Like legions of other health care policy wonks when I discovered that former U.S. Sen. Tom Daschle was going to be Obama's point guy on health care, I sent off for a copy of his book Critical. It's a fast and easy read, but in its examination of the problem it doesn't add much to superior books on what's wrong with health care.
First, the former Senate Majority Leader promotes himself as a scholar of failed attempts at health reform past, and of course a witness to the most recent attempt. He's been here, and seen this done wrong.
Critical
But the actual coverage solution Daschle proposes is to essentially expand the insurance program that covers federal government workers (something called the Federal Employee Health Benefits Program) with some improvements made by states like Massachusetts and to impose a pay (the government) or play (by providing insurance) option on employers. Daschle would also expand Medicaid and the current insurance for poor children - and then add an individual mandate with subsidies to those who can't afford to buy-in to FEBHP.
This package is tied together, sort of, by a Federal Health Board.
Daschle lucky that he didn't call this board Fannie Med, but he's a victim of poor timing as he links his health board's success to the accomplishments of the Federal Reserve at a time when that "success" is looking, shall we say, shaky.
The main role of the Federal Health Board would be as a cost-effectiveness review organization with teeth since that Medicare, Medicaid and the (newly expanded) federal employees benefit plan would all be bound to follow its guidelines. So essentially he's advocating the creation of a national health insurance benefits package with federal supervision on rates and practices.
Critics on the loony right (old reliable Sally Pipes there in the Wall Street Journal) will call this rationing. More thinking critics will call it the slow emanation of a messy single payer system. That's essentially what it'll turn out to be as the private plans toss the worse (and most expensive) health risks into the federally supported pool and employers steadily get priced out of providing health benefits. Daschle, would be happiest with a U.K.-style single payer with a trade up option, but dismisses that course as unrealistic for the U.S. He also dismisses as unrealistic moderate attempts by Sen. Ron Wyden attempts to decouple health care insurance from employment and create a truer "market" based on social insurance (which is closer to the Dutch model).
So the problem with Daschle's proposals as outlined in Critical come down to two things.
One; most of the uninsured are working poor and their employers are small employers who are all for health reform until they figure out that it means they have to pay for it. My guess is that only a puny Massachusetts-type "pay" fine ($200 or so) will be little enough to get them to willingly back a public and compulsory plan for their employees. At that point more of those small employers who offer coverage will ditch it too, meaning that the public subsidy to insure the working poor will have to be much greater than Daschle thinks. And that's leaving aside the administrative nightmares.
Second, the Federal Health Board will be fought tooth and nail by the health care industry.
To rationally rationalize the health care system, we need to make cardiologists in Miami behave like cardiologists in Minnesota with a consequent impact on the incomes of doctors, hospitals and stent and speedboat salesman in high cost areas. If Daschle's Federal Health Board has teeth, that's what it'll do, and the American Medical Association, American Hospital Association, the Advanced Medical Technology Association, and PhRMA, the pharmacuticals lobby alll know it.
So my guess is that the Federal Health Board, if it gets established, will get defanged immediately and a mish-mash "expand what we got now" system will cover a few more people at a lot more cost (as has been the Massachusetts experience). That's OK because suddenly we're rich (or at least suddenly the government is pretending it is!). But like a lot of recent wealth, this is transitory. Once President Obama's stimulus plans fade away, we'll be back where we are with too few really sick people able to get insurance for a variety of reasons creating a burden on those who can pay - ever increasing - premiums for the decreasing coverage they do get.
Daschle's book and the picks Obama has made to run health care in the White House suggest that modest incrementalism like that outlined in Critical is all we're going to get from this administration. I've always been a believer that only a big bang reform will be able to solve the core problems of our system (primarily the incredible costs lumped on some of those unlucky enough to be very sick). How this gets done without a clear social insurance system that everyone pays into according to ability, and in which there's no real distinction between choice of services due to the individual's ability to pay, I don't know. And I'm afraid neither does Daschle.
Few of the books I've read lately have been quite as staggering as Free Lunch, from former New York Times investigative reporter David Cay Johnston who, heroically, made his career writing about - brace yourselves - the U.S. tax code. Free Lunch is a fabulous book by a veteran investigative reporter giving you his life's work--a look at how corporations and wealthy Americans have profited, again and again, at the expense of you and me.
Johnston's best known for his exhaustive investigations at the Times into how corporations and very very rich individuals subvert U.S. tax law so that they pay less to the government, while the rest of us pay more. But in this book - written after he's free of the "responsibility" of being a Times reporter - he gets almost biblical in calling out the cheats, crooks and murderers.
"Free Lunch"
And when I say murderers, I'm not fooling. In that case, Johnston is talking about John Snow, President George W. Bush's former Treasury Department secretary - the one who did such a great job regulating the sub-prime mortgage market back around the turn of the century that the potential for a credit and housing collapse in the latter part of this decade was avoided...Oh, wait. Nevermind.
Snow was CEO of CSX Corp. the railroad which, Johnston shows, sucked entirely off the public teat, and systematically and knowingly reduced the amount it spent on train and passenger safety - and also subverted the safety inspectors who were supposed to enforce the law - to the point that train crashes and railraod passenger deaths dramatically increased. Even worse, when CSX was successfully sued by the wife of a Miami cop who died in a crash, somehow the company managed to get Amtrak - the government-supported train service - to pay the penalities demanded by the court, not the CSX's CEO or the shareholders. Yup, you and me paid for it. That of course didn't stop Snow from raking tens of millions off CSX over his tenure, even as the stock price fell.
My usual bailiwick, health care is not spared Johnston's wrathful scrutiny. I was amused last year when Bob Gumbiner who made tens of millions converting FHP International Corp., from a non-profit HMO to a for-profit sent me his book proclaiming that a single-payer socialized system was the answer for America. Johnston reminds us how Gumbiner essentially defrauded the state of California out of about $200 million (in 1986 dollars!) when he bought FHP on the cheap. Same with Wellpoint CEO Len Schaeffer, who's initial attempts to pay nothing when Wellpoint/Blue Cross converted from non-profit to profit-making insurance company were eventually at least partially blocked.
It's good to know that in the course of Schaeffer, Gumbiner and others like United HealthGroup CEO and options cheat Bill McGuire becoming gazillionaires, the health care system became cheaper and all the problems with access got fixed....Oh wait. Nevermind.
But it's not just large corporations that feel Johnston's wrath. He goes after the welfare queens who run sports teams (George Steinbrenner, George W. Bush) and the politicians who tax the poor and middle class to pay them huge subsidies. In fact organized sports in the U.S. makes a profit for their owners that is less than the amount of public subsidies they receives for stadium construction and other "incentive" tax breaks. That's right - we're all paying for the billions those owners make, often in the name of urban renewal or economic redevelopment.
Johnston presents a long line of industries and individuals who have lobbied to change the rules that benefit the rich at the expense of everyone else. You think Warren Buffet is some cuddly grandfather who gets a free pass cause he's a Democrat who's giving it all away to charity? Not in Johnston's world. Johnston shows how lobbyists for electric utilities Buffet owned systematically went after municipalities in Iowa and prevented them from competing with him in the power business. Buffett didn't stop the municipally-owned power utilities in the free market; he stopped them by paying off politicians.
This is part of Johnston's look at de-regulated electricity "markets" - the kind brought to you by Enron and its "kept" politicians which were systematically rigged against consumers. It was news to me but he shows that there's theoretical and actual proof that municipally-owned plants are cheaper (and more reliable) sources of electricity. Something, by the way, that the residents of Sacramento, Palo Alto and Los Angeles know and that those in San Francisco would like to find out ... which is why PG&E's ads against the public power initiative on the ballot in my home town have started two full months before the election.
That pattern is repeated over and over again in the book. Under the cover of obfuscation and with the co-operation of an emasculated corporate-dominated media, politicians at the state and federal level take campaign contributions to do the bidding of wealthy men and corporations who, in return, do anything they can to suck more from the public teat and to avoid paying their fair share. The final tally: The richest 400 families in America, making over $100 million annually, pay a lower proportion of their income in tax than the rest of us.
Johnston ends the book laying out the income data. And although we know it, it's staggering. All of the gains in the last thirty years have gone to the top 10% income bracket. Everyone else has seen their incomes go down in real terms and of course their share of the nation's wealth plummet. But wait there's more (a catch phrase Johnston likes!). The bottom half of the top 10% are standing still and it's only the top 5% who have gained, and most of that gain is in the top 1% and most of that gain is in the top 0.1%.
After 35 years of "free marketeers" running their own version of corporate welfare, we are a nation that has an income distribution that looks like Mexico, Russia or Brazil. Or like France before 1789.
Revolution anyone?
Ask any health care wonk and they'll tell you that within the larger health care crisis is a primary care crisis. There is more and more demand for primary care physicians - the person you probably call your "family doctor" - but America's medical schools are producing fewer of them.
Why? Well in a word, money.
It's not actually medical school that's the problem. It's what happens next. A newly graduated physician, carrying a big chunk of debt used to pay for medical school tuition, gets to chose their residency and, as such, decides what type of doctor to become.
In the U.S. we let medical students choose what to do. Not being dummies, most of them notice that diagnostic radiologists and orthopedic surgeons make three times what primary care doctors make, and choose their career path accordingly. Why the vast difference in compensation? Doing something to a patient - fixing a broken hip, reading an x-ray - has always been better rewarded more than talking to them about their high blood pressure or their son's excema.
And while the taxpayer has subsidised teaching hospital residency slots to the tune of a more than $100 billion over the last two decades, the government doesn't limit the number of those slots by specialty type. Most sensible countries do because they know that the more specialists there are the more specialty care gets done. And specialty care is very expensive. Which is the main reason we spend so much more on health care here than in other countries. In 1965, primary care doctors made up 50 percent of physcians; the other half were specialists. Today, about 70 per cent of America's doctors have become specialists. Most other countries have the reverse ratio.
There were two major attempts to redress the imbalance in the 1990s. First, managed care plans like HMOs started paying primary care physicians a global fee to provide all care to their patients. In some cases this meant that primary care groups started acting as general contractors and ended up reducing the specialty and hospital care their patients received -- and keeping more money into the bargain. In some markets, notably southern California, specialists saw their incomes drop dramatically. Politically this resulted in the 'managed care backlash'. Patients and specialists complained, politicians and judges threatened, and insurers and employers who were paying for the HMOs backed off. Worse the insurers started cutting payments to the primary care groups and many doctors ended up bankrupt -- having taken on insurance-type risks that they couldn't manage: getting paid to treat a group with a range of illnesses and problems and incomes rather than one or two not-so-sick people with fat wallets.
The other attempt to improve the lot of the primary care doctor was the introduction of a physician payment scheme by Medicare called the Resource-based Relative Value Scale (RBRVS). The name underlined the intention. Payments to doctors were meant to be based on the relative value of resources used. So a unit of time spent managing patients and talking to them about exercise for high blood pressure, for instance, would be close in value to a unit of time cutting them open.
Unfortunately, America's specialty societies hijacked the process and they now control the somewhat secretive RBRVS Update Committee, which advises Medicare on those payments. So specialty care and procedures remain much much better rewarded than primary care. In the nearly three decades after this problem was first recognized, it's becoming harder and harder to find primary care doctors. It's going to get worse; last year the number of medical students opting for primary care fell to an all time low.
So what's the likely outcome? Medicare clearly will take a hack at redressing the imbalance in payments as part of whatever reform happens in 2009. But unless the specialists and the hospitals that live in symbiosis with them are ready to significantly and voluntarily cut their incomes and reallocate that money to primary care, there will not be enough money for primary care to solve the current shortfall. And the U.S. is not seriously going to tackle - let along address - this problem as a matter of public policy until the whole system breaks so severely that more people demand massive reform. Such a time is still at least a decade or so away.
In the meantime, the market will have a go at addressing the primary care shortage. but it won't do it in ways that primary care doctors will like. You'll continue to see an expansion in nurse practitioners in retail clinics in supermarkets and drugstores. And more and more people will become frustrated by the lack of availability of primary care docs in their neighborhood and will go online where they'll find plenty of entrepreneurial companies offering Internet consults. Of course if an online consult is good enough - and it probably is in many if not most cases - why does that doctor need to be in the same town, or even the same country? Or if it's a diagnosis that requires extensive medical knowledge, why can't a computer do it as well? Why not indeed? You'll see all this happening in the next few years as well.
In fact, the result of the primary care crisis may not be inspired reform. it may instead just end up causing globalization and technology outsourcing to come into physicians' lives. Just like it has to auto workers, steel workers and call center clerks.
Well, lookee there: Congressional Democrats actually won one. That's right. After 14 years of ignoring core liberal principles - including the last 18 months when they actually had a majority - they took on the Republicans and won.
How did this happen? Well, it's an election year, and by forcing an issue that Congress has been putting off for years--automatic cuts in Medicare physician payments--Democrats seized the chance to score a few points.
Essentially, the Democrats decided that, instead of agreeing to another fudged compromise to put off the decision to cut payments, they'd set the insurers against the doctors. So they found the money to put off those automatic cuts by taking some away from private Medicare insurers. Now, it was a bit of a surprise that so many House Republicans joined them and drop-kicked the insurers with whom they've been aligned for so long, although of course they're all up for re-election. But once there was a veto-proof majority in the House, the Senate Democrats realized that they could force the issue and score a political win.
First time 'round on the roll-call vote, not enough Senate Republicans voted with the Democrats to create a veto-proof majority. But the Democrats hung tough and sent the Republicans home to the 4th of July festivities as the party that wanted to cut doctors' fees so rich insurance companies could stay just that.
When the Senate returned seven Republicans, including three up for-re-election this November, caved. And to call attention to the issue, Sen. Ted Kennedy, back from brain tumor surgery, made a dramatic entry on to the Senate floor, where he cast the filibuster-overriding vote. The cuts in Medicare physician payments were suspended and the money will instead to be taken from private Medicare insurers.
The New York Times' Paul Krugman speculates that this - as well as the expected Congressional over-ride of President Bush's veto - means that the Democrats have found their spines and may get enough Republicans on their side to pass Obama's full health care program, should he become President.
But there's a little problem here, and it's not Ted Kennedy the Senator, it's Ted Kennedy the patient.
Kennedy's illness sparked a lot of vitriolic discussion about whether he would have received emergency surgery if he'd lived in Canada. He didn't even stay home in Boston, home of five major teaching hospitals, but went to a super-specialist at Duke University in North Carolina. And while rich politicians in any nation will always get the medical care they desire, there is an honest discussion to be had about whether it is appropriate for society to be paying for the type of care Kennedy received.
That conversation often gets railroaded by the crowd who say that health care by government means rationing. Now in fact that's a laughable accusation in the U.S. as the taxpayer, via Medicare, pays for just about any new treatment that the medical care system can dream up. That's a major reason why we spend so much on health care in the U.S. But it is unquestionably true that other countries spend less on health care in part because they do fewer more aggressive procedures, including fewer more aggressive procedures on very ill elderly people. Like Kennedy.
This generates two arguments. The first is very controversial. How much is it worth spending to keep an elderly and very sick person alive for a few more months? After all resources spent on the elderly and ill are then not available for other needs. This isn't just theoretical. Right now we spend $100,000 on a cancer drug that may extend life for three months, when there's no pre-natal care program for 15% of America's pregnant women
The second argument is less well known. The types and amount of treatment all patients receive, including the very, very sick, vary tremendously in different parts of the country. More importantly, perhaps, the data is pretty clear that less care results in better outcomes. So potentially we could provide all the effective medical care that's needed while providing less actual care.
Regardless of your reasoning, providing less care means spending less money. This could and should be good for society overall and may improve health. But it also means that the debate about how to treat patients like Ted Kennedy--and those even older and sicker--and also the debate about what the appropriate level of care is for everyone, translates into an argument about putting less money into the system overall.
Any wonk knows that we need to deal with the problem of un-contained and unjustifiable health care spending growth. But every rational politician knows that significant cuts to the Medicare budget will cause a vigorous reaction from those currently receiving money for providing that "unjustifiable" care. And when that someone is a doctor or a hospital, it's easy for them to rally support for their cause, as the Republicans found out this week.
Eventually we'll have to do something about how we agree to finance, and provide, care to the next generation of Ted Kennedys. By then there may not be some greedy evil insurers to play off against the good guys. Instead there'll be a massive change in what and how Medicare pays the health care system. And then the real hardball will begin.
I want to ask your help. I have to make a financial decision regarding my health insurance and given the confusion of the system - one I'm supposedly expert in - I need advice.
Now realistically you're not likely to be much good to me. Why do I say this? Well, the data says you're dummies.
Last week Trizetto, a private tech company, put out a survey that said as much. While 80% of consumers surveyed were concerned about health care costs, less than a third knew how much their family spent.
It gets worse. Around 60% of Americans, including the vast majority of those under 65, get their insurance from their employer. How much are employers paying each year? Well according to Joe Public, not that much. Most don't know or think it's less than $5,000 per family. In reality it's around $9,000.
But I'm not one of the blissfully ignorant who gets his insurance at the company trough. Well, not quite. And hence my cry for help.
As a solo consultant I buy my insurance in the gong-show that is the individual insurance market. It's an convoluted process in which you attempt to persuade an insurance company that you are healthy and worthy of their lowest premium rate. About four years ago I succeeded in this endeavor and Healthnet issued me a high deductible policy at the low price of $99 a month. I'm paying nearly $200 a month now because of premium increases, but that's still way less than I would have paid if HealthNet had decided that I wasn't a good risk.
Now California, where I live, doesn't do much to protect individuals entering the insurance market but once you've bought an individual policy, the insurer can only increase the rates with everyone in your age group. But if you let the policy lapse and then try to buy another -- usually because you went back into the corporate world and then left again -- they'll re-examine your medical history. If anything has gone wrong - surgery, illness, funny blood work - you might see your rates increase by a factor of 4 or 5. More likely, you won't get insurance at all.
That's not currently my problem. This is: I got married.
My wife has a job and health care benefits. She put me on her company plan for an extra $50 a month.
This year my individual premium is heading to $250 a month. Now most of you are saying, why is he continuing to pay $250 a month when his wife is paying $50 to cover him on her plan? The obvious thing is to cancel my HealthNet plan.
But what happens if my wife comes to her senses and stops being my wife? If that happens I'd be better off keeping my plan at $3,000 a year because if I have to buy insurance again in a year or two, and they decide I'm not a good risk, it might cost me $12,000 a year!
It gets more complicated. If my wife stops working, we could buy into her company's plan under something called COBRA for another three years. But if we decide not to do that we might have to re-apply in in the individual market as a family which means being underwritten again - and running the risk of being a bad risk. So, perhaps we wouldn't be able to buy insurance, and we'd both be in deep trouble!
And like the rest of the dummies in the survey I don't know how much my wife's employer plan actually costs. When you pay for COBRA you pay the whole fee: the employer does not chip in. So I need to find out, and work out the possible future costs. And if you figure into that the relative chance of my not being married and therefore not being able to buy into my wife's plan my $3,000 in "extra" insurance starts to make a kind of odd sense.
But this all begs a question: Why? The current health insurance system has so many complex wrinkles that an alleged expert (me!) is not sure what to do. There aren't any good choices, and the decision analysis requires PhD-level economic forecasting. Which makes Republican nominee John McCain's plan to force these decisions on more people, by giving tax incentives for people to drop their employer's plan, a mite puzzling.
If this keeps going long enough, the political revolt may create a stable universal insurance plan that will cover me. OK now I'm really kidding.
So can someone tell this dummy what to do?
Clinton has quit, Obama has three times McCain's resources, and the country is fed up with the Republicans' war, corruption and toadying to corporations. Democrats have won three "safe" Republican house seats in recent months. It's their election to lose, and assuming that the fences between rivals really are mended, it might be a landslide.
I've written previously that I don't think Obama is serious about pursuing health care reform. But this week in at a Health Care Town Hall held immediately after he clinched the nomination, he repeated that by the end of his first term, there would be universal healthcare.
In an Obama administration, we'll lower premiums by up to $2,500 for a typical family per year. And we'll do it by ....covering every single American and making sure that they can take their health care with them if they lose their job.....We'll do it by the end of my first term as President of the United States......
Coming from someone who had relatively little to say about health care until goaded into it by former rivals John Edwards and Hillary Clinton this counts as a turning up of the rhetoric. So let's imagine that there is a solid Democratic majority in the House and Senate with a strong Democratic President.
What type of health care reform might actually pass into law?
Obama's proposed plan is complicated so the plan's trip through Congress will be tortuous. And some details are still not aligned. Although Obama says most employers would have to provide insurance, he doesn't mandate that individuals to buy insurance. But then he says we'd get to universal coverage by having people buy insurance, rather than having the government provide it for free.
The Obama theory is that if insurance becomes cheaper, more people will buy it, and those that truly can't afford it will be subsidized. But that's not realistic. Ten percent of people account for more than 50 percent of health care costs and the current game in insurance is to avoid covering that 10 percent.
It looks fairly inevitable that the worst excesses of current insurance practices - avoiding people with chronic conditions - will be banned. But the next step, which is spreading that uneven cost of health care across wider populations, means healthy folks who are not paying their "fair share" will have to pay more. That's necessary if those paying the most - or in reality, currently unable to get insurance - get to pay less. And those who will have to pay more will likely outnumber those getting a better deal right now. So the Obama plan will look like a cost increase to many. This has largely been the experience in the new Massachusetts "universal insurance" plan.
Obama's way around this is to have the U.S. government subsidize some of the most expensive cases. That's the source of his $2,500 a family savings. He'll also allow people to buy into an equivalent of the Medicare system. Both of these safeguard proposals mean big increases in government subsidies that will require more taxes. But this is all likely to be proposed during a recession. The Federal budget is already heading for another record deficit. Add in the opposition from much of the health insurance industry to these reforms (as they will put some of its members out of business), and you can see how hard this will be to pass Congress.
There is one place Obama can go for the money to pay for his plans. The Medicare program continues to run more or less as it did in the 1960s, incenting doctors and hospitals to provide more and more services, at a total cost of some $460 billion in 2008. Remember that Obama says he needs less than $100 billion to cover everybody.
For the past two decades Medicare "reform" has meant paying private plans to take on more of the Medicare population. But more than 80% of Medicare recipients are still in the traditional program, and worse, it's turned out that it costs Medicare more overall to send a senior into a private plan. So serious reforms of the mainstream Medicare program are going to be necessary.
Any such reforms will have winners and losers. Losers will presumably be those making money providing "too much" acute care now. You can imagine the ability of those "loser" hospitals and doctors to rally political support. So although there be reallocation of funds within Medicare and for the rest of Obama's plan to work there'll need also to be an overall reduction in Medicare spending to help pay for the expansion of subsidies to cover more of the uninsured.
So my quick forecast, regardless of who wins in November: We'll see cuts in Medicare as part of a series of necessary and positive changes in how we pay for health care services. If Obama wins, we'll also see greater regulation of insurers to prevent the bad behavior we've seen in the last few years.
Whether we'll see real efforts to "cover every single American" is much less likely.
Given that he's the presumptive Republican nominee, it's time to look at what would happen if Sen. John McCain won the election and the Republicans took Congress and they passed the plan that he's proposed. Of course, the good news is that what I'm about to describe is purely theoretical. As we stand this fall, Democrats should win back the White House and will pick up enough Senate and House seats to prevent any GOP-backed proposals making it into law.
Nevertheless, this contemplation is spurred on by my recent visit with the Washington Policy Institute, a right wing think-tank in rainy Seattle, not cherry-blossom filled D.C. where McCain's proposal got serious attention.
His basic idea is to phase out the tax exemption for employer-based health care and replace it with an individual tax credit of $2,500 per individual and $5,000 per family, to buy insurance. In addition, state laws governing health insurance would be overridden - so low cost plans from one state could be sold in another.
The result of this would be that many - if not most employers - would get out of the business of providing health benefits, and people would take the tax credit to the individual insurance market. Where many, if not most, would buy high deductible individual plans. The problem is that these plans don't insure people who are sick, ever have been sick or know anyone who may ever be sick, and make very big profits by doing so. I've ranted about one company, Mega Life and Health which sells dodgy plans to individuals, and has what's known as a "medical loss ratio" that's woefully low - around 30% - so only $3 in $10 paid in premiums gets spent on actual care. Another little known segment of the insurance marketplace, plans for college students, have just been exposed in BusinessWeek as having a medical loss ratios as low as 10%! But honestly, this isn't all that unusual: the idea of keeping costs low by excluding sick people is what makes the insurance market a profitable business.
McCain has advisors who understand this. One, Galen Institute's Grace-Marie Turner thinks giving sick people access to a combination of subsidies and government provided health plans of last resort can solve this problem. The idea is to help plans take on risker clients - by giving the consumer more money so the plan can charge them a little more - and then having states sponsor plans for those who fall between the cracks.
That may pass the theoretical smell test but in real life we're talking about increasing taxes on the average to pay specifically for targeted groups that are likely to be poor, sick and expensive. As Sick author Jon Cohn often says, programs for poor people get treated poorly. If rich and poor are not in programs together - Social Security is the leading example - it's easy for them to be ignored and de-funded. That's happened with some states' children's insurance plans, and existing state-based high risk health insurance pools like those Turner proposes supporting.
The real solution, she says, is a new Federal program with more Federal dollars for people in high-risk groups, channeled through the state plans. The Libertarian sitting next to me called this yet another complicated government program. But the real issue is that it wouldn't survive long. As soon as state budgets get tight, support for insurance for those on the margins will be cut, and the sickies will be left on the shelf. And since the employer-based market will be decaying even faster - it wouldn't be tax exempt, remember - there'll be more sick folks with no insurance.
The problem underlying all of these plans is that the care of sick people costs money. And somehow we have to redistribute money to pay for it. Simply suggesting that it ought to happen isn't going to make it happen, no matter whether there's an R or D after the politician's name. Particularly if there isn't a real, high demand for a solution. And I don't think we're seeing enough of that demand for Congress to come up with a plan that's more than just window dressing.
So we're going to spend the next few months going through the exercise of talking about health care reform. But it's after all the talk, nothing's going to happen. Which in the case of the McCain program is a good thing. His halfway solution is worse than no change.
My six weeks of traveling the world on an extended honeymoon is over. With my lovely wife Amanda I've been diving on coral reefs, sleeping under the stars with the Bedouin, exploring 3,500 year-old tombs, watching lions tear apart a buffalo, and tracking chimps hanging out in the rain forest.
What better way to return than to enter the jungle of U.S. Presidential politics? So Tuesday, I sat in on two conference calls. One from the McCain camp on their health care proposal, the other from the Campaign for America's Future, which is promoting Yale professor Jacob Hacker's plan as the theory behind both Clinton and Obama's policy intentions. Like the lion and the buffalo, it wasn't pretty.
McCain's proxies were Douglas Holtz-Eakin, sensible former director of the Congressional Budget Office, a usually fair-minded group of bean counters, and Carly Fiorina, the former CEO of Hewlett-Packard, apparently on the shortlist for the vice presidency.
The two surrogates offered a taste of what we can expect the Republican version of the health care debate to be as the election moves closer: For Carly it's either free market choice, or the government telling your family which doctor you can go and see. You're going to hear "government run heath care care" uttered as a threat - just as if we were all moving to the Gulag. Tomorrow.
After a lot of platitudes about medical homes and transparency and electronic medical records - Holtz-Eakin finally got down to the meat of the campaign's proposal. McCain aims more or less end the employer-based system that's currently in place for most Americans by taking away the tax deductibility of health benefits for individuals.
Instead, every family will get a $5,000 tax credit to go buy insurance in the individual market and they will no longer be restricted to buying insurance their own state thus, in theory, creating more competition between insurers. Holtz-Eakin has been sensible enough to get McCain to identify the problem associated with the main thrust of his plan: the consequences of forcing people into the individual insurance market. As many frustrated Americans know, under such a system most healthy people will find a high deductible policy that costs less than $5,000 a year but those with pre-existing conditions - like John McCain (were he not a Federal employee and eligible for Medicare) - would find insurance unobtainable.
There is a rational way out of this fix for those (including me) who want to hasten the end of employer-based health insurance. Establish a regulated national insurance market which forces insurers to take all comers. Massachusetts has made vague efforts towards creating such a market. And Sen. Ron Wyden has proposed something similar. But doing that without killing the insurance market requires the government to force everyone to buy in to the plan. It also means that benefits and options have to be made similar by regulatory fiat, and that a system of risk adjustment between those insurers needs to be in place. Failing that the whole thing collapses because insurers will be left with all the sick people while the healthy ones opt out of the system.
There's no reason that McCain couldn't have gone some way down that path - Wyden's plan has Republican support. But McCain's answer to the problem is literally, "we'll study it more".
Now, this should be sweet hay for the Democrats and the AFL-CIO. And yes, the Campaign for America's Future's folks were very persistent in reminding us that 1) McCain wants to take away employer-based health insurance and 2) you're on your own in the individual market.
Funnily enough, though, they focused on point one - changes to health care tax deductibility ending the employer-based health care benefit. Instead they should explain the obvious about point two - the individual market is run by insurance companies who focus on attracting healthy customer who need fewer services, not on the sick. In the political jungle it should be pretty fair to say that the individual market is run by insurance companies (like some in California that retroactively cancel all sick people's policies) and that under the McCain plan that's the only place you'd be able to buy insurance! But I'm sure we'll hear loads more about that come the Fall, won't we?
But the lack of pointed Democratic criticism aside, why is straight talking maverick John McCain spouting the free market line drawn by the National Federation of Independent Businesses and the Cato Institute? Isn't this a great area to be a maverick and deviate from the Bush rhetoric?
I assume that the answer is McCain feels health care is important enough that he has to say something, but he's more concerned about not upsetting the health care industry. After all, even if he does win the election by some miracle (or the usual Democratic ineptitude) he's not actually going to do anything about health reform.
But then again, my guess is neither are the Democrats.
It's almost full-on election season so I'm getting email from the Republican National Committee suggesting that there are problems with both the Sen. Hillary Clinton and Barrack Obama plans for health reform. Funny that - given my politics - but it gets better.
The RNC thoughtfully sent along a copy of a Wall Street Journal op-ed featuring an appearance by that blast from the health reform past, Betsy McCaughey who these days hangs her hat at the ultra-right wing Hudson Institute. In the 1990's she was a brief star of the new right after writing, in early 1994, a magazine article in the then-quasi-liberal magazine The New Republic. Called No Exit, it contained a damning account of the Clinton Health Plan and got a fair amount of attention at the time. No Exit was a fair load of old tosh (you really keen health policy archaeologists can unearth the Clinton White House's full rebuttal to see what I mean). The article's impact on the demise of the Clinton health plan, which was already in substantial trouble by the time it came out, was in fact greatly overstated, not in the least by McCaughey herself.
Nonetheles, she somewhat improbably rode that wave to the New York Lieutenant Governor's office under George Pataki, and to marriage to a multi-millionaire. Her relationship with Pataki, the millionaire and, some say, reality all fell apart in quick sequence. But now that health care politics are back so is she.
So what does she say in her new attack piece?
Well more of the same that's been emanating from similar quarters, and has been smeared all over the WSJ op-ed pages for years. For example here's McCaughey on:
The growing number of uninsured? The fault of those damn illegal immigrants! McCaughey seems to think there are reams of cancer patients swimming across the Rio Grande, even if a peer reviewed article in Health Affairs this very week shows that the increase in uninsurance has little to do with immigration and much to do with the decrease in insurance provided by employers.
Uninsured children? The fault of their parents who are too dumb, stupid or poor to sign them up for the wealth of public programs just desperate to enroll them. Not mentioned? Several states dis-enrolled "eligible" children from their programs in the last recession. And isn't it funny that every other country seems to have much cleverer parents when it comes to ensuring their children have health coverage?
Mandates for universal coverage as Clinton's current plan would impose? An unfair tax on cheap young people who are forced to transfer wealth to rich old people.
Health information technology - a part of Obama's proposed plan? A pox on the super-efficient medical delivery system.
Regulation of the "politically unpopular" insurance industry? A sure path to collectivist Bolshevism!
In the bizzarro world of Betsy McCaughey and the far right, there are no problems with the American health care system and if there are, that's entirely because of the system's socialized nature. And they'll insist that their version of reform is all about bringing market forces to health care. But that's just not true.
There's a basic mathematical concept at work here that just seems to escape these people. Care of a few people costs a lot of money. Somehow we have to figure out how to cross-subsidize the expensive care of those who are ill.
But logic and mathematics aren't part of McCaughey's argument. This type of attack is really about is stopping any real health care reform. Why? There are plenty of players in the current health care system who make a very nice living today and do not want to change that. They include insurers, pharmaceutical and device companies, most hospitals, many doctors and virtually anyone involved in the current system. The long-term logical outcome of the reform in the Clinton and Obama plans reduces the over-use of devices, drugs, procedures, and services that's rampant in the current system. The plans also halt the games insurers play to boost profits.
So when you see these attack pieces - and you're going to see a lot more - remember what this is about. It's about maintaing the the appalling status quo in American health care today. And Betsy is no doubt ready for the next round.
Just when you thought it was safe to switch on the telly, the Democratic presidential candidates had yet another debate. The caucus in Nevada and the primary in South Carolina gave the three front runners an excuse to indulge in a long conversation about whether or not Sen. Barack Obama could find piece of paper on his desk, exactly how many years Sen. Hillary Clinton has had experience or to the minute how long John Edwards has been struggling to get out of that mill town.
And if I hear the word “change” one more time...
None of this has too much to do with the health care problem facing the nation. Or the housing slump, the crisis in Pakistan, global warming, energy independence, or - really - anything that matters very much. It’s quite possible that towards the end of the debate the candidates came to some earth-shattering conclusion about these topics. Unfortunately by that time I'd changed the channel to a rerun of Scrubs.
The problem is twofold. First, the primary process is essentially a contest among politicians who, in general, seem to agree with each other. If you look at their health care plans, the plans for Iraq, or much anything else, there's not much difference between the main Democratic contenders. For that matter there's not much difference between the main Republicans. There is of course a difference between the Democrats and the Republicans -- although not perhaps as much as there ought to be.
But we're not seeing the two sides debate on another because that's not the American way. In fact head to head debate doesn't even happen in Congress.
This means that we voters spend the vast majority of the political season concentrating on personality differences, essentially irrelevant compared to distinctions which might make a difference to our domestic and foreign policies. This focus on personality - on style, not substance - continues straight on into the presidential race when irrelevancies about the backgrounds of the candidates loom much larger. It may well be that President George W. Bush was technically a deserter from the Air National Guard. His Democratic opponent John Kerry may well have overstated the the risks he took in Vietnam (at the least he managed to piss off a sufficient number of other Vietnam vets that we ended up with the Swiftboat fiasco). But the point is that personal character traits, and supposed strengths and weaknesses, make very little difference to the impact that politicians have once they actually make it into office.
What actually matters is the legislation that gets enacted, and the types of interest groups that will be represented by the members of the Administration. So when George W. Bush appointed some of the most extreme and polarizing figures in American life to run the departments of Justice and Defense one can safely say that it mattered alot. It's also clear that that the vast majority of those who voted for him had no idea what he was going to do in that regard. And then there's the sneaking suspicion many of us have that the actual running of the country was carried out by Vice President Dick Cheney - who chose himself for the job. Regardless of how you look at it, the culmination of legislation and administrative action develop by the Administration has nothing to do with the various character traits of the individual running for office.
That's why the real question about the future of American political life is not about the candidate’s personality, nor about their tears, nor about their self-styled monikers as fighter, change agent, or experienced decision-maker. The real issue is how the next President is going to appoint their team, and pick their fights over the big problems that require legislation, money and force. Getting that done does require them to be a skilled political operator (although it's better for them to be more ruthless than skilled), but their personal character traits are less important.
Of course in many other countries an election has voters choose between teams not individuals, and the policies that will be put in place by the winner are worked out and known in advance. And the election cycle is (thankfully) much, much shorter. Even after living through seven years of what most Americans seem to think was a bait and switch, we know very little about the substance of what we are going to get in terms of practical change whomever takes over the White House in 2009. We will know how they described themselves "on message" during endless months of campaigning.
In the end the important thing is what they do not how they do it. For example, LBJ got civil rights and Medicare passed into law, but no one considered him full of empathy. Unfortunately, voters seem to value style over substance, which means that in the end we may not know much about the substance we get and it may not be much to our liking.
