Health Care Reform I
Jul 21st, 2009 | 20 responses
Earlier this morning President Obama came out to speak on health care reform so I thought it a proper topic for a posting today. I think it goes without saying that everyone agrees the current system is a mess and needs changes. We are spending billions, if not trillions, of dollars on health care and yet we still have millions of Americans without coverage and millions more with coverage that doesn’t seem to be working.
Having said that, I am a little disturbed by some of the rhetoric from the left, which seems to suggest that if you don’t support the current proposal from the President that you are somehow opposed to solving the problem. I am also bothered by the idea that we need to rush to pass the current proposal as soon as possible.
Further complicating the process is the fact that we have disinformation coming from both the left and the right. It almost requires as much effort to figure out what facts are true and what facts are false as it does to figure out what the best solution to the problem is. With this in mind I would like to start a discussion about the various issues connected with HCR and to see if we can have a reasoned debate on the topic.
Let’s start with the idea that we have to support the current proposal from the Obama administration or we are opposed to reform. I’ve heard this claim from various Congressional Democrats and find it not only silly but a bit insulting. I do want to reform health care but I’m not convinced the current proposal is a good idea.
To begin with we have the fact that according to the Congressional Budget Office the proposal would actually increase, not decrease the total cost of health care. If we are already dealing with the dual problems of runaway health care costs and huge budget deficits, I’m not sure that passing a proposal to increase the size of both is a good step to take.
In addition, I have a real problem with needing to rush to pass the legislation as soon as we can. Whenever Congress passes major legislation we are talking about bills that are hundreds, even thousands of pages long. We are talking about spending huge amounts of money which we arguably do not have and we are talking about programs that impact millions of people.
I was also reluctant to see the stimulus bills passed so quickly but at least there we had some argument that if we did not move quickly the damage to the economy would be worse than not moving. Here we do have some time to sit down and really look at the proposals and decide which program is the best.
One idea that I think is worth considering is that we move to solve the problem of the truly uninsured first before we move to establish a full blown program. While the numbers vary from place to place, even the most liberal estimates do not put it over 40 million people who are currently without coverage.
As best as I can tell from various sources, the uninsured are divided into five roughly equal groups consisting of 1) young people who choose not to have coverage for various reasons, 2) those who can afford insurance but choose not to purchase it (often this is actually people in fairly high income brackets), 3) immigrants, 4) the temporarily uninsured (for example those who have just started a job) and 5) pretty much everyone not included in the first four groups.
Of course nobody knows for sure exactly how these numbers break down but it does seem to be true that at least some of those in the uninsured group are there by choice and they don’t necessarily need to be covered. This does not mean that we do not have a large group of people who need help but it does mean the group may be smaller than we currently think.
So perhaps one step to take would be to determine exactly how many people are truly in need of coverage and how many are making the choice not to have coverage. If I am a young healthy person who doesn’t feel the need to be covered or if I am wealthy enough to cover my own costs, perhaps I should have that choice. I’m a little less sure on the first group than the second, at least in terms of catastrophic coverage.
Once we determine who is truly uncovered, perhaps the next step would be to get these people covered in some way, perhaps through subsidies to allow them to purchase insurance coverage on their own. We could also look to pass other reforms, such as tort reform, to help reduce medical costs.
Taking these steps would allow us to get coverage to those who need it while also allowing us to take time in determining what the best long term solution would be. Certainly we have many examples around the world to choose from and they seem to have both good and bad elements.
In addition we need to look at the validity of the claims on both sides of the debate, whether it is the validity of the claims on overhead costs or the accuracy of the allegations about the problems with the Canadian or European systems.
Obviously I am not suggesting that I have all of the solutions, if I did I’d probably be sitting in an office in Washington instead of writing on a blog. But I do think that this debate is something that we need to take our time with. In the coming days and weeks I’d like to try and cover the various issues I’ve outlined here.
20 Responses to “Health Care Reform I”
Maybe you feel unrepresented because no Republicans are seriously involved in trying to solve this problem?
GeorgeS my understanding was that Blue Dog Democrats and moderate Republicans were meeting to try and find a middle ground on this.
The future brought to you now by Obama!
http://directorblue.blogspot.com/2009/07/newsre…
I'm not surprised to find that the bill in its current form is going to be more expensive, lobbyists for the health & insurance industries are going full tilt to shape the bill into their favor, not for the public good. There is a WaPo article I just read titled, “Industry Cash Flowed To Drafters of Reform”
Yes, SD, what I find really funny is the commercials where “The government is going to get between you and your doctor”. Like there isn't already an faceless for-profit bureaucracy between you and your doctor right now with even LESS accountability.
I agree with Patrick, I too want to see the system reformed. Something is very wrong with our system, why should a chest x-ray cost thousands?!
DaGoat–
I haven't heard anything about Blue Dogs and moderate Republicans getting togeather. My understanding is that Republicans are just playing politics.
For example, Republican Senator Jim DeMint: “If we’re able to stop Obama on this it will be his Waterloo. It will break him”.
William Kristol: “Go for the kill.”
George,
you gotta love Google: Blue Dogs Are Attempting to Form an Alliance w/ the GOP to Thwart Real Healthcare Reform
I swear to god these Blue Dogs are like the fifth column in the Democratic party. Even worse they come from either the South or small states that lack the diversity and dynamism of the big states yet they want to impose their narrow-minded policies on the rest of the nation
Funny thing, we just may see a resurgence of the “DINOs”. And here I thought it was only those crazy righties who were willing to purge those who bucked the party line.
Using the August 2008 Census Report, the following facts about America's uninsured demographics:
* 27% of Americans are currently covered by taxpayer financed public insurance. These Americans are covered by Medicare, Medicaid, SCHIP, and military health care. (Probably more now that SCHIP has passed.)
*Of the 47 million uninsured in America:
1. 26.8 million are working Americans with 21 million of those working full time
2. 9.7 million are non-citizens (by law legal immigrants are to be covered)
3. 8.1 million are children but are not eligible for SCHIP (SCHIP has since passed thanks to the Democrats)
4. 17.5 million had household incomes of $50,000 or more and 9.1 million had incomes over $75,000
http://healthcare.nationaljournal.com/2009/07/e…
Henry J. Aaron, Bruce and Virginia MacLaury Senior Fellow, The Brookings Institution
Way, way too much is being made of this remark on substantive grounds. Doug (Elmendorf) simply put in words the numbers in the CBO and JCT cost estimates of HR 3200. HR 3200 raises spending more than it raises taxes; so, it raises the LEVEL of the curve and deficits over the next ten years. That simply says that more work remains to be done either to cut spending or to raise taxes to make the plan deficit neutral. Doug's comment says nothing about the impact over the long-haul of HR3200 on the SLOPE of the curve, which depends on reforms in the way health care is financed and delivered. Like many other analysts, I would like to see more specific incentives in the bill for the change in the way health care is delivered. And I would like to see a clear and direct linkage between sources of finance for health care and outlays on health care. Of course, the political impact of the comment goes way beyond the dry facts. Rather belatedly, it seems, enthusiasts of health reform are discovering that there is a connection between the revenue and expenditure…
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Way, way too much is being made of this remark on substantive grounds. Doug simply put in words the numbers in the CBO and JCT cost estimates of HR 3200. HR 3200 raises spending more than it raises taxes; so, it raises the LEVEL of the curve and deficits over the next ten years. That simply says that more work remains to be done either to cut spending or to raise taxes to make the plan deficit neutral.
Doug's comment says nothing about the impact over the long-haul of HR3200 on the SLOPE of the curve, which depends on reforms in the way health care is financed and delivered. Like many other analysts, I would like to see more specific incentives in the bill for the change in the way health care is delivered. And I would like to see a clear and direct linkage between sources of finance for health care and outlays on health care.
Of course, the political impact of the comment goes way beyond the dry facts. Rather belatedly, it seems, enthusiasts of health reform are discovering that there is a connection between the revenue and expenditure sides of the budget and that vague claims of savings cut no ice (and shouldn't!) with CBO.
It is time to think hard about steps short of the large scale reforms that can be reliably enacted at reasonable cost–the minimum steps that can be taken at a politically digestible cost to begin the process of transforming the U.S. health care system. If it is not possible to 'do it all' in one big bill, what are the essential steps that will begin that process? My candidates, in addition to the major steps already taken this year (SCHIP expansion, health IT, and comparative effectiveness) would be the creation of health exchanges (even if they have limited authority) and modest additional extension of coverage. Let us all pray that the headlong pursuit of full-scale reform does not crowd out consideration of lesser steps that may not be all that we want but that are constructive and allow supporters of reform to claim credibly that 'We Won.'
*Of the 47 million uninsured in America:
1. 26.8 million are working Americans with 21 million of those working full time
2. 9.7 million are non-citizens (by law legal immigrants are to be covered)
3. 8.1 million are children but are not eligible for SCHIP (SCHIP has since passed thanks to the Democrats)
4. 17.5 million had household incomes of $50,000 or more and 9.1 million had incomes over $75,000
That's great that we are in such an excellent shape when it comes to health care and health insurance in America. That means is will be that much easier, inexpensive, and less conrtoversial to—according to these figures–take care of the insurance/health of those three or four Americans that truly need it.
Very few politicians or commentators seem to understand there are really 2 issues, containing costs, and covering the uninsured. Lifestyle choices, eating right, exercising and not smoking or drinking would go far in containing costs. Limiting prescription drug advertising and marketing of bandaid solutions for marginal health issues and figuring out a way to compensate doctors for wellness services rather than tests and treatments would help too. Also how about paying for med school for doctors willing to serve 10 years as general practitioners in salaried clinics? There are ways to cover the uninsured that are much less drastic than current proposals.
Yes, but look at the doctor payments. At the current Medicare rate (19% less than private insurance pays), there is no increase in cost at all. The increase is due to increasing what doctors are paid. That's a concession that addresses the point often made by conservatives here that Medicare pays too little. What is your proposal or suggestion for resolving this? Med industry says it needs more money, but you want to lower costs. What to do?
That's a non-solution. Uninsured cost more because they use the ER for primary care. Leaving them out of the solution is convenient but does nothing. Solution? Force them to buy insurance? Government mandated customers for the insurance industry? Great for execs and shareholders, but not a sound public health solution.
That number is actually low I think, though not looking it up right now. There's also veterans, federal, state, county and local employees, Indian health care etc.
Also, consider that all those with employer health plans are “taxpayer financed” private insurance. The taxpayer picks up about $2,000 per family for that group. 16.7% of that is insurance company overhead and profit, according to the health insurance industry. Think about that. For every family with employer provided coverage, we the people pay the insurance companies $334 in non-medical cost. Medicare costs 12% less, so we could save $240 of that for each covered family. The overhead cost under Medicare for all would be around $80. Of course the insurance industry is going all out to prevent a nonprofit public option.
Patrick, Obama's rush to judgment is for political expediency. He's gambling the time is ripe and his personal popularity at a peak to drive health care reform to some kind of conclusion hoping for a reasonable solution. But the downside is obvious because of the enormous complexities and costs involved. History will prove Obama correct. Next year is midterm elections and the entire House and third of the Senate will return to campaign mode and the anti-reform lobbyists will pay top dollar for the sheep to follow their flock.After the August recess, the best thing Obama can expect is legislation that will set most of the new reform system in motion. Keep in mind, none of the stuff on the table now will be triggered until 2012 or later. Congress can fill in the gaps and fix the problems not addressed in this session at a later date once the ball is rolling.
Jchem–
Thanks for the link to the Daily Kos.
I agree with Jerry:
“16.7% of that is insurance company overhead and profit, according to the health insurance industry. Think about that. For every family with employer provided coverage, we the people pay the insurance companies $334 in non-medical cost. Medicare costs 12% less, so we could save $240 of that for each”
Well let's break that down. State taxes are usually 2% to 3%. Commissions to brokers are usually about 2% to 5%, so real Insurance company profit, risk and overhead is about 10.7% to 12.7%. Does your number include the companies that self insure, and there for only pay for administration and claim preocessing? If not, this will bring that 16.7% down as well.
Also, Medicare ooverhead is a fuzzy number. Other federal agencies pick up some of the administrative tasks of Medicare (I think the IRS does the monthly billing) so you are not comparing apples to apples. Finally, Medicare loses 30% (by Obama's own admission) out the door due to inefficiency and fraud. What is the private insurance loss rate?
George,
I suppose it is worth noting that the Blue Dogs and the Repubs are not in absolute agreement about stopping the bill, as some folks on the right would like to hope for. But I think a common area that they both agree on is to make sure they get it right the first time around, rather than rushing it through. Of course, it depends on your political perspective, but it sure seems to me that they “getting together” as you put it above. Here's a link to the Hill's take from Rep. Mike Ross (D-Ark).
My comment above was an observation about how some folks on the left are more than happy to go after their own, in much the same way that some on the right do. As far as I'm concerned, the Dems have all the votes they need–they control all 3 branches of government; the Repubs are essentially irrelevant. If they don't want to take part in anything productive, what's to stop the Dems from telling them to take a hike?
Greg, the 16.7% and 5.2% numbers are not fuzzy at all, nor are they partisan in MY direction. They're from the insurance industry's trade association. Their own numbers confirm that Medicare overhead will likely hit 3.3% next year, while theirs won't vary “more than a percent or two” from the 16.7%. You can argue that the insurance industry is fudging the numbers to make themselves look bad, but uh, that would be really stupid.
The point is that nonprofit insurance is cheaper, because *surprise*, no profit motive. Also lower executive salaries (way lower than $17 million a year!), no lavish executive suites, planes or expensive claims denial departments. I could go on, but I'll just state the obvious: Insurance companies will never care more about your health than their profit. They are at cross purposes with public health care. They're about making money, not about providing quality, cost effective health care.
btw, if you want to “break that down” why not look at the original study. I think they already did break it down: (PDF warning)
http://www.cahi.org/cahi_contents/resources/pdf…
One word captures what is the American Health care system today: Greed.
GD is right, “Insurance companies will never care more about your health than their profit.”
Jchem–
Here's a quote from that link about Rep. Ross:
Whatever happens in the end, going by that quote, he's in favor of having an end product by sometime in August.
The answer to the second paragraph of your comment might just be found in the first paragraph of your comment.
And again, I'm not aware of any Republican leadership toward reform on this issue. What I'm aware of are Republican efforts to prevent any reform on this issue.
Republicans aren't off the hook.