Martin Feldstein lies about health care

It's difficult for me to imagine anybody filling one newspaper page with more distortions, omissions and outright lies than Martin Feldstein has done in his recent Washington Post piece. The rhetoric is becoming so shrill and misleading that I suppose this is evidence that health care reform is really going to happen (although I have little confidence any current proposal will be beneficial). Feldstein's op-ed is such a piece of crap that I'll go over it in its entirety. He starts (in italics, my response is not italicized):

For the 85 percent of Americans who already have health insurance, the Obama health plan is bad news. It means higher taxes, less health care and no protection if they lose their current insurance because of unemployment or early retirement.

Right off the bat, Feldstein includes the 90 million Americans who are currently in a government-paid health plan (Medicare and Medicaid) as part of the 85% with insurance. Perhaps he shows us later how the provision of health care for more will deprive these 85% of care, or is this a scare tactic? (Hint: he doesn't).

President Obama's primary goal is to extend formal health insurance to those low-income individuals who are currently uninsured despite the nearly $300-billion-a-year Medicaid program. Doing so the Obama way would cost more than $1 trillion over the next 10 years. There surely must be better and less costly ways to improve the health and health care of that low-income group.

What's the gripe here, that "formal health insurance" is better than the piss-poor, underfunded Medicaid that low-income individuals and their doctors must navigate now? Medicaid is a minimally-funded charity program that relies in large part on the beneficence of physician groups and health care entities who accept the ultra-low reimbursement as a service to their communities. Should we just put another 46 million people into this program? Feldstein intimates that "there surely must be" a better plan, yet this great Harvard economist offers nothing. Some Republicans admit now that health care reform is necessary, yet they stood by when they had control of the government and did nothing as health care costs eroded our GDP, and now just lob grenades at anything proffered by the Democrats in power. Unproductive. The $1 trillion cost estimate from the CBO does not take into account any of the potential cost savings from health care reform such as economies of scale, preventing catastrophic health events, the increased productivity of a mobile labor force and other intangibles.

Although the president claims he can finance the enormous increase in costs by raising taxes only on high-income individuals, tax experts know that this won't work. Experience shows that raising the top income-tax rate from 35 percent today to more than 45 percent -- the effect of adding the proposed health surcharge to the increase resulting from letting the Bush tax cuts expire for high-income taxpayers -- would change the behavior of high-income individuals in ways that would shrink their taxable incomes and therefore produce less revenue. The result would be larger deficits and higher taxes on the middle class. Because of the unprecedented deficits forecast for the next decade, this is definitely not a time to start a major new spending program.

Completely misleading. The House plan calls for a 1% surtax on those making over $280,000 per year and up to 5.4% for those making over $1 million. The increase "35% to 45%" to which Feldstein alludes has nothing whatsoever to do with health care reform, but rather, as he says, is the sunset of the Bush tax cuts. The fact is that the federal budget became unbalanced due to two wars, a Medicare Part D pharma boondoggle and other frivolous spending over the past 8 years. If the GOP-controlled government had been more frugal, then there would be no need to allow the tax cuts to sunset. Feldstein is lying and for him to say that income tax rates will rise from 35% to 45% because of health care reform is a complete abrogation of any duty he has to the truth. Also, a news flash to Dr Feldstein: we are already spending money on health care for the uninsured, the problem is that the health care they are getting is the most expensive type, least efficacious, rendered only after delay and through an emergency department... so he can stop with the BS about a "major new" spending program.

A second key goal of the Obama health plan is to slow the growth of health-care spending. The president's budget calls explicitly for cutting Medicare to help pay for the expanded benefits for low-income individuals. But the administration's goal is bigger than that. It is to cut dramatically the amount of health care that we all consume.

A recent report by the White House Council of Economic Advisers claims that the government can cut the projected level of health spending by 15 percent over the next decade and by 30 percent over the next 20 years. Although the reduced spending would result from fewer services rather than lower payments to providers, we are told that this can be done without lowering the quality of care or diminishing our health. I don't believe it.

Feldstein doesn't believe it? I always thought economists fancied themselves mathematicians and scientists, so where is his fact-based study loaded with formulae to support his belief? Or, I suppose, we should just take his word for it. The fact is the White House report, as referenced, is replete with charts, graphs and liberal use of all manner of economic jargon... which, sure, could be 56 pages of bullshit, but we wouldn't know it by Feldstein's assessment. He just wants us to accept his belief-system. Feldstein was given an opportunity in a major paper to answer the White House report, and he whiffed.

To support their claim that costs can be radically reduced without adverse effects, the health planners point to the fact that about half of all hospital costs are for patients in the last year of life. I don't find that persuasive. Do doctors really know which of their very ill patients will benefit from expensive care and which will die regardless of the care they receive? In a world of uncertainty, many of us will want to hope that care will help.

I'll let Dr Bob Wachter, a hospitalist MD who cares for the infirm, answer this question: "I just finished a couple of weeks on the wards, and once again cared for several patients – cachectic, bedbound, sometimes stuck on ventilators – in the late stages of severe and unfixable chronic illnesses whose families wanted to “do everything.” ...There are limits (like chest compressions) on what I am willing to do in these circumstances, but they are mostly symbolic – basically, I am a bit player in this crazy house, with no choice but to flog the helpless patient at a cost of $10,000 a day in a system that is nearly broke and whose burn rate threatens to ruin our country. Go figure... Is there anything we can do? The favored solution [is]..."

Dr Wachter goes on with a rather lengthy discussion about the problems and costs of end-of-life care and the issue of rationing. So, yes, physicians can be a part of a health care system that looks at outrageous costs that are incurred with little or no benefit rendered. Feldstein fails to realize that health care costs approach a zero sum situation whereby every dollar spent on a ventilator for an end-stage emphysema patient is a dollar unavailable for prenatal care for a 25 year-old with two young lives at stake. While we can scare everyone by invoking the spectre of "rationing", the reality is that we are now constantly allocating scarce resources, and it's about time economists like Feldstein got in the game before our whole country goes bankrupt.

We are also often told that patients in Minnesota receive many fewer dollars of care per capita than patients in New York and California without adverse health effects. When I hear that, I wonder whether we should cut back on care, as these experts advocate, move to Minnesota, or wish we had the genetic stock of Minnesotans.

The administration's health planners believe that the new "cost effectiveness research" will allow officials to eliminate wasteful spending by defining the "appropriate" care that will be paid for by the government and by private insurance. Such a constrained, one-size-fits-all form of medicine may be necessary in some European health programs in which the government pays all the bills. But Americans have shown that we prefer to retain a diversity of options and the ability to choose among doctors, hospitals and standards of care.

Americans worship at the altar of the specious "diversity of options", but physicians by and large follow standard protocols for screening, diagnosis and treatment of nearly every problem and diagnosis. We are more technical in our decision-making than one might realized-- or at least we should be. Every medical specialty provides guidelines for the standard of care for all manner of procedures and tests which are easily understood and based on science, and any deviation from these standards is almost never warranted. Insurance companies and Medicare and Medicaid currently understand these protocols and pay for these services accordingly. Furthermore, many think that government-financed health care will limit their choice of doctors, but no evidence points to this conclusion. Regardless, individuals will retain the ability to purchase more coverage as they see fit for their needs or peace of mind. Feldstein is merely engaging in fear mongering and cites no references in refutation.

At a time when medical science offers the hope of major improvements in the treatment of a wide range of dread diseases, should Washington be limiting the available care and, in the process, discouraging medical researchers from developing new procedures and products? Although health care is much more expensive than it was 30 years ago, who today would settle for the health care of the 1970s?

And, again, what evidence exists that medical research would diminish due to an expansion of the government financed health care system? Pharmaceutical and device manufacturers now need to show efficacy to government panels to be awarded patents and FDA approval, and without acceptance by Medicare no innovation will be successful in the market. This has not seemed to slow such advances. The remuneration for innovation has always been sacrosanct in our culture, why would that change? The military, NIH and NASA are all government financed entities that have a long history of working with private industry to develop some of the most advanced technologies in the history of humankind. Why would Obama's health care plan change that? In fact, the one thing that is currently limiting more money being put into research here is the runaway costs of health care in the US now. Feldstein is delusional which is clear by the fact that he cites no references to support his argument.

Obama has said that he would favor a British-style "single payer" system in which the government owns the hospitals and the doctors are salaried but that he recognizes that such a shift would be too disruptive to the health-care industry. The Obama plan to have a government insurance provider that can undercut the premiums charged by private insurers would undoubtedly speed the arrival of such a single-payer plan. It is hard to think of any other reason for the administration to want a government insurer when there is already a very competitive private insurance market that could be made more so by removing government restrictions on interstate competition. [bold is mine]

Outright, flagrant Lie. Obama has never said anything close to this. The nearest he has gotten to this topic was his support for Medicare-for-all in 2002 while running for the Illinois Senate. Medicare does not "own hospitals", nor do they "salary" physicians. Either Feldstein is purposely misleading for what ever reason, or he has no understanding of Obama's position, or he has no idea what Medicare is, or he's senile. This is the seminal paragraph because it betrays Feldstein's flaws and bias, and this alone should have alerted the WaPo editor to throw this entire op-ed in the trash.

There is much that can be done to improve our health-care system, but the Obama plan is not the way to do it. One helpful change that could be made right away is fixing the COBRA system so that middle-income households that lose their insurance because of early retirement or a permanent layoff are not deterred by the cost of continuing their previous coverage.

"Much that can be done..." What, pray tell? "Fixing Cobra"? How, by having the government pay the premiums for those in need? For how long..., until the individual gets another job or qualifies for Medicare? This would allow some private insurer to obtain a government-financed premium for probably the most expensive health insurance plan on the planet, while the individual would have no better coverage than the average Medicare recipient. And COBRA participants are only a small fraction of the uninsured and underinsured.

Now that congressional leaders have made it clear that Obama will not see health legislation until at least the end of the year, the president should look beyond health policy and turn his attention to the problems that are impeding our economic recovery.

(Martin Feldstein, a professor of economics at Harvard University and president emeritus of the nonprofit National Bureau of Economic Research, was chairman of the Council of Economic Advisers from 1982 to 1984.)

Conclusion: I may have disagreements with the health care reform plans put forth by Obama and the other Democrats, but Martin Feldstein is completely dishonest in his portrayal of the plans and the problem at hand. When the rhetoric becomes so unreasonable, we can only conclude that these detractors are becoming desperate in their defense of the status quo. Feldstein adds nothing to the debate, he merely lowers himself to distortions and lies. He was given a perfect opportunity to outline his solutions and ideas and he chose to use this valuable newspaper space to engage in shameful untruths not becoming an academic economist.

Universal health care is necessary for no other reason than we are currently providing it anyway. Nobody is allowed to die in this country and when individuals come to the hospital after years of neglecting their health, their patient care is ALWAYS MORE expensive. You are paying for it one way or the other in the form of increased premiums and misallocated resources. As Ben Franklin said, an ounce of prevention is worth a pound of cure. So, why not find the pennies to pay for the prevention?

Europeans spend 7 to 10% of their GDP on health care while we pay upwards of 17%, with no dicernible difference in quality. Just imagine what we could do with another 7% of our massive GDP liberated for other things besides insurance executives' salaries and wastesful health care expenditures.