot Be Informed Consumers of their Most Expensive Care

I am not sure how I came to the page, but in going through the proliferation of articles I had opened in my browser with the intention of "getting to this later", I found "Saving Medicare from Itself" written in mid-2011 by Avik Roy of the Manhattan Institute. For the most part the article simply rehashes the conventional wisdom about Medicare - if costs continue to significantly outstrip inflation, the program cannot be sustained.

Given that Roy started out by, in effect, preaching to the choir, he had what should have been a relatively simple task. Use the available facts and data to point to possible solutions to the problem of healthcare inflation. I know that some argue that the problem of healthcare inflation is going to cure itself - that the changes that led to the rise in costs reflect the significant evolution of the industry and, as we exit the era of new blockbuster drugs and improvements in medical technology become more incremental, inflation will tame itself. But history is a better teacher than wishful thinking - or as Burgess Meredith put it... - we have to plan as if healthcare inflation will continue to rise. And you know what? If we find ways to make healthcare significantly more affordable without compromising quality, even if the cost curve cures itself we'll be much better off as a society.

If Roy believes his own thesis, then one of his arguments should be, "We should look at how other industrialized nations are able to offer a comparable quality of care, with comparable outcomes, at a much lower cost, and at least think about doing what they're doing." Alas, Roy is not so much interested in advancing good policy as he is in advancing the agenda of reducing the scope of Medicare.

Roy argues,

The largest driver of Medicare cost inflation is the fact that retirees bear little of the expense for their own care. As a result, seniors have no incentive to avoid unnecessary or overpriced treatments. Rettenmaier and Saving have shown that, between 1960 and 1985, growth in health expenditures was highest in those categories of spending in which consumer cost-sharing was lowest (such as hospital care), and lowest where consumers were most responsible for their own expenses (like prescription drugs, which were not covered by Medicare during that period).

If that actually were the cost, you should see a different rate of medical inflation for non-elderly populations. You should see yet another, much lower rate of medical inflation for procedures that normally fall outside of insurance coverage. And you should see a much higher rate of inflation in industrialized nations that offer universal or near-universal healthcare coverage. But... you don't.

Roy overlooks the fact that people are inevitably going to be poor consumers of healthcare services. They like their doctor, so they keep going back to their doctor - and while the relationship will benefit many patients, others will keep going back to a doctor who is providing substandard care or who is opportunistically ordering unnecessary tests and procedures, perhaps through self-referral, in order to maximize his revenues. How does Roy suggest that the average elderly person determine whether the doctor she trusts is providing sufficient care, or if a different doctor might offer equivalent care at a lower price or better care at a higher price that nonetheless results in a net savings?

But more than that, where does Roy imagine that the savings will come from? If we're talking about seniors with chronic health conditions, they are going to need diabetes supplies, oxygen, catheters and the like. No way around it. Does Roy believe that individuals can get better pricing on care, supplies and services than an insurance company or government agency that can negotiate a discount? If so, I would like to see him connect that theory to the reality in this country, where the uninsured pay the highest prices for their medical care. If I were to be less charitable, I might ask whether Roy's intention is that the elderly have to choose the care, medication and equipment they need, versus paying their bills, buying food....

One has to ask if Roy's goal is to bend the cost curve, or if it's simply to shift medical costs from Medicare onto elderly individuals. If we presuppose that the elderly can afford the care that they require, it remains fair to observe that a cost shift does not actually address either the cost of the healthcare system or healthcare inflation. It simply means that instead of the money coming from Medicare, it will come from a senior's savings. Or their children's savings. Because unless the goal is deprivation, the money has to come from somewhere.

The problem with Roy's argument actually goes much deeper, when you consider the times when the elderly can easily run up five and six figure medical bills. A senior falls and fractures her hip. A senior has a heart attack or stroke. A senior collapses and is diagnosed with acute kidney failure. They can be in a hospital with a five figure medical bill before they're even able to consider whether they're in the most appropriate care center with the most appropriate doctor and most appropriate treatment plan. When you suffer a catastrophic health issue, odds are you are going to have to rely upon some combination of serendipity and the good intentions of others to get you to a point of medical stability - Roy's conceit that it is possible to address this type of issue by giving seniors an incentive to shop around for the best deal isn't realistic.

Roy complains that the same general problem holds true across the board:

The same holds true for all consumers of health care — not just the elderly. Medicaid and the system of employer-based health insurance both provide a great deal of first-dollar insurance coverage, meaning that consumers do not pay directly for services they receive and therefore have no clear sense of relative costs and values. In 1960, individuals paid directly for 52% of national health expenditures, but by 2008 that share had declined to just 12%. Americans are shielded from the real costs of their health care; as a result, it costs too much.

Except here's the thing: Insurance companies have been experimenting with copayments and deductibles to try to save money. And that cost-shifting has been relatively successful. However, on the whole, the net cost to the consumer has gone up. Why? Because when you have comprehensive insurance and your doctor says, "You need a CT scan", somebody from the medical center calls up your insurance company to see if it's covered. If the answer is "No," the patient is likely to receive a less expensive test that is covered by insurance. On the other hand, if the patient does not have that invisible intermediary, there's nobody to come back with, "Why not start with an ultrasound (or other test that might either confirm or refute a potential diagnosis) and we can see if the CT remains necessary once we have the results." They simply hear their doctor saying, "You need this," and so they pay for it.

Which brings to mind another contributing factor: the doctor may not have any idea what the tests, procedures, and medications he orders cost. In fact, there's a large, lucrative industry built around trying to convince doctors to prescribe expensive, patented medications, or to use new medical technologies, implants and devices. Perhaps that would be mitigated in part if more patients were overtly cost conscious, but I doubt it - it's not realistic for doctors to keep track of the relative cost of myriad treatment options, and to try to guide patients through their choices - particularly at those times when the most expensive care decisions are being made. Even if we assume that the information is available, accurate and that the patient is capable of understanding the financial information. It's simply not realistic.

Note that Roy also assumes that the fact that "In 1960, individuals paid directly for 52% of national health expenditures" while now "but by 2008 that share had declined to just 12%" means that people are choosing to obtain care that the don't actually require. A big part of the difference comes directly from Medicare - a program that was created in no small part because the elderly were being underserved by the health insurance market. We also now diagnose and treat a wide range of chronic health issues that were barely on the radar screen, or even unknown to medicine, back in 1960. We also offer a wide range of medical treatments that significantly improve the quality of life that were in their infancy or largely unavailable in 1960. A big part of the difference comes from the fact that, as a society, we have decided that certain medical care should be provided to people even when they cannot afford to pay a cent toward that care - hence programs like Medicaid and laws like EMTALA.

Roy makes little effort to advance his position that healthcare costs would decline if consumers were required to pay for a greater percentage of their care, and as I noted the data suggests that costs could actually increase. Roy does not attempt to document that the care is unnecessary, or the mercenary argument that if we apply a cost-benefit analysis we as a society will be better off even if we deny people access to necessary medical care.

At the end of his article, Roy reveals himself to be little but a foot soldier for the Romney/Ryan "reform" plan - not a policy analyst, but a political advocate. His first recommendation is right out of the political coward's playbook - "Don't change anything for anybody aged 55 or older." That's not about making good policy or protecting people - it's about votes. If in fact his second proposal, cost sharing (i.e., increasing what people have to pay for the care they receive) leads people to "make sensible decisions about whether to pursue treatment", it will do so for somebody who is presently 55 or older. If in fact his third proposal, means testing, is a reasonable measure, there's no reason to exempt the present generation of wealthy Medicare recipients from that standard. Worse, cost-sharing is unlikely to work, and means testing is not likely to produce appreciable savings.

Roy's next proposal is to "index the Medicare retirement age to life expectancy", that is, to make people wait longer to qualify for Medicare. Never mind that a significant population of seniors already postpone medical treatment until they qualify for Medicare. Never mind that the cost of postponed treatment can mean that the overall cost of Medicare goes up, or that more people will end up either on Medicaid, or become eligible for Medicare through SSDI instead of through reaching the retirement age. If there is a valid argument that actual savings could be realized, Roy hasn't tried to make it, relying instead upon supposition.

Roy's first meaningful proposal is to work harder to eliminate fraud from Medicare. Except everybody wants to eliminate fraud. Doctors and clinics get sued and prosecuted for Medicare fraud. Roy's solution? To privatize administration of Medicare. He may as well argue that we should wave a magic wand. There is no reason to believe that privatized administration will reduce fraud, and every reason to anticipate that it will increase costs.

Roy's ultimate proposal is that we implement a Ryan-style voucher plan for Medicare, while allowing seniors to buy insurance through a health insurance exchange. You know, the sort of exchange that's "the end of the world" as part of the PPACA, but for some reason is the height of market efficiency for a post-Medicare voucher program for the elderly.

Roy closes by attempting to put Medicare "in context":

Addressing this problem would require reforming and integrating Medicare, Medicaid, the employer-sponsored system, and the individual market (and would therefore require replacing Obamacare with a very different set of health-care reforms well beyond Medicare). It would involve addressing the runaway costs of defensive medicine and medical-malpractice litigation. Such changes would of course be extremely difficult to undertake, as the heated ongoing health-care debate amply demonstrates.

Roy wants to "integrat[e] Medicare, Medicaid, the employer-sponsored system, and the individual market"? That sounds a lot like what would be accomplished through "single payer". So no, that's actually not what Roy wants. Were Roy and his brand of analyst serious about reform they would be looking around the world at how other industrialized nations have responded to the same issues and proposing that we emulate their success. Instead they urge us to ignore our lying eyes, drink the Kool-Aid, and double down on our history of failed market-based (non-)solutions.

Note also Roy's introduction of the canards that "defensive medicine" and medical malpractice play a significant role in the current problem, and his prevarication that they are "runaway costs". They weren't important enough to address in his plan to save Medicare, but how can you close out a political argument like this without dropping them in for good measure? A serious analyst would put the prevention of malpractice and maloccurrence on the agenda, while recognizing that any effort to push the "runaway malpractice costs" like would reveal him as a dilettante. The current system compensated a very small percentage of malpractice victims, and is very accurate at weeding out unsupported claims. There's no indication that so-called "defensive medicine" could be eliminated even if doctors enjoyed absolute immunity - and if you look at the facts even the most sweeping "tort reform" measures, such as the laws in Texas that come close to giving doctors immunity, do not affect the manner in which doctors order tests and procedures. What changes things? The sort of salaried arrangement used by facilities like the Mayo Clinic and the Cleveland Clinic. Go figure.

Strip away the window dressing and the argument boils down to, "Medical care costs too much and costs are rising too quickly. I have no solutions, so I propose eliminating any form of group health insurance, giving poor people vouchers that they can use to pay for individual insurance policies, and calling it a day."

A Broccoli Tax Instead of a Broccoli Mandate?

Greg Sargent quotes a law professor on the Roberts Court's apparent expansion of Congress's authority to regulate through taxation:

Barry Friedman, a New York University law professor who wrote a brief supporting Obamacare, argued that by affirming the ability to regulate with taxing power, the decision created a precedent for future regulation along these lines.

“They can’t make you eat broccoli, but they can tax you for not eating it,” Friedman joked, by way of summarizing the meaning of the decision. This is, of course, a reference to what Jonathan Bernstein has called the Broccoli Tyranny argument....

“This is far more devastating to federalism and the balance of power between states and the national government,” he says. “You can now tax pretty much anything.”

I think Friedman is correct in his description of the logical consequences of Roberts' opinion but something tells me that, were squarely before the Court, Roberts and the dissenters - for that matter, perhaps all 9 justices - would have no difficulty distinguishing a "broccoli tax" on the grounds that the rare and compelling circumstances surrounding health care and health insurance don't exist in relation to broccoli.

"But," you protest, "Wouldn't that approach betray that the entire broccoli argument was specious from the outset?" Yes, it would. But Roberts' didn't let his embrace of the slippery slope - his treatment the "broccoli mandate" as a genuine possibility as opposed to a reductio ad absurdum of the opposition's argument - get in the way of his approval of the mandate as a tax. There's no reason to believe he won't invoke the slippery slope the next time a similar tax question comes before the court. Or he could choose a better approach, embracing the argument that the unique aspects of the healthcare market can justify or necessitate measures that would not be permitted in other contexts. Either way he gets at least five votes.

[Insert obligatory Emerson quote here.]

When Will Health Care Inflation Normalize

Before disappearing to warmer climes for a week, I made note of an interesting argument on Mark Thoma's blog, that our worry about projected healthcare inflation may be overblown. How well can we predict the future? Not well.

Thoma quotes Jeff Sachs,

Yet somehow I'm not ready to panic about the health care costs as of 2085. Mechanical extrapolations that assume that health care costs will rise much faster than GNP between 2011 and 2085 are utterly unconvincing. Why should healthcare costs continue to rise so far and fast when healthcare costs are already vastly over-priced now compared with what other countries pay for the same services? Why should we assume failure decade after decade to use the new information technologies to lower the costs of health-care delivery and administration?

In fact, the recent trends are mildly favorable. As J. D. Keinke of the American Enterprise Institute writes today in the Wall Street Journal, the idea of runaway health spending is a "myth" because "new data show that health spending over the past several years has been normalizing toward the rate of general inflation, rather than growing higher and higher, as had been the case almost continuously since the 1970s." ...

My first reaction is that it's a bit silly to worry about what the economy will look like in twenty-five, fifty or a hundred years because - even if we pretend that we're good at making such projections based upon current data - there are too many possible intervening factors that can completely undermine the projection. Economic projections in 1900 would not have anticipated a half-century that included two world wars, the dust bowl, the Spanish flu and the Great Depression. Economic projections in 2000 did not anticipate Medicare Part D, 9/11, the housing bubble, the collapse of the auto and financial industries, or two extraordinarily expensive and protracted wars of choice. Economic projections for the public cost of health care today typically do not take into consideration the predicted impact of global warming on sea levels and food supply, the probable continued upward curve in the cost of oil and gasoline, and largely assume a return to the economic norms of the past half-century. That is to say, the projections largely assume that the economy will largely remain unchanged for the duration of the projection, even though we all know that it won't - that there will be big surprises, not all of them happy.

Without digging into the data referenced above, showing a reduction in healthcare inflation, the first thing that occurs to me is that we're really talking about the cost of prescription medications. It's anything but a secret that prescription medications play a major role in the cost of healthcare in the U.S., with pharmaceutical giants having repeatedly and successfully lobbied Congress to prevent price negotiation by Medicare and to restrict the import of identical medications from nations that offer better pricing than the U.S. But a lot of the blockbuster drugs that drove up the cost of healthcare have come out of patent, resulting in their availability in generic form and at lower prices.

Still, bleeding edge technologies tend to be expensive, and there will remain a strong incentive for pharmaceutical companies and other medical companies to develop new drugs and technologies to more effectively treat medical conditions. People will clamor for those drugs, devices and procedures over those which are (or which are perceived as) lesser, even if the improvements are marginal or the costs enormous. And somebody will continue to have to draw a line over what medications and treatments are going to be available to the masses, and at what cost. Is it possible that somebody will invent a new technique that will revolutionize medical care, allowing for vastly improved, individualized care at a lower cost? Certainly. It's also possible that we'll get the same invention but that over the short- or longer-term it will be available only at an enormous cost.

If we can change the way human beings perceive and fear death, we can achieve significant cost savings in health care. But the odds of that seem roughly equivalent to our ability to project how the economy will look in a half-century. (Okay, I exaggerate. The odds of sound economic projections over a half-century or longer are actually much greater than the odds of changing human nature.)

There's No Return in Backing a Loser

Some people in South Carolina are irate that their governor, supposedly a tea party type,¹ has backed Romney. Some people are puzzled that Jon Huntsman, having decided that he's the only major candidate who is never going to get a "bubble", is reportedly going to endorse Romney.

But there should be no surprise in any of that.

If you want to be on good terms with the man who is potentially the next President, you back him. You don't try to tear him down. Ask Hillary Clinton's backers how they have fared in terms of cabinet positions and political appointments in relation to those who backed President Obama.

Still, I sense no enthusiasm.
-------------
1. Gov. Nikki Haley was troubled by Romney's healthcare reforms in Massachusetts. Not when she backed him in 1988, mind you, but only after it became fashionable to demagogue about the issue in order to curry favor with Tea Partiers. I'm sure the timing is a coincidence.

The ACA and the Legacy of Chief Justice Roberts

Scott Lemiux offers a short analysis of how he expects various Supreme Court Justices might rule on the Affordable Care Act. He references his earlier argument that the ACA is constitutional; I personally agree that the attempt to distinguish the regulation of "action" from "inaction" under the Commerce Clause is not justified by history, precedent, or the language of the Constitution. But as Lemiux argues, "The fact that the arguments asserting the unconstitutionality of the Affordable Care Act are weak, alas, doesn’t mean that the Court will reject them".

It's interesting to me that Lemieux gives almost no attention to Chief Justice Roberts,

Ruling that the mandate can be severed from the rest of the ACA would appeal to Kennedy and Roberts for two reasons: They like “minimalist” opinions that don’t go beyond what is necessary, and striking down the relatively unpopular individual mandate would probably not attract a great deal of public opposition.

Of all the Justices, Roberts has the most at stake here. You can view any other sitting Justice as a partisan, a hack, an incompetent, or the greatest legal genius on the court, but it is unlikely that any other sitting Justice will ever gain the title of "Chief Justice". Roberts is young and is apt to be on the court for decades to come. The same political considerations that led to his being nominated and made Chief Justice are not going away - his successor is apt to also be a new or newer, young appointee, who is anticipated to support the then-President's agenda for decades to come.

The decision in this case will be a large, if not overshadowing, part of Roberts' legacy. Will he be viewed by history as an activist, partisan hack who trashed health care reform, as a uniter who led the court through a difficult case and engineered a 9:0 (or 7:2) majority, or as the guy who oversaw a messy plurality that required years of additional litigation to parse. Lemieux doesn't actually state that there will be a clear majority opinion, but he also doesn't discuss the possibility of a plurality, possibly 4:3:2, or 4:3:1:1, or perhaps even more fractured with Justices joining parts of various opinions while dissenting from other parts and also writing their own dissents or concurrences.

Although some in the Republican Party appear to believe that the total failure of healthcare reform, and even the notion of universal access to health insurance, is misguided, the fact is that most Americans want decent health insurance. While shooting down the ACA may provide the "anti" faction of the Republican Party with a "feel good moment", it puts the nation right back on track to the disaster reform was hoping to avert - continued health insurance premium increases of 8% - 15% per year, rendering health insurance unavailable to more and more Americans. Strike the ACA and its various cost control measures and you place responsibility for that probable future squarely at the feet of the Supreme Court and the Republican Party. If you assume that Roberts is motivated either by his own legacy or by a wish to advance the Republican Party (as opposed to his personal legal philosophy that largely overlaps with the Republican Party's agenda), that has to give him pause.

The issue here goes beyond the mere appearance of creating a new constitutional doctrine in order to strike down a major piece of legislation, passed after extensive debate and controversy. Acceptance of the "action" / "inaction" distinction creates a line of argument that can be raised in pretty much any Commerce Clause case, including those that have largely been viewed as settled. Lemieux references the opinion of Laurence Silberman,

We think the closest Supreme Court precedent to our case is Wickard v. Filburn, 317 U.S. 111 (1942). There, a farmer ran afoul of his allowed wheat acreage under the Agricultural Adjustment Act of 1938 by growing additional wheat, not for sale, but to feed his family and his livestock. Id. at 114-15, 118- 19. Filburn argued that the Act was unconstitutional as applied to him because he was not using the excess wheat for any activity in the interstate market. The Supreme Court unanimously rejected this claim. It held that even growing wheat for personal consumption, not for sale in any market, could affect the national price, and therefore was within Congress’s commerce power. Id. at 127-28. This conclusion was not only because his wheat might be diverted into the national market, as was recognized in Gonzales v. Raich, 545 U.S. 1, 18-19 (2005). Justice Jackson said even “if we assume that it is never marketed, it supplies a need of the man who grew it which would otherwise be reflected by purchases in the open market. Home-grown wheat in this sense competes with wheat in commerce. The stimulation of commerce is a use of the regulatory function quite as definitely as prohibitions or restrictions thereon.” Wickard, 317 U.S. at 128 (emphasis added). Justice Jackson thus recognized that the Act “force[d] some farmers into the market to buy what they could provide for themselves.” Id. at 129. Although a regulation limited the size of the farms covered, the logic of the opinion would apply to force any farmer, no matter how small, into buying wheat in the open market. See Raich, 545 U.S. at 20. Wickard, therefore, comes very close to authorizing a mandate similar to ours, at least indirectly, and the farmer’s “activity” could be as incidental to the regulation as simply owning a farm.

Indeed, were “activities” of some sort to be required before the Commerce Clause could be invoked, it would be rather difficult to define such “activity.” For instance, our drug and child pornography laws, criminalizing mere possession, have been upheld no matter how passive the possession, and even if the owner never actively distributes the contraband, on the theory that possession makes active trade more likely in the future. And in our situation, as Judge Sutton has cogently demonstrated, many persons regulated by the mandate would presumably be legitimately regulated, even if activity was a precursor, once they sought medical care or health insurance. Thomas More, 651 F.3d at 560-61 (Sutton, J., concurring). The Supreme Court has repeatedly rejected these kinds of distinctions in the past–disavowing, for instance, distinctions between “indirect” and “direct” effects on interstate commerce–because they were similarly unworkable. See Wickard, 317 U.S. at 119-20; see also Lopez, 514 U.S. at 569-71 (Kennedy, J., concurring). [footnote omitted]

I recognize that the small faction of the political right that would love to see all of the New Deal decisions reversed would rejoice at the idea of the Supreme Court revisiting that era's Commerce Clause cases, but the implications of such a decision, both in terms of political consequence and judicial economy, are enormous.

I would like to tell you that none of this matters, or none of this should matter, but I would be wrong on both counts. Chief Justices (really, all of the Justices) do consider their legacies. And it is appropriate for the Court to weigh the impact of a decision on society, and the availability of remedies at the ballot box, when asked to invent new rules of law in order to strike major pieces of legislation. Chief Justice Warren knew the importance of public perceptions when he engineered a unanimous decision in Brown v. Board of Education of Topeka, 347 U.S. 483 (1954). If he wants to demonstrate that he was a good choice for his position, Roberts would do well to work behind the scenes to obtain an opinion that is supported by a clear majority of the Court and rests firmly on established precedent.

A Weak Defense of Paul Ryan

Before you can understand why Shawn Tully thinks that Paul Ryan's plan to end Medicare is the best plan there is, it may help to have some sense of what Tully believes constitutes fantastic health insurance.¹

The best solution is to move to a let-freedom-ring regime of high deductibles, no community rating, no standard benefits, and cross-state shopping for bargains² (another market-based reform that's strictly taboo in the bills).

In short, the best insurance is "no insurance". To Tully, it would be unfair to limit what insurers could charge the elderly:

The state laws gouging the young are a major reason so many of them have joined the ranks of uninsured.... Under the Senate plan, insurers would be barred from charging any more than twice as much for one patient vs. any other patient with the same coverage. So if a 20-year-old who costs just $800 a year to insure is forced to pay $2,500, a 62-year-old who costs $7,500 would pay no more than $5,000.

Second, the bills would ban insurers from charging differing premiums based on the health of their customers.

How much would the elderly, for whom being "elderly" is in effect a pre-existing condition putting them in a high risk pool for insurance, have to pay in Tully's "free market"? The sky's the limit. Tully shed crocodile tears over the idea that some people might want to keep their existing plans, but that those plans might not be available in the future due to the Affordable Care Act. His heart, it seems, would bleed for seniors who want to stay in a government subsidized "Medicare Plus" plan, but for some reason that concern doesn't extend to those who are happy with Medicare.

Oddly, Tully describes himself as providing a "defense of Paul Ryan's Medicare plan" - the plan that has so many pundits clapping Ryan on the back and talking about how "brave" and "serious" he is needs a defense? Perhaps then, unlike his peers, Tully has read the details and understands what the reaction to this plan would be if the public truly understood it. Tully isn't an ignorant man - he does a good job summarizing the problem we're facing:

If we remain on the current course, [federal health care] spending would jump [from 8% of GDP today] to 14% in that time frame.

Tully tells us that Ryan's "plan" would lower the government's share "to just 5% by 2050". Let's use Tully's figures to evaluate what that might mean for seniors.

On average, the annual cost for its 46 million enrollees is roughly $13,000. The recipients pay total premiums of $1,326 a year for hospital visits and zero for physician services, and can purchase supplementary private Medigap policies that cover virtually all deductibles and co-pays for another $1,500 a year. So the enrollees pay a total of around $3,000, or 23% of the total $13,000 cost. Taxpayers cover the balance of $10,000.

If Ryan's plan were put into effect right now, the government subsidy would drop by approximately 37.5%,³ so that would mean that Medicare enrollees would pay on average $6,250 per year for their health costs. Whoops - plus (let's keep it low) about 10% in additional overhead and profit for the private insurer, so just shy of $7,000 per year. With people age 65 and older earning about $30,000 per year on average, do you think that's an increase the average person would notice? And let's not forget, Ryan also plans to decimate Medicaid - I don't want to think about what your nursing homes might look like under Ryan's plans if you cannot afford a private pay facility. It has been suggested that, on average, seniors retiring this year will need $250,000.00 to cover medical expenses. With immediate implementation of Ryan's ideas can we reasonably say that would easily jump by another $150,000.00?

Here's something else to keep in mind: Even if you believe that seniors could afford to absorb the average annual cost of their care, that's not how things work in real life. Some seniors will have more expensive annual care due to their need for medications, diabetes treatment, dialysis, or other chronic health conditions - and many would obviously struggle with the cost-shift that Ryan proposes. But the real hardship would come at the near-inevitable point when an elderly person suffers a medical crisis and incurs five to six figures in medical costs through a round of hospitalization, surgery and rehabilitation services. Many seniors might scrape by, year after year, paying a 10% deductible and 20% copayment for their routine and recurring services. But the year they incur a $50,000+ medical bill? That could break the bank. Do we expect doctors and hospitals to absorb the unpaid medical costs, or do we push seniors into bankruptcy court so that they can keep their homes? And if the latter, what happens two years later when they or their spouse suffer another medical crisis?

When you see the figures for Medicare costs and inflation the first question you need to ask yourself is, "Do I care if many or most seniors cannot afford the care they need to extend their lives or to live a reasonable quality of life?" If your answer to that is "No," supporting Ryan's plan is easy. You may even find yourself echoing a talking head from the Heritage Foundation who doesn't think it goes far enough. If, on the other hand, your answer is "Yes", there are three basic responses you can offer:

1. Bend the Cost Curve: Attempt to determine which medications and treatments are effective, which are not effective, and which are not cost-effective as compared to alternative treatments with similar outcomes; attempt to improve preventive care and to lower the cost of care for chronic conditions; attempt to develop less expensive treatments and medications for medical conditions, common or rare, etc.

2. Rationing: Whatever effort we may make to bend the cost curve, we need to implement (or at least be prepared to implement) benefits caps, cut-off ages for specific procedures, limits on care based upon projected survival rates, and/or similar measures that limit the amount of subsidized care an elderly person can receive.⁴ If you can afford your own care, you can private pay for additional treatment. If not, sorry, you can have your church hold a bake sale, you can pass the hat, but as far as government subsidies go you're done.

3. Increase Premiums and Copays: Inadequate in and of itself, but by increasing premiums and copays for wealthier seniors you can continue to provide a larger subsidy to the poor.

Oops, I'm sorry, I forgot "We can wish for a pony":

In effect, Ryan is asking Americans to make a historic leap of faith. He projects that the newly cost-conscious customers, who'll inevitably be spending more of their own money, will shop far more carefully for health care.

More cynically, he's expecting that a senior who needs a hip or knee replacement might drag through another couple of years of excruciating pain before getting the procedure, or may simply "choose" to ride out retirement immobilized in a bed or recliner. He's expecting that a poor senior with COPD will "choose" not to incur the high cost of maintaining lung capacity and instead will continue to lose lung capacity in what amounts to slow suffocation. He's expecting that a senior with diabetes may choose not to test their blood sugar as frequently as they should, and that if they lose a limb they'll have to go out-of-pocket if they want a prosthesis. Seriously - if those aren't the types of "choices" Ryan wants seniors to make, how could he expect to bend the cost curve? Or am I being unfair by suggesting that Ryan truly wants to lower the cost of healthcare as opposed to simply lowering the subsidy?

"It's very speculative how the new system would work," says Robert Moffitt, a health care policy expert at the conservative Heritage Foundation. "But we know for sure that the Ryan plan would force private providers to compete ferociously for business, and that would introduce a degree of competition into Medicare that's totally absent today."

Translation: We're going to make seniors the "lab rats" of a reform that, for all we know, has a snowball's chance in H-E-Double-Chopsticks of succeeding, but who knows - we may get a pony! (And did I mention the enormous tax cut for the rich? We rich folks will more than make up for it on the back end.)"

Flashing back to Tully's concern-trolling over the ACA, he lamented that Americans would lose the "Freedom to choose your doctors":

The Senate bill requires that Americans buying through the exchanges -- and as we've seen, that will soon be most Americans -- must get their care through something called "medical home." Medical home is similar to an HMO. You're assigned a primary care doctor, and the doctor controls your access to specialists. The primary care physicians will decide which services, like MRIs and other diagnostic scans, are best for you, and will decide when you really need to see a cardiologists or orthopedists.

Under the proposals, the gatekeepers would theoretically guide patients to tests and treatments that have proved most cost-effective. The danger is that doctors will be financially rewarded for denying care, as were HMO physicians more than a decade ago. It was consumer outrage over despotic gatekeepers that made the HMOs so unpopular, and killed what was billed as the solution to America's health-care cost explosion.

How horrible! What an unthinkable loss of rights and freedoms! No wonder Tully detests the ACA and praises Ryan's plan which "is all about unleashing the market" and lets freedom ring!

The big issue is how fast costs grow for the enrollees. With the inflation and age adjustment, the premium support payments will increase at a rate far below today's relentless escalation of 7% or so a year. The success of the Federal Employees plan is highly encouraging. Its costs are growing at a rate that's 2% lower than medical inflation in the private sector.

Even if the Ryan plan matches that success, Americans will no longer get more than 70% of their Medicare costs paid by the government. Retirees are bound to pay a much bigger share of their own medical costs. More and more seniors will choose high deductible plans, and HMO or PPO-style programs that limit choices of doctors.

Oh... Well then, I'm sure this is different because, um, we're talking about old people and, um.... old people don't care who their doctors are, or if they're denied care by an insurer who is looking at nothing but the bottom line. They don't care if they get to see a rheumatologist, cardiologist or orthopedist. Our misery, to them, is freedom! All hail Ryan the brave, Ryan the bold, Ryan the serious who, by substituting wishful thinking for everything difficult about healthcare reform, offers us "the best choice in a world of poor alternatives."
--------------
1. Fantastic for others? I would assume that his own plan is comparatively gold-plated, although I welcome any authoritative correction on that point.

2. The concept of "cross-state shopping for bargains" amounts to his peddling snake oil - did you notice how credit card companies relocated to the states that allowed the highest interest rates and fewest consumer protections? The silent wish of most people who push this idea is for health insurers to do the same thing - to relocate to states that require the fewest benefits and have the least regulation, such that other states are pressured to join the "race to the bottom" and insurance covers as little as possible, allowing insurance companies to maximize their profit by avoiding coverage for any routine or recurring expenses (e.g., birth control) or special needs (e.g., hearing aids - yes, Tully specifically mentions hearing aids; he also appears concerned that insurance companies can be required to cover mental health, substance abuse treatment and even prescription drugs) while minimizing the health conditions they actually cover. Your "bargain" will mean that instead of overpaying for a bad policy from an insurer based in your state you'll overpay for a horrendous policy from an insurer based in another state who is beyond local recourse.

3. Ballpark, of course. But even with that in mind, Tully's piece suggests that the percentage I use might be low - "Even in today's weak economy, the total Medicare bill is waxing at over 7%."

4. Yes, to some degree this happens now - some people are deemed to sick or too old for certain medical procedures - but in the future the Ryan-Tilly death panels, if I may coopt that Republican term, will have to make some very difficult decisions based upon cost alone.

Severability Clauses and Healthcare Reform

Randy Barnett notes that the Obama Administration has conceded that if the individual mandate is held unconstitutional, "provisions preventing health insurance companies from discriminating against people with pre-existing conditions would also be invalidated by the court because the two are inseparably linked".

To me that doesn't seem like a big concession. First, it's obvious that those regulations would not be economically viable in the absence of an individual mandate. Second, were the Obama Administration to argue otherwise, the health insurance industry would launch a full-bore assault on the bill both in the courts and in Congress, and they would (for once) have a valid argument to make.

Frankly, given how many concessions the Obama Administration had to negotiate to get a bill that the various health industry players wouldn't torpedo, it seems less reasonable to assume that the Dems "forgot" to include a severability clause as opposed to having deliberately omitted one in order to prevent an outcome where a court upheld the regulations while striking the individual mandate. The "need" for a severability clause is largely overstated by opponents of the legislation and, to put it mildly, the inclusion of a clause that would have stated "If the individual mandate goes, so do provisions like 'no discrimination based on pre-existing conditions'" would not have been politically popular.

Reducing the Overutilization of Emergency Room Care

The Washington Post recently offered an editorial on the subject from an emergency physician. While some of the ideas seem a bit simplistic and underdeveloped, I'll give the author the benefit of the doubt - you can't develop multiple ideas that complex inside the confines of the Op/Ed pages. It's a discussion we need to have, so it's worth a look.

Gingrich & Goodman Idea #10: "Make Medical Breakthroughs Accessible to Patients"

The final "GOP idea" shared by Newt Gingrich and John C. Goodman is to "Make medical breakthroughs accessible to patients".

Breakthrough drugs, innovative devices and new therapies to treat rare, complex diseases as well as chronic conditions should be sped to the market. We can do this by cutting red tape before and during review by the Food and Drug Administration and by deploying information technology to monitor the quality of drugs and devices once they reach the marketplace.

The FDA doesn't get much love from anybody. When it doesn't approve medications or medical devices quickly, it is a behemoth that must be streamlined. But when it makes a mistake, approving a dangerous drug or device, even if the error was caused in part by streamlining the same critics previously demanded. At the far extreme, some call for eliminating the FDA and simply letting the market do its magic - I guess if enough patients die, people will figure out that they don't want a particular medication, treatment or medical device.

With some of the FDA's sluggishness it does appear that a new device or treatment could be a genuine boon to patients, and could potentially decrease medical costs. Consider, for example, the artificial pancreas. The FDA describes itself as having taken a "proactive role" in the development of the technology, but diabetes patients still wait. The FDA cites concerns about safety and the accuracy of sensors - after all, an error in the administration of insulin could be lethal - and that at best an artificial pancreas won't function as well as the real thing. But no question, there are diabetes patients who would accept that risk and find the FDA's caution to be both excessive and frustrating.

But let's take a step back for a moment. Let's assume that the FDA's approval process could be streamlined, such that new devices and drugs could be approved much more quickly without jeopardizing patient health. Although there are exceptions, and the artificial pancreas may prove to be one, how often have new medications and new technologies reduced the cost of health care? Usually they have the opposite effect - investment in new technologies and the high cost of patented drugs and devices push overall healthcare costs up. With due respect for Gingrich's love of science fiction, how does he expect that a proliferation of drugs and devices, not fully tested, will decrease health care costs as opposed to increasing them - not only to pay for the patented technologies themselves, but to treat patients who experience bad outcomes due to errors resulting from an accelerated approval process?

If Gingrich and Goodman have answers then, once again, I expect that this is a proposal that would get broad bipartisan support. Without answers, given their insistence that the reform bill be revenue-neutral, I expect that the GOP will be quick to reject it.

(Return to Parent Article.)

Gingrich & Goodman Idea #3: "Meet the Needs of the Chronically Ill"

A third "idea" that Newt Gingrich and John C. Goodman claim belongs to the GOP is the idea that health insurance should "Meet the needs of the chronically ill". You know, sometimes it's better to admit you only have nine ideas than to claim that the Republican Party is more concerned than the Democrats about people suffering from chronic illness. What does Gingrich propose?

Most individuals with chronic diseases want to be in charge of their own care. The mother of an asthmatic child, for example, should have a device at home that measures the child's peak airflow and should be taught when to change his medication, rather than going to the doctor each time.

If the GOP were to write up a simple bill encapsulating this proposal, overlooking the fact that it would likely increase healthcare expenditures, I expect that the Senate would pass the bill by a very wide margin, with most of the "nays" likely to come from the Republican side.

What does Newt have in mind? If you recall, one of his goals is to deny coverage for routine medical care, such that you would have to pay for that care out-of-pocket. This proposal is apparently meant to soften the impact of the fact that many chronically ill people will not be able to afford the care they need if Gingrich's dream comes true. So instead he imagines them being given medical devices and trained to "be in charge of their own care", while pretending that his goal is to empower them.

That's not to say this is a bad idea, or shouldn't (to the extent possible) be implemented without gutting health insurance coverage. But there's another side to this: if there were substantial cost savings to be achieved, health insurance companies should be more than happy to implement this idea without any prodding from Congress. And in fact, when it is economically viable, the chronically ill are given the tools they need to administer insulin, breathing treatments, and other treatments that they can reasonably perform at home. It also follows that, to the extent that it is not done, it's because their actuaries don't project a cost savings.

The question thus becomes, are Gingrich and Goodman making this proposal because they seriously want to empower patients even though it will increase healthcare costs, are they making this proposal because they want patients to be empowered to the maximum extent once the device and home-based care are no more costly than the status quo, or are they making this proposal because they want to put a friendlier spin on what prior editorials suggest to be Gingrich's goal - making patients responsible to buy the machine from health savings accounts (if they actually have health savings) with the consequence of their failing to do so (or inability to do so?) meaning that they either forego the care or pay out-of-pocket? Because, as I suggested before, it's only for that third option that they should not be able to easily construct and pass a bipartisan bill.

Consistent with that inference, Gingrich and Goodman propose that those with chronic illnesses can be allowed to self-manage their care through "Health Savings Accounts". They hold up as an example a program operated by Medicaid. So are they advocating "Medicaid for all", at least for basic care and for the disabled? Of course not.

Their contempt for community rating is made plain in their last "reform" proposal, having insurance companies "specialize in managing chronic diseases" so that healthier people can obtain cheaper insurance from non-specialist carriers. They argue, "This is the alternative to forcing insurers to take high-cost patients for cut-rate premiums, which guarantees that these patients will be unwanted" - but no, what it will do is guarantee that you don't have insurance for your chronic illness if and when you develop such an illness. After all, everybody gets sick at some point, and everybody dies. The Gingrich/Goodman plan seems intent on making sure that you bear that cost out-of-pocket (if you can afford it) rather than spreading the risk through insurance - despite the fact that the purpose of insurance is to spread risk.

(Return to Parent Article.)

"Fault" and the Death of the Public Option

There's no small amount of anger being directed at President Obama over the death of the public option, some form of national health insurance program to compete with private insurers. Take, for example, Glenn Greenwald,

Of all the posts I wrote this year, the one that produced the most vociferous email backlash -- easily -- was this one from August, which examined substantial evidence showing that, contrary to Obama's occasional public statements in support of a public option, the White House clearly intended from the start that the final health care reform bill would contain no such provision and was actively and privately participating in efforts to shape a final bill without it.

Greenwald then contends that Obama gave up the public option early, in order to buy off the insurance industry and perhaps to get it to financially support the Democratic Party.

I think Greenwald is correct in part - that President Obama has never viewed a public option as essential for healthcare reform. But what if he did? Obama could have twisted every arm in the Senate and he would not have come up with sixty votes, so why should he have wasted his energy on a doomed public option (and inevitably being accused of 'failing' by both the left-wing advocates of the public option and the entire Republican establishment when it didn't happen), when he could focus on things that could actually be achieved. Also, this appears to be misplaced anger - the public option died in the Senate some time ago. What Lieberman just killed off was part of a proposed compromise to advocates of a public option - the expansion of Medicare.

Greenwald alleges that the White House pressured freshmen Members of Congress on a war funding bill, linking to an article that notes that the White House denied the charge. But even accepting it as true, which of the Senators who were intent on killing the public option is a freshman? Which would shiver in his boots at the idea that "they won't get help with reelection and will be cut off from the White House" if they don't accede to the President? Sorry, but when you're scrambling for sixty votes every time an important issue comes up, and when you're dealing with Senators who don't need your help to get reelected, threats like that are apt to make you look silly and lose credibility.

Moreover, it does appear that President Obama has been doing his best to keep the party on track to pass a bill that he believes may work. He has also clearly embraced the principle of progress, not perfection. Think about it: A perfect healthcare reform bill would include provisions that have never even been on the table.

Joseph freakin' Lieberman - it's hard to think of a politician more deserving of being kicked to the curb by the White House, but reports are quite to the contrary - that up to now Obama has lobbied against any serious consequence to Lieberman because he supposedly can provide that sixtieth vote (that he somehow never seems to deliver when the need is critical). As much as I want to see Lieberman kicked to the curb, by all appearances he's such a petty, vindictive small-minded man that to do so now may well result in there never again being more than 59 Senate votes for healthcare reform - even the hobbled remnants Lieberman has deemed acceptable for debate (but still hasn't promised to support in a final vote).

Carts, Horses and Healthcare

Tyler Cowen takes a valid premise, and then gallops off in the wrong direction.

The proposals now before Congress would require just about everyone to buy health insurance or to get it through their employers — which would generally result in lower wages. In other words, millions of people would be compelled to spend lots of money on something they previously did not want, at least not at prevailing prices.

That is the unfortunate result of our current "no new taxes" culture. It would be better for the poor, as well as for uninsured and underinsured working Americans, if a sensible tax reform funded basic insurance. People could still choose between plans, but we wouldn't have to worry about subsidies or whether the cost of insurance will be too onerous on people of limited resources. Obviously, forcing people to buy insurance for a price they deem to high - let alone at a cost beyond what they can reasonably afford - could (would) create a lot of resentment.

However, I think his argument that national healthcare amounts to a tax that would discourage the poor from trying to earn more is absurd. First, I don't know of many people who even think that way - "No, boss, I'm turning down that raise because due to its effect on my health insurance subsidy I'll only put half of it in my pocket". (Without digressing into the vagaries of the human mind, there's evidence that earning "more than the next guy" is a much more compelling factor than take-home pay.) Second, people don't always have the luxury of turning down a promotion, even if they want to. Third, people actually do recognize that raises and promotions are incremental - this year's raise may not be as much as you would like, but maybe next year's will be better. Fourth, most people are happy to pocket extra money, even if they would prefer to have more.

But I digress. The argument he offers that I find to be most flawed is this:

We’re often told that America should copy the health care institutions of Western Europe. Yet we’re failing to copy the single most important lesson from those systems — namely, to put cost control first.

Which European nation, in adopting a national healthcare plan, put cost control first? It seems to me to have been quite the opposite - that national healthcare plans were implemented in order to properly serve the needs of the nation's population, and that concerns about cost control arose considerably later. It may well be that, once a nation has implemented a national healthcare plan, cost control becomes a leading consideration, but the plan still comes first. If anything, doesn't Cowen's argument support the idea that the best way to make cost control a priority is to extend insurance to everybody through a nationally managed program?

Budget Mendacity From the Washington Post

Have you ever seen Willie Wonka & The Chocolate Factory? Recall Gene Wilder's "protests" when the various naughty children engaged in acts that he knew would lead to very unpleasant consequences? Somehow Fred Hiatt's gang brought that image to mind with their argument that their acceptance of massive deficit spending for the wars in Iraq and Afghanistan is consistent with their insistence that healthcare reform be revenue neutral.

In principle, all wars should be paid for, just like all other federal spending. We criticized President George W. Bush for sticking with tax cuts rather than calling for national sacrifice after Sept. 11, 2001, and for failing to fund the wars in Iraq and Afghanistan.

So we start with a general statement of principle, with no indication that the Post has any interest in standing behind that principle. Hiatt's editorial board protested, Willie Wonka-style ("Oh! I wouldn't do that... I really wouldn't"), at some point in the past and, having given lip service to their principles, proceeded with full-throated advocacy of the wars and their escalation.

If Mr. Obama were to propose offsetting the cost of additional troops in Afghanistan with a gasoline or carbon tax, we would support it.

But not if he proposed such taxes to fund healthcare reform - for that, Hiatt and his crew want new taxes on the middle class. But take a step back in history to the budget surpluses G.W. inherited and frittered away on tax cuts for the wealthy and a ruinously expensive war of choice in Iraq - why not let some of those tax cuts expire to fund the war? Or to fund healthcare reform?¹

Hiatt and his crew then argue that the budget games they're using to avoid funding the wars in Iraq and Afghanistan are analogous to arguments that future savings in healthcare costs should be considered when calculating the cost of a reform bill. An obvious flaw in this argument is that, at least in any modern western society, the state cannot avoid healthcare costs. It's perfectly appropriate in that context to consider how reforms might bring about savings, and how that will relate to future expenditures. When the government chooses to spend vast amounts of money on a war of choice, the baseline for spending is $0 and (unless you endorse some modern form of loot and plunder) there's no way to achieve "savings" by making that number negative.

Further, the Post combines spending for the wars in Iraq and Afghanistan, suggesting that "savings" that may be achieved from possible troop reductions in Iraq could be applied to the increased budget for the war in Afghanistan, thus bringing about a net "savings". If the Post believes this argument, then it has justified in spades what it deems to be the "creative accounting" behind the healthcare reform bill. Further, money is fungible - why not apply the Post's imagined "savings" from Iraq to healthcare reform, and pass the Post's proposed new taxes to fund the war in Afghanistan? ("Did we just say we opposed sticking with the Bush tax cuts for those wars, so that we wouldn't run up huge deficits? Well, that was so five minutes ago.")

The Post continues with a similar quality of logic:

All this assumes that defense and health care should be treated equally in the national budget. We would argue that they should not be, for two reasons. One is that wars, unlike entitlement programs, eventually come to an end. A guarantee of health care for all, particularly in the context of steadily rising costs, will bankrupt the nation if not matched by a steady stream of revenue.

Sure, wars end... Even the Hundred Years War came to an end. I suspect, though, that the Iraq war would have wrapped up sooner or perhaps not been launched at all if G.W. had told the wealthy, "Sorry, you won't be getting those tax cuts after all, and estate taxes will not be reduced." The Post's tax proposals are consistent with this - they're big on picking the pockets of working Americans, but in relative terms the proposals they're presently endorsing will have a small impact on the wealthy.

Since wars do end, it's reasonable to ask "When will these wars end, and how much will they cost?" The best answer we're likely to get from Hiatt and his boys is probably Jackson Diehl's² "Nothing's anything like Vietnam" argument - a shrug. Who knows, who cares, it's probably best not to even ask - and don't mention long, costly wars we entered with no vision of how we would achieve victory or an exit strategy, because they're nothing like what will soon be our longest war ever with no end in sight."

The Post's slippery slope argument on healthcare costs is amusing, given the Post's strong opposition to the cheapest alternative to the status quo - a robust national healthcare plan, even a single payer plan. I find it childish to suggest that the inevitable consequence of providing health insurance to every U.S. citizen will be that the nation is bankrupted. It's not at the level of "death panels", but it's still a dishonest, fear-based argument.

The point hidden behind the hypocrisy and logical fallacy is actually a good one - when we're committing to an indefinite expenditure we should consider how we are going to pay for it. But the Post's definition of what expenditures are of a limited nature is reminiscent of how the Supreme Court has interpreted the Constitution's provisions on copyright - anything that's less that indefinite in duration is "limited". When there's no end in sight to war spending, and no plan or strategy that will bring an end to that spending, the open-ended nature of the commitment makes it little different than entitlement spending - infinity is not so much different from "infinity minus one".

The Post's last argument is that wars are necessary to defend our nation and its people, while healthcare reform is not. Again we have dubious logic - that any money spent on wars and the military, no matter how spent, is necessary to the defense of the state. Would Fred Hiatt expand that "reasoning", Candian Bacon-style, to a war of choice against Canada? Some wars aren't all that important to our defense. Jackson Diehl just got through suggesting that the wars in Iraq and Afghanistan are less important "in its consequences for the United States" than was the Vietnam War - we ended the war, the North took control of the country, it's still a communist nation, and... Americans can easily and safely visit Vietnam as tourists, and we have normalized diplomatic and trade relations. How would that have been improved by giving the Vietnam War an indefinite³, deficit-funded blank check?

Combining the Hiatt crew's assertion, "the nation's security must be the president's first priority", with Diehl's insistence that our current wars are less important than Vietnam, would the Post endorse a decision to end both the Afghanistan and Iraq wars on the ground that they're less important than Vietnam and we did pretty darn well despite having ended that war with an outcome falling far short of victory? Or would we hear Diehl shriek, "Any analogy to Vietnam is imperfect - continue the war forever (less a day) if necessary to win!" With Hiatt chiming in, "At any cost... to the middle class and future generations."

Since we're focusing on the question of what bankrupts a nation, potentially leading to collapse, it seems reasonable to ask this question: In the history of the world, how many nations or empires have collapsed under the weight of healthcare costs (or any other public benefit), and how many have collapsed under the weight of costly wars and imperial overreach? Sometimes wars end because they bankrupt the proponent.

---------------
1. Here, they may be channeling Lionel Hutz. It says we argued "No New Taxes'? They got that all wrong. It's supposed to say 'No! New Taxes!"

2. Jackson Diehl is deputy editorial page editor of The Washington Post.

3. Limited only by the Post's assertion that all wars eventually end.

Healthcare, Not Health Insurance

It's really simple, but I think this essay identifies the biggest flaw of healthcare reform as it's presently conceived. How can we end hunger?

Providing food to those without is simple, really: we'll just pass a strict law requiring all hungry people to buy some, and if they don't, fine them harshly enough to persuade even the most recalcitrant ones it's in their best interest to eat something once in a while.

Now change "food" to "health insurance," and behold: you have what Congress and President Obama want to inflict upon hapless constituents like me.

Forget health insurance – what sick or struggling Americans need is healthcare. They're not the same thing.

The essay presents an anecdote about a woman who, following reconstructive surgery on her face by volunteer surgeons, complains that the Oregon Health Plan denied payment for the procedure on the ground that it was cosmetic:

I do not want my healthcare decisions made by bureaucrats who think that having a face with a nose you can breathe with is no health issue but a mere matter of vanity.

In fairness she doesn't say "government bureaucrats"; many health insurance companies would make the same determination, if they could not deny her care on the basis that her condition was preexisting. There will be similar denials under any system of health insurance, be it single payer, entirely private, or some form of hybrid.

One of the many hazards of trying to fashion a "one size fits all" bill is that you'll end up with a suit that fits quite poorly on pretty much everybody, but unfortunately that's what our present political culture demands.

Timing Is.... Difficult

In relation to the anti-healthcare reform propaganda campaign, Paul Krugman writes,

So far, at least, the Obama administration’s response to the outpouring of hate on the right has had a deer-in-the-headlights quality. It’s as if officials still can’t wrap their minds around the fact that things like this can happen to people who aren’t named Clinton, as if they keep expecting the nonsense to just go away.

What, then, should Mr. Obama do? It would certainly help if he gave clearer and more concise explanations of his health care plan. To be fair, he’s gotten much better at that over the past couple of weeks.

What’s still missing, however, is a sense of passion and outrage — passion for the goal of ensuring that every American gets the health care he or she needs, outrage at the lies and fear-mongering that are being used to block that goal.

Personally, I think it's a bit silly to suggest (as many do) that Obama can somehow make a speech or hold a press conference and transform the moment. From what I can see, we have a two-fold problem:

• Irresponsible politicians who are willing to lie to a gullible public, to create an atmosphere of fear, anger and uncertainty about reform; and

• A media that fans the flames, presents false equivalence rather than debunking the lies, or engages in the type of meta-analysis Krugman offers.

In fairness to Krugman (and to myself) there's room for meta-analysis. His column could be viewed as a commentary on President Obama and his critics, not a commentary on healthcare reform. This post is about the weaknesses of our nation's media and its effect on politics, not about healthcare reform. It seems that that the two competing media themes right now are the advancement of anti-reform lies versus "This is a referendum on Obama so he needs to find a solution - all by himself." Except that latter theme is a right-wing talking point, not in any sense a valid approach to the issues or to Obama. (But boy, the media loves the "referendum on Obama" theme.)

People who were watching this phenomenon develop, such as Robert Reich, pushed hard for a vote before the August recess. I don't think that anybody estimated the amount of astroturfing, fear mongering, and lying - not just by professional hysterics like Glenn Beck and Rush Limbaugh, or astroturfoing organizations and lobbyists such as Freedom Works and Americans for Prosperity, but by prominent Republicans like Sarah Palin and Michael Steele. The amount of media attention on the failure of the Republican Party to stamp out the lies? Next to nothing. Is deliberate lying now an accepted part of party politics, such that it isn't worthy of media attention? Is it "objective" to fail to call out a liar, instead putting on a "he said, she said" show and pretending not to know who's telling the truth? Or deferring to Obama to magically save the day?

What does Obama have to do? He has to line up enough votes to get an acceptable reform package through, then worry about fixing it in future years. Just as happened (and continues to happen) with programs like Social Security and Medicare. Does it make sense for him to launch his massive effort right now in the face of the deliberate, willful lying of the Republican Party coupled with a media more interested in the outrage the lies inspire than in their truth? I suspect we will receive a solid speech from Obama, addressing healthcare reform, as we get closer to a vote. Offering such a speech now would, in my opinion, be followed by a blitz of right-wing distortion and misrepresentation, with the media again taking primary interest in "whose message is winning" rather than who was presenting better policy or even telling the truth.

Some are comparing the present right-wing propaganda campaign to the Swift Boat Liars attacks on John Kerry. There are parallels: People are coming forth with misrepresentations and lies, the target of those lies seems slow to respond, the media is happy to make it the target's responsibility to debunk the lies rather than its own, and the media focus is on "whose message is winning" instead of "whose message is true." So I can understand supporters of healthcare reform being concerned that Obama may "lose control of the message" and be unable to recover the momentum needed to get healthcare passed... never mind that if he had that momentum we would have had a vote before the August recess.

But there's an important difference. Obama isn't trying to win a primary or an election. He's trying to get enough votes to pass a bill. If he gets those votes it doesn't matter if Sarah Palin and Micheal Steel have successfully convinced a third of America that Obama will personally preside over death panels to kill their grandmothers and children - it will have passed, and those lies will be betrayed by history. Seriously, what would Obama's speech accomplish right now - will he change one mind among those who eagerly embrace every insane lie of a Glenn Beck, Sarah Palin or Michelle Malkin? Will those right-wing commentators suddenly become contrite, apologize and tell the truth? Get real. He's not going to win over people who believe - and who are encouraged to believe - that this is a "government takeover of Medicare". To the extent that some "independents" are wavering, due to the extent of the propaganda and their ignorance of the issues, his best bet to win them back is probably not to start a personal campaign right now, but to let the gun-toting nut jobs undermine their own credibility, then to step in at a more crucial juncture with his explanation of the reform bill.

When Congress resumes session, I expect Obama and his team will do a lot of arm-twisting to get votes on board, and to keep votes already committed, and that Howard Dean wasn't just speaking for himself when he fired this shot across the bow of the "Blue Dogs" - "I do think there will be primaries as the result of all this, if the bill doesn't pass with a public option". And Obama has to give enough of a speech to let the country know, in advance of the vote (and after the present round of childish, Beck/Limbaugh-fueled, astroturf driven hysterics are "old news") that their Member of Congress has done the right thing.

Update: I came across a Mencken quote that highlights both that the problem with our news "elites" is far from new:

A good reporter used to make as much as a bartender or a police sergeant; he now makes as much as the average doctor or lawyer. ... His view of the world he lives in has thus changed. He is no longer a free-lance in human society, thumbing his nose at its dignitaries; he has got a secure lodgment in a definite stratum. ... The highest sordid aspiration that any reporter had, in my time, was to own two complete suits of clothes. Today they have dinner coats, and some of them even own plug hats.

Mencken saw some rotten apples in the barrel, but nobody took them out and now.... Actually, I think the problem is more than the celebrity journalist who now, more than anything else, strives to advance his social status - it's that they've been joined, perhaps supplanted, by a class of pundits and commentators who do the same thing, but do no actual reporting (and in many cases never did).