Strong opinions, weakly held

Tag: health care (page 1 of 4)

It’s good to be rich and well educated

Yesterday Ezra Klein flagged a study that shows that health insurance aside, the rich and better educated tend to live much longer, healthier lives than the poor:

The researchers ran the data two ways: High-income patients vs. low-income patients, and highly educated patients vs. less educated patients. Over the course of the study, the high-income patients were only 35 percent as likely to die as the low-income patients, and the highly educated patients only 26 percent as likely to die as the low-income patients. And the problem wasn’t that the low-income and low-education patients were hanging back from the health-care system. Because they were getting sick while their richer and better educated counterparts weren’t, they actually used considerable more in health-care services.

This study used a sample of 15,000 Canadians, all of whom have government provided health insurance. The short answer is that if you’re already undergoing medical treatment, things probably aren’t looking too great for you in the first place. Being well-educated prepares you to avoid unhealthy oatmeal. Having money and being educated enables you to avoid physically demanding jobs that often expose you to toxins that are likely to kill you.

If nothing else, this is a reminder that health care reform is necessary but not sufficient to make the United States a more egalitarian society, where the benefits of being the richest and most powerful nation in human history accrue to as many people as possible. Failing to provide economic and educational opportunities not only lowers the quality of their lives, but also shortens them substantially as well. It’s something to think about when you see people arguing that keeping taxes low for rich people is more important than preserving programs that offer some benefit to the bottom half of the income spectrum in the United States.

Individual health insurance is not available to many individuals

Donna Dubinsky explains how her family was shut out of the individual health insurance market in the New York Times. Here’s how she starts out:

This isn’t the story of a poor family with a mother who has a dreadful disease that bankrupts them, or with a child who has to go without vital medicines. Unlike many others, my family can afford medical care, with or without insurance.

Instead, this is a story about how broken the market for health insurance is, even for those who are healthy and who are willing and able to pay for it.

I realize many people are against the Affordable Care Act, but I don’t see any of them offering feasible proposals for fixing this problem. On the left, the most reasonable alternative is Medicare for everyone. I’d be in favor of that, but there aren’t anywhere close to 60 votes for it in the Senate just as there weren’t when the Affordable Care Act passed. As activists, we can clamor for legislation that won’t actually make it through the legislative process, but it doesn’t do much good for elected leaders to spend too much energy on those types of proposals.

And from the right, what alternatives are on offer? Or is the argument from the right that this is not a problem worth tackling?

Why’s it taking so long

The big question I’ve had this week with regard to health care reform is, “Why is it taking so long to vote?” The path forward is that the House will pass the Senate bill, and then the House and Senate will pass a small bill that amends the Senate bill by way of reconciliation, so that it can be passed with a simple majority in the Senate. My impression was that the holdup was due to the Democrats having insufficient votes to pass both bills, but that’s actually not the case.

Jonathan Cohn explains:

But, as Lori Montomery explains today in the Washington Post, the devil really is in the details. And the devil, in this case, has a name: the Congressional Budget Office (CBO). In order to satisfy the requirements for the budget reconciliation process, through which Congress will consider the amendments, CBO must certify that the changes will reduce the deficit both in the decade following enactment and the decade following that.

By “reduce the deficit,” I mean reduce the deficit relative to whatever the Senate health care reform bill would do on its own. And that is no small thing. The Senate bill, as written, was projected to save quite a bit of money. As such, the amendments must result in reform, as a whole, saving even more money than the CBO projected originally.

So basically legislators are tinkering with the reconciliation bill and then letting the CBO score it until they get a bill that accomplishes what’s necessary and is eligible for reconciliation. Once we have a bill that’s been scored acceptably by the CBO, we’ll see if the Democrats have enough votes to send it to Obama for his signature.

The two sides of health care reform

James Surowiecki ably describes the gulf between Democrats and Republicans on expanding access to health care. Democrats see the fact that 50 million Americans don’t have health insurance as a problem that the federal government should solve in the near term, and Republicans don’t. Democrats also see the fact that for certain groups of people, it’s impossible to get affordable health insurance at all as an individual as a problem, and the Republicans don’t. Or at least they don’t see either of those problems as being worth doing what it takes to solve them.

But there’s another side of the issue that he completely ignores — the fact that health care costs are rising rapidly and that both Medicare and employer-funded health insurance are headed for disaster. Most retiree health plans are already in deep trouble, and the second order effects are severe. One of the reasons General Motors has been uncompetitive is that a substantial portion of the revenue they earn from each car they make goes to pay for health insurance for retired autoworkers. Republicans do not seem to want to engage on this issue, even if America’s system were perfect today, the rising costs insure that it’s going to have big problems down the road.

And this, to me, is the bigger problem. Republicans and Democrats can debate until the end of the world whether the government should make sure everyone has health insurance. I am strongly in favor of universal health care, personally. But regardless of where people stand on that issue, our government is going to have to engage with the issue of rising health care costs and growing Medicare enrollment sometime soon. The fact that Republicans are unwilling to treat the problem as the impending crisis that it is disqualifies them from being taken seriously as far as I’m concerned.

Atul Gawande on health care

If there’s one person I listen to on health care, it’s Atul Gawande. His piece on the problems with fee for service in health care was probably the most influential piece on health care costs that anybody wrote last year. Salon magazine just ran a new interview with Gawande about his book on checklists and more generally the importance of building effective systems rather than focusing on individual performance. I think there are lessons for everyone in both observations. Gawande was also a guest on the Daily Show this week.

The political version of the bike shed discussion

The metaphor of the bike shed discussion has served me well over the years. Here’s a theory of how it applies to politics:

In the book “Stealth Democracy” (which I previously blogged on here), John Hibbing and Elizabeth Theiss-Morse argue that voters have very weak policy preferences. Indeed, you can get a lot of people to change their mind on policy by asking them whether, thinking through the potential consequences of that policy, they’d like to change their mind. You can get even more of them to change their mind if you pay them a compliment first.

Which makes sense. People don’t know very much about policy. The twist in Hibbing and Theiss-Morse’s argument, however, is that people do know quite a bit about process, or feel they do, and in contrast to their weak policy preferences, they have very strong process preferences. The strongest among them is the belief that the people sent to do the people’s work shouldn’t be working on behalf of special interests, which explains the fury over the Nelson deal. Similarly strong is the aversion to partisan conflict, as most people think that these problems have common-sense solutions, and too much conflict suggests the two parties are deviating from that middle path.

People may not know the details of the health care reform bill, but the know that the legislative process that produced it stinks.

Health care costs and compensation

Bob Herbert talks today about the downsides of the excise tax on expensive health insurance plans, and Ezra Klein does a good job of arguing the other side. There’s one thing Herbert mentions that Klein doesn’t address that betrays a pretty fundamental understanding of economics. Herbert’s argument is that lowering insurance premiums will not result in higher wages, but he’s wrong. Here’s what he says:

The rest of the $150 billion, more than 82 percent of it, will come from the income taxes paid by workers who have been given pay raises by employers who will have voluntarily handed over the money they saved by offering their employees less valuable health insurance plans. … A survey of business executives by Mercer, a human resources consulting firm, found that only 16 percent of respondents said they would convert the savings from a reduction in health benefits into higher wages for employees. Yet proponents of the tax are holding steadfast to the belief that nearly all would do so.

Of course few companies will directly convert savings on insurance costs into wages. But there are two mechanisms by which these savings will end up going to workers.

Let’s say my labor costs for a developer are $75,000. That includes their salary, their health insurance, life insurance, dental insurance, 401k match, my contribution to their FICA bill, and so on. Let’s say that a firm down the street pays $3,000 less than we do in health insurance premiums per employee. If all other labor costs are the same, they can pay the same developer $3,000 more than I can with the same impact on their bottom line. It doesn’t matter whether I pass my savings onto my employees in wages, someone is going to, gradually raising wages across the board.

The second mechanism that comes into play is annual raises. Every year companies sit down to figure out how much more they’re going to pay their employees next year. The cost of covering rising health care premiums come directly out of the same bucket that pay increases come out of. Annual raises are diminished everywhere by higher health insurance costs. Companies that try to keep the savings rather than passing it on in wages will lose employees to firms who do pass on the savings.

Rising health care costs diminish wage growth, and lowering the rate at which health care costs rise will increase wage growth, not because of charity on the part of employers but because of how markets work.

Huge problem, no solutions

As has been mentioned many times, what we’ve learned in the health care debate is that our government is currently hapless to really engage with the huge problems our country faces. First, let’s look at the magnitude of the health care crisis. Andrew Sullivan links to a chart from National Geographic that illustrates the problem in stark terms. Americans spend a whole lot more on health care than any other country, have ultimate outcomes in the mediocre to poor range, and don’t even go to the doctor very much. We’re spending an awful lot of money and not getting a lot for it. And the second order effect is that our future obligations to continue spending ever increasing amounts of money on health care are going to bankrupt the federal government and eat away at wage growth indefinitely, unless things change in a pretty radical fashion.

As has been mentioned any number of times, this is just one of our really big problems. We also have structural deficits in the federal budget that must be addressed at some point, we have climate change to deal with, and we have any number of other smaller, but still important problems that are also going to require attention.

What we have seen this year is a federal government that is unequipped to grapple with any of these problems in a serious way. Republicans refuse to attempt to solve any of these problems at all. Not only have the Republicans declined to work with the Democrats in moving any bills through the Senate or House this year, but in the six years where they were in charge (not counting 2007 and 2008 where Democrats ran Congress), they opted not to address any of these problems at all. They continue to deny that global warming is even an issue, and the only thing they did on the health care front was work with Democrats to pass an unfunded prescription drug benefit for seniors. And the only thing they did while they were running things was expand the budget deficit to a massive degree through tax cuts without offsetting spending cuts, new programs (like the Medicare drug benefit), and of course, multiple wars that they chose not to fund through revenue, either.

When President Bush was in charge, it was pretty obvious that the most acute problem facing the country was his administration. Now that he’s out of office, it’s clear that we can zero in on the de facto supermajority requirement in the Senate as the largest obstacle to progress. Liberals are angry with President Obama (for some good reasons and some bad ones), but it’s clear that the Senate is the biggest problem. President Obama could be twice as committed to the progressive agenda as he is, and Harry Reid would still need every member of his caucus plus both independents to vote for every bill to make progress. Ezra Klein has an op-ed today that explains just what a liability this is for effective government.

So the health care reform bill that the Senate passed will, I think, be good for the country, but it’s almost devoid of ambition. Beyond expanding coverage, it doesn’t take on any of the biggest problems we face going forward. And it seems clear it was the best bill we could possibly get from the Senate given the rules it operates under. Had Al Franken lost the recount battle in Minnesota, we would probably have nothing. It’s hard not to be pessimistic about the future of the country when one political party has as much power as any has had in decades, and it’s still unable to make real progress on its agenda.

Health care reform: the model

One state in America already has a health care system very much like the one that the Senate bill will create — it has an individual mandate, an exchange to buy individual plans through that acts as a prudent purchaser, and no public option. That state is Massachusetts. Ezra Klein asks Jon Kingsdale, the executive director of the Commonwealth Health Insurance Connector Authority how it’s working out, three years into to the project.

Let me just add that not too long ago, most liberals would have regarded the federal government adopting the Massachusetts plan as a very large victory. Odd what expectations do to people.

Head to head on health care

If you’re a liberal or progressive or whatever, chances are you fall into one of two camps today when it comes to health care reform. Either you’re in this camp (with Ezra Klein):

It’s difficult to conclude that these things slip backwards rather than marching forwards. The $900 billion for people who need help, the regulations on insurers and the exchanges that will force them to compete, the structure that will make health care nearly universal and the trends that suggest more people — and more politically powerful people — will be entering the new system as employer-based health care erodes — it all makes this look even more like the sort of program that will take root and be made better, as opposed to the sort of common opportunity people should feel comfortable rejecting. It doesn’t feel like that now. But then, it rarely does.

Or you’re in this camp (with Howard Dean):

If I were a senator, I would not vote for the current health-care bill. Any measure that expands private insurers’ monopoly over health care and transfers millions of taxpayer dollars to private corporations is not real health-care reform. Real reform would insert competition into insurance markets, force insurers to cut unnecessary administrative expenses and spend health-care dollars caring for people. Real reform would significantly lower costs, improve the delivery of health care and give all Americans a meaningful choice of coverage. The current Senate bill accomplishes none of these.

Nate Silver has 20 questions for people in Howard Dean’s camp.

Update: Nate Silver offers his elevator pitch for health care reform.

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