Wednesday, July 15, 2009

Obama's Health Care Mess

Obama has promised to make health care universal, to pay for it with current revenues, to improve or maintain quality and to reduce the cost of health care in the US as a percentage of GDP.

These are quite desirable goals and certainly much more than the GOP had ever approached in their tenure, which was marked by costly warmongering and deregulation. While it is commendable that the loyal opposition voice their opinions, I find it difficult to believe that their goals are to fulfill the priorities of the average Joe and Jane.

The Wall Street Journal uses a similar title for their recent editorial, but the issues thay have with the Democratic health care fix are 180 degrees off. They oppose Obama by comparing the current proposal to the Massachusetts plan and they go out of their way to show the failings. First and foremost, health care insurance is not automatic and many people choose to open policies only when they are sick and then cancel them once their health is restored becauase the penalties for non-coverage are too small. Other problems are outlined as well.

The fact is that Obama's and the Democrats' proposals are terrible and the GOP is correct that none of the initial goals will be met. The failing of Massachusetts do not support eschewing reform, however... rather it underlines this fact: the only solution is a single payer Medicare-for-all option and anything less will not satisfy the goals as verbalized.

To wit, Obama's plan does not require coverage, so the risk pool will be too small. Obama's plan burdens employers, so the incentive would be to refrain from hiring employees. Obama's plan has no provision for cost containment or quality enhancement. The faults outlined by the GOP and the WSJ only show that Obama has not gone far enough in his proposal.

The Democrats are trying too hard to appease the Republicans and their small-government ideology. The fact is that the only way to reduce costs and cover everyone is to meld everyone into the Medicare program, the lowest cost/ highest quality program in the country, whcih is especially impressive considering it manages the highest risk and sickest patients. Quality and costs can be controlled in such an environment, as they are now. By increasing the risk pool, Medicare would become immediately solvent. People would still have the option of purchasing a private policy, as they do now with Medicare, but at least everyone would have basic coverage.

Paying for the system with a value-added or consumption tax seems the most rational approach, thereby releasing employers from the burden. My employer doesn't pay for my auto or homeowners insurance, so why should they pay for my health insurance?

The political realities that the Democrats much face are daunting, but with such massive control of the Congress and the public's overwhelming support for reform, this is the time for single payer to be passed and, as the WSJ has shown, anything less is foolish.

12 comments:

Mike Szymanski said...

You wrote: "...Medicare program, the lowest cost/ highest quality program in the country..."

Not sure what you are smoking but I sure would like some. Obviously, that massive hit of hopium is still coursing through your system. Please take an economics course and another concerning the Constitution. You will learn that the federal government adds no value to our economy and that it obtains its financing by confiscating private property from the productive members of society. It's a zero sum game. Less resources for the productive side of the economy means a lower standard of living for all. FDR's New Deal set in motion a trampling of the 10th Amendment. We are fast heading down the road to serfdom. Half the people in the country pay no income tax and will certainly vote for anyone promising more "free" goodies. If this half becomes a majority how do you propose the large and bloated federal government finance its ever increasing handouts? Economic illiteracy is as dangerous as ignoring history.

"We all declare for liberty; but in using the same word we do not all mean the same thing. With some the word liberty may mean for each man to do as he pleases with himself, and the product of his labor; while with others, the same word many mean for some men to do as they please with other men, and the product of other men's labor. Here are two, not only different, but incompatible things, called by the same name - liberty. And it follows that each of the things is, by the respective parties, called by two different and incompatible names - liberty and tyranny." Abraham Lincoln

Tony said...

Mike, Thank you for the personal insult! My self-esteem has been getting a little ahead of itself lately. As for "what I'm smoking", if you must know, it's currently Santa Damiana #600, a mild Honduran blended cigar, rolled between the thighs of virgins (presumably), and finished with a dark Cameroon wrapper. (JR Cigar, $89 per box of 25). Highly recommended.

As for health care, I'm puzzled at your apparent disgust and at first had you pegged as simply a "no-tax" nutjub, but after closer reading, I'll correct my first impression and give you the benefit of the doubt.

I fully understand your angst over a few people paying the lion's share of the taxes while the free-loaders all benefit. Trust me, I pay ALOT of income tax, so I feel you pain, which is the reason that I included the paragraph about health care being paid with a value-added CONSUMPTION tax. Liberal do-gooders typically hate consumption taxes because they are regressive (ie, everyone pays them), so this is the seminal issue of the post.

As for debating whether we should have Medicare-for-all or some conglomeration of private plans, that is really of minimal consequence. The fact is that Medicare is very efficient, as health insurance goes, and comparing private plans versus Medicare is impossible since the demographics, the economies of scale and collection systems are all vastly different.

A large plan like Medicare has inherent benefits such as the huge risk pool, the huge data base that can be studied and, as mentioned above, the economies of scale for cost-cutting. Likewise, Medicare has inherent liabilities, but I would argue that they are fewer. I realize that some folks such as yourself will eschew anything "gov't run", but I would add that Medicare is not "gov't run", only gov't financed. As a physician, I can tell you that private payers, for the most part, are at least as intrusive as Medicare in the medical decision- making process.

One other thing about Constitutional rights and your comment about serfdom: health care is a de facto right in this nation whether you like it or not, so we should find a way for everyone to have the means to pay for it. Currently, physicians and hospitals are required to accept all emergency patients without regard for their ability to pay, and emergency patients always could have been managed much more cost-effectively if they had been seen earlier... and the number one reason the uninsured go to the emergency room? Lack of insurance.

Mike Szymanski said...

One of the cost "efficiencies" of Medicare is that it underpays for services. Patients with non-public insurance subsidize much of the difference (Medicaid reimbursement rates drive up premiums for non-public insurance). How will services under a single public payer plan be subsidized? Again, zero sum.

Does the next steaming pile of legislation no one reads address higher costs resulting from defensive medical testing and treatments? Tort reform not likely part of health care reform; too many Dems in the legal lobbies making mucho moola on bogus lawsuits.

Ask Cuba migrants about single payer solutions. They happily traded a higher standard of living for Castro's "free" health care and "free" education. Sorry, no lunch is free.

I worked in a very large federal bureaucracy for several years. Central planning versus local decision making: No contest. One size will not fit all.

De facto rights versus the rule of law: Yes, there is no basis in law for a right to health care. This may be interesting:

"No mention of health care can be found in either the Declaration of Independence or the
Constitution..."

Full paper at: http://bioethics.georgetown.edu/publications/scopenotes/sn20.pdf

Rights, de facto or otherwise, are not the issue. You wrote, "we should find a way for everyone to have the means to pay for it." Who is "we"?

Cost, not paying, is the issue. CBO estimates "we" need to pony up at least another $1,100,000,000,000 on top of current costs in order to (grab hold of your willingness to suspend disbelief) lower health care costs. A tip of the hat to George Orwell. Economics matter.

We have a bunch of pro-large government, market disrupting eggheads that have never been responsible for P&L. They didn't misread the economy or have incomplete information. They simply do not understand the basic workings of capitalism.

Show trials aside, government intervention had more to do with the recession than misbehavior by bankers. The bankers were responding to the Community Reinvestment Act, also something Obama inherited - appears to have slipped his mind and indicates long term memory impairment since he was busy community activating with ACORN at the time (http://www.mediacircus.com/tag/madeline-talbott/ or http://www.allbusiness.com/banking-finance/banking-lending-credit-services-mortgage/5556516-1.html).

"50 million" uninsured is no basis for the massive grab by the government to take over 17% of the economy. Half those people are uninsured by choice (they could afford a policy but there priorities are elsewhere - why should should someone else pay for their insurance?). Another 10 to 12 million are non-US citizens (sorry, but we are not the world's HMO). That leaves the real problem at a more manageable 13 to 15 million unable to afford insurance (qualified for Medicaid?). Guess these numbers don't support a universal single payer solution.

My own plan for reducing health costs? A federal law mandating maximum body fat as a prerequisite for handouts. How much does obesity add to health costs? Eat right (count fat and fiber grams and watch sodium) and exercise regularly. We ban smoking in public places on the basis of non-science (second hand smoke causes cancer...not quite: see http://www.data-yard.net/39/cabin.pdf, http://www.bmj.com/cgi/content/full/326/7398/1057, http://www.cato.org/pub_display.php?pub_id=5811, or http://knol.google.com/k/dave-hitt/second-hand-smoke/3e57mbkdb8gxm/2#) so why not a body-fat law based on real science?

Sorry about your bruised ego. Self esteem is soooo important in the drive toward mediocrity. Without the nirvana of equal outcomes (versus equal opportunity) to right so much social injustice, the case for victimization and large government solutions would lose its legs. We've all been so wronged by fat cat bankers, oil companies, insurance companies, etc. Wahhhh! Someone give me something for free to make it all better.

Mike Szymanski said...

Since you cited an earlier WSJ article, these may also be of interest:

Model for a private non-single payer alternative:
http://online.wsj.com/article/SB124536722522229323.html

Privacy issues:
http://online.wsj.com/article/SB124562948992235831.html

Tony said...

Mike, you have now wandered into the territory known as "GYOFB".

BTW, when you confused Medicaid and Medicare in the first paragraph, that set the tone for the rest of your comment.

1. Comparing a third world country like Cuba to the US is a stretch.

2. I never said that I agreed that health "should" necessarily be a de facto right, only noting the reality. Why don't you channel some of your energy towards the rights of indentured physicians?

3. Likewise, Blackwater, the FAA and the Interstate Highway System weren't mentioned in the Constitution either.

4. I tend to agree with your comments about second hand smoke, but why do you think obesity is any different?

5. Remember to be just as skeptical of the intentions of the anti-Medicare propaganda put out by the private insurance lobbyists.

6. George Orwell fought on the side of the Communists in the Spanish Civil War.

7. "Half these people were uninsured by choice..." Please explain to these people that they will not be seen in the Emergency Dep't without paying up front, because they don't seem to understand that one basic tenet of the free market.

Good luck, my friend... methinks you're gonna need it.

nonlemming said...

GYOFB: Don't write publicly if you can't defend your thoughts. If that's the case, learn. Too busy for my own blog. Slow day. Googled Obama and hostels and landed here.

Medicaid was a typo (you could grammar check, but it's not pertinent to the discussion, nor the fact that you say you're a smoking physician - kind of like an AA buddy that drinks).

Not comparing US to Cuba; a warning of total Cuban-style health care costs (including a lower standard of living); someone will bear those costs. Could also compare national economy to California but the nation isn't there...yet...just a glimpse of what a big government future means.

Blackwater has a basis in national security and foreign policy (State Dept didn't have in-house capability for its security in Iraq). FAA is covered under interstate safety (can't have 50 non-integrated flight control systems). The highway system it tied to interstate commerce and security. Health care only crosses state lines because of federal mismanagement - a self-inflicted & flawed entitlement).

"...why do you think obesity is any different?" Better studies & much stronger statistical results.

"Remember to be just as skeptical of the intentions of anti-Medicare propaganda put out by private insurance lobbyists." Skepticism is good. Same holds for man-caused catastrophic global warming (google "Aliens Caused Global Warming", a non-partisan discussion of bad outcomes when politics hijacks science; also consider Bio fuels - turns out ethanol exacerbates the problem: google "Biofools Economist"). Another alleged fat cat: Large numbers believe the oil industry doesn't deserve the profits it earns. From 1997 to 2004, US oil companies earned about $640 billion after taxes. They paid about $530 billion in federal and state taxes. Individuals paid another $1.3 trillion in gasoline excise taxes (The Tax Foundation). Oil company earnings of $640 billion vs. government "earnings" of $1.83 trillion. Makes the fat cat label less sticky. How will Dems replace those "earnings" as gasoline demand plummets when we're all toodling around in little clown cars?

"George Orwell fought on the side of Communists in the Spanish Civil War." Ernesto Guevara was a mass murderer who has become a style icon for youngsters too lazy to read; he didn't start out that way. People change. I never voted Republican until last year.

"Good luck, my friend... methinks you're gonna need it." Double back to anyone who thinks single payer solves the "problem". The problem is massive government intervention without a starting definition of the actual problem. The system is too complex to be centrally administered. At the least, regularly browse the Economist, Financial Times or any other non-partisan online business news source. We get the governance we vote for. Poorly informed voters yield poor governance.

The government has become a blob (think Steve McQueen and an old sci-fi movie). It competes for resources and consumes them without a revenue stream to cover its costs. It was never intended to consume so much. Its growth is much accelerated, more focused on how we serve it than vice versa. The Greek and Roman democracies were obligated to give things away to retain power. It did not end well. Surprisingly, BO has acknowledged this is an unsustainable model. Yet he presses on, cycling the negative feedback loop ever faster, lest he waste a good crisis.

Poor BO! The thing he inherited. What is he bequeathing our children and grandchildren?

Power to the sheeple!

Tony said...

"GYOFB" refers to commenters who are unable to refrain from personal insults every other paragraph. Trust me, my ego is intact; you are just rude.

You brought up a few valid points (between the bile), and I answered them in a full post.

I'm not sure the relevance of global warming and the oil companies, but whatever.

You can be passionate about your issue without being a dick.

Canada Life Insurance said...

Mike: Thanks for posting those links, the private non-single payer alternative looks pretty good to me. this is an excellent approach and should be supported. Americans must take personal responsibility for their health and the cost of their own care. If not, they'll just continue to sink further into the financial abyss that inevitably follows from a third party payment system (for any goods and/or services, not just health care).

Take care, Lorne

nonlemming said...

Tony: From the get go you took this on a very personal level. Hard to believe your ego is intact when you resort to name calling. Again, if you can't defend your ideas, maybe you should consider new ones. Like skepticism about the Dems version of the health care crisis. Medicare is a Gov program run by the Gov and it is insolvent. It is not the best anything. Expanding the Govs reach and role in this area is more likely to make the problem worse. Ron Wyden from Oregon has a better idea, however, don't expect to see much of it in the final legislation that is so "urgently" need (what is the hurry?).

Health care reform is the next travesty after cap and trade and the stimulus bill. The tangential discussions are linked to the bigger picture of how the tag team of an incompetent congress and a leadership vacuum in the white house are wrecking this country. We (the taxpayers) will be suffering the damage for decades. No one is saying do nothing, but it would be nice to see these loons slow down and at least consider doing no harm in addressing whatever they think is so damn urgent, and stop forcing major and ill conceived policy change under the guise of fixing the economy.

An investment recommendation from another site: Go long on gold, canned food, bullets, guns, bottled water. My personal list adds a healthy stash of Montecristo Laguito No.2s and a case of Talisker 10 year.

Cheers!

Tony said...

I'm sure there a lot of very good ideas form Ron Wyden and others... the problem is none of it was instituted when they had the chance. As for the urgency that you eschew, this problem has been ongoing for at least 20 years and has only worsened every year. And the ironic thing is that YOU are paying for it. When an uninsured someone get diagnosed with Stage IV breast cancer and requires oodles of "free" care when that same tumor could have been diagnosed with a timely mammogram and a lumpectomy paid for with a consumption tax on their boat and camper, it hurts YOU in the pocketbook because instead of her paying for it with a tax on her boat and camper, you are paying for her care with income tax money.

The GOP and insurance and pharma lobbyists took reform off the table in 1992 and then when they had control of both Houses of Congress and the Presidency, health care was not a priority at all and costs have only continued to rise.

The ideas put forth now are not new, they have been hashed out for a long time: mandates, health savings accts, single-payer, various combinations...-- nothing is really new here.

I fully understand that you do not feel change is in order. I do. I see that health care will continue to take more and more of our GDP and it is now limiting our economic diversity and growth. Workers are tied to jobs only because of health care. People eschew school and training for health care concerns. More of OUR paychecks go to pay for those who choose to go without health care.

Something should be done now, and the window is closing. I have real concerns for the current Dem program backed by Obama as I have outlined in this post. (BTW, I cross posted at Dailykos and got deluged with liberals who think consumption taxes are evil.) Obama's plan does not address the key issues that concern me. If I could wade thru your angst, I would surmise that you and I have very similar concerns and a fruitful discussion might even ensue.

As for taking things personally, you'll be reassured that my fragile ego is hanging in there... but re-read your comments: in the first 50 words, you come to my blog and imply I'm using drugs and that I'm stupid... hard not to view that as a personal insult. Maybe that's how you win friends and influence people, but it seems odd. The anonymity of the internet has a weird effect on people. Here at my blog, I ask that you address people with respect as you would in their own home. And if you don't like it, then GYOFB.

Tony said...

I've just read Ron Wyden's proposal and I'm surprised you like it, Mike. I'll perhaps put up a full post on it. There are many things that are consistent with single-payer and I don't really have a problem with Wyden's premise... it's certainly better than the House Dems' proposal winding its way thru the system.

But I would think you would find fault with the large new bureaucracies involved with instituting the Wyden plan. Govt would dictate what is covered, what is paid out and would need to enforce that everyone has proof of insurance. Govt would cut costs by limiting coverage and would dictate what is deemed "necessary." Sounds like Medicare to me. The only things that private insurance companies seem to be doing are collecting premiums and paying for pre-determined services... and of course taking a percentage off the top.

How is this different than Medicare, except for the CEO making $5 Million per year for acting as the middle man in running a utility?

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