Wednesday, March 31, 2010

In Some Places It's Already Tomorrow

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Back To Where You Began

One of the consistent criticisms of President Obama is that in his quest for bipartisan legislation he offers compromises up-front, and then has to negotiate from a weak starting point. The conception is that if he were to demand a lot more up front, he would be able to make concessions (giving up the portions of the proposed legislation that were added merely for this purpose) and thereby gain more concessions from the other side. That criticism presupposes two things: first, that it's appropriate for the two sides to a legislative negotiation to start from maximalist positions and work toward common ground, and second that opponents of the legislation had any actual interest in negotiation.

I have a different impression: I believe that President Obama has little patience for political theater, a pretended devotion to maximalist positions that the advocate knows will never gain majority support, that it's possible to identify a consensus position that reasonably advances the public policy goals of even major legislative initiatives in a manner that is acceptable to both sides, and that it thus saves a lot of time and bother to bypass the theater, start with the consensus position and focus on the details.

I do believe Obama made mistakes in his pursuit of healthcare reform, most significantly in assuming that the Republican Party would participate in the debate in good faith, and that his own party would recognize that getting squarely behind healthcare reform would be best for both their party and the country. Instead he got "the Party of No" on one side, and a mad mixture of pandering and demands for pork from his own party that left a lot of people with the impression that they had learned nothing from the Clinton years and weren't fit to govern. The Democratic Congress had the option of demonstrating leadership, if for only a few months focusing on what's good for the country and how to make the best possible healthcare reform bill, and... largely chose self-interest. Had they followed Obama's lead, the difference between the initial framework he proposed and the final bill would have been minimal, but they would have appeared effective in office.

I get the same sense from Obama's tense interactions with Binyamin Netanyahu over restarting peace talks with the Palestinians. Obama appears to accept the consensus view of what a final resolution will look like - at least if it is to be a two-state solution. That is, there will be a final border that roughly follows the Green Line, the Palestinians will have a capital in East Jerusalem, and the end-result will be a genuine Palestinian state alongside Israel. Netanyahu lacks the personal courage to commit to such an outcome, and perhaps more to the point does not desire that outcome. In Netanyahu's initial term as Prime Minister, his government's contemptuous view of what a Palestinian state - a rump state with no control over its borders, water, or airspace, might look like was reportedly, "Well, they want to call it a state? Fine, they can call it fried chicken if they want to." It's obvious that peace can never be achieved on those terms, and it appears that Obama would prefer to work with grown-ups on both sides to start negotiations from the consensus view and focus on the details.

Today, a new criticism - that Obama is offering to allow offshore drilling in areas that were previously off-limits, in order to try to entice Republican support for climate legislation - as well as feckless Democrats like Mary "Louisiana Purchase" Landrieu. Without Republican support, the bill will die. To me it appears that President Obama is starting with the belief that offshore drilling will eventually happen, with the actual debate being over when and how, in a context where the concession will achieve a great good (getting the climate bill passed) based upon a relatively minor concession - and with significant oversight of environmental concerns. If it works, he gets his climate bill. If not, the bill dies and the offshore drilling proposals don't become law.

If my inference is correct, Obama's biggest mistake is his hope that people will rise to the occasion, recognize that maximalist positions will not work, and commence good faith negotiations based upon "what everybody knows" is likely to ultimately happen. For healthcare reform, it took a year for the legislation to evolve into a form remarkably similar to President Obama's proposed starting point. For Israel-Palestine, we have forty years of history that tell us that negotiations that start from maximalist positions will accomplish nothing. For climate legislation, if his proposal works he'll get a bill while making a concession that is very likely to occur in the future, but on his own terms - as opposed to losing the opportunity to pass climate legislation until after the midterm elections.
Update: From Obama's remarks,
Ultimately, we need to move beyond the tired debates between right and left, between business leaders and environmentalists, between those who would claim drilling is a cure all and those who would claim it has no place. Because this issue is just too important to allow our progress to languish while we fight the same old battles over and over again.
To me that again sounds like, "We all know the approximate destination, so let's skip the theater and work out the details."

Tuesday, March 30, 2010

Can "Health Courts" Work?

Recently in a comment, Dr. Michael Kirsch proposed that "health courts" might be a beneficial reform to the medical malpractice system.
While I doubt that any recommendation will gain traction here, here is a suggestion. Maintain caps on non-economic damages, which I have supported in Ohio as we had no other available remedy. The acute flaw, in my view, is the absence of a meaningful barrier to sue innocent physicians. Establish a health court or panel that would determine if there is a reasonable basis to sue a doctor. If the panel agrees that there is a reasonable case for negligence, then the physican is sued. If the panel concludes that there is no reasonable basis, then this negative judgement should raise the bar for suing. If the plaintiff wants to sue anyway, even if the panel does not believe there is a reasonable case, then if the defendant prevails, his legal fees should be shared by the plaintiff and his attorney. This mechanism still preserves the patient’s right to sue, but raises the stakes for the plaintiff & attorney if they do so despite a conclusion by an impartial panel that a case should not be filed.
Given that Dr. Kirsch had previously commented, "I do not insist upon caps. I favor a system that makes patients 'whole' who have been injured by negligent care," it is not clear why he proposes damages caps as part of a solution.

If in fact Dr. Kirsch wants to be sure that victims of malpractice are made whole, it seems self-evident that damages caps would work in the opposite direction. I don't think any sane person would argue, for example, that a child who is rendered brain damaged or quadriplegic due to undisputed medical malpractice would be "made whole" by an award for pain and suffering that was capped at $250,000, but that's exactly what proponents of those caps have in mind. Damages caps also do nothing to stop so-called "frivolous lawsuits", as they're aimed at valid, high-damages cases and not at dubious cases or those likely to result in small awards or settlements. Experience has shown little to no effect on insurance premiums from damages caps.

One of the difficulties in discussing "health courts" is that no two people seem to agree on what a "health court" is, let alone what it should do. The name "health court" is often slapped on a bundle of proposed reforms or modifications to the current system, many or most of which could be implemented without creating a new court. Sometimes the term is used to describe an administrative court that would hear medical malpractice cases in a manner similar to the way workers' compensation cases are resolved. Sometimes the term is used to describe a specialized court in which the judge would have special training and there would be additional support from court-appointed experts or masters. Dr. Kirsch appears to be proposing some form of pre-suit screening or arbitration, with the parties having the option of proceeding into litigation if they don't like the outcome. It should be needless to say, but when no two people are on the same page, it becomes very difficult to address the overall concept of a "health court" as opposed to the merits of a specific suggestion.

Dr. Kirsch's proposal is that some form of "health court" or "screening panel" be created to review possible claims of malpractice. Were Dr. Kirsch to speak to a lawyer who handles malpractice claims, he would be aware that there is already intense screening of claims - claims for which damages are considered to be insufficient to justify a lawsuit (depending on the complexity of the case, the threshold may be over six figures) even where malpractice unquestionably occurred, where the medical evidence is insufficient to substantiate malpractice, where the patient confuses a bad outcome or bad bedside manner with malpractice... lawyers invest a great deal of time and money into malpractice litigation and are not interested in cases that are not likely to return a profit. The cost of taking a malpractice case to trial can easily run into the six figures, and is unlikely to be less than $30-$60K even when the liability is clear. The "certificate of merit" system, something that Dr. Kirsch correctly deems to be inadequate for filtering most cases, is in effect a $5,000 tax just to get through the courthouse door, and costs go up from there.

Right now, probably at least 19 out of 20 prospective malpractice clients are screened out by law firms (there’s no way to obtain a verifiable statistic). Some would-be plaintiffs will go from firm to firm to firm, trying to find a lawyer who will take their case, but in most cases results will be consistent. Yes, there are lawyers who don't have the skill or competence to properly review a malpractice case, and don't understand what's involved in taking one to trial, and sometimes they'll pick up a case that should never have been filed, with the likely result that the case is dismissed on summary disposition or settled for nuisance value. Most of those lawyers get their fingers burned, and learn to refer malpractice cases to specialists. For analogous behavior on the other side, we can turn to the world of cosmetic surgery, where some patients with obvious body dysmorphic disorder manage to find surgeons willing to, dare I say, mutilate them. Or doctors notorious for writing pain prescriptions to anybody who has the cash for an office visit. No profession is free of hacks or, more generously, people who don’t understand the complexity of a task they’ve convinced themselves they’re competent to perform.

What happens if you create an official screening system, no lawyer required, that allows anybody who believes herself to be a victim of malpractice to initiate a case? Most of the patients with strong cases will continue to be represented by lawyers. But the huge numbers of would-be plaintiffs ware are presently screened out? They'll be able to initiate a review without the assistance of a lawyer. Many will even be instructed of that right by law firms that are rejecting their cases - just as they presently caution rejected clients about statutes of limitation, as to do otherwise can constitute (did you guess?) malpractice. What will be the impact on the medical community of a proliferation of malpractice claims made through the health/screening court, most of which are groundless?

It’s also important to recall that cases aren’t screened solely on the basis of their merits. In order to be viable, a malpractice claim must be supported by an injury to the patient, and the injury must be likely to provide a return sufficient to cover the costs of litigation, a reasonable return to the attorney, and also to compensate the plaintiff. Claims that involve medical error but little or no harm would become viable in a system in which plaintiffs could represent themselves before “health courts”, resulting in findings of malpractice against doctors for errors that escape prosecution under the current system.

Of cases screened by a “health court”, what will happen when the evidence is ambiguous? That is, cases in which the nature of the available medical evidence (or lack thereof) leaves the panel unable to make a judgment call as to whether or not malpractice occurred? I assume that one of the expected benefits of the screening proposed by Dr. Kirsch would be to bring about a quick resolution, rather than having things drawn out through court hearings, discovery and depositions. But it's well-documented that the leading reason that marginal malpractice suits are filed is a lack of information on the part of the plaintiff:
The profile of non-error claims we observed does not square with the notion of opportunistic trial lawyers pursuing questionable lawsuits in circumstances in which their chances of winning are reasonable and prospective returns in the event of a win are high. Rather, our findings underscore how difficult it may be for plaintiffs and their attorneys to discern what has happened before the initiation of a claim and the acquisition of knowledge that comes from the investigations, consultation with experts, and sharing of information that litigation triggers. Previous research has described tort litigation as a process in which information is cumulatively acquired.
As you increase the amount of discovery permitted by the screening court, you drive up costs for both sides and burdens on the doctor. But if you don’t permit discovery you’ll bias the system in favor of the doctor and to the detriment of injured patients, or at best will end up with a large number of useless determinations – “We don’t have enough information to assess this case” decisions that will, in effect, transform the “health court” into a waste of time and resources for everybody involved.

Dr. Kirsch did not describe the type of judge or panel that would constitute a “health court” or how they would be compensated. The system could be one involving a judge supported by experts, although if the experts are to be “neutral, court-appointed” experts the question is raised of “who pays them?” Similarly, the system could be a form of arbitration, perhaps with each side proposing an arbitrator, the arbitrators selecting a mutually acceptable third “neutral” arbitrator, and the decision of the majority carrying the day, but the question remains of how the arbitrators would be paid. If the cost is to be borne equally by the parties, it becomes a tax on litigation that is unduly burdensome to the claimaint.

One of the concerns raised by advocates of “health courts” is that they don’t trust juries to decide malpractice cases. The easy response is that juries are routinely trusted to resolve disputes that are more complicated, more scientifically involved, and carry greater consequences for the parties than a typical malpractice case. What makes malpractice so special that juries “aren’t good enough” to decide them? But truth be told, by the measure of independent screeners, when deciding malpractice cases juries “get it right” most of the time, tend to give small awards when they err on the side of the patient, and most importantly are far more likely to err on the side of the defendant doctor, wrongfully denying compensation to a patient who suffered injury due to malpractice. In the NEJM study:
Overall, 73 percent (1054 of 1441) of all claims for which determinations of merit were made had outcomes concordant with their merit. Discordant outcomes in the remaining 27 percent of claims consisted of three types: payment in the absence of documented injury (6 of 1441 [0.4 percent of all claims]), payment in the absence of error (10 percent), and no payment in the presence of error (16 percent). Thus, nonpayment of claims with merit occurred more frequently than did payment of claims that were not associated with errors or injuries. All results hereafter relate to the subsample of 1404 claims that involved injuries and for which determinations of error were made.
One of the interesting aspects of retrospective analysis by medical experts, as demonstrated in that study, is that they are more likely to find medical errors by physicians than are the juries who heard the cases. That is, it appears that all else being equal, a trained panel of experts will be harder on doctors than a lay jury. There are also studies suggesting that judges are more likely to find in favor of plaintiffs in malpractice cases than are juries, but I don’t give that type of study much weight as there are likely to be significant differences in the facts and issues presented in a case a plaintiff chooses to take to a bench trial as opposed to a jury. But it is fair to observe that having judges or “panels of experts” evaluate cases may result in a greater number of findings of “malpractice” than would occur as a result of jury trials.

Dr. Kirsch proposes that only the plaintiff would bear a consequence for proceeding with a case despite the ruling of a “health court”:
If the panel concludes that there is no reasonable basis, then this negative judgement should raise the bar for suing. If the plaintiff wants to sue anyway, even if the panel does not believe there is a reasonable case, then if the defendant prevails, his legal fees should be shared by the plaintiff and his attorney.
In Michigan, once discovery is closed, most tort cases go through “case evaluation” in which a panel of lawyers (one defense-oriented, one plaintiff-oriented, and one neutral) review cases and recommend resolutions. The panel can also find a case to be frivolous. If a party rejects the panel’s recommendation and proceeds forward with the case, but does not appreciably increase the value of the case at trial, the party can be held responsible for the other side’s fees and costs from the date of case evaluation forward. But that’s an even-handed system, applying to both plaintiffs and defendants.

Why does Dr. Kirsch propose that only the plaintiff and the plaintiff’s lawyers face a potential a cost for proceeding with a case following the determination of the “health court”? In cases where the “health court” finds malpractice and the defense proceeds to trial on any issue other than the dollar amount of damages, why not require unsuccessful defendants and their lawyers to cover the costs and attorney fees (including full, lawful contingency fees) of the plaintiffs, with insurance companies prohibited from reimbursing those amounts? If the panel also recommends damages awards, why not impose a similar sanction based upon the amount of the award against a party who doesn’t improve its position by at least 10% after rejecting the recommendation? Is the goal here to create a fair, balanced system, or to create a system that is skewed in favor of doctors?

It may be possible to create an effective screening system for malpractice cases, and it certainly should be possible to create one that is superior to the requirement of “certificates of merit”. But the costs of such a system must be affordable to the claimant, the screening court must have the ability to obtain and review information necessary to make a reasonably fair and accurate determination, and sanctions should apply equally to both sides.

Is such a screening system reasonably called a “health court”? Sure, in the sense that any juridical alternative to the present system that focuses on malpractice cases can be deemed a “health court”. But if it’s simply a form of pre-filing arbitration, I don’t think it lives up to that name. Unless and until there is some agreement on what a “health court” is and what it will do, demanding “health courts” as a “solution” to a perceived malpractice crisis does nothing to either advance the debate or solve the problems of the current system.

Putting the Chain Before the Ball?

That's probably not the most sensitive title to a post on marriage.... (I was thinking of "Putting the cart before the horse".) Um... anyway. David Brooks lectures,
Marital happiness is far more important than anything else in determining personal well-being. If you have a successful marriage, it doesn’t matter how many professional setbacks you endure, you will be reasonably happy. If you have an unsuccessful marriage, it doesn’t matter how many career triumphs you record, you will remain significantly unfulfilled.
But Brooks' claim raises the question, is it truly the marriage that makes you happy and fulfilled, or is it that people who are happy and fulfilled tend to either enter into happier marriages, find their marriages to be happier and more fulfilling (whatever somebody else might think), or both? If people who are intrinsically happy enter into happier marriages, it would be no real surprise that they're also happier at work - it's their personality driving their happiness in both contexts. If your personality is such that you always want more, then you're apt to find your marriage and work unsatisfying.

I suspect that Brooks was inspired by this recent New Yorker article, which notes that things we expect to make us happy often don't.
Several theories have been offered to explain why the United States is, in effect, a nation of joyless lottery winners. One, the so-called “hedonic treadmill” hypothesis, holds that people rapidly adjust to improved situations; thus, as soon as they acquire some new delight—a second house, a third car, a fourth-generation iPhone—their expectations ramp upward, and they are left no happier than before. Another is that people are relativists; they are interested not so much in having more stuff as in having more than those around them. Hence, if Jack and Joe both blow their year-end bonuses on Maseratis, nothing has really changed and neither is any more satisfied.
Peripherally related to the subject of marriage,
Research that Graham has done in Afghanistan shows that, despite three decades of war and widespread destitution, Afghans are, on average, a pretty cheerful lot. (The most cheerful areas of the country tend to be those in which the Taliban’s influence is stronger.)
You might not get that impression from books like A Thousand Spendid Suns, but then I suspect that opinion polling in Taliban areas is heavily skewed toward reports from men who may be very happy with their marital relationships. I suspect that another factor ties into relativism - when your neighbors don't have much, it's easier to be content with what you have. When I was traveling in Southeast Asia, it was a pretty obvious takeaway that you can live a full, contented life with a minimum of "stuff", and that it's in fact easier to be happy once you clear away the clutter and focus on your needs instead of your wants. That's a message Madison Avenue would prefer you not hear.

I don't find the "hedonic treadmill" model to be incompatible with the "relativist" model of happiness. That is, while I think people can be more content when there's no competition to "keep up with the Joneses", whether by virtue of the financial realities of their society or by virtue of the recognition that they can choose to be happy with what they have, following triumph or tragedy most people will adjust back to their baseline level of contentment (or discontent). You can make society happier by disappointing Madison Avenue, educating people that having "more stuff" is not the key to happiness, but you can also focus on early childhood development. That, after all, is when a child's basic outlook on life - love, safety, security, whether or not basic needs will be fulfilled - is established.

"But It Was Cheaper Than You Thought It Would Be"

I am already tired of the new defense of the financial industry bailouts - that one portion of the bailout or another "could turn a profit" or that it "cost less than critics feared". In reading this article about Timothy Geithner, I was struck by the self-approbation:
“My basic view is that we did a pretty successful job of putting out a severe financial crisis and avoiding a Great Depression or Great Deflation type of thing,” he said. “We saved the economy, but we kind of lost the public doing it.”
As if there was only one path to "saving the economy" - the approach of smothering out any sign of flame with a truckload of money - and that as it "worked" there is no need to reflect on why the same end could not have been accomplished by different means, at a lesser cost, at greater return for the taxpayer, or some combination thereof. The one consistent element that has prevailed throughout Geithner's "decision-making" is that the welfare of the financial oligarchs, bondholders and shareholders should whenever possible take precedence over any other interest, and certainly should predominate over making the taxpayer whole. To the extent that one corner or another of the bailout threatens to "show a profit", it is by accident - it is certainly not by design.

I'm not arguing that Geithner's approach was all wrong - far from it. I am arguing that some of the proposed alternatives may have been better for taxpayers and for main street, and that some alternative approaches would have done a great deal more to deter the return to "business as usual" on Wall Street. At the same time, the import Geither appears to have placed on restoring Wall Street to "business as usual," at the expense of any other goals or interests, is a very fair topic for criticism. When you keep writing blank checks, sooner or later you'll have poured enough money into an industry to be able to claim to have "rescued" it - not only is there no particular genius in that approach to a problem, it insulates the industry from the consequences of its bad decision making, and potentially sets things up for yet another failure to be again bailed out at exceptional cost to the taxpayer.

Geither's defense of his blank check approach to Wall Street?
He suggested that his critics draw up a balance sheet comparing the Administration’s expenditures on programs that benefitted Wall Street with those that benefitted Main Street. “By any measure, the Main Street stuff dwarfs the Wall Street stuff. Compare money for housing versus money for banks. Measure tax cuts for working families versus money for banks.”
So stimulus measures aimed at industries responsible for about 92% of the nation's GDP, "by any measure", are larger than the bailout directed at the industry responsible for 8% of the nation's GDP? With due respect to the fact that the fire that was burning down the economy was fueled by the financial industry collapse, why does Geithner believe that to be a defense of his "blank check" approach to bailing out the financial sector, perpetuating - really subsidizing - its extraordinary levels of compensation, and insulating its participants, individually and collectively, from meaningful consequence for their own failures?

Take a look at the Citigroup bailout. Every step of the way, the bailout focused on giving the taxpayers the least possible amount for their money.
On November 23, 2008, the government bought $20 billion in preferred shares in Citigroup. It also received another $7 billion in preferred shares in exchange for guarantees on $300 billion in bad assets. At the time, the combined value of the investment in preferred shares and the guarantee on bad assets exceeded the full market value of Citigroup stock on November 21st, the last trading day prior to the deal. In other words, for the same financial commitment that the government made on that day, it could have owned Citigroup outright.

The government subsequently held onto to its preferred shares until Citigroup's stock had nearly tripled in value. In September of last year it traded its preferred shares for common shares that were priced at a level that only give the government a 27 percent stake in Citigroup. These shares have have now risen enough to give the government an $8 billion profit on its investment. While the Post tells readers that:
"The windfall expected from the stock sale would amount to a validation of the rescue plan adopted by government officials during the height of the financial panic, when the banking system neared the brink of collapse. A year ago, Citigroup's stock hovered around a dollar a share, and the bank's future seemed in doubt. On Friday, the stock closed at $4.31."
The logic of the Post's assertion that the profit on Citigroup stock validated the bailout is not clear. By making capital available to Citigroup at below market rates, the government effectively subsidized the income of Citigroup's shareholders. It also allowed its top executives to make millions of dollars because they were smart enough to be able to get taxpayers to subsidize the bank. The current market value of Citigroup is $123 billion, with only $33 billion belonging to the government. This means that the government has effectively given $90 billion (@ 25 million kid-years of health care provided through the State Children's Health Insurance Program or SCHIP) to Citigroup's shareholders and billions more to its executives by not demanding a market price for its support.

It is also worth noting that the government has supported Citigroup through other mechanisms. The Fed created various special lending facilities that allowed Citigroup to borrow money from the government at extremely low interest rates. Since one of the main uses of this money was buying government bonds, Citigroup was essentially getting free money from the government. If it borrowed $200 billion at near zero interest and lent it back to the government by buying 10-year Treasury bonds at 3.7 percent interest, then the government was effectively handing Citigroup $7.4 billion a year for nothing. This money is not deducted from the Post's estimate of the government's "profit" on its dealings with Citigroup. (The Fed refuses to tell the public how much money it lent to Citigroup and other banks at below market rates.)
Part of the backdoor bailout involved the government buying up mortgage-backed securities:
If the Fed's program of buying mortgage-backed securities lowered the interest rate on 30-year mortgages from 5.5 percent to 5.0 percent, then this would raise the value of Citigroup's outstanding 30-year mortgages by more than 7 percent. If Citi had $500 billion invested in mortgages or related assets, then the action by the Fed would have effectively given Citi $35 billion.

If the Fed subsequently resells the $1.25 trillion in mortgage-backed securities it purchased in order to push down mortgage interest rates in an environment in which interest rates have risen, then it will lose money on these purchases. If it sells the mortgage-backed securities when interest rates are 6 percent, then it will lose close to 15 percent, or more than $180 billion on its purchases of these mortgages.
Yeah, some deal for the taxpayer.

Monday, March 29, 2010

Be Careful What You Wish For....

The New York Times offers a variety of arguments on the constitutionality of the healthcare reform bill, doing a reasonable job of representing both sides. The New York Times offered space to the lawyers who are suing to invalidate the individual mandate. Their argument, to me, is interesting as it seems to have at its heart a yearning for the repeal of the New Deal, or more accurately the sweeping expansion of the Commerce Clause in a series of Supreme Court cases that enabled the New Deal. The authors contend,
In a 1942 case involving wheat producers and Gonzales v. Raich , a 2005 case concerning medical marijuana, the Supreme Court upheld federal regulation of purely local economic activities as a necessary part of regulating the indisputably national market in those commodities.

The health care insurance mandate is in no way necessary to Congress’ efforts to regulate the insurance markets. It does not govern how, when and under what conditions insurance may be locally bought or sold as a means of regulating those activities on an interstate basis — as was the case in the wheat and medical marijuana cases.

The insurance mandate applies without regard to any economic or commercial activity, local or national. If Congress can legislate this broadly, then there is in fact no limit to federal power because every aspect of human life can be said — in the aggregate — to substantially affect interstate commerce.
That sounds like a discussion from a Constitutional Law class, in which first year law students debate the wisdom of that 1942 case, Wickard v Filburn. I don't think the sidestep works - the argument that an insurance mandate is not necessary to the effective regulation of insurance markets - as it is beyond obvious that in the absence of a mandate it is not economically feasible for insurers to follow regulations requiring them to end medical underwriting and insure any applicant regardless of their preexisting medical condition. It remains my opinion that the health insurance mandate is a clumsy tool, but if it is deemed unconstitutional what would actually be accomplished by opponents of healthcare reform? We would simply end up with a slightly modified system of taxes and credits to achieve the same end.

Law Professor Randy Barnett rails against the individual mandate,
Imagine if Congress ordered the majority of American households without a firearm to buy a handgun from a private company, and punished their failure to do so with an escalating monetary fine, which it labeled a “tax.” Would the supporters of the health insurance mandate feel the same about the constitutionality of such a measure?
Imagine if Congress passed a bill that allowed you to go into a gun store and, if you claimed to be in need of a gun, required the store to either immediately verify that you did not need a gun or provide you one on credit (or as a present) with no credit check - and that they could be sued for "big bucks" over a "wrongful denial". That would be a lot like how people get emergency care under EMTALA - show up at an emergency room and get treatment until you're medically stable, without regard to your ability to pay.

High numbers of uninsured and underinsured people do affect the quality, availability and cost of medical care available to the rest of the population. Some hospitals don't offer emergency departments to avoid EMTALA, and some in impoverished areas have had to close. As a law professor, Barnett is no doubt aware of the usefulness of rhetorical questions, hypotheticals and reductio ad absurdum to illustrate a point but, in class or out, a bad analogy is a bad analogy. Similarly,
Congress has never before mandated that a citizen enter into an economic transaction with a private company, so there can be no judicial precedent for such a law.
So... the cure is to tweak the nature of the mandate and associated tax? Or is Barnett telling us that all we need to make the healthcare bill constitutional is the implementation of a pubic option? Easy cures... how, in Barnett's view, do they compare to the "disease"?

Barnett also takes an activist view of the Supreme Court:
Now that it has, supporters are betting there won’t be five votes on the court to thwart a popular act of Congress. Another safe bet.

But what if the bill turns out to be supremely unpopular? What if one or both houses of Congress flip parties because of it? What if majorities in Congress favor repeal but are blocked by a Senate filibuster or a presidential veto? Still as confident about five votes?
Last I checked, there wasn't language in the Constitution that authorized the Court to determine whether or not a law was constitutional based upon the latest public opinion poll. I'm not certain what point Barnett intended to make, but his argument reads like continued advocacy for the form of judicial activism "that dare not speak its name" - a continuation of the Reagan/Bush/Bush II brand of conservative judicial activism that seeks to accomplish through the courts that which can't be achieved through the ballot box.

The quibbles that the political right is raising about healthcare reform likely could have been avoided had a mere handful of Republican senators worked to effect healthcare reform, rather than choosing obstructionism. I'm not optimistic that such a bill would have markedly better solutions to the individual mandate or tax structure behind the bill than the one that passed, but it's at least theoretically possible. Even now, a more mature approach would be to propose ways to fix the bill's defects, real and imagined. In the long run that would also be more effective than pointing to those same (real and imagined) defects in an effort to undo reform, while seemingly blind to the fact that those defects can be fixed in ways you'll like even less than the status quo.

It's Pocket Change... No, It's a Footnote...

As Robert Samuelson once again vociferates that any form of universal health coverage takes us inexorably down the road to ruin, The Nonsequitur revisits comparable, discretionary expenditures that don't bother him at all. I wonder what he would make of this argument by Paul Krugman:
Many independent sources are moderately more pessimistic; they think that on current policies we’d be looking at a deficit of 5-6 percent of GDP. So that makes it more like a 3 or 4 percent of GDP adjustment.

That’s not, in economic terms, a huge number. We could raise taxes that much and still be one of the lowest-tax nations in the advanced world. Or we could save a significant share of that total by not being totally prepared for the day when Soviet tanks sweep across the North German plain.

The only reason to doubt our ability to get things under control a decade from now is politics: if we’re still deadlocked, if sane Republicans are cowed by the Tea Party, then sure, we can have a fiscal crisis. And longer term, we’ll be in a mess unless we get health care costs under control — which is exactly what we’re trying to do, in the face of cries about death panels.

The numbers aren’t that bad; if we go wrong, the fault will lie not in our debt, but in ourselves.
Samuelson is correct to complain that the Independent Payment Advisory Board that will examine Medicare costs is artificially constrained, but could it possibly be true that he never stopped to think why topics such as "rationing" care or changing benefits are explicitly off the table? And has he considered that when it comes to more sensible tax policy or cutting a "footnote's worth" of spending out of the military budget, he personifies the problem?

Were Samuelson to talk to his editorial page boss, he might get the sense that President Obama understands the financial problems facing our nation.
Last summer I asked the president how he could overcome such inertia, given the almost impossible politics of deficit control. He suggested that events might jump-start the politics, when lenders start to fret about the creditworthiness even of the United States.

"I actually think that, sadly, decisions are going to be forced upon us," he said. "I mean, I think that if we don't show that we're serious in some fashion, then I think you're going to see a reluctance on the part of people who've been snapping up Treasurys to keep doing so. . . . And that, in some sense, will -- certainly compels me, if I'm being responsible in my office, to push hard on this."
What I find most interesting about that passage is that it points no partisan figures. It appears that President Obama and Fred Hiatt both recognize the unsustainable status quo to be a problem created and perpetuated by both parties, or... dare I say, a "victory" of bipartisan politics.

Friday, March 26, 2010

Apple's Advertising Patent, Revisited

Not so long ago, I speculated about the goal of Apple's advertising patent that allows advertisers to test whether users have watched an ad, locking them out from... something... at the hardware level if they had not. My guess was that Apple was going to use the feature to offer "free music", earned by those willing to watch ads.

But then along came the iPad. The larger format, and what appears to be a strong effort by Apple to bring traditional media to its new platform, suggests that users might be able to access firewalled news content after verifiably watching an ad. Websites such as Salon have experimented with advertising-based "day passes", and increasing numbers of sites are introducing ads and interstitials on all content. The Apple patent seems like a good tool for bringing some revenue to traditional media outlets while allowing users to get "free" access to their content, but limiting their ability to "cheat the system".

Good Things vs. Bad Things

Back in the day, Charles Krauthammer knew a good thing when he saw it:
On the domestic front, more shock. Democrats understand that the Bush tax cuts make structural changes that will long outlive him. Like the Reagan cuts, they will starve the government of revenue for years to come.
Bush, Krauthammer lectured, was viewed by Democrats as "demonic" for creating funding shortages that would force structural changes in government.

As you guessed, that was then, this is now:
But even if it were revenue-neutral, Obamacare preempts and appropriates for itself the best and easiest means of reducing the existing deficit. Obamacare's $500 billion of cuts in Medicare and $600 billion in tax hikes are no longer available for deficit reduction. They are siphoned off for the new entitlement of insuring the uninsured.
Spending and taxes are not separate issues. Bush's tax cuts didn't lead to the structural changes of Krauthammer's dreams - the Republican party is profligate, so tax cuts led to extraordinary deficit spending. If he were to try to hold a consistent thesis, Krauthammer would have to acknowledge that whether the cash shortfall he envisions as bringing about a "structural change" comes from taxing or spending, it will either "starve the government" (and force the cuts of Medicare, Medicaid and Social Security for which he yearns) or it won't. When the Bush tax cuts didn't prevent G.W. from pushing Medicare Part D through Congress without funding the new benefit, there was no caterwauling by Krauthammer about how Bush would have to raise taxes. (But he's never been one to strive for intellectual consistency.)

I find it fascinating that Krauthammer's new professed fear is that the Obama Administration will pass a "consumption tax". Recall the Republican "FairTax" proposal - here are Tom Delay and Bruce Bartlett back in 2005, describing a VAT / consumption tax / "national sales tax" as a cornerstone for "tax reform". In 2006, Rep. Darrell Issa took up the cause. A consumption tax was also recommended in 2005 by G.W. Bush's President's Advisory Panel on Federal Tax Reform. What other conclusion could you possibly draw, other than that a consumption tax is an evil Democratic plot to take over the world?

In fairness to Krauthammer, he loves the idea of replacing income taxes with a consumption tax - it would be, after all, regressive, easily avoided by the wealthy, and completely inadequate to fund the government. And then there's the issue that we're trying to reinvigorate the economy by boosting consumption. Whether nor not you believe that to be a good idea, it goes without saying that a VAT would depress consumption by making goods more expensive.

Krauthammer personifies the type of person who made healthcare reform such a mess. "It must be revenue neutral! Oh... it's revenue neutral? Then it must cut spending by hundreds of billions because it's not good enough for it to be revenue neutral - in the future spending may not go down, and taxes may not go up." We would likely have ended up with better legislation if the major goals of healthcare reform had been addressed independently. Even within one bill, issues such as universality, spending and improved efficiency could have been separately addressed, but that would have required more honesty from opponents of reform. That would mean, for example, no editorials selectively attacking out the components of the bill that would increase spending in willful disregard of other provisions that cut spending or raised revenue.

It would have made sense for there to have been a new payroll tax (albeit, one that did not implicate additional double- and triple-1... or perhaps create quadruple-taxation) to collect money for premiums (see, e.g., my suggestion from yesterday). But every politician since Mondale has been effectively forced to take a "no new taxes", or at least a "no new taxes on the middle class" position, much to the pleasure of people like Krauthammer. Between those promises and the import of stimulating the economy, no, we won't have a consumption tax - not even (or should I say "and certainly not") at the level of luxury goods - any time soon.

1. When you calculate multiple taxes based upon net pay, you're effectively taxing the same money over and over again. The Republican Party tends to be very concerned when this affects the rich, thus lamenting that taxes on dividends and large estates are "double taxation", but don't appear at all concerned about the same phenomenon affecting the wages of working Americans.

Thursday, March 25, 2010

Wretched Public Policy Arguments

If Paul Krugman is correct, it becomes more understandable why editorials from AEI "scholars" seem so often to be wretched, weak in analysis and careless with facts.
In discussing the [David] Frum firing [by AEI], Bruce Bartlett asserts that AEI has muzzled its health-care experts, because the truth is that they agree with a lot of what Obama is proposing.
Sort of an, "If you don't have anything nice to say for the benefit of our corporate sponsors, don't say anything at all"? Ensuring that your most knowledgeable experts either toe the corporate line or remain silent?

Update: "They’re hiring Jonah Goldberg and Marc Thiessen." As I was saying... wretched.

(Fake?) Confusion on Health Insurance

After playing host to any number of editorials that attempted to shoot down healthcare reform, and no small number of unsigned editorials from its own editorial board seemingly designed to do the same, the Washington Post's editorial page found enough ambiguity in its past comments to claim, "We supported the bill". Okay... let's take that at face value. But can't we get better analysis? Just one day later, for example, the same editorial board offers an unsigned editorial claiming not to understand basic policy issues:
It's worth noting, too, that while the goal of the mandate is crucial to reform, the mandate isn't the only way to achieve that goal. For universal coverage to work, healthy people have to be brought into the insurance pool; if mostly the sick and old sign up, insurance will become more and more expensive, further driving away the healthy. The mandate, with an accompanying fine, is one approach to avoid such a spiral. Another, as Paul Starr of the American Prospect has pointed out, would allow individuals to opt out of the system but would force them to wait five years before opting in again and becoming eligible for subsidies. If they get sick in the meantime, they must either pay for treatment on their own or find an insurer willing to take them on, presumably at inflated rates.

Which would work better? The truth is that we don't know.
A few more details from Mr. Starr,
In other words, instead of paying a fine, they would forgo a potential benefit. For five years they would become ineligible for federal subsidies for health insurance and, if they did buy coverage, no insurer would have to cover a pre-existing condition of theirs.
We've already made the decision not to let the uninsured die in the streets, and that will continue. We're not going to start turning people away from emergency rooms, let alone turning away their dependent children who had no say in the matter, merely because we've legislated away their ability to insure themselves for what is now a pre-existing condition and they cannot otherwise afford care. Their unpaid bills would burden the budgets of hospitals with emergency departments nd public hospitals, and eat up the charity care budgets of nonprofit providers.

It's not even a close call.

I'm not going to pretend to like the mandate. It's a clumsy tool, and stands to be extremely unpopular if people are forced to buy substandard insurance. Easier and better alternatives could be fashioned, but they would constitute "new taxes" on the middle class - something that was deemed out of the question for this reform bill - and would be attacked from the right as part of a "government takeover". For example, a payroll tax could be implemented, either with the collected taxes directed to the employees' insurance providers or with employers exempted from the tax if they documented that their employees were enrolled in adequate health insurance. Increase that tax over time to the point that it is sufficient to cover the worker's share of a full insurance premium, and you could even provide to automatically enroll people who failed to sign up on their own in the cheapest plan available through their exchange.

With all of the right-wing flip-flopping attacks on the mandate, who knows? Maybe a court will rule against the mandate and we'll get a more sensible approach to the issue that the Republicans will like even less but that will be more easily enforced and sustained. But let's not pretend that perpetuating the problem of uninsured patients at emergency rooms is a good alternative approach.

Wednesday, March 24, 2010

Lost Ending (Spoiler)

Not that I am usually inclined to post spoilers, but given that last night's episode all but gave away the "nature vs. nurture" theme on the corruptability of man it doesn't seem like I'm giving much away. So here's a climactic moment from the script for the final episode:
The scene opens with a fight between Jack and Sayid. Sayid knocks Jack to the ground and starts to strangle him. Hurley and Kate rush over to try to pull the men apart.

Jack: [gasping] It was an experiment... to see how our lives would turn out... Jacob and the Man in Black arranged it... they made a bet.

Hurley: I'm afraid it's true.

Kate: I believe him, Sayid.

Sayid: Jacob and the Man in Black... ruined my life... over a bet? For how much?

Jack: A drachma.

Sayid: One drachma... fine. That's the way they want it? No problem.
A delightful revenge plot then develops during which Ben ends up in a Polar Bear costume, locked in a cage with an amorous, long-forgotten island resident, while the castaways trick Jacob into believing that the Island is nothing more than a dream sequence in which characters from the HBO series Deadwood have been transposed into a sequel to CarnivĂ le. Jacob releases the Man in Black from the island, and a grinning Sayid hands Jack a drachma.

The episode closes with the entire cast, hand-in-hand on the beach, singing "Freewill" as the sun sets behind them.

Tuesday, March 23, 2010

Crybabies Everywhere

Thomas Sowell sheds some crocodile tears over the healthcare reform bill:
The corrupt manner in which this massive legislation was rammed through Congress, without any of the committee hearings or extended debates that most landmark legislation has had, has provided a roadmap for pushing through more such sweeping legislation in utter defiance of what the public wants....

The ruthless and corrupt way this bill was forced through Congress on a party-line vote, and in defiance of public opinion, provides a road map for how other "historic" changes can be imposed by Obama, Pelosi and Reid.
Legislation passing with sixty votes in the Senate - a bona fide supermajority - and a majority vote in the House? With the majority party repeatedly trying to get the minority to join in the debate? With the President coordinating a meeting with the minority party to try to bring them on board? I'm sure all of the Founding Fathers would agree that this is the absolute death of democracy. Wow. If passing bills with sixty votes in the Senate and a majority in the House takes off as a precedent, we'll pretty soon have, um, laws?

Ah, yes, I recall all of Sowell's columns lamenting the passage of Bush's tax cuts through reconciliation (i.e., a mere majority vote in the Senate) and that he would advocate for the privatization of Social Security but, alas, the will of the people prevented any such action. Or... not.

To think, as recently as 2007 Sowell was bragging about the economic boon brought about by Bush's tax cuts. The man truly is the philosopher of our time - the best thing short of a second coming.

The Failing State on Our Southern Border

As areas of Mexico devolve into lawless zones, is there a strategy to help the Mexican government regain control? As long as the drug wars continue, is that even possible? (Just asking.)

Update: A strategy has been announced. I am skeptical, though, that it can work given the amount of money involved in the drug trade.

It's Well Past Time for Medicaid Reform

Many approaches could be taken to Medicaid reform, including replacing the patchwork of state Medicaid programs with a consistent level of benefits through a national program, transitioning it to a voucher system (although for any reasonable amount of coverage that would cost far more than the status quo), creating a plan to put Medicaid recipients onto a private plan when the insurance exchanges come into effect (with need-based subsidies of deductibles and copayments).... But what we have right now is a mess. The expansion of Medicaid that is supposed to occur under the healthcare reform bill may break its back - even if present levels of participation by care providers are maintained, in many parts of the country those levels are inadequate to serve the existing population of Medicaid recipients.

The demand that the healthcare reform bill be "revenue neutral" killed any chance that the bill would address the many woes of Medicaid. Nationalizing the program and funding it at adequate levels would require a significant infusion of federal cash. It may be possible to engage in a privatization of the system through the exchanges created by the current bill, but that would also likely be significantly more costly than the status quo. Also, no private insurer is going to want to touch the end of life costs that Medicaid picks up for many of the nation's long-term nursing home residents and elderly population.

If any Republicans are listening to David Frum, or if Frum himself is done wringing his hands, maybe they could share some ideas?

It's Hard to Stop a Moving Train

Ages ago, I attended high school with the son of a prominent Canadian political figure - and by prominent I mean, when the party was in power, not just to the extent of "getting invited to dinner at the Prime Minister's house," but having the Prime Minister come over to dinner at your house. (If you're wondering, it was a public high school.) He was a smart kid, opinionated (I have nothing against that), liked to debate, and was conversant about politics. Although we were well short of voting age, one day he asked me what political party I favored. I shared my opinion of the political parties, then asked the same of him. "What do you think? You know who my father is." Sort of an "Alex Keating" thing, or perhaps "Alex Keating, Jr." - locked into a political ideology at an early age and living it without reflection.

Although I make no claim of insight into the genesis of David Frum's conservatism, when I read David Frum's columns, he brings to mind my former classmate. The man is bright, capable of discussing the issues of the day, and usually attempts to provide a solid foundation for his arguments. He seems to have accepted that his brand of conservatism is not particularly welcome in the current incarnation of the Republican Party, and is making as strong an effort as he can to forge his own initiative to rescue the party from itself. I suspect I would find him personable and, given the opportunity, we would have some interesting political discussions. But at the same time I sense that he spends a lot of time examining and reexamining issues other than the conservative orthodoxy he has embraced.

I can say this: growing up in Canada, spending most of those years in the province that spawned the CCF (eventually the NDP) and the program of socialized medicine that eventually became Canada's Medicare system, it is really hard to scare me with stories of "socialized medicine" or with claims that U.S. politicians are "socialists". The Medicare system served me well in my childhood and teen years, and it has served my parents well during the decades since. I have no complaints about the care I've been able to receive in the U.S., save for the periods when I was uninsured and underinsured. But fables of rationing and waiting lists don't phase me. Every system has problems, most of which are related to funding. If anything is shocking, it's how many problems our own system has despite the incredible amount of funding it receives from both private and public sources.

I thus have to question when I read David Frum's commentary on healthcare reform if he has any actual concern about the substance of reform - if he has concern over access to or quality of medical care under even a single payer plan - or if he's more concerned about universal health insurance as a threat to his ideology. That is, I see little sign that he believes that universal coverage, however accomplished, is a bad thing of itself, but instead he seems to fear that once implemented it will hobble the implementation of his vision of conservatism.

Frum's Waterloo column suggests the latter - that the Republican Party should have cooperated with reform to somehow make it more "conservative" - not expanding Medicaid, finding other (unidentified) sources of funding... and maybe it would have been possible for such a bill to have been fashioned. But perhaps the difference is that Frum accepts that a significant healthcare overhaul would be possible without threatening the future of his version of conservatism, while the Republican Party views any expansion of health insurance as incompatible with its vision for the future. In both cases it can be argued that politics are being placed ahead of what's good for the country - it's difficult to credit to genuine differences of ideology conduct the following conduct as summarized by Frum:
Conservative talkers on Fox and talk radio had whipped the Republican voting base into such a frenzy that deal-making was rendered impossible. How do you negotiate with somebody who wants to murder your grandmother? Or – more exactly – with somebody whom your voters have been persuaded to believe wants to murder their grandmother?

I’ve been on a soapbox for months now about the harm that our overheated talk is doing to us. Yes it mobilizes supporters – but by mobilizing them with hysterical accusations and pseudo-information, overheated talk has made it impossible for representatives to represent and elected leaders to lead.
The most favorable interpretation is that the Republican Party expected their arguments to lose on their merits, and the alternative explanation is that the Republican Party didn't care about the merits, choosing under either interpretation to try to drown out the debate with lies and vitriol. Frum wants to believe that the Republican Party somehow lost its way, and could have been led back to an honest, reasoned debate of the bill on its merits. Maybe that would have been true twenty years ago, but I get no sense that the current Republican Party has any interest in taking a higher road, even though it remains theoretically capable of doing so.

I have read suggestions that, after healthcare reform, the Republican Party can't have "another Reagan". Absolute nonsense. During Reagan's era, if you recall, the British Conservative Party was led by his sister in arms, Prime Minister Margaret Thatcher. She broke unions, privatized industry, and went to war with Argentina. (Good times, good times....) No, what we're really talking about is that once an effective universal healthcare program is implemented, the country will not want to go back to the "free market" approach that preceded reform. We've seen that in Britain with the Conservative Party, in Canada with its version of the Conservative Party, and in every other industrialized nation. People may want the system to be fixed or improved, but propose an "American-style system" and (if you're not joking) you're not going to stay in office.

Seriously, for all their talk of how Medicare is not sustainable, the Republicans won't propose simple legislation that would make it more sustainable - such as implementing need-based copayments and deductibles to have people who can afford to do so pay more money out of pocket before their "free" benefits kick in. Instead you get "ideas" that range from "Medicare vouchers for private insurance coverage" to "eliminating Medicare"... and there's not much distance between those ideas. (But heavens no, don't cut subsidies for private insurers in the Medicare Advantage program.) If you listen only to Republicans you might think that the only choices we have are to maintain the status quo or scrap the entire Medicare system... interspersed with angry opposition to any Democratic Party proposals to cut Medicare benefits. That opposition panders to the elderly, while simultaneously helping to ensure that Medicare remains on an unsustainable path - what the Republican party might deem a "win-win". But it's wholly irresponsible

For all the Republican griping about how "the public doesn't support this bill", that's not what they're afraid of. It's easy, after all, to overturn an unpopular bill. Their fear, and this includes Frum's fear, is that calls to "spend enough" to support the system and fix its flaws will end the "Club for Growth"-type dreams of a nation in which the wealthy pay virtually no tax, and domestic spending is pared to the bone... more accurately, to the marrow. If the reform bill succeeds in its goals, the next time a G.W. comes along with a plan to slash taxes for the rich, he'll first have to explain why he's not using that money to fix or improve the national healthcare system. It's that brand of conservatism that is facing its Waterloo, and hence it is that brand of conservatism that remains desperate to kill reform.

"Real Financial Reform"

The New York Times is calling for "real financial reform",
Unless President Obama throws himself fully into the fight, there is not much chance of pulling this off in an election year, when many lawmakers are more focused on deep-pocketed donors than on the public interest. The House passed a flawed reform bill last year. After months of talks that led to some compromises between Democrats and Republicans, no Republicans voted for the Senate’s version when the banking committee passed it on Monday. That bill, too, is flawed, and the banks are lobbying relentlessly to water it down even more.
If I were pushing for real financial reform, I would want the legislation to come up for a vote in the Senate in October, inviting the Republican Party to either filibuster or get on board - but one way or another to reveal to the country their willingness (or lack thereof) to get behind a bill that could scale back abusive lending practices and help prevent another financial industry meltdown.

I recognize that no small number of Democrats are in bed with the financial industry, and are as against meaningful reform as many of their Republican counterparts. But the Dems should have enough votes to move a meaningful reform bill forward and, really, if they're afraid of backlash in the November election you may even see enough Republicans sign on to pass the bill despite the Democratic Party's holdouts. And if voting against the bill hurts some Democrats in the election? A fate they deserve.

Don't Judge a Brooks by its Cover

The healthcare reform bill is simultaneously a huge step and a small step - it's a huge step toward universal coverage and eliminating some of the absurdities in our nation's system of providing health care. As more of the population gains insurance, it should be possible for hospitals to route more patients out of the emergency room and into primary care, and to reduce the number of patients housed in emergency departments. Under EMTALA, the uninsured and underinsured must be treated until they're medically stable - they can't just be dumped in the street to die (at least not without recourse) - so ER's have become a de facto source of "free health care", and can be unduly burdened by the cost of caring for the indigent. It should become easier for people to shift between jobs, or to start their own businesses or work for startups, if reasonable insurance is available at a reasonable cost.

At the same time, without wanting to discount the importance of the reforms in the bill, as passed the bill will not make the present system sustainable. In no small part due to pressure from the political right, the bill attempted to solve all of the woes of the current system in a "revenue neutral" manner, meaning that some reforms are done on the cheap and a lot of costs is masked by accounting tricks, and by spending cuts or taxes that don't come into effect for years, leaving open the possibility that they won't become effective.

Within that context, with the Senate bill in final form, and the reconciliation bill being well-defined, it appears possible to get past the process and start talking about what we need to do next. Unfortunately, the Republican Party seems locked into its "say 'no' to everything" mindset, and thus not even one Republican vote is expected for the reconciliation bill - even though, by any reasonable measure, they should favor many of its provisions. Republican Members of Congress act like children, Senators vow to continue to obstruct this and any future legislation, and their operatives whine that passing a bill by a majority in the House and with 60 votes in the Senate signals the end of democracy.

So when I saw the New York Times RSS feed summarizing David Brooks' latest column as, "The passage of health care reform is the end of the century-long welfare project and the beginning of the task of saving the country from fiscal ruin", I had some small hope that he was going to move past process and start addressing the steps necessary to improve upon the bill and to establish sustainability. I know... I should have known better.

I have to admit I found some amusement in his back-handed compliment for President Obama and Nancy Pelosi as "possess[ing] the political tenaciousness that you only get if you live for government and believe ruthlessly in its possibilities", given how they are more typically characterized by right-wing pundits - and given that Brooks, himself, previously described their tactics as incompetent. Toward the end of his summary of the process by which the reform bill was passed, he did briefly acknowledge "gross misinformation" against the bill (skipping over how that tied into the "hostile public opinion" he also mentions in passing). But he remains stuck in the process, and still can't bring himself to address substance.

Brooks offers cloying praise of markets to criticize the reform bill, despite the fact that it leaves the insuring of most Americans to private insurance companies. Despite the fact that, in his words, "We spend 17 percent and are predicted to soon spend 20 percent and then 25 percent" while other nations, less slavishly devoted to the concept of a for-profit health insurance market "spend 10 percent or so of their G.D.P. on health care" - no mention of the fact that many of those other countries get equal or better outcomes despite their lower spending. No mention of the fact that Medicare is popular with its beneficaries, or that the V.A. outperforms most private insurers on quality measures. (Shhhhhh.)

You would think that by now even Brooks would be able to admit that there's no magic path to perfect health insurance coverage, and that any free market solution requires significant regulation and oversight, but it's so much easier to invoke "the markets" in a manner that seems based more in religiosity than in reality. So while I agree with Brooks' mention in passing that the current bill does not put us on a course to sustainability, it is fair to mention that by the only measures he has shared with us - the percent of G.D.P. any given nation spends on health care and the skyrocketing cost of health care in this country - he appears to be worshiping a false god. Other countries have managed to incorporate private insurance providers into their system of universal coverage, so perhaps Brooks should be turning to those countries to find out what has worked rather than personifying Einstein's definition of insanity.

Brooks also trots out the tired line that Democrats don't care about balancing the budget. You know, as compared to... Republicans? If we compare track records.... It never ceases to amaze me how pundits like Brooks can give the Republicans a free pass for creating a fiscal train wreck, then blame the Democrats who inherit the mess for not taking the nation's financial situation seriously enough. Is my memory failing, because I seem to recall that before Bush II took office we were being warned by Alan Greenspan that we were entering an era of sustained budget surpluses and might (gasp) pay off the deficit too quickly.

Boy, we were lucky Bush came along to "fix" things for us by cutting taxes on the rich and spending us into oblivion. Setting up a context for Brooks to demand (yes) a regressive "consumption" tax and Social Security and Medicare cuts for the middle class - that must be passed by a Democratic Congress and President. It's "the only responsible thing to do," right? How... convenient. (No, David, mentioning in passing that the Party primarily responsible for our present crisis is also unwilling to tackle it doesn't make up for your omitting that background.)

I had some small hope that Brooks might offer some suggestions to his own party - how they could join with the Democrats to pass a supplemental reform bill in lieu of the reconciliation bill that would create a more stable financial foundation for reform. But he can't even sputter out encouragement for them to join in the repeal of the "Louisiana Purchase", the "Cornhusker Kickback", or similar measures that the Democrats will now be cutting out of the bill without a single Republican vote of support. What's so hard about being part of the solution for once?

Friday, March 19, 2010

CBO Scoring

I've mentioned in the past my skepticism of CBO scoring... we have something of a Churchillian "it's the worst scoring system except for all the others" thing going on, with the non-partisan nature of the office helping to achieve, but not of itself proving, either objectivity or accuracy. CJR offers a quick summary of some of the questions raised in recent news stories about the CBO's scoring of the healthcare reform bill.

A Gremlin Ate My Cookie

I had a long post on "health courts" prepared, in response to Dr. Kirch's suggestions in this thread, but due to some sort of corruption of my Google authentication cookie it got eaten. Now you'll all have to suffer through the agony of waiting for a rewrite. ;-)

Wednesday, March 17, 2010

Feeling "Snubbed" By President Obama

Ah, it seems like only yesterday we were in the age when "old Europe" no longer mattered, Congress was snacking on "Freedom Fries" and "Freedom Toast", and people like Robert Kagan were attempting to persuade us that our differences French were not based upon their being "cheese-eating surrender monkeys", but on an irreconcilable difference in world view:
Europe is turning away from power, or to put it a little differently, it is moving beyond power into a self-contained world of laws and rules and transnational negotiation and cooperation. It is entering a post-historical paradise of peace and relative prosperity, the realization of Kant’s “Perpetual Peace.” The United States, meanwhile, remains mired in history, exercising power in the anarchic Hobbesian world where international laws and rules are unreliable and where true security and the defense and promotion of a liberal order still depend on the possession and use of military might. That is why on major strategic and international questions today, Americans are from Mars and Europeans are from Venus: They agree on little and understand one another less and less. And this state of affairs is not transitory — the product of one American election or one catastrophic event. The reasons for the transatlantic divide are deep, long in development, and likely to endure. When it comes to setting national priorities, determining threats, defining challenges, and fashioning and implementing foreign and defense policies, the United States and Europe have parted ways.
That was then, this is now. As Dan Larison recently observed, Kagan personifies a particular type of critic of the Obama Administration:
Hawkish critics of Obama want to make two contradictory arguments against the administration. On the one hand, they say that he is too accommodating and too willing to believe that there are common interests among major powers that will lead to cooperation on supposedly “global” issues. This is one of the standard complaints against the administration by Robert Kagan in any one of a half-dozen articles and op-eds in the last year. The complaint goes something like this: “Doesn’t Obama realize that states have divergent interests? How can he be so naive as to expect cooperation from other great powers?”

To take their criticism seriously, we would have to believe that his critics accept the reality and inevitability of multipolarity, and we would have to believe that they also accept the relative decline in American power that this entails. Of course, they don’t really accept either of these things. For the most part, they do not acknowledge the structural political reasons for resistance to Obama’s initiatives, and they recoil from any suggestion that America needs to adjust to a changing world. They locate the fault for any American decline entirely with Obama, because he fails to be sufficiently strong in championing U.S. interests....

At the same time, they obsessively ridicule Obama’s supposed conceit that all of America’s international problems were going to start disappearing once he became President, and they are always ready to point out that Obama has not somehow magically eliminated the divergent state interests that prevent him from succeeding in his foreign policy initiatives. They insist Obama is blind to structural barriers and divergent state interests, and in the next breath they mock him for not having dissolved them through force of personality.
As if on cue, along comes Kagan to tell us that our allies feel "snubbed" by President Obama because, surprise, he hasn't made all of Europe love us again by sheer force of personality. He adds the silly complaint that President Obama has devoted too much energy to trying to diplomatically resolve international problems with countries like Iran, neglecting to note that this is a continuation of the Bush Administration's approach and that the alternatives to diplomacy aren't exactly good. He whines that the Obama Administration is working too hard to improve relations with Russia and China, without noting that we can't get the Security Council to approve sanctions on nations like Iran or North Korea over the vetoes of those other two permanent members.

Kagan argues,
This administration pays lip-service to "multilateralism," but it is a multilateralism of accommodating autocratic rivals, not of solidifying relations with longtime democratic allies.
Back in 2002 he observed that the Bush Administration was contemptuous of Europe, but argued that the problems were structural:
Europeans have complained about President Bush’s “unilateralism,” but they are coming to the deeper realization that the problem is not Bush or any American president. It is systemic. And it is incurable.
Kagan also argued that the principal solution to this problem was for Europe to "build up its military capabilities, even if only marginally" and for the U.S. to get over the idea that it was constrained by Europe:
Rather than viewing the United States as a Gulliver tied down by Lilliputian threads, American leaders should realize that they are hardly constrained at all, that Europe is not really capable of constraining the United States. If the United States could move past the anxiety engendered by this inaccurate sense of constraint, it could begin to show more understanding for the sensibilities of others, a little generosity of spirit. It could pay its respects to multilateralism and the rule of law and try to build some international political capital for those moments when multilateralism is impossible and unilateral action unavoidable.
Apparently he meant to say, "the problem is not Bush or any American president" as long as the president is Republican.

Kagan isn't really writing about strained relationships with Europe. He is throwing up that cloud around his actual concern, the possibility that the Obama Administration might pressure Israel to start working toward a genuine resolution of its forty-plus year occupation of Palestinian territories. Returning to Larison, who recently capsulized the issue,
Despite dire warnings that the embarrassment of a visiting U.S. vice president will damage U.S.-Israel relations, nothing substantive will follow recent displays of indignation by Biden and Secretary of State Hillary Clinton. The combination of blunt words and inaction invites the worst of all consequences for the Obama administration, which will be attacked by hawks for “undermining” an ally, mocked by foreign policy realists for ineptitude, and derided by doves for caving in the face of Israeli intransigence. As for the Israelis, the only thing Netanyahu’s ministers will likely do differently next time is to exercise more discretion when thumbing their noses at President Obama.

* * *

Washington created the conditions for its own embarrassment by creating a bilateral relationship defined by dependence and warped by unaccountability. If it is unwilling to place conditions on the support it provides to Israel, and unwilling to enforce them when it does, Washington will continue to find its pronouncements ignored and its efforts in the Near East frustrated.
If Kagan were to approach the issue honestly, he would note that it's not just the Arab world but also our European allies and, more recently, the leadership of our nation's military, that would like us to be more firm with Israel. President Obama could do a lot of fence-mending with political leaders around the world by taking measures that would help effect a resolution of the conflict. It's reasonable to infer, both from his 2002 piece and from his deliberate omissions, that Kagan does not actually desire any such thing. Instead he wants to minimize the seriousness of Israel's continued intransigence, and to claim that it's somehow a fault of the Obama Administration to even take notice that Israel continues to actively and deliberately undermine the prospects for peace.

Meanwhile, a few clicks away, Fred Hiatt offers up an unsigned editorial that takes a similar view, whining that if the Obama Administration criticizes Israel the Palestinians and Arab nations will increase their demands on Israel. Apparently the only thing to do is for the Obama Administration to ignore Israel's misconduct - that, of course, sends a message to the rest of the world that the Obama Administration has no backbone on the issue, and will not take any measures to advance a viable Palestinian state, but that's a message Hiatt and his crew can live with.
A larger question concerns Mr. Obama's quickness to bludgeon the Israeli government. He is not the first president to do so; in fact, he is not even the first to be hard on Mr. Netanyahu. But tough tactics don't always work: Last year Israelis rallied behind Mr. Netanyahu, while Mr. Obama's poll ratings in Israel plunged to the single digits.
This takes us back to Reihan Salam's forgetfulness. President Obama isn't running for office in Israel. When his generals come to him and say "Israel's actions are putting our troops in danger," it shouldn't matter at all that his demand to Israel to take corrective action won't be popular in that country. Moreover, it's deliberately misleading to characterize a few appropriately harsh words, so far not backed up by any action, as "bludgeoning". This is the same paper that habitually criticizes President Obama for being too soft on Iran? By this definition of the word "bludgeon", the Obama Administration has already beaten Iran to a bloody pulp.

More on that Bipartisanship Thing....

The water carriers, concern trolls, and whiners are out in force as healthcare reform enters its end game. Not at all surprisingly, you can find every sort on the pages of the Washington Post's editorial pages, consistent with the editorial board's largely anti-reform stance. Tom Scully, a former Bush Administration official, complains,
We are on the verge of an overheated political meltdown over health care that will result in either a partisan, controversial law that polarizes Washington for years or nothing passing, which would spook Congress into another decade of inactivity. It does not have to happen this way.
He then rattles off a series of changes to the bill that he wants the Democrats to implement, then tells us of the net effect of his proposals:
It would not be enough for many Democrats and would be far more than most Republicans could accept.
Translation: If the Democrats did everything he demands in the name of "bipartisanship" the revised bill would have less Democratic support than the current bill, without gaining a single Republican vote. Before writing an editorial on bipartisanship, perhaps Scully should have taken the time to find out what the word means.

Scully lectures the Democrats that only the capitulation to his demands, creating a new healthcare bill that would not pass, "would create a framework for long-term bipartisan reform." Right....

Tuesday, March 16, 2010

So, What's Bipartisanship Again?

It has become a cliché that, to the mainstream media, when the Democrats are out of power "bipartisanship" means that some of them break ranks with their party and vote with Republicans, but when the Democrats have a majority "bipartisanship" means that they literally do whatever it takes to get Republicans to sign onto a bill. Even if the Republicans strong-arm their moderates into adhering to the party line while declaring, "No part of that bill is satisfactory, you must scrap the entire bill and start over."

It's no surprise the Republican operatives like Mark Thiessen enjoy the resulting atmosphere. Kicking the "former Bush speechwriters contest" back into full gear, Thiessen complains,
Democrats are in a tight spot on health-care reform. The only way they got the legislation though the Senate was with a series of sweetheart deals -- including the now infamous "Louisiana Purchase," "Gator-aid," and "Cornhusker kickback." Those deals won the support of recalcitrant senators. But now they're now the biggest obstacle President Obama and House Speaker Nancy Pelosi face as they make their final health-care push.
You know what it would take to get rid of all of those deals? Three or four Republican Senators who had the maturity to say, "We recognize that this bill is going to pass, and that it's childish to demand that you start from scratch, but if you cut those special deals out of the bill we'll promise to vote for cloture and to support the final bill."

From day one it has been Republican obstructionism that enabled individual Senators to demand the special favors of which Thiessen complains. When any Senator can be "vote number 60" of the sixty needed to effect cloture, any Senator can demand concessions. Add a few Republicans to the mix, that power vanishes and so do the deals.

You know what else the Republicans could do, right now? They could put their money (or maybe I should say "our money") where Thiessen's mouth is, proposing legislation that would strip those deals out of the reform package. Or by agreeing not to filibuster a Senate bill that includes the fixes required by the House, on the condition that the special deals be stripped out. But even if we assume that Thiessen's professed convictions are genuine, that his sudden concern for pork is inspired by true concerns about such dealing as opposed to his party's fall from power, it does not appear that any sitting Republican Senator shares his convictions - or is it enough courage in his convictions to do what's right for the country instead of toeing the party line.

In a much- and deservedly ridiculed editorial, David Brooks whines that if the Democrats pass a Senate bill carefully tailored to the rules of reconciliation to supplement the bill already passed by the Senate, it will somehow mean the end of the comity that he admits no longer exists in the Senate, resulting in "rule by simple majority... for everything, now and forever." Accepting for the moment the absurdity of the argument, if in fact the Senate's future hangs in the balance, all the more reason for one single, solitary Republican to stand up and say, "The future of this institution is more important than trying to harm the Democratic Party and President - I'll vote for cloture." I know, I know.... Way too much to ask.

Monday, March 15, 2010

Emergency Room Usage and Healthcare Reform

The three principal goals of healthcare reform are to provide insurance to the uninsured, limit abuses by the insurance industry, and maintain or reduce present levels of healthcare expenditure. These goals are uncomfortably jammed into a single bill due to a demand that reform be "revenue neutral", allowing opponents of reform such as Robert Samuelson to pluck out of the larger context of the bill a reform that serves one goal and whine endlessly that it is inconsistent with another. Case in point, emergency room care.

First, Samuelson complains that the uninsured don't actually use the emergency room for primary care,
A study by the Robert Wood Johnson Foundation found that the insured accounted for 83 percent of emergency-room visits, reflecting their share of the population. After Massachusetts adopted universal insurance, emergency-room use remained higher than the national average, an Urban Institute study found.
The first claim is misleading. The study at issue found,
Compared with the privately insured, ED utilization rates are almost four times as high among Medicaid/SCHIP patients and more than twice as high for patients with Medicare or no insurance. After adjustment for self-reported health status, demographics, and the capacity of local EDs and primary care providers, uninsured patients used the ED at the same rate as the privately insured, while patients with Medicaid/SCHIP or Medicare coverage continued to exhibit much higher utilization rates.
ED utilization rates were thus twice the level of the insured, even if other factors are said to account for that higher rate of utilization.

Samuelson's second point belies his implication that ED use will increase following healthcare reform. Yes, Massachusetts had higher than average rates of emergency care usage before and after its health insurance reform, but the study Samuelson references does not attribute the problem to the fact that more people obtained insurance. Its concern was the disproportionately high rate of usage by people on public insurance (Medicare and Medicaid), not those who were finally able to enroll in private insurance.

Samuelson approaches this discussion with the simplistic construct that once a patient reaches the emergency room, everything that happens afterward will be exactly the same whether or not they're insured. Let's assume for the moment that, post-reform, the uninsured will continue to utilize emergency rooms at their present rates. When somebody who is uninsured or underinsured goes to the emergency room, they may not be able to pay the bill such that the hospital is not reimbursed for part or all of the care. Whether the hospital provides the care as "charity care" or writes off the loss against its profits, the unreimbursed cost gets passed on to other patients. If most patients are insured, while it may be true that the overall cost of care remains the same, the costs can be properly allocated between patients such that the typical patient's ED bill goes down.

Also, many emergency departments are overcrowded, and many patients who require more intensive care are "boarded" in the ER due to a lack of beds in other departments. The Robert Wood Johnson study that Samuelson cites informs us,
“Patient boarding” results in overcrowding, but many hospitals fail to improve the flow of patients through the ED because they cannot gain the necessary cooperation from other hospital units. Improvements in patient flow often require disruption to current delivery patterns for elective surgeries and other profitable service lines with no clear monetary benefit in return. Although the ED may serve as a gateway to profitable admissions (e.g., cardiac surgery), it also attracts a less remunerative payer and service mix (e.g., uninsured, outpatient care). Hospitals that reduce ED overcrowding, therefore, may suffer financially if this reduction leads more profitable patients and their physicians to go elsewhere. Improving efficiency by correcting reimbursement imbalances may have the additional benefit of helping control cost growth.
In other words, if more patients in the ER are insured, hospitals can more easily take steps to reduce emergency department overcrowding because the doctors in other parts of the hospital won't undermine doctor income and potentially cause staff doctors to seek employment elsewhere, and this could potentially help control healthcare inflation. Samuelson truly missed that?

One of the problems that is identified in the studies as driving the use of emergency departments instead of primary care is a shortage of available primary care. The Massachusetts study states:
While most ED users reported a doctor’s office or private clinic as their usual source of care, ED users were more likely to rely on hospital outpatient departments, community health centers, and other public clinics than were non-ED users. Barriers to care in the community and unmet need were more common among those reporting that their most recent ED visit was for a non-emergency condition and those reporting multiple ED visits over the year.
The Robert Wood Johnson study similarly instructs policy makers that they should "Improve access to primary care, either through community providers or through delivery of primary care in the ED." Thus it's perfectly reasonable in this context to introduce the subject of primary care. But Samuelson's approach would likely worsen the situation:
Unless we change the fee-for-service system, costs will remain hard to control because providers are paid more for doing more. Obama might have attempted that by proposing health-care vouchers (limited amounts to be spent on insurance), which would force a restructuring of delivery systems to compete on quality and cost. Doctors, hospitals and drug companies would have to reorganize care.
Clear as mud? It seems reasonable to infer that Samuelson is cryptically alluding to his position that we shift from fee-for-service reimbursement of doctors to capitation:
But moving toward "capitation" - fixed annual payments per patient, adjusted for medical risk - would trigger opposition. Doctors would feel their independence threatened by dictates from the network. Patients would correctly fear that their "choice" was being restricted. Payment limits would raise the specter of important care being denied.
As I've previously noted, that is much more of an experiment than anything the Obama Administration has proposed, and includes "pretty much every concept that had the political right shrieking about a government takeover of healthcare". Further, if such a change is implemented to save costs - that is, to reduce the compensation to primary care physicians - the net effect will likely be to further reduce the availability of primary care and to increase the number of patients who rely upon the emergency room for primary care - at a time when even Samuelson knows we need to be moving in the opposite direction.

There's tension between Samuelson's advocacy for the status quo or "market-based" reforms and his advocacy for a compensation system that is better suited to a single payer plan, in which doctors are paid a salary or capitation rather than being reimbursed for each service they provide. Britain's NHS has experimented extensively with capitation - is that where Samuelson's preferred set of reforms would take us?

No, of course not. My guess is that the moment somebody proposed a set of reforms that would satisfy each and every one of Samuelson's objections he would switch from squawking about cost controls to squawking about "nationalization".