Jan
13
The Democratic Senatorial candidate for Massachusetts, Martha Coakley, hosted a fundraiser in Washington D.C. yesterday. The roll call:
As first reported by Timothy Carney of the Washington Examiner, the host committee for the fundraiser at Pennsylvania Avenue’s Sonoma Restaurant includes lobbyists for Pfizer, Merck, Eli Lilly, Novartis and sundry other drug companies that have been among the biggest of ObamaCare’s corporate sponsors. Other hosts—who have raised at least $10,000 for Ms. Coakley—include representatives from UnitedHealthcare, Blue Cross Blue Shield, Humana and other insurers. As far as we can tell, the insurance industry claims to oppose ObamaCare’s current incarnation.
So why are health insurance companies lining up to give their lobby money to Martha Coakley who represents the 60th vote in the Senate that breaks a filibuster on the Democratic healthcare legislation? Surely, as Democrats tell us ad nauseum, health insurance companies are opposed to the proposed reforms.
Well consider what the reforms do:
1. The Health Insurance mandate – With the public option off the table, the mandate forcing Americans to buy health insurance just means that the health insurance companies get a whole host of new customers.
2. Reforms aimed at requiring health insurance companies to not disallow people for pre-existing conditions means that insurance companies now have carte blanche to put up prices.
3. This is likely to be the last significant legislation on healthcare (should it pass). That means that Republican calls to open up the market (allowing people to buy insurance across state lines for example) has been effectively killed off for the foreseeable future. That makes it harder for smaller businesses to enter into a more heavily regulated marketplace thus protecting the share for the large incumbent companies.
The Democratic Party – Good for the health insurance business.
Nov
12
Health Reform Will Save Lives
Filed Under American Politics | 4 Comments
No it won’t!
A famous study carried out by the Physicians For A National Health Program reported that 45,000 Americans a year die because they don’t have medical insurance.
The methodology used in this research is flawed. To make the determination, researchers interviewed (once only) a number of people without health insurance. They then followed up on this research by studying the mortality rates of those interviewed to arrive at their figure that there is a 40% increased probability of dying if you don’t have insurance.
John Goodman points out the obvious flaw:
As in the previous incarnations, the researchers interviewed the uninsured only once — and never saw them again. A decade later, the researchers assumed the participants were still uninsured and, if they died in the interim, lack of insurance is blamed as one of the causes.
Yet, like unemployment, uninsurance happens to many people for short periods of time. Most people who are uninsured regain insurance within one year. The authors of the study did not track what happened to the insurance status of the subjects over the decade examined, what medical care they received or even the causes of their deaths.
But this study finds no link between mortality and the lack of insurance:
Principal Findings. Adjusted for demographic, health status, and health behavior characteristics, the risk of subsequent mortality is no different for uninsured respondents than for those covered by employer-sponsored group insurance
and:
Conclusions. The Institute of Medicine’s estimate that lack of insurance leads to 18,000 excess deaths each year is almost certainly incorrect. It is not possible to draw firm causal inferences from the results of observational analyses, but there is little evidence to suggest that extending insurance coverage to all adults would have a large effect on the number of deaths in the United States.
Back in your box please Alan Grayson.
Oct
31
The Public Option Will Bring Competitiveness To The Health Insurance Industry
Filed Under American Politics | Leave a Comment
Not so much.
Ezra Klein, a liberal policy wonk and strong advocate for health reform legislation points out that the CBO scoring of Pelosi’s new public option will result in more expensive insurance for members than those who get insurance privately:
I’ve been saying that a public option with negotiated rates probably won’t post much of a price advantage against private insurers. But according to the Congressional Budget Office (pdf), that’s an overoptimistic take. The public option’s premiums, they say, will actually be more expensive than private insurance:
He quotes the CBO:
Roughly one-fifth of the people purchasing coverage through the exchanges would enroll in the public plan, meaning that total enrollment in that plan would be about 6 million.
That estimate of enrollment reflects CBO’s assessment that a public plan paying negotiated rates would attract a broad network of providers but would typically have premiums that are somewhat higher than the average premiums for the private plans in the exchanges. The rates the public plan pays to providers would, on average, probably be comparable to the rates paid by private insurers participating in the exchanges. The public plan would have lower administrative costs than those private plans but would probably engage in less management of utilization by its enrollees and attract a less healthy pool of enrollees.
In other words, because the Public Plan will insure those that other private insurers are cautious of (ie no pre-existing conditions), it’s insurance roll will be made up of more of the expensive sickly clientele than private insurers. Of itself it’s not necessarily a bad thing that those who struggled to get insurance privately are able to be covered by the public plan, but that’s not the bill of goods that the Democrats have been selling as Obama himself said:
To my progressive friends, I would remind you that for decades, the driving idea behind reform has been to end insurance company abuses and make coverage affordable for those without it. The public option is only a means to that end – and we should remain open to other ideas that accomplish our ultimate goal.
But the Public option no longer offers a price competitive offering and although it picks up the slack of the sick and unhealthy from private insurers (albeit only those in the exchange), it no longer offers anything to help on the price of insurance.
And on another health related issue, the new Pelosi bill deals with medical malpractice. But not in a good way:
buried in the 1,990 pages of the House health-care bill that was released on Thursday by Pelosi is a provision in Section 2531 that provides incentive payments to states that provide “an alternative medical liability law” that prevents or prompts “fair resolution” of disputes. However, no such incentive will be paid to any state that limits “attorneys’ fees or impose caps on damages.”
Got to keep those trial lawyers sweet.
Oct
6
Step Forward Bobby Jindal
Filed Under American Politics | 3 Comments
Bobby Jindal, in an op-ed in the Washington post recognises that it is time for Republicans to move forward on healthcare and seize a conservative initiative:
The debate on health care has moved on. Democratic plans for a government takeover are passé. The people don’t want it. Believe the polls, the town halls, the voters. Only Democrats in Washington would propose new taxes on businesses and families in the middle of a recession, $900 billion in new spending at a time of record deficits, and increased taxes on health insurance and products to reduce health-care costs.
Yet hope for meaningful reform need not be lost. Only two things need to happen. First, Democrats have to give up on their grand experiment and get serious about bipartisan solutions. Second, Republicans have to join the battle of ideas.
To be clear, the Republicans in Congress who have led the opposition to the Obama-Pelosi vision of health-care reform have done the right thing for our country. If they had rolled over, the results could have been devastating for our health-care system and our nation’s budget.
But Republicans must shift gears. Conservatives should seize the mantle of reform and lead. Conservatives either genuinely believe that conservative principles will work to solve real-world problems such as health care or they don’t. I believe they will.
To that end, he proposes a number of conservative reforms:
- Voluntary purchasing pools: Give individuals and small businesses the opportunities that large businesses and the government have to seek lower insurance costs.
- Portability: As people change jobs or move across state lines, they change insurance plans. By allowing consumers to “own” their policies, insurers would have incentive to make more investments in prevention and in managing chronic conditions.
- Lawsuit reform: It makes no sense to ignore one of the biggest cost drivers in the system — the cost of defensive medicine, largely driven by lawsuits. Worse, many doctors have stopped performing high-risk procedures for fear of liability.
- Require coverage of preexisting conditions: Insurance should not be least accessible when it is needed most. Companies should be incentivized to focus on delivering high-quality effective care, not to avoid covering the sick.
- Transparency and payment reform: Consumers have more information when choosing a car or restaurant than when selecting a health-care provider. Provider quality and cost should be plainly available to consumers, and payment systems should be based on outcomes, not volume. Today’s system results in wide variations in treatment instead of the consistent application of best practices. We must reward efficiency and quality.
- Electronic medical records: The current system of paper records threatens patient privacy and leads to bad outcomes and higher costs.
- Tax-free health savings accounts: HSAs have helped reduce costs for employers and consumers. Some businesses have seen their costs decrease by double-digit percentages. But current regulations discourage individuals and small businesses from utilizing HSAs.
- Reward healthy lifestyle choices: Providing premium rebates and other incentives to people who make healthy choices or participate in management of their chronic diseases has been shown to reduce costs and improve health.
- Cover young adults: A large portion of the uninsured are people who cannot afford coverage after they have “aged out” of their parents’ policies. Permitting young people to stay on their parents’ plans longer would reduce the number of uninsured and keep healthy people in insurance risk pools — helping to lower premiums for everyone.
- Refundable tax credits (for the uninsured and those who would benefit from greater flexibility of coverage): Redirecting some of the billions already spent on the uninsured will help make non-emergency care outside the emergency room affordable for millions and will provide choices of coverage through the private market rather than forcing people into a government-run system. We should trust American families to make choices for themselves while we ensure they have access to quality, affordable health care.
In this debate, it is necessary to consider what the endgame is. What are the goals that any reform intends to serve. Jindal’s proposals will make healthcare cheaper, eliminates it’s unfairness and ensures greater coverage. Reforms that don’t require a government takeover of healthcare or the propping up of Democratic contributors like Unions and the lawyers.
Sep
16
Morgan kindly posted a link to this interesting piece in The New Yorker about the causes of America’s very high medical costs. I thought it should be brought to the main part of this blog because it warrants some debate. Because ultimately, America’s health care problems won’t be solved until the costs are brought down. Proof of this can be shown in this chart from Cato:
In it, you can see that medicare (the white box) is the fastest growing program in the federal budget. It is on an unsustainable path. Reforming the costs are essential, whether those reforms are conservative or liberal.
In summary, the New Yorker piece identifies that it is the capitalistic nature of health care in America that is driving the costs, that Doctors, who are paid by action and not result, arrange for expensive care because they get rewarded for it either by the insurance companies or by the government through medicare. The article goes on to note that more communitarian organisations like the Mayo Clinic provide the ideal for any future move towards decreasing the costs. The Mayo Clinic effectively pools the doctors, and rather than pay them by each individual medical intervention that they carry out, pays them a fixed salary. In that way the doctors are able to focus on patient care without worrying about how many unnecessary tests need to be ordered.
Although long (eight pages), the article is well worth reading and raises some interesting points. But I cannot agree with it’s conclusion. It concludes:
And that will mean rewarding doctors and hospitals if they band together to form Grand Junction-like accountable-care organizations, in which doctors collaborate to increase prevention and the quality of care, while discouraging overtreatment, undertreatment, and sheer profiteering. Under one approach, insurers—whether public or private—would allow clinicians who formed such organizations and met quality goals to keep half the savings they generate. Government could also shift regulatory burdens, and even malpractice liability, from the doctors to the organization. Other, sterner, approaches would penalize those who don’t form these organizations.
I’m afraid that this lazy first resort of the left-minded. To see every solution as being one in which people are forced to behave according to an ideological prejudice, or even a politically motivated conclusion. What this approach precludes, is that there may be another less coercive solution out there.
One which needs to be considered, and one which I favour, is to put people more in control of their own interactions with the health care industry. Less emphasis on employer provided or pooled insurance, more on personal insurance. Of course, this can only work if insurance premiums can be reduced by less usage. Something similar to the no-claims bonuses we have on car insurance in this country would be the ideal – the less you use the service, the less you pay (perhaps our American friends can tell us if something like this already exists or not). In this way, people are able to choose whether a treatment or test is really necessary and their insurance costs are positively or negatively affected by their choices.
There are two potential arguments against this. Firstly, I can see it being argued that people, particularly during economic downturns like now, may be prepared to sacrifice their own health in order to keep their insurance costs down. My response would be a) that’s their own decision and b) I’m not sure people really would do this if the illness is serious or life threatening. The second criticism is given in the article; that we are too reliant on the health care professional to make a true decision on whether a treatment or test is unnecessary or not. If a doctor tells us a test is necessary, who are to disagree?
The third class of health-cost proposals, I explained, would push people to use medical savings accounts and hold high-deductible insurance policies: “They’d have more of their own money on the line, and that’d drive them to bargain with you and other surgeons, right?”
He gave me a quizzical look. We tried to imagine the scenario. A cardiologist tells an elderly woman that she needs bypass surgery and has Dr. Dyke see her. They discuss the blockages in her heart, the operation, the risks. And now they’re supposed to haggle over the price as if he were selling a rug in a souk? “I’ll do three vessels for thirty thousand, but if you take four I’ll throw in an extra night in the I.C.U.”—that sort of thing? Dyke shook his head. “Who comes up with this stuff?” he asked. “Any plan that relies on the sheep to negotiate with the wolves is doomed to failure.”
This rebuttal doesn’t really wash. People will come to know which doctors are providing a principled service and which are not. People will gravitate to those doctors and the charlatans will be marginalised and put out of business. A watchdog could be implemented to monitor doctors interactions with their patients. Businesses who deal dishonestly with their customers don’t often survive long in the private sector.
So there are my thoughts. I hope you read the article and form your own conclusions. I’ll be interested to know what they are.
Sep
11
The Numbers Of The Uninsured
Filed Under American Politics | 47 Comments
You might find this analysis of the numbers of those insured privately versus some form of public plan interesting:
These overall changes mask important differences by the type of health insurance that individuals have. The fraction of U.S. residents with employment-based health insurance declined significantly, from 59.3 percent in 2007 to 58.5 percent in 2008, continuing a trend from the past several years….
In contrast, from 2007 to 2008, the fraction of individuals with public health insurance through Medicaid, Medicare, or the military increased substantially, from 27.8 percent in 2007 to 29.0 percent in 2008. Most of this increase was attributable to a rise in the fraction with Medicaid/CHIP (hereafter Medicaid) which was likely driven by the declining incomes caused by the first year of the recession.
That is to say, there’s already a dramatic shift underway toward government health insurance, and the only reason the ranks of the uninsured didn’t grow more dramatically was an, er, government takeover.
I can see how this could be used as an argument for and against the type of reform that the Democrats are pushing. Supporters would see it as evidence that the public find public plans as acceptable. Opponents however would see it as evidence that public plans do indeed impact on the numbers choosing private insurance with two probable affects. A smaller market for insurers will mean higher insurance prices, and more people than expected in a public plan will drive up the cost of government run healthcare. Medicare and Medicaid are evidence of that.
Still, an interesting report. Any thoughts?
And a question from me. Previously, Obama has referred to either 42 or 47 million insured. In his speech to Congress, he said that there were 30 million uninsured, and that’s despite 14,000 losing insurance on a daily basis. Is he just bad at maths, or is there something else going on here. Like the difference between 30 million and 40+ million being illegal immigrants, the very people the Democrats say weren’t going to be covered. So in a debate where accusations of lying are being thrown around like confetti, in one way or another, the 40+ million figure is a proveable lie.
Sep
5
By shockwaver
Preface
I claim no special expertise in the complexities of financing health care. But as a citizen I stay informed so that I can make sensible choices at the ballot box and vote for people whom I think will do the right thing. The biggest problem I see in the financing of health care reform is that all the good solutions will be very expensive. This is much the same problem faced with the aborted try at Social Security reform a few years back. While I believed that individually held accounts were the way to go, getting there required significant extra expenditure because dollars diverted to the new system would no longer be available to pay the legacy members still in the old system. In my view this double paying had to be traded off against the assured financial disaster that would surely follow from the status quo. The views I express below on health care reform have the same difficulty However, just doing more of the same thing we have been doing will lead to the same kind of ugly result.
Insurance was invented to manage risk. The concept is that if people pool their risk, chances of financial wipeout can be diminished.
In U.S. health care, this insurance concept has morphed into what amounts to a pre-paid health care plan and does not at all resemble an insurance plan although it still carries the name.
I believe the correct path for health care reform is to undo this pre-paid notion and replace it with something that forces people to trade off health care with other expenses.
Health-Saving Accounts (HSA) are one way to go. In this model, people have the option of putting some of their income, tax free, into an account in their name. Under no circumstances should the money be held by the Government account lest the Congress spend it and put IOUs into an otherwise empty lockbox, generating yet another Ponzi scheme like Social security. Individuals could, at their own discretion, use these funds for health care expenses that they deem necessary. The account would be allowed to grow, year by year without limit. Many people would opt to supplement this HSA with a real insurance policy for catastrophic situations.
There are a number of problems that HSAs would generate. Some working people would not opt in. Although I do not usually favor confiscation of money, it might be necessary to have employers set up such plans with employee funds, at least at some level. Others might opt in but not buy supplementary catastrophic insurance so could be faced with medical bills they could not pay. I would favor treating these people on the public’s money, billing them for the service and if they cannot pay, let them declare bankruptcy.
Another group is composed of older people like me who are on Medicare and no longer hold a full time job. This group has planned on Medicare for their old age health care and it should not be taken away from them (me!). But it should be phased out in the upcoming generations. Some provisions must also be crafted to allow young people to fund a different HSA over the years of their employment that is large enough that it will provide health care in their old age. This would also be complemented with a catastrophic policy.
It is important that the Government hold none of these funds. Individuals should control all funds. The Government has show a callous disregard for stewardship of Social Security funds. They have spent it all to buy votes and have left a liability of 10’s of trillions of dollars for future generations to deal with. There is no reason to believe they would not do the same thing if they had access to people’s HSAs.
The third group is those who cannot afford health care. This group is much smaller than we are led to believe by advocates of the present health care bill proposal. All of these people should have access to some basic level of health care. But it should not be so easily available and totally free that they do not see the benefit of trying to raise their station in life.
Most of these people already have that in my locale. (Caution, I may be off in some of the following figures. I do not have the time or inclination to do a detailed budget study and have just pulled a few facts from various web sites. But be assured, the story below is true in substance). The state run hospital is over 1 million square feet and has an operating budget of $350M/year. I believe the State built the facilities. I know for a fact that they treat a large number of uninsured clients and I also believe they do not turn anyone away. I pay several thousand dollars a year in my property tax for their operating budget. They also get State funds (funded by people like me in State taxes)
The hospital is quite grand. Little expense was spared in making a pleasant, modern facility with extensive art, atriums, terrazzo floors and a pleasant campus. It is nicer than some resorts that I have stayed in. In other words, it has substantial form in addition to its function. This compares with the 50-year old industrial box that is my for-pay hospital, the nicest private hospital in town.
I do not know how many citizens in my locale have no health insurance but I believe the number who have no health care is close to zero. We still need something like our “free” care but free usage should be means tested and the venue a little less grand.
Well, as you can probably tell, a non-expert wrote the above and the ideas put forward may contain flaws that would render them unworkable. But they derive from principles that I adhere to. Were I to engage in developing health care reform, the above is what I would initially offer. I would be ready to compromise on the specifics and be flexible with new ideas but unwilling to surrender on principles:
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Keep the Government out of it as much as possible. It has shown itself totally incapable of acting in an ethical and sensible way.
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Significant tort reform. In spite of skeptics, it defies logic to deny our present tort system costs a lot of money for malpractice insurance and defensive medicine.
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Move away from faux insurance to a system that depends more on individual accountability. For those who could have provided for themselves but choose not to, let the realities of their actions be felt in their financial futures.
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Make health care treatment costs feel like they are out of pocket to the individual instead of free. This will cause people to both shop around stimulating competition and reduce unnecessary use.
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Relax interstate restrictions on health care “insurance” providers. i.e., the U.S. has 1300 providers but only 6 are authorized to sell their products in California. The principal impediment is variation in State mandates. A sex change operation, massages, personal athletic trainers and hair prosthesis treatment and the like are mandated in some states but not others. (Cripes! We wonder why “insurance” is so expensive) A bill that would fix this at a National level was defeated in Congress a couple of years ago. Notably, Obama voted against it.
http://www.cahi.org/cahi_contents/resources/pdf/HealthInsuranceMandates2009.pdf
Something must be done as our present system is headed toward financial collapse. These fixes would cost individuals more, the transition would be expensive and there would be hardship and some pain in changing.
I strongly believe that a big Government program will not work and that free market solutions and more individual responsibility are the only sensible way to go. Unfortunately we are often not sensible.
Aug
24
The Biggest Political Donors
Filed Under American Politics | 19 Comments
There is a much bandied about view, that the Republican Party is the beneficiary of, and thus in hoc too, a realtively small number of large political donors. A tall tale increasingly put out by the left in light of the healthcare debate.
OpenSecrets, via The Dish, have listed the top political donors since 1989.
Of the 10 largest donors, eight gave significantly more to the Democrats than to the Republicans, and by massive margins. Certainly, of those top 10, most are Trade Unions who naturally find their home on the left, but aren’t trade unions as much a special interest as a business or a Rifle Association?
And interestingly, whilst businesses do lean towards the Republicans in donations, they don’t do so by massive margins in most cases. For example, the top two banks in terms of donations, Goldman Sachs and Citigroup both have historically donated more to the Democratic Party than to the Republican Party.
It’s an interesting survey which allows searches by year. A particularly illuminating exercise, if only to reveal that in 2008, Blue Cross/Blue Shield, the largest health insurance provider on that list donated more money to the Democrats at the last election than too the Republicans. Which is a little strange when one remembers the rhetoric about how the insurance companies are funding the fight against healthcare reform.
Aug
19
Enemies List
Filed Under American Politics | 35 Comments
flag@whitehouse.gov was purported, by some of Obama’s critics, to be the basis of an enemies list. A somewhat fanciful, although understandable, response to a very poorly planned P.R. exercise.
But perhaps there is an enemies list in place. It’s not the American people on it, but the CEO’s and directors of health insurance companies:
Democrats on a House committee are seeking detailed financial records from dozens of large insurance companies, officials disclosed Tuesday, part of an investigation into “executive compensation and other business practices” in an industry opposed to President Barack Obama’s plan to overhaul health care.
The request included records relating to compensation of highly paid employees, documents relating to companies’ premium income and claims payments, and information on expenses stemming from any event held outside company facilities in the past 2 1/2 years.
Other health companies aren’t getting these letters, just health insurance companies, the ones most likely to oppose the Democratic Health reform plans:
52 letters were sent late Monday to the nation’s largest health insurers, those with $2 billion or more in annual premiums. He said letters were not sent to other industry groups, some of which have been airing television advertising in support of Obama’s call for legislation.
If this had been reported on a right-wing blog, I’d probably dismiss it as being too blatant and so obviously immoral. But this comes from The Huffington Post, unashamedly it seems. Can anyone defend this? This amounts to a threat to political opponents, bearing in mind how Congress demagogued executive compensation for bankers.
So they are threatening the pay of executives in private companies who happen to oppose Democratic reform. Who said anything about socialism?
Jul
30
Losing The Argument On Healthcare
Filed Under American Politics | 5 Comments
According to this Gallup poll, a plurality of Americans believe that healthcare reform would benefit the country as a whole (note that Gallup are asking about generic reform, not a specific plan working through Congress):
Forty-four percent of Americans believe a new healthcare reform law would improve medical care in the U.S., contrasted with 26% who say it would improve their personal medical care. Forty-seven percent of Americans believe reform will expand access to healthcare in the U.S., while 21% say it will expand their own access to healthcare.
But interestingly, this positive view of healthcare isn’t reflected in how people perceive their own healthcare will benefit. In fact, more people see the quality of their healthcare, and the costs getting worse. Only 26% think their own healthcare will get better through reform, whilst 34% think that their own quality of care will get worst. On costs, 21% think that reform will reduce their own costs whilst 29% think it will lead to more expensive healthcare.
So the Democrats have effectively won the argument on the necessity of healthcare reform as the plurality in favour of reform demonstrates. But they haven’t been able to come up with a solution that isn’t perceived as being punitive to those already with health insurance. The Democrats are expecting a self-sacrificing altruistic response from the American people, but one’s own health is probably the most important asset one has, and expecting people to sacrifice that, which the poll shows is how people are perceiving it, is not going to win the type of support needed to give reform the public mandate it needs to override the pressures from fiscal hawks and lobbyists.
This legislation is almost certainly going to be delayed beyond August which means that legislators will go back to their districts and states. This is a chance to rethink their approach to legislation on reform. They need to do this. Reform is still possible, it just needs to be less controlling, more targeted and much much more cautious fiscally. Not only have the Democrats lost the argument on healthcare reform benefiting everyone, if they continue on this path of crisis driven massive reform, they will lose the chance for even incremental reform (which should have been the path they took from the start). Creeping reform would not have concerned the public as much as this behemoth has.