Universal Health Care Messaging
Bob Jensen at
Trinity University
Great 2011 Health Statistics --- http://www.census.gov/prod/2011pubs/11statab/health.pdf
Let me state at the very beginning that I'm in favor of nationalized health care. Between 2008 and 2010 the Democrats had substantial majorities in the House and Senate and an enormously popular President Obama could've legislated nationalized health care without any help from a single Republican. Instead the Democrats blew it and gave birth to an abomination that is yet another unfunded entitlement nail in the coffin of the United States.
I also like Germany's combination of public and private health insurance
system for a number of reasons, including the fact that it like the health plans
of most other nations is a pay-as-you go plan.
Health Insurance in Germany ---
http://www.toytowngermany.com/wiki/Health_insurance
The worst of all plans is the U.S. plan that, in large measure, will be charged to a Chinese credit card. What bothers me the most are the blatant lies our leaders broadcast to voters just to get a health care bill passed. I would be much less critical if they had flat out been honest about what they really intend for this legislation to cost. One example of a political lie is that Cadillac insurance plans will be taxed. The unions didn't object very loudly because they know full well that by 2018 when the tax is supposed to commence, Congress will have repealed all or most of the Cadillac tax. The same is true with many other provisions of the legislation that can be altered at taxpayer expense. Also our leaders promised that nearly a half trillion dollars will be saved by reducing third party payments to physicians. But those projections are easily altered if physicians truly demand higher reimbursements.
I just wish that Congress had passed a pay-as-you-go tax as part of this legislation, where people at all levels of income and wealth pay their fair share of the health benefits they receive. Middle class America should foot their own bills for health care through substantial tax increases on the middle class.
National Bureau of Economic Research: Bulletin on Aging and Health --- http://www.nber.org/aginghealth/
The Worst Bill Ever:
"Epic new spending and taxes, pricier insurance, rationed care, dishonest
accounting: The Pelosi health bill has it all," The Wall
Street Journal, November 1, 2009 ---
http://www.trinity.edu/rjensen/Health.htm#110709
Jensen Comment
Nancy Pelosi catered to just about every special interest in the United States
and doled out earmark frauds like jelly beans to get
economy/jobs destroying bill through the House. The old folks on
Medicare and the young stuck with unemployment because of the bill came back in
2010 and kicked her ass in the polls. Thanks to the health care abomination that
was passed we now have a swamp filled with tea that paralyzes the government of
the United States.
February 15, 2010 (including Health Insurance in Germany)
November 10, 2009 (The Most Frightening Legislation in the Shrinking History of the United States)
America, what is happening to you?
“One thing seems probable to me,” said Peer Steinbrück,
the German finance minister, in September 2008....“the United States will lose
its status as the superpower of the global financial system.” You don’t have to
strain too hard to see the financial crisis as the death knell for a
debt-ridden, overconsuming, and underproducing American empire.
Richard Florida, "How the Crash Will
Reshape America," The Atlantic, March 2009 ---
http://www.theatlantic.com/doc/200903/meltdown-geography
Medical Malpractice Lottery for Lawyers or Criminals or Both
History Timeline of Health Care Reform in the United States
Something AARP Wants Kept Secret
Introductory Quotations and Links
Full Text of H.R. 3962 ---
http://thomas.loc.gov/cgi-bin/bdquery/z?d111:H.R.3962
A Personal Experience
Why many physicians will turn away their Medicare patients just like my wife was
turned away by her surgeon in the South Texas Spinal Clinic in San Antonio
because she was on Medicare ---
http://www.trinity.edu/rjensen/Health.htm#SpinalClinic
"The Worst Bill Ever: Epic new spending and taxes, pricier insurance, rationed
care, dishonest accounting: The Pelosi health bill has it all," The Wall
Street Journal, November 1, 2009 ---
http://www.trinity.edu/rjensen/Health.htm#110709
Jensen Comment
Nancy Pelosi catered to just about every special interest in the United States
(except Medicare patients) and doled out earmark frauds like jelly beans to get
economy/jobs destroying bill through the House. Please pray for Senate
sensibility.
Frightening Clauses in the Pending House Bill (H.R. 3962) in November 2009
Obamacare Chart --- http://www.trinity.edu/rjensen/ObamaCareChart.pdf
The Top Ten Myths About Medicare
A Brief History of Health Insurance
in the United States ---
http://everylearner.com/bm/knowledgenews/americana/health-insurance-history-1.shtml
A key stimulus was in 1945 when the National War Labor Board made it possible
for unions to negotiate coverage.
More importantly, however, business firms could get tax deductions for health
benefits that were not taxable,
Thereby, workers did not have to pay for health insurance out of after-tax
dollars.
Humor
The Wall Street Journal Guide to
Obamacare, October 14, 2009 ---
Click Here
http://online.wsj.com/article/SB10001424052748704471504574441193211542788.html?mod=djemEditorialPage
"Follow the Money," by Ben Shapiro,
Townhall, October 21, 2009 ---
http://townhall.com/columnists/BenShapiro/2009/10/21/follow_the_money
Fathom the odd hypocrisy that the administration wants
every citizen to prove they are insured, but people don't have to prove they are
citizens.
Ben Stein
October 15, 2010 message from Bob Jensen to the AECM
Hi David,
There are many reasons why people cannot or should not stay in the main careers. Professional athletes are generally over the hill before age 40 in terms of beating out their competitors, but they generally find alternative employment. We can't trust many pilots and bus drivers and combat buddies after age 55. But they too can find alternative employment.
Trinity University has a management professor named Don VanEynde who was a Battalion Commander in Vietnam, earned a PhD from Columbia University after military retirement, and has been one of the most popular, if not the most popular, campus-wide professors for 15 years. He's still going strong even though he's older than me. .
Professors have many advantages in that many physical ailments like Professor Fordham's arthritis do not detract from outstanding performance as long as wisdom, memory, scholarship, and enthusiasm have not yet waned. .
When tragedy does strike at any age that prevents working in virtually any productive capacity, it's possible to start collecting social security and Medicare before the prescribed ages for retirement. Due to being injured on the job as a surgical nurse, my wife commenced collecting SS disability benefits and Medicare when she 54 years old. After her spinal injury (she was ordered by a surgeon to lift a 300 lb instrument table over a power cord and had to be put immediately on traction for 30 days in the hospital) she worked for 10 more painful years before undergoing the first of her eventual 12 spine surgeries. Each surgery led to worse enduring pain --- http://www.trinity.edu/rjensen/Erika2007.htm She most certainly is not a poster child for million-dollar spine surgeries. Worker compensation paid for the early surgeries until she was declared eligible for social security disability and Medicare.
The problem is that Congress provided disability entitlements without nearly enough funding such that these entitlements now are enormous drivers of present and future multi-trillion deficits being passed on to current and future children in the United States. Extending SS retirement ages will most certainly increase the numbers of disability claims, but the majority of older workers are gratefully not eligible for disability status before retirement at higher ages. Disabled people can start collecting Medicare at any age as soon as they are declared eligible for SS disability benefits.
Disabled people should've been funded outside the SS retirement system, but members of Congress were too chicken to establish a separate Disability and Medical Fund. They sneaked the financial entitlements of the disabled onto the SS retirement and Medicare systems and passed the funding deficits on to our present and future children.
Between 1776 and 1950 the care of the elderly and disabled was the responsibility of their own savings, their parents, their children, and in extreme cases the County Homes. After the disabled became the responsibility of the Federal government, heirs confiscated their parents' savings and children were unburdened of parental care responsibilities. Federal and state governments took on the housing, care, and feeding of every disabled person. In theory, savings of the elderly are to be used for nursing home care, but fraud is rampant in terms of passing these costs on to taxpayers.
We can argue endlessly whether disabled people should be the responsibilities of their families or taxpayers or employers. For example, perhaps I should've been more financially responsible for my wife's disability than the social security and Medicare systems. On this subject I can truly be an academic who can take on any side in a debate. Perhaps worker compensation insurance should've covered my injured wife for a longer period of time, but the worker compensation insurance firm worked tooth and nail to pass her on to SS and Medicare.
The point is that government funding for the disabled should be a pay-as-you-go system taxation rather than a Ponzi scheme of deficit financing. The present entitlement system is not only unfair to future generations, it threatens the very survival of the United States --- http://www.trinity.edu/rjensen/Entitlements.htm
Bob Jensen
Deficit tops $1 trillion second year in a row ($1.29 trillion
before November and December) ---
http://money.cnn.com/2010/10/15/news/economy/treasury_fy2010_deficit/index.htm
Long-term problem:
There has been a lot of political hysteria expressed over the annual deficits of the past two years.Fiscal experts note, however, that the abnormally large deficits incurred in the wake of the financial crisis are not the primary source of the country's biggest fiscal problems.
The biggest source of fiscal concern remains the so-called structural deficit, which is made up primarily of spending on the big three entitlement programs. That structural deficit will continue to balloon faster than the economy grows long after the current downturn has ended.
Indeed, the Government Accountability Office projects that by the end of this decade, the vast majority of all federal tax revenue will be swallowed up by just four things: Interest payments on the country's debt, and the payment of Medicare, Medicaid and Social Security benefits.
The president's bipartisan fiscal commission, charged with recommending ways to get U.S. debt under control, will issue a report in December.
I'm in favor of health care reform that completely nationalizes health insurance phased in reasonably with high tax pay-as-you-go restriction and strict cost-saving caps on punitive damage lawsuits. I really favor former Senator Bill Bradley's long-forgotten Canada-like proposal:
The bipartisan trade-off in a viable health care bill is obvious: Combine universal coverage with malpractice tort reform in health care. Universal coverage can be obtained in many ways — including the so-called public option. Malpractice tort reform can be something as commonsensical as the establishment of medical courts — similar to bankruptcy or admiralty courts — with special judges to make determinations in cases brought by parties claiming injury. Such a bipartisan outcome would lower health care costs, reduce errors (doctors and nurses often don’t report errors for fear of being sued) and guarantee all Americans adequate health care. Whenever Congress undertakes large-scale reform, there are times when disaster appears certain — only to be averted at the last minute by the good sense of its sometimes unfairly maligned members. What now appears in Washington as a special-interest scrum could well become a triumph for the general interest. But for that to happen, the two parties must strike a grand bargain on universal coverage and malpractice tort reform. The August recess has given each party and its constituencies a chance to reassess their respective strategies. One result, let us hope, may be that Congress will surprise everyone this fall.
Bill Bradley, "Tax Reform’s Lesson for Health Care Reform," The New York Times, August 30, 2009 ---
http://www.nytimes.com/2009/08/30/opinion/30bradley.html?_r=1
IOUSA (the most frightening movie in American
history) ---
(see a 30-minute version of the documentary at
www.iousathemovie.com )
I have come to the conclusion that the real reason
this gifted communicator (Obama) has become
so bad at communicating is that he doesn't really believe a word that he is
saying. He couldn't convey that health-care reform would be somehow cost-free
because he knows it won't be. And he can't adequately convey either the
imperatives or the military strategy of the war in Afghanistan because he
doesn't really believe in it either. He feels colonized by mistakes of the past.
He feels trapped by the hand that has been dealt him.
Leftist Leaning Tina Brown, "Obama's Fog War," The
Daily Beast ---
http://www.thedailybeast.com/blogs-and-stories/2009-12-03/what-is-obama-talking-about/
Jensen Comment
And President Obama was the dealer.
Voters are increasingly worried about unemployment,
but Democratic leaders in Congress remain obsessed with passing health- care
reform. Senate Majority Whip Richard Durbin was asked recently if a health-care
bill would pass the Senate by the end of this month. "It must," he said. "We
have to finish it." Still, many in the trenches are uneasy about the sprawling,
complex bill they privately acknowledge has no bipartisan support, doesn't
seriously tackle soaring costs and will increase insurance premiums. That may
explain Majority Leader Harry Reid's haste—he has ordered a rare Sunday session
this weekend to hurry up the debate. Public support for the bill averages only
39.2% backing in all polls compiled by Pollster.com.
John Fund, "Why Dems Are Obsessed by
Health Reform: They believe the liberal base expects them to deliver and
will punish them if they don't," The Wall Street Journal, December 4,
2009 ---
http://online.wsj.com/article/SB10001424052748704007804574575584229775884.html#mod=djemEditorialPage
America spends far more on health care per capita than any other nation in
the world.
One reason is that America spends trillions each year on people that other
nations let go of for cost reasons:
(1) Extremely premature and lightweight newborns that other nations cannot or do not afford to save;
(2) Dying people prolonged by machines in intensive care units that have no hope of leaving ICU alive.
Born at 9.1 Ounces She Would've been
thrown away in most other nations
Cozy in her incubator, set to 81.5 degrees, heart going
at 174 beats a minute as she snoozed in her red, footy pajamas, Oliviyanna
Harbin-Page may be a global record-holder. Born Aug. 5 to 16-year-old Jamesha
Harbin of Eight Mile after 21 to 24 weeks of gestation, Oliviyanna weighed only
259 grams, or 9.1 ounces -- possibly making her, according to the University of
South Alabama Children's & Women's Hospital, the world's smallest surviving
baby. She now weighs 3 pounds 2 ounces. One of three girl triplets -- the other
two are identical, she is fraternal
"Baby who may be world's smallest surviving newborn could go home soon," by Roy
Hoffman, al.com, December 18, 2009 ---
http://blog.al.com/live/2009/12/baby_who_may_be_worlds_smalles.html
What went so wrong in the health care system of the United States?
Mostly what went wrong is our ill-conceived and underfunded attempts to reform
the system!
The New York Times Timeline History of Health Care Reform in the United States ---
http://www.nytimes.com/interactive/2009/07/19/us/politics/20090717_HEALTH_TIMELINE.html
Click the arrow button on the right side of the page.
The $61 Trillion Margin of Error, and What "Empire Decline" Means in
Layman's Terms
This is a bipartisan disaster from the beginning and will be until the end
David Walker --- http://en.wikipedia.org/wiki/David_M._Walker_(U.S._Comptroller_General)
Niall Ferguson --- http://en.wikipedia.org/wiki/Niall_Ferguson
Call it the fatal arithmetic of imperial decline.
Without radical fiscal reform, it could apply to America next.
Niall Ferguson, "An Empire at
Risk: How Great Powers Fail," Newsweek Magazine
Cover Story, November 26, 2009 ---
http://www.newsweek.com/id/224694/page/1
Please note that this is NBC’s liberal Newsweek Magazine and not Fox News
or The Wall Street Journal.
. . .
In other words, there is no end in sight to the borrowing binge. Unless entitlements are cut or taxes are raised, there will never be another balanced budget. Let's assume I live another 30 years and follow my grandfathers to the grave at about 75. By 2039, when I shuffle off this mortal coil, the federal debt held by the public will have reached 91 percent of GDP, according to the CBO's extended baseline projections. Nothing to worry about, retort -deficit-loving economists like Paul Krugman.
. . .
Another way of doing this kind of exercise is to calculate the net present value of the unfunded liabilities of the Social Security and Medicare systems. One recent estimate puts them at about $104 trillion, 10 times the stated federal debt.
Continued in article --- http://www.newsweek.com/id/224694/page/1
Niall Ferguson is the Laurence A. Tisch professor of history at Harvard University and the author of The Ascent of Money. In late 2009 he puts forth an unbooked discounted present value liability of $104 trillion for Social Security plus Medicare. In late 2008, the former Chief Accountant of the United States Government, placed this estimate at$43 trillion. We can hardly attribute the $104-$43=$61 trillion difference to President Obama's first year in office. We must accordingly attribute the $61 trillion to margin of error and most economists would probably put a present value of unbooked (off-balance-sheet) present value of Social Security and Medicare debt to be somewhere between $43 trillion and $107 trillion To this we must add other unbooked present value of entitlement debt estimates which range from $13 trillion to $40 trillion. If Obamacare passes it will add untold trillions to trillions more because our legislators are not looking at entitlements beyond 2019.
The Meaning of "Unbooked" versus "Booked" National Debt
By "unbooked" we mean that the debt is not included in the current "booked"
National Debt of $12 trillion. The booked debt is debt of the United States for
which interest is now being paid daily at slightly under a million
dollars a minute. Cash must be raised daily for interest payments. Cash is
raised from taxes, borrowing, and/or (shudder) the current Fed approach to
simply printing money. Interest is not yet being paid on the unbooked debt for
which retirement and medical bills have not yet arrived in Washington DC for
payment. The unbooked debt is by far the most frightening because our leaders
keep adding to this debt without realizing how it may bring down the entire
American Dream to say nothing of reducing the U.S. Military to almost nothing.
Niall Ferguson, "An Empire at Risk: How Great Powers Fail," Newsweek Magazine Cover Story, November 26, 2009 --- http://www.newsweek.com/id/224694/page/1
This matters more for a superpower than for a small Atlantic island for one very simple reason. As interest payments eat into the budget, something has to give—and that something is nearly always defense expenditure. According to the CBO, a significant decline in the relative share of national security in the federal budget is already baked into the cake. On the Pentagon's present plan, defense spending is set to fall from above 4 percent now to 3.2 percent of GDP in 2015 and to 2.6 percent of GDP by 2028.
Over the longer run, to my own estimated departure date of 2039, spending on health care rises from 16 percent to 33 percent of GDP (some of the money presumably is going to keep me from expiring even sooner). But spending on everything other than health, Social Security, and interest payments drops from 12 percent to 8.4 percent.
This is how empires decline. It begins with a debt explosion. It ends with an inexorable reduction in the resources available for the Army, Navy, and Air Force. Which is why voters are right to worry about America's debt crisis. According to a recent Rasmussen report, 42 percent of Americans now say that cutting the deficit in half by the end of the president's first term should be the administration's most important task—significantly more than the 24 percent who see health-care reform as the No. 1 priority. But cutting the deficit in half is simply not enough. If the United States doesn't come up soon with a credible plan to restore the federal budget to balance over the next five to 10 years, the danger is very real that a debt crisis could lead to a major weakening of American power.
The Meaning of Present Value
Initially it might help to explain what present value means. When I moved from
Florida State University to Trinity University in 1982, current mortgage rates
were about 18%. As part of my compensation package, President Calgaard agreed to
have Trinity University carry my mortgage. I purchased a home at 9010 Village
Drive for $300,000 by paying $100,000 down and signing a 240 month mortgage at
12% APR and a 1982 present value of $200,000. At payments of $2,202 per month my
total cash obligation (had I not refinanced from a bank when mortgage rates went
below 12%) would've been $528,521. However, since money has time value, the
present value of that $528,521 was only $200,000.
In a similar manner, Professor Ferguson's $104 trillion present value translates to over $300 trillion in cash obligations of Social Security and Medicare before being tinkered with changed entitlement obligations.
The "Burning Platform" of the United States Empire
Former Chief Accountant of the United States, David Walker, is spreading the
word as widely as possible in the United States about the looming threat of our
unbooked entitlements. Two videos that feature David Walker's warnings are as
follows:
David Walker claims the U.S. economy is on a "burning platform" but does not go into specifics as to what will be left in the ashes.
The US government is on a “burning platform” of unsustainable policies and practices with fiscal deficits, chronic healthcare underfunding, immigration and overseas military commitments threatening a crisis if action is not taken soon.
David M. Walker, Former Chief Accountant of the United States --- http://www.financialsense.com/editorials/quinn/2009/0218.html
An "Empire at Risk"
Harvard's Professor Niall Ferguson is equally vague about what will happen if
the U.S. Empire collapses from its entitlement burdens.
Niall Ferguson, "An Empire at Risk: How Great Powers Fail," Newsweek
Magazine Cover Story, November 26, 2009 ---
http://www.newsweek.com/id/224694/page/1
This is how empires decline. It begins with a debt explosion. It ends with an inexorable reduction in the resources available for the Army, Navy, and Air Force. Which is why voters are right to worry about America's debt crisis. According to a recent Rasmussen report, 42 percent of Americans now say that cutting the deficit in half by the end of the president's first term should be the administration's most important task—significantly more than the 24 percent who see health-care reform as the No. 1 priority. But cutting the deficit in half is simply not enough. If the United States doesn't come up soon with a credible plan to restore the federal budget to balance over the next five to 10 years, the danger is very real that a debt crisis could lead to a major weakening of American power.
The precedents are certainly there. Habsburg Spain defaulted on all or part of its debt 14 times between 1557 and 1696 and also succumbed to inflation due to a surfeit of New World silver. Prerevolutionary France was spending 62 percent of royal revenue on debt service by 1788. The Ottoman Empire went the same way: interest payments and amortization rose from 15 percent of the budget in 1860 to 50 percent in 1875. And don't forget the last great English-speaking empire. By the interwar years, interest payments were consuming 44 percent of the British budget, making it intensely difficult to rearm in the face of a new German threat.
Call it the fatal arithmetic of imperial decline. Without radical fiscal reform, it could apply to America next.
Empire Collapse in Layman's Terms
In 2010, hundreds upon hundreds of people will daily sneak across the U.S.
border illegally in search of a job, medical care, education, and a better life
under the American Dream. By 2050 Americans will instead be exiting in
attempts to escape the American Nightmare and sneak illegally into BRIC nations
for a job, medical care, education, and a better life under the BRIC Dream.
A BRIC nation at the moment is a nation that has vast resources and virtually no entitlement obligations that drag down economic growth --- http://en.wikipedia.org/wiki/BRIC
In economics, BRIC (typically rendered as "the BRICs" or "the BRIC countries") is an acronym that refers to the fast-growing developing economies of Brazil, Russia, India, and China. The acronym was first coined and prominently used by Goldman Sachs in 2001. According to a paper published in 2005, Mexico and South Korea are the only other countries comparable to the BRICs, but their economies were excluded initially because they were considered already more developed. Goldman Sachs argued that, since they are developing rapidly, by 2050 the combined economies of the BRICs could eclipse the combined economies of the current richest countries of the world. The four countries, combined, currently account for more than a quarter of the world's land area and more than 40% of the world's population.
|
Brazil, Russia, India and China,
(the BRICs) sometimes lumped together as
BRIC to represent fast-growing developing economies, are selling off
their U.S. Treasury Bond holdings. Russia announced earlier this
month it will sell U.S. Treasury Bonds, while China and Brazil have
announced plans to cut the amount of U.S. Treasury Bonds in their
foreign currency reserves and buy bonds issued by the International
Monetary Fund instead. The BRICs are also soliciting public support
for a "super currency" capable of replacing what they see as the
ailing U.S. dollar. The four countries account for 22 percent of the
global economy, and their defection could deal a severe blow to the
greenback. If the BRICs sell their U.S. Treasury Bond holdings, the
price will drop and yields rise, and that could prompt the central
banks of other countries to start selling their holdings to avoid
losses too. A sell-off on a grand scale could trigger a collapse in
the value of the dollar, ending the appeal of both dollars and bonds
as safe-haven assets. The moves are a challenge to the power of the
dollar in international financial markets. Goldman Sachs economist
Alberto Ramos in an interview with Bloomberg News on Thursday said
the decision by the BRICs to buy IMF bonds should not be seen simply
as a desire to diversify their foreign currency portfolios but as a
show of muscle. "BRICs Launch Assault on Dollar's Global Status," The Chosun IIbo, June 14, 2009 --- http://english.chosun.com/site/data/html_dir/2009/06/12/2009061200855.html Their
report, "Dreaming with BRICs: The Path to 2050," predicted that
within 40 years, the economies of Brazil, Russia, India and China -
the BRICs - would be larger than the US, Germany, Japan, Britain,
France and Italy combined. China would overtake the US as the
world's largest economy and India would be third, outpacing all
other industrialised nations. The first economist, an early Nobel Prize Winning economist, to raise the alarm of entitlements in my head was Milton Friedman. He has written extensively about the lurking dangers of entitlements. I highly recommend his fantastic "Free to Choose" series of PBS videos where his "Welfare of Entitlements" warning becomes his principle concern for the future of the Untied States 25 years ago --- http://www.ideachannel.com/FreeToChoose.htm |
"Social Security to See Payout Exceed Pay-In This Year," by Mary
Williams Walsh, The New York Times, March 24, 2010 ---
http://www.nytimes.com/2010/03/25/business/economy/25social.html?hp
The bursting of the real estate bubble and the ensuing recession have hurt jobs, home prices and now Social Security.
This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office.
Stephen C. Goss, chief actuary of the Social Security Administration, said that while the Congressional projection would probably be borne out, the change would have no effect on benefits in 2010 and retirees would keep receiving their checks as usual.
The problem, he said, is that payments have risen more than expected during the downturn, because jobs disappeared and people applied for benefits sooner than they had planned. At the same time, the program’s revenue has fallen sharply, because there are fewer paychecks to tax.
Analysts have long tried to predict the year when Social Security would pay out more than it took in because they view it as a tipping point — the first step of a long, slow march to insolvency, unless Congress strengthens the program’s finances.
“When the level of the trust fund gets to zero, you have to cut benefits,” Alan Greenspan, architect of the plan to rescue the Social Security program the last time it got into trouble, in the early 1980s, said on Wednesday.
That episode was more dire because the fund could have fallen to zero in a matter of months. But partly because of steps taken in those years, and partly because of many years of robust economic growth, the latest projections show the program will not exhaust its funds until about 2037.
Still, Mr. Greenspan, who later became chairman of the Federal Reserve Board, said: “I think very much the same issue exists today. Because of the size of the contraction in economic activity, unless we get an immediate and sharp recovery, the revenues of the trust fund will be tracking lower for a number of years.”
The Social Security Administration is expected to issue in a few weeks its own numbers for the current year within the annual report from its board of trustees. The administration has six board members: three from the president’s cabinet, two representatives of the public and the Social Security commissioner.
Though Social Security uses slightly different methods, the official numbers are expected to roughly track the Congressional projections, which were one page of a voluminous analysis of the federal budget proposed by President Obama in January.
Mr. Goss said Social Security’s annual report last year projected revenue would more than cover payouts until at least 2016 because economists expected a quicker, stronger recovery from the crisis. Officials foresaw an average unemployment rate of 8.2 percent in 2009 and 8.8 percent this year, though unemployment is hovering at nearly 10 percent.
The trustees did foresee, in late 2008, that the recession would be severe enough to deplete Social Security’s funds more quickly than previously projected. They moved the year of reckoning forward, to 2037 from 2041. Mr. Goss declined to reveal the contents of the forthcoming annual report, but said people should not expect the date to lurch forward again.
The long-term costs of Social Security present further problems for politicians, who are already struggling over how to reduce the nation’s debt. The national predicament echoes that of many European governments, which are facing market pressure to re-examine their commitments to generous pensions over extended retirements.
The United States’ soaring debt — propelled by tax cuts, wars and large expenditures to help banks and the housing market — has become a hot issue as Democrats gauge their vulnerability in the coming elections. President Obama has appointed a bipartisan commission to examine the debt problem, including Social Security, and make recommendations on how to trim the nation’s debt by Dec. 1, a few weeks after the midterm Congressional elections.
Although Social Security is often said to have a “trust fund,” the term really serves as an accounting device, to track the pay-as-you-go program’s revenue and outlays over time. Its so-called balance is, in fact, a history of its vast cash flows: the sum of all of its revenue in the past, minus all of its outlays. The balance is currently about $2.5 trillion because after the early 1980s the program had surplus revenue, year after year.
Now that accumulated revenue will slowly start to shrink, as outlays start to exceed revenue. By law, Social Security cannot pay out more than its balance in any given year.
For accounting purposes, the system’s accumulated revenue is placed in Treasury securities.
In a year like this, the paper gains from the interest earned on the securities will more than cover the difference between what it takes in and pays out.
Mr. Goss, the actuary, emphasized that even the $29 billion shortfall projected for this year was small, relative to the roughly $700 billion that would flow in and out of the system. The system, he added, has a balance of about $2.5 trillion that will take decades to deplete. Mr. Goss said that large cushion could start to grow again if the economy recovers briskly.
Indeed, the Congressional Budget Office’s projection shows the ravages of the recession easing in the next few years, with small surpluses reappearing briefly in 2014 and 2015.
After that, demographic forces are expected to overtake the fund, as more and more baby boomers leave the work force, stop paying into the program and start collecting their benefits. At that point, outlays will exceed revenue every year, no matter how well the economy performs.
Mr. Greenspan recalled in an interview that the sour economy of the late 1970s had taken the program close to insolvency when the commission he led set to work in 1982. It had no contingency reserve then, and the group had to work quickly. He said there were only three choices: raise taxes, lower benefits or bail out the program by tapping general revenue.
The easiest choice, politically, would have been “solving the problem with the stroke of a pen, by printing the money,” Mr. Greenspan said. But one member of the commission, Claude Pepper, then a House representative, blocked that approach because he feared it would undermine Social Security, changing it from a respected, self-sustaining old-age program into welfare.
Mr. Greenspan said that the same three choices exist today — though there is more time now for the painful deliberations.
“Even if the trust fund level goes down, there’s no action required, until the level of the trust fund gets to zero,” he said. “At that point, you have to cut benefits, because benefits have to equal receipts.”
Where Did Social Security Go So Wrong?
Social Security in the United States currently refers to the Federal Old-Age,
Survivors, and Disability Insurance (OASDI) program. It commenced only as an old
age ("survivors:") retirement insurance program as a forced way of saving for
retirement by paying worker premiums matched by employer contributions into the
SS Trust Fund. Premiums were relatively low due heavily to the proviso that the
SS Trust Fund got to keep all the premiums paid for each worker and spouse that
did not reach retirement age (generally viewed as 65). Details are
provided at
http://en.wikipedia.org/wiki/Social_Security_(United_States)#Creation:_The_Social_Security_Act
If Congress had not tapped the SS Trust Fund for other (generally unfunded social programs of various types), the SS Trust Fund would not be in any trouble at all if it were managed like a diversified investment fund. But it became too tempting for Congress to tap the SS Trust Fund for a variety of other social programs, the costliest of which was to make monthly living allowance payments to each person of any age who is declared "disabled." In many cases a disabled person collects decades of benefits after having paid less than a single penny into the SS Trust Fund. It's well and good for our great land to provide living allowances to disabled citizens, but without funding from other sources such as a separate Disability Trust Fund fed with some type of other taxes, the disability payments mostly drained the SS Trust Fund to where it is in dire trouble today.
The obligation to pay pensioners as well as disabled persons was passed on to current and future generations to a point where the Social Security and Disability Program is no longer self-sustaining with little hope for meeting entitlement obligations from worker premiums and employer matching funds. The SS Trust Fund will have deficits beginning in 2010 that are expected to explode as baby boomers collect benefits for the first time.
Where Did Medicare Go So Wrong?
Medicare is a much larger and much more complicated entitlement burden relative
to Social Security by a ratio of about six to one or even more. The Medicare
Medical Insurance Fund was established under President Johnson in1965.
Note that Medicare, like Social Security in general, was intended to be insurance funded by workers over their careers. If premiums paid by workers and employers was properly invested and then paid out after workers reached retirement age most of the trillions of unfunded debt would not be precariously threatening the future of the United States. The funds greatly benefit when workers die before retirement because all that was paid in by these workers and their employers are added to the fund benefits paid out to living retirees.
The first huge threat to sustainability arose beginning in 1968 when medical coverage payments payments to surge way above the Medicare premiums collected from workers and employers. Costs of medical care exploded relative to most other living expenses. Worker and employer premiums were not sufficiently increased for rapid growth in health care costs as hospital stays surged from less than $100 per day to over $1,000 per day.
A second threat to the sustainability comes from families no longer concerned about paying up to $25,000 per day to keep dying loved ones hopelessly alive in intensive care units (ICUs) when it is 100% certain that they will not leave those ICUs alive. Families do not make economic choices in such hopeless cases where the government is footing the bill. In other nations these families are not given such choices to hopelessly prolong life at such high costs. I had a close friend in Maine who became a quadriplegic in a high school football game. Four decades later Medicare paid millions of dollars to keep him alive in an ICU unit when there was zero chance he would ever leave that ICU alive.
On November 22, 2009 CBS Sixty Minutes aired a video featuring experts
(including physicians) explaining how the single largest drain on the Medicare
insurance fund is keeping dying people hopelessly alive who could otherwise be
allowed to die quicker and painlessly without artificially prolonging life on
ICU machines.
"The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009
---
http://www.cbsnews.com/stories/2009/11/19/60minutes/main5711689.shtml?tag=mncol;lst;1
What is really sad is the way Republicans are standing in the way of making
rational cost-benefit decisions about dying by exploiting the "Kill Granny"
political strategy aimed at killing a government option in health care reform.
See the "Kill Granny" strategy at ---
www.defendyourhealthcare.us
The third huge threat to the economy commenced in when disabled persons (including newborns) tapped into the Social Security and Medicare insurance funds. Disabled persons should receive monthly benefits and medical coverage in this great land. But Congress should've found a better way to fund disabled persons with something other than the Social Security and Medicare insurance funds. But politics being what it is, Congress slipped this gigantic entitlement through without having to debate and legislate separate funding for disabled persons. And hence we are now at a crossroads where the Social Security and Medicare Insurance Funds are virtually broke for all practical persons.
Most of the problem lies is Congressional failure to sufficiently increase Social Security deductions (for the big hit in monthly payments to disabled persons of all ages) and the accompanying Medicare coverage (to disabled people of all ages). The disability coverage also suffers from widespread fraud.
Other program costs were also added to the Social Security and Medicare insurance funds such as the education costs of children of veterans who are killed in wartime. Once again this is a worthy cause that should be funded. But it should've been separately funded rather than simply added into the Social Security and Medicare insurance funds that had not factored such added costs into premiums collected from workers and employers.
The fourth problem is that most military retirees are afforded full lifetime medical coverage for themselves and their spouses. Although they can use Veterans Administration doctors and hospitals, most of these retirees opted for the underfunded TRICARE plan the pushed most of the hospital and physician costs onto the Medicare Fund. The VA manages to push most of its disabled veterans onto the Medicare Fund without having paid nearly enough into the fund to cover the disability medical costs. Military personnel do have Medicare deductions from their pay while they are on full-time duty, but those deductions fall way short of the cost of disability and retiree medical coverage.
The fifth threat to sustainability came when actuaries failed to factor in the impact of advances in medicine for extending lives. This coupled with the what became the biggest cost of Medicare, the cost of dying, clobbered the insurance funds. Surpluses in premiums paid by workers and employers disappeared much quicker than expected.
A sixth threat to Medicare especially has been widespread and usually undetected fraud such as providing equipment like motorized wheel chairs to people who really don't need them or charging Medicare for equipment not even delivered. There are also widespread charges for unneeded medical tests or for tests that were never really administered. Medicare became a cash cow for crooks. Many doctors and hospitals overbill Medicare and only a small proportion of the theft is detected and punished.
The seventh threat to sustainability commenced in 2007 when the costly Medicare drug benefit entitlement entitlement was added by President George W. Bush. This was a costly addition, because it added enormous drains on the fund by retired people like me and my wife who did not have the cost of the drug benefits factored into our payments into the Medicare Fund while we were still working. It thus became and unfunded benefit that we're now collecting big time.
In any case we are at a crossroads in the history of funding medical care in the United States that now pays a lot more than any other nation per capita and is getting less per dollar spent than many nations with nationalized health care plans. I'm really not against Obamacare legislation. I'm only against the lies and deceits being thrown about by both sides in the abomination of the current proposed legislation.
Democrats are missing the boat here when they truly have the power, for now at least, in the House and Senate to pass a relatively efficient nationalized health plan. But instead they're giving birth to entitlements legislation that threatens the sustainability of the United States as a nation.
In any case, The New York Times presents a nice history of other
events that I left out above ---
http://www.nytimes.com/interactive/2009/07/19/us/politics/20090717_HEALTH_TIMELINE.html
"THE HEALTH CARE DEBATE: What Went Wrong? How the Health Care Campaign
Collapsed --
A special report.; For Health Care, Times Was A Killer," by Adam Clymer, Robert
Pear and Robin Toner, The New York Times, August 29,
1994 ---
Click Here
http://www.nytimes.com/1994/08/29/us/health-care-debate-what-went-wrong-health-care-campaign-collapsed-special-report.html
November 22, 2009 reply from Richard.Sansing [Richard.C.Sansing@TUCK.DARTMOUTH.EDU]
The electorate's inability to debate trade-offs in a sensible manner is the biggest problem, in my view. See
Richard Sansing
The New York Times Timeline History of Health Care Reform in the
United States ---
http://www.nytimes.com/interactive/2009/07/19/us/politics/20090717_HEALTH_TIMELINE.html
Click the arrow button on the right side of the page. The biggest problem with
"reform" is that it added entitlements benefits without current funding such
that with each reform piece of legislation the burdens upon future generations
has hit a point of probably not being sustainable.
Call it the fatal arithmetic of imperial decline.
Without radical fiscal reform, it could apply to America next.
Niall Ferguson, "An Empire at Risk: How Great Powers Fail,"
Newsweek Magazine Cover Story, November 26,
2009 ---
http://www.newsweek.com/id/224694/page/1
. . .
In other words, there is no end in sight to the borrowing binge. Unless entitlements are cut or taxes are raised, there will never be another balanced budget. Let's assume I live another 30 years and follow my grandfathers to the grave at about 75. By 2039, when I shuffle off this mortal coil, the federal debt held by the public will have reached 91 percent of GDP, according to the CBO's extended baseline projections. Nothing to worry about, retort -deficit-loving economists like Paul Krugman.
. . .
Another way of doing this kind of exercise is to calculate the net present value of the unfunded liabilities of the Social Security and Medicare systems. One recent estimate puts them at about $104 trillion, 10 times the stated federal debt.
Continued in article
This is now President Obama's problem with or without new Obamacare entitlements that are a mere drop in the bucket compared to the entitlement obligations that President Obama inherited from every President of the United States since FDR in the 1930s. The problem has been compounded under both Democrat and Republican regimes, both of which have burdened future generations with entitlements not originally of their doing.
Professor Niall Ferguson and David Walker are now warning us that by year 2050 the American Dream will become an American Nightmare in which Americans seek every which way to leave this fallen nation for a BRIC nation offering some hope of a job, health care, education, and the BRIC Dream.
Bob Jensen's threads on health care ---
http://www.trinity.edu/rjensen/Health.htm
Bob Jensen's threads on entitlements ---
http://www.trinity.edu/rjensen/entitlements.htm
Quotations
Let me get this straight.
We're about to get a health care plan shoved down our
throats that is Written by a committee whose head says he doesn't understand it,
Passed by a Congress that hasn't read it but exempts themselves from it, signed
by a president that also hasn't read it, With funding administered by a treasury
chief who was caught not paying his Taxes, overseen by a surgeon general who is
obese, and financed by a Country that's nearly broke.
What could possibly go wrong?
IS THIS A GREAT COUNTRY OR WHAT!
Forwarded by Maureen
Video Shocker
"Health Care Shocker: Special Democratic Voting Counties Would Get Protected
Medicare Benefits," Brietbart ---
http://www.breitbart.tv/healthcare-shocker-special-democratic-voting-counties-would-get-protected-medicare-benefits/
"How can Obama Top a Great Speech," by
Joan Walsh, Salon, September 10, 2010 ---
http://www.salon.com/opinion/walsh/politics/2009/09/10/healthcare_speech/index.html
Jensen Answer
Dear Ms Walsh, President Obama can top his great speech by filling in details of
truthful estimates of Obamacare costs and how he plans to finance these added
costs of wider coverage of health issues and more people covered. Thus far his
sweeping claims of cost savings sound like snake oil.
Video tutorial on the President's strategy and the legislative process for passing health reform legislations --- http://www.kaiseredu.org/tutorials/reformprocess/player.html
H.R. 3200 Summary
http://www.trinity.edu/rjensen/Health.htm#HR3200
Introduced in
the House on July 14, 2009
Also see
http://www.defendyourhealthcare.us/houseandsenatebills.html
H.R. 676 Summary ---
http://www.trinity.edu/rjensen/Health.htm#HR676
Introduced in House on January 26. 2009
U.S. Debt/Deficit Clock --- http://www.usdebtclock.org/
Bob Jensen's threads on pending
economic disaster ---
http://www.trinity.edu/rjensen/Entitlements.htm
Jensen Comment
Because of the present health care
system in the United States is unjust and inefficient, I am in favor of a
National Health Plan modeled after the Canadian National Health Plan where
Canadians are taxed for a huge portion of their health services irrespective of
their levels of income. Any system that does not make users of the system share
heavily in the cost of the services will be unjust, abused, and inefficient ---
http://www.trinity.edu/rjensen/Health.htm#Canada
Having said that I prefer a Canadian-style national health plan for the U.S., I wish democrats in Congress would use their power and vote one in in spite of protests around the country. With a 60-vote surplus in the House and only needing 51 votes in the Senate, the Democrats could vote in National Health Care in an instant. The reason they won't is that most of them would be voted out of office the next time they come up for re-election. They know this!
But Americans at all levels of income would have to
agree to much higher taxes
The average Canadian family
spends more money on taxes than on necessities of life such as food, clothing,
and housing, according to a study from The Fraser Institute, an independent
research organization with offices across Canada. The Canadian Consumer Tax
Index, 2007, shows that even though the income of the average Canadian family
has increased significantly since 1961, their total tax bill has increased at a
much higher rate.
The Fraser Institute,
April 16, 2007 ---
http://www.newswire.ca/en/releases/archive/April2007/16/c5234.html
Jensen Comment
I put the portion of the Canadian tax dollars going into comparable health and
social services contained in Obamacare legislation to be about 40% of each
Canadian's tax dollar where malpractice coverage and government fraud is greatly
controlled relative to the United States ---
http://www.trinity.edu/rjensen/Health.htm#Canada
Canada greatly restricts the number of free riders in the system and negotiates
much lower prescription drug prices relative to insurance companies and Medicare
in the United States. Malpractice awards in Canada are tightly controlled.
So the present (health care) system is an
unsustainable disaster, but you can keep your piece of it if you want. And the
Democrats wonder why selling health care reform to the public has been so hard?
Ramesh Ponuru, "Obamacare's Fatal Flaw:
Democrats claim their plans will save money, but they have too many conflicting
goals," Time Magazine August 17, 2009, Page 35
Jensen Comment
The problem is that they keep adding expensive medical services that sound great
on paper, but few people, companies, and certainly not government can afford
these uncapped benefits.
YouTube - ABC's John Stossel Destroys/Pulverizes/Crushes Obama's anti-American 'Health Care' Plan --- Click Here
Congressman Mike Rogers' opening statement on Health Care reform in Washington
D.C. ---
http://www.youtube.com/watch?v=G44NCvNDLfc
Jacob Hacker: Fixing America's Healthcare System (not humor)
---
http://fora.tv/2008/07/21/Jacob_Hacker_Fixing_America_s_Healthcare_System
Jack Webb on Health Care and America (Humor) ---
http://pubsecrets.wordpress.com/2009/09/05/just-the-facts-barack/
Video: Jon Stewart reveals Glenn Beck speaking about health care from
both ends of his digestive tract ---
http://www.thenation.com/blogs/notion/462437/breaking_rush_newt_and_sarah_supported_death_panels_too
Americans who want to tip the debate in the most
progressive direction should take advantage an opening provided at the last
minute during negotiations to get a bill approved by the House Energy and
Commerce Committee. And they should do so by advocating even more aggressively
for
single-payer health care.
John Nichols, "Why Single Payer
Advocacy Matters Now More Than Ever ," The Nation, August 4, 2009 ---
Click Here
Jensen Comment
Passionate advocates of universal health care are screaming "yes, yes, yes"
without even caring how health care will be funded or whether or not it will
further destruct the U.S. economy. The cannot care because they're so willing to
vote yet before a funding proposal is even put forth. I actually favor
single-payer nationalized health care but I'm unwilling to destroy by beloved
homeland in a passionate rage for the gold plated version that this debt-ridden
nation can ill afford at the present time ---
http://www.trinity.edu/rjensen/Entitlements.htm
"Schumer: Healthcare Changes This Year 'No Matter What'" ---
Click Here
U.S. Debt/Deficit Clock ---
http://www.usdebtclock.org/
Jesus, the Great Healer, wants Obamacare
according to MSNBC (even if top preachers are "dreadfully silent").
Watch the video ---
http://hotair.com/archives/2009/08/13/msnbc-host-hey-wouldnt-jesus-want-us-to-have-universal-health-care/
But what helps many Americans as individuals may
hurt society as a whole. That's the paradox. Unchecked health spending is
depressing take-home pay, squeezing other government programs—state and local
programs as well as federal—and driving up taxes and budget deficits. The
president has said all this; he simply isn't doing much about it. He offers the
illusion of reform while perpetuating the status quo of four decades: expand
benefits, talk about controlling costs. The press should put "reform" in quote
marks, because this is one "reform" that might leave the country worse off.
Robert J. Samuelson, Health Reform
That Isn't: Despite the Rhethoric, Costs (and trillion dollar deficits)
Will Rise, Newsweek Magazine, August 3, 2009, Page 26 ---
http://www.newsweek.com/id/208439/page/2
Samuelson is the author of The Great -Inflation and Its Aftermath.
For starters, $1 trillion of extra debt-financed
spending would cause the government to pay about $300 billion of extra interest
in the next decade. Moreover, the CBO's method of estimating the cost of such a
program doesn't recognize the incentives it creates for households and firms to
change their behavior. The House health-care bill gives a large subsidy to
millions of families with incomes up to three times the poverty level (i.e., up
to $66,000 now for a family of four) if they buy their insurance through one of
the newly created "insurance exchanges," but not if they get their insurance
from their employer. The CBO's cost estimate understates the number who would
receive the subsidy because it ignores the incentive for many firms to drop
employer-provided coverage. It also ignores the strong incentive that
individuals would have to reduce reportable cash incomes to qualify for higher
subsidy rates. The total cost of ObamaCare over the next decade likely would be
closer to $2 trillion than to $1 trillion.
Martin Feldstein, "ObamaCare's
Crippling Deficits The higher taxes, debt payments and interest rates needed to
pay for health reform mean lower living standard," The Wall Street Journal,
September 7, 2009 ---
http://online.wsj.com/article/SB10001424052970203585004574393110640864526.html?mod=djemEditorialPage
In 1935 President Franklin Roosevelt engineered the Social Security Act with honest and well-defined components of benefits and costs. It was intended to only be a supplemental pension program to force people to save something for their retirements. Later on Congress muddled the program up by adding social services (such as lifetime pensions for disabled people of all ages and death benefits for families of soldiers who died in service). Medicare and Medicaid health coverage was later added to massively increase the entitlements obligations of Social Security as pension fund (as originally crafted).
The Wall Street Journal Guide to Obamacare, October 14,
2009 ---
Click Here
http://online.wsj.com/article/SB10001424052748704471504574441193211542788.html?mod=djemEditorialPage
Bumper Stickers --- http://www.upyoursobama.com/
Obamacare: Call us when you're shovel ready
Bankrupt America? Yes we can
America needs a leader, not a (teleprompter) reader
Congressional pirates are the worst kind
Are you better off than $5 trillion before?
Community organize Timbuctoo
The Promise and Peril of Big Data --- http://www.aspeninstitute.org/sites/default/files/content/docs/pubs/InfoTech09.pdf
Frightening Clauses in the Pending House Bill (H.R. 3962) in November 2009
Full Text of H.R. 3962 --- www.defendyourhealthcare.us .
"We Pay Them to Lie to Us," by my hero
John Stossel, Townhall, November 25, 2009 ---
http://townhall.com/columnists/JohnStossel/2009/11/25/we_pay_them_to_lie_to_us
When you knowingly pay someone to lie to you, we call the deceiver an illusionist or a magician. When you unwittingly pay someone to do the same thing, I call him a politician.
President Obama insists that health care "reform" not "add a dime" to the budget deficit, which daily grows to ever more frightening levels. So the House-passed bill and the one the Senate now deliberates both claim to cost less than $900 billion. Somehow "$900 billion over 10 years" has been decreed to be a magical figure that will not increase the deficit.
It's amazing how precise government gets when estimating the cost of 10 years of subsidized medical care. Senate Majority Leader Harry Reid's bill was scored not at $850 billion, but $849 billion. House Speaker Nancy Pelosi said her bill would cost $871 billion.
How do they do that?
The key to magic is misdirection, fooling the audience into looking in the wrong direction.
I happily suspend disbelief when a magician says he'll saw a woman in half. That's entertainment. But when Harry Reid says he'll give 30 million additional people health coverage while cutting the deficit, improving health care and reducing its cost, it's not entertaining. It's incredible.
The politicians have a hat full of tricks to make their schemes look cheaper than they are. The new revenues will pour in during Year One, but health care spending won't begin until Year Three or Four. To this the Cato Institute's Michael Tanner asks, "Wouldn't it be great if you could count a whole month's income, but only two weeks' expenditures in your household budget?"
To be deficit-reducers, the health care bills depend on a $200 billion cut in Medicare. Current law requires cuts in payments to doctors, but let's get real: Those cuts will never happen. The idea that Congress will "save $200 billion" by reducing payments for groups as influential as doctors and retirees is laughable. Since 2003, Congress has suspended those "required" cuts each year
Do you feel the leaked information from a global warming alarmist organization is meaningful? This was an illegal information leak that should be ignored It makes me question my belief in global warming activists It's an example of dangerous scientific politicization I haven't really heard about the controversy
This was an illegal information leak that should be ignored (1 %)
It makes me question my belief in global warming activists (8 %)
It's an example of dangerous scientific politicization (86 %)
I haven't really heard about the controversy (5 %)
Our pandering congressmen rarely cut. They just spend. Even as the deficit grows, they vomit up our money onto new pet "green" projects, bailouts for irresponsible industries, gifts for special interests and guarantees to everyone.
Originally, this year's suspension, "the doc fix," was included in the health care bills, but when it clearly pushed the cost of "reform" over Obama's limit and threatened to hike the deficit, the politicians moved the "doc fix" to a separate bill and pretended it was unrelated to their health care work.
Megan McArdle of The Atlantic reports that Rep. Paul Ryan of Wisconsin asked the Congressional Budget Office what the total price would be if the "doc fix" and House health care overhaul were passed together. "The answer, according to the CBO, is that together they'd increase the deficit by $89 billion over 10 years." McArdle explains why the "doc fix" should be included: "They're passing a bill that increases the deficit by $200 billion in order to pass another bill that hopefully reduces it, but by substantially less than $200 billion. That means that passage of this bill is going to increase the deficit."
From the start, Obama has promised to pay for half the "reform" cost by cutting Medicare by half a trillion over 10 years. But, Tanner asks, "how likely is it that those cuts will take place? After all, this is an administration that will pay seniors $250 to make up for the fact that they didn't get a Social Security cost-of-living increase this year (because the cost of living didn't increase). And Congress is in the process of repealing a scheduled increase in Medicare premiums."
Older people vote in great numbers. AARP is the most powerful lobby on Capitol Hill. Like the cut in doctor's pay, the other cuts will never happen.
I will chew on razor blades when Congress cuts Medicare to keep the deficit from growing.
Medicare is already $37 trillion in the hole. Yet the Democrats proudly cite Medicare when they demand support for the health care overhaul. If a business pulled the accounting tricks the politicians get away with, the owners would be in prison.
Something AARP Wants Kept Secret
"McCain Urges Seniors to Abandon AARP," Fox News,
December 3, 2009 ---
http://www.foxnews.com/politics/2009/12/03/mccain-aarp-betrayed-senior-citizens/
"Medicare Part D 'Reforms' Will Harm Seniors An ObamaCare
change will cost taxpayers a bundle and lead to poorer drug coverage," Tom
Scully, The Wall Street Journal, December 7, 2009 ---
http://online.wsj.com/article/SB10001424052748704107104574569930258127214.html#mod=djemEditorialPage
There is a little-noticed provision buried deep in both the House and Senate health-care reform bills that is intended to save billions of dollars—but instead will hurt millions of seniors, impose new costs on taxpayers, and charge employers millions in new taxes.
As part of the Medicare Modernization Act in 2003, Congress created a new drug benefit—called Medicare Part D—for retirees at a cost of about $1,900 per recipient per year. Many private employers already provided drug coverage for their retirees, and the administration and Congress did not want to tempt employers into dropping their coverage. Actuaries calculated that if the government provided a subsidy of at least $800, employers would not stop covering retirees.
The legislation created a $600 tax-free benefit (the equivalent of $800 cash for employers), and it worked. Employers continued to cover about seven million retirees who might have otherwise been dumped into Medicare Part D.
It was a good arrangement for all involved. An $800 subsidy is cheaper than the $1,900 cost of providing drug coverage. And millions of seniors got to keep a drug benefit they were comfortable with and that in many cases was better than the benefit offered by the government.
But now that subsidy is coming in to be clipped. This fall congressional staff, looking for a new revenue source to pay for health reform, proposed eliminating the tax deductibility of the subsidy to employers. The supposed savings were estimated by congressional staff to be as much as $5 billion over the next decade.
It sounds smart—except that nobody asked how many employers will drop retiree drug coverage. Clearly, many will. The result is that, instead of saving money, the proposed revenue raiser will force Medicare Part D costs to skyrocket as employers drop retirees into the program.
The careful calculation that was made in 2003 to minimize federal spending and maximize private coverage will go out the window if this provision becomes law. Any short-term cost savings that Congress gets by changing the tax provision will be overwhelmed by higher costs in the long run.
Some members in the House want to mitigate the cost of this provision by mandating that employers maintain existing levels of retiree coverage despite the reduced subsidy. But it's not that simple. A mandate would increase costs on businesses, which in turn would make it harder for those businesses to hire new employees. The mandate would effectively be a tax on employers that provide retiree benefits; this in turn will simply induce some unknown number of employers to terminate their retiree drug programs before the mandate kicks in.
In short, if the changes that are proposed for employer subsidies in the current Medicare Part D program are enacted, everyone will lose. Unions will lose as employers seek ways to drop retiree drug coverage. Seniors will lose as employers drop them into Medicare Part D. Medicare and taxpayers will lose as they face higher costs. And employers will lose as they find it harder to provide benefits.
To make matters worse, accounting rules for post-retirement benefits will require companies that keep their retiree benefits to record the entire accrued present value of the new tax the day the provision is signed into law. This would cause many employers to immediately post billions in losses, which could significantly impact our financial markets.
There are many reasons to pass health-care reform. There is no reason to hurt seniors, employers and taxpayers in the process. Businesses are struggling, and the Medicare trust funds have plenty of problems as it is. It makes no sense to make these problems worse.
Mr. Scully was the administrator of the Centers for Medicare and Medicaid Services from 2001-04 and was one of the designers of the Medicare Part D benefit.
"What the Pelosi Health-Care Bill Really Says: Here are some important passages in the 2,000 page legislation," by Betsy McCaughey, The Wall Street Journal, November 7, 2009 --- Click Here
The health bill that House Speaker Nancy Pelosi is bringing to a vote (H.R. 3962) is 1,990 pages. Here are some of the details you need to know.
What the government will require you to do:
• Sec. 202 (p. 91-92) of the bill requires you to enroll in a "qualified plan." If you get your insurance at work, your employer will have a "grace period" to switch you to a "qualified plan," meaning a plan designed by the Secretary of Health and Human Services. If you buy your own insurance, there's no grace period. You'll have to enroll in a qualified plan as soon as any term in your contract changes, such as the co-pay, deductible or benefit.
• Sec. 224 (p. 118) provides that 18 months after the bill becomes law, the Secretary of Health and Human Services will decide what a "qualified plan" covers and how much you'll be legally required to pay for it. That's like a banker telling you to sign the loan agreement now, then filling in the interest rate and repayment terms 18 months later.
On Nov. 2, the Congressional Budget Office estimated what the plans will likely cost. An individual earning $44,000 before taxes who purchases his own insurance will have to pay a $5,300 premium and an estimated $2,000 in out-of-pocket expenses, for a total of $7,300 a year, which is 17% of his pre-tax income. A family earning $102,100 a year before taxes will have to pay a $15,000 premium plus an estimated $5,300 out-of-pocket, for a $20,300 total, or 20% of its pre-tax income. Individuals and families earning less than these amounts will be eligible for subsidies paid directly to their insurer.
• Sec. 303 (pp. 167-168) makes it clear that, although the "qualified plan" is not yet designed, it will be of the "one size fits all" variety. The bill claims to offer choice—basic, enhanced and premium levels—but the benefits are the same. Only the co-pays and deductibles differ. You will have to enroll in the same plan, whether the government is paying for it or you and your employer are footing the bill.
• Sec. 59b (pp. 297-299) says that when you file your taxes, you must include proof that you are in a qualified plan. If not, you will be fined thousands of dollars. Illegal immigrants are exempt from this requirement.
• Sec. 412 (p. 272) says that employers must provide a "qualified plan" for their employees and pay 72.5% of the cost, and a smaller share of family coverage, or incur an 8% payroll tax. Small businesses, with payrolls from $500,000 to $750,000, are fined less.
Eviscerating Medicare:
In addition to reducing future Medicare funding by an estimated $500 billion, the bill fundamentally changes how Medicare pays doctors and hospitals, permitting the government to dictate treatment decisions.
• Sec. 1302 (pp. 672-692) moves Medicare from a fee-for-service payment system, in which patients choose which doctors to see and doctors are paid for each service they provide, toward what's called a "medical home."
The medical home is this decade's version of HMO-restrictions on care. A primary-care provider manages access to costly specialists and diagnostic tests for a flat monthly fee. The bill specifies that patients may have to settle for a nurse practitioner rather than a physician as the primary-care provider. Medical homes begin with demonstration projects, but the HHS secretary is authorized to "disseminate this approach rapidly on a national basis."
A December 2008 Congressional Budget Office report noted that "medical homes" were likely to resemble the unpopular gatekeepers of 20 years ago if cost control was a priority.
• Sec. 1114 (pp. 391-393) replaces physicians with physician assistants in overseeing care for hospice patients.
• Secs. 1158-1160 (pp. 499-520) initiates programs to reduce payments for patient care to what it costs in the lowest cost regions of the country. This will reduce payments for care (and by implication the standard of care) for hospital patients in higher cost areas such as New York and Florida.
• Sec. 1161 (pp. 520-545) cuts payments to Medicare Advantage plans (used by 20% of seniors). Advantage plans have warned this will result in reductions in optional benefits such as vision and dental care.
Video Shocker
"Health Care Shocker: Special Democratic Voting Counties Would Get Protected Medicare Benefits," Brietbart ---
http://www.breitbart.tv/healthcare-shocker-special-democratic-voting-counties-would-get-protected-medicare-benefits/• Sec. 1402 (p. 756) says that the results of comparative effectiveness research conducted by the government will be delivered to doctors electronically to guide their use of "medical items and services."
Questionable Priorities:
While the bill will slash Medicare funding, it will also direct billions of dollars to numerous inner-city social work and diversity programs with vague standards of accountability.
• Sec. 399V (p. 1422) provides for grants to community "entities" with no required qualifications except having "documented community activity and experience with community healthcare workers" to "educate, guide, and provide experiential learning opportunities" aimed at drug abuse, poor nutrition, smoking and obesity. "Each community health worker program receiving funds under the grant will provide services in the cultural context most appropriate for the individual served by the program."
These programs will "enhance the capacity of individuals to utilize health services and health related social services under Federal, State and local programs by assisting individuals in establishing eligibility . . . and in receiving services and other benefits" including transportation and translation services.
• Sec. 222 (p. 617) provides reimbursement for culturally and linguistically appropriate services. This program will train health-care workers to inform Medicare beneficiaries of their "right" to have an interpreter at all times and with no co-pays for language services.
• Secs. 2521 and 2533 (pp. 1379 and 1437) establishes racial and ethnic preferences in awarding grants for training nurses and creating secondary-school health science programs. For example, grants for nursing schools should "give preference to programs that provide for improving the diversity of new nurse graduates to reflect changes in the demographics of the patient population." And secondary-school grants should go to schools "graduating students from disadvantaged backgrounds including racial and ethnic minorities."
• Sec. 305 (p. 189) Provides for automatic Medicaid enrollment of newborns who do not otherwise have insurance.
For the text of the bill with page numbers, see www.defendyourhealthcare.us .
Ms. McCaughey is chairman of the Committee to Reduce Infection Deaths and a former Lt. Governor of New York state.
Making Sense of Health Care Reform (from the AccountingWeb on September 1,
2009) ---
http://www.accountingweb.com/topic/tax/making-sense-health-care-reform
President Obama's Budget for 2010 --- http://www.whitehouse.gov/omb/
The Lies and Deceptions
Americans stubbornly resist this landmark
legislation in part because virtually every major claim about its benefits is
turning out to be false—and people recoil when misled.
Karl Rove, The Wall Street Journal, September 30, 2010 ---
http://online.wsj.com/article/SB10001424052748704116004575522073624475054.html?mod=djemEditorialPage_t
It is exceptionally difficult -- for all practical
purposes, impossible," writes Eberstadt, "for a medical professional to disprove
a patient's claim that he or she is suffering from sad feelings or back pain. In
other words, many people are gaming or defrauding the system. This includes not
only disability recipients but health care professionals, lawyers and others who
run ads promising to get you disability benefits. Between 1996 and 2011, the
private sector generated 8.8 million new jobs, and 4.1 million people entered
the disability rolls.
Michael Barone, "Men Find
Careers in Collecting Disability," ---
Click Here
http://townhall.com/columnists/michaelbarone/2012/12/03/men_find_careers_in_collecting_disability?utm_source=thdaily&utm_medium=email&utm_campaign=nl
Jensen Comment
Even after one or more spine surgeries it is virtually impossible to determine
whether remaining pain is real or faked. I can claim first hand that after 15
spine surgeries and metal rods from neck to hip that my wife's suffering is
real. However, I know of at least two instances where the disability careers are
faked in order to get monthly lifetime disability payments and access to
Medicare long prior to age 65. This seems to be one of the unsolvable problems
in society that becomes even more problematic when a disability career is easier
to enter than a job-like career.
Two Ivy League Professors Slugging It Out in a Political Arena
Harvard History Professor Niall Ferguson ---
http://en.wikipedia.org/wiki/Niall_Ferguson
Princeton Economics Professor Paul Krugman ---
http://en.wikipedia.org/wiki/Paul_Krugman
"Kinds Of Wrong," by Paul Krugman, The New York Times, August
21, 2012 ---
http://krugman.blogs.nytimes.com/2012/08/21/kinds-of-wrong/
Looking at the comments on my Niall Ferguson takedown (see Ezra Klein, Matthew O’Brien, James Fallows, and Noah Smith for more), I found my memory jogged about a point I’ve been meaning to make about the nature of error in economics.
It seems to me that when readers declare that some piece of economics commentary is “wrong”, they often confuse three different notions of wrongness, which are neither intellectually nor morally equivalent.
First, there’s the ordinary business of expressing a view about the economy that the reader disagrees with – e.g., “Krugman is wrong, because the government can’t create jobs”; or, if you prefer, “Casey Mulligan is wrong, because we’re suffering from demand problems, not supply problems.” Obviously it’s OK to say things like this, and sometimes the criticism is correct. (I’m not wrong, but Mulligan is!) But equally obviously, there’s nothing, er, wrong about being wrong in this sense: people will disagree, and that’s legitimate.
Second, and much less legitimate, is the kind of wrongness that involves making assertions that are logically or empirically indefensible. I’d put the Cochrane/Fama claims that government spending can’t increase demand as a matter of accounting in this category; this is a basic conceptual error, which goes beyond mere difference of opinion. And economists who are wrong in this sense should pay a professional price.
That said, I don’t think it’s realistic to expect the news media to be very effective at policing this kind of wrongness. If professors with impressive-sounding credentials spout nonsense, it’s asking too much of a newspaper or magazine serving the broader public to make the judgment that they actually have no idea what they’re talking about.
Matters are quite different when it comes to the third kind of wrongness: making or insinuating false claims about readily checkable facts. The case in point, of course, is Ferguson’s attempt to mislead readers into believing that the CBO had concluded that Obamacare increases the deficit. This was unethical on his part – but Newsweek is also at fault, because this is the sort of thing it could and should have refused to publish.
Now, I don’t expect a publication that responds to daily or weekly news to do New Yorker-style fact checking. But it should demand that anyone who writes for it document all of his or her factual assertions – and an editor should check that documentation to see that it actually matches what the writer says.
Continued in article
"Unethical Commentary, Newsweek Edition," by Paul Krugman,
The New York Times, August 19, 2012 ---
http://krugman.blogs.nytimes.com/2012/08/19/unethical-commentary-newsweek-edition/
¶There are multiple errors and misrepresentations in Niall Ferguson’s cover story in Newsweek — I guess they don’t do fact-checking — but this is the one that jumped out at me. Ferguson says:
¶The president pledged that health-care reform would not add a cent to the deficit. But the CBO and the Joint Committee on Taxation now estimate that the insurance-coverage provisions of the ACA will have a net cost of close to $1.2 trillion over the 2012–22 period.
¶Readers are no doubt meant to interpret this as saying that CBO found that the Act will increase the deficit. But anyone who actually read, or even skimmed, the CBO report (pdf) knows that it found that the ACA would reduce, not increase, the deficit — because the insurance subsidies were fully paid for.
¶Now, people on the right like to argue that the CBO was wrong. But that’s not the argument Ferguson is making — he is deliberately misleading readers, conveying the impression that the CBO had actually rejected Obama’s claim that health reform is deficit-neutral, when in fact the opposite is true.
¶More than that: by its very nature, health reform that expands coverage requires that lower-income families receive subsidies to make coverage affordable. So of course reform comes with a positive number for subsidies — finding that this number is indeed positive says nothing at all about the impact on the deficit unless you ask whether and how the subsidies are paid for. Ferguson has to know this (unless he’s completely ignorant about the whole subject, which I guess has to be considered as a possibility). But he goes for the cheap shot anyway.
¶Continued in article
Jensen Comment
The CBO assumes that the requirement (just upheld by a Supreme Court decision)
that all people in the United States have health insurance or otherwise will
have health insurance premiums deducted from their tax refunds that will fund
the added cost of covering current poor people needing subsidies for health
insurance coverage. This is what Krugman means above when he assumes "the
insurance subsidies are fully paid for." This is why the Affordable Health Care
Act (ACA) tried to get states to raise the number of people receiving state
subsidies for Medicaid. About half the states, however, are refusing to along
with the expanded coverage under Medicaid. This means that more higher-end low
income people will depend on the ACA "subsidies" instead of Medicaid coverage
from federal and state Medicaid funding.
It seems to be a matter of semantics whether these tax return add-ons are a tax or not, but Krugman (probably rightfully) ignores this matter of semantics. But since about half the taxpayers in the U.S. pay no income taxes and over 90% of them are below the median in earnings it's not clear whether enough insurance premiums expected to be collected will really be collected. The CBO may have been planning on an economic recovery that perhaps will never materialize in this new era of global competition with Asia. The CBO expectations of lower unemployment may not materialize (currently there are nearly 13 million unemployed people not counting the many who've simply given up looking for work or received fraudulent Social Security lifetime disability awards). The required subsidies in reality may greatly exceed the added premiums "tax" collected. But nobody, including the CBO, knows what deficits will become.
Also it's not at all clear that the CBO correctly estimated health care claims given the double-digit inflation in the cost of medical services. This is the real Achilles Heel of the Affordable Health Care Act. The costs of actually providing the promised services in the future may greatly exceed expectations.
What may be more subject to dispute is how accurate the CBO is on estimating future costs of bringing on people who have prior conditions that prevent them from currently being able to obtain health care coverage. I'm definitely in favor of providing affordable coverage to these people with prior conditions. But I think the eventual coverage costs will exceed CBO estimates since many of them need high-cost organ transplants and other very expensive medical services.
Professor Krugman has a very loyal crowd of liberal followers who seldom
disagree with his liberal politics.
The comment of NS
The New York Times, August 19, 2012 ---
http://krugman.blogs.nytimes.com/2012/08/19/unethical-commentary-newsweek-edition/
I am very surprised by the hysterical reaction of many readers to Krugman's comment. The point of the argument is what the HBO report says. Does Ferguson lie about the HBO report in his Newsweek article? Either Ferguson or Krugman is correct. I would expect readers disagreeing with Krugman to provide quotations from the HBO report showing that he is wrong and that Ferguson is right.
Instead of that I see a lot of ideological delirium in too many of the comments.
NS, Paris, France
Comment of Laurie Wick
The New York Times, August 19, 2012 ---
http://krugman.blogs.nytimes.com/2012/08/19/unethical-commentary-newsweek-edition/
I cancelled my subscription to Newsweek today. I do not need this kind of uninformed blather in my home. If I feel the need to read/hear totally unfactual, biased reporting, I can just turn on FOX news at any hour of the day or night. Which I will never do.
Laurie Wick
Jensen Comment
Actually, since Tina Brown became editor, Newsweek became a liberal feminist magazine. Niall Ferguson's column is only there for tokenism. The Ferguson cover story is most likely a desperate attempt to recover the millions of conservative subscribers who've defected since Tina Brown took over. One of the recent cover's of Newsweek accuses Candidate Romney of "being a Wimp." Are you sure you want to cancel Newsweek Laurie?
The Comment of J. Philip
The New York Times, August 19, 2012 ---
http://krugman.blogs.nytimes.com/2012/08/19/unethical-commentary-newsweek-edition/
FTA: "health reform that expands coverage requires that lower-income families receive subsidies to make coverage affordable. "
And, exactly,. Mr. Krugman, where do you think those subsidies are gonna come from? You can continue to carry Obama's water that's what you get paid to do, but the rest of us know a TAX when we see one.
J. Phillip
Closing Jensen Comment
I wish the Democrats had rammed a national health care plan down our throats in
that short window of time 2008-2010 when they controlled the entire executive
and legislative branches of the federal government. Instead we ended up with a
bastardized public-private ACA that pleases neither the left nor the right. I am
inclined to believe that the ACA will always have insurance premiums falling way
short of costs of delivering medical services. Whether or not this adds to the
deficit is simply a matter of accounting gimmicks the familiar governmental
accounting shell game ---
http://www.trinity.edu/rjensen/Theory02.htm#GovernmentalAccounting
Bob Jensen's threads on the ACA are at
http://www.trinity.edu/rjensen/Health.htm
Paul Ryan on the Affordable Health Care Act ---
http://www.youtube.com/watch?
The larger reality is that Medicare cannot and will
not continue as it is, as the President used to admit. A sampler of his rhetoric
from the town-hall summer of 2009: "Mark my words," he declared in Grand
Junction, Colorado, "Medicare in about eight to nine years goes into the red. .
. . It is going broke." He added in Portsmouth, New Hampshire, that "What is
truly scary—what is truly risky—is if we do nothing" because Medicare is
"unsustainable" and "running out of money." In Belgrade, Montana, he said the
program must be reformed "to be there for the next generation, not just for this
generation."What he rarely mentions is how he plans to fix
Medicare under ObamaCare. First the government will do things like arbitrarily
commanding providers to deliver the exact same benefits except for $716 billion
less. When that doesn't work, as it surely won't, the feds will take control of
the case-by-case decisions currently made between patients and doctors and
substitute the judgment of technocrats. (See what's already happening in
Massachusetts, "RomneyCare 2.0," August 6.)
"The Mediscare Boomerang," The Wall Street Journal, August 16, 2012 ---
http://professional.wsj.com/article/SB10000872396390444772404577587464183295348.html?mod=djemEditorialPage_t&mg=reno64-wsj
It's Unethical as it Gets in the Whitehouse
"Axelrod's ObamaCare Dollars Emails suggest the White House pushed business
to the presidential adviser's former firm to sell the health-care law," by
Kimberly A. Strassel, The Wall Street Journal, June 21, 2012 ---
http://professional.wsj.com/article/SB10001424052702304765304577480871706139792.html?mod=djemEditorialPage_t&mg=reno-wsj
Rewind to 2009. The fight over ObamaCare is raging, and a few news outlets report that something looks ethically rotten in the White House. An outside group funded by industry is paying the former firm of senior presidential adviser David Axelrod to run ads in favor of the bill. That firm, AKPD Message and Media, still owes Mr. Axelrod money and employs his son.
The story quickly died, but emails recently released by the House Energy and Commerce Committee ought to resurrect it. The emails suggest the White House was intimately involved both in creating this lobby and hiring Mr. Axelrod's firm—which is as big an ethical no-no as it gets.
Mr. Axelrod—who left the White House last year—started AKPD in 1985. The firm earned millions helping run Barack Obama's 2008 campaign. Mr. Axelrod moved to the White House in 2009 and agreed to have AKPD buy him out for $2 million. But AKPD chose to pay Mr. Axelrod in annual installments—even as he worked in the West Wing. This agreement somehow passed muster with the Office of Government Ethics, though the situation at the very least should have walled off AKPD from working on White-House priorities.
It didn't. The White House and industry were working hand-in-glove to pass ObamaCare in 2009, and among the vehicles supplying ad support was an outfit named Healthy Economy Now (HEN). News stories at the time described this as a "coalition" that included the Pharmaceutical Research and Manufacturers of America (PhRMA), the American Medical Association, and labor groups—suggesting these entities had started and controlled it.
House emails show HEN was in fact born at an April 15, 2009 meeting arranged by then-White House aide Jim Messina and a chief of staff for Democratic Sen. Max Baucus. The two politicos met at the Democratic Senatorial Campaign Committee (DSCC) and invited representatives of business and labor.
A Service Employees International Union attendee sent an email to colleagues noting she'd been invited by the Baucus staffer, explaining: "Also present was Jim Messina. . . . They basically want to see adds linking HC reform to the economy. . . . there were not a lot of details, but we were told that we wd be getting a phone call. well that call came today."
The call was from Nick Baldick, a Democratic consultant who had worked on the Obama campaign and for the DSCC. Mr. Baldick started HEN. The only job of PhRMA and others was to fund it.
Meanwhile, Mr. Axelrod's old firm was hired to run the ads promoting ObamaCare. At the time, a HEN spokesman said HEN had done the hiring. But the emails suggest otherwise. In email after email, the contributors to HEN refer to four men as the "White House" team running health care. They included John Del Cecato and Larry Grisolano (partners at AKPD), as well as Andy Grossman (who once ran the DSCC) and Erik Smith, who had been a paid adviser to the Obama presidential campaign.
In one email, PhRMA consultant Steve McMahon calls these four the "WH-designated folks." He explains to colleagues that Messrs. Grossman, Grisolano and Del Cecato "are very close to Axelrod," and that "they have been put in charge of the campaign to pass health reform." Ron Pollack, whose Families USA was part of the HEN coalition, explained to colleagues that "the team that is working with the White House on health-care reform. . . . [Grossman, Smith, Del Cecato, Grisolano] . . . would like to get together with us." This would provide "guidance from the White House about their messaging."
According to White House visitor logs, Mr. Smith had 28 appointments scheduled between May and August—17 made through Mr. Messina or his assistant. Mr. Grossman appears in the logs at least 19 times. Messrs. Del Cecato and Grisolano of AKPD also visited in the spring and summer, at least twice with Mr. Axelrod, who was deep in the health-care fight.
A 2009 PhRMA memo also makes clear that AKPD had been chosen before PhRMA joined HEN. It's also clear that some contributors didn't like the conflict of interest. When, in July 2009, a media outlet prepared to report AKPD's hiring, a PhRMA participant said: "This is a big problem." Mr. Baldick advises: "just say, AKPD is not working for PhRMA." AKPD and another firm, GMMB, would handle $12 million in ad business from HEN and work for a successor 501(c)4.
A basic rule of White House ethics is to avoid even the appearance of self-dealing or nepotism. If Mr. Axelrod or his West Wing chums pushed political business toward Mr. Axelrod's former firm, they contributed to his son's salary as well as to the ability of the firm to pay Mr. Axelrod what it still owed him. Could you imagine the press frenzy if Karl Rove had dome the same after he joined the White House?
Continued in article
"Study: Obama's Health Care Law Would Raise Deficit," SmartPros,
April 10, 2012 ---
http://accounting.smartpros.com/x73682.xml
Reigniting a debate about the bottom line for President Barack Obama's health care law, a leading conservative economist estimates in a study to be released Tuesday that the overhaul will add at least $340 billion to the deficit, not reduce it.
Charles Blahous, who serves as public trustee overseeing Medicare and Social Security finances, also suggested that federal accounting practices have obscured the true fiscal impact of the legislation, the fate of which is now in the hands of the Supreme Court.
Officially, the health care law is still projected to help reduce government red ink. The Congressional Budget Office, the government's nonpartisan fiscal umpire, said in an estimate last year that repealing the law actually would increase deficits by $210 billion from 2012 to 2021.
The CBO, however, has not updated that projection. If $210 billion sounds like a big cushion, it's not. The government has recently been running annual deficits in the $1 trillion range.
The White house dismissed the study in a statement late Monday. Presidential assistant Jeanne Lambrew called the study "new math (that) fits the old pattern of mischaracterizations" about the health care law.
Blahous, in his 52-page analysis released by George Mason University's Mercatus Center, said, "Taken as a whole, the enactment of the (health care law) has substantially worsened a dire federal fiscal outlook.
"The (law) both increases a federal commitment to health care spending that was already unsustainable under prior law and would exacerbate projected federal deficits relative to prior law," Blahous said.
The law expands health insurance coverage to more than 30 million people now uninsured, paying for it with a mix of Medicare cuts and new taxes and fees.
Blahous cited a number of factors for his conclusion:
- The health care's law deficit cushion has been reduced by more than $80 billion because of the administration's decision not to move forward with a new long-term care insurance program that was part of the legislation. The Community Living Assistance Services and Supports program raised money in the short term, but would have turned into a fiscal drain over the years.
- The cost of health insurance subsidies for millions of low-income and middle-class uninsured people could turn out to be higher than forecast, particularly if employers scale back their own coverage.
- Various cost-control measures, including a tax on high-end insurance plans that doesn't kick in until 2018, could deliver less than expected.
The decision to use Medicare cuts to finance the expansion of coverage for the uninsured will only make matters worse, Blahous said. The money from the Medicare savings will have been spent, and lawmakers will have to find additional cuts or revenues to forestall that program's insolvency.
Under federal accounting rules, the Medicare cuts are also credited as savings to that program's trust fund. But the CBO and Medicare's own economic estimators already said the government can't spend the same money twice.
Continued in article
Freakonomics
"Here’s Why Health Care Costs Are Outpacing Health Care Efficacy," by
Stephen J. Dubner, Freakonomics.com, April 18, 2011 ---
http://www.freakonomics.com/2011/04/18/heres-why-health-care-costs-are-outpacing-health-care-efficacy/
In a new working paper called “Technology Growth and Expenditure Growth in Health Care” (abstract here, PDF here), Amitabh Chandra and Jonathan S. Skinner offer an explanation:
In the United States, health care technology has contributed to rising survival rates, yet health care spending relative to GDP has also grown more rapidly than in any other country. We develop a model of patient demand and supplier behavior to explain these parallel trends in technology growth and cost growth. We show that health care productivity depends on the heterogeneity of treatment effects across patients, the shape of the health production function, and the cost structure of procedures such as MRIs with high fixed costs and low marginal costs. The model implies a typology of medical technology productivity: (I) highly cost-effective “home run” innovations with little chance of overuse, such as anti-retroviral therapy for HIV, (II) treatments highly effective for some but not for all (e.g. stents), and (III) “gray area” treatments with uncertain clinical value such as ICU days among chronically ill patients. Not surprisingly, countries adopting Category I and effective Category II treatments gain the greatest health improvements, while countries adopting ineffective Category II and Category III treatments experience the most rapid cost growth. Ultimately, economic and political resistance in the U.S. to ever-rising tax rates will likely slow cost growth, with uncertain effects on technology growth.
This paper strikes me as sensible, explanatory, and non-ideological to the max. It would be nifty if the people who work in Washington read it, and thought about it, and maybe even acted on it. (And it would be nifty if the Knicks beat the Celtics too, but I’m not holding my breath for either outcome …)
Here’s a very good paragraph from the paper:
The science section of a U.S. newspaper routinely features articles on new surgical and pharmaceutical treatments for cancer, obesity, aging, and cardiovascular diseases, with rosy predictions of expanded longevity and improved health functioning (Wade, 2009). The business section, on the other hand, features gloomy reports of galloping health insurance premiums (Claxton et al., 2010), declining insurance coverage, and unsustainable Medicare and Medicaid growth leading to higher taxes (Leonhardt, 2009) and downgraded U.S. debt (Stein, 2006). Not surprisingly, there is some ambiguity as to whether these two trends, in outcomes and in expenditures, are a cause for celebration or concern.
And the authors offer good specific examples of what they built their argument on, noting the …
Continued in article
"The Truth About Health Care Reform and the Economy: Separating economic fact from economic myth," by Veronique de Rugy, Reason Magazine, April 15, 2011 --- http://reason.com/archives/2011/04/15/the-truth-about-health-care-re
Myth 1: Health care reform will reduce the deficit.
Fact 1: Health care reform will increase the deficit.
The Patient Protection and Affordable Care Act includes many provisions that have nothing to do with health care: the CLASS act, a student loan overhaul, and many new taxes. These provisions don't change the health care system. They just raise money to pay for the new law. Strip them away and the law’s actual health care provisions don't lower the deficit—they increase it!
The chart below uses data from Congressional Budget Office (CBO) to clarify the fiscal consequences of health care reform.
. . .
As you can see, from 2012 to 2021, the Congressional Budget Office estimates that the health care act will reduce deficits by $210 billion (note that this estimate differs from the widely cited $143 billion figure used during the lead-up to the passage of the act). During this same time period, however, the actual health care reform provisions of the law will increase deficits by $464 billion.
Of course, one should not evaluate the health care legislation on its fiscal impacts alone. In theory we should get some fiscal benefits. But the key question is how they net out. Still, no matter what you think about the benefits of the health care legislation, it is incorrect to claim that health care reform will save money. It won’t.
Myth 2: The U.S. health care system is a free-market system.
Fact 2: Roughly half of all U.S. health care is currently paid for by the government.
. . .
Even in the absence of the health care reform law, government programs including Medicare and Medicaid already fund almost half of American health care. Roughly a third of the remaining expenditures are funded by private insurers—mainly through subsidized and highly regulated employee plans. Not exactly a free market.
As this chart shows, state and federal entities make up over half of the health insurance market. Of course, the Patient Protection and Affordable Care Act will only increase the share of government involvement in the health care market.
Myth 3: Medicare spending increases life expectancy for seniors. Reductions in Medicare spending will therefore reduce their life expectancy.
Fact 3: Increases in life expectancy for seniors are due to increased access to health care, not to Medicare.
While Medicare spending has certainly decreased seniors’ out of pocket health care expenses (by 1970, Medicare reduced out of pocket expenses by an estimated 40 percent relative to pre-Medicare levels), the program’s effect on mortality is much less clear.
. . .
Continued in article
"Mayberry OMG: Those false ads cost taxpayers $3.5 million,"
The Wall Street Journal, March 25, 2011 ---
|http://online.wsj.com/article/SB10001424052748704604704576220640964310506.html#mod=djemEditorialPage_t
President Obama met with the winner of the "save award" in the Oval Office the other day, the contest for federal employees who find ways to make government more efficient. Trudy Givens, of Portage, Wisconsin, suggested that the feds stop mailing out paper copies of the Federal Register (available online since 1994) to the provinces. Her good idea will cut about $4 million a year in printing and postage.
We don't work for the government, but here's our "save" suggestion: How about not spending some $3.5 million to deceptively promote ObamaCare?
It turns out it cost the Health and Human Services Department $2.78 million to buy airtime for three cable TV ads last year, featuring Andy Griffith praising the new entitlement. The "Matlock" eminence rendered his services pro bono, but Porter Novelli didn't. The media consulting firm racked up 668 billable hours and earned $404,384.40 producing the spots, according to documents released by the outside GOP advocacy group Crossroads GPS through the Freedom of Information Act.
At least Porter Novelli didn't charge taxpayers for fact-checking. Among Mr. Griffith's many deceptive claims, he tells his fellow seniors that their Medicare benefits won't change (they will, most immediately in Medicare Advantage) and that ObamaCare strengthens the program's finances (it doesn't, according to the chief Medicare actuary). Lovable ol' Andy of Mayberry then says "that new health-care law sure sounds good" to him, in a transparent bid to win over senior voters in advance of the 2010 election.
The next time the President wants to run misleading ads ahead of an election, he might hit up the Democratic Party or use his bully pulpit, rather than passing the bill to taxpayers. Meantime, an Administration functionary says in a new promotional Web video for the save award—how much did that one cost to produce?—that "Something that seems relatively small if replicated over the full length of the federal government can really result in substantial savings."
How about we go one better and save several trillion dollars by repealing a health-care bill that Americans still hate despite Sheriff Andy's endorsement?
"PolitiFiction True 'lies' about ObamaCare," The Wall Street
Journal, December 23, 2010 ---
http://online.wsj.com/article/SB10001424052748703886904576031630593433102.html?mod=djemEditorialPage_t
So the watchdog news outfit called PolitiFact has decided that its "lie of the year" is the phrase "a government takeover of health care." Ordinarily, lies need verbs and we'd leave the media criticism to others, but the White House has decided that PolitiFact's writ should be heard across the land and those words forever banished to describe ObamaCare.
"We have concluded it is inaccurate to call the plan a government takeover," the editors of PolitiFact announce portentously. "'Government takeover' conjures a European approach where the government owns the hospitals and the doctors are public employees," whereas ObamaCare "is, at its heart, a system that relies on private companies and the free market." PolitiFact makes it sound as if ObamaCare were drawn up by President Friedrich Hayek, with amendments from House Speaker Ayn Rand.
This purported debunking persuaded Stephanie Cutter, a special assistant to the President. If "opponents of reform haven't been shy about making claims that are at odds with the facts," she wrote on the White House blog, "one piece of misinformation always stood out: the bogus claim . . ." We'll spare you the rest.
PolitiFact's decree is part of a larger journalistic trend that seeks to recast all political debates as matters of lies, misinformation and "facts," rather than differences of world view or principles. PolitiFact wants to define for everyone else what qualifies as a "fact," though in political debates the facts are often legitimately in dispute.
For instance, everyone can probably agree that Medicare's 75-year unfunded liability is somewhere around $30.8 trillion. But that's different from a qualitative judgment, such as the wisdom of a new health-care entitlement that was sold politically as a way to reduce entitlement spending. But anyway, let's try to parse PolitiFact's ObamaCare reasoning.
Evidently, it doesn't count as a government takeover unless the means of production are confiscated. "The government will not seize control of hospitals or nationalize doctors," the editors write, and while "it's true that the law does significantly increase government regulation of health insurers," they'll still be nominally private too.
In fact—if we may use that term without PolitiFact's seal of approval—at the heart of ObamaCare is a vast expansion of federal control over how U.S. health care is financed, and thus delivered. The regulations that PolitiFact waves off are designed to convert insurers into government contractors in the business of fulfilling political demands, with enormous implications for the future of U.S. medicine. All citizens will be required to pay into this system, regardless of their individual needs or preferences. Sounds like a government takeover to us.
PolitiFact is run by the St. Petersburg Times and has marketed itself to other news organizations on the pretense of impartiality. Like other "fact checking" enterprises, its animating conceit is that opinions are what ideologues have, when in reality PolitiFact's curators also have political views and values that influence their judgments about facts and who is right in any debate.
In this case, they even claim that the government takeover slogan "played an important role in shaping public opinion about the health-care plan and was a significant factor in the Democrats' shellacking in the November elections." In other words, voters turned so strongly against Democrats because Republicans "lied," and not because of, oh, anything the Democrats did while they were running Congress. Is that a "fact" or a political judgment? Just asking.
As long as the press corps is nominating "lies of the year," ours goes to the formal legislative title of ObamaCare, the Patient Protection and Affordable Care Act. For a bill that in reality will raise health costs and reduce patient choice, the name recalls Mary McCarthy's famous line about every word being a lie, including "the" and "and."
"Bachmann Exposes $105 Billion Secret," by Phyllis Schlaffy,
Townhall, March 15, 2011 ---
http://townhall.com/columnists/phyllisschlafly/2011/03/15/bachmann_exposes_$105_billion_secret
When ObamaCare was passed by the Senate on Christmas Eve of 2009, senators had less than 72 hours to compare a 383-page package of amendments to the 2,074-page bill. Public outrage over backroom deals (such as the Cornhusker Kickback and the Louisiana Purchase) led to the election of Scott Brown in Massachusetts.
Democrats then cooked up a plan to link the now-2,409-page Senate-passed ObamaCare bill to dozens of amendments contained in a separate 150-page Budget Reconciliation bill that could pass both houses by a simple majority. That's when then-Speaker Nancy Pelosi famously told the then-Democratic majority, "We have to pass the bill so that you can find out what is in it."
When President Obama signed ObamaCare into law, that set in motion a series of funding triggers and money transfers that add up to $105,464,000,000 in pre-authorized appropriations that are scheduled to be paid up through FY2019. In laymen's language, that means writing postdated checks that are guaranteed to be paid out over the next eight years.
This money was divided into dozens of smaller amounts so the big total would not be apparent. For example, Section 2953 of ObamaCare included a pre-funded appropriation of $75 million a year for five years to "educate adolescents" in "adult preparation subjects" such as "stress management" and "the development of healthy attitudes and values about adolescent growth and development, body image, racial and ethnic diversity, and other related subjects."
Section 4101(a) of ObamaCare prefunded $200 million a year over four years for the construction of school-based health centers. In Section 4002, a total of $17,750,000,000 will be deposited over 10 years to a discretionary account controlled by the HHS secretary (currently Kathleen Sebelius), who may spend that money "to provide for expanded and sustained national investment in prevention" and to "help restrain the rate of growth in private and public sector health care costs."
Continued in article
White did President Obama turn down IBM's offer to, for free, to detect
medical fraud?
Video: Did White House Snub Fraud Fighter?
http://news.yahoo.com/video/politics-15749652/did-white-house-snub-fraud-fighter-22352314
Is Medicare a "Medicare is a good example of a government program that is highly efficient?"
-----Original Message-----
From: AECM, Accounting Education using Computers and Multimedia [mailto:AECM@LISTSERV.LOYOLA.EDU] On Behalf Of Peters, James M Sent: Thursday, September 23, 2010 10:37 AM
To: AECM@LISTSERV.LOYOLA.EDU
Subject: Re: accounting basicsI think it is time to push back against all this anti-government rhetoric that just isn't based on observed evidence. Whether goverments work best or markets work best is a function of the task to be performed and the nature of the product. Governments have proven they can provide better health insurance and health care than the private sector. Medicare is a good example of a goverment program that is highly efficient and spends 97% of your tax dollars on health care while private sector firms spend only 70% to 75% of your premium dollars on health care. Some firms reach 80%, but they are the exception. Government run hospitals in the US are now rated as among the best, if not the best in the nation. The Veterans Hospitals have better records of treatment success and lower costs that the vast majority of private hospitals.
Market advocates seem to forget free market theory. Free markets only work when certain, rather restrictive conditions are met. Among the most frequently violated are equal power and knowledge among all market participants. Even Adam Smith in the Wealth of Nations advocated a strong role for governments in keeping markets free. When conditions are right, markets work brilliantly. However, (a rhetorical question) how many market in the industrialize world really meet the conditions of truly free markets? My answer is very few.
Governments do some things much better than markets. The key is recognizing the market conditions that lead to government advantage and letting governments handle those areas. Auditing is a prime candidate for government intervention because of no auditor can truly be objective when they are being paid by the client. The markets cannot function properly in auditing because the true customer, the general public, isn't a party to the transaction. Audits aren't just for the current owners, they are for perpsective owners as well, which means the general public. The general public needs to be represented at the table when auditors are hired.
The other key is to recognize that governments fail when people fail to be informed voters. All governments, like all markets, are not made equal. Some work better than others. In democracies, the effectiveness of the government is a function of the involvement and knowledge of the electorate. Thus, we are all responsible for our own government's success and failures. The fact that America seems to have a disfunctional government right now is that we have a disfunctional electorate that seems to enjoy mindless shouting matches over informed policy dialog. Other nations don't suffer from this disease.
Let's all join John Stewart in Washington DC for the "Return Sanity to America" rally. It is a start to building a government that can live up to its potential.
Jim
September 23, 2010 reply from Bob Jensen
Hi Jim,
If this is your idea of "observed evidence" then I've no hope for you in the academy. For one thing a good academic would be more precise about definitions like “better health care.” For example, some other nations come out “better” in infant mortality because they throw away very premature small babies and don’t count them into survival rates. What does “better” mean in terms of who invents the latest and greatest medications to fight cancer?
Medicare, for example, is one of the least-efficient government programs that arguably has the worst internal accounting controls of all other government programs except, possibly, the defense program. An "efficient" program would have stellar internal controls preventing fraud and error.
President Obama repeatedly asserts that "Medicare and Medicaid are largest deficit drivers" ---
http://www.politifact.com/truth-o-meter/statements/2009/jun/25/barack-obama/obama-says-medicare-and-medicaid-are-largest-defic/And Medicare is not a very good example of "government" efficiency since the private sector delivers virtually all the medical services. The Medicare service providers are notoriously inefficient by prescribing billions of dollars in unneeded services, medications, non-existent medical equipment, and lifetime disability benefits to crooks that are not disabled.
I don't care to continue on in the AECM with debates over extreme political dogma since this is truly outside what subscribers expect from the AECM. They wanted to learn more about the PwC re-branding and the future of auditing/assurance services. I doubt that they want to hear a rant about joining a Glenn Beck-bashing by Jon Stewart in Washington DC. Most of us do not support the extremes of Beck or Stewart and certainly do not want the AECM to be a rallying call for either extreme. That is not in the mission of the AECM.
Also I see no need to censor the other subscribers of the AECM if they happen to disagree with Jim Peterson’s political dogma. Even if I were a Glenn Beck supporter (which I’m not) I would not urge AECM subscribers to join me in Beck’s big Washington DC rally (where you would never find me).
It’s a free country, and I suspect you will be among the Glenn Beck bashers at Jon Stewart’s rally for liberals. But I don’t think you should plead with AECM subscribers to join you in this political burning of Beck’s books.
Bob Jensen
In 2009 President Barack Obama is engineering a universal health care bill by appealing to the with blatant and deceitful estimates of costs in a muddled up system of inclusions of social services that are only remotely linked to health care (such as marriage counseling).
Note that I’m not in favor of repealing the recent legislation. But I am in favor of adding a public option so long as taxation and insurance premiums are added to fully cover the annual costs of health insurance. And let's stop the BS on the left and on the right side of this debate.
Some of the blatant lies are as follows:
Fuzzy CBO Accounting Tricks
"ObamaCare by the Numbers: Part 2," by John Cassidy, The New Yorker,
March 2010 ---
http://www.newyorker.com/online/blogs/johncassidy/2010/03/obamacare-by-the-numbers-part-2.html
This is a long and somewhat involved followup to my previous post on ObamaCare. . For those of you with O.A.D.D. (online attention-deficit disorder), I’ve provided an express and local version.
EXPRESS:
The official projections for health-care reform, which show it greatly reducing the number of uninsured and also reducing the budget deficit, are simply not credible. There are three basic issues.
The cost and revenue projections rely on unrealistic assumptions and accounting tricks. If you make some adjustments for these, the cost of the plan is much higher.
The so-called “individual mandate” isn’t really a mandate at all. Under the new system, many young and healthy people will still have a strong incentive to go uninsured.
Once the reforms are up and running, some employers will have a big incentive to end their group coverage plans and dump their employees onto the taxpayer-subsidized individual plans, greatly adding to their cost.
LOCAL:
For future reference (or possibly to roll up and beat myself over the head with in my dotage) I have filed away a copy the latest analysis (pdf) of health-care reform from the Congressional Budget Office. By 2019, it says, the bills passed by the House and Senate will have cut the number of uninsured Americans by thirty-two million, raised the percentage of people with some form of health-care coverage from eighty-three per cent to ninety-four per cent, and reduced the federal deficit by a cumulative $143 billion. If all of these predictions turn out to be accurate, ObamaCare will go down as one of the most successful and least costly government initiatives in history. At no net cost to the taxpayer, it will have filled a gaping hole in the social safety net and solved a problem that has frustrated policymakers for decades.
Does Santa Claus live after all? According to the C.B.O., between now and 2019 the net cost of insuring new enrollees in Medicaid and private insurance plans will be $788 billion, but other provisions in the legislation will generate revenues and cost savings of $933 billion. Subtract the first figure from the second and—voila!—you get $143 billion in deficit reduction.
The first objection to these figures is that the great bulk of the cost savings—more than $450 billion—comes from cuts in Medicare payments to doctors and other health-care providers. If you are vaguely familiar with Washington politics and the letters A.A.R.P. you might suspect that at least some of these cuts will fail to materialize. Unlike some hardened skeptics, I don’t think none of them will happen. One part of the reform involves reducing excessive payments that the Bush Administration agreed to when it set up the Medicare Advantage program in 2003. If Congress remains under Democratic control—a big if, admittedly—it will probably enact these changes. But that still leaves another $300 billion of Medicare savings to be found.
The second problem is accounting gimmickry. Acting in accordance with standard Washington practices, the C.B.O. counts as revenues more than $50 million in Social Security taxes and $70 billion in payments towards a new home-care program, which will eventually prove very costly, and it doesn’t count some $50 billion in discretionary spending. After excluding these pieces of trickery and the questionable Medicare cuts, Douglas Holtz-Eakin, a former head of the C.B.O., has calculated that the reform will actually raise the deficit by $562 billion in the first ten years. “The budget office is required to take written legislation at face value and not second-guess the plausibility of what it is handed,” he wrote in the Times. “So fantasy in, fantasy out.”
Holtz-Eakin advised John McCain in 2008, and he has a reputation as a straight shooter. I think the problems with the C.B.O.’s projections go even further than he suggests. If Holtz-Eakin’s figures turned out to be spot on, and over the next ten years health-care reform reduced the number of uninsured by thirty million at an annual cost of $56 billion, I would still regard it as a great success. In a $15 trillion economy—and, barring another recession, the U.S. economy should be that large in 2014—fifty or sixty billion dollars is a relatively small sum—about four tenths of one per cent of G.D.P., or about eight per cent of the 2011 Pentagon budget.
My two big worries about the reform are that it won’t capture nearly as many uninsured people as the official projections suggest, and that many businesses, once they realize the size of the handouts being offered for individual coverage, will wind down their group plans, shifting workers (and costs) onto the new government-subsidized plans. The legislation includes features designed to prevent both these things from happening, but I don’t think they will be effective.
Consider the so-called “individual mandate.” As a strict matter of law, all non-elderly Americans who earn more than the poverty line will be obliged to obtain some form of health coverage. If they don’t, in 2016 and beyond, they could face a fine of about $700 or 2.5 per cent of their income—whichever is the most. Two issues immediately arise.
Even if the fines are vigorously enforced, many people may choose to pay them and stay uninsured. Consider a healthy single man of thirty-five who earns $35,000 a year. Under the new system, he would have a choice of enrolling in a subsidized plan at an annual cost of $2,700 or paying a fine of $875. It may well make sense for him to pay the fine, take his chances, and report to the local emergency room if he gets really sick. (E.R.s will still be legally obliged to treat all comers.) If this sort of thing happens often, as well it could, the new insurance exchanges will be deprived of exactly the sort of healthy young people they need in order to bring down prices. (Healthy people improve the risk pool.)
If the rules aren’t properly enforced, the problem will be even worse. And that is precisely what is likely to happen. The I.R.S. will have the administrative responsibility of imposing penalties on people who can’t demonstrate that they have coverage, but it won’t have the legal authority to force people to pay the fines. “What happens if you don’t buy insurance and you don’t pay the penalty?” Ezra Klein, the Washington Post’s industrious and well-informed blogger, asks. “Well, not much. The law specifically says that no criminal action or liens can be imposed on people who don’t pay the fine.”
So, the individual mandate is a bit of a sham. Generous subsidies will be available for sick people and families with children who really need medical care to buy individual coverage, but healthy single people between the ages of twenty-six and forty, say, will still have a financial incentive to remain outside the system until they get ill, at which point they can sign up for coverage. Consequently, the number of uninsured won’t fall as much as expected, and neither will prices. Without a proper individual mandate, the idea of universality goes out the window, and so does much of the economic reasoning behind the bill.
The question of what impact the reforms will have on existing insurance plans has received even less analysis. According to President Obama, if you have coverage you like you can keep it, and that’s that. For the majority of workers, this will undoubtedly be true, at least in the short term, but in some parts of the economy, particularly industries that pay low and moderate wages, the presence of such generous subsidies for individual coverage is bound to affect behavior eventually. To suggest this won’t happen is to say economic incentives don’t matter.
Take a medium-sized firm that employs a hundred people earning $40,000 each—a private security firm based in Atlanta, say—and currently offers them health-care insurance worth $10,000 a year, of which the employees pay $2,500. This employer’s annual health-care costs are $750,000 (a hundred times $7,500). In the reformed system, the firm’s workers, if they didn’t have insurance, would be eligible for generous subsidies to buy private insurance. For example, a married forty-year-old security guard whose wife stayed home to raise two kids could enroll in a non-group plan for less than $1,400 a year, according to the Kaiser Health Reform Subsidy Calculator. (The subsidy from the government would be $8,058.)
In a situation like this, the firm has a strong financial incentive to junk its group coverage and dump its workers onto the taxpayer-subsidized plan. Under the new law, firms with more than fifty workers that don’t offer coverage would have to pay an annual fine of $2,000 for every worker they employ, excepting the first thirty. In this case, the security firm would incur a fine of $140,000 (seventy times two), but it would save $610,000 a year on health-care costs. If you owned this firm, what would you do? Unless you are unusually public spirited, you would take advantage of the free money that the government is giving out. Since your employees would see their own health-care contributions fall by more than $1,100 a year, or almost half, they would be unlikely to complain. And even if they did, you would be saving so much money you afford to buy their agreement with a pay raise of, say, $2,000 a year, and still come out well ahead.
Even if the government tried to impose additional sanctions on such firms, I doubt it would work. The dollar sums involved are so large that firms would try to game the system, by, for example, shutting down, reincorporating under a different name, and hiring back their employees without coverage. They might not even need to go to such lengths. Firms that pay modest wages have high rates of turnover. By simply refusing to offer coverage to new employees, they could pretty quickly convert most of their employees into non-covered workers.
The designers of health-care reform and the C.B.O. are aware of this problem, but, in my view, they have greatly underestimated it. According to the C.B.O., somewhere between eight and nine million workers will lose their group coverage as a result of their employers refusing to offer it. That isn’t a trifling number. But the C.B.O. says it will be largely offset by an opposite effect in which employers that don’t currently provide health insurance begin to offer it in response to higher demand from their workers as a result of the individual mandate. In this way, some six to seven million people will obtain new group coverage, the C.B.O. says, so the overall impact of the changes will be minor.
The C.B.O.’s analysis can’t be dismissed out of hand, but it is surely a best-case scenario. Again, I come back to where I started: the scale of the subsidies on offer for low and moderately priced workers. If economics has anything to say as a subject, it is that you can’t offer people or firms large financial rewards for doing something—in this case, dropping their group coverage—and not expect them to do it in large numbers. On this issue, I find myself in agreement with Tyler Cowen and other conservative economists. Over time, the “firewall” between the existing system of employer-provided group insurance and taxpayer-subsidized individual insurance is likely to break down, with more and more workers being shunted over to the public teat.
At that point, if it comes, politicians of both parties will be back close to where they began: searching for health-care reform that provides adequate coverage for all at a cost the country can afford. What would such a system look like? That is a topic for another post, but I don’t think it would look much like Romney-ObamaCare.
On a quiet Friday afternoon this summer, the central justification for President Obama’s health-care overhaul died a quiet death. On that day, a bipartisan coalition in Congress reversed the scheduled Medicare cuts to physician payments, ensuring that, over the next decade, the White House’s reforms will cost many billions more than advertised. After over a year of debate and lofty rhetoric, the reality is this: the president’s goal of “bending” the health-care cost curve has unraveled in just a few months.
The president and his supporters argued that we need ObamaCare in order to tame the federal budget deficit. When he signed the bill into law, the president touted the importance of the legislation in reducing long-term deficits. Democrats cited Congressional Budget Office scoring showing that the health legislation would reduce the deficit over ten years to the tune of roughly $130 billion. But that was back in March.
In May, the CBO released its quantitative analysis showing that discretionary spending not accounted for in the previous scores would cost $115 billion. The CBO director himself expressed significant doubts about potential deficit reduction. Speaking to the Institute of Medicine, he said: “Rising health costs will put tremendous pressure on the federal budget during the next few decades and beyond. In CBO’s judgment, the health legislation enacted earlier this year does not substantially diminish that pressure.”
That brings us to the quiet Friday afternoon of June 25. By cancelling scheduled Medicare cuts, the president and his Congressional allies have made the fiscal problem even worse: Not only do those fiscal problems remain, but White House reforms meant to address them will push net federal-government health expenditures further into the red. Any notion of fiscal balance has been lost.
Yet cancelling these scheduled Medicare cuts is nothing new. Time and again, Republican and Democratic leaderships in Congress have haphazardly voted to undo scheduled cuts.
Congress reversed planned Medicare physician cuts in 1999—and 2004, 2005, 2006, and 2008. In fact, since 1997, when members of both parties agreed to automatic cuts if spending rose faster than population and economic growth, the program has been cut just once, in 2002. Maybe it’s the pressure of the doctors’ lobby. Maybe it’s the seniors’ lobby. Maybe it’s both.
And this Democratic Congress has been no better. In fact, just months after passing Obama’s health-reform legislation, Democrats vigorously and successfully pushed to postpone the Medicare cut until November (they had previously voted to delay it from April to June 2010).
More worrisome is this: in liberal circles, it’s popular to argue that Congressional efforts to control Medicare costs under the Sustainable Growth Rate (SGR) formula have been overly successful. James R. Horney and Paul N. Van de Water make exactly this point in a publication for the liberal Center on Budget and Policy Priorities. They write: “Even though Congress did not allow the full cuts required under the SGR formula to take effect, it has still cut the physician reimbursement rate substantially – at its current level, the reimbursement rate in 2010 will be 17 percent below the rate for 2001, adjusted for inflation.” Picking up on this point, Paul Krugman recently argued that Medicare has been historically very successful at reigning in costs. But praising Medicare cost containment in a time of heavy health-care cost inflation is like praising Lehman Brothers for making good investments in Latin America when the market for subprime mortgages was imploding.
Let’s put this in perspective: health inflation was 3.4 percent last year, just over double the basic inflation rate. Tellingly, the worst cost increases were experienced by Medicare (costs were up 8.6 percent), and Medicaid (9.9 percent).
Unfortunately, the White House and Congress squandered a great opportunity to bend the cost curve downwards, opting instead for the status quo. The quiet congressional vote in June shows how far the administration has strayed from its reform rhetoric. If we are ever to reign in health care spending, we need leaders who will make tough choices and tough cuts. Their rhetoric must become reality.
"What Difference Has RomneyCare Made?" by John C. Goodman,
Townhall, July 9, 2011 ---
http://townhall.com/columnists/johncgoodman/2011/07/09/what_difference_has_romneycare_made
. . .
On paper, it looks as though the state has made major progress in insuring the uninsured. From 6.4% of the population in 2006, the uninsured hover around 2% today. However, one study found that nearly all of the newly insured are either on Medicaid, in a state-subsidized plan or in an employer subsidized plan. Only 7% of the newly insured, or about 30,000 people, are directly paying their own way. It’s relatively easy to get people to sign up for insurance when coverage is free or almost free. And it’s not very expensive if you pay for the subsidies using money you would have spent anyway on free care for those who can’t pay their medical bills.
But aside from moving money from one bucket to another, have any real problems been solved? The evidence isn’t positive.
There are three major problems in health care all over the world: cost, quality and access. Since nothing in the Massachusetts reform addressed the problems of rising costs and less than adequate quality, those problems have remained more or less unchanged. What about access to care? Surely, newly insured people have more options in the medical marketplace.
The trouble is that almost all of the newly insured are in health plans that pay doctors and hospitals a lot less than what private insurance pays. Like other places around the country, Massachusetts Medicaid (called MassHealth) pays providers so little that patients often turn to hospital emergency rooms and community health centers for their care when they can’t find doctors who will see them. People in the newly subsidized private insurance plans aren’t faring much better because these plans pay only slightly more than what Medicaid pays.
The only solid analysis of what has actually happened to patients at this point is a study by Sharon Long and Paul Masi published in the journal Health Affairs. According to the study:
• There has been no significant change in the number of Massachusetts patients seeking care in hospital emergency rooms since the reform was implemented, and there has actually been an increase in emergency room use by people with incomes below 300% of the poverty level.
• There has been an increase in doctor visits but no change in visits to specialists and an actual decrease in “medical tests, treatment and follow up care,” which I assume is care for the chronically ill.
• There has been no change in the percent of the population reporting a failure to “get needed care for any reason within the past 12 months” and remarkably that includes one-third of those with incomes below 300% of the poverty level.
The problem with counting up doctor visits is that a visit is not always a visit. Nationally, in the state children’s health insurance program (CHIP) doctors have responded to an increase in the demand for their services by scheduling more appointments, but spending less time with patients. Also, you would think that the Massachusetts reform would shift health care resources from the general population to those with less income. But there is no evidence that has happened. On measures of access, the gap between the poor plus the near poor and everyone else appears not to have changed at all!
Ask yourself why you care whether other people have health insurance? The most likely reason is that you want people to have access to health care. But lack of access to care is a huge problem in Massachusetts right now. As I previously reported more than half of all family doctors and more than half of all internists are not accepting new patients. The wait is more than a month before a new patient is able to see a family doctor, and the wait to see an internist averages 48 days. The average wait in Boston to see a family doctor is more than two months.
What I am now reporting will be different than what you may have read in the newspapers or at other health blogs. MIT Professor Jon Gruber calls Massachusetts an unqualified success, citing some of the very same studies I am citing. But since Gruber was one of the architects of the Massachusetts health reform, this is like a student grading his own exam.
What about elevating the Massachusetts reforms to the national level in the form of ObamaCare? As I have previously reported, ObamaCare is likely to result in less access to care for our most vulnerable populations: the disabled and the elderly on Medicare, the poor on Medicaid and the near poor in newly subsidized private insurance. But that is only the beginning.
ObamaCare threatens a federal takeover of the practice of medicine. It threatens to cost millions of people their jobs. It threatens to cause a wasteful restructuring of American industry in a way that will make us less efficient and less competitive in the international marketplace. It will cause millions to lose their employer sponsored insurance. And it threatens to create health plans with perverse incentives to underprovide care to the patients most in need of the miracles of modern medical science.
ObamaCare will be anything but benign.
"The Massachusetts Health-Care 'Train Wreck': The future of
ObamaCare is unfolding here: runaway spending, price controls, even limits on
care and medical licensing," by Joseph Rago, The Wall Street Journal,
July 7, 2010 ---
http://online.wsj.com/article/SB10001424052748704324304575306861120760580.html?mod=djemEditorialPage_t
.
President Obama said earlier this year that the health-care bill that Congress passed three months ago is "essentially identical" to the Massachusetts universal coverage plan that then-Gov. Mitt Romney signed into law in 2006. No one but Mr. Romney disagrees.
As events are now unfolding, the Massachusetts plan couldn't be a more damning indictment of ObamaCare. The state's universal health-care prototype is growing more dysfunctional by the day, which is the inevitable result of a health system dominated by politics.
In the first good news in months, a state appeals board has reversed some of the price controls on the insurance industry that Gov. Deval Patrick imposed earlier this year. Late last month, the panel ruled that the action had no legal basis and ignored "economic realties."
In April, Mr. Patrick's insurance commissioner had rejected 235 of 274 premium increases state insurers had submitted for approval for individuals and small businesses. The carriers said these increases were necessary to cover their expected claims over the coming year, as underlying state health costs continue to rise at 8% annually. By inventing an arbitrary rate cap, the administration was in effect ordering the carriers to sell their products at a loss.
Mr. Patrick has promised to appeal the panel's decision and find some other reason to cap rates. Yet a raft of internal documents recently leaked to the press shows this squeeze play was opposed even within his own administration.
In an April message to his staff, Robert Dynan, a career insurance commissioner responsible for ensuring the solvency of state carriers, wrote that his superiors "implemented artificial price caps on HMO rates. The rates, by design, have no actuarial support. This action was taken against my objections and without including me in the conversation."
Mr. Dynan added that "The current course . . . has the potential for catastrophic consequences including irreversible damage to our non-profit health care system" and that "there most likely will be a train wreck (or perhaps several train wrecks)."
Sure enough, the five major state insurers have so far collectively lost $116 million due to the rate cap. Three of them are now under administrative oversight because of concerns about their financial viability. Perhaps Mr. Patrick felt he could be so reckless because health-care demagoguery is the strategy for his fall re-election bid against a former insurance CEO.
The deeper problem is that price controls seem to be the only way the political class can salvage a program that was supposed to reduce spending and manifestly has not. Massachusetts now has the highest average premiums in the nation.
In a new paper, Stanford economists John Cogan and Dan Kessler and Glenn Hubbard of Columbia find that the Massachusetts plan increased private employer-sponsored premiums by about 6%. Another study released last week by the state found that the number of people gaming the "individual mandate"—buying insurance only when they are about to incur major medical costs, then dumping coverage—has quadrupled since 2006. State regulators estimate that this amounts to a de facto 1% tax on insurance premiums for everyone else in the individual market and recommend a limited enrollment period to discourage such abuses. (This will be illegal under ObamaCare.)
Liberals write off such consequences as unimportant under the revisionist history that the plan was never meant to reduce costs but only to cover the uninsured. Yet Mr. Romney wrote in these pages shortly after his plan became law that every resident "will soon have affordable health insurance and the costs of health care will be reduced."
One junior senator from Illinois agreed. In a February 2006 interview on NBC, Mr. Obama praised the "bold initiative" in Massachusetts, arguing that it would "reduce costs and expand coverage." A Romney spokesman said at the time that "It's gratifying that national figures from both sides of the aisle recognize the potential of this plan to transform our health-care system."
An entitlement sold as a way to reduce costs was bound to fundamentally change the system. The larger question—for Massachusetts, and now for the nation—is whether that was really the plan all along.
"If you're going to do health-care cost containment, it has to be stealth," said Jon Kingsdale, speaking at a conference sponsored by the New Republic magazine last October. "It has to be unsuspected by any of the key players to actually have an effect." Mr. Kingsdale is the former director of the Massachusetts "connector," the beta version of ObamaCare's insurance "exchanges," and is now widely expected to serve as an ObamaCare regulator.
He went on to explain that universal coverage was "fundamentally a political strategy question"—a way of finding a "significant systematic way of pushing back on the health-care system and saying, 'No, you have to do with less.' And that's the challenge, how to do it. It's like we're waiting for a chain reaction but there's no catalyst, there's nothing to start it."
In other words, health reform was a classic bait and switch: Sell a virtually unrepealable entitlement on utterly unrealistic premises and then the political class will eventually be forced to control spending. The likes of Mr. Kingsdale would say cost control is only a matter of technocratic judgement, but the raw dirigisme of Mr. Patrick's price controls is a better indicator of what happens when health care is in the custody of elected officials rather than a market.
Naturally, Mr. Patrick wants to export the rate review beyond the insurers to hospitals, physician groups and specialty providers—presumably to set medical prices as well as insurance prices. Last month, his administration also announced it would use the existing state "determination of need" process to restrict the diffusion of expensive medical technologies like MRI machines and linear accelerator radiation therapy.
Meanwhile, Richard Moore, a state senator from Uxbridge and an architect of the 2006 plan, has introduced a new bill that will make physician participation in government health programs a condition of medical licensure. This would essentially convert all Massachusetts doctors into public employees.
All of this is merely a prelude to far more aggressive restructuring of the state's health-care markets—and a preview of what awaits the rest of the country.
"Your Health Care Costs, Going Higher," by Carrie Lukas,
Townhall, June 1, 2010 ---
http://townhall.com/columnists/CarrieLukas/2010/06/01/your_health_care_costs,_going_higher
How much will the new health care law cost? That was a matter of particular dispute during the debate of the Patient Protection and Affordability Act. The bill's authors monkeyed around with the numbers, delaying some benefits, creating new revenue raisers, and pushing off known, needed reforms, so that the Congressional Budget Office (CBO) could come up with a score below the $900 billion target.
Only the most naïve failed to recognize that those numbers were meaningless: Ultimately, they would have no relationship to how much the legislation would add to taxpayers' burdens and bloat the federal budget. CBO has since been revising its estimates upward: Another $115 billion for additional administrative costs associated with the new law. In addition, Congress now struggles to pass a change to the Medicare reimbursement rates, which will cost $23 billion just to patch the problem over for two years.
Taxpayers must be warned that these are just the first of many upward revisions by CBO. As Congressman Paul Ryan pointed out during the health care debate, the CBO score was based on ten years of increased taxes and Medicare cuts, and only six years of benefits. Former CBO Director Douglas Holtz-Eakin just released his own analysis of the law and found that, far from reducing the deficit as the President and Congressional proponents promised, the law will add more than $500 billion to the deficit during the first ten years and another $1.4 trillion in the decade after that.
Yet the program's cost for taxpayers are just a small part of the costs that will be borne by American citizens. Speaker Pelosi explained that only when the bill passed would Americans know what's in it, and she was right. Since the bill became law it's consequences for businesses and the medical system is becoming more obvious. Several large companies reported that they would suffer multi-million dollar losses due to the law's new taxes. Companies are also noting the incentives created by the law to drop insurance coverage for their employees. As Holtz-Eakin wrote: “Caterpillar recently noted that it could save 70 percent on health care costs by dropping coverage and paying the penalties; AT&T's $2.4 billion cost of coverage would drop to just $600 million for penalties.” Altogether, Holtz-Eakin estimates that as many as 35 million Americans could lose their employer-sponsored health insurance.
So much for being able to keep your insurance. Americans are also learning how other provisions will drive up insurance costs. This year, “children” up to the age of twenty-six will become eligible for their parents' health insurance policy. Analysts estimate that this change will increase the cost of all family policies by about one percent.
One percent itself isn't a big deal, but it's a reminder of the relationship between mandated benefits and price. The federal government will soon foist numerous new mandates upon insurance companies: free preventive care services, an end to benefit caps, limits on price differentials for those with pre-existing conditions, and many more to come. Far from freebies, these are expensive benefits and their costs will be spread around the insured population, driving premium prices up.
The law also gives government new powers to dictate how much insurance companies operate. As a result, insurance companies will have to find new ways to make ends meet, such as by reducing payments to doctors. And those doctors will also find ways to trim back costs, by consolidating practices to reduce overhead and taking on fewer patients.
Americans need not wait for the federal law to fully take effect to understand what's in store. They can also look to Massachusetts, where a similar health care law is already in force. Health care policy expert Grace Marie Turner recently reviewed the problems that plague Massachusetts. Health care costs for a family of four in the Bay State are the highest in the nation, with per capita health care spending 27% higher than the rest of the nation. The increased demand for medical services has created a shortage of doctors, making it difficult to get an appointment and creating long wait times. Ironically this has led to increased use of emergency rooms, a problem that greater insurance coverage was supposed to solve. Insurance companies need to raise rates to cover additional expenses, but the Governor is threatening to cap rate hikes, which will leave private insurers operating at a loss. How long is that sustainable?
The debate about how much this new health care law will cost Americans is far from over. Undoubtedly, as more of the law is implemented, we will learn more about its many hidden costs and consequences. But one thing is for sure, this new law will cost more, and like much, much more than the law's proponents promised.
There are lies and then there are damn
lies
"Pelosi Claims Health Care Reform to Save $1.3 Trillion; No Mention in CBO
Estimate," by Matt Cover, CNS News, March 26, 2010 ---
http://www.cnsnews.com/news/article/63373
House Speaker Nancy Pelosi (D-Calif.) said that the health care reform package the House passed on March 21 would ultimately save the country $1.3 trillion over the next 20 years. That claim, however, was not made by the Congressional Budget Office (CBO) in its cost estimate of the bill.
Pelosi, speaking to reporters at her weekly Capitol Hill press conference on Thursday, said that one of the most important reasons for passing the legislation was that it would save the government so much money.
“[O]ne of the main reasons to do the bill was that it saves the taxpayers $1.3 trillion — $1.3 trillion — over the life of the bill and the 10 years beyond,” she said.
However, no such figure appears in the Congressional Budget Office’s estimate of the package President Obama signed into law Tuesday.
According to a CBO letter sent to Pelosi on March 20, the day before that House passed the bill, the health reform bill and an accompanying package of amendments is expected to reduce the deficit by $143 billion over the 2010-2019 time period.
For the following decade, the CBO does not attempt to quantify the bill’s possible effects on the budget because, as it says, there are simply too many unknown factors for any estimate to be accurate.
“CBO has developed a rough outlook for the decade following the 2010–2019 period by grouping the elements of the legislation into broad categories and (together with JCT) assessing the rate at which the budgetary impact of each of those broad categories is likely to increase over time,” the report says.
The CBO did give a broad range that the package might reduce the deficit, saying that if Congress did not modify the law over the next 20 years, it could reduce the deficit “during that decade in a broad range between one quarter percent and one-half percent of gross domestic product (GDP).”
The CBO said that any estimates beyond 20 years were unreasonable, and declined to give any in their letter to Pelosi.
“CBO has not extrapolated estimates further into the future because the uncertainties surrounding them are magnified even more.”
While some press accounts attributed Pelosi’s figure to internal calculations based on the CBO’s 20-year projections, CNSNews.com could not confirm this despite repeated requests to the Speaker’s office asking to name the source of the figure.
In addition, in a March 19 letter to Rep. Paul Ryan (R-Wisc.) the CBO explained that the health care bill will begin adding to the deficit the moment congressional Democrats change the payment system Medicare uses to pay doctors.
Known as the “Doc Fix,” the change was removed from earlier versions of the bill in order to make it appear deficit- friendly. However, if Democrats go ahead with the changes as expected, the CBO explained that the deficit will rise by nearly $60 billion.
"CBO estimates that enacting H.R. 3961 [Doc Fix], by itself, would cost about $208 billion over the 2010–2019 period," the CBO informed Ryan. "CBO estimates that enacting H.R. 3961 together with those two bills [health care and a companion package of amendments] would add $59 billion to budget deficits over the 2010–2019 period."
"Signed, sealed, delivered," The Economist, March 27, 2010, Page 31 ---
http://www.economist.com/world/united-states/displaystory.cfm?story_id=15769767"SignThe first big idea that he stresses is the creation of a new agency to spearhead innovation and scale up any of the many pilot schemes contained in the bills that manage to reform delivery or payment systems. It is true that the reform effort began with earnest intent to “bend the cost curve”. Alas, explains Mark McClellan of the Brookings Institution, the most meaningful proposals have since been watered down or delayed.
The second lever of change that Mr Orszag says is underappreciated is an excise tax introduced on the most expensive (or “Cadillac”) insurance plans. Most economists like this idea, as it is likely to discourage excessive consumption of health care. Unfortunately, because of political pressure from labour unions and other groups, the Cadillac tax has been diluted, and delayed until 2018. Sceptics wonder if a future Congress will really implement this tax when the time comes. Mr Orszag is right that, if implemented, this provision will represent an important lever of cost control. But it’s a big “if”.
"What You Get With Free Health Care," by Janice Shaw Crouse, Townhall, March 29, 2010 ---
http://townhall.com/columnists/JaniceShawCrouse/2010/03/29/what_you_get_with_free_health_careOne of the prime arguments used to sell ObamaCare was that it would reverse the financial crisis and save the country a gazillion dollars — with benefits beginning in its first year. Sadly, somebody’s arm got twisted to produce Congressional Budget Office (CBO) figures — nicely timed for the House vote — to supposedly back up the Democrats’ arguments. Nobody seemed to understand that the CBO figures were just estimates. Yet, as they say, the devil is in the details. The CBO details clearly indicate that having the government’s role expanded to provide universal coverage will significantly increase costs, as well as premiums and taxes. Worse, the CBO notes that most of the current costs of the U.S. world-class health care are from providing new, cutting-edge treatments and ever-expanding medical technologies. They add, “Given the central role of medical technology in cost growth, reducing or slowing spending over the long term would probably require decreasing the pace of adopting new treatments and procedures or limiting the breadth of their application.”
How’s that for dispelling the claims that quality will remain high, rationing won’t happen, and technology will continue to expand while costs go down? The real life record of government control is a long way from matching the soaring rhetoric that has dominated the media coverage of the health care debate. Further, in those countries where massive government intervention has replaced free market enterprise, the reality is far short of the utopian promises and the policies that have been spun out so recklessly and misleadingly. Price controls, inevitably, limit innovation. If that happens to medical research and technological advancement, the results will be disastrous.
Continued in article
Note that I’m not in favor of repealing the recent legislation. But I am in favor of adding a public option so long as taxation and insurance premiums are added to fully cover the annual costs of health insurance. And let's stop the BS on the left and on the right side of this debate.
Fuzzy CBO Accounting Tricks
"ObamaCare by the Numbers: Part 2," by John Cassidy,
The New Yorker,
March 2010 ---
http://www.newyorker.com/online/blogs/johncassidy/2010/03/obamacare-by-the-numbers-part-2.html
This is a long and somewhat involved followup to my previous post on ObamaCare. . For those of you with O.A.D.D. (online attention-deficit disorder), I’ve provided an express and local version.
EXPRESS:
The official projections for health-care reform, which show it greatly reducing the number of uninsured and also reducing the budget deficit, are simply not credible. There are three basic issues.
The cost and revenue projections rely on unrealistic assumptions and accounting tricks. If you make some adjustments for these, the cost of the plan is much higher.
The so-called “individual mandate” isn’t really a mandate at all. Under the new system, many young and healthy people will still have a strong incentive to go uninsured.
Once the reforms are up and running, some employers will have a big incentive to end their group coverage plans and dump their employees onto the taxpayer-subsidized individual plans, greatly adding to their cost.
LOCAL:
For future reference (or possibly to roll up and beat myself over the head with in my dotage) I have filed away a copy the latest analysis (pdf) of health-care reform from the Congressional Budget Office. By 2019, it says, the bills passed by the House and Senate will have cut the number of uninsured Americans by thirty-two million, raised the percentage of people with some form of health-care coverage from eighty-three per cent to ninety-four per cent, and reduced the federal deficit by a cumulative $143 billion. If all of these predictions turn out to be accurate, ObamaCare will go down as one of the most successful and least costly government initiatives in history. At no net cost to the taxpayer, it will have filled a gaping hole in the social safety net and solved a problem that has frustrated policymakers for decades.
Does Santa Claus live after all? According to the C.B.O., between now and 2019 the net cost of insuring new enrollees in Medicaid and private insurance plans will be $788 billion, but other provisions in the legislation will generate revenues and cost savings of $933 billion. Subtract the first figure from the second and—voila!—you get $143 billion in deficit reduction.
The first objection to these figures is that the great bulk of the cost savings—more than $450 billion—comes from cuts in Medicare payments to doctors and other health-care providers. If you are vaguely familiar with Washington politics and the letters A.A.R.P. you might suspect that at least some of these cuts will fail to materialize. Unlike some hardened skeptics, I don’t think none of them will happen. One part of the reform involves reducing excessive payments that the Bush Administration agreed to when it set up the Medicare Advantage program in 2003. If Congress remains under Democratic control—a big if, admittedly—it will probably enact these changes. But that still leaves another $300 billion of Medicare savings to be found.
The second problem is accounting gimmickry. Acting in accordance with standard Washington practices, the C.B.O. counts as revenues more than $50 million in Social Security taxes and $70 billion in payments towards a new home-care program, which will eventually prove very costly, and it doesn’t count some $50 billion in discretionary spending. After excluding these pieces of trickery and the questionable Medicare cuts, Douglas Holtz-Eakin, a former head of the C.B.O., has calculated that the reform will actually raise the deficit by $562 billion in the first ten years. “The budget office is required to take written legislation at face value and not second-guess the plausibility of what it is handed,” he wrote in the Times. “So fantasy in, fantasy out.”
Holtz-Eakin advised John McCain in 2008, and he has a reputation as a straight shooter. I think the problems with the C.B.O.’s projections go even further than he suggests. If Holtz-Eakin’s figures turned out to be spot on, and over the next ten years health-care reform reduced the number of uninsured by thirty million at an annual cost of $56 billion, I would still regard it as a great success. In a $15 trillion economy—and, barring another recession, the U.S. economy should be that large in 2014—fifty or sixty billion dollars is a relatively small sum—about four tenths of one per cent of G.D.P., or about eight per cent of the 2011 Pentagon budget.
My two big worries about the reform are that it won’t capture nearly as many uninsured people as the official projections suggest, and that many businesses, once they realize the size of the handouts being offered for individual coverage, will wind down their group plans, shifting workers (and costs) onto the new government-subsidized plans. The legislation includes features designed to prevent both these things from happening, but I don’t think they will be effective.
Consider the so-called “individual mandate.” As a strict matter of law, all non-elderly Americans who earn more than the poverty line will be obliged to obtain some form of health coverage. If they don’t, in 2016 and beyond, they could face a fine of about $700 or 2.5 per cent of their income—whichever is the most. Two issues immediately arise.
Even if the fines are vigorously enforced, many people may choose to pay them and stay uninsured. Consider a healthy single man of thirty-five who earns $35,000 a year. Under the new system, he would have a choice of enrolling in a subsidized plan at an annual cost of $2,700 or paying a fine of $875. It may well make sense for him to pay the fine, take his chances, and report to the local emergency room if he gets really sick. (E.R.s will still be legally obliged to treat all comers.) If this sort of thing happens often, as well it could, the new insurance exchanges will be deprived of exactly the sort of healthy young people they need in order to bring down prices. (Healthy people improve the risk pool.)
If the rules aren’t properly enforced, the problem will be even worse. And that is precisely what is likely to happen. The I.R.S. will have the administrative responsibility of imposing penalties on people who can’t demonstrate that they have coverage, but it won’t have the legal authority to force people to pay the fines. “What happens if you don’t buy insurance and you don’t pay the penalty?” Ezra Klein, the Washington Post’s industrious and well-informed blogger, asks. “Well, not much. The law specifically says that no criminal action or liens can be imposed on people who don’t pay the fine.”
So, the individual mandate is a bit of a sham. Generous subsidies will be available for sick people and families with children who really need medical care to buy individual coverage, but healthy single people between the ages of twenty-six and forty, say, will still have a financial incentive to remain outside the system until they get ill, at which point they can sign up for coverage. Consequently, the number of uninsured won’t fall as much as expected, and neither will prices. Without a proper individual mandate, the idea of universality goes out the window, and so does much of the economic reasoning behind the bill.
The question of what impact the reforms will have on existing insurance plans has received even less analysis. According to President Obama, if you have coverage you like you can keep it, and that’s that. For the majority of workers, this will undoubtedly be true, at least in the short term, but in some parts of the economy, particularly industries that pay low and moderate wages, the presence of such generous subsidies for individual coverage is bound to affect behavior eventually. To suggest this won’t happen is to say economic incentives don’t matter.
Take a medium-sized firm that employs a hundred people earning $40,000 each—a private security firm based in Atlanta, say—and currently offers them health-care insurance worth $10,000 a year, of which the employees pay $2,500. This employer’s annual health-care costs are $750,000 (a hundred times $7,500). In the reformed system, the firm’s workers, if they didn’t have insurance, would be eligible for generous subsidies to buy private insurance. For example, a married forty-year-old security guard whose wife stayed home to raise two kids could enroll in a non-group plan for less than $1,400 a year, according to the Kaiser Health Reform Subsidy Calculator. (The subsidy from the government would be $8,058.)
In a situation like this, the firm has a strong financial incentive to junk its group coverage and dump its workers onto the taxpayer-subsidized plan. Under the new law, firms with more than fifty workers that don’t offer coverage would have to pay an annual fine of $2,000 for every worker they employ, excepting the first thirty. In this case, the security firm would incur a fine of $140,000 (seventy times two), but it would save $610,000 a year on health-care costs. If you owned this firm, what would you do? Unless you are unusually public spirited, you would take advantage of the free money that the government is giving out. Since your employees would see their own health-care contributions fall by more than $1,100 a year, or almost half, they would be unlikely to complain. And even if they did, you would be saving so much money you afford to buy their agreement with a pay raise of, say, $2,000 a year, and still come out well ahead.
Even if the government tried to impose additional sanctions on such firms, I doubt it would work. The dollar sums involved are so large that firms would try to game the system, by, for example, shutting down, reincorporating under a different name, and hiring back their employees without coverage. They might not even need to go to such lengths. Firms that pay modest wages have high rates of turnover. By simply refusing to offer coverage to new employees, they could pretty quickly convert most of their employees into non-covered workers.
The designers of health-care reform and the C.B.O. are aware of this problem, but, in my view, they have greatly underestimated it. According to the C.B.O., somewhere between eight and nine million workers will lose their group coverage as a result of their employers refusing to offer it. That isn’t a trifling number. But the C.B.O. says it will be largely offset by an opposite effect in which employers that don’t currently provide health insurance begin to offer it in response to higher demand from their workers as a result of the individual mandate. In this way, some six to seven million people will obtain new group coverage, the C.B.O. says, so the overall impact of the changes will be minor.
The C.B.O.’s analysis can’t be dismissed out of hand, but it is surely a best-case scenario. Again, I come back to where I started: the scale of the subsidies on offer for low and moderately priced workers. If economics has anything to say as a subject, it is that you can’t offer people or firms large financial rewards for doing something—in this case, dropping their group coverage—and not expect them to do it in large numbers. On this issue, I find myself in agreement with Tyler Cowen and other conservative economists. Over time, the “firewall” between the existing system of employer-provided group insurance and taxpayer-subsidized individual insurance is likely to break down, with more and more workers being shunted over to the public teat.
At that point, if it comes, politicians of both parties will be back close to where they began: searching for health-care reform that provides adequate coverage for all at a cost the country can afford. What would such a system look like? That is a topic for another post, but I don’t think it would look much like Romney-ObamaCare.
"Premiums Will Decrease 3000% So You Should Get A Raise When
H'care Is Passed"
Barach Obama ---
http://www.youtube.com/watch?v=lUd-slJc-GY&feature=player_embedded
"Obamacare: Cooked Books You Can Believe In," by Deeroy Murdock,
National Review, March 11, 2010 ---
http://article.nationalreview.com/427508/obamacare-cooked-books-you-can-believe-in/deroy-murdock?page=1
The non-partisan Congressional Budget Office likewise warned last December 23 that Obamacare’s putative savings “would be received by the government only once, so they cannot be set aside to pay for future Medicare spending and, at the same time, pay for current spending on other parts of the legislation or on other programs. . . . To describe the full amount of [Hospital Insurance] trust fund savings as both improving the government’s ability to pay future Medicare benefits and financing new spending outside of Medicare would essentially double-count a large share of those savings and thus overstate the improvement in the government’s fiscal position.”
Consequently, Sen. Jeff Sessions (R., Ala.) predicts: “Taxpayers will be left holding billions in debt bonds to the Medicare Trust Fund that must be repaid.”
The Senate’s Obamacare bill would take $52 billion in anticipated Social Security revenues and divert them to offset Obamacare’s overall net cost. But wait: Those who have been promised future Social Security payments expect that $52 billion to be available to prevent their pension checks from bouncing. These $104 billion in political pledges cost only $52 billion.
This bill also includes something called Community Living Services and Support. This “CLASS Act” would offer long-term-care insurance with premiums invoiced immediately, but with benefits commencing in 2016. In the interim, the CBO expects a $72 billion surplus to accumulate. Congressional Democrats already have dedicated that sum to counterbalance and thus lower Obamacare’s perceived cost. But the Treasury needs that same $72 billion to finance the CLASS Act’s medical services. So, which is it?
Senate Budget Committee Chairman Kent Conrad (D., N.D.) described this scam in the Washington Post as “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of.”
Continued in article
In his speech Wednesday (March
3, 2010) , demanding an "up or down" vote, the president
seemed convinced and committed—but nothing he said sounded true. His bill will
"bring down the cost of health care for millions," it is "fully paid for," it
will lower the long term deficit by a trillion dollars.
"What a Disaster Looks Like: ObamaCare will have been a colossal waste
of time—if we're lucky," by Peggy Noonan, The Wall Street Journal, March 4,
2010 ---
http://online.wsj.com/article/SB10001424052748704187204575101742162779612.html?mod=djemEditorialPage_t
All this contributes to a second problem, which is a growing credibility gap. In his speech Wednesday, demanding an "up or down" vote, the president seemed convinced and committed—but nothing he said sounded true. His bill will "bring down the cost of health care for millions," it is "fully paid for," it will lower the long term deficit by a trillion dollars.
Does anyone believe this? Does anyone who knows the ways of government, the compulsions of Congress, and how history has played out in the past, believe this? Even a little? Rep. Bart Stupak said Thursday that he and several of his fellow Democrats won't vote for the Senate version of the bill because it says right there on page 2,069 that the federal government would directly subsidize abortions. The bill's proponents say this isn't so. It would be a relief to have a president who could weigh in believably and make clear what his own bill says. But he seems to devote more words to obscuring than clarifying.
Continued in article
"Congressional Budget Office Says Dems Are Using Accounting Trick To Claim Medicare 'Savings'," by Megan McArdle, Business Insider, December 23, 2009 --- http://www.businessinsider.com/congressional-budget-office-says-dems-are-using-accounting-trick-to-claim-healthcare-savings-2009-12
"This bill will strengthen Medicare and extend the life of the program." -
President Barack Obama, after the Senate health care bill secured 60 votes.It's from the Wonk Room blog at the Center for American Progress, and as you can see, it puts this claim up there front and central. As you can see from the quote above, it's not just an error made by one pundit. As I recall, the claim was made more than once during the Senate debate, and of course, by our president in selling the bill. The graphic was very widely distributed.
Unfortunately, the CBO finally got around to ruling on this question, and no, this is not actually going to fix the Medicare budget problem; it's an artifact of the way the government accounting is done.
The explanation is a little complicated, and I'm not sure how many of you want to go through it, but I'll try my hand at a reasonably succinct explanation. Basically, Medicare, like Social Security, has a "trust fund" (actually, more than one), which is supposed to fund it until the trust fund is exhausted in 2019. The "trust fund" does not exist in any meaningful sense, because its "assets" consist of claims on the general fund, i.e. all the rest of the tax money. As Medicare goes into deficit, it trades in those assets to cover its funding gap, which means the general fund has to find the money to pay off the special bonds by either raising taxes, cutting other spending, or borrowing more money. After the trust fund is exhausted, the general fund has to find the money to pay for the Medicare deficit by either . . . raising taxes, cutting other spending, or borrowing more money. The difference to taxpayers is nil.
Technically, when you cut Medicare spending, that money shows up as an increase in the Medicare trust fund, rather than some other possible accounting entry. But the effect on the unified budget is the same: the money saved by cutting Medicare is spent on other stuff. Whether Medicare is "calling bonds" or "demanding money to cover its deficit", we still have to find exactly as much money to pay for Medicare as we did before. Which is a lot of money. One of the reasons the projected deficits for the rest of the decade are so big is that the cost of Medicare is outstripping the revenue raised by its payroll tax, and so we have to shovel in more and more money from the general fund.
You can dedicate that money to paying for Medicare--but then you have to introduce a corresponding future liability on the general fund, in the amount of the Medicare savings. That would mean that this bill would increase the deficit by hundreds of billions of dollars, rather than reducing it.
Or as the CBO says:
The key point is that the savings to the HI trust fund under the PPACA would be received by the government only once, so they cannot be set aside to pay for future Medicare spending and, at the same time, pay for current spending on other parts of the legislation or on other programs. Trust fund accounting shows the magnitude of the savings within the trust fund, and those savings indeed improve the solvency of that fund; however, that accounting ignores the burden that would be faced by the rest of the government later in redeeming the bonds held by the trust fund. Unified budget accounting shows that the majority of the HI trust fund savings would be used to pay for other spending under the PPACA and would not enhance the ability of the government to redeem the bonds credited to the trust fund to pay for future Medicare benefits. To describe the full amount of HI trust fund savings as both improving the government's ability to pay future Medicare benefits and financing new spending outside of Medicare would essentially double-count a large share of those savings and thus overstate the improvement in the government's fiscal position.
It's a little disappointing, really. At the rate that Democratic politicians were generating ever-more-spectacular budget savings from the same old set of health care proposals, I had expected our looming fiscal problems to be permanently resolved by this time next week.
From TheAtlantic - shaping the national debate on the most critical issues of our times, from politics, business, and the economy, to technology, arts, and culture.
Lie: Billions will be saved from new Medicare billing efficiencies and
fraud prevention
Never ending fraud in Medicare billings:
Unaudited overpayments, unqualified items, and criminal vendors
One spending sinkhole can be traced to large
medical-equipment suppliers, device makers, and pharmaceutical companies, which
government auditors and industry veterans describe as a recalcitrant bunch.
Medical manufacturers know public agencies generally pay first and ask questions
later—if ever. Medicare receives 4.4 million claims
daily; fewer than 3% are reviewed before being paid within the legally required
30 days.
"A Hole in Health-Care Reform: Overbilling by medical-equipment suppliers,
device makers, and drug companies has cost taxpayers billions.
New legislation will do little to stem the tide,"
by Chad Terhune, Business Week, December 10, 2009 ---
http://www.businessweek.com/magazine/content/09_51/b4160046945722.htm?link_position=link3
President Barack Obama and his Democratic allies on Capitol Hill say that a vast expansion of health coverage can be funded by squeezing out waste and fraud rather than cutting benefits. Whether that turns out to be true may help determine the success of the sweeping reform package being debated by Congress. Slashing costs is no easy task, and stopping fraud is even tougher. No less than $47 billion in Medicare spending went to dubious claims in the year ended Sept. 30, according to the U.S. Health & Human Services Dept. That's 10.7% of the $440 billion program that subsidizes care for the elderly. Medicaid, the government program for the poor, lets billions trickle away at roughly the same rate. The $10 million annual increase that Congress is allocating to fight fraud may not be enough to do the trick.
One spending sinkhole can be traced to large medical-equipment suppliers, device makers, and pharmaceutical companies, which government auditors and industry veterans describe as a recalcitrant bunch. Medical manufacturers know public agencies generally pay first and ask questions later—if ever. Medicare receives 4.4 million claims daily; fewer than 3% are reviewed before being paid within the legally required 30 days.
One way to get a sense of the scale of the seepage—and the challenge facing the Administration—is to look at whistleblower lawsuits filed under the federal False Claims Act. That law allows company employees to sue on behalf of the government to recover improperly claimed federal funds.
A suit filed by William A. Thomas, a former senior sales manager at Siemens Medical Solutions USA, one of the nation's largest medical suppliers and a unit of German engineering giant Siemens (SI), offers a case study in the difficulty of containing costs. Thomas, a 15-year Siemens Medical veteran, alleges in federal court in Philadelphia that for years the company overbilled the Veterans Affairs Dept. and other government agencies by hundreds of millions of dollars for MRI and CT scan machines and other expensive equipment. These high-tech systems—used to examine everything from damaged knees to suspected cancers—cost $500,000 to $3 million apiece, sometimes more. Thomas, who retired from Siemens in 2008, claims that with no justification other than larger profits, his former employer charged its government customers far more than private-sector buyers for the same equipment.
"Billions and billions could be saved with the right government regulation and oversight applied to health care," Thomas, 56, says in an interview. "But I think corporations will continue running circles around the federal government."
In court filings, Siemens has denied any wrongdoing and has sought to have the Thomas suit dismissed. A company spokesman, Lance Longwell, declined to elaborate for this article, citing the litigation.
The Thomas suit illustrates some of the vagaries of False Claims Act cases, hundreds of which are filed every year against government contractors in a range of industries. As the plaintiff, Thomas stands to pocket up to 30% of any court recovery, with the rest going to the Treasury. The Justice Dept., which can intervene in such suits to help steer them, announced last year that it will stay out of the case against Siemens for now. Yet Thomas' allegations have helped drive a parallel criminal investigation of Siemens' equipment marketing practices by the Defense Dept. and the U.S. Attorney's Office in Philadelphia.
In April federal investigators searched for records at the headquarters of Siemens Medical in Malvern, Pa., a suburb of Philadelphia. Ed Bradley, special agent-in-charge of the Defense Criminal Investigative Service, confirmed that the investigation is continuing but declined to comment further.
Longwell, the Siemens Medical spokesman, says the company is cooperating with criminal investigators. In March, just weeks before the search of its offices, Siemens won a new $267 million contract to provide radiology equipment to the U.S.
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Jensen Comment
The GAO has declared that many huge sink holes for fraud and waste are
unauditable --- the Pentagon, the IRS, Medicare, and the list goes on and on.
But the Congress that funds these programs is manipulated by special interest
groups who do not want these audits. The new sink hole on the block is almost
anything green.
What is happening to America?
Sadly, Medicare patients in Texas may once again be turned away by their doctors under the pending 2009 House version of Obamacare:
The health care bill recently unveiled by Speaker Nancy Pelosi is over 1,900 pages for a reason. It is much easier to dispense goodies to favored interest groups if they are surrounded by a lot of legislative legalese. For example, check out this juicy morsel to the trial lawyers (page 1431-1433 of the bill):
Section 2531, entitled “Medical Liability Alternatives,” establishes an incentive program for states to adopt and implement alternatives to medical liability litigation. [But]…… a state is not eligible for the incentive payments if that state puts a law on the books that limits attorneys’ fees or imposes caps on damages.
Unfortunately, it appears that under Obamacare, Texas will once again have to return to lawyer-ambulance-chasing days of old and revise its Constitution that presently limits attorneys' fees and imposes caps on damages. A former colleague at Trinity University on November 5, 2009 explained in a private message some of the reasonable details of the current Texas restrictions on damages in Texas (sounds reasonable to me and is more generous to patients and lawyers than Canada's really tight restrictions):
It is not true (under the revised Texas Constitution) that those who have been harmed by a physician’s malfeasance will not have their day in a Texas court. They will be able to claim real damages (economic - loss of income and medical costs) as well as punitive and pain and suffering damages – the difference is that some types of damages (non-economic) will be capped. What most of us don’t understand, is that the fear of these huge punitive damages causes physicians to practice defensive medicine – ordering more tests, ordering procedures just to make certain that they’re not missing anything. All these tests and procedures would be great and expected if they in themselves did not pose a risk to the patient, but many of them do. So, physicians must constantly balance their certainty of their diagnosis against the risk to the patient of additional tests. When we add huge punitive damages, we tip the scales in favor of more tests and procedures, which may, in fact, be more risky for the patient. And, in the end the burden for million dollar awards is borne by us all not just the physicians.
Since it is difficult to undo the health damage that has occurred, oversight of the physician is at the heart of the matter. There are ways to insure quality, standard-of-care medical practice outside of expensive court proceedings. So in addition to tort reform, the focus should equally be on systems of accountability for physicians.I think it is an outright lie that Obamacare will not cause many medical specialists to turn their backs on Medicare patients for much the same reason that Erika was turned away by a surgeon from the South Texas Spinal Clinic after having two of his surgeries. It will be amazing that any highly specialized neurosurgeon will accept the losses of treating Medicare patients.
The sad part is that Obamacare will reduce fees allowed to be charged to Medicare patients while at the same time greatly increase the cost of malpractice insurance for physicians treating those patients.
Canadian Malpractice Insurance Takes Profit Out Of
Coverage," by Jane Akre, Injury Board, July 28, 2009 ---
Click Here
The St. Petersburg Times takes a look at the cost of insurance in Canada for health care providers.
A neurosurgeon in Miami pays about $237,000 for medical malpractice insurance. The same professional in Toronto pays about $29,200, reports Susan Taylor Martin.
A Canadian orthopedic surgeon pays just over $10,000 for coverage that costs a Miami physician $140,000. An obstetrician in Canada pays $36,353 for insurance, while a Tampa Bay obstetrician pays $98,000 for medical malpractice insurance.
For those of you interested in Erika's saga with spine surgeries, you can
read about more of the details at
http://www.trinity.edu/rjensen/Erika2007.htm
She has a metal rack on her spine that extends from her neck to her hips.
Surgeons broke her back in three places before attaching the rods and screws, In
spite of the rack she can bend over while standing and pick a paper towel up
from the floor.
"The Cost of Health Care Reform,"
by Michael Tanner, Townhall, November 7, 2009 ---
http://townhall.com/columnists/MichaelTanner/2009/11/07/the_cost_of_health_care_reform
The Democratic leadership simply shifted some of the bill's cost to other bills. For example, for purposes of the health care bill, the Democrats assume that a currently scheduled 21 percent cut in Medicare reimbursements will take affect next year. However, at the same time, they have introduced a separate bill repealing those cuts at a cost of $250 billion, so that cost isn't technically part of health care reform. And your household budget would look so much better if you didn't have to pay your mortgage and car payment. (The Senate just tried to do something similar, only to have the cynical ploy rejected 53-47, with 13 Democrats refusing to play along.)
If you count that cost honestly, the bill's cost rises to nearly $1.3 trillion. And that still understates the bill's cost.
The CBO provides ten year projections of a bill's cost, between 2010 and 2019 in this case. But most provisions of the health bill don't take effect until 2014. So the "10-year" cost projection only includes six years of the bill. Again, consider your household budget. Wouldn't it be great if you could count a whole month's income, but only two weeks expenditures? If we look at the bill more honestly over the first 10 years that the programs are actually in existence, say from 2014 to 2024, it would actually cost more than $2.3 trillion. And, this doesn't include approximately $200 billion in additional spending for public health programs, a reinsurance program for retiree health care, and new preventive care programs that was added to the bill after it was submitted for official "scoring." So call the total cost somewhere in excess of $2.5 trillion.
Continued in article
We believe premiums would come down for several
reasons. Companies would no longer need to spend as much money on administrative
costs, to screen out people with pre-existing conditions (prohibited by all
reform bills). If they wanted to participate on the exchanges (and have access
to millions of new customers), the companies would also be forced to compete
with other private plans, and possibly a public option, encouraging them to
lower premiums and accept lower profits.
The New York Times Editorial, November 1, 2009 ---
http://www.nytimes.com/2009/11/01/opinion/01sun1.html?hp
"Health Cost Containment Troublesome Issue," SmartPros,
November 10, 2009 ---
http://accounting.smartpros.com/x68073.xml
Some Democrats and analysts are raising alarms that bills to reform the U.S. healthcare system fall short of President Obama's pledge to slow health spending.
Obama has made cost containment a key leg to healthcare reform. However, health economists say it isn't possible to know whether the bills would meet that goal, with many saying they doubt they would even come close, The New York Times reported Tuesday.
Both the House and the Senate propose cost-saving measures. The House bill, which passed Saturday, projects $440 billion in Medicare savings over 10 years. The Senate Finance Committee bill projects about $420 billion. White House officials said additional savings in the private sector would be realized as well.
Experts, even those whom the White House consulted, said the measures represent only small steps toward revising the existing fee-for-service system, which drives up costs by paying health providers for each visit or procedure performed -- and some lawmakers are paying attention, the Times said.
"My assessment at this point," said Sen. Ron Wyden, D-Ore., and a member of the Finance Committee, "is that the legislation is heavy on health and light on reform."
Sen. Susan Collins, R-Maine, during a news conference Monday with Sen. Lamar Alexander, R-Tenn., shared her concern about the cost-containment issue. Collins said she also has met with moderate Democrats who share her view.
"I don't believe we need more pilot projects to show us that healthcare delivery reforms are necessary," Collins told the Times. "I think people are much more upset over the cost of care than the administration is acknowledging."
Jensen Comment
You can argue for coverage of all new insureds irrespective of pre-existing
conditions on the basis of social equity, but the reasoning of the NYT editorial
above is pure hogwash. If this were true at least one medical insurance company
would've added to profits by ending pre-screening expenses. Pre-existing
conditions often require the most expensive kinds of treatment for such things
as organ transplants, cataracts, kidney dialysis, etc.
Also eliminating pre-existing conditions coupled with the inevitable coverage of illegal immigrants creates moral hazard in that when Grandma Lopez in Mexico City needs an eye operation, her relatives will float her across the Rio Grande primarily for immediate $25,000 eye surgery. If she wants to return she might even walk back across the border unassisted after she can see better.
Lie: States like Texas that have capped punitive damages in
medical lawsuits probably may not keep their limiting caps according to pending
Obamacare legislation. Such caps purportedly have significantly lowered medical
insurance rates in those states.
"Pelosi Health Care Bill Blows a Kiss to Trial Lawyers," Andrew Breitbart,
October 30, 2009 ---
Click Here
The health care bill recently unveiled by Speaker Nancy Pelosi is over 1,900 pages for a reason. It is much easier to dispense goodies to favored interest groups if they are surrounded by a lot of legislative legalese. For example, check out this juicy morsel to the trial lawyers (page 1431-1433 of the bill):
Section 2531, entitled “Medical Liability Alternatives,” establishes an incentive program for states to adopt and implement alternatives to medical liability litigation. [But]…… a state is not eligible for the incentive payments if that state puts a law on the books that limits attorneys’ fees or imposes caps on damages.
So, you can’t try to seek alternatives to lawsuits if you’ve actually done something to implement alternatives to lawsuits. Brilliant! The trial lawyers must be very happy today!
While there is debate over the details, it is clear that medical malpractive lawsuits have some impact on driving health care costs higher. There are likely a number of procedures that are done simply as a defense against future possible litigation. Recall this from the Washington Post:
“Lawmakers could save as much as $54 billion over the next decade by imposing an array of new limits on medical malpractice lawsuits, congressional budget analysts said today — a substantial sum that could help cover the cost of President Obama’s overhaul of the nation’s health system. New research shows that legal reforms would not only lower malpractice insurance premiums for medical providers, but would also spur providers to save money by ordering fewer tests and procedures aimed primarily at defending their decisions in court, Douglas Elmendorf, director of the nonpartisan Congressional Budget Office, wrote in a letter to Sen. Orrin Hatch (R-Utah).”
Lie: The U.S. infant mortality rate is much higher than even in Cuba and Europe
Longtime readers will recall that we caught Kristof playing similar games with statistics back in January 2005, when he claimed that the U.S. infant-mortality rate was worse than communist Cuba's and much worse than European rates. We pointed out that a central reason U.S. rates are high is that American physicians make heroic efforts to save extremely premature infants, who nonetheless have a mortality rate in excess of 50%. In other countries, these babies are simply discarded and not even counted in the statistics.
Wall Street Journal Editors Newsletter, November 6, 2009
Lie: Capping punitive damages does not save a significant amount of
money in medical costs.
Here’s an academic study of over 10 million insured. Although 1-2% on average does not sound very large, it adds up if you eventually count in medical insurance costs of 200-300 million insured people.
Limiting medical malpractice punitive (as opposed to damage) awards has also been shown in Canada to greatly reduce costs of the National Health Care Plan.
The Impact of Tort Reform on Employer-Sponsored
Health Insurance Premiums
Ronen
Avraham (University of Texas at Austin, School of Law(, Leemore S. Dafny
(Kellogg School of Management, Northwestern University) and NBER Max M.
Schanzenbach, (Northwestern University, School of Law)
September 2009 ---
Click Here
http://www.kellogg.northwestern.edu/faculty/dafny/personal/Documents/Working%20Papers/ADS_9_09w_ack.pdf
Abstract
We evaluate the effect of tort reform on employer-sponsored health insurance premiums by exploiting state-level variation in the timing of reforms. Using a dataset of healthplans representing over 10 million Americans annually between 1998 and 2006, we find that caps on non-economic damages, collateral source reform, and joint and several liability reform reduce premiums by 1 to 2 percent each. These reductions are concentrated in PPOs rather than HMOs, suggesting that can HMOs can reduce “defensive” healthcare costs even absent tort reform. The results are the first direct evidence that tort reform reduces healthcare costs in aggregate; prior research has focused on particular medical conditions.
Lie: Baucus' Senate bill taxes gold plated medical insurance that's
only a tax on the rich
Yeah right! How about postal workers? This is misleading at best since the many
unions have negotiated gold plated coverage for their rank and file. Some of the
best medical insurance in the U.S. is given to some of the lowest-paid
workers in the U.S. who can ill-afford a tax on their premium insurance plans.
Unions are against this tax, so it will most certainly die in the House
negotiations and force our Keystone Cops to scurry for other taxes or borrow
more trillions from China.
Lie: In an effort to rush through Obamacare in 2009, Congress
will drop demands for a government-operated health insurance competitor in
favor of a non-profit Fannie Health Insurance Cooperative
not run by the government. (this promise no longer exists in the current
House version of the the pending legislation)
This is obvious bait and switch fraud. The
bait is to get Obamacare passed this year by
making grandiose claims about not having government health insurance to compete
unfairly with private health insurance companies. The
switch is that Fannie HIC, like Fannie Mae, is doomed from get
go and will have to be taken over by the government.
Fannie HIC will insure tens of millions of minimum-wage workers, part-time workers, the unemployable, and the otherwise unemployed. There's zero chance of having premium revenues come anywhere close to cash outflows for expanded health, mental health and social service coverage demanded in H.R. 3200. Before she even commences operation, Fannie HIC will have to become a government owned and operated and subsidized health insurance company competing with private insurance companies.
One can only hope that Congress will be so proud of Fannie HIC that this cooperative-gone-government company will provide the only health insurance coverage available to members of the House, Senate, and Executive branches of Federal and State Governments. Fat Chance!
Whereas Fannie Mae cost taxpayers hundreds of billions of dollars in toxic mortgages mandated by Rep. Barney Frank and Sen. Chris Dodd, Fannie HIC will cost taxpayers untold trillions. Well, maybe not. The economic disasters Bernanke, Geithner, and Summers are agreeing to print U.S. dollars in lieu of having to tax and borrow to fund trillion dollar government spending deficits. Isn't that a brilliant idea? --- http://blog.mises.org/archives/009457.asp
Video: David Dreman Warns About 10-12% Inflation, Simoleon Sense,
August 5, 2009 ---
http://www.simoleonsense.com/videodavid-dreman-warns-about-10-12-inflation/
For starters, $1 trillion of extra debt-financed
spending would cause the government to pay about $300 billion of extra
interest in the next decade. Moreover, the CBO's method of estimating the
cost of such a program doesn't recognize the incentives it creates for
households and firms to change their behavior. The House health-care bill
gives a large subsidy to millions of families with incomes up to three times
the poverty level (i.e., up to $66,000 now for a family of four) if they buy
their insurance through one of the newly created "insurance exchanges," but
not if they get their insurance from their employer. The CBO's cost estimate
understates the number who would receive the subsidy because it ignores the
incentive for many firms to drop employer-provided coverage. It also ignores
the strong incentive that individuals would have to reduce reportable cash
incomes to qualify for higher subsidy rates. The total cost of ObamaCare
over the next decade likely would be closer to $2 trillion than to $1
trillion.
Martin Feldstein, "ObamaCare's
Crippling Deficits The higher taxes, debt payments and interest rates needed
to pay for health reform mean lower living standard," The Wall Street
Journal, September 7, 2009 ---
http://online.wsj.com/article/SB10001424052970203585004574393110640864526.html?mod=djemEditorialPage
"Fact Check: Obama Uses Iffy Math on Deficit Pledge," SmartPros, September 10, 2009 --- http://accounting.smartpros.com/x67604.xml
President Barack Obama used only-in-Washington accounting Wednesday when he promised to overhaul the nation's health care system without adding "one dime" to the deficit. By conventional arithmetic, Democratic plans would drive up the deficit by billions of dollars.
The president's speech to Congress contained a variety of oversimplifications and omissions in laying out what he wants to do about health insurance.
A look at some of Obama's claims and how they square with the facts or the fuller story:
---
OBAMA: "I will not sign a plan that adds one dime to our deficits either now or in the future. Period."
THE FACTS: Though there's no final plan yet, the White House and congressional Democrats already have shown they're ready to skirt the no-new-deficits pledge.
House Democrats offered a bill that the Congressional Budget Office said would add $220 billion to the deficit over 10 years. But Democrats and Obama administration officials claimed the bill actually was deficit-neutral. They said they simply didn't have to count $245 billion of it - the cost of adjusting Medicare reimbursement rates so physicians don't face big annual pay cuts.
Their reasoning was that they already had decided to exempt this "doc fix" from congressional rules that require new programs to be paid for. In other words, it doesn't have to be paid for because they decided it doesn't have to be paid for.
The administration also said that since Obama already had included the doctor payment in his 10-year budget proposal, it didn't have to be counted again.
That aside, the long-term prognosis for costs of the health care legislation has not been good.
CBO Director Douglas Elmendorf had this to say in July: "We do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount."
---
OBAMA: "Nothing in this plan will require you or your employer to change the coverage or the doctor you have."
THE FACTS: That's correct, as far as it goes. But neither can the plan guarantee that people can keep their current coverage. Employers sponsor coverage for most families, and they'd be free to change their health plans in ways that workers may not like, or drop insurance altogether. The Congressional Budget Office analyzed the health care bill written by House Democrats and said that by 2016 some 3 million people who now have employer-based care would lose it because their employers would decide to stop offering it.
In the past Obama repeatedly said, "If you like your health care plan, you'll be able to keep your health care plan, period." Now he's stopping short of that unconditional guarantee by saying nothing in the plan "requires" any change.
---
OBAMA: "The reforms I'm proposing would not apply to those who are here illegally." One congressman, South Carolina Republican Joe Wilson, shouted "You lie!" from his seat in the House chamber when Obama made this assertion. Wilson later apologized.
THE FACTS: The facts back up Obama. The House version of the health care bill explicitly prohibits spending any federal money to help illegal immigrants get health care coverage. Illegal immigrants could buy private health insurance, as many do now, but wouldn't get tax subsidies to help them. Still, Republicans say there are not sufficient citizenship verification requirements to ensure illegal immigrants are excluded from benefits they are not due.
---
OBAMA: "Don't pay attention to those scary stories about how your benefits will be cut. ... That will never happen on my watch. I will protect Medicare."
THE FACTS: Obama and congressional Democrats want to pay for their health care plans in part by reducing Medicare payments to providers by more than $500 billion over 10 years. The cuts would largely hit hospitals and Medicare Advantage, the part of the Medicare program operated through private insurance companies.
Although wasteful spending in Medicare is widely acknowledged, many experts believe some seniors almost certainly would see reduced benefits from the cuts. That's particularly true for the 25 percent of Medicare users covered through Medicare Advantage.
Supporters contend that providers could absorb the cuts by improving how they operate and wouldn't have to reduce benefits or pass along costs. But there's certainly no guarantee they wouldn't.
---
Video Shocker
"Health Care Shocker: Special Democratic Voting Counties Would Get Protected Medicare Benefits," Brietbart ---
http://www.breitbart.tv/healthcare-shocker-special-democratic-voting-counties-would-get-protected-medicare-benefits/OBAMA: Requiring insurance companies to cover preventive care like mammograms and colonoscopies "makes sense, it saves money, and it saves lives."
THE FACTS: Studies have shown that much preventive care - particularly tests like the ones Obama mentions - actually costs money instead of saving it. That's because detecting acute diseases like breast cancer in their early stages involves testing many people who would never end up developing the disease. The costs of a large number of tests, even if they're relatively cheap, will outweigh the costs of caring for the minority of people who would have ended up getting sick without the testing.
The Congressional Budget Office wrote in August: "The evidence suggests that for most preventive services, expanded utilization leads to higher, not lower, medical spending overall."
That doesn't mean preventive care doesn't make sense or save lives. It just doesn't save money.
---
OBAMA: "If you lose your job or change your job, you will be able to get coverage. If you strike out on your own and start a small business, you will be able to get coverage."
THE FACTS: It's not just a matter of being able to get coverage. Most people would have to get coverage under the law, if his plan is adopted.
In his speech, Obama endorsed mandatory coverage for individuals, an approach he did not embrace as a candidate.
He proposed during the campaign - as he does now - that larger businesses be required to offer insurance to workers or else pay into a fund. But he rejected the idea of requiring individuals to obtain insurance. He said people would get insurance without being forced to do so by the law, if coverage were made affordable. And he repeatedly criticized his Democratic primary rival, Hillary Rodham Clinton, for proposing to mandate coverage.
"To force people to get health insurance, you've got to have a very harsh penalty," he said in a February 2008 debate.
Now, he says, "individuals will be required to carry basic health insurance - just as most states require you to carry auto insurance."
He proposes a hardship waiver, exempting from the requirement those who cannot afford coverage despite increased federal aid.
---
OBAMA: "There are now more than 30 million American citizens who cannot get coverage."
THE FACTS: Obama time and again has referred to the number of uninsured as 46 million, a figure based on year-old Census data. The new number is based on an analysis by the Kaiser Commission on Medicaid and the Uninsured, which concluded that about two-thirds of Americans without insurance are poor or near poor. "These individuals are less likely to be offered employer-sponsored coverage or to be able to afford to purchase their own coverage," the report said. By using the new figure, Obama avoids criticism that he is including individuals, particularly healthy young people, who choose not to obtain health insurance.
Jensen Comment
In fairness, a single-payer medical insurance provider that covered all
Americans would probably result in cost savings in the long run. However,
President Obama realistically proclaims that such an abrupt changeover with lead
to unprecedented turmoil and inefficiencies, to say nothing of quality of care,
if the U.S. Government abruptly decided to insure 300 million Americans in one
fell swoop.
And the cost of phasing in a single-payer system would cause massive deficits, including the windfall profits that government would have to pay present medical insurance companies to operate efficiently over the years before they must operate before being terminated.
The fact of the matter is that we will be forced to live with inefficient private insurers until they are shut down or take over by government. In the meantime, government spending deficits will soar due to increased numbers of insured Americans, illegal immigrants, and expanded scope of coverage (mental health, pre-existing conditions, marriage counseling, and expanded social services).
"How Congress Is Cooking the Books," by Michael Tanner, The New York Post, September 30, 2009 --- Click Here
LAST week, the Senate Finance Committee voted 12-11 not to wait for the Congressional Budget Office to "score" its health-care bill before the committee votes on it. Imagine that: Some senators actually wanted to know how much the bill costs before voting on it.
Let them get away with something like that, and before you know it they'll be demanding honest accounting practices -- sending the whole legislative process to hell in a hand basket.
When it comes to the health-care-reform debate, you see, honest budgeting is nowhere to be seen.
Start with the simple matter of how much health-care reform will cost. The House bill, HR 3200, will cost roughly $1.3 trillion over 10 years -- or so we're told. By the same token, the Senate Finance Committee bill is supposed to cost just under $900 billion. Sure, that's a lot of money -- but it still badly understates the true cost.
The CBO provides 10- year projections of a bill's cost. But most provisions of the health bill don't take effect until 2014. So the "10-year" cost projection only includes six years of the bill.
Plus, the costs ramp up slowly. In its first year, the House bill would only cost about $6 billion; in its first three, less than $100 billion. The big costs are in the final years of the 10-year budget window -- and beyond. In fact, over the first 10 years that the House bill would be in existence (2014 to 2024), its costs would be closer to $2.4 trillion. Similarly, the real cost of the Senate bill over 10 years of operation is estimated at $1.5 trillion.
Worse, the trajectory of the costs after 10 years rises dramatically -- meaning "reform" would cost even more in its second 10 years and beyond.
Such gimmicks also infest the projections of how much reform will add to the deficit. CBO says the House bill adds $235 billion to the deficit. But that, again, cuts off arbitrarily in 2019. Beyond that date, the bill adds enormously to the deficit, about $1.5 trillion in the second 10 years. In fact, if the health-reform bill were treated like other entitlements, such as Social Security and Medicare, which are required to have a 75-year actuarial forecast, its unfunded liabilities would exceed $9.2 trillion.
Of course, the Senate Finance Bill is supposed to be deficit-neutral. But that claim relies on other forms of budgetary flimflam.
For example, the Senate bill relies on Medicare "savings" that Congress keeps refusing to make. Specifically, Medicare has long been ordered to cut 21 percent from what it pays health-care providers -- yet, each year since 2003, for reasons both good and bad, Congress has voted to defer the cuts.
Does anyone else really think that Congress is simply going to slash payments to doctors and hospitals by 21 percent across the board?
Of course, President Obama has long said we can cut Medicare by $500 billion simply by eliminating fraud, waste and abuse. That would be the same "fraud, waste and abuse" that the government has been cutting since Ronald Reagan first used the term.
The truth is that health-care reform is going to cost us a lot. And we're going to pay for it in higher taxes and more debt.
No wonder they don't want us to know.
"Medicare Part D 'Reforms' Will Harm Seniors An ObamaCare
change will cost taxpayers a bundle and lead to poorer drug coverage," Tom
Scully, The Wall Street Journal, December 7, 2009 ---
http://online.wsj.com/article/SB10001424052748704107104574569930258127214.html#mod=djemEditorialPage
There is a little-noticed provision buried deep in both the House and Senate health-care reform bills that is intended to save billions of dollars—but instead will hurt millions of seniors, impose new costs on taxpayers, and charge employers millions in new taxes.
As part of the Medicare Modernization Act in 2003, Congress created a new drug benefit—called Medicare Part D—for retirees at a cost of about $1,900 per recipient per year. Many private employers already provided drug coverage for their retirees, and the administration and Congress did not want to tempt employers into dropping their coverage. Actuaries calculated that if the government provided a subsidy of at least $800, employers would not stop covering retirees.
The legislation created a $600 tax-free benefit (the equivalent of $800 cash for employers), and it worked. Employers continued to cover about seven million retirees who might have otherwise been dumped into Medicare Part D.
It was a good arrangement for all involved. An $800 subsidy is cheaper than the $1,900 cost of providing drug coverage. And millions of seniors got to keep a drug benefit they were comfortable with and that in many cases was better than the benefit offered by the government.
But now that subsidy is coming in to be clipped. This fall congressional staff, looking for a new revenue source to pay for health reform, proposed eliminating the tax deductibility of the subsidy to employers. The supposed savings were estimated by congressional staff to be as much as $5 billion over the next decade.
It sounds smart—except that nobody asked how many employers will drop retiree drug coverage. Clearly, many will. The result is that, instead of saving money, the proposed revenue raiser will force Medicare Part D costs to skyrocket as employers drop retirees into the program.
The careful calculation that was made in 2003 to minimize federal spending and maximize private coverage will go out the window if this provision becomes law. Any short-term cost savings that Congress gets by changing the tax provision will be overwhelmed by higher costs in the long run.
Some members in the House want to mitigate the cost of this provision by mandating that employers maintain existing levels of retiree coverage despite the reduced subsidy. But it's not that simple. A mandate would increase costs on businesses, which in turn would make it harder for those businesses to hire new employees. The mandate would effectively be a tax on employers that provide retiree benefits; this in turn will simply induce some unknown number of employers to terminate their retiree drug programs before the mandate kicks in.
In short, if the changes that are proposed for employer subsidies in the current Medicare Part D program are enacted, everyone will lose. Unions will lose as employers seek ways to drop retiree drug coverage. Seniors will lose as employers drop them into Medicare Part D. Medicare and taxpayers will lose as they face higher costs. And employers will lose as they find it harder to provide benefits.
To make matters worse, accounting rules for post-retirement benefits will require companies that keep their retiree benefits to record the entire accrued present value of the new tax the day the provision is signed into law. This would cause many employers to immediately post billions in losses, which could significantly impact our financial markets.
There are many reasons to pass health-care reform. There is no reason to hurt seniors, employers and taxpayers in the process. Businesses are struggling, and the Medicare trust funds have plenty of problems as it is. It makes no sense to make these problems worse.
Mr. Scully was the administrator of the Centers for Medicare and Medicaid Services from 2001-04 and was one of the designers of the Medicare Part D benefit.
'Liberals Seek Health Care Access for Illegals: A
group of House Democrats say it's unfair to bar illegal immigrants from
paying their own way in a government-sponsored exchange," The Washington
Times, September 27, 2009 ---
http://www.foxnews.com/politics/2009/09/27/liberals-seek-health-care-access-illegals/
Fearful that they're losing ground on immigration and health care, a group of House Democrats is pushing back and arguing that any health care bill should extend to all legal immigrants and allow illegal immigrants some access, The Washington Times reported on Monday.
The Democrats, trying to stiffen their party's spines on the contentious issue, say it's unfair to bar illegal immigrants from paying their own way in a government-sponsored exchange. Legal immigrants, they say, regardless of how long they've been in the United States, should be able to get government-subsidized health care if they meet the other eligibility requirements.
"Legal permanent residents should be able to purchase their plans, and they should also be eligible for subsidies if they need it. Undocumented, if they can afford it, should be able to buy their own private plans. It keeps them out of the emergency room," said Rep. Michael M. Honda, California Democrat and chairman of the Congressional Asian Pacific American Caucus.
Honda was joined by more than 20 of his colleagues in two letters laying out the demands.
Coverage for immigrants is one of the thorniest issues in the health care debate, and one many Democratic leaders would like to avoid. But immigrant rights groups and the Democrats who sent the letters say they have to take a stand now.
Jensen Comment
The key absurdity here is the statement "pay their own way." If a foreigner
in need of a $50,000 eye implant surgeries sneak into the U.S. for the main
purpose of paying $100 in premiums for each $50,000 surgery and then return
to their home countries, these aliens have hardly "paid their own way."
They've taken on illegal alien status mainly for getting expensive health
care on the cheap.
"What disturbs Americans of all ideological persuasions is the fear that almost everything, not just government, is fixed or manipulated by some powerful hidden hand," Frank Rich wrote in Sunday's New York Times.
That manipulation should disturb us. But contrary to Rich, it is not the work of "corporatists" who have sprung up to attack progressive reforms proposed by Obama and the Democratic majority. Manipulation is what we got many years ago when we traded a more or less free market for the "progressive" interventionist state. When government is big, the well-connected always have an advantage over the rest of us in influencing public policy.
Observe: Although President Obama and big-government activists demonize health-insurance companies, the companies "are still mostly on board with the president's effort to overhaul the U.S. health-care system," the Wall Street Journal reports; and ...
Although the activists criticize Big Pharma, "The drug industry has already contributed millions of dollars to advertising campaigns for the health care overhaul through the advocacy groups like Healthy Economies Now and Families USA. It has spent about $1 million on similar advertisements under its own name," the Times reports.
Big Pharma and Big Insurance want Obama-style health-care reform?
It's not so hard to understand. "The drug makers stand to gain millions of new customers," the Times said.
And from the Journal: "If health legislation succeeds, the [insurance] industry would likely get a fresh batch of new customers. In particular, many young and healthy people who currently forgo coverage would be forced to sign up." No wonder insurers are willing to stop "discriminating" against sick people. (Forget that the essence of insurance is discrimination according to risk.)
Not that Big Pharma and Big Insurance like every detail of the Democratic plan. Drug companies don't want Medicare negotiating drug prices—for good reason. If it forces drug prices down, research and development will be discouraged. (Depending whom you believe, Obama may or may not have agreed with the drug companies on this point.)
As for the insurance companies, they worry—legitimately—that a government insurance company—the so-called public option"—would drive them out of business. This isn't alarmism. It's economics. The public option would have no bottom line to worry about and therefore could engage in "predatory pricing" against the private insurers.
But despite these differences, the biggest companies in these two industries are on board with "reform."
It illustrates economist Steven Horwitz's First Law of Political Economy: "No one hates capitalism more than capitalists." In this case, big business wants to shape—and profit from—what inevitably will be an interventionist health-care reform. Can you think of the last time a major business supported a truly free market in anything?
In light of all this, it's funny to watch Democrats and their activist allies panic over the protests at congressional town meetings around the country. Tools of the corporate interests! they cry. But anyone opposing "socialized medicine" at the meeting can't be a mouthpiece for big business because, as we've seen, big business supports government control. Conservative groups may be encouraging people to vent their anger at congressmen who pass burdensome legislation without even bothering to read it, but that's no reason to insult the protestors as pawns. What's wrong with organizations helping like-minded people to voice their opinions? Why do Democrats, such as Speaker Nancy Pelosi, dismiss citizen participation as "AstroTurf"—not real grassroots—only when citizens oppose the kind of big government they favor?
They weren't so dismissive when George W. Bush was president and people protested—appropriately—his accumulation of executive powers.
"When handfuls of Code Pink ladies disrupted congressional hearings or speeches by Bush administration officials," Glenn Reynolds writes, "it was taken as evidence that the administration's policies were unpopular, and that the thinking parts of the populace were rising up in true democratic fashion. ... But when it happens to Democrats, it's something different: A threat to democracy, a sign of incipient fascism ... House Speaker Nancy Pelosi calls the 'Tea Party' protesters Nazis. ... "
So when lefties do it, it's called "community organizing."
When conservatives and libertarians do it, it's "AstroTurf."
Give me a break.
John Stossel is co-anchor of ABC News' 20/20 and the author of Myth, Lies, and Downright Stupidity. He has a new blog at http://blogs.abcnews.com/johnstossel.Jensen Comment
So who's against Obamacare? I think of the little people who are tired of being told that it's raining when hypocrites in Congress are peeing on our shoes. I think it's the little people who know full well that Obamacare will be neither less expensive nor less wasteful of consumer/taxpayer dollars. I think of the little people who are tired of spending deficits that are paving the road to Hell. I think it's the little people who fear the hoards of foreigners sneaking across our borders for free health care. I think it's the little people who wish that genuine photo identification should be required for voting and collection of benefits.John Stossel's right. The great divide between big government and big business is a myth. We're puppets on a string being exploited by the people in glass towers who blow up our economic bubbles and pop our balloons. Obamacare is just another way of justifying lousy health care from overworked and underpaid healthcare providers. Obamacare's another way to beat down small business and competition in America.
The Lie: How to lie with statistics
These Democrats are all over the map on where
precisely Americans place in the life-expectancy rankings. We're 24th,
according to Vice President Joe Biden and Sen. Barbara Boxer; 42nd,
according to Pennsylvania Gov. Ed Rendell; 35th, according to Washington
Post columnist Eugene Robinson; and 47th, according to Rep. Dennis Kucinich.
So the U.S. may have less of a "life expectancy" problem than a "Democratic
math competency" problem. (Coulter mentions other widely varying
medical statistics reported in the media)
Ann Coulter, "Would Your Company
Like to Sponsor the Next Installment of Liberal Lies on National Health
Care?" , Townhall, October 7, 2009 ---
Click Here
The Lie: That the
ten-year cost of the current H.R. 676/3200 is $1.5 trillion as estimated by the
non-partisan Congressional Budget Office. Even without the anticipated
massive fraud that's not factored into these estimates, there is an
accounting problem. Amidst the often emotional passions for passing
universal health (and social services) legislation, the accounting for it
will frontload revenues and defer costs
such that when President Obama finally admits his Obamacare will add to the
Federal deficit, the amounts to be added will be grossly underestimated.
This deception in accounting is what has Social
Security and Medicare entitlements in such deep, deep trouble as the cost
back loading is finally catching up with revenue shortfalls. President Roosevelt in 1935 promised a Trust Fund in which social security
revenues collected in early years would set aside for recipients in their
retirement years. Congress over the years decimated the Trust Fund for
social causes that, although very worthy, were not intended to be funded by
the Social Security Trust Fund.
"The Deficit and Health Care: Falls the Shadow,"
The Economist,
July 25-31, 2009, pp. 25-26 --- "
http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=14085725
Most of the red ink results from the enormous hole the recession has punched in GDP and consequently in tax revenue, the cost of bailing out the financial system, and interest on the mounting debt. Only a small part of it comes from America’s big and growing entitlements, Medicare and Medicaid (health care for the elderly and poor, respectively) and Social Security (public pensions), whose worst fiscal problems lie beyond 2019. “Unless we demonstrate a strong commitment to fiscal sustainability,” Mr Bernanke remarked, “we risk having neither financial stability nor durable economic growth.”
Mr Obama knows all this: he promises repeatedly not to leave the problem to his successors. Yet he has done little to back up the rhetoric. His willingness to veto more F-22 spending is admirable, but the $1.75 billion at stake is immaterial. He will release an updated budget outlook in mid-August, but it is unlikely to contain any notable new initiatives. There is still no sign of a path towards fiscal tightening over the medium term as the economy recovers. Quite the opposite; Mr Obama has not wavered from his position that taxes on those earning less than $250,000 will not go up. In fact, they’ve been temporarily cut. He did say in an interview this week that he might set up a commission that could look at ways of reducing entitlements spending once the recession is over.
The president has promised that health-care reform will be deficit-neutral, but this is a slippery concept. A plan may be deficit-neutral over ten years, but add significantly to it thereafter by front-loading revenue and backloading costs. The CBO figures show that this is a big problem with the House plan, whose shortfall will balloon beyond the ten-year horizon.
Jim Cooper, one of the Democrats’ most fiscally hawkish congressmen, fears that if push comes to shove, his party will not long remain stalwart on deficit-neutrality. “Health care has been such an impossible dream for so many decades that a lot of today’s Congress would overlook the deficit problems. I hear it all the time from colleagues in leadership: ‘We always find enough money for defence. We’ll find enough for health care’.” Mr Galston, though, thinks that the public’s worries about the deficit will reinforce Mr Obama’s commitment that health reform should not boost the deficit over the medium or long term. This could mean that he ends up with a plan that covers fewer of the uninsured than many had hoped.
None of this deals with the still-gaping hole in the budget. Indeed, a truly deficit-neutral health-care plan may make it tougher to fill that hole: if the rich are already being taxed more to pay for health reform, that makes it harder to use them to address the wider deficit. There are other ways to reduce the deficit, including getting rid of the mortgage-interest deduction, raising the age of eligibility for Medicare and Social Security, altering the inflation-indexation formula, or proposing some sort of tax reform that raises additional revenue. These ideas need not be implemented immediately; that would contradict the purposes of stimulus. But the knowledge that they are in the works would help reassure the public and investors that the federal debt—forecast on current policies to explode from a net $5.8 trillion last year to a net $11.7 trillion in 2019—may be tamed.
The Lie: Business firms
will be able to carry on with their present health insurance providers. The
fact of the matter is that the present house bill explicitly puts death
conditions on Erisa-enabled self insurance plans used by millions of business firms.
The cost of switching to big insurance company coverage will be massive if
they are forced to pay for all the medical and social services mandated in
the current version of Obamacare legislation.
The Lie: The insurance industry abides by state
laws by not rescinding insurance coverage even when there is no fraud on the
part of the patient in information provided to the insurance company.
This is actually a blatant lie that Bill Moyers documented quite well ---
Video:
http://www.pbs.org/moyers/journal/07312009/watch.html
The Lie: Obama's relationship with tort lawyers
is the real driver of Obamacare costs
According to a 2007
study
by McKinsey&Company, physician
compensation bumps up health care spending in America by $58 billion
annually,on average, because U.S. doctors make twice as much as their OECD
peers. And even the poorest in
specializations
like radiology and surgery
routinely rake in around $400,000 annually. Doctors—and many
Republicans—constantly carp about the costs of "defensive medicine" because
it forces providers to perform unnecessary procedures and tests to insulate
them from potential lawsuits. But excessive physician salaries contribute
nearly three times more to wasteful health care spending than the $20
billion or so that defensive medicine does. "While the U.S. malpractice
system is extraordinary," the study notes, "it is only a small contributor
to the higher cost of health care in the United States." Meanwhile, other
studies have found that doctors' salaries contribute more to soaring medical
costs than the
$40 billion or so
that the uninsured cost in uncompensated care--the president's bete noir.
Shikha Dalmia, "The
Evil-Mongering of the American Medical Association: Obama's cozy
relationship with Big Medicine will hurt patients," Reason Magazine,
August 27, 2009 ---
http://www.reason.com/news/show/135682.html
The Lie: AARP endorsed
H.R. 3200 (Obama's Press Secretary belated admitted to the lie)
"Gibbs: Obama misspoke about AARP,"
Fox News, August 12, 2009 ---
Click Here
AARP = Armed and Really Pissed
"McCain
Urges Seniors to Abandon AARP," Fox News, December 3, 2009
---
http://www.foxnews.com/politics/2009/12/03/mccain-aarp-betrayed-senior-citizens/
The Lie: AARP
perpetuates a lie that government run insurance, like Medicare, is a good
deal for patients and taxpayers.
To put the reader at ease the (AARP) article says
that government run health care can’t be so bad since, after all, Medicare
is government run health care and everybody loves it. The article omits the
fact that Medicare is $38 trillion in the red. Yes, trillion with a “tr”)
and by Obama’s own admission is overrun by $500 billion of waste, fraud and
abuse. Obama says Medicare and Medicaid are responsible for our deficits. So
what does he do? He proposes the vast expansion of the Medicare and Medicaid
programs to further balloon our deficits and our health care inflation.
Herb Dennenberg, "AARP: The
Hype, The Lies, The Facts," The Bulletin (Philadelphia's oldest
newspaper), September 21, 2009 ---
Click Here
- The AARP Bulletin (September 2009) has a front-page headline on Obamacare: “The Hype, the Lies, the Facts: How to Tune Out the Fear-mongering and Misinformation and Make Sense of the Health Care Reform.” I’d add only one amendment to that AARP headline: “If you want to avoid the hype, the lies, and get the facts on Obamacare, don’t read the biased one-sided propaganda that AARP publishes in its Bulletin.”
The article is supposed to answer the question of AARP readers, “How do I know what to believe?” Anyone who reads the article critically or studies AARP history on this matter, knows they are in the tank for Obamacare, and in the guise of fair and balanced journalism they are presenting the Obamacare party line.
The article starts out by quoting Kathleen Hall Jamieson, director of he Annenberg Public Policy Center at the University of Pennsylvania, who runs FactCheck.org, a website that examines specious claims from all sides of the political spectrum. She says that health care reform has “serious consequences to people’s lives and it would be useful if as many people as possible actually understood what the proposals are about.” But, then she identifies the rise of the Internet and the decline of the mainstream press as a prime source of information which have put that prospect at risk.
Poor, pathetic Ms. Jamieson is saying, in effect, that the public was only getting the truth when they were relying on the biased, fraudulent, dishonest, and ultra-liberal mainstream media. That poor, pathetic “expert” who is “fact checking for the public” feels the truth is threatened now that multiple points of view, some of which are the opposing point of view, are presented by the Internet and now that the public is slowly beginning to realize that you can’t trust the mainstream media. (I would agree with Bernard Goldberg that the mainstream media is no longer mainstream. Until a good alternative description emerges, I’ll call it the biased, fraudulent, dishonest, and ultra liberal mainstream media.)
So, the AARP article is doing its readers a great public service by demonstrating that you can’t trust the AARP, FactCheck.org, Ms. Jamieson, and the Annenberg Public Policy Center at the University of Pennsylvania if you want fair and balanced information about such matters as Obama and Obamacare.
The article goes on to perpetuate every fraud and deceit that people like House Speaker Nancy Pelosi and the leadership of the Democratic Party have put forth to stigmatize and demonize dissent. For example, the article asks, “Could rumor-mongering affect the outcome? Recent violent interruptions at lawmakers’ town hall meetings suggest it might.” So, the AARP, which is supposed to represent senior citizens, is joining the chorus that sees those who oppose Obamacare and who exercise their First Amendment Rights at Tea Parties as mobsters, prone to violence, Nazis, Brown Shirts and all the rest. They are proving that AARP, the Democratic leadership, and the mainstream media believe in the First Amendment only for those in agreement with its radical, far-left policies.
The AARP and its editors and officers clearly have no conscience and no sense, as they would not carry forward such blatant propagandizing for Obamacare and hurl insults at their own membership. If they are in the business of informing their diverse membership, they should provide both sides of an issue, not just give the appearance of doing so while residing in the pocket of the pro-Obamacare forces.
No wonder AARP been losing membership by the tens of thousands. Sometime ago, it was estimated at 60,000 members lost and that figure is probably much higher by now. Their stance on this did not surprise me. I have already reported in one column how they, along with AMA and others, have sold out to Obama and Company to support his vision of health care reform. I’ve also reported how the AARP is not in the business of representing the interests of senior citizens, but is, in fact, a phony membership organization in the business of selling its members insurance, credit cards, mutual funds, and other services. In fact, facing the first page of the propaganda piece in question is a full-page ad for life insurance sold by AARP. The same issue carries ads for AARP mobile home insurance, AARP Medicare insurance supplements, and AARP auto insurance.
I want to be fair to AARP and its article on health care reform. It did have four words of truth in it. The inside headline reads, “The Assault on Truth.” Of course, that was intended to characterize the critics of Obamacare. However, it perfectly characterizes the article in question and AARP. Let me give you a few examples involving the questions asked and answered by the article:
Will The Government Take Over Health Care So We End Up With Socialized Medicine?
The answer is the standard party line: “No. Neither the president nor the congressional committees have suggested anything remotely resembling a government takeover of health care.”
This answer is based on the fact that Mr. Obama says he doesn’t want the single-payer, government-takeover system that is used in Canada. The article fails to state that Obama has long been on record as favoring the discredited single-payer system and has even said we will have to get there gradually. But the article doesn’t explain that you can have a government takeover without a single-payer system.
When you look at what some of these proposals do, you will see they involve the federal government deciding what kind of policies will be written, what kind of rates will be charged, what kind of government insurance companies will be established, what kind of end-of-life counseling will be provided for senior citizens. What’s more, when you start setting up dozens of new agencies and commissions to control the health care system and to decide on what is the “best” medical practice, you don’t need single-payer to bring about a government takeover. When you grant insurance to 47 million “uninsured,” you assure a shortage of health care providers that sets the stage for rationing. As Dick Morris pointed out, contrary to the view of Obama press secretary Robert Gibbs, “You don’t have to be a medical school graduate to figure that out. That’s an elementary school problem.”
If that’s not quite enough to convince you, when you populate the White House with radicals, communists, socialists and advocates of such things as compulsory abortion, compulsory sterilization, and providing medical care based on quality of life years remaining, meaning seniors will be locked out, you are setting the stage for something worse than single-payer.
The article also tries to refute the fact of government takeover by saying “socialized” medicine is also off the table. The article says socialized medicine involves government ownership of hospitals and employment of doctors, as in the United Kingdom. It says that’s not contemplated. But, again, when government and federal bureaucrats control virtually every aspect of the health care system, you don’t need formal ownership. Comprehensive control is the equivalent of government ownership, of socialized medicine, and of the discredited systems of Canada and the United Kingdom.
To put the reader at ease the article says that government run health care can’t be so bad since, after all, Medicare is government run health care and everybody loves it. The article omits the fact that Medicare is $38 trillion in the red. Yes, trillion with a “tr”) and by Obama’s own admission is overrun by $500 billion of waste, fraud and abuse. Obama says Medicare and Medicaid are responsible for our deficits. So what does he do? He proposes the vast expansion of the Medicare and Medicaid programs to further balloon our deficits and our health care inflation.
Will Private Insurance Be Outlawed Or Wither On The Vine?
Needless to say, the AARP article answers, “No. Obama and the congressional committees say their objective is to build on the current system – keeping employer-sponsored group insurance and giving more consumer protections to people who are employed by small businesses or buy insurance as individuals.”
The AARP article argues that those with employer-sponsored insurance are ineligible for the public plan. But the article forgets that many employers would stop giving coverage, as the penalty for not providing it is smaller than the cost of providing it. Even the New York Times, a lap dog for Obama, in an editorial dedicated to selling Obamacare, admitted that the public option would likely be less costly than many alternatives.
The article also ignores the fact that the public option, a government insurer, would be subject to rules made by the government, so the umpire of the marketplace would be on the side of the government insurer. That is not likely to produce a level playing field for private insurers.
Finally, the article ignores the ways proposed in Republican-sponsored bills that would encourage competition. For example, opening up a nationwide market for health insurance would be an obvious and easy way to increase competition. Now, the consumer is limited to companies admitted to do business in his state. The insurance exchanges, proposed in many bills, would also make sense, as they would ratchet up competition.
Incidentally, it is important to remember that with or without a public option or some variation of it in the form of co-ops, Obamacare still involves a government takeover. So, don’t think it is a big deal to delete the public option. The bill spells catastrophe with or without that provision.
All the other questions asked in the article also provide the wrong answers. For example, “Will Medicare be eliminated or gutted to pay for reforms?” The article answers, “No. It’s inconceivable that any lawmaker would commit political suicide by proposing to get rid of Medicare.” But the AARP article forgets that Obama has said that he would cut $500 billion in waste, fraud, abuse, and inefficiency out of Medicare. We’ve heard that line since the days of President Nixon, and we’re still waiting for that waste, fraud, abuse, and inefficiency to be eliminated. If Obama knows how to do it, what is he waiting for? Why hasn’t he proceeded to cut that waste, fraud, abuse and inefficiency out of the system to prove he knows what he’s doing and can give more than campaign speeches? He’s been in office about seven months, and yet he’s done nothing to solve this problem which he says is bankrupting the country and is responsible for the deficits. When you cut $500 billion out of Medicare and grant coverage to 47 million previously uninsured, you’re going to have to ration medical care, and that means rationing medical care for senior citizens.
The biggest barrels of red ink have been generated by Medicare and Medicaid to the tune of tens of trillions of dollars. So what does Obama do? He proposes, in effect, to vastly expand Medicare and Medicaid and to compound our problems.
The president and chief executive officer of AARP, in an editorial accompanying the article in question, endorse the lies, hype, and exaggeration in the article by writing that there has been too much fear-mongering and misinformation involved in the debate. They continue to give the false impression that they are above the fray, but then echo the party line coming from Obama and the Democratic leadership in Congress. AARP and its leadership have continued to demonstrate they are the ones getting in the way of a fair, balanced, and honest debate on heath care reform.
Meanwhile, we have the case of the Association for the Advancement of Retired Persons (AARP), and its fanciful Medicare claims. The self-styled seniors lobby is using all its money and influence to cheer on ObamaCare, even though polls show that most retired persons oppose it. AARP has spent millions of dollars on its TV ad campaign and bulletins and newsletters to its members, including eight million direct-mail letters over Labor Day. The AARP Web site claims that it is a "myth" that "health care reform will hurt Medicare," while it is a "fact" that "none of the health care reform proposals being considered by Congress will cut Medicare benefits or increase your out-of-pocket costs."
"Medicare and Gag Orders Humana gets whacked for telling the truth, AARP gets a pass for spreading falsehoods," The Wall Street Journal, September 24, 2009 --- Click Here
The Lie: "Preventative medicine as envisioned in Obamacare will make health care significantly cheaper.
So last week, CBO Director Doug Elmndorf wrote
a
letter to Congressmen explaining what cost savings they can expect from
preventive medical services: The evidence
suggests that, for most preventive services, expanded utilization leads to
higher, not lower, medical spending overall. It makes sense if you think
about what are called the “false positives”.
John Stossel, "Expanding
Preventive Care May Add to Costs, CBO Says," ABC News, August 13,
2009 ---
http://blogs.abcnews.com/johnstossel/2009/08/prevention-saves-money.html
See The Washington Post account ---
http://www.washingtonpost.com/wp-dyn/content/article/2009/08/07/AR2009080703822.html
The Lie: H.R. 3200
proposed "Death Panels" to decide when decide when to refuse health
treatments..
False charges about Obamacare don't
help. Like the end-of-life tempest. Former Alaska Gov. Sarah Palin
popularized the term "death panels." She said: "The America I know and love
is not one in which my parents or my baby with Down syndrome will have to
stand in front of Obama's 'death panel' so his bureaucrats can decide, based
on a subjective judgment of their 'level of productivity in society,'
whether they are worthy
of health care". . .
. The House bill does deal with the issue. (The
Senate Finance Committee bill did until the provision was removed the other
day.) Section 1233 amends the Medicare law to add "advance care planning
consultation" (counseling about living wills and the like) to the list of
reimbursable
services. The provision defines "consultation,"
but nowhere does it require Medicare beneficiaries to participate or
authorize death panels. (Grassley voted for a similar provision in 2003 when
his Republican-controlled Congress added
drug coverage
to Medicare.)
John Stossel,
Townhall,
August 19, 2009 ---
http://townhall.com/columnists/JohnStossel/2009/08/19/obamacares_inevitable_logic
Jensen Comment
I agree that the "death panels" arguments were straw men. But then I do see
where the Obama was relying heavily on the cost savings attributable to
five-year health consultation plans with the aged. One has to wonder what
savings were lost with the Senate decided to drop the five-year
consultations? This seems prima facia to imply that quality of
care was intended to be reduced for the aged, including such things as hip
replacements and dialysis.
The chronically ill and those toward the end of
their lives are accounting for potentially 80 percent of the total health
care bill out here.
President Barach Obama as quoted from a David Leonhardt interview
reported in The New York Times:
The Lie: Surgeons bill Medicare $50,000 for a foot amputation.
American Academy of Orthopaedic Surgeons Responds to False Allegations of
President Obama
"Orthopedic Surgeons respond to Obama on amputation comment," by Thomas
Lifson, The American Thinker, August 16, 2009 ---
Click Here
The American Academy of Orthopaedic Surgeons (AAOS) is profoundly disappointed with President Obama's recent comments regarding the value of surgery and blurring the realities of physician reimbursements. The AAOS represents over 17,000 US board-certified orthopaedic surgeons who provide essential services to patients every day. As President Obama has said, "Where we do disagree, let's disagree over things that are real, not these wild misrepresentations that bear no resemblance to anything that's actually been proposed." In that spirit, we would like to bring some clarity to his comments and underscore the value that orthopaedic surgeons bring to Americans every day of every year.
First, surgeons are neither reimbursed by Medicare, nor any provider for that matter, for foot amputations at rates anywhere close to $50,000, $40,000 or even $30,000. Medicare reimbursements to physicians for foot amputations range from approximately $700 to $1200 which includes the follow up care the surgeon provides to the patient up to 90 days after the operation. Moreover, orthopaedic surgeons are actively involved in the preventive care he mentions. We are a specialty that focuses on limb preservation whenever possible and when it is in the best interests of the patient. Our approach to amputation follows the same careful, thoughtful approach, always with the patients best interest as the primary focus.
Continued in article
The Lie: The health insurance mandate is not a tax.
"Yes, health-insurance mandate is a tax." by Donald Lambro, Townhall, September 23, 2009 ---
http://townhall.com/columnists/DonaldLambro/2009/09/23/yes,_health-insurance_mandate_is_a_taxPresident Obama absolutely refuses to acknowledge there is a huge middle-class tax in the Senate Finance Committee's healthcare bill. The president flatly denies the legislation that the White House supports contains a stiff penalty tax that would hit uninsured middle-income people the hardest -- the very folks he promised would never see their taxes rise under his presidency.
Obama has repeatedly stated that promise throughout the healthcare debate, despite evidence to the contrary, and no one in the national news media has called him on it. That is, until George Stephanopoulos raised the issue with him Sunday on ABC's "This Week."
First, Stephanopoulos reminded the president that in his campaign for the presidency he was "against the individual mandate" that all Americans be required to buy health insurance.
"Yes," Obama replied.
Then Stephanopoulos hit him with the question no one apparently had asked him before. Pointing out that the Finance Committee plan contained just such a mandate whereby "the government is forcing people to spend money, fining you if you don't," he asked, "How is that not a tax?"
Obama replied, "No, but ... but, George, you ... can't just make up that language and decide that that's called a tax increase."
"You reject that it's a tax increase?" Stephanopoulos asked. Obama said, "I absolutely reject that notion."
But if Obama looked on page 29 of Senate Finance Committee Chairman Max Baucus' legislation -- the bill he hopes will enact his healthcare plans into law -- he would have read this line: "The consequence for not maintaining (health) insurance would be an excise tax."
What part of those two words doesn't he understand? The government imposes a raft of excise taxes on all of us: the tires for our cars, alcoholic beverages, jewelry and many other purchases. Now it wants to add health insurance to the tax-revenue list as a penalty for those who do not purchase a product the feds insist you must buy or else face fines up to $950 for an individual and up to $3,800 a year for a family.
Continued in article
The Lie: A huge portion
of Obamacare will be financed by further limiting what hospitals receive
from Medicare.
This will be a lie because it just will not work. I think
this is a wrong because it creates age discrimination that should not
be allowed. If government medical insurance pays hospitals more for younger
patients than older patients it will be age discrimination. If all
government medical insurance payments to hospitals is so tight-fisted that
the hospitals lose money on every government-insured patient (which is why
the Massachusetts hospitals are suing the Mass. universal health care plan),
then hospitals will have to rely more and more on private insurance plans to
keep those hospitals in business. This, in turn, will drive up the cost of
private insurance to a point where many businesses, especially small
businesses, will shift almost entirely to part-time workers.
Democrats are now blaming the defection of elderly voters from Obama care on the phony threats of euthanasia and rationing of treatment of older people. But this is not the underlying cause of the defection. The underlying cause is the genuine threat that government health insurance will pay less for hospital and doctor care that what is being paid for younger patients. President Obama needs to assure the elderly that hospitals and doctors will receive just as much from older patients as younger patients. Why don't Barack Obama, Nancy Pelosi, Chris Dodd, Keith Olbermann and Chris Matthews ever assure us that there will be no age discrimination in claims coverage?
Michael Moore lets the Obamacare cat out of the
bait and switch bag
Free Republic, August 11, 2009 ---
http://www.freerepublic.com/focus/f-bloggers/2313338/posts
In politics, knowing what your opposition thinks and says about you and your team is critical. But listening to what they’re saying about their own side can sometimes be even more telling.
In the latest issue of Rolling Stone, Michael Moore insists that Barack Obama’s ambitions are much farther left than he lets on. Thus, the President has been deliberately lying to us about everything from healthcare reform to the war on terror. But contrary to the Bush years, when perceived presidential deceit evoked liberal rage and a film to go with it, Moore adoringly approves of what he now sees as a necessary “rope-a-dope strategy” to advance his side’s cause.
The interview, part of a larger round table discussion also including Paul Krugman and David Gergen, asks the “three leading political observers” to analyze and discuss the first six months of the Obama presidency. The most startling perspective Moore provides is in regard to the current health care debate:
I take all of the things that make me nervous about the decisions that Obama has made, and I look and them through that lens – that it’s some kind of master plan. It’s like his continued support of a government-run option for health care. If a true public option is enacted – and Obama knows this – it will eventually bring about a single-payer system, because the profit-making insurance companies won’t be able to compete with a government plan and make the profits they want to make. At some point most of them will probably have to bow out of the business.
Michael Moore"Video: Obama Explains How His Health Care Plan Will ‘Eliminate’ Private Health Insurance," Breitbart, August 3, 2009 ---
http://www.breitbart.tv/uncovered-video-obama-explains-how-his-health-care-plan-will-eliminate-private-insurance/
The Lie: Every Obamacare Critic is a Racist
Since my post below about Obama supporters who tar all
of the President’s critics as racists, Fidel Castro has weighed in. Reuters
reports that Castro says Obama is trying to make positive changes but is being
fought at every turn by right-wingers who hate him because he is black: “(T)he
extreme right hates him for being African-American… I don't have the slightest
doubt that the racist right will do everything possible to wear him down,
blocking his program to get him out of the game one way or another, at the least
political cost," (Castro) said. More than a thousand...
John Stossel, ABC News,
August 27, 2009 ---
http://blogs.abcnews.com/johnstossel/2009/08/every-critic-a-racist.html
The Lie: The House Bill
presently states that business firms can opt out of providing health
insurance coverage for employees by paying an 8% of
gross payroll good-deal penalty to the government.
This is bait and switch fraud at its worst!
By the time the government insurance option becomes viable this will
increase to X% at whatever it takes to keep most working full-time employees
out of the government health insurance option. The reason partly is due to
the fact that it will take decades before the government option can process
the claims for between virtually the entire population of the United States
plus all the illegal aliens who will sneak into the country for health
services. The reason also is that President Obama promised to keep private
health insurance viable such that he must eventually make it virtually
impossible for employers to opt out of private medical insurance plans at
lower costs.
Two weeks ago I warned about the "bait and switch fraud" in the H.R. 3200 good news bait of an 8% of gross payroll penalty for employers who do not provide health insurance coverage for employees. In a surprising move, Congress is already switching the bait to 10% even before H.R. 3200 is passed. After its passage I look for the bait to be switched to an even higher percentage, maybe 50%, such that there is no way for employers to avoid an absolutely massive expense for health care coverage under the new rules of virtually no self insurance (policies will have to be purchased from large private insurance companies). virtually all pre-existing health issues will have to be covered instantly for each new person hired, part-time workers and illegal aliens will have to receive health insurance, and an array of social services will have to be covered including marriage counseling and family counseling.
The projected cost of employer-based health coverage is so huge that even a 10% penalty would still be cheaper. But employers should count on the bait being switched once again after Obamacare is legislated. The government medical insurance plan just will not be able to insure 200 million to 300 million people instantly if all employers opt out of health coverage by paying the X% penalty. Irrespective of the bait, the switch is inevitable!
The only reason I can see for switching the bait before H.R. 3200 is passed is to deceivingly make it look more deficit neutral and once again deceive the public and dimwitted members of Congress.
Even many Democrats are revolting against Speaker Nancy
Pelosi’s 5.4% income surtax to finance ObamaCare, but another tax in her House
bill isn’t getting enough attention. To wit, the up to 10-percentage point
payroll tax increase on workers and businesses that don’t provide health
insurance. This should put to rest the illusion that no one making more than
$250,000 in income will pay higher taxes.
"The Pelosi Jobs Tax: Workers will pay for the new health-care payroll
levy," The Wall Street Journal, July 30, 2009 ---
http://online.wsj.com/article/SB10001424052970203609204574316183688201934.html#mod=djemEditorialPage
Because of the present health care system in the United
States is unjust and inefficient, I am in favor of a National Health Plan
modeled after the Canadian National Health Plan where Canadians are taxed
for a huge portion of their health services irrespective of their levels of
income. In Canada, about 40% of taxpayer's tax dollars go
for health services. Any system that does not make users of the system share
heavily in the cost of the services will be unjust, abused, and inefficient.
Also in Canada the National Health Plan greatly restricts the size of
malpractice lawsuit lotteries for lawyers ----
http://www.trinity.edu/rjensen/Health.htm#Canada
USA Today
reported on July 31, 2009, Page 10A, (using OECD data for 2008) that health
care costs in Canada were $3,505 per capita Before any Obamacare legislation
for health care the per capita cost of health care in the United States was
$6,567. In large measure this due to the cost physicians, nurses, ambulance
services, and hospitals must pay for malpractice insurance. Thousands of
gynecologists in the United States dropped the obstetrics part of their
practices because of the enormous price of malpractice insurance. Many
hospitals dropped obstetrics services for the same reason.
Why Medical Malpractice Is Off Limits in Terms of Health Care Reform
The upshot is simple: A few thousand trial lawyers
are blocking reform that would benefit 300 million Americans. This is not
just your normal special-interest politics. It's a scandal—it is as if
international-trade policy was being crafted in order to get fees for
customs agents. Trial lawyers are agents, and their claims are only as valid
as those they represent. They argue, of course, that they are champions of
malpractice victims. As Anthony Tarricone, president of the trial lawyers
association (called the American Association of Justice) put it: "Trial
attorneys see first-hand the effects medical errors have on patients and
their families. We should keep those injured people in mind as the debate
moves forward." But under the current system, 54 cents of the malpractice
dollar goes to lawyers and administrative costs, according to a 2006 study
in the New England Journal of Medicine. And because the legal process is so
expensive, most injured patients without large claims can't even get a
lawyer. "It would be hard to design a more inefficient compensation system,"
says Michelle Mello, a professor of law and public health at Harvard, "or
one which skewed incentives more away from candor and good practices."
Philip K. Howard, "Why Medical
Malpractice Is Off Limits: A few thousand lawyers have a lock on
Democrats, who refuse any legal reform," The Wall Street Journal,
September 29, 2009 ---
http://online.wsj.com/article/SB10001424052970204488304574432853190155972.html?mod=djemEditorialPage
"Dean says Obamacare authors don't want to challenge trial lawyers," by: Mark Tapscott, Washington Examiner, August 26, 2009 --- Click Here
Whatever else he said Wednesday evening at the town hall hosted by Rep. Jim Moran, D-VA, former Democratic National Committee chairman and presidential candidate Howard Dean let something incredibly candid slip out about President Obama's health-care reform bill in Congress.
Asked by an audience member why the legislation does nothing to cap medical malpractice class-action lawsuits against doctors and medical institutions (aka "Tort reform"), Dean responded by saying: “The reason tort reform is not in the [health care] bill is because the people who wrote it did not want to take on the trial lawyers in addition to everybody else they were taking on. And that’s the plain and simple truth,”
Dean is a former physician, so he knows about skyrocketing medical malpractice insurance rates, and the role of the trial lawyers in fueling the "defensive medicine" approach among medical personnel who order too many tests and other sometimes unneeded procedures "just to be sure" and to protect themselves against litigation.
Texas Gov. Rick Perry recently described in an Examiner oped the medical-malpractice caps enacted by the state legislature at his urging that reversed a serious decline in the number of physicians practicing in the Lone Star state and the resulting loss of access to quality medical care available to Texas residents. Mississippi Gov. Haley Barbor also shared some of his successes in this area in a recent Examiner oped.
Credit goes to the American Tort Reform Association's Darren McKinney for catching this momentary outbreak of political honesty by Dean. McKinney has conveniently posted an audio recording of Dean speaking here, so you can listen for yourself. Mckinney has also offered more comment here, helpfully even including a link to the Examiner's recent analysis of the degree to which trial-lawyer political contributions go to Democrats in Congress.
Those contributions are why Dean knows it would be a difficult task indeed for Obama to persuade congressional Democrats to do anything that might offend the trial-lawyers lobby. The Examiner's David Freddoso and Kevin Mooney did the reporting on this link here.
Jensen Comment
Reports are that the Texas cap on punitive damages has been quite successful in restraining outrageous settlements of malpractice lawsuits.The Impact of Tort Reform on Employer-Sponsored Health Insurance Premiums Ronen Avraham (University of Texas at Austin, School of Law(, Leemore S. Dafny (Kellogg School of Management, Northwestern University) and NBER Max M. Schanzenbach, (Northwestern University, School of Law)
September 2009 --- Click Here
http://www.kellogg.northwestern.edu/faculty/dafny/personal/Documents/Working%20Papers/ADS_9_09w_ack.pdf
Abstract
We evaluate the effect of tort reform on employer-sponsored health insurance premiums by exploiting state-level variation in the timing of reforms. Using a dataset of healthplans representing over 10 million Americans annually between 1998 and 2006, we find that caps on non-economic damages, collateral source reform, and joint and several liability reform reduce premiums by 1 to 2 percent each. These reductions are concentrated in PPOs rather than HMOs, suggesting that can HMOs can reduce “defensive” healthcare costs even absent tort reform. The results are the first direct evidence that tort reform reduces healthcare costs in aggregate; prior research has focused on particular medical conditions.
"The President's Tort Two-Step Special-interests and the health-care status," by Kimberly Strassel, The Wall Street Journal, September 11, 2009 --- Click Here
Tort reform is a policy no-brainer. Experts on left and right agree that defensive medicine—ordering tests and procedures solely to protect against Joe Lawyer—adds enormously to health costs. The estimated dollar benefits of reform range from a conservative $65 billion a year to perhaps $200 billion. In context, Mr. Obama's plan would cost about $100 billion annually. That the president won't embrace even modest change that would do so much, so quickly, to lower costs, has left Americans suspicious of his real ambitions.
It's also a political no-brainer. Americans are on board. Polls routinely show that between 70% and 80% of Americans believe the country suffers from excess litigation. The entire health community is on board. Republicans and swing-state Democrats are on board. State and local governments, which have struggled to clean up their own civil-justice systems, are on board. In a debate defined by flash points, this is a rare area of agreement.
The only folks not on board are a handful of powerful trial lawyers, and a handful of politicians who receive a generous cut of those lawyers' contingency fees. The legal industry was the top contributor to the Democratic Party in the 2008 cycle, stumping up $47 million. The bill is now due, and Democrats are dutifully making a health-care down payment.
During the markup of a bill in the Senate Health Committee, Republicans offered 11 tort amendments that varied in degree from mere pilot projects to measures to ensure more rural obstetricians. On a party line vote, Democrats killed every one. Rhode Island senator and lawyer Sheldon Whitehouse went so far as to speechify on the virtues of his tort friends. He did not, of course, mention the nearly $900,000 they have given him since 2005, including campaign contributions from national tort powerhouses like Baron & Budd and Motley Rice.
Even Senate Finance Chair Max Baucus, of bipartisan bent, has bowed to legal powers. The past two years, Mr. Baucus has teamed up with Wyoming Republican Mike Enzi to offer legislation for modest health-care tort reform in states. That Enzi-Baucus proposal had been part of the bipartisan health-care talks. When Mr. Baucus released his draft health legislation this weekend, he'd stripped out his own legal reforms. The Montanan is already in the doghouse with party liberals, and decided not to further irk leadership's Dick Durbin ($3.6 million in lawyer contributions), the Senate's patron saint of the trial bar.
Over in the House the discussion isn't about tort reform, but about tort opportunities. During the House Ways & Means markup of a health bill, Texas Democrat Lloyd Doggett ($1.5 million from lawyers) introduced language to allow freelance lawyers to sue any outfit (say, McDonald's) that might contribute to Medicare costs. Only after Blue Dogs freaked out did the idea get dropped, though the trial bar has standing orders that Democrats make another run at it in any House-Senate conference.
It says everything that Mr. Obama wouldn't plump for reform as part of legislation. The president knows the Senate would never have passed it in any event. Yet even proposing it was too much for the White House's legal lobby. Mr. Obama is instead directing his secretary of health and human services to move forward on test projects. That would be Kathleen Sebelius, who spent eight years as the head of the Kansas Trial Lawyers Association.
The issue has assumed such importance that even some Democrats acknowledge the harm. With bracing honesty, former DNC chair Howard Dean recently acknowledged his party "did not want to take on the trial lawyers." Former Democratic Sen. Bill Bradley, in a New York Times piece, suggested a "grand bipartisan compromise" in which Democrats got universal coverage in return for offering legal reform. The White House yawned, and moved on.
It isn't clear if Republicans would or should take that deal, but we won't know since it won't be offered. The tort-reform issue has instead clarified this presidency. Namely, that the bipartisan president is in fact very partisan, that the new-politics president still takes orders from the old Democratic lobby.
The Lie: President Obama
promises that millions of small mom and pop businesses will be able to stay
profitable and offer private insurance coverage under Obamacare. Wal-Mart is
promoting Obamacare precisely for the reason that smaller competitors will
go out of business. Small and medium sized businesses will fail do to the
added costs of coverage mandated in Obamacare legislation such as instant
coverage of expensive pre-existing health conditions and the cost of
mandated social services such as marriage and family counseling and vastly
increased costs of mental health coverage.
"What disturbs Americans of all
ideological persuasions is the fear that almost everything, not just
government, is fixed or manipulated by some powerful hidden hand," Frank
Rich wrote in Sunday's New York Times. That manipulation should disturb us.
But contrary to Rich, it is not the work of "corporatists" who have sprung
up to attack progressive reforms proposed by Obama and the Democratic
majority. Manipulation is what we got many years ago when we traded a more
or less free market for the "progressive" interventionist state. When
government is big, the well-connected always have an advantage over the rest
of us.
"Big Business for Health-Care Reform," by John Stossel,
ABC News,
August 11, 2009 ---
http://blogs.abcnews.com/johnstossel/2009/08/big-business-for-healthcare-reform.html
The Lie: President Obama
is promising that Obamacare will be so efficient that the cost of processing
government and private health claims will save billions of dollars each
year. The Congressional Budget Office is not buying his gross exaggerations
about such cost savings. It might be much more efficient if Obamacare were
equivalent to the Canada National Health Plan, but President Obama promises
to keep all the private health insurance companies in business at profitable
returns.
The Lie: President Obama
is promising that Obama care will be so efficient that it will not increase
the annual Federal spending deficit that that, without Obamacare, will in
2009 be about $2 trillion more outflow than inflow --- http://www.usdebtclock.org/
This is such a blatant lie it's almost laughable --- if it was not so
tragic!
The interest cost on the National Debt will soon be about a million dollars
a second.
The Lie: President Obama is promising that there will
be no new taxes on 98% of Americans to pay for Obamacare. However, he does
not say anything about the huge increases in the prices everybody will have
to pay at Wal-Mart, Safeway, Citgo, Exxon, Sears, Penneys, Burger King, KFC,
GM, Chrysler, Toyota, Honda, Deere, Kubota, etc. to pay for the added health care
insurance costs forced on employers due to Obamacare mandates.
The American Academy of Orthopaedic Surgeons (AAOS) is profoundly disappointed with President Obama's recent comments regarding the value of surgery and blurring the realities of physician reimbursements. The AAOS represents over 17,000 US board-certified orthopaedic surgeons who provide essential services to patients every day. As President Obama has said, "Where we do disagree, let's disagree over things that are real, not these wild misrepresentations that bear no resemblance to anything that's actually been proposed." In that spirit, we would like to bring some clarity to his comments and underscore the value that orthopaedic surgeons bring to Americans every day of every year.
First, surgeons are neither reimbursed by Medicare, nor any provider for that matter, for foot amputations at rates anywhere close to $50,000, $40,000 or even $30,000. Medicare reimbursements to physicians for foot amputations range from approximately $700 to $1200 which includes the follow up care the surgeon provides to the patient up to 90 days after the operation. Moreover, orthopaedic surgeons are actively involved in the preventive care he mentions. We are a specialty that focuses on limb preservation whenever possible and when it is in the best interests of the patient. Our approach to amputation follows the same careful, thoughtful approach, always with the patients best interest as the primary focus.
Continued in article
Click here: Fred Thompson: Interviews
Scroll down to Betsey MacCaughhey's audio (this is a bit too biased in tone
for my liking, but Betsey did take the time and trouble to read the July
2009 House Bill in detail.
Health Care Numbers Don't Add Up ---
http://www.mpnnow.com/lifestyle/x2141125428/Health-care-reform-numbers-don-t-add-up
President Barack Obama apparently came to believe
the myth of his messiahship and has accordingly abused and squandered his
good will and political capital and possibly self-sabotaged his socialized
medicine scheme. Of all the newsworthy aspects of this desperate "reform"
effort, none is more so than the robust democratic processes it has
reinvigorated in this nation. While Democrats insist the nationwide
grass-roots movement against his Draconian measure is contrived and
illusory, it is just the opposite. Nothing could be so real as the American
people, emboldened by their passion for liberty, standing up against a
callous, dishonest government trolling for its freedoms in exchange for
false promises.
David Limbaugh, "Obama's Forfeited
Credibility Sabotaging Obamacare," Townhall, August 14, 2009 ---
http://townhall.com/columnists/DavidLimbaugh/2009/08/14/obamas_forfeited_credibility_sabotaging_obamacare
Jensen Comment
The public just isn't buying into the lie that it's possible to widen the
scope of coverage of each person's health insurance and add 50 million
uninsured to the insurance plans without increasing the Federal deficit
and/or driving small companies out of business with requirements to pay
greatly increased premiums. The public recognizes that this is a job killer
--- their jobs.
Fact Check
Desktop Users
www.factcheck.org/politics/obamas_health_care_news_conference.html
Mobile Users
http://www.factcheck.org/mobile/article.php?id=997
Sampling Only
President Obama tried to sell his health care overhaul in prime time, mangling some facts in the process. He also strained to make the job sound easier to pay for than experts predict.
- Obama promised once again that a health care overhaul “will be paid for.” But congressional budget experts say the bills they've seen so far would add hundreds of billions of dollars to the deficit over the next decade.
- He said the plan "that I put forward" would cover at least 97 percent of all Americans. Actually, the plan he campaigned on would cover far less than that, and only one of the bills now being considered in Congress would do that.
- He said the "average American family is paying thousands" as part of their premiums to cover uncompensated care for the uninsured, implying that expanded coverage will slash insurance costs. But the nonpartisan Kaiser Family Foundation puts the cost per family figure at $200.
Note: This is a summary only. The full article with analysis, images and citations may be viewed on the above Fact Check Websites.
- Obama claimed his budget "reduced federal spending over the next 10 years by $2.2 trillion" compared with where it was headed before. Not true. Even figures from his own budget experts don't support that. The Congressional Budget Office projects a $2.7 trillion increase, not a $2.2 trillion cut.
- The president said that the United States spends $6,000 more on average than other countries on health care. Actually, U.S. per capita spending is about $2,500 more than the next highest-spending country. Obama's figure was a White House-calculated per-family estimate.
Updates on August 31, 2010
"Go To the Back of the CLASS," by
Ed Feulner, Townhall, August 17, 2010 ---
http://townhall.com/columnists/EdFeulner/2010/08/18/go_to_the_back_of_the_class
In Washington, politicians often give their bills clever names designed more to obscure than to reveal.
Consider the CLASS Act. It sounds like yet another federal attempt to meddle in local schools. Instead, it stands for “Community Living Assistance Services and Support.”
CLASS was a little-noticed part of the massive Obamacare bill that the president signed in March. It’s supposed to provide affordable long-term care insurance to American workers. In reality, it creates another entitlement likely to increase our exploding federal deficit.
Starting next year CLASS is scheduled to begin enrolling people and collecting premiums. If CLASS was a normal insurance program, it would invest these premiums to build reserves. These reserves would later be tapped to provide benefits for those individuals in need of long-term care services.
But CLASS doesn’t work that way.
Similar to Social Security, all premiums that CLASS collects will be spent immediately. Its trust fund will be filled with government IOUs. Since participants need to pay five years of premiums before they’re eligible to collect any benefits, a sizeable amount of short-term revenue will be raised from CLASS. This aspect was especially useful when lawmakers were trying to find tricks to reduce the projected cost of Obamacare. By including the revenues from CLASS, politicians were able to pretend they’d reduced the cost of the bill by $70 billion.
But even Uncle Sam can’t spend your money twice. It’s impossible to spend the money today on government programs and invest the money to fund eventual benefits.
Eventually 2017 will arrive. That’s when CLASS starts paying benefits. It’s difficult to predict how soon after that the program would dive into the red and pay out more in benefits than it collects in premiums. Actuaries at the Centers for Medicare & Medicaid Services estimate it could be as soon as 2025.
Continued in article
Updates on October 31, 2010
"Say NO to Government Subsidies For
Frivolous Litigation," by Lisa A. Ricard, Townhall, October 6, 2010
---
http://townhall.com/columnists/LisaARickard/2010/10/05/say_no_to_government_subsidies_for_frivolous_litigation
Taxes are a major topic of debate in Washington right now. Faced with a massive federal deficit, some politicians have proposed raising taxes on individuals and businesses, despite the obvious negative effects of tax increases on economic growth and job creation. Yet at the same time, some in Washington are actually considering the creation of a new special interest tax break that will hurt economic growth, increase the deficit and fuel increased civil litigation.
The plaintiffs' bar and its allies in Congress and the administration are pushing for the adoption of a nearly $1.6 billion tax deduction for trial lawyers who take contingency fee cases. This proposed deduction would essentially provide a U.S. government subsidy to plaintiffs' lawyers to increase the number of frivolous lawsuits.
For several years, the plaintiffs' bar has been attempting to push this proposed tax break through Congress. With Congress so far unwilling to act, plaintiffs' lawyers have decided on a new approach and are now aggressively lobbying the Treasury Department to bypass Congress and create the deduction through administrative action.
The tax deduction would impose direct costs on the federal government and American taxpayers. According to the Congressional Budget Office, this trial lawyer subsidy would cost nearly $1.6 billion over ten years, all during a time of record federal deficits.
But these direct costs represent just a fraction of the proposal's potential damage. The contingency fee tax break would, in effect, subsidize ever more costly, frivolous litigation against American businesses. By some estimates, the tax deduction could subsidize as much as 40 percent of the initial plaintiffs' expenses for certain cases. With the federal government paying for such a large percentage of the up-front costs of lawsuits, plaintiffs' lawyers will be emboldened to take on the most speculative and frivolous litigation.
And in these troubled economic times, the last thing America needs is more frivolous lawsuits. As a percentage of gross domestic product, the United States spends more than twice as much on litigation as any other industrialized nation, a cost that reached $254.7 billion in 2008 according to a report by Towers Perrin.
Continued in article
April 1-June 30, 2013
Belatedly The New York Times Fesses Up on the Obamacare Mess
By David Brooks, April 2013
David BrooksImplementation got off to a bad start because the Obama administration didn’t want to release unpopular rules before the election. Regulators have been working hard but are clearly overwhelmed, trying to write rules that influence the entire health care sector — an economic unit roughly the size of France. Republicans in Congress have made things much more difficult by refusing to provide enough money for implementation.By now, everybody involved seems to be in a state of anxiety. Insurance companies are trying to put out new products, but they don’t know what federal parameters they have to meet. Small businesses are angry because the provisions that benefited them have been put on the back burner. Health care systems are highly frustrated. They can’t plan without a road map. Senator Max Baucus, one of the authors of the law, says he sees a “huge train wreck” coming.
I’ve been talking with a bipartisan bunch of health care experts, trying to get a sense of exactly how bad things are. In my conversations with this extremely well-informed group of providers, academics and former government officials, I’d say there is a minority, including some supporters of the law, who think the whole situation is a complete disaster. They predict Obamacare will collapse and do serious damage to the underlying health system.
But the clear majority, including some of the law’s opponents, believe that we’re probably in for a few years of shambolic messiness, during which time everybody will scramble and adjust, and eventually we will settle down to a new normal.
What nobody can predict is how health care chaos will interact with the political system. There’s a good chance that Republicans will be able to use unhappiness with what is already an unpopular law to win back the Senate in 2014. Controlling both houses of Congress, they will be in a good position to alter, though not repeal, the program.
The law’s biggest defenders will then become insurance companies and health care corporations. Having spent billions of dollars adapting to the new system, they are not going to want to see it repealed or replaced.
The experts talk about the problems that lie ahead in cascades. First, there is what you might call the structural cascade. Everything is turning out to be more complicated than originally envisioned. The Supreme Court decision made the Medicaid piece more complicated. The decision by many states not to set up exchanges made the exchange piece more complicated. The lines of accountability between, for example, state and federally run exchanges have grown byzantine and unclear.
A law that was very confusing has become mind-boggling. That could lead people to freeze up. Insurance companies will hesitate before venturing into state exchanges, thereby limiting competition and choice. Americans are just going to be overwhelmed and befuddled. Many are just going to stay away, even if they are eligible for benefits.
Then there is the technical cascade. At some point, people are going to sit at computers and enroll. If the data process looks like some 1990s glitchmonster, if information doesn’t flow freely, then the public opinion hit will be catastrophic.
Then there is the cost cascade. Nearly everybody not in the employ of the administration agrees this law does not solve the cost problem, and many of the recent regulatory decisions will send costs higher. A study in California found that premiums could increase by an average of 20 percent for people not covered by federal subsidies. A study by the Society of Actuaries found that by 2017 costs could rise by 32 percent for insurers covering people in the individual exchanges, and as high as 80 percent in states like Ohio.
Then there is the adverse selection cascade. Under the law, young healthy people subsidize poorer, sicker and older people. But the young may decide en masse that it is completely irrational for them to get health insurance that subsidizes others while they are healthy. They’ll be better off paying the fines, if those are even enforced, and opting out. Without premiums from the young, everybody else’s costs go up even higher.
Then there is the provider concentration cascade. The law further incentivizes a trend under way: the consolidation of hospitals, doctors’ practices and other providers. That also boosts prices.
Over all, it seems likely that in some form or another Obamacare is here to stay. But the turmoil around it could dominate politics for another election cycle, and the changes after that — to finally control costs, to fix the mind-boggling complexities and the unintended consequences — will never end.
Regulatory regimes can be simple and dumb or complex and sprawling. When you build complex, it takes a while to work through the consequences.
Overview Of The New 3.8%
Investment Income Tax, Part 3: Gains From The Sale Of Property
[Forbes,
Part 1,
Part 2.]
Part 3]
So when did the USA lawmakers ever want to impose their own laws (like
minimum wage) and professional ethics on themselves and their employees?
"Lawmakers, aides may get Obamacare exemption," by John Bresnahan and
Jake Sherman, Poliico, April 24, 2013 ---
http://www.politico.com/story/2013/04/obamacare-exemption-lawmakers-aides-90610.html#.UXiYUajBcrc.twitter
Jensen Comment
What's that old saying ---
"Do as I say, not as I do."
Obamacare Tax "Surprise" High Earners for May Have Failed to See Coming
For married taxpayers filing jointly: $250,000.
•For married taxpayers filing separately: $125,000.
•For all other taxpayers: $200,000.
"Overview Of The New 3.8% Investment Income Tax, Part 1," Forbes,
April 26, 2013 ---
http://www.forbes.com/sites/anthonynitti/2013/04/26/overview-of-the-new-3-8-investment-income-tax-part-1/
Beginning January 1, 2013, Obamacare – through the enactment of Section 1411 — will impose upon certain high earners a brand spankin’ new 3.8% tax on their “net investment income.” This additional tax has been the source of much confusion and misinformation for taxpayers and tax advisors alike.
Much of the uncertainty is to be anticipated; after all, Section 1411 is not an amendment, expansion, or alteration of preexisting law. Rather, this is brand new statute, which means there are no judicial precedents or administrative rulings available to help interpret the legal language.
But this new statute presents hurdles beyond what we typically see with recently enacted legislation; specifically, the vagaries of a term as critical to its implementation as “net investment income” is to Section 1411.
In my honest opinion (man, I wish there was a shorthand way to write that), the determination of what does and does not constitute “net investment income” for purposes of Section 1411 will vex tax advisors more than any other issue in 2013. So as a public service, I thought I’d take advantage of this post-April 15th downtime to put together a handy, four-part overview of the new investment income tax, focusing primarily on answering the question, “What IS net investment income?”
Before we begin unraveling that mystery, however, let’s address the basic mechanics of Section 1411.
Beginning January 1, 2013, taxpayers will pay an additional 3.8% Medicare tax on the lesser of:
- The taxpayer’s “net investment income,” or
- The taxpayer’s “modified adjusted gross income” (if the taxpayer does not have foreign earned income excluded under Section 911, this will be identical to adjusted gross income)” less the “applicable threshold;” specifically:
•For married taxpayers filing jointly: $250,000.
•For married taxpayers filing separately: $125,000.
•For all other taxpayers: $200,000.
There are two very important distinctions to be made about the math behind this lesser of calculation that should serve to dispel two popular misconceptions about the new tax:
First, because this is a “lesser of” rather than “greater of” computation, the tax cannot apply unless an individual’s modified adjusted gross income exceeds the applicable threshold. If the taxpayer’s MAGI does not exceed the applicable threshold, the second component of the “lesser of” calculation will always be zero, and the last time I checked, zero will always be the lesser of two positive numbers. Thus, right from the start, we can eliminate from the reaches of Section 1411 all married filing jointly taxpayers with MAGI less than $250,000, married filing separately taxpayers with MAGI less than $125,000, and all other taxpayers with MAGI less than $200,000.
Secondly, just because an individual’s MAGI exceeds the applicable threshold does not necessarily sentence the taxpayer to paying the 3.8% tax on all of their net investment income. Again, this is due to the mechanics of the “lesser of” calculation.
Example: Hansel, a single taxpayer, earns $195,000 in compensation and $30,000 of dividend and interest income during 2013. These are his only items of income or loss.
Hansel is subject to the 3.8% Medicare tax on the lesser of:
1. Net investment income, or $30,000, or
2. MAGI ($225,000) less the applicable threshold ($200,000) or $25,000.
Thus, despite the fact that Hansel has both net investment income and MAGI in excess of his applicable threshold, he does not owe the 3.8% on all of his investment income. Rather, he owes the tax on the lesser of the two components, or $25,000.
But let’s not kid ourselves; it’s not the mechanics or mathematics behind Section 1411 that will be the bane of the tax advisor’s existence during 2013, it’s the understanding of what constitutes “net investment income.” And for clarity on that issue, we must look to our only source of guidance on the topic.
In late November, the IRS released long-awaited proposed regulations under Section 1411. While the proposed regulations are not effective until tax years beginning after December 31, 2013, they may be relied on until final regulations are issued, which is expected to happen sometime during 2013.
The definition of “net investment income” is first introduced in Prop. Reg. Section 1.1411-4(a)(1), which breaks those items constituting “net investment income” into three subparagraphs:
(i) Gross income from interest, dividends, annuities, royalties, rents, substitute interest payments, and substitute dividend payment. (one little i income)
(ii) Other gross derived from a trade or business described in Prop. Reg. Section 1.1411-5 (two little i income); and
(iii) Net gain attributable to the disposition of property (three little i income).
In parenthesis following each of the three types of income, you will find the term the tax community has begun to use to describe the income as part of its general parlance. As you can see, the term relates to which subparagraph the income is found in, and is as good a way as any to present the types of net investment income in this overview. So today, we take on “one little i income” – the interest, dividends, rent, etc… found in Prop. Reg. Section 1.1411-4(a)(1)(i) — and we’ll examine “two little i” and “three little i” income in subsequent posts.
One Little i Income, In General
While the Section 1411 regulations are full of surprises, the items that constitute net investment income under Prop. Reg. Section 1.1411-4(a)(1)(i) are not among them; in fact, these are the items we all anticipated to be included in net investment income before promulgation of the proposed regulations. As mentioned above, they include:
- Interest
- Dividends
- Annuities
- Royalties
- Rents
- Substitute interest and dividend payments (even though these amounts are not categorically “interest” and “dividends’” for income tax purposes.
The preamble to the regulations offers additional detail. For example, gross income from dividends includes any item treated as a divided for purposes of chapter 1 of the Code (the income tax provisions). This includes:
- Constructive dividends
- Amounts treated as distributions under Section 1248(a), relating to the gain from the sale of stock in a controlled foreign corporation, and
- Amounts distributed by an S corporation that are treated as a dividend by virtue of the fact that the distribution is deemed to have come from earnings and profits accumulated in prior C corporation years.
Exceptions
In general, any interest, dividends, etc… listed under Prop. Reg. Section 1.1411-4(a)(1)(i) will constitute net investment income. However, the regulations and preamble note four exceptions to this general rule:
- Interest earned on state and local bonds that is exempt from income tax under Section 103 is excluded from the definition of net investment income for purposes of Section 1411.
- Net investment income does not include distributions from a qualified plan described in Sections 401(a), 403(a), 403(b), 408, 408A or 457(b).
- Interest paid to an employee by an employer under a nonqualified deferred compensation plan is not considered net investment income.
- Any “one little i income” earned in the “ordinary course of a trade or business” is not included in net investment income. This is an important exclusion that warrants further examination.
Assume you own an interest in an S corporation, partnership, or sole proprietorship. Assume further that interest and dividends are earned in the activity and are either allocated to you on a Schedule K-1 (in the case of an S corporation or partnership) or reported by you on Schedule C (in the case of a sole proprietorship).
Naturally, you might assume that the interest and dividends are to be included in net investment income as “one little i income,” and nine times out of ten, you’d be correct. However, under the “ordinary course of trade or business exception” the interest and dividends, despite generally meeting the definition of net investment income under “one little i,” can be excluded from the computation of net investment income if four tests are met:
Continued in article
Jensen Comment
Investors who do not get hit with this tax every year may bet blind sided in a
year when they (or their estates) dispose of some property such as rental
property or a farm investment.
Remember those tiresome and frequent adds on television from "The Scooter Store"
"Scooter Store Files For Bankruptcy After Overbilling Medicare At Least
$47 Million," by Laura Northrup, Consumerist, April 15, 2013 ---
http://consumerist.com/2013/04/15/scooter-store-files-for-bankruptcy-after-fbi-raid-and-medicare-fraud-allegations/
If you watch daytime TV or have been stuck watching daytime TV while visiting your parents, surely you’re familiar with The Scooter Store. The power wheelchair vendor has had some trouble lately, including accusations of Medicare and Medicaid fraud, a raid by the FBI, and even a lawsuit from the company’s hometown, of New Braunfels, Texas. The company laid off most of its employees, and plans to deal directly with health care providers, rather than blanketing the airwaves and selling directly to consumers.
Those investigations came after a a scathing investigative piece by CBS News about the company. (Warning: the video at that link plays automatically.) Former salesmen and doctors who prescribed chairs in the past explained the company’s tactics: contact doctors’ offices incessantly to wear them down and convince them to prescribe scooters and power chairs whether the patient really needed one or not, and to depend on bureaucratic incompetence and error to get them approved by Medicare and Medicaid.
That got the attention of the federal government, and led to a raid by the Federal Bureau of Investigation. The company’s CEO insists that The Scooter Store itself wasn’t accused of fraud. Just a few weeks later, the company furloughed all employees, then permanently laid off about 1,000.
An independent audit found that the company had overbilled Medicare and Medicaid somewhere between $46.8 million and $87.7 million. The company had agreed to pay back $19.5 million. The Centers for Medicare and Medicaid Services is one of the largest creditors listed in the company’s bankruptcy petition, which details about $50 million in debt.
Just a few short years ago, in 2009, the city of New Braunfels gave the Scooter Store economic development money to convert a former Kroger store into their sparkling new headquarters. On Friday, the city filed a lawsuit to to get $2.6 million of that money back.
Continued in article
Jensen Comment
Milking Medicare and Medicaid seems to be the rule rather than the exception.
Bob Jensen's Fraud Updates ---
http://www.trinity.edu/rjensen/FraudUpdates.htm
January 1-March 31. 2013
"Which Governments Spend the Most Per Capita on Government Healthcare:
France, Italy, the United States, Sweden, Canada, Greece, or the United Kingdom?"
by Daniel J. Mitchell, Townhall, February 22, 2013
http://www.townhallmail.com/fnbzdpfbzzgwdbzbwbdhfwcnnywnnbyfrrhpldgnrnybys_msycbpyncdb.html
See bar chart at
http://www.cs.trinity.edu/~rjensen/temp/HealthCostPerCapita.jpg
. . .
There are three big reasons why there’s more government-financed healthcare spending in the United States.
1. Richer nations tend to spend more, regardless of how they structure their healthcare systems.
2. As you can see at the 1:18 mark of this video, the United States is halfway down the road to a single-payer system thanks to programs such as Medicare and Medicaid.
3. America’s pervasive government-created third-party payer system leads to high prices and costly inefficiency.
So what’s the moral of the story? Simple, notwithstanding the shallow rhetoric that dominates much of the debate, the United States does not have anything close to a free-market healthcare system.
That was true before Obamacare and it’s even more true now that Obamacare has been enacted.
Indeed, it’s quite likely that many nations with “guaranteed” health care actually have more market-oriented systems than the United States.
Avik Roy argues, for instance, that Switzerland’s system is the best in the world. And the chart above certainly shows less direct government spending.
And there’s also the example of Singapore, which also is a very rich nation that has far less government spending on healthcare than the United States.
Continued in article
Jensen Comment
Articles like this are controversial and misleading. Firstly, we may be
comparing apples and kangaroos when it comes to the terms "health care" and
"cost." Much of the USA health care "cost" gets buried in other accounts like
"research" and "education." The many research universities in the USA are
contributing tuition and state taxpayer money to fund biomedical science faculty
and other science and engineering faculty who are doing medical research and
development in one way or another. But these costs are treated as "education"
and "research" costs rather than medical costs.
An enormous proportion of what the USA includes in costs of medical care is really the cost of fraud that other nations, especially those with either free market or nationalized coverage, avoid much more efficiently and effectively. The frauds are especially high in Medicare billings for our aged and disabled such as billings for nonexistent medical equipment and $6,384 cost of an aspirin administered inside a hospital.
Much of what gets billed as "medical care" in the USA is the massive cost of malpractice insurance, costs which nations like Canada with national health care cover much more efficiently and effectively by leaving out the lawyers salivating over punitive damages.
In the USA and Mexico much of the cost of geriatric and disability care is borne by patient savings and family earnings that does not pass through governmental or third-party insurance "medical care" accounts.. In nations with nationalized medicine like Norway such costs are more apt to be called "medical costs."
In the USA most patients like me bear their own eye care and dental billings out-of-pocket and are not captured in governmental "medical care" accounts. In many other nations the costs of these services pass through governmental accounts.
The USA spends (usually under Medicare) hundreds of billions on patients that are terminally ill, often extending their lives uselessly for weeks or a few months in intensive care and cardiac care units. Most other nations save this money by letting nature run its course for dying patients and/or facilitating euthanasia. CBS Sixty Minutes ran a module on this under the title "The High Cost of Dying" in the USA.
Similar discrepancies arise for extremely premature and/or underweight new babies that are not saved in most nations outside the USA.
The above comparison of nations by Daniel Mitchell is mostly an example of the many attempts (such as poverty and unemployment) to make international comparisons on variables that are inconsistently defined and subject to enormous measurement error and variation between nations
"Sandwich Generation: What are our Ethical Obligations to Care for our
Aged-Parents and Children?" by accounting professor Steven Mintz, Ethics
Sage, January 25, 2013 ---
http://www.ethicssage.com/2013/01/sandwich-generation.html
Bob Jensen's threads on health care are at
http://www.trinity.edu/rjensen/Health.htm
A tax in sheep's clothing
"Employers Blast Fees (that won't cover their workers) From New Health Law,"
by Janet Adamy, The Wall Street Journal, March 14, 2013 ---
http://online.wsj.com/article/SB10001424127887324392804578358540464713464.html?mod=djemCFO_t
. . .
The fees will hit most large U.S. employers, and several have been lobbying to change the program, contending the levy is unfair because it subsidizes individually purchased plans that won't cover their workers. Boeing Co. BA -0.15% and a union health plan covering retirees of General Motors, GM +0.32% Ford Motor Co. F +0.22% and Chrysler, among other groups, have asked federal regulators to exclude or shield their insurance recipients from the fee.
Insurance companies, which helped put the fee in the law, say the fee is essential to prevent rates from skyrocketing when insurers get an influx of unhealthy customers next year. The fee is part of a new insurance landscape created by the health law that will forbid insurers from denying coverage to people with pre-existing conditions.
The $63 fee will apply to plans covering millions of Americans in 2014. It applies to employers that assume the risk for workers' medical bills, and many private plans sold by insurers. The fee will be smaller for 2015 and 2016, though regulators haven't set those amounts.
Few noticed the fee when the 2010 Affordable Care Act passed. Employers have spent recent months trying to peel it back, but final regulations published Monday in the Federal Register left it largely intact.
"It's caught most employers, if not all employers, by surprise," said Steve Wojcik, vice president of public policy at the National Business Group on Health in Washington, which represents large employers. "They're very upset about it."
The fee comes on top of other costs employers expect to face. Proponents of the law say it eventually will lower employers' health costs by expanding insurance coverage to 30 million Americans, meaning employers won't subsidize their unpaid medical bills.
Continued in article
The Health Care Market is Not a Market
"Video: Inside ‘Bitter Pill’: Steven Brill Discusses His TIME Cover
Story," Time Magazine, February 22, 2013 ---
http://healthland.time.com/2013/02/20/bitter-pill-inside-times-cover-story-on-medical-bills/
Simple lab work done during a few days in the hospital can cost more than a car. A trip to the emergency room for chest pains that turn out to be indigestion brings a bill that can exceed the price of a semester at college. When we debate health care policy in America, we seem to jump right to the issue of who should pay the bills, blowing past what should be the first question: Why exactly are the bills so high?
Steven Brill spent seven months analyzing hundreds of bill from hospitals, doctors, and drug companies and medical equipment manufacturers to find out who is setting such high prices and pocketing the biggest profits. What he discovered, outlined in detail in the cover story of the new issue of TIME, will radically change the way you think about our medical institutions:
· Hospitals arbitrarily set prices based on a mysterious internal list known as the “chargemaster.” These prices vary from hospital to hospital and are often ten times the actual cost of an item. Insurance companies and Medicare pay discounted prices, but don’t have enough leverage to bring fees down anywhere close to actual costs. While other countries restrain drug prices, in the United States federal law actually restricts the single biggest buyer—Medicare—from even trying to negotiate the price of drugs.
· Tax-exempt “nonprofit” hospitals are the most profitable businesses and largest employers in their regions, often presided over by the most richly compensated executives.
· Cancer treatment—at some of the most renowned centers such as Sloan-Kettering and M.D. Anderson—has some of the industry’s highest profit margins. Cancer drugs in particular are hugely profitable. For example, Sloan-Kettering charges $4615 for a immune-deficiency drug named Flebogamma. Medicare cuts Sloan-Kettering’s charge to $2123, still way above what the hospital paid for it, an estimated $1400.
· Patients can hire medical billing advocates who help people read their bills and try to reduce them. “The hospitals all know the bills are fiction, or at least only a place to start the discussion, so you bargain with them,” says Katalin Goencz, a former appeals coordinator in a hospital billing department who now works as an advocate in Stamford, CT.
Brill concludes:
The health care market is not a market at all.
It’s a crapshoot. Everyone fares differently based on circumstances they can neither control nor predict. They may have no insurance. They may have insurance, but their employer chooses their insurance plan and it may have a payout limit or not cover a drug or treatment they need. They may or may not be old enough to be on Medicare or, given the different standards of the 50 states, be poor enough to be on Medicaid. If they’re not protected by Medicare or protected only partially by private insurance with high co-pays, they have little visibility into pricing, let alone control of it. They have little choice of hospitals or the services they are billed for, even if they somehow knew the prices before they got billed for the services. They have no idea what their bills mean, and those who maintain the chargemasters couldn’t explain them if they wanted to. How much of the bills they end up paying may depend on the generosity of the hospital or on whether they happen to get the help of a billing advocate. They have no choice of the drugs that they have to buy or the lab tests or CT scans that they have to get, and they would not know what to do if they did have a choice. They are powerless buyers in a sellers’ market where the only consistent fact is the profit of the sellers.
"Bitter Pill: Why Medical Bills Are Killing Us," Time
Magazine Cover Story, March 4, 2013, pp. 16-65 (a very long article)
---
http://healthland.time.com/2013/02/20/bitter-pill-why-medical-bills-are-killing-us/
"Yes, Hospital Pricing Is Insane, But Why? Time magazine issues a
24,000-word memo on what we already knew," by Holman Jenkins Jr., The
Wall Street Journal, March 1, 2013 ---
http://online.wsj.com/article/SB10001424127887323978104578334082993009730.html?mod=djemEditorialPage_h
Without diminishing the epic scope of Steven Brill's Time magazine piece about the U.S. health care system, he reiterates in lengthy detail perversities that are already well known, without offering a single useful insight on how it go that way, and even less on how to fix it.
Yet Mr. Brill, founder of CourtTV and American Lawyer magazine, author of books on terrorism and education, has written the longest piece in Time's history—24,000 words—so attention must be paid.
That health-care costs are inflated compared to what they would be in a reasonably transparent, competitive market (a point Mr. Brill never clearly makes) won't be a revelation. That hospitals allocate their costs to various items on their bills and price lists in ways that are opaque and arbitrary is not a new discovery either.
He finds it shocking that a hospital charging $1,791 a night won't throw in the generic Tylenol for free (instead charging $1.50 each). But this is to commit the reification fallacy of thinking there is some organic relationship between what a hospital charges for a particular item and what that item costs in the first place.
He dwells on the irrationality of hospitals charging their highest prices to their poorest customers, those without insurance. But he's also aware that these customers often pay little or nothing of what they are charged and hospitals reallocate the cost to the bills of other patients. He even notes that a hospital might collect as little as 18% of what it bills.
He vaguely gets that hospital price lists are memos for the file, to be drawn out and waved as a reference in negotiations with their real customers, the big health-care insurers, Medicaid, Medicare and other large payers.
The deals hammered out with these customers tend naturally to gravitate toward round numbers, leaving a hospital free to allocate its costs and profits to specific items however it wants. Mr. Brill may be offended that certain "non-profit" hospitals appear to be highly profitable. He probably wouldn't be happier, though, if they diverted their surplus revenues into even higher salaries and more gleamingly superfluous facilities.
"What is so different about the medical ecosystem that causes technology advances to drive bills up instead of down?" Mr. Brill asks. But his question is rhetorical since he doesn't exhibit much urge to understand why the system behaves as it does, treating its nature as a given.
In fact, what he describes—big institutions dictating care and assigning prices in ways that make no sense to an outsider—is exactly what you get in a system that insulates consumers from the cost of their health care.
Your time might be better spent reading Duke University's Clark Havighurst in a brilliant 2002 article that describes the regulatory, legal and tax subsidies that deprive consumers of both the incentive and opportunity to demand value from medical providers. Americans end up with a "Hobson's choice: either coverage for 'Cadillac' care or no health coverage at all."
"The market failure most responsible for economic inefficiency in the health-care sector is not consumers' ignorance about the quality of care," Mr. Havighurst writes, "but rather their ignorance of the cost of care, which ensures that neither the choices they make in the marketplace nor the opinions they express in the political process reveal their true preferences."
You might turn next to an equally fabulous 2001 article by Berkeley economist James C. Robinson, who shows how the "pernicious" doctrine that health care is different—that consumers must shut up, do as they're told and be prepared to write a blank check—is used to "justify every inefficiency, idiosyncrasy, and interest-serving institution in the health care industry."
Hospitals, insurers and other institutions involved in health care may battle over available dollars, but they also share an interest in increasing the nation's resources being diverted into health care—which is exactly what happens when costs are hidden from those who pay them.
Continued in article
Jensen Comment
Over a year ago Erika's Medicare-Anthem summary of charges for the month
included an $11,376 charge for out patient surgery that was mistakenly billed to
her account. We called our doctor who did the procedure in the hospital. Our
doctor responded not to bother her or the hospital --- since Medicare-Anthem
paid the entire bill it would not matter.
This bothered us since the woman (I assume it was a woman) may not have been eligible for Medicare-Anthem. So I phoned Medicare. Medicare said not to bother them and advised us to contact the hospital where the procedure took place. Any corrections should be made by the hospital and the doctor.
So I called the hospital's accounting office. They asked that I send in a copy of the Medicare-Anthem report. I hand-delivered the report to the the hospital accounting office --- which is miles from the hospital.
Over the ensuing year we waited for a corrected Medicare-Anthem report. Nothing! So I did a follow up visit to the hospital's accounting office. The feedback was that since Medicare-Anthem paid the bill there was no need to waste time correcting this item.
I keep thinking that some woman not eligible for Medicare got a windfall gain here. Who cares if it was Medicare-Anthem that got screwed?
Erika and I changed to a doctor that we like better. But we cannot change hospitals.
Moral of the Story
If the third party insurer gets billed mistakenly or pays too much nobody cares,
least of all the doctors and hospitals who got reimbursed.
Question
Who is telling a lie?
Steven Brill wrote a long cover story for Time Magazine, In that story
he describes having his team examine eight very complicated hospital bills from
different hospitals. In every case they found that the bills were laced with
errors and overcharges in favor of the hospital and possible frauds.
Bitter Pill: Why Medical Bills Are Killing Us," Time
Magazine Cover Story, March 4, 2013, pp. 16-65 (a very long article)
---
http://healthland.time.com/2013/02/20/bitter-pill-why-medical-bills-are-killing-us/
The following week Stamford Hospital CEO Brian G. Grissler replied as shown, in part, below. Steven Brill's reply to Grissler, Time Magazine, March 18, 2013, Page 2.
Brian G. Grissler
". . . Brill refused to share the patient's name or the complete bill, so we are unable to answer those questions . . . "Steven Brill Responds
"Stamford Hospital was shown the bill and never disputed its authenticity. I made clear in the article the hospital settled for cutting its bill entirely in half."
Jensen Comment
There are four possibilities behind this dispute:
- Brian Grissler could be lying through his teeth.
- Brian Grissler may not have thoroughly investigated the ultimate resolution of this bill by his staff.
- Steven Brill could be lying through his teeth.
- Steven Brill and Brian Grissler may not be discussing the same bill (although Brill claims he only picked one bill to examine from Stamford Hospital).
My vote is that Answer 1 above is probably the correct answer, but we most likely will never know.
From Paul Caron's TaxProf Blog on March 8, 2013
ObamaCare Tax Increases Are Double Original Estimate
Following up on Tuesday's post, House Holds Hearing Today on The Tax-Related Provisions in the President’s Health Care Law: Tax Foundation, Obamacare Tax Increases Will Impact Us All:
The Joint Committee on Taxation recently released a 96 page report on the tax provisions associated with Affordable Care Act. The report describes the 21 tax increases included in Obamacare, totaling $1.058 trillion – a steep increase from initial assessment. The summer 2012 estimate is nearly twice the $569 billion estimate produced at the time of the passage of the law in March 2010. ...
Provision 2010 Estimate, 2010-2019, $billion 2012 Estimate, 2013-2022, $billion 0.9% payroll tax on wages and self-employment income and 3.8% t tax on dividends, capital gains, and other investment income for taxpayers earning over $200,000 (singles) / $250,000 (married) 210.2 317.7 “Cadillac tax” on high-cost plans * 32 111 Employer mandate * 52 106 Annual tax on health insurance providers * 60.1 101.7 Individual mandate * 17 55 Annual tax on drug manufacturers/importers * 27 34.2 2.3% excise tax on medical device manufacturers/importers* 20 29.1 Limit FSAs in cafeteria plans * 13 24 Raise 7.5% AGI floor on medical expense deduction to 10% * 15.2 18.7 Deny eligibility of “black liquor” for cellulosic biofuel producer credit 23.6 15.5 Codify economic substance doctrine 4.5 5.3 Increase penalty for nonqualified HSA distributions * 1.4 4.5 Impose limitations on the use of HSAs, FSAs, HRAs, and Archer MSAs to purchase over-the-counter medicines * 5.0 4 Impose fee on insured and self-insured health plans; patient-centered outcomes research trust fund * 2.6 3.8 Eliminate deduction for expenses allocable to Medicare Part D subsidy 4.5 3.1 Impose 10% tax on tanning services * 2.7 1.5 Limit deduction for compensation to officers, employees, directors, and service providers of certain health insurance providers 0.6 0.8 Modify section 833 treatment of certain health organizations 0.4 0.4 Other Revenue Effects 60.3 222** Additional requirements for section 501(c)(3) hospitals Negligible Negligible Employer W-2 reporting of value of health benefits Negligible Negligible Total Gross Tax Increase: 569.2 1,058.3 * Provision targets households earning less than $250,000. ** Includes CBO’s $216.0 billion estimate for “Associated Effects of Coverage Provisions on Tax Revenues” and $6.0 billion within CBO’s “Other Revenue Provisions” category that is not otherwise accounted for in the CBO or JCT estimates.
Source: Joint Committee on Taxation Estimates, prepared by Ways and Means Committee Staff
March 4, 2013 message from Roger Collins
Rivetting - and chilling - account of a care control system
breakdown.Its in the UK but could easily happen here. I sent this to a
colleague in our School of Nursing yesterday - this evening she's
suggested that we run a joint Nursing/School of Business seminar on the
report.
http://www.midstaffspublicinquiry.com/ report
http://www.midstaffspublicinquiry.com/ sites/default/files/report/ Volume%201.pdf
http://www.midstaffspublicinquiry.com/ sites/default/files/report/ Volume%202.pdf
http://www.midstaffspublicinquiry.com/ sites/default/files/report/ Volume%203.pdf
Note - I found the .pdf files to be troublesome to save; you may have
to specify that the file should be opened with Adobe Reader and then
save - but they repay the effort.
Two quotes from the Chairman of the Public Inquiry, which began in 2010
and cost around $20 million
"This is a story of appalling and unnecessary suffering of hundreds of
people. They were failed by a system which ignored the warning signs
and put
corporate self interest and cost control ahead of patients and their
safety. I have today made 290 recommendations designed to change this
culture and
make sure that patients come first.
……
There was a lack of care, compassion, humanity and leadership. The
most basic standards of care were not observed, and fundamental rights
to dignity were not respected. Elderly and vulnerable patients were left
unwashed, unfed and without fluids. They were deprived of dignity and
respect. Some patients had to relieve themselves in their beds when they
offered no help to get to the bathroom. Some were left in excrement
stained sheets and beds. They had to endure filthy conditions in their
wards. There were incidents of callous treatment by ward staff. Patients
who could not eat or drink without help did not receive it. Medicines
were prescribed but not given. The accident and emergency department as
well as some wards had insufficient staff to deliver safe and effective
care. Patients were discharged without proper regard for their welfare.
"
Roger
Roger Collins
Associate Professor
OM1275
TRU School of Business & Economics
"The Coming Failure of 'Accountable Care' The Affordable Care Act's
updated versions of HMOs are based on flawed assumptions about doctor and
patient behavior,"
Clayton Christensen is a professor of business administration at Harvard
Business School and co-founder of Innosight Institute, a think tank focusing on
disruptive innovation. Jeffrey Flier is dean of the faculty of medicine at
Harvard University and professor of medicine at Harvard Medical School.and.
Vineeta Vijayaraghavan is a senior research fellow at Innosight Institute.
The Wall Street Journal, February 19, 2013 ---
http://professional.wsj.com/article/SB10001424127887324880504578296902005944398.html?mod=djemEditorialPage_h&mg=reno64-wsj
Spurred by the Affordable Care Act, hundreds of pilot programs called Accountable Care Organizations have been launched over the past year, affecting tens of millions on Medicare and many who have commercial health insurance.
The ACOs are in effect latter-day health-maintenance organizations—doctors, hospitals and other health-care providers grouped together to provide coordinated care. The ACOs assume financial responsibility for the cost and quality of the care they deliver, making them accountable to patients. With President Obama's re-election making it certain that the Affordable Care Act will begin taking full effect next year, the number of ACOs will continue to increase.
We believe that many of them will not succeed. The ACO concept is based on assumptions about personal and economic behavior—by doctors, patients and others—that aren't realistic. Health-care providers are spending hundreds of millions of dollars to build the technology and infrastructure necessary to establish ACOs. But the country isn't likely to get the improvements in cost, quality and access that it so desperately needs.
The first untenable assumption is that ACOs can be successful without major changes in doctors' behavior. Many proponents of ACOs believe that doctors automatically will begin to provide care different from what they have offered in the past. Doctors are expected to adopt new behavior that reduces the cost of care while retaining the ability to do what's medically appropriate. But the behavior of doctors today has been shaped by decades of complicated interdependencies with other medical practices, hospitals and insurance plans. Such a profound behavior shift would likely require re-education and training, and even then the result would be uncertain.
To give one example, if ACOs are to achieve their cost-saving goals and improve medical care, most doctors will need to change some of their approaches to treating patients. They'll need to employ evidence-based protocols more often to determine optimal treatment—for instance, in prescribing medication or deciding whether certain kinds of surgery are necessary. Doctors will also have to find ways to move some care to lower-cost sites of service, such as more surgery in ambulatory clinics instead of a hospital. ACOs aren't designed or equipped to transform physician behaviors on the scale that will be needed.
The second mistaken assumption is that ACOs can succeed without changing patient behavior. In reality, quality-of-care improvements are possible only with increased patient engagement. Managed care, as formulated in the 1990s by the HMO model, left consumers with a bad taste because the HMOs acted as visible gatekeepers to patient access to care. ACOs, seemingly wary of stirring a similar backlash, allow Medicare patients to obtain care anywhere they choose, but there is no preferential pricing, discounting or other way for ACOs to steer patients to the most effective providers.
The Everett Clinic in Washington state has taken steps to plug this hole by deciding not to become a full-fledged ACO. Last year, the clinic told patients that to remain with Everett, they must shift to Medicare Advantage—which encourages preventive care and supports disease-management programs. Those who want to remain on regular Medicare were required to obtain their care elsewhere.
Accountable Care Organizations are also on the hook for patients who don't comply with recommended treatment or lifestyle changes. Patients can even decide not to share their claims data or medical history with the ACO. If a woman from, say, Massachusetts, spends half the year in Florida and receives care there, the Massachusetts ACO is still responsible for managing the patient's medical costs, though it in no way was able to manage the Florida care. The seems to be unfair both to the responsible ACO provider and to the patient, who will likely not receive optimal care in these transitions.
In other words, ACOs hold caregivers accountable without requiring patient accountability. How can this work?
The third and final flawed assumption of the Affordable Care Act is that ACOs will save money. Even if the pilot Medicare Pioneer ACOs—as the 32 most advanced Medicare ACOs are called—achieve their full desired impact, the Congressional Budget Office estimates that the savings would total $1.1 billion over the next five years. This is insignificant in a total annual Medicare budget of $468 billion. As for the commercial and Medicare ACOs that are operating outside these pilot programs, even the most optimistic assumptions come up with relatively small reductions to annual health-care spending nationally.
The architects of the ACO initiative somehow assume that making the existing system more efficient will make health-care affordable. But slowing the rise of health-care costs can't address the challenge of adding 50 million uninsured to the system while keeping expenditures the same or even somewhat lower than the unsustainable percentage of national wealth that they already represent. No dent in costs is possible until the structure of health care is fundamentally changed.
How can that level of change be achieved? We beseech policy makers in Washington to study a range of reform approaches that aren't burdened by as many untenable assumptions as Accountable Care Organizations, and go well beyond them in their aspirations.
• Consider opportunities to shift more care to less-expensive venues, including, for example, "Minute Clinics" where nurse practitioners can deliver excellent care and do limited prescribing. New technology has made sophisticated care possible at various sites other than acute-care, high-overhead hospitals.
• Consider regulatory and payment changes that will enable doctors and all medical providers to do everything that their license allows them to do, rather than passing on patients to more highly trained and expensive specialists.
• Going beyond current licensing, consider changing many anticompetitive regulations and licensure statutes that practitioners have used to protect their guilds. An example can be found in states like California that have revised statutes to enable highly trained nurses to substitute for anesthesiologists to administer anesthesia for some types of procedures.
• Make fuller use of technology to enable more scalable and customized ways to manage patient populations. These include home care with patient self-monitoring of blood pressure and other indexes, and far more widespread use of "telehealth," where, for example, photos of a skin condition could be uploaded to a physician. Some leading U.S. hospitals have created such outreach tools that let them deliver care to Europe. Yet they can't offer this same benefit in adjacent states because of U.S. regulation.
These a ...
Continued in the article
"IBM Touts 'Watson' Supercomputer for the Health-Care Industry," by
James Rogers, The Street, February 8, 2013 ---
http://www.thestreet.com/story/11837053/1/ibm-touts-watson-supercomputer-for-the-health-care-industry.html
. . .
IBM has been working closely with WellPoint and Memorial Sloan Kettering to "teach" Watson how to process and analyze clinical data, specifically around cancer care. The supercomputer has already ingested more than 600,000 pieces of medical evidence, according to Big Blue, as well as 2 million pages of text from clinical oncology trials.
Continued in article
Jensen Comment
The worst news for you is when the screen says nothing but "Checkmate."
After reading this article I can barely lift one hand to the keyboard. The thought of going out to both shovel and blow snow in a wind chill well below zero makes me want "to crawl back in bed, assume a prenatal position, and turn the electric blanket up to nine" [as spoken by one of the Limelighters (the base player) years ago]. In truth I'm in great shape relative to the old folks discussed in the article below. Give me one for my baby and one more for the road.
"Scary Health-Care Statistics on the Broken-Down Boomer Generation,"
by Peter Coy, Bloomberg Business Week, February 7, 2013 ---
http://www.businessweek.com/articles/2013-02-07/scary-health-care-statistics-on-the-broken-down-boomer-generation
Aging baby boomers are fatter and sicker than their predecessors were at the same age, says a new study that’s raising alarms about the future costs of health care and disability.
The study, published online on Feb. 4 by JAMA Internal Medicine, says boomers were less likely to report excellent health and to do regular exercise, and more likely to suffer from obesity, hypertension, diabetes, and other maladies. To pick one sorrowful example, they were twice as likely to use a “walking assist device,” such as a cane. (See below for a statistical table.)
Boomers who are in poor health will not only have more expensive health care; they are more likely to retire early, depriving employers of their specialized knowledge. That’s bad news for companies like Chrysler, FedEx (FDX), J.C. Penney (JCP), Raytheon (RTN), and Vanguard Group. All of those companies are members of the San Diego-based Disability Management Employer Coalition.
The JAMA study, if accurate, is “very discouraging,” says Charlie Fox, president of the Disability Management Employer Coalition. “What we’d been hearing all along was that boomers were the most healthy,” agrees Terri Rhodes, the coalition’s manager of education programs. “There’s been some thought that if we can hang on to boomers longer, we can hang on to their intellectual capital. If we’re having a population now that’s going to be disabled, that definitely is going to impact the sheer number of available workers.”
Since the start of the 2007-09 recession, there’s been a rise in the number of people filing for disability insurance and the government’s Supplemental Security Income program. The Council for Disability Awareness in Portland, Me., which represents insurers, said last year that in its survey, “most, but not all, companies continue to believe the economic environment is a factor.” But the JAMA Internal Medicine report makes clear that genuine deterioration in health is also a factor.
The study is by five researchers from West Virginia University School of Medicine and the Medical University of South Carolina, led by Dr. Dana E. King of West Virginia’s Department of Family Medicine. It draws on data from the National Health and Nutrition Examination Survey, a project of the Centers for Disease Control. The boomer group had an average age of 54 during the study period of 2007-10. It was compared to a group of people who were the same age in 1988-94.
The study says that although boomers have a longer life expectancy than their elders, their health is another matter. Better habits would help, the authors say. “The present study demonstrates a clear need for policies that expand efforts at prevention and healthy lifestyle promotion in the baby boom generation,” they write.
Now, some statistics pulled from the two-page report:
Eleven ways that aging boomers are worse off than their predecessors …
Pre- Boomer Boomer Excellent health status 32% 13% Use a walking assist device 3.3 6.9 Limited in work 10.1 13.8 Functional limitation 8.8 13.5 Obese 29 39 Regular exercise 50 35 Moderate drinking 37 67 Hypertension 36 43 Hypercholesterolemia 34 74 Diabetes 12 16 Cancer 10 11… and three in which they’re better off …
Pre- Boomer Boomer Current smoker 28 21 Emphysema 3.5 2.3 Myocardial infarction 5 4
Bob Jensen's threads on health care ---
http://www.trinity.edu/rjensen/Health.htm
"Why Not Drop Health
Insurance and Pay the Penalty? It’s because the decision is not just a financial
one. Here are the other factors to consider," by Benjamin S. Lupin,
CFO.com, January 3, 2013 ---
http://www3.cfo.com/article/2013/1/regulation_pay-or-play-healthcare-risk-lupin-insurance
"Rahm's ObamaCare
Brainstorm Chicago may dump its retiree health costs on federal taxpayers,"
The Wall Street Journal, January 25, 2013 ---
http://professional.wsj.com/article/SB10001424127887323968304578245702495382788.html?mg=reno64-wsj#mod=djemEditorialPage_t
Rahm Emanuel's parting gift to national taxpayers upon leaving Washington two years ago was a $1 trillion bill for ObamaCare. Now the Chicago Mayor may add billions more to the tab by dumping his city's retirees on the federally subsidized state health exchange.
This public service announcement is brought to you by a city commission that the mayor appointed last summer to study the cost of continuing health benefits for retired workers. A 25-year-old legal settlement requiring the city and its pension funds to pay between 40% and 55% of most retirees' health costs conveniently expires this June—convenient because the city can't afford the bill.
The city is running a $370 million budget deficit, which will blow up in 2015 when a $1.2 billion balloon payment for pensions comes due. The bill for retiree health benefits is $194 million this year and will grow to $540 million by 2023. Actuaries have recommended that the city sock away $2 billion this year to finance future benefits and pay down a $23 billion unfunded liability. Meanwhile, Chicago's pension funds, which are projected to run dry by the end of the decade, are scraping the bottoms of their barrels to pay for retiree health benefits as required by the settlement.
Enter the Mayor's commission. The four-member panel issued a report this month suggesting that dumping pre-Medicare retirees onto the state's ObamaCare exchange in 2014 could be fab for retirees and city taxpayers. Nearly 60% of retirees and 94% of those who receive subsidies would pay less for their health care on the exchange. Married retirees with dependents would save an average of $4,300.
Chicago and its pension funds in turn would shed $23 billion in liabilities, assuming supplemental benefits for Medicare recipients are also cancelled. (These calculations are based on models that assume public pensions are retirees' only source of income.)
On the other hand, the cost to national taxpayers would be enormous, especially if other local and state governments joined the party. Federal subsidies for Chicago retirees would amount to $44 million in 2014 and increase as more workers retire in their early to mid-50s and health costs grow. All told, state and local governments are on the hook for between $700 billion and $1.5 trillion for retiree health benefits, and like Chicago most will soon be unable to afford even their minimum annual payments.
Offloading the costs on Uncle Sam will look attractive since retiree health benefits don't enjoy the legal protections that some states have bestowed upon pensions. Stockton, California intends to shed its $400 million unfunded liability for retiree benefits in bankruptcy.
Mr. Emanuel says the city's decision on retiree health benefits will "strike the right balance between meeting the needs of the retirees and providing them health-care choices with protecting the interests of the city's taxpayers." So, let's see. On the one hand, Chicago pays, on the other everyone else does. Which do you think he'll choose?
The Chicago report illustrates once again how ObamaCare provides a convenient mechanism and incentive for employers to transfer health-care liabilities to national taxpayers—and how the costs will explode beyond Washington's phony projections.
December 31, 2012
National Bureau of Economic Research: Bulletin on Aging and Health --- http://www.nber.org/aginghealth/
It is exceptionally difficult -- for all practical
purposes, impossible," writes Eberstadt, "for a medical professional to disprove
a patient's claim that he or she is suffering from sad feelings or back pain. In
other words, many people are gaming or defrauding the system. This includes not
only disability recipients but health care professionals, lawyers and others who
run ads promising to get you disability benefits. Between 1996 and 2011, the
private sector generated 8.8 million new jobs, and 4.1 million people entered
the disability rolls.
Michael Barone, "Men Find
Careers in Collecting Disability," ---
Click Here
http://townhall.com/columnists/michaelbarone/2012/12/03/men_find_careers_in_collecting_disability?utm_source=thdaily&utm_medium=email&utm_campaign=nl
Jensen Comment
Even after one or more spine surgeries it is virtually impossible to determine
whether remaining pain is real or faked. I can claim first hand that after 15
spine surgeries and metal rods from neck to hip that my wife's suffering is
real. However, I know of at least two instances where the disability careers are
faked in order to get monthly lifetime disability payments and access to
Medicare long prior to age 65. This seems to be one of the unsolvable problems
in society that becomes even more problematic when a disability career is easier
to enter than a job-like career.
"Hospital Will Stop Delivering Babies, Thanks to Obamacare," by Steven
Ertelt, Life News, January 17, 2013 ---
http://www.lifenews.com/2013/01/17/hospital-will-stop-delivering-babies-thanks-to-obamacare/
. . .
A southwestern Pennsylvania hospital will stop delivering babies after March 31 because its obstetricians are either leaving or refocusing their practices, and because hospital officials believe they can’t afford it based on projected reimbursements under looming federal health care reforms.
The Windber Medical Center, about 60 miles southeast of Pittsburgh, is losing two obstetricians and two others are shifting their focus more to gynecology.
Hospital officials say the population of women of child-bearing age is dropping and that the number of births the hospital would be called upon to perform isn’t enough for it to provide the service in the face of lower reimbursements under the federal Affordable Care Act.
The hospital delivered about 200 babies each year since restarting its obstetrics program in 2005.
Officials aren’t sure how many jobs will be lost.
Continued in article
The new payroll tax and other Obama care taxes that the media tends not to
mention ---
http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions
"An Overview of the Affordable Care Act," by Matt Kukla, Scribed,
November 2012 ---
http://www.scribd.com/doc/109391737/An-Overview-of-the-ACA
As you know, health care has been a highly politicized topic in recent years and become a focal point of theupcoming elections. Solving our health care crisis is crucial to the survival, productivity and well being of boththe U.S. economy and all its citizens. Fortunately, there exists a growing body of evidence from across theworld offering solutions for fixing our health system – evidence that bridges and blends the best of bothpolitical parties for those open minded enough to see it. Yet it is stuck behind the curtain of drama andpartisanship, and I fear the ongoing political theatre will prevent us from utilizing this body of knowledge.I recently finished my PhD in Health Systems Financing, Economics and Policy and returned from working atthe World Health Organization in Geneva. While my background focuses on the U.S. health care system, mostof my work involves reforming health systems in other developed and developing countries. I essentially dealwith (a) how institutional frameworks, governance, and political systems impact health care and (b) howhealth care dollars are collected, pooled, and redistributed / paid among the big three (insurance, individualsand medical providers). Because this is the primary goal of the Affordable Care Act (Obamacare) and given thetremendous amount of misinformation circulating about these issues, I have writtena summary of (a) whatour existing health care system looks like, notably the root causes of rising costs and the uninsured, (b) thetrue content of the Affordable Care Act, (c) what the ACA should have done differently, and (d) someadditional insights into our health care system that you might find prevalent and interesting.I realize that terms like “Evidence” and “Facts” are thrown around so frequently in American society,individuals rarely know which are truly accurate and non-biased. Political parties, special interest groups, andmany Americans are also willing to utilize sound research when it supports their arguments but are keen todebunk it as biased when it does not. As such, I want to ensure your confidence that this write-up is accurateand non-biased. My data comes from my own work and a range of sources including the World Bank, WorldHealth Organization, top academic literature, and the best non-partisan policy think tanks (RAND,Commonwealth Fund, Health Affairs, Kaiser). I have also been critical of many liberal and conservative "talkingpoints" as well as the ACA, while providing the most updated evidence where possible. If you have any questions about these sources or wish to read them, please don’t hesitate to email me.
The Problem Interestingly, the U.S. health care system is not actually a system, but something that has been put togetherpiecemeal over decades of policymaking. Our political system is built for incremental policymaking at best;thus health care reforms have built on one another only to fill in any existing gaps. Yet we have never steppedback, looked at the big picture and restructured the entire system to be coordinated, efficient or effective. It'slike continuing to put band-aids on a gushing wound, when what's needed is surgery. Or it's like having 40workers operate an assembly line that's meant for 15 people -- instead of removing them and simplifying, weadd more people to manage those 40. The system becomes increasingly layered, inefficient, ineffective,complex and stagnant. The following is a brief overview of what our existing health care system looks like as aresult of this reform process. While there is no silver bullet or single change that will fix our health care system(despite what people tell you), overwhelming evidence from dozens of developed countries and the USsuggests that the following factors account for a significant portion of the growth in our healthcare costs (18percent of GDP vs. 8-13 percent in most other developed countries) and lack of health care coverage (19percent of the population / 49 million vs. 1-2 percent in other countries
Continued in article
Healthcare Video and Cases From PwC
Why mobile technology may well define the future of healthcare... for
everyone. ---
http://www.youtube.com/watch?feature=player_embedded&v=qkm_7XUDqIY
PwC mHealth (read that Mobile Health) Master Site --- http://www.pwc.com/gx/en/healthcare/mhealth/index.jhtml?WT.ac=vt-mhealth#&panel1-1
Mobile is accelerating trends in healthcare
Three major trends already happening in healthcare lend themselves to the revolution in mobile technology:Ageing population
Ageing populations and chronic illness are driving regulatory reform. Public sector healthcare is seeking better access and quality, and it's looking to the private sector for innovation and efficiency. mHealth improves access and quality, and offers dramatic innovation and cost reduction.
Foundations already in place
The foundations of industrialisation of healthcare are already in place — electronic medical records, remote monitoring and communications. ‘Care anywhere’ is already emerging. The platform for mHealth is set.
Personalisation
Healthcare, like other industries, is getting personal. mHealth can offer personal toolkits for predictive, participatory and preventative care.
"Obama's Electronic Medical Records Scam," by Michelle Malkin, Townhall,
December 14, 2012 ---
Click Here
http://townhall.com/columnists/michellemalkin/2012/12/14/obamas-electronic-medical-records-scam-n1466808?utm_source=thdaily&utm_medium=email&utm_campaign=nl
. . .
The program was originally sold as a cost-saving measure. In theory, modernizing record-collection is a good idea, and many private health care providers have already made the change. But as with many government "incentive" programs, the EMR bribe is a tax-subsidized, one-size-fits-all mandate. This one pressures health care professionals and hospitals across the country into radically federalizing their patient data and opening up medical information to untold abuse. Penalties kick in for any provider that hasn't switched over by 2014.
So, what's it to you? Well, $4 billion has already gone out to 82,535 professionals and 1,474 hospitals, and a total of $6 billion will be doled out by 2016. But the feds' reckless profligacy, neglect and favoritism have done more harm than good.
Don't take my word for it. A recent report released by the Department of Health and Human Services Inspector General acknowledged that the incentive system is "vulnerable to paying incentives to professionals and hospitals that do not fully meet" the program's quality assurance requirements. The federal health bureaucracy "has not implemented strong prepayment safeguards, and its ability to safeguard incentive payments postpayment is also limited," the IG concluded.
Translation: No one is actually verifying whether the transition from paper to electronic is improving patient outcomes and health services. No one is actually guarding against GIGO (garbage in, garbage out). No one is checking whether recipients of the EMR incentives are receiving money redundantly (e.g., raking in payments when they've already converted to electronic records). No one is actually protecting private data from fraud, abuse or exploitation.
Little is being done to recoup ill-gotten payments. In any case, such "pay and chase" policing after the fact is a crummy way to run government in lean times -- or in fat times, for that matter.
Adding Pain to Misery in Medicare Funding of the Future
"The Dementia Plague: As the world's population of older people rapidly
grows in the coming years, Alzheimer's and other forms of dementia will become a
health-care disaster," by Stephen S. Hall, MIT's Technology Review, October
5, 2012 ---
Click Here
http://www.technologyreview.com/featured-story/429494/the-dementia-plague/?utm_campaign=newsletters&utm_source=newsletter-daily-all&utm_medium=email&utm_content=20121005
"Health-Care Law Spurs a Shift to Part-Time Workers," by By Julie
Jargon, Louise Radnofsky, and Alsexantra Berzon, The Wall Street Journal,
November 4, 2012 ---
http://professional.wsj.com/article/SB10001424052970204707104578094941709047834.html?mod=ITP_marketplace_0&mg=reno-wsj
Some low-wage employers are moving toward hiring part-time workers instead of full-time ones to mitigate the health-care overhaul's requirement that large companies provide health insurance for full-time workers or pay a fee.
Several restaurants, hotels and retailers have started or are preparing to limit schedules of hourly workers to below 30 hours a week. That is the threshold at which large employers in 2014 would have to offer workers a minimum level of insurance or pay a penalty starting at $2,000 for each worker.
The shift is one of the first significant steps by employers to avoid requirements under the health-care law, and whether the trend continues hinges on Tuesday's election results. Republican presidential nominee Mitt Romney has pledged to overturn the Affordable Care Act, although he would face obstacles doing so.
President Barack Obama is set to push ahead with implementing the 2010 law if he is re-elected.
Pillar Hotels & Resorts this summer began to focus more on hiring part-time workers among its 5,500 employees, after the Supreme Court upheld the health-care overhaul, said Chief Executive Chris Russell. The company has 210 franchise hotels, under the Sheraton, Fairfield Inns, Hampton Inns and Holiday Inns brands.
"The tendency is to say, 'Let me fill this position with a 40-hour-a-week employee.' "Mr. Russell said. "I think we have to think differently."
Pillar offers health insurance to employees who work 32 hours a week or more, but only half take it, and Mr. Russell wants to limit his exposure to rising health-care costs. He said he planned to pursue new segments of the population, such as senior citizens, to find workers willing to accept part-time employment.
He described the shift as a "cultural change" toward hiring more part-timers and not a prohibition against hiring full-timers.
CKE Restaurants Inc., parent of the Carl's Jr. and Hardee's burger chains, began two months ago to hire part-time workers to replace full-time employees who left, said Andy Puzder, CEO of the Carpinteria, Calif., company. CKE, which is owned by private-equity firm Apollo Management LP, APO -3.31% offers limited-benefit plans to all restaurant employees, but the federal government won't allow those policies to be sold starting in 2014 because of low caps on payouts. Mr. Puzder said he has advised Mr. Romney's campaign on economic issues in an unpaid capacity.
Home retailer Anna's Linens Inc. is considering cutting hours for some full-time employees to avoid the insurance mandate if the health-care law isn't repealed, said CEO Alan Gladstone.
Mr. Gladstone said the costs of providing coverage to all 1,100 sales associates who work at least 30 hours a week would be prohibitive, although he was weighing alternative options, such as raising prices.
The Costa Mesa, Calif., company currently offers benefits to workers who put in at least 32 hours a week.
Supporters of the health-care overhaul said most large employers already covered workers voluntarily, and requiring others to do so or pay a penalty was important to level the playing field between businesses.
A spokeswoman for the Department of Health and Human Services said the administration didn't believe the law would substantially affect employment, citing the Massachusetts health-care overhaul signed by then-Gov. Romney in 2006.
"Consistent with the experience in Massachusetts and projections of the Congressional Budget Office, the health-care law will improve the affordability of health care while not significantly impacting the labor market," spokeswoman Erin Shields Britt said in a written statement. "This law will decrease costs, strengthen our businesses and make it easier for employers to provide coverage to their workers." Administration officials declined to answer further questions.
Companies in industries that already offer full benefits have indicated that they weren't planning major changes around the law. Several employers with hourly workforces, including Marriott International Inc. MAR -0.73% hotels, the Costco Wholesale Corp. COST -1.04% warehouse chain and the Panera Bread Co. PNRA -0.01% restaurant chain also said they had no plans to change employee hours in response to the law.
But benefits consultants said most retail and hotel clients have explored shifting toward part-time workers.
Those industries are less likely to offer health coverage now, and if they do, the plans typically are too skimpy to meet the minimum-coverage requirements.
"They've all considered it," Matthew Stevenson, a workforce-strategy principal at Mercer. In a July survey, 32% of retail and hospitality company respondents told the consulting firm that they were likely to reduce the number of employees working 30 hours a week or more.
Consultants have warned that companies that use more part-time labor risk productivity losses from high staff turnover and lower morale. Laurence Geller, who until last week was CEO of Strategic Hotels & Resorts Inc., BEE +0.36% said he weighed moving toward part-time workers but decided against risking that highly trained staff at his high-end hotels would go elsewhere. The company owns hotels bearing the Four Seasons, Fairmont and Ritz-Carlton names.
The insurance mandate applies to companies with the equivalent of 50 or more full-time workers, a calculation based on the number of people employed by the company and an average of hours they work in a week. Companies are adjusting schedules now because they will have to review employment rolls for up to a year in advance to determine which workers will be deemed full-time under the law.
A company will have to pay a penalty of $2,000 for every such worker, after the first 30, if it doesn't offer qualifying health coverage. If a company offers health insurance but the coverage is deemed sparse or unaffordable, the company must pay $3,000 for every worker who gets a federal tax subsidy to purchase coverage as an individual.
Continued in article
Richard Kaplan --- http://www.law.illinois.edu/faculty/profile/RichardKaplan
"Does
Anyone Really Understand Medicare? Richard Kaplan Does, and You Can, Too
(Jotwell) (reviewing
Richard L. Kaplan (Illinois),
Top Ten Myths of Medicare, 20 Elder L.J. 1 (2012)): ---
http://tax.jotwell.com/does-anyone-really-understand-medicare-richard-kaplan-does-and-you-can-too/
When former Massachusetts Governor Mitt Romney chose Paul Ryan to be his running mate in the 2012 United States Presidential election, he guaranteed that Medicare would become a central battleground of the campaign. Ryan, a veteran Congressman from Wisconsin, is widely known for his efforts to turn the federal Medicare program into a voucher program (with the value of the vouchers deliberately calibrated not to keep up with health care costs over time), a transformation that would change everything about Medicare except its name.
Ryan’s proposal is sufficiently controversial that the Romney/Ryan camp has gone to significant lengths to distance itself from it – refusing to use the word “vouchers,” for example, which they evidently believe is toxic politically. At the same time, the Republican team’s strategists have made a point of highlighting the decreases in Medicare spending that have been projected as a result of various cost-saving measures in the Patient Protection and Affordable Care Act, calling those measures “cuts in Medicare” for which President Obama should be blamed. Both parties apparently believe that there is such strong support among likely voters to preserve Medicare that they must try to convince voters that the other candidate is going to gut the program, even though only the Republican side has ever proposed actually doing so.
Jotwell readers who wish to know more about Medicare might lament the lack of an accessible source of basic facts about how Medicare works. That is where Professor Richard L. Kaplan comes in. Kaplan, a noted tax scholar who teaches at the University of Illinois College of Law, is the founding advisor of the Elder Law Journal, and a noted expert in the field of elder law. Professor Kaplan draws on his wealth of knowledge about the subject of health care for the elderly in “Top Ten Myths of Medicare,” which was published this past summer. The article expertly walks the line between being technically accurate and broadly understandable. Neophytes, as well as those of us who think we know a lot about these issues, will come away from Professor Kaplan’s short article (fewer than 14,000 words) with both knowledge and insight that are sorely lacking in public discussions about this crucial program.
To put the importance of this article in some perspective, readers might consider that the forecasts of long-term U.S. budget deficits that are so often mentioned in the press are driven almost entirely by projected increases in health care costs. As the economist Paul Krugman once put it, any long-term fiscal problem that the United States faces can be summarized “in seven words: health care, health care, health care, revenue.” In other words, other than replacing the revenues lost to the Bush tax cuts of 2001 and 2003, the only thing that matters in our long-term fiscal picture is getting health care spending under control. (I should also note that this means, as both Professor Kaplan and I have each written about in many other venues, Social Security is most definitely not part of the problem, nor need it be any part of a solution.)
Professor Kaplan’s article, however, does not merely enlighten readers about the costs of the program and its interaction with federal budgeting (although he does that well). He also includes explanations of the nuts and bolts of the program, while trying to correct the public’s misunderstandings about a wide range of issues regarding Medicare beneficiaries, medical providers, and so on.
The article, as its title makes clear, is usefully organized as a “top ten” list. In a short review like this one, one must fight the temptation simply to list the ten subject headings, even though each one offers its own enticing hint of what one might learn by reading the article. In addition to debunking a few obvious myths (#2: “Medicare is Going Bankrupt,” and #10: “Increased Longevity Will Sink Medicare”), the reader is treated to some genuinely unexpected revelations, perhaps the most surprising of all being Myth #1: “There is One Medicare Program.” Some readers will know that Medicare has multiple parts (Part A, Part B, and so on), but few will know the specifics of those separate programs as well as Professor Kaplan does.
This kind of academic article does, however, often run the risk of simply becoming a summary of a statute. Fortunately, the myth-busting format provides an over-arching narrative to the article that allows Professor Kaplan to make some larger points – points that are truly counter-intuitive, or that are at least contrary to the conventional wisdom in U.S. policy circles today.
One theme that infuses the article is that Medicare is not the gold-plated, overly generous big government program that so many portray. On page 13 of the article, for example, we learn how stringently (and, I would argue, absurdly) the program restricts benefits for nursing home care. After detailing five surprising requirements before a patient can qualify for such coverage at all, Kaplan notes that Medicare pays for only twenty days of such care, and then for no more than an additional eighty days, with an inflation-adjusted deductible currently set at $144.50 per day.
This theme – that Medicare is hardly a freebie, forcing its enrollees to have serious financial “skin in the game” – is not merely a point about how well or poorly we actually provide for our elders’ care. Professor Kaplan’s concern is also about planning, noting that too many people believe that Medicare simply covers everything, and so they fail to prepare for the large costs that they will actually face when they inevitably need health care. Failure to plan, under the many onerous rules that Kaplan describes, is truly disastrous for many elderly Americans and their families.
Finally, although Professor Kaplan is very obviously a passionate proponent of Medicare in its current basic form, he is more than willing to acknowledge some troubling facts – facts that might (at least partially) support those whose views of Medicare are less favorable than Kaplan’s.
One of the common themes among supporters of Medicare is to point to the very low administrative costs associated with the program, compared to the costs borne by private, for-profit health insurers. Even while debunking the myth that “Medicare Is Less Efficient than Private Health Insurance” – a myth that, as he points out, is based on little more than the presumption that government programs must be inefficient, because they are government programs – Kaplan carefully discusses why one key statistic is misleading: “Medicare spends only 1.4% of medical benefits paid on administrative expenditures, while private insurers spend 25% or more for such costs.”
The most cynical explanation for this “apparently excellent result” is that any program can keep its administrative costs down if it does not put much effort into policing false claims. Medicare, we learn, sometimes has a “practice of paying apparently reasonable claims for medical services with little verification of the claims’ validity.” Moreover, some of the program’s administrative needs are already covered by other agencies, such as the IRS’s role in collecting Medicare premia from workers’ paychecks. This means that Medicare itself need not expend those resources, but the government as a whole does.
Still, the reader cannot help but come away with the sense that the lower administrative costs of Medicare mostly reflect genuine advantages over private plans. Medicare need not advertise, and, perhaps most importantly, it has no reason to try to exclude sick people from its coverage, which is a major activity of private plans that must (for reasons of profit maximization) try to cherry-pick the healthiest customers and deny benefits to as many people as possible.
In short, readers could not find a better article to explain Medicare’s basic workings, its budgetary and political realities, and its combination of shortcomings and truly significant benefits to American society. Even if the next U.S. President were not going to be chosen on the basis of his commitment to protecting Medicare, reading this article would be worth anyone’s time.
Jensen Comment
One reason Medicare's administrative costs are so low, is that it is a piñata
for fraud, including payments to scam artists for equipment to never delivered
on fictitious claims. Medicare floods us with mailings about every payment they
make on our behalf. However, when there's a billing error such as when report a
charge that was not our charge (maybe a payment for some phony claim or for a
patient not eligible for Medicare) the system seemingly does nothing about it.
Of course we do not really, really care personally if we had not copays for a
phony claim, but not investigating phony claims is one way of keeping Medicare's
administrative costs low. Perhaps more would get done if we filed a claim with
the Justice Department, but the Justice Department most likely would do nothing
until a pattern of related claims are reported.
Video: A Risky Scenario: Disruption of Group Health Insurance,
by Deloitte, CFO Journal, October 12, 2012 ---
http://deloitte.wsj.com/cfo/2012/10/12/a-risky-scenario-disruption-of-group-health-insurance/?icontype=video
The Patient Protection and Affordable Care Act creates, among many other things, a new marketplace for individuals and small businesses to purchase health insurance, and for the first time, the federal government will provide subsidies to individuals to make it affordable. These and other issues are discussed in Deloitte Insights and in a paper, Power to the People? How health care reform could result in the disruption of the group health insurance industry.
The individual market starts January 1, 2014, and while no one really knows exactly what the size is going to be, it is certainly going to be much larger than it is today, which is about 14 million people. Depending on how many people decide to sign up for the new insurance products and the subsidies from the federal government, as well as how many employers might decide to drop coverage and promote their employees to go to the exchange, there could be anywhere between 25 million and 60 million people inside these individual market exchanges.
Watch Deloitte Insights to learn how the growth of the new individual market could disrupt the existing health insurance industry. Deloitte Insights speakers are:
- Bill Copeland, vice chairman, U.S. Life Sciences & Health Care leader and U.S. Health Plans leader, Deloitte LLP
- Michael Raynor, director, Deloitte Consulting LLP, and a New York Times best-selling author
Related Resources
- Power to the People? How Health Care Reform Could Result in the Disruption of the Group Health Insurance Industry
- How CFOs Can Prepare for the New World of Health Care
- Health Care CEOs’ Perspectives on the Future
Bob Jensen's threads on health insurance controversies ---
http://www.trinity.edu/rjensen/Health.htm
October 8, 2012 message form Professor Saeed Roohani
New healthcare standard for medical malpractice: disclosure –apology- offer helps to lower the cost of healthcare.:
http://healthcarenews.com/
article.asp?id=3170 It’s hard to say "I’m sorry." Especially if it could get you sued.
But physicians in Massachusetts say a new law represents a major breakthrough in how doctors and patients interact after a medical error causes harm — not to mention reforming a medical-liability system that has become onerous and expensive for doctors.
The approach is called ’disclosure, apology, and offer’ (DA&O), and is included in the healthcare cost-control bill passed by the Massachusetts Legislature and signed into law by Gov. Deval Patrick in August.
The reform language was hammered out in multi-year negotiations by representatives of the Mass. Medical Society (MMS), the Mass. Bar Assoc., and the Mass. Academy of Trial Attorneys, all of whom agree that the change will both improve patient safety and reduce the volume of unnecessary and protracted lawsuits — and perhaps lower ever-spiraling insurance costs for physicians.
Saeed Roohani
sroohani@bryant.edu
XBRL and Healthcare Standardization
Jensen Comment
This does not go as far as the Texas constitutional amendment limiting punitive
damages, but it's a good start for the blue, blue state of Massachusetts.
September 30, 2012
Why it's better to grow old in the United States (at least for the moment)
United Kingdom National Health patients’ lives are at risk in NHS hospital wards
that are “on the brink of collapse” due to a critical shortage of out-of-hours
doctors and growing numbers of the elderly.
"Patients' lives at risk in NHS hospital wards 'on brink of collapse," by
Stephen Adams, The Telegraph, September 12, 2012 ---
http://www.telegraph.co.uk/health/healthnews/9539872/Patients-lives-at-risk-in-NHS-hospital-wards-on-brink-of-collapse.html
Some hospitals narrowly avoid “catastrophe” every weekend, research by the Royal College of Physicians has found, because doctors’ shifts are limited by the European Working Time Directive and they do not want to work anti-social hours.
Some are “struggling to cope” with the volume of older patients. Many are discharged in the middle of the night or shunted around “like parcels” to free beds for new arrivals.
If the problem is not tackled there will be more tragedies like the Mid Staffs scandal, in which up to 1,200 mainly elderly patients died from substandard care. A radical reorganisation of the NHS is needed, according to the college. It may include shutting the worst-performing hospitals to expand care at better ones, with more staff coverage at nights and weekends.
The Hospitals on the Edge report warns that:
- Four in 10 doctors surveyed said that staff shortages were jeopardising patient care
- One in four was concerned about the impact of the Working Time Directive, with one warning that “weekends and bank holidays function on a skeleton staff of doctors – very dangerous”
- Doctors are reluctant to work unsociable hours, leaving one in 10 consultant posts in emergency medicine vacant
- Over-65s account for seven in 10 beds, but the “the system continues to treat older patients as a surprise, at best, or unwelcome, at worst”.
The report notes that the number of beds in acute and general wards has fallen by a third over the past 25 years, while patients have increased. Beds have been cut as better care has led to shorter stays.
Dr Andrew Goddard, medical director for the college’s workforce unit, said: “Many hospitals run a traffic light system for their status: they are green if they are taking in patients; amber if they need to be a bit more careful; red for full or black if they are shut.
"KPMG: Healthcare System Disconnect," by Rob Starr, Content, Big
Four Blog, August 29, 2012 ---
http://www.big4.com/kpmg/kpmg-healthcare-system-disconnect/
According to the findings from a recent survey by KPMG LLP, the U.S. audit, tax and advisory firm, healthcare and pharmaceutical executives are clearly uncertain whether or not existing business models are sustainable over the next five years, even though they do anticipate major change in the short-term.
In fact, despite their majority opinions that current business models are at least somewhat sustainable, many provider (65 percent) and health plan (41 percent) executives do expect major business model changes in the next five years, while a majority of pharmaceutical executives (63 percent) expect only moderate changes.
Payers were more optimistic about the possibility of partnerships involving providers and suppliers, with 55 percent of respondents saying it was possible. Additionally, they said they expect that healthcare information technology, evidence-based medicine, disease management, and pay for performance incentives will be the most effective approaches to curbing costs.
Pharmaceutical executives are also struggling with change strategies. On one hand, 47 percent said a shift toward health system accountability would have a positive impact on their industry, and more than half said they are currently or will be using risk and outcome-based contracting in the future. Additionally, more than 70 percent of the executives said that comparative effectiveness research (CER) data would help show the value of their products.
Two Ivy League Professors Slugging It Out in a Political Arena
Harvard History Professor Niall Ferguson ---
http://en.wikipedia.org/wiki/Niall_Ferguson
Princeton Economics Professor Paul Krugman ---
http://en.wikipedia.org/wiki/Paul_Krugman
"Kinds Of Wrong," by Paul Krugman, The New York Times, August
21, 2012 ---
http://krugman.blogs.nytimes.com/2012/08/21/kinds-of-wrong/
Looking at the comments on my Niall Ferguson takedown (see Ezra Klein, Matthew O’Brien, James Fallows, and Noah Smith for more), I found my memory jogged about a point I’ve been meaning to make about the nature of error in economics.
It seems to me that when readers declare that some piece of economics commentary is “wrong”, they often confuse three different notions of wrongness, which are neither intellectually nor morally equivalent.
First, there’s the ordinary business of expressing a view about the economy that the reader disagrees with – e.g., “Krugman is wrong, because the government can’t create jobs”; or, if you prefer, “Casey Mulligan is wrong, because we’re suffering from demand problems, not supply problems.” Obviously it’s OK to say things like this, and sometimes the criticism is correct. (I’m not wrong, but Mulligan is!) But equally obviously, there’s nothing, er, wrong about being wrong in this sense: people will disagree, and that’s legitimate.
Second, and much less legitimate, is the kind of wrongness that involves making assertions that are logically or empirically indefensible. I’d put the Cochrane/Fama claims that government spending can’t increase demand as a matter of accounting in this category; this is a basic conceptual error, which goes beyond mere difference of opinion. And economists who are wrong in this sense should pay a professional price.
That said, I don’t think it’s realistic to expect the news media to be very effective at policing this kind of wrongness. If professors with impressive-sounding credentials spout nonsense, it’s asking too much of a newspaper or magazine serving the broader public to make the judgment that they actually have no idea what they’re talking about.
Matters are quite different when it comes to the third kind of wrongness: making or insinuating false claims about readily checkable facts. The case in point, of course, is Ferguson’s attempt to mislead readers into believing that the CBO had concluded that Obamacare increases the deficit. This was unethical on his part – but Newsweek is also at fault, because this is the sort of thing it could and should have refused to publish.
Now, I don’t expect a publication that responds to daily or weekly news to do New Yorker-style fact checking. But it should demand that anyone who writes for it document all of his or her factual assertions – and an editor should check that documentation to see that it actually matches what the writer says.
Continued in article
"Unethical Commentary, Newsweek Edition," by Paul Krugman,
The New York Times, August 19, 2012 ---
http://krugman.blogs.nytimes.com/2012/08/19/unethical-commentary-newsweek-edition/
¶There are multiple errors and misrepresentations in Niall Ferguson’s cover story in Newsweek — I guess they don’t do fact-checking — but this is the one that jumped out at me. Ferguson says:
¶The president pledged that health-care reform would not add a cent to the deficit. But the CBO and the Joint Committee on Taxation now estimate that the insurance-coverage provisions of the ACA will have a net cost of close to $1.2 trillion over the 2012–22 period.
¶Readers are no doubt meant to interpret this as saying that CBO found that the Act will increase the deficit. But anyone who actually read, or even skimmed, the CBO report (pdf) knows that it found that the ACA would reduce, not increase, the deficit — because the insurance subsidies were fully paid for.
¶Now, people on the right like to argue that the CBO was wrong. But that’s not the argument Ferguson is making — he is deliberately misleading readers, conveying the impression that the CBO had actually rejected Obama’s claim that health reform is deficit-neutral, when in fact the opposite is true.
¶More than that: by its very nature, health reform that expands coverage requires that lower-income families receive subsidies to make coverage affordable. So of course reform comes with a positive number for subsidies — finding that this number is indeed positive says nothing at all about the impact on the deficit unless you ask whether and how the subsidies are paid for. Ferguson has to know this (unless he’s completely ignorant about the whole subject, which I guess has to be considered as a possibility). But he goes for the cheap shot anyway.
¶Continued in article
Jensen Comment
The CBO assumes that the requirement (just upheld by a Supreme Court decision)
that all people in the United States have health insurance or otherwise will
have health insurance premiums deducted from their tax refunds that will fund
the added cost of covering current poor people needing subsidies for health
insurance coverage. This is what Krugman means above when he assumes "the
insurance subsidies are fully paid for." This is why the Affordable Health Care
Act (ACA) tried to get states to raise the number of people receiving state
subsidies for Medicaid. About half the states, however, are refusing to along
with the expanded coverage under Medicaid. This means that more higher-end low
income people will depend on the ACA "subsidies" instead of Medicaid coverage
from federal and state Medicaid funding.
It seems to be a matter of semantics whether these tax return add-ons are a tax or not, but Krugman (probably rightfully) ignores this matter of semantics. But since about half the taxpayers in the U.S. pay no income taxes and over 90% of them are below the median in earnings it's not clear whether enough insurance premiums expected to be collected will really be collected. The CBO may have been planning on an economic recovery that perhaps will never materialize in this new era of global competition with Asia. The CBO expectations of lower unemployment may not materialize (currently there are nearly 13 million unemployed people not counting the many who've simply given up looking for work or received fraudulent Social Security lifetime disability awards). The required subsidies in reality may greatly exceed the added premiums "tax" collected. But nobody, including the CBO, knows what deficits will become.
Also it's not at all clear that the CBO correctly estimated health care claims given the double-digit inflation in the cost of medical services. This is the real Achilles Heel of the Affordable Health Care Act. The costs of actually providing the promised services in the future may greatly exceed expectations.
What may be more subject to dispute is how accurate the CBO is on estimating future costs of bringing on people who have prior conditions that prevent them from currently being able to obtain health care coverage. I'm definitely in favor of providing affordable coverage to these people with prior conditions. But I think the eventual coverage costs will exceed CBO estimates since many of them need high-cost organ transplants and other very expensive medical services.
Professor Krugman has a very loyal crowd of liberal followers who seldom
disagree with his liberal politics.
The comment of NS
The New York Times, August 19, 2012 ---
http://krugman.blogs.nytimes.com/2012/08/19/unethical-commentary-newsweek-edition/
I am very surprised by the hysterical reaction of many readers to Krugman's comment. The point of the argument is what the HBO report says. Does Ferguson lie about the HBO report in his Newsweek article? Either Ferguson or Krugman is correct. I would expect readers disagreeing with Krugman to provide quotations from the HBO report showing that he is wrong and that Ferguson is right.
Instead of that I see a lot of ideological delirium in too many of the comments.
NS, Paris, France
Comment of Laurie Wick
The New York Times, August 19, 2012 ---
http://krugman.blogs.nytimes.com/2012/08/19/unethical-commentary-newsweek-edition/
I cancelled my subscription to Newsweek today. I do not need this kind of uninformed blather in my home. If I feel the need to read/hear totally unfactual, biased reporting, I can just turn on FOX news at any hour of the day or night. Which I will never do.
Laurie Wick
Jensen Comment
Actually, since Tina Brown became editor, Newsweek became a liberal feminist magazine. Niall Ferguson's column is only there for tokenism. The Ferguson cover story is most likely a desperate attempt to recover the millions of conservative subscribers who've defected since Tina Brown took over. One of the recent cover's of Newsweek accuses Candidate Romney of "being a Wimp." Are you sure you want to cancel Newsweek Laurie?
The Comment of J. Philip
The New York Times, August 19, 2012 ---
http://krugman.blogs.nytimes.com/2012/08/19/unethical-commentary-newsweek-edition/
FTA: "health reform that expands coverage requires that lower-income families receive subsidies to make coverage affordable. "
And, exactly,. Mr. Krugman, where do you think those subsidies are gonna come from? You can continue to carry Obama's water that's what you get paid to do, but the rest of us know a TAX when we see one.
J. Phillip
Closing Jensen Comment
I wish the Democrats had rammed a national health care plan down our throats in
that short window of time 2008-2010 when they controlled the entire executive
and legislative branches of the federal government. Instead we ended up with a
bastardized public-private ACA that pleases neither the left nor the right. I am
inclined to believe that the ACA will always have insurance premiums falling way
short of costs of delivering medical services. Whether or not this adds to the
deficit is simply a matter of accounting gimmicks the familiar governmental
accounting shell game ---
http://www.trinity.edu/rjensen/Theory02.htm#GovernmentalAccounting
Bob Jensen's threads on the ACA are at
http://www.trinity.edu/rjensen/Health.htm
Why U.S. Medical Costs Are so High: Wastes Caused by Losing Causes
As usual, I preface this by saying that I favor a national health care insurance system, possibly like the one in Canada where people of all levels of income pay their fair share for medical services. Having said this, I point out that in providing basic medical services to all citizens the quality of the medical services decline in terms of waits for such services, difficulties for many to get replacement knees, hips, and organs, and the need to come to the U.S. for some of the great specialty physicians and medical centers.
Two reasons medical costs are higher in the U.S. is that the U.S. spends more on average per capita on futile extensions of life for a few weeks or months, which is the most single costly component of Medicare costs according to CBS Sixty Minutes. The other reason is the hundreds of billions spent in the U.S. on medical research where other nations become free riders on the the most successful discoveries.
The High Cost of Dying
On November 22, 2009 CBS Sixty Minutes aired a video featuring experts
(including physicians) explaining how the single largest drain on the Medicare
insurance fund is keeping dying people hopelessly alive who could otherwise be
allowed to die quicker and painlessly without artificially prolonging life on
ICU machines.
"The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009
---
http://www.cbsnews.com/stories/2009/11/19/60minutes/main5711689.shtml?tag=mncol;lst;1
What is really sad is the way Republicans are standing in the way of making
rational cost-benefit decisions about dying by exploiting the "Kill Granny"
political strategy aimed at killing a government option in health care reform.
See the "Kill Granny" strategy at ---
www.defendyourhealthcare.us
Other nations simply do not spend as much on saving extremely premature babies
and the terminally ill.
The High Cost of Research
"How Much Would You Pay for Three More Months of Life?," by Laura Beil,
Newsweek Magazine, September 3, 2012, pp. 40-44 ---
http://www.thedailybeast.com/newsweek/2012/08/26/the-cancer-breakthroughs-that-cost-too-much-and-do-too-little.html
In his more than 35 years of practice, Dr. Lowell Schnipper has seen a lot of women die from breast cancer. A patient’s options start to dwindle by the time tumor cells set up outposts in the bones, lungs, and other organs, defying all attempts to keep them under control. But in June, when the government approved Perjeta, Schnipper had something new to offer. The drug is one of an innovative class of drugs known as “targeted therapies.”
As the chief of oncology at Beth Israel Deaconess Medical Center in Boston, Schnipper knew Perjeta was not a cure: added to a standard treatment with Herceptin—another targeted therapy that was hailed as a breakthrough in 1998—Perjeta gives the average woman only about six months more of calm before her disease starts to stir again. Given the limited benefit, the price was startling. For most women, a full course of the drug combination will cost $188,000—enough, he says, “to give anybody a cold sweat.”
Americans spent more than $23 billion last year for cancer drugs, more than we paid for prescriptions to treat anything else. But many oncologists are starting to question what we are getting in return for that bill, whether the war on cancer has become too much of a race to produce the next blockbuster. “In general, progress for cancer has been halting and slow,” says David Howard of the Department of Health Policy and Management at Emory University. So far, most new drugs offer only marginal extensions of life and few cures. Howard says new so-called breakthroughs “overpromise and underdeliver.” Consider the popularity of Avastin, a targeted drug approved for metastatic colon cancer in 2004. A recent study found that almost 70 percent of patients on chemotherapy were receiving Avastin within a year of its release. In clinical trials, the drug increased survival by about five months. The cost? About $10,000 a month.
Treating cancer has never been cheap, but today, the price of each new treatment seems to outpace the one before, with little bearing on its efficacy. According to figures from insurer United Healthcare, a standard cocktail of drugs for treating lung cancer used to run about $1,000 a month. Today’s regimens cost from more than $6,000 to almost $10,000—for about two more months of life. “There is no such thing as a cancer drug coming on the market that is some sort of regular drug price,” says Dr. Peter Bach of Memorial Sloan-Kettering Cancer Center in New York, who studies the impact of cancer costs on U.S. health care. “They’re all priced at spectacularly high levels.” Which leads to an unsettling question: how much is a little more time worth? Would you spend $50,000 for four more months? How about $15,000 for two weeks?
Of three frontiers in cancer treatment, targeted therapies like Perjeta are widely seen as the best hope for a cure. Traditional chemotherapy is notorious for side effects because it wields destruction indiscriminately throughout the body. Targeted therapies are designed to hit cancer cells only. Perjeta, for example, targets a protein produced in excess amounts in some breast cancers; Avastin hinders the ability of a tumor to form new blood vessels to feed itself.
. . .
The Cancer “Breakthroughs” that Cost Too Much and Do Too Little
Doctors envision the day when every patient will have therapy precisely matched to the genetic bull’s-eyes of their own cancers. The holdup has been that cancer has proven to be more genetically crafty than researchers once imagined. Scientists may build a drug to hit one target, but a tumor may also employ lots of yet-undiscovered genetic tricks to keep itself alive. Instead of a magic bullet, scientists now know that any particular tumor may need lots of magic bullets. With so many targets unknown, a lot of patients end up getting drugs that barely touch their cancers, which is why the effectiveness of many new drugs remains underwhelming.
Not that this keeps a drug from becoming a blockbuster. Patients with advanced cancer, and their physicians, are hungry for progress. As a result, almost all of the 10 bestselling cancer drugs are targeted therapies, many less than a decade old. All came on the market at thousands of dollars a month, a trend that continues today with gusto. The drug Afinitor, a daily pill, was approved in July for patients with breast cancer. It costs more than $200 a tablet. But price rarely matters to patients or even doctors, says Dr. Oliver Sartor, medical director of the Tulane Cancer Center in New Orleans. “People have already been told there is no cure for their disease,” he says. “Every increment, every improvement, gives hope, and when options are extremely limited, we all focus on the positive possibilities.”
In addition to targeted therapies, drugs have come on the market that can spur the body’s own immune cells to lead the charge. Significant hurdles have hindered this kind of treatment for years. But they are finally being overcome. The prostate cancer drug Provenge, which came on the market in 2010, was the first immune-therapy drug to gain governmental approval. It was followed the next year by Yervoy, when approved the only drug ever shown to extend survival in advanced melanoma. Men with a common kind of advanced prostate cancer who used Provenge lived an average of four months longer than the comparison group; patients on Yervoy got an average of 3.6 months. The gains are modest, but not the cost. When Sartor learned Provenge would run $93,000 per patient, “I was stunned,” he says. And even that was cheaper than Yervoy, which appeared the following year at $120,000 for four injections. He predicts the pricing of immune therapies may be seen as “a watershed moment” in the debate over health-care costs.
The third area of touted breakthroughs has been in radiation, most recently by using protons instead of traditional X-rays to kill cancer cells. It’s a controversial undertaking: many doctors believe that protons offer better precision, able to get rid of tumors without collateral damage to nearby healthy tissues. But whether protons can treat with fewer side effects than traditional radiation is, to date, a matter of debate for almost all but pediatric and certain neurological tumors.
As with new drugs, proton-beam radiation is expensive—it can run roughly twice as much as the current state-of-the-art form of radiation that uses X-rays. In the case of proton beams, much of the cost has to do with building a cyclotron to harvest the protons—a construction project that can cost upwards of $150 million. In 2001 just three centers in the country offered proton treatment, but that number is now up to 10, with a half dozen more planned. About three quarters of the proton patient population covered by Medicare are men with prostate cancer, which, because of the length of their therapy, are the most lucrative to treat.
Why do new drugs cost so much? Pharmaceutical companies say it’s payment for scientific creativity, that high prices are necessary to recover the expense of developing and manufacturing their products and to encourage more research. A spokeswoman for Bristol-Myers Squibb, which makes Yervoy, says the cost of drugs is “based on a number of factors, including the value they deliver to patients, the scientific innovation they represent, and the cost to develop them.” Part of the price is also an investment in drug discovery. “We look at not only the past research and development, but development in the future,” says Krysta Pellegrino, a spokeswoman for Genentech, which developed Perjeta.
That said, many cancer experts remain skeptical of the notion that drug companies are simply passing along the cost of doing business and funding the incubation of new drugs. In 2004 researchers tried to test the relationship between a drug’s development and its final asking price. In the Journal of Clinical Oncology, the scientists concluded “that the drug companies are not pricing their drugs to recuperate losses associated with research and development, marketing, and operating prices, but rather [the average wholesale price] depends on what the market itself can bear.”
“It’s a marketplace where the seller has all of the control,” says Bach, from Memorial Sloan-Kettering, because private insurance companies and Medicare—the largest purchasers of drugs—are powerless to bargain for a less expensive deal. “Prices are high because they can be,” Bach says. As one doctor observed, “we are always paying for a Ferrari but often getting a Ford.” The occasional Ferrari does exist. The targeted drug Gleevec, which treats certain forms of leukemia and intestinal tumors, has allowed patients to live for years with their cancer in check.
Continued in article
Jensen Comment
At a cost of $150 million each, how many other nations have built 10 cyclotrons
for harvesting proton beams for cancer treatments and research?
Only the most successful findings in the U.S. will motivate other free-rider nations to invest in such expensive hardware.
If we adopt a national health care plan the medical services will be spread more evenly across all residents of the U.S. However, we will then have to come to grips with costs of dying and costs of research that we perhaps can no longer afford on the same scale.
We will also have to come to grips with controlling punitive damage hundreds of billions in lawsuits like other nations control such frictions on medical services. Other nations like Canada provide for damages and lost income, but they do not turn medical litigation into a legal lottery.
"Canadian Malpractice Insurance Takes Profit Out
Of Coverage," by Jane Akre, Injury Board, July 28, 2009 ---
Click Here
http://www.injuryboard.com/national-news/canadian-malpractice-insurance-takes-profit-out-of-coverage.aspx?googleid=267890
The St. Petersburg Times takes a look at the cost of insurance in Canada for health care providers.
A neurosurgeon in Miami pays about $237,000 for medical malpractice insurance. The same professional in Toronto pays about $29,200, reports Susan Taylor Martin.
A Canadian orthopedic surgeon pays just over $10,000 for coverage that costs a Miami physician $140,000. An obstetrician in Canada pays $36,353 for insurance, while a Tampa Bay obstetrician pays $98,000 for medical malpractice insurance.
Why the difference?
In the U.S., private for-profit insurance companies extend medical malpractice coverage to doctors.
In Canada, physicians are covered through membership in a nonprofit. The Canadian Medical Protective Association offers substantially reduced fees for the same coverage, especially considering that their payout is limited by caps in Canada just as in some U.S. states.
In 1978, the Canadian Supreme Court limited pain and suffering awards to just over $300,000, circumventing the opportunity for a jury to decide on an award depending on the case before them.
Canadian Medical Protective Association
Here’s how it works.
Fees for membership vary depending on the region of the country in which the doctor works and their specialty. All neurosurgeons in Ontario will pay the same, for example. The number of claims they have faced for medical malpractice does not figure into their premium
"We don't adjust our fees based on individual experience; it's the experience of the group,'' says Dr. John Gray, the executive director, "That's what the mutual approach is all about, and it helps keep the fees down for everyone,” he tells the St. Petersburg Times.
If a doctor is sued, the group pays the claim and provides legal counsel.
In the U.S., the push has been on for limiting claims, no matter how egregious the medical malpractice. President Obama was booed in June when, before the American Medical Association, he said he would not limit a malpractice jury award.
"We got a crazy situation where Obama is talking about the cost of medicine but he said, 'I don't believe in caps,' " complains Dr. Dennis Agliano, past president of the Florida Medical Association. "If you don't have caps, the sky's the limit and there's no way to curtail those costs.''
But the importance of limiting jury awards may not play into the big picture on health care reform.
Malpractice lawsuits amount to less than one percent of both the Canadian and the U.S. healthcare system, meanwhile between 44,000 and 98,000 Americans die each year due to medical errors in hospitals alone, while 16 times as many suffer injuries without receiving any compensation, reports the group Americans for Insurance Reform.
Major Difference
In Canada, an injured patient is often required to pay for the initial investigation into his case. In the U.S. the contingency fee basis, usually in the range of 30 percent, allows the injured party to proceed without a financial downside.
In both the U.S. and Canada, the definition of medical negligence is that a duty of care was owed to the patient by the physician, there was a breach h of the standard of care and the patient suffered harm by the physician’s failure to meet that standard of care.
A bad outcome in itself is not the basis of a lawsuit.
The Canadian Medical Protective Association insures virtually all of the country’s 76,000 doctors, as opposed to the U.S. where private for-profit insurance companies cover physicians for medical malpractice.
In Canada, the median damaged paid in 2007 was $91,999 and judgments favored patients 25 times, doctors 70 times.
In the U.S., many physician groups are requiring patients to waive their rights to a jury trial, even though malpractice litigation accounts for just 0.6 percent of healthcare costs.
Public Citizen, the consumer group, charges that the facts don’t warrant the “politically charged hysteria surrounding medical malpractice litigation.”
For the third straight year, medical malpractice payments were at record lows finds the group in a study released this month. The decline, however, is likely due to fewer injured patients receiving compensation, not improved health safety.
2008 saw the lowest number of medical malpractice payments since the federal government’s National Practitioner Data Bank began compiling malpractice statistics. In 2008, payments were 30.7 percent lower than averages recorded in all previous years.
In the report titled, The 0.6 Percent Bogeyman, the nonprofit watchdog group states, “between three and seven Americans die from medical errors for every 1 who receives a payment for any type of malpractice claim.”
Public Citizen previously reported that about five percent of doctors are responsible for half of the medical malpractice in the U.S. that can result in permanent injury or death. #
Read more: http://www.injuryboard.com/national-news/canadian-malpractice-insurance-takes-profit-out-of-coverage.aspx?googleid=267890#ixzz0W0Z71JOP
November 12. 2010 message from Ramesh Fernando
Prof. Jensen,
While it's true our spending on health-care is much lower than the US in terms of percentage of GDP and we don't have the level of malpractice suits as in the USA there are severe problems with the healthcare system. The federal government has a guaranteed I think 6% accelerator, much higher than inflation, transfer payment to the provinces for health care. I doubt the federal government can guarantee that kind of spending in the next negotiations between the provinces and the federal government.Then again federal government transfers amount to only about 15-20% of most provincial health spending and provinces spend about 40-50% of their budget on the health budget and growing larger as the boomers age. Provinces especially Ontario and Quebec but even Alberta with it's oil and natural gas royalties will not be able to keep this up,
Ontario has a bigger deficit at $21 billion Canadian than California I think and Ontario only has 12-13 million people. Quebec which is usually a very socialist province, has actually liberalized the private element of health care services the most, there are many Ontarians who go to Quebec to get treated including private MRI scans etc. British Columbia is also following Quebec and has allowed private clinics to serve patients.
There are two cures for reducing the deficits of the provinces, one is to stop the increase in health spending so per capita spending goes down along with co-payments for superficial emergencies like colds and coughs to the doctor or emergencies. Other is to create a two tier system with a fully private one along with the public system. All three federal parties, even the governing Conservatives who are most similar to your Republicans and the Bloc Quebecois (the Quebec nationalists-separatists) are against a private system but there is a lot of support for it from the more conservative elements in Canada, including Preston Manning, the former leader of the populist Reform and former Conservative premier of Ontario Mike Harris.
They wrote a couple booklets published by the Fraser Insitute
"A Canada Strong and Free"
URL http://www.fraserinstitute.org/research-news/display.aspx?id=1277 and"Caring for Canadians"
URL http://www.fraserinstitute.org/research-news/display.aspx?id=12928
which basically noted the problems with the Canada Health Act.Note I am not saying I agree with them or disagree with either way but they do have some valid points.
Regards,
Ramesh Fernando
CMA Candidate
Ottawa, Ontario, Canada
Paul Ryan on the Affordable Health Care Act ---
http://www.youtube.com/watch?
"Will Big Companies Drop Health Benefits? Once the dust settles on the
forthcoming state insurance exchanges, small companies may not be the only ones
seeking to shed employee health plans," by David McCann, CFO.com,
July 12, 2012 ---
http://www3.cfo.com/article/2012/7/health-benefits_state-insurance-exchanges-2014-affordable-care-act
Large employers plan to continue offering health benefits after the health-insurance exchanges provided for under the Affordable Care Act (ACA) begin operating — whether that’s in 2014, as the law currently requires, or later, as seems more likely.
At least, that’s what those employers are saying now. “My corporate clients, most of which are large, are asking a lot of questions about [the ACA], but none are about the exchanges,” says Priscilla Ryan, a partner at law firm Sidley Austin, which has a large health-care practice. “None of them are considering dropping their health-care coverage.”
Many such companies considered the idea when the law was enacted in 2010, or even earlier, and rejected it, according to Ryan. “They’ve moved on and are well on to new plan designs and expanding coverage as required by the law,” she says.
But companies have no reason to show their hands now. That’s especially so because timetables for the state-run exchanges, as well as federally operated exchanges that are to be created for residents of states that decline to tap federal subsidies and create their own, are so iffy. Thirty-six states have achieved less than 10% of the 109 milestones toward the establishment of an exchange identified by the National Academy for State Health Policy.
That may mean it’s a long shot that a majority of states will meet a November 16 deadline to indicate whether they plan to set up an exchange and, if so, provide a blueprint demonstrating their readiness in 13 areas so that the exchange will be operational by January 1, 2014, as stipulated in the ACA. That will in turn delay the federal government’s work on creating the state exchanges it will run (which could turn out to be as many as half of them, by some estimates), since the health insurers that will participate in the exchanges will vary from state to state.
“Maybe a few states will be ready, but it seems quite unlikely that most of these things will be running by 2014,” says Susan Nash, a partner at McDermott Will & Emery, another law firm with a strong health-care focus.
So companies have plenty of time to make the “pay or play” decision. It’s called that because employers with more than 50 full-time-equivalent workers that decide to forgo offering health insurance will have to pay a tax, in most cases $2,000 per employee per year, minus 30 employees.
Companies that now say they have no intention of abandoning employee health-care benefits — even though it likely would be a financial plus for them, because average per-employee costs are almost always greater than $2,000 per year — might change their mind if a competitor makes the move.
“I think it’s going to be like the lemmings: who’s going to jump off the cliff first?” says Nash. “I haven’t heard any large employers say they’ll do it yet, but it’s highly possible. If Wal-Mart or Costco did it and were successful, it might become an easier and easier decision for other retailers to make and it could become a standard in that sector.”
Indeed, retailers, restaurants, and other companies that employ many low-wage workers are the most likely to bid adieu to employee health benefits at some point. That’s partly because it’s a fiscal strain to provide a large number of employees with benefits whose worth is equal to a relatively high percentage of their wages.
But it’s also partly because of the sliding-scale subsidies the federal government will provide under the ACA to workers who lose their health-care coverage. That’s important for employers who elect to nix their health plans, because it could lessen a potential blow to employee engagement stemming from the move. “The value of the subsidy to employees would dwarf the employer’s tax for not offering coverage,” says benefits consultant Ed Kaplan, senior vice president and national health practice leader at The Segal Co. “But at an engineering firm or an IBM, for example, employees’ incomes are much higher so their subsidies would be much smaller.”
Some companies could opt for what Nash calls a “soft landing”: dropping their health plans but giving employees a certain amount of money with which to buy insurance on their own through an exchange.
It remains to be seen, though, how well the exchanges will work. A key reason they may not be operational until after 2014, and why the federal government is subsidizing their creation, is that they are big undertakings.
Continued in article
Bob Jensen's threads on the Affordable Health Care Act ---
http://www.trinity.edu/rjensen/Health.htm
Concerning the Affordable Health Care Act
"Biggest Tax Increase in History?" FactCheck, July 10, 21012 ---
http://factcheck.org/2012/07/biggest-tax-increase-in-history/
Q: Is the new health care law “the biggest tax increase in history”?
A: In raw dollars, perhaps. But several tax increases just since 1968 were larger as percentages of the economy, or in inflation-adjusted dollars.
FULL QUESTION
Will “Obamacare” be the largest tax hike in US history?
FULL ANSWER
Several readers have asked us about this since Rush Limbaugh made a hugely exaggerated claim that the new health care law is “the biggest tax increase in the history of the world.”
We’re not sure Limbaugh meant his statement to be taken seriously; He offered no figures or citations to back up what he said. But other critics of the law have made similar claims.
The increase is certainly large. So let’s take a look at how the taxes and fees that finance “Obamacare” stack up against earlier increases.
Continued in article
Bob Jensen's universal health care messaging --- http://www.trinity.edu/rjensen/Health.htm
"TOP TEN MYTHS OF MEDICARE," by Richard L. Kaplan, The Elder Law Journal,
Vol. 20, No.1, 2012 ---
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2111535
In the context of changing demographics, the increasing cost of health care services, and continuing federal budgetary pressures, Medicare has become one of the most controversial federal programs. To facilitate an informed debate about the future of this important public initiative, this article examines and debunks the following ten myths surrounding Medicare: (1) there is one Medicare program, (2) Medicare is going bankrupt, (3) Medicare is government health care, (4) Medicare covers all medical cost for its beneficiaries, (5) Medicare pays for long-term care expenses, (6) the program is immune to budgetary reduction, (7) it wastes much of its money on futile care, (8) Medicare is less efficient than private health insurance, (9) Medicare is not means-tested, and (10) increased longevity will sink Medicare.
Jensen Comment
I don't agree with every conclusion in this paper, but it is one of the best
summaries of Medicare that I can recommend.
Waste, Fraud, and Abuse: The gap between payments and payees in Medicare makes it a criminal's piñata
It should be emphasized at the outset that this contention is not about the ever-present specter of “waste, fraud, and abuse” that haunts governmental programs generally. That Medicare is targeted by scammers and schemers of all sorts is both indisputable and hardly surprising. As the famed bank robber, Willie Sutton, reportedly replied when asked why he robbed banks: “That’s where the money is.”101 Indeed, Medicare is where the money is—specifically $509 billion in fiscal year 2010 alone.102 Any program that pays out this amount of money to a wide variety of service providers in literally every county in America will be very difficult to police. That reality notwithstanding, such violations of the public trust as are encapsulated in the phrase “waste, fraud, and abuse” should be ferreted out whenever possible and eliminated. No one excuses these leakages, just as no one has a sure-fire solution to stem them once and for all.
Kaplan, Page 19
One thing to think about is why Medicare may be losing hundreds of billions of dollars relative to the national health care plans of Canada, Europe, etc. The obvious thing to pick on is that Medicare is a third party payment system where medical services, medications, equipment such as battery-powered scooters and home hospital beds, and medical care centers are not directly managed by the government. This opens the door to millions of fraudulent claims, often by extremely clever criminals, unscrupulous physicians, etc. The gap between payments and payees in Medicare makes it more vulnerable to abuse and waste.
This and other articles make a big deal about how administrative costs of Medicare are significantly less that the administrative costs of private insurance carriers like Blue Cross. However, what this article and related articles almost always fail to mention is that the major component of administrative cost to companies like Blue Cross lies in operating controls to prevent waste, fraud, and abuse.
National plans like those in
Canada have both lower administrative costs and less waste, fraud, and abuse
because the government provides most of the services directly without the moral
hazards that arise from the gap between funding and delivery of services.
Personally, I favor national plans. Of course, in some nations like Germany
there are premium alternatives where people that can afford it can pay for
premium services not covered in the national plans.
http://www.trinity.edu/rjensen/Health.htm
Futile Care Waste: My former University of Maine colleague was given thirty days to live (because of Stage Four bone cancer) received two new hips but never walked again and died in less than two weeks
But the issue of “futile care” is very different from “waste, fraud, and abuse.” The claim that Medicare should not pay for pointless medical interventions presumes that funds were indeed spent on actual medical procedures. The issue is whether those procedures should not have been done for reasons of inefficacy or insufficient “bang for the buck.” It is certainly true that Medicare spends a disproportionate amount of its budget on treatments in the final months of its beneficiaries’ lives. Some twenty-eight percent of the entire Medicare budget is spent on medical care in enrollees’ final year of life,103 and nearly forty percent of that amount is spent during a patient’s last month. The critical issue, of course, is whether these expenditures are pointless.
In one respect, it is not surprising that the cost of a person’s final medical episode is unusually expensive. That person’s presenting condition must have been especially severe because he or she did in fact die during or shortly after treatment. Moreover, when circumstances are particularly bleak, more intensive and often much more expensive procedures, tests, and interventions seem appropriate. After all, the patient was literally fighting off death at that point, so medical personnel try everything in their armamentarium to win what was ultimately the patient’s final battle. Only after the fact does one know that the battle in question was indeed the patient’s last episode. Does that mean that the effort expended, and the attendant costs, were wasted?
This question is more difficult than some might suspect. A recent study of Medicare claims data examined the association between inpatient spending and the likelihood of death within thirty days of a patient’s being admitted to a hospital.It found that for most of the medical conditions examined, including surgery, congestive heart failure, stroke, and gastrointestinal bleeding, a ten percent increase in inpatient spending was associated with a decrease in mortality within thirty days of 3.1 to 11.3%, depending upon the specific medical condition in question. Only for patients who presented with acute myocardial infarction was there no association of increased inpatient spending and improved outcomes. Thus, the authors concluded, “the amount [of waste] may not be as large as commonly believed, at least for hospitalized Medicare patients.” To be sure, the results might not be as encouraging in non-hospital settings, but Medicare does not cover the cost of nursing home patients who are lingering at death’s door while receiving “custodial care.”In any case, hospital costs represent the single largest component of Medicare’s expenditures— fully twenty-seven percent in the most recent year for which such data are available.
That is not to say that some of Medicare’s expenditures near the end of beneficiaries’ lives provide insufficient benefit to justify their cost. But the tough questions are how to determine those wasteful expenditures in advance and who should make that determination. Such considerations are beyond the scope of this Article,but suffice it to note that end-of-life care discussions are extraordinarily contentious and easily demagogued. After all, former Vice Presidential candidate Sarah Palin effectively scuttled a rather benign effort to include payment for end-of-life counseling in Medicare’s newly provided “annual wellness visit[s]” by contending that such counseling was a first step to rationing health care by “death panels” run by government bureaucrats. Thus, while patients can individually indicate in advance how much treatment they want at the end of their lives, any comprehensive effort to root out Medicare’s wasteful expenditures on “futile care” might face serious political opposition.
In any case, an authoritative analysis published in The New England Journal of Medicine concluded that “the hope of cutting the amount of money spent on life-sustaining interventions for the dying in order to reduce overall health care costs is probably vain.” The authors noted that “there are no reliable ways to identify the patients who will die” and that “it is not possible to say accurately months, weeks, or even days before death which patients will benefit from intensive interventions and which ones will receive ‘wasted’ care.” That leaves age-based rationing of care or more precisely, denial of medical services on the basis of chronological age, as the only easily implemented pathway to eliminate what some might regard as inefficacious expenditures of medical resources. Such age-based rationing of health care is practiced in other national health care systems, even though studies of prognostic models have demonstrated that “age alone is not a good predictor of whether treatment will be success ful.” In any case, polls of Americans have shown little support and significant opposition to the concept. One survey undertaken in late 1989 sought agreement with the following statement: “Lifeextending medical care should be withheld from older patients to save money to help pay for the medical care of younger patients.” Only 5.7% of respondents under age sixty-five strongly agreed with this statement while 38.3% of that group strongly disagreed with it.120 Interestingly, among respondents who were themselves age sixty-five and older, the gap between these opposing viewpoints was narrower: 8.8% strongly agreed with the statement in question while 35.4% strongly disagreed.
Whether results would be substantially different today when the range of medical interventions has increased significantly and when the nation’s budgetary situation has worsened considerably is an open question. Yet, when the 2010 health care reform legislation created an Independent Payment Advisory Board to reduce Medicare’s expenses, the enabling statute was explicit that this Board may not make proposals that would “ration health care.” Clearly, the prospect of eliminating Medicare expenditures that are medically futile will not be an easy task to accomplish.
Kaplan, pp. 19-22
Jensen Comment
My former University of Maine
colleague on Medicare was given thirty days to live (because of Stage Four bone
cancer) received two new hips but never walked again and died in less than two
weeks. I don't think he would've received those two useless and very expensive
hips on any of the national plans of Canada or Europe.
Where Did Medicare Go So Wrong?
Medicare is a much larger and much more complicated entitlement burden relative
to Social Security by a ratio of about six to one or even more. The Medicare
Medical Insurance Fund was established under President Johnson in1965.
Note that Medicare, like Social Security in general, was intended to be insurance funded by workers over their careers. If premiums paid by workers and employers was properly invested and then paid out after workers reached retirement age most of the trillions of unfunded debt would not be precariously threatening the future of the United States. The funds greatly benefit when workers die before retirement because all that was paid in by these workers and their employers are added to the fund benefits paid out to living retirees.
The first huge threat to sustainability arose beginning in 1968 when medical coverage payments payments to surge way above the Medicare premiums collected from workers and employers. Costs of medical care exploded relative to most other living expenses. Worker and employer premiums were not sufficiently increased for rapid growth in health care costs as hospital stays surged from less than $100 per day to over $1,000 per day.
A second threat to the sustainability comes from families no longer concerned about paying up to $25,000 per day to keep dying loved ones hopelessly alive in intensive care units (ICUs) when it is 100% certain that they will not leave those ICUs alive. Families do not make economic choices in such hopeless cases where the government is footing the bill. In other nations these families are not given such choices to hopelessly prolong life at such high costs. I had a close friend in Maine who became a quadriplegic in a high school football game. Four decades later Medicare paid millions of dollars to keep him alive in an ICU unit when there was zero chance he would ever leave that ICU alive.
On November 22, 2009 CBS Sixty Minutes aired a video featuring experts
(including physicians) explaining how the single largest drain on the Medicare
insurance fund is keeping dying people hopelessly alive who could otherwise be
allowed to die quicker and painlessly without artificially prolonging life on
ICU machines.
"The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009
---
http://www.cbsnews.com/stories/2009/11/19/60minutes/main5711689.shtml?tag=mncol;lst;1
What is really sad is the way Republicans are standing in the way of making
rational cost-benefit decisions about dying by exploiting the "Kill Granny"
political strategy aimed at killing a government option in health care reform.
See the "Kill Granny" strategy at ---
www.defendyourhealthcare.us
The third huge threat to the economy commenced in when disabled persons (including newborns) tapped into the Social Security and Medicare insurance funds. Disabled persons should receive monthly benefits and medical coverage in this great land. But Congress should've found a better way to fund disabled persons with something other than the Social Security and Medicare insurance funds. But politics being what it is, Congress slipped this gigantic entitlement through without having to debate and legislate separate funding for disabled persons. And hence we are now at a crossroads where the Social Security and Medicare Insurance Funds are virtually broke for all practical persons.
Most of the problem lies is Congressional failure to sufficiently increase Social Security deductions (for the big hit in monthly payments to disabled persons of all ages) and the accompanying Medicare coverage (to disabled people of all ages). The disability coverage also suffers from widespread fraud.
Other program costs were also added to the Social Security and Medicare insurance funds such as the education costs of children of veterans who are killed in wartime. Once again this is a worthy cause that should be funded. But it should've been separately funded rather than simply added into the Social Security and Medicare insurance funds that had not factored such added costs into premiums collected from workers and employers.
The fourth problem is that most military retirees are afforded full lifetime medical coverage for themselves and their spouses. Although they can use Veterans Administration doctors and hospitals, most of these retirees opted for the underfunded TRICARE plan the pushed most of the hospital and physician costs onto the Medicare Fund. The VA manages to push most of its disabled veterans onto the Medicare Fund without having paid nearly enough into the fund to cover the disability medical costs. Military personnel do have Medicare deductions from their pay while they are on full-time duty, but those deductions fall way short of the cost of disability and retiree medical coverage.
The fifth threat to sustainability came when actuaries failed to factor in the impact of advances in medicine for extending lives. This coupled with the what became the biggest cost of Medicare, the cost of dying, clobbered the insurance funds. Surpluses in premiums paid by workers and employers disappeared much quicker than expected.
A sixth threat to Medicare especially has been widespread and usually undetected fraud such as providing equipment like motorized wheel chairs to people who really don't need them or charging Medicare for equipment not even delivered. There are also widespread charges for unneeded medical tests or for tests that were never really administered. Medicare became a cash cow for crooks. Many doctors and hospitals overbill Medicare and only a small proportion of the theft is detected and punished.
The seventh threat to sustainability commenced in 2007 when the costly Medicare drug benefit entitlement entitlement was added by President George W. Bush. This was a costly addition, because it added enormous drains on the fund by retired people like me and my wife who did not have the cost of the drug benefits factored into our payments into the Medicare Fund while we were still working. It thus became and unfunded benefit that we're now collecting big time.
In any case we are at a crossroads in the history of funding medical care in the United States that now pays a lot more than any other nation per capita and is getting less per dollar spent than many nations with nationalized health care plans. I'm really not against Obamacare legislation. I'm only against the lies and deceits being thrown about by both sides in the abomination of the current proposed legislation.
Democrats are missing the boat here when they truly have the power, for now at least, in the House and Senate to pass a relatively efficient nationalized health plan. But instead they're giving birth to entitlements legislation that threatens the sustainability of the United States as a nation.
In any case, The New York Times presents a nice history of other
events that I left out above ---
http://www.nytimes.com/interactive/2009/07/19/us/politics/20090717_HEALTH_TIMELINE.html
"THE HEALTH CARE DEBATE: What Went Wrong? How the Health Care Campaign
Collapsed --
A special report.; For Health Care, Times Was A Killer," by Adam Clymer, Robert
Pear and Robin Toner, The New York Times, August 29,
1994 ---
Click Here
http://www.nytimes.com/1994/08/29/us/health-care-debate-what-went-wrong-health-care-campaign-collapsed-special-report.html
November 22, 2009 reply from Richard.Sansing [Richard.C.Sansing@TUCK.DARTMOUTH.EDU]
The electorate's inability to debate trade-offs in a sensible manner is the biggest problem, in my view. See
Richard Sansing
The New York Times Timeline History of Health Care Reform in the
United States ---
http://www.nytimes.com/interactive/2009/07/19/us/politics/20090717_HEALTH_TIMELINE.html
Click the arrow button on the right side of the page. The biggest problem with
"reform" is that it added entitlements benefits without current funding such
that with each reform piece of legislation the burdens upon future generations
has hit a point of probably not being sustainable.
Call it the fatal arithmetic of imperial decline.
Without radical fiscal reform, it could apply to America next.
Niall Ferguson, "An Empire at Risk: How Great Powers Fail," Newsweek
Magazine Cover Story, November 26, 2009 ---
http://www.newsweek.com/id/224694/page/1
. . .
In other words, there is no end in sight to the borrowing binge. Unless entitlements are cut or taxes are raised, there will never be another balanced budget. Let's assume I live another 30 years and follow my grandfathers to the grave at about 75. By 2039, when I shuffle off this mortal coil, the federal debt held by the public will have reached 91 percent of GDP, according to the CBO's extended baseline projections. Nothing to worry about, retort -deficit-loving economists like Paul Krugman.
. . .
Another way of doing this kind of exercise is to calculate the net present value of the unfunded liabilities of the Social Security and Medicare systems. One recent estimate puts them at about $104 trillion, 10 times the stated federal debt.
Continued in article
This is now President Obama's problem with or without new Obamacare entitlements that are a mere drop in the bucket compared to the entitlement obligations that President Obama inherited from every President of the United States since FDR in the 1930s. The problem has been compounded under both Democrat and Republican regimes, both of which have burdened future generations with entitlements not originally of their doing.
Professor Niall Ferguson and David Walker are now warning us that by year 2050 the American Dream will become an American Nightmare in which Americans seek every which way to leave this fallen nation for a BRIC nation offering some hope of a job, health care, education, and the BRIC Dream.
Bob Jensen's threads on health care ---
http://www.trinity.edu/rjensen/Health.htm
Bob Jensen's threads on entitlements ---
http://www.trinity.edu/rjensen/entitlements.htm
U.S. National Debt
Clock ---
http://www.usdebtclock.org/
Also see
http://www.brillig.com/debt_clock/
Question
Should we keep increasing the government spending deficit and the national debt
every year ad infinitum?
Answers
Although in these down economic times, the liberal's Keynesian hero and Nobel
Prize economist, Paul Krugman, thinks recovery is stalled because the government
is not massively increasing spending deficits. But he's not willing to commit
himself to never reducing deficits or never paying down some of the national
debt. Hence, he really does not answer the above question ---
http://www.nytimes.com/2012/01/02/opinion/krugman-nobody-understands-debt.html
So let's turn to a respected law professor who advocates increasing the government spending deficit and the national debt every year ad infinitum?
"Why We Should Never Pay Down the National Debt (even partly)," by
Neil H. Buchanan George Washington University Law School), SSRN, 2012 ---
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2101811
Abstract:
Calls either to balance the federal budget on an annual basis, or to pay down all or part of the national debt, are based on little more than uninformed intuitions that there is something inherently bad about borrowing money. We should not only ignore calls to balance the budget or to pay down the national debt, but we should engage in a responsible plan to increase the national debt each year. Only by issuing debt to lubricate the financial system, and to support the economy’s healthy growth, can we guarantee a prosperous future for current and future citizens of the United States.
Student Assignment
Since many of the most liberal economists are not quite willing to assert that "we should never pay down the national debt," what questionable and unmentioned assumptions have been made by Neil H. Buchanan that need to be addressed?
Are some of these assumptions unrealistic in any world other than a utopian world?
Bob Jensen's Answers ---
http://www.cs.trinity.edu/~rjensen/temp/NationalDeficit-Debt.htm
June 30, 2012
The Bright Side (it has a chance of working) and Dark Side (fiscal
disaster) of the Affordable Care Act
Interestingly, among the quotes below a University of Chicago law professor
sides with liberals and a U.C. Berkeley law professor sides with conservatives
That is academia at it's best.
I might note that Michael Moore, in his famed documentary Sicko, was
snookered by Cuban leaders into thinking that all Cubans got the premium health
care reserved for only to elites in Cuba ---
http://feathersblog.blogspot.com/2007/10/michael-moores-sicko-and-gruesome.html
Video: 'No Going Back': Michael Moore on the Last Word With Lawrence
O'Donnell, 6/28/12 ---
http://www.michaelmoore.com/words/must-read/no-going-back-michael-moore-last-word-lawrence-odonnell-62812
The Supreme Court has upheld the Affordable Care
Act, President Obama’s signature bill, clearing the way for the largest revamp
of America’s healthcare system since the 1960s. We get reaction from acclaimed
filmmaker Michael Moore, whose 2007 documentary, "Sicko," tackled many failures
of the U.S. healthcare system. "This really is a huge victory for our side, in
spite of all of my concerns with this law," Moore says. "We have to work toward
Medicare for all, so that everyone’s covered ... We can’t allow private
insurance — people making a profit off of people getting sick." [includes rush
transcript]
http://www.democracynow.org/2012/6/29/michael_moore_supreme_court_healthcare_ruling
The Supreme Court’s decision in National Federation of
Independent Business v. Sebelius—the healthcare cases—was a tremendous political
victory for the Obama administration and, more importantly, the tens of
thousands of Americans who will be saved from illness and death by the law. But
make no mistake: the decision could also be a significant legal victory for the
political forces committed to limiting the state’s ability to care for the weak
and fragile among us.
Ariz Huq (University of Chicago Law School) , "In the Healthcare Decision, a
Hidden Threat?" The Nation, June 29, 2012 ---
http://www.thenation.com/article/168677/healthcare-decision-hidden-threat
"Health Care Reform and the Supreme Court (Affordable Care Act),
The New York Times, June 29, 2012 ---
http://topics.nytimes.com/top/reference/timestopics/organizations/s/supreme_court/affordable_care_act/index.html
Since you can easily access this article for free, I will not waste space by quoting it here
"The Affordable Care Act: A Doctor's View," by Thomas H. Lee (Harvard
Medical School), Harvard Business Review Blog, June 29, 2012 ---
Click Here
http://blogs.hbr.org/cs/2012/06/placeholder_for_lee_obamacare.html?referral=00563&cm_mmc=email-_-newsletter-_-daily_alert-_-alert_date&utm_source=newsletter_daily_alert&utm_medium=email&utm_campaign=alert_date
Since you can easily access this article for free, I will not waste space by quoting it here.
Jensen Comment
If over half the nation's graduates (higher percentage for Literature, Music,
and Philosophy PhDs) and unemployed teachers are not finding jobs or can only
get part-time McJobs it's never been clear what we will do with them if they
really cannot afford the mandated health insurance coverage mandated for them.
Do they go to jail or will Uncle Sam simply pick up their insurance premiums?
And do emergency rooms refuse services to the uninsured. Yeah Right!
The Affordable Health Care Act is a sorry excuse for what should have been the More Like Canada Health Care Act.
The Journal of Accountancy discusses tax implications of the Affordable
Health Care Act ---
"Supreme Court upholds health care law," by Sally P. Schreiber and Alistair M.
Nevius, Journal of Accountancy, June 28, 2012
http://www.journalofaccountancy.com/News/20125972.htm
"ObamaCare—Upheld and Doomed Regardless of the Supreme Court, fiscal
reality will prevail," by Holman W. Jenkins Jr., The Wall Street Journal,
June 29, 2012 ---
http://professional.wsj.com/article/SB10001424052702303649504577496850233678284.html?mod=djemEditorialPage_t&mg=reno64-wsj
Worse, in doing so, he may have read any constitutional limit on Congress out of the Constitution while pretending to do the opposite. Congress cannot compel you to do anything Congress wishes, but it can impose taxes on you until you finally have no rational alternative but to do whatever Congress wishes.
History will judge whether Mr. Roberts saved the reputation of the court or lost his nerve. Many conservatives obviously suspect the latter. Resolved: The government cannot make you eat broccoli, though it may levy a non-broccoli-eating tax on any who refuse.
Yet he may also think—and would not be wrong to think—that ObamaCare is doomed in any case. His opinion makes clearer than ever that ObamaCare is a tax program—throwing more tax dollars at an unreformed health-care system. ObamaCare is a huge new entitlement in a nation laboring under commitments it already can't afford. Those who gripe that he just authorized a vast expansion of the welfare state haven't reckoned with this fiscal reality principle.
What's more—and save us your constitutional brickbats—the mandate's survival could actually be a convenience to those who remain seriously interested in fixing health care.
GOPers, including Mitt Romney, immediately adopted "repeal" as their mantra. But repealing ObamaCare would just leave us with the health-care system we have, which is already ObamaCare in many respects—an unsustainable set of subsidies bankrupting the nation.
The solution is a tweak. Republicans already are lip-committed to a national health-insurance charter that allows insurers to design their own policies and market them across state lines. Republicans are also lip-committed to a tax reform to equalize the tax treatment of health care whether purchased by individuals or by employers on behalf of individuals.
Now just modify the Affordable Care Act so buying any health policy authorized by the new charter, no matter how minimalist, satisfies the employer and individual mandate.
What would follow is a boom in low-cost, high-deductible plans that leave individuals in charge of managing most their ordinary health-care costs out of pocket. Because it would be cheap, millions who would opt not to buy coverage will buy coverage. Because it will be cheap, companies will direct their low-wage and entry-level employees to this coverage.
Now these workers will be covered for serious illness or injury, getting the rest of us off the hook. As they grow older, wealthier and start families, they will choose more extensive but still rationally limited coverage. Meanwhile, the giant subsidies ObamaCare would dish out to help the middle class afford ObamaCare's gold-plated mandatory coverage would be unneeded.
With consumers shouldering a bigger share of health expenses directly, hospital and doctors would discover the advantages of competing on price and quality. This way lies salvation. In the long run, whatever share of GDP society decides to allocate to health care, it will get its money's worth—the fundamental problem today.
Perhaps a not-discreditable sense of the political moment lies behind the chief justice's opinion after all. The court's job, he wrote, is not to "protect the people from the consequences of their political choices."
He may have meant: The chief justice's job is to get the court out of the way while the body politic still remains suspended between recognizing the unsustainabilty of the current welfare model and deciding what to do about it.
This was always the fatal problem of ObamaCare. Reality could not have instructed President Obama more plainly: The last thing we needed, in a country staggering under deficits and debt, a sluggish economy and an unaffordable entitlement structure, was a new Rube Goldberg entitlement. The last thing we needed was ObamaCare. The nation and the times were asking Mr. Obama to reform health care, not to double-down on everything wrong with the current system.
Even with this week's Court success, he failed—and it's not as if there wasn't a deep well of policy understanding in Washington that he could have drawn on to take the country in a better direction. Regardless of any Supreme Court ruling, reality will pass its own judgment on the Affordable Care Act and it won't be favorable.
"Study: Obama's Health Care Law Would Raise Deficit," SmartPros,
April 10, 2012 ---
http://accounting.smartpros.com/x73682.xml
"Chief Justice Roberts and His Apologists: Some conservatives see a
silver lining in the ObamaCare ruling. But it's exactly the big-government
disaster it appears to be," by John Yoo (U.C. Berkeley Law School Professor)
, The Wall Street Journal, June 29, 2012 ---
http://professional.wsj.com/article/SB10001424052702303561504577496520011395292.html?mod=djemEditorialPage_t&mg=reno-wsj
White House judge-pickers sometimes ask prospective nominees about their favorite Supreme Court justice. The answers can reveal a potential judge's ideological leanings without resorting to litmus tests. Republican presidential candidates similarly promise to appoint more judges like so-and-so to reassure the conservative base.
Since his appointment to the high court in 2005, the most popular answer was Chief Justice John Roberts. But that won't remain true after his ruling on Thursday in NFIB v. Sebelius, which upheld President Barack Obama's signature health-care law.
Justice Roberts served in the Reagan Justice Department and as a White House lawyer before his appointment to the D.C. Circuit Court of Appeals and then to the Supreme Court by President George W. Bush. Yet he joined with the court's liberal wing to bless the greatest expansion of federal power in decades.
Conservatives are scrambling to salvage something from the decision of their once-great judicial hero. Some hope Sebelius covertly represents a "substantial victory," in the words of conservative columnist George Will.
After all, the reasoning goes, Justice Roberts's opinion declared that the Constitution's Commerce Clause does not authorize Congress to regulate inactivity, which would have given the federal government a blank check to regulate any and all private conduct. The court also decided that Congress unconstitutionally coerced the states by threatening to cut off all Medicaid funds if they did not expand this program as far as President Obama wants.
All this is a hollow hope. The outer limit on the Commerce Clause in Sebelius does not put any other federal law in jeopardy and is undermined by its ruling on the tax power (discussed below). The limits on congressional coercion in the case of Medicaid may apply only because the amount of federal funds at risk in that program's expansion—more than 20% of most state budgets—was so great. If Congress threatens to cut off 5%-10% to force states to obey future federal mandates, will the court strike that down too? Doubtful.
Worse still, Justice Roberts's opinion provides a constitutional road map for architects of the next great expansion of the welfare state. Congress may not be able to directly force us to buy electric cars, eat organic kale, or replace oil heaters with solar panels. But if it enforces the mandates with a financial penalty then suddenly, thanks to Justice Roberts's tortured reasoning in Sebelius, the mandate is transformed into a constitutional exercise of Congress's power to tax.
Some conservatives hope that Justice Roberts is pursuing a deeper political game. Charles Krauthammer, for one, calls his opinion "one of the great constitutional finesses of all time" by upholding the law on the narrowest grounds possible—thus doing the least damage to the Constitution—while turning aside the Democratic Party's partisan attacks on the court.
The comparison here is to Marbury v. Madison (1803), where Chief Justice John Marshall deflected President Thomas Jefferson's similar assault on judicial independence. Of the Federalist Party, which he had defeated in 1800, Jefferson declared: "They have retired into the judiciary as a stronghold. There the remains of federalism are to be preserved and fed from the treasury, and from that battery all the works of republicanism are to be beaten down and erased." Jeffersonians in Congress responded by eliminating federal judgeships, and also by impeaching a lower court judge and a Supreme Court judge.
In Marbury, Justice Marshall struck down section 13 of the Judiciary Act of 1789, thus depriving his own court of the power to hear a case against Secretary of State James Madison. Marbury effectively declared that the court would not stand in the way of the new president or his congressional majorities. So Jefferson won a short-term political battle—but Justice Marshall won the war by securing for the Supreme Court the power to declare federal laws unconstitutional.
While some conservatives may think Justice Roberts was following in Justice Marshall's giant footsteps, the more apt comparison is to the Republican Chief Justice Charles Evans Hughes. Hughes's court struck down the centerpieces of President Franklin Roosevelt's early New Deal because they extended the Commerce Clause power beyond interstate trade to intrastate manufacturing and production. Other decisions blocked Congress's attempt to delegate its legislative powers to federal agencies.
FDR reacted furiously. He publicly declared: "We have been relegated to a horse-and-buggy definition of interstate commerce." After winning a resounding landslide in the 1936 elections, he responded in February 1937 with the greatest attack on the courts in American history. His notorious court-packing plan proposed to add six new justices to the Supreme Court's nine members, with the obvious aim of overturning the court's opposition to the New Deal.
After the president's plan was announced, Hughes and Justice Owen J. Roberts began to switch their positions. They would vote to uphold the National Labor Relations Act, minimum-wage and maximum-hour laws, and the rest of the New Deal.
But Hughes sacrificed fidelity to the Constitution's original meaning in order to repel an attack on the court. Like Justice Roberts, Hughes blessed the modern welfare state's expansive powers and unaccountable bureaucracies—the very foundations for ObamaCare.
Hughes's great constitutional mistake was made for nothing. While many historians and constitutional scholars have referred to his abrupt and unprincipled about-face as "the switch in time that saved nine," the court-packing plan was wildly unpopular right from the start. It went nowhere in the heavily Democratic Congress. Moreover, further New Deal initiatives stalled in Congress after the congressional elections in 1938.
Justice Roberts too may have sacrificed the Constitution's last remaining limits on federal power for very little—a little peace and quiet from attacks during a presidential election year.
Given the advancing age of several of the justices, an Obama second term may see the appointment of up to three new Supreme Court members. A new, solidified liberal majority will easily discard Sebelius's limits on the Commerce Clause and expand the taxing power even further. After the Hughes court switch, FDR replaced retiring Justices with a pro-New Deal majority, and the court upheld any and all expansions of federal power over the economy and society. The court did not overturn a piece of legislation under the Commerce Clause for 60 years.
If a Republican is elected president, he will have to be more careful than the last. When he asks nominees the usual question about justices they agree with, the better answer should once again be Scalia or Thomas or Alito, not Roberts.
On November 22, 2009 CBS Sixty Minutes aired a video featuring experts
(including physicians) explaining how the single largest drain on the Medicare
insurance fund is keeping dying people hopelessly alive who could otherwise be
allowed to die quicker and painlessly without artificially prolonging life on
ICU machines.
"The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009
---
http://www.cbsnews.com/stories/2009/11/19/60minutes/main5711689.shtml?tag=mncol;lst;1
What is hypocritical is that most families only want to keep Granny alive only when Medicare will pay. The instant Granny's estate will have to bear the cost these hypocrites instantly agree to pull Granny off life support.
What is really sad is the way Republicans are standing in the way of making
rational cost-benefit decisions about dying by exploiting the "Kill Granny"
political strategy aimed at killing a government option in health care reform.
See the "Kill Granny" strategy at ---
www.defendyourhealthcare.us
"Chief Justice Roberts and His Apologists: Some conservatives see a
silver lining in the ObamaCare ruling. But it's exactly the big-government
disaster it appears to be," by John Yoo (U.C. Berkeley Law School Professor)
, The Wall Street Journal, June 29, 2012 ---
http://professional.wsj.com/article/SB10001424052702303561504577496520011395292.html?mod=djemEditorialPage_t&mg=reno-wsj
White House judge-pickers sometimes ask prospective nominees about their favorite Supreme Court justice. The answers can reveal a potential judge's ideological leanings without resorting to litmus tests. Republican presidential candidates similarly promise to appoint more judges like so-and-so to reassure the conservative base.
Since his appointment to the high court in 2005, the most popular answer was Chief Justice John Roberts. But that won't remain true after his ruling on Thursday in NFIB v. Sebelius, which upheld President Barack Obama's signature health-care law.
Justice Roberts served in the Reagan Justice Department and as a White House lawyer before his appointment to the D.C. Circuit Court of Appeals and then to the Supreme Court by President George W. Bush. Yet he joined with the court's liberal wing to bless the greatest expansion of federal power in decades.
Conservatives are scrambling to salvage something from the decision of their once-great judicial hero. Some hope Sebelius covertly represents a "substantial victory," in the words of conservative columnist George Will.
After all, the reasoning goes, Justice Roberts's opinion declared that the Constitution's Commerce Clause does not authorize Congress to regulate inactivity, which would have given the federal government a blank check to regulate any and all private conduct. The court also decided that Congress unconstitutionally coerced the states by threatening to cut off all Medicaid funds if they did not expand this program as far as President Obama wants.
All this is a hollow hope. The outer limit on the Commerce Clause in Sebelius does not put any other federal law in jeopardy and is undermined by its ruling on the tax power (discussed below). The limits on congressional coercion in the case of Medicaid may apply only because the amount of federal funds at risk in that program's expansion—more than 20% of most state budgets—was so great. If Congress threatens to cut off 5%-10% to force states to obey future federal mandates, will the court strike that down too? Doubtful.
Worse still, Justice Roberts's opinion provides a constitutional road map for architects of the next great expansion of the welfare state. Congress may not be able to directly force us to buy electric cars, eat organic kale, or replace oil heaters with solar panels. But if it enforces the mandates with a financial penalty then suddenly, thanks to Justice Roberts's tortured reasoning in Sebelius, the mandate is transformed into a constitutional exercise of Congress's power to tax.
Some conservatives hope that Justice Roberts is pursuing a deeper political game. Charles Krauthammer, for one, calls his opinion "one of the great constitutional finesses of all time" by upholding the law on the narrowest grounds possible—thus doing the least damage to the Constitution—while turning aside the Democratic Party's partisan attacks on the court.
The comparison here is to Marbury v. Madison (1803), where Chief Justice John Marshall deflected President Thomas Jefferson's similar assault on judicial independence. Of the Federalist Party, which he had defeated in 1800, Jefferson declared: "They have retired into the judiciary as a stronghold. There the remains of federalism are to be preserved and fed from the treasury, and from that battery all the works of republicanism are to be beaten down and erased." Jeffersonians in Congress responded by eliminating federal judgeships, and also by impeaching a lower court judge and a Supreme Court judge.
In Marbury, Justice Marshall struck down section 13 of the Judiciary Act of 1789, thus depriving his own court of the power to hear a case against Secretary of State James Madison. Marbury effectively declared that the court would not stand in the way of the new president or his congressional majorities. So Jefferson won a short-term political battle—but Justice Marshall won the war by securing for the Supreme Court the power to declare federal laws unconstitutional.
While some conservatives may think Justice Roberts was following in Justice Marshall's giant footsteps, the more apt comparison is to the Republican Chief Justice Charles Evans Hughes. Hughes's court struck down the centerpieces of President Franklin Roosevelt's early New Deal because they extended the Commerce Clause power beyond interstate trade to intrastate manufacturing and production. Other decisions blocked Congress's attempt to delegate its legislative powers to federal agencies.
FDR reacted furiously. He publicly declared: "We have been relegated to a horse-and-buggy definition of interstate commerce." After winning a resounding landslide in the 1936 elections, he responded in February 1937 with the greatest attack on the courts in American history. His notorious court-packing plan proposed to add six new justices to the Supreme Court's nine members, with the obvious aim of overturning the court's opposition to the New Deal.
After the president's plan was announced, Hughes and Justice Owen J. Roberts began to switch their positions. They would vote to uphold the National Labor Relations Act, minimum-wage and maximum-hour laws, and the rest of the New Deal.
But Hughes sacrificed fidelity to the Constitution's original meaning in order to repel an attack on the court. Like Justice Roberts, Hughes blessed the modern welfare state's expansive powers and unaccountable bureaucracies—the very foundations for ObamaCare.
Hughes's great constitutional mistake was made for nothing. While many historians and constitutional scholars have referred to his abrupt and unprincipled about-face as "the switch in time that saved nine," the court-packing plan was wildly unpopular right from the start. It went nowhere in the heavily Democratic Congress. Moreover, further New Deal initiatives stalled in Congress after the congressional elections in 1938.
Justice Roberts too may have sacrificed the Constitution's last remaining limits on federal power for very little—a little peace and quiet from attacks during a presidential election year.
Given the advancing age of several of the justices, an Obama second term may see the appointment of up to three new Supreme Court members. A new, solidified liberal majority will easily discard Sebelius's limits on the Commerce Clause and expand the taxing power even further. After the Hughes court switch, FDR replaced retiring Justices with a pro-New Deal majority, and the court upheld any and all expansions of federal power over the economy and society. The court did not overturn a piece of legislation under the Commerce Clause for 60 years.
If a Republican is elected president, he will have to be more careful than the last. When he asks nominees the usual question about justices they agree with, the better answer should once again be Scalia or Thomas or Alito, not Roberts.
"ObamaCare—Upheld and Doomed Regardless of the Supreme Court, fiscal
reality will prevail," by Holman W. Jenkins Jr., The Wall Street Journal,
June 29, 2012 ---
http://professional.wsj.com/article/SB10001424052702303649504577496850233678284.html?mod=djemEditorialPage_t&mg=reno64-wsj
Worse, in doing so, he may have read any constitutional limit on Congress out of the Constitution while pretending to do the opposite. Congress cannot compel you to do anything Congress wishes, but it can impose taxes on you until you finally have no rational alternative but to do whatever Congress wishes.
History will judge whether Mr. Roberts saved the reputation of the court or lost his nerve. Many conservatives obviously suspect the latter. Resolved: The government cannot make you eat broccoli, though it may levy a non-broccoli-eating tax on any who refuse.
Yet he may also think—and would not be wrong to think—that ObamaCare is doomed in any case. His opinion makes clearer than ever that ObamaCare is a tax program—throwing more tax dollars at an unreformed health-care system. ObamaCare is a huge new entitlement in a nation laboring under commitments it already can't afford. Those who gripe that he just authorized a vast expansion of the welfare state haven't reckoned with this fiscal reality principle.
What's more—and save us your constitutional brickbats—the mandate's survival could actually be a convenience to those who remain seriously interested in fixing health care.
GOPers, including Mitt Romney, immediately adopted "repeal" as their mantra. But repealing ObamaCare would just leave us with the health-care system we have, which is already ObamaCare in many respects—an unsustainable set of subsidies bankrupting the nation.
The solution is a tweak. Republicans already are lip-committed to a national health-insurance charter that allows insurers to design their own policies and market them across state lines. Republicans are also lip-committed to a tax reform to equalize the tax treatment of health care whether purchased by individuals or by employers on behalf of individuals.
Now just modify the Affordable Care Act so buying any health policy authorized by the new charter, no matter how minimalist, satisfies the employer and individual mandate.
What would follow is a boom in low-cost, high-deductible plans that leave individuals in charge of managing most their ordinary health-care costs out of pocket. Because it would be cheap, millions who would opt not to buy coverage will buy coverage. Because it will be cheap, companies will direct their low-wage and entry-level employees to this coverage.
Now these workers will be covered for serious illness or injury, getting the rest of us off the hook. As they grow older, wealthier and start families, they will choose more extensive but still rationally limited coverage. Meanwhile, the giant subsidies ObamaCare would dish out to help the middle class afford ObamaCare's gold-plated mandatory coverage would be unneeded.
With consumers shouldering a bigger share of health expenses directly, hospital and doctors would discover the advantages of competing on price and quality. This way lies salvation. In the long run, whatever share of GDP society decides to allocate to health care, it will get its money's worth—the fundamental problem today.
Perhaps a not-discreditable sense of the political moment lies behind the chief justice's opinion after all. The court's job, he wrote, is not to "protect the people from the consequences of their political choices."
He may have meant: The chief justice's job is to get the court out of the way while the body politic still remains suspended between recognizing the unsustainabilty of the current welfare model and deciding what to do about it.
This was always the fatal problem of ObamaCare. Reality could not have instructed President Obama more plainly: The last thing we needed, in a country staggering under deficits and debt, a sluggish economy and an unaffordable entitlement structure, was a new Rube Goldberg entitlement. The last thing we needed was ObamaCare. The nation and the times were asking Mr. Obama to reform health care, not to double-down on everything wrong with the current system.
Even with this week's Court success, he failed—and it's not as if there wasn't a deep well of policy understanding in Washington that he could have drawn on to take the country in a better direction. Regardless of any Supreme Court ruling, reality will pass its own judgment on the Affordable Care Act and it won't be favorable.
Bob Jensen's universal health care messaging --- http://www.trinity.edu/rjensen/Health.htm
"Study: Obama's Health Care Law Would Raise Deficit," SmartPros,
April 10, 2012 ---
http://accounting.smartpros.com/x73682.xml
Reigniting a debate about the bottom line for President Barack Obama's health care law, a leading conservative economist estimates in a study to be released Tuesday that the overhaul will add at least $340 billion to the deficit, not reduce it.
Charles Blahous, who serves as public trustee overseeing Medicare and Social Security finances, also suggested that federal accounting practices have obscured the true fiscal impact of the legislation, the fate of which is now in the hands of the Supreme Court.
Officially, the health care law is still projected to help reduce government red ink. The Congressional Budget Office, the government's nonpartisan fiscal umpire, said in an estimate last year that repealing the law actually would increase deficits by $210 billion from 2012 to 2021.
The CBO, however, has not updated that projection. If $210 billion sounds like a big cushion, it's not. The government has recently been running annual deficits in the $1 trillion range.
The White house dismissed the study in a statement late Monday. Presidential assistant Jeanne Lambrew called the study "new math (that) fits the old pattern of mischaracterizations" about the health care law.
Blahous, in his 52-page analysis released by George Mason University's Mercatus Center, said, "Taken as a whole, the enactment of the (health care law) has substantially worsened a dire federal fiscal outlook.
"The (law) both increases a federal commitment to health care spending that was already unsustainable under prior law and would exacerbate projected federal deficits relative to prior law," Blahous said.
The law expands health insurance coverage to more than 30 million people now uninsured, paying for it with a mix of Medicare cuts and new taxes and fees.
Blahous cited a number of factors for his conclusion:
- The health care's law deficit cushion has been reduced by more than $80 billion because of the administration's decision not to move forward with a new long-term care insurance program that was part of the legislation. The Community Living Assistance Services and Supports program raised money in the short term, but would have turned into a fiscal drain over the years.
- The cost of health insurance subsidies for millions of low-income and middle-class uninsured people could turn out to be higher than forecast, particularly if employers scale back their own coverage.
- Various cost-control measures, including a tax on high-end insurance plans that doesn't kick in until 2018, could deliver less than expected.
The decision to use Medicare cuts to finance the expansion of coverage for the uninsured will only make matters worse, Blahous said. The money from the Medicare savings will have been spent, and lawmakers will have to find additional cuts or revenues to forestall that program's insolvency.
Under federal accounting rules, the Medicare cuts are also credited as savings to that program's trust fund. But the CBO and Medicare's own economic estimators already said the government can't spend the same money twice.
Continued in article
s Unethical as it Gets in the Whitehouse
"Axelrod's ObamaCare Dollars Emails suggest the White House pushed business
to the presidential adviser's former firm to sell the health-care law," by
Kimberly A. Strassel, The Wall Street Journal, June 21, 2012 ---
http://professional.wsj.com/article/SB10001424052702304765304577480871706139792.html?mod=djemEditorialPage_t&mg=reno-wsj
Rewind to 2009. The fight over ObamaCare is raging, and a few news outlets report that something looks ethically rotten in the White House. An outside group funded by industry is paying the former firm of senior presidential adviser David Axelrod to run ads in favor of the bill. That firm, AKPD Message and Media, still owes Mr. Axelrod money and employs his son.
The story quickly died, but emails recently released by the House Energy and Commerce Committee ought to resurrect it. The emails suggest the White House was intimately involved both in creating this lobby and hiring Mr. Axelrod's firm—which is as big an ethical no-no as it gets.
Mr. Axelrod—who left the White House last year—started AKPD in 1985. The firm earned millions helping run Barack Obama's 2008 campaign. Mr. Axelrod moved to the White House in 2009 and agreed to have AKPD buy him out for $2 million. But AKPD chose to pay Mr. Axelrod in annual installments—even as he worked in the West Wing. This agreement somehow passed muster with the Office of Government Ethics, though the situation at the very least should have walled off AKPD from working on White-House priorities.
It didn't. The White House and industry were working hand-in-glove to pass ObamaCare in 2009, and among the vehicles supplying ad support was an outfit named Healthy Economy Now (HEN). News stories at the time described this as a "coalition" that included the Pharmaceutical Research and Manufacturers of America (PhRMA), the American Medical Association, and labor groups—suggesting these entities had started and controlled it.
House emails show HEN was in fact born at an April 15, 2009 meeting arranged by then-White House aide Jim Messina and a chief of staff for Democratic Sen. Max Baucus. The two politicos met at the Democratic Senatorial Campaign Committee (DSCC) and invited representatives of business and labor.
A Service Employees International Union attendee sent an email to colleagues noting she'd been invited by the Baucus staffer, explaining: "Also present was Jim Messina. . . . They basically want to see adds linking HC reform to the economy. . . . there were not a lot of details, but we were told that we wd be getting a phone call. well that call came today."
The call was from Nick Baldick, a Democratic consultant who had worked on the Obama campaign and for the DSCC. Mr. Baldick started HEN. The only job of PhRMA and others was to fund it.
Meanwhile, Mr. Axelrod's old firm was hired to run the ads promoting ObamaCare. At the time, a HEN spokesman said HEN had done the hiring. But the emails suggest otherwise. In email after email, the contributors to HEN refer to four men as the "White House" team running health care. They included John Del Cecato and Larry Grisolano (partners at AKPD), as well as Andy Grossman (who once ran the DSCC) and Erik Smith, who had been a paid adviser to the Obama presidential campaign.
In one email, PhRMA consultant Steve McMahon calls these four the "WH-designated folks." He explains to colleagues that Messrs. Grossman, Grisolano and Del Cecato "are very close to Axelrod," and that "they have been put in charge of the campaign to pass health reform." Ron Pollack, whose Families USA was part of the HEN coalition, explained to colleagues that "the team that is working with the White House on health-care reform. . . . [Grossman, Smith, Del Cecato, Grisolano] . . . would like to get together with us." This would provide "guidance from the White House about their messaging."
According to White House visitor logs, Mr. Smith had 28 appointments scheduled between May and August—17 made through Mr. Messina or his assistant. Mr. Grossman appears in the logs at least 19 times. Messrs. Del Cecato and Grisolano of AKPD also visited in the spring and summer, at least twice with Mr. Axelrod, who was deep in the health-care fight.
A 2009 PhRMA memo also makes clear that AKPD had been chosen before PhRMA joined HEN. It's also clear that some contributors didn't like the conflict of interest. When, in July 2009, a media outlet prepared to report AKPD's hiring, a PhRMA participant said: "This is a big problem." Mr. Baldick advises: "just say, AKPD is not working for PhRMA." AKPD and another firm, GMMB, would handle $12 million in ad business from HEN and work for a successor 501(c)4.
A basic rule of White House ethics is to avoid even the appearance of self-dealing or nepotism. If Mr. Axelrod or his West Wing chums pushed political business toward Mr. Axelrod's former firm, they contributed to his son's salary as well as to the ability of the firm to pay Mr. Axelrod what it still owed him. Could you imagine the press frenzy if Karl Rove had dome the same after he joined the White House?
Continued in article
"Why I No Longer Support the Health Insurance Mandate:
Should ObamaCare be overturned by the Supreme Court, insurers have solutions
ready to go," by Former Aetna CEO Ron Williams, The Wall Street Journal,
June 17, 2012 ---
http://professional.wsj.com/article/SB10001424052702303734204577464713182634028.html?mg=reno64-wsj#mod=djemEditorialPage_t
Soon the U.S. Supreme Court will rule on the constitutionality of the Affordable Care Act. I am not a lawyer, or an expert on the Constitution. But as the chairman and CEO of a major health plan, I had a ringside seat to the entire health-care reform process. After much reflection, I have concluded that the federal individual mandate, which requires all Americans to purchase health insurance starting in 2014, will not be upheld.
I don't say this lightly, as I have long been a vocal advocate of getting and keeping every American covered. As a society, we have a moral obligation to ensure everyone has access to affordable health care. We must find a way to cover those who are no longer healthy but need care.
A workable solution used by many states is a high-risk insurance pool funded by broad-based taxes. But Congress and the president chose to require health-insurance companies to guarantee issue—that is, to insure anyone at anytime.
This approach encourages people to only purchase insurance when care is needed. Insurance does not work if you only pay two months of premiums and receive hundreds of thousands of dollars of health care. This is the equivalent of getting a free ride. Under such a system, consumers would end up paying more to offset the added costs of free riders. Insurance would soon become unaffordable.
Once the government mandates guaranteed issue, then a second mandate is required for individuals to purchase and maintain insurance. My early support for an individual mandate had always been grounded in this companion solution, supported by broadly funded subsidies for lower-income Americans.
Yet, as I studied the arguments for and against the individual mandate, it became clear to me that the legislation raises serious constitutional concerns.
For starters, the legislative process that produced the Act was driven by partisan politics, and traditional oversight mechanisms that would have facilitated bipartisan and reasoned policy development were discarded in favor of rapid enactment. Several structural flaws emerged as a result. For example, the mandate should have been framed as a traditional tax—a move that could have bolstered the Act's constitutionality.
Most seriously, Congress insisted on describing personal inactivity—in this case, the failure to purchase insurance—as interstate commerce within its regulatory reach. Americans were alarmed, rightly, that this could empower future legislatures to mandate that citizens engage in activities none of us would think reasonable today.
Should the Act or part of it be overturned by the high court, I believe many of the consumer-friendly aspects already implemented will be adopted by the industry or quickly find their way into new legislation.
The federal government should encourage rather than micromanage market reform in all 50 states. Since health care is local, private-sector innovation in conjunction with state-level reform of the individual and small-group markets is a better approach.
But no matter how the Supreme Court rules, we still need bipartisan solutions that work for all Americans. One benefit of the past two years has been the vigorous public policy discussion that we should have had prior to passing the legislation—and a recognition that the core problems are health-care cost and value. Simply put, we must create more value for consumers by improving the quality and long-term affordability of health care.
The private sector is hard at work creating new ways to deliver health care. Health plans are collaborating with hospital systems to develop innovative accountable care organizations that provide physicians with incentives to cooperate and enhance patient outcomes. Hospitals are encouraging physicians to improve the accuracy and quality of patient data, enhancing clinical decision-making to improve the quality of care.
Health plans and employers are cooperating on decision-support tools to help employees better understand their conditions and choices. These tools are making quality and costs more transparent, encouraging employees to make better decisions. Finally, employers are implementing condition-management programs to help employees manage chronic illnesses such as diabetes and hypertension. They are also investing in on-site clinics, value-based health plans to increase medication adherence and incentive-based wellness programs.
As the law continues to evolve, we must not let politics impede our collective efforts to reinvent American health care.
"Honey, I Shrunk the Entitlement: Another budget ruse
that disguises ObamaCare's real costs," The Wall Street Journal, June
8, 2012 ---
http://professional.wsj.com/article/SB10001424052702303753904577450320997798422.html?mg=reno-wsj#mod=djemEditorialPage_t
One detail revealed by Tuesday's debt forecast is that there's another budget gimmick that makes it seem as if ObamaCare costs less than it really will, and the ruse deserves more scrutiny than it's received. Who was it who said we need to pass the bill to find out what's in it?
The Congressional Budget Office explained clearly for the first time that the Affordable Care Act's subsidies aren't indexed over the long term. Indexation is the standard practice that adjusts policies so they are constant over time as the value of the dollar and the cost of living change.
Social Security payments, for example, rise automatically to preserve their purchasing power. When Congress created the Alternative Minimum Tax (AMT) in 1969 to target 21 millionaires, it didn't index its income brackets, which is why it now hits the middle class.
ObamaCare's insurance subsidies are like an AMT in reverse. People making up to 400% of the poverty line—or about $96,000 for a family of four in 2016—are eligible for refundable tax credits to offset the premiums and cost-sharing of their government-approved health plans. The system is insanely complicated, but the amounts of the tax credits vary by how much people earn and rise over time so that people never contribute more than a certain share of their paycheck to health care.
Through 2018, the subsidies are indexed to grow in tandem with incomes and health-care costs. When premiums follow their historical pattern of rising faster than income, the subsidies grow by more too so that the individual out-of-pocket percentage is constant year to year. So far, so routine.
But then in 2019, ObamaCare's drafters slip in what they euphemize as "additional indexing." According to this new technical formula, the government is never allowed to spend more than 0.504% of the economy on subsidies. If normal indexing applied, CBO expects that the subsidies would blow through the GDP cap in 2022 and keep climbing. But as a result of the additional indexing, and as more and more people flood into ObamaCare, every individual will get a smaller piece of the subsidy pie, which will offset less and less of premiums.
It sounds like great news for taxpayers—the incredible shrinking entitlement. The problem is that CBO doesn't think Congress will make the benefits less generous as scheduled, and the pity is that's probably right. Washington rarely if ever takes away entitlements (e.g., the political firedrill when seniors decide Social Security's cost-of-living increases are too small). CBO's euphemism is that the additional indexing "might be difficult to sustain over a long period."
Therefore in its alternative fiscal scenario, CBO assumes that Congress will suspend the indexing change every year, just as it passes an annual "patch" to prevent AMT bracket creep. The upshot is that billions of dollars are not counted as part of the formal budget—one more reason that, after ObamaCare, federal bookkeeping is a worthless guide to future spending.
On paper, Medicare, Medicaid, the Affordable Care Act and other government health programs will consume 9.6% of GDP in 25 years, up from 5.4% today. But then count the indexing ruse, other ObamaCare budget gimmicks like Medicare "cuts" to hospitals that CBO doesn't think will happen, and the Medicare formula that says doctor payments will plunge next year by 27%, which President Obama promised to fix but didn't. In that case government health care will hit 10.4% of GDP in 2037.
Almost 1% of the economy is a lot of money. And it's part of the epic deception that was necessary to pass this not-so-shrinking entitlement, as Americans continue to discover.
Ernst & Young's annual outside audit of the HHS
balance sheet last November was considered a triumph because several material
weaknesses were downgraded merely to significant deficiencies. But on a
"day-to-day or even monthly basis" HHS cannot accurately track its spending,
according to the audit. The agency is in violation of numerous federal
accounting rules written specifically for the bureaucracy, to say nothing of the
financial reporting required of public companies.
"Fannie Med: Health and Human Services gets into the venture capital
game," The Wall Street Journal, June 4, 2012 ---
http://online.wsj.com/article/SB10001424052702303360504577408150150837834.html#mod=djemEditorialPage_t
Perhaps you thought that the Affordable Care Act is all about making insurance more affordable. Too bad no one told Americans that the law also turned the Health and Human Services Department into a giant venture capital investor for health care. This won't turn out well.
Awash in ObamaCare dollars, HHS has a growing investment portfolio that includes everything from new insurance companies to health-care start-ups to information technology. Secretary Kathleen Sebelius is rushing out loans and subsidies like nobody's business in case the Supreme Court overturns the law or Mitt Romney wins.
"We're moving forward with implementing this law, including moving forward with this very important commitment by the President, by the Administration, to community health centers and the people they serve," said senior White House aide Cecelia Munoz on a recent conference call with reporters. She was referring to $728 million in seed money for new clinics that HHS dispensed last month.
HHS already makes more grants than all other agencies combined, and it is the purchaser of health care for about one of three Americans via Medicare, Medicaid or both. The problem is that HHS spends its money—$788 billion for entitlements in 2012 and another $78 billion to run HHS's 300-odd programs—so badly.
Ernst & Young's annual outside audit of the HHS balance sheet last November was considered a triumph because several material weaknesses were downgraded merely to significant deficiencies. But on a "day-to-day or even monthly basis" HHS cannot accurately track its spending, according to the audit. The agency is in violation of numerous federal accounting rules written specifically for the bureaucracy, to say nothing of the financial reporting required of public companies.
The HHS inspector general revealed this year that his team can barely monitor HHS because its staff is too busy chasing the criminals exploiting HHS's incompetence. Experts disagree about how much is stolen from taxpayers through entitlement fraud—the Government Accountability Office puts it at $48 billion annually—but one sign of the problem is that Medicare allows doctors (or "doctors") to register for billing privileges as "other."
One particular ObamaCare boondoggle that needs fly-specking is the HHS decision to finance nonprofit insurance companies with up to $7.25 billion in ultra-low-cost loans. These co-ops were a consolation prize for liberals after Democratic opposition killed the government-run public option, and the co-ops are supposed to be managed by and for consumers. But it turns out that running an insurance company is hard for amateurs who can't attract private financing.
HHS officially estimates that the default rate on the loans will hit between 35% and 40%, which would be bad enough. But White House budget documents show that HHS expects to lose $3.1 billion of the $3.4 billion appropriated so far—which implies a default rate of 91%. The lack of accountability to shareholders or capital markets may help explain this propensity for failure.
Another problem is the way HHS chose to structure the co-op loans. To protect the insured, states require insurers to maintain reserves in the event they go bankrupt—and debts that are supposed to be repaid are viewed as liabilities. To end run these solvency requirements, HHS is issuing "surplus notes" that subordinate the taxpayer to everyone else for repayment if a co-op fails.
That seems likely, given the challenges of building a provider network and attracting members when expertise in such matters is legally prohibited under HHS rules. Any organization that wrote insurance policies prior to 2009—as it were, the pre-existing insurers of the Bush era—is barred from applying for loans or any significant role in the operations of a co-op. So the co-ops can't benefit from the business experience that might give them a chance to succeed.
Continued in article
Bob Jensen's threads on the sad state of governmental accounting ---
http://www.trinity.edu/rjensen/Theory02.htm#GovernmentalAccounting
Bob Jensen's threads on health care ---
http://www.trinity.edu/rjensen/Health.htm
"ObamaCare's Secret History: How a Pfizer CEO and Big
Pharma colluded with the White House at the public's expense," The Wall
Street Journal, June 11, 2012 ---
http://professional.wsj.com/article/SB10001424052702303830204577446470015843822.html?mod=djemEditorialPage_t&mg=reno64-wsj
On Friday House Republicans released more documents that expose the collusion between the health-care industry and the White House that produced ObamaCare, and what a story of crony capitalism it is. If the trove of emails proves anything, it's that the Tea Party isn't angry enough.
Over the last year, the Energy and Commerce Committee has taken Nancy Pelosi's advice to see what's in the Affordable Care Act and how it passed. The White House refused to cooperate beyond printing out old press releases, but a dozen trade groups turned over thousands of emails and other files. A particular focus is the drug lobby, President Obama's most loyal corporate ally in 2009 and 2010.
The business refrain in those days was that if you're not at the table, you're on the menu. But it turns out Big Pharma was also serving as head chef, maître d'hotel and dishwasher. Though some parts of the story have been reported before, the emails make clear that ObamaCare might never have passed without the drug companies. Thank you, Pfizer. ***
The joint venture was forged in secret in spring 2009 amid an uneasy mix of menace and opportunism. The drug makers worried that health-care reform would revert to the liberal default of price controls and drug re-importation that Mr. Obama campaigned on, but they also understood that a new entitlement could be a windfall as taxpayers bought more of their products. The White House wanted industry financial help and knew that determined business opposition could tank the bill.
Initially, the Obamateers and Senate Finance Chairman Max Baucus asked for $100 billion, 90% of it from mandatory "rebates" through the Medicare prescription drug benefit like those that are imposed in Medicaid. The drug makers wheedled them down to $80 billion by offsetting cost-sharing for seniors on Medicare, in an explicit quid pro quo for protection against such rebates and re-importation. As Pfizer's then-CEO Jeff Kindler put it, "our key deal points . . . are, to some extent, as important as the total dollars." Mr. Kindler played a more influential role than we understood before, as the emails show.
Thus began a close if sometimes dysfunctional relationship with the Pharmaceutical Research and Manufacturers of America, or PhRMA, as led by Billy Tauzin, the Louisiana Democrat turned Republican turned lobbyist. As a White House staffer put it in May 2009, "Rahm's calling Nancy-Ann and knows Billy is going to talk to Nancy-Ann tonight. Rahm will make it clear that PhRMA needs a direct line of communication, separate and apart from any coalition." Nancy-Ann is Nancy-Ann DeParle, the White House health reform director, and Rahm is, of course, Rahm.
Terms were reached in June. Mr. Kindler's chief of staff wrote a memo to her industry colleagues explaining that "Jeff would object to me telling you that his communication skills and breadth of knowledge on the issues was very helpful in keeping the meeting productive." Soon the White House leaked the details to show that reform was making health-care progress, and lead PhRMA negotiator Bryant Hall wrote on June 12 that Mr. Obama "knows personally about our deal and is pushing no agenda."
But Energy and Commerce Chairman Henry Waxman then announced that he was pocketing PhRMA's concessions and demanding more, including re-importation. We wrote about the double-cross in a July 16, 2009 editorial called "Big Pharma Gets Played," noting that Mr. Tauzin's "corporate clients and their shareholders may soon pay for his attempt to get cozy with ObamaCare."
Mr. Hall forwarded the piece to Ms. DeParle with the subject line, "This sucks." The duo commiserated about how unreasonable House Democrats are, unlike Mr. Baucus and the Senators. The full exchange is among the excerpts from the emails printed nearby.
Then New York Times reporter Duff Wilson wrote to a PhRMA spokesman, "Tony, you see the WSJ editorial, 'Big Pharma Gets Played"? I'm doing a story along that line for Monday." The drug dealers had a problem.
The White House rode to the rescue. In September Mr. Hall informed Mr. Kindler that deputy White House chief of staff Jim Messina "is working on some very explicit language on importation to kill it in health care reform. This has to stay quiet."
PhRMA more than repaid the favor, with a $150 million advertising campaign coordinated with the White House political shop. As one of Mr. Hall's deputies put it earlier in the minutes of a meeting when the deal was being negotiated, "The WH-designated folks . . . would like us to start to define what 'consensus health care reform' means, and what it might include. . . . They definitely want us in the game and on the same side."
In particular, the drug lobby would spend $70 million on two 501(c)(4) front groups called Healthy Economy Now and Americans for Stable Quality Care. In July, Mr. Hall wrote that "Rahm asked for Harry and Louise ads thru third party. We've already contacted the agent."
Mr. Messina—known as "the fixer" in the West Wing—asked on December 15, 2009, "Can we get immediate robo calls in Nebraska urging nelson to vote for cloture?" Ben Nelson was the last Democratic holdout toward the Senate's 60-vote threshold, and, as Mr. Messina wrote, "We are at 59, we have to have him." They got him.
At least PhRMA deserves backhanded credit for the competence of its political operatives—unlike, say, the American Medical Association. A thread running through the emails is a hapless AMA lobbyist importuning Ms. DeParle and Mr. Messina for face-to-face meetings to discuss reforming the Medicare physician payment formula. The AMA supported ObamaCare in return for this "doc fix," which it never got.
"We are running out of time," this lobbyist, Richard Deem, writes in October 2009. How can he "tell my colleagues at AMA headquarters to proceed with $2m TV buy" without a permanent fix? The question answers itself: It was only $2 million. ***
Mr. Waxman recently put out a rebuttal memo dismissing these email revelations as routine, "exactly what Presidents have always done to enact major legislation." Which is precisely the point—the normality is the scandal. In 2003 PhRMA took a similar road trip with the Bush Republicans to create the Medicare drug benefit. That effort included building public support by heavily funding a shell outfit called Citizens for a Better Medicare.
Of course Democrats claim to be above this kind of merger of private profits and political power, as Mr. Obama did as a candidate. "The pharmaceutical industry wrote into the prescription drug plan that Medicare could not negotiate with drug companies," he said in 2008. "And you know what? The chairman of the committee who pushed the law through"—that would be Mr. Tauzin— "went to work for the pharmaceutical industry making $2 million a year."
Continued in article
"Exposing the Medicare Double Count: The same money can't be
spent twice. ObamaCare tries to do precisely that, and the government will have
to borrow the difference," by By Charles Blahous and James C. Capretta, The
Wall Street Journal, May 1, 2012 ---
http://online.wsj.com/article/SB10001424052702304299304577346332422834276.html?mod=djemEditorialPage_t
One of the enduring mysteries of President Obama's health law is how its spending constraints and payroll tax hikes on high earners can be used to shore up Medicare finances and at the same time pay for a massive new entitlement program. Isn't this double counting?
The short answer is: Yes, it is. You can't spend the same money twice. And so, thanks to the new health law, federal deficits and debt will be hundreds of billions of dollars higher in the next decade alone.
Here's how it works. When Congress considers legislation that alters taxes or spending related to Medicare's Hospital Insurance Trust Fund, the changes are recorded not just on the Hospital Insurance Trust Fund's books, but also on Congress's "pay-as-you-go" scorecard.
The "paygo" requirement is supposed to force lawmakers to find "offsets" for new tax cuts or entitlement spending, and thus protect against adding to future federal budget deficits. Putting the Medicare payroll tax hikes and spending constraints on the "pay-as-you-go" ledger was instrumental in getting the health law through Congress, because doing so fostered a widespread misperception that the law would reduce future deficits.
But the same provisions add to the Hospital Insurance Trust Fund's reserves, which expands Medicare's spending authority. Medicare can only pay full benefits so long as its trust fund has sufficient reserves to meet these obligations. If the trust fund has insufficient resources, then spending must be cut automatically to ensure the fund does not go into deficit. The health law's Medicare provisions prevent these spending cuts from taking place for several more years.
In short, the scoring convention is not widely understood and thus obscures the double-counting.
Perhaps the easiest way to understand this is to look at Social Security. If we generate $1 in savings within that program, then that's $1 that Social Security can spend later. If we also claimed this same $1 to finance a new spending program, we would clearly be adding to the total federal deficit. There has long been bipartisan understanding of this aspect of Social Security, which is why Congress's paygo rules prohibit using Social Security savings as an offset to pay for unrelated federal spending.
No such prohibition exists in the budget process against committing Medicare savings simultaneously to Medicare and to pay for a new federal program. It's this budget loophole, unique to Medicare, that gives the health law's spending constraints and payroll tax hikes the appearance of reducing federal deficits. But it is appearance, not reality. If you have only $1 of income and are obliged to pay a dollar each to two different recipients, then you will have to borrow another $1. This is effectively what the health law does. It authorizes far more in spending than it creates in savings.
How much more? Charles Blahous's study, "The Fiscal Consequences of the Affordable Care Act," published last month by the Mercatus Center, found that the health law would add over $340 billion to federal deficits over the next 10 years. Over the longer term, deficits would run into the trillions.
Medicare spending cuts and tax increases have always been double-counted—recorded both on the paygo scorecard and added to the Hospital Insurance Trust Fund. No budgetary rules were bent. But the fiscal stakes in the Affordable Care Act are extraordinarily high. The health law's Medicare hospital insurance spending cuts and tax hikes are now claimed to have eliminated most of the program's medium- and long-term deficits—even as they have also paved the way for the most expensive entitlement expansion in a generation.
Continued in article
Bob Jensen's threads on the sad state of governmental accounting ---
http://www.trinity.edu/rjensen/Theory02.htm#GovernmentalAccounting
Bob Jensen's threads on health care ---
http://www.trinity.edu/rjensen/Health.htm
Bob Jensen's threads on entitlements ---
http://www.trinity.edu/rjensen/Entitlements.htm
Dartmouth University Professor's Suggestions for Reduced Costs of Health Care in the United States
"Health Care for 1% of the Cost," by Vijay Govindarajan, Harvard
Business Review Blog, April 9, 2012 ---
http://blogs.hbr.org/cs/2012/04/saving_and_improving_lives_for.html?referral=00563&cm_mmc=email-_-newsletter-_-daily_alert-_-alert_date&utm_source=newsletter_daily_alert&utm_medium=email&utm_campaign=alert_date
This blog post is written with Pepijn Veling, Utrecht University, Netherlands.
There is a general consensus that U.S. healthcare needs major reform. Can reverse innovation — innovations originating from poor countries — provide one important answer? Most definitely.
In the U.S., the approach is to spend more money on major technological advances and come up with innovative products and solutions. In poor countries, the innovation paradigm is just the opposite: spend less and innovate new business models. Poor countries face severe resource constraints. They just cannot afford to spend a lot. Constraints need not be limiting, they can actually be liberating.
The ultra low-cost, high-quality prostheses innovation of Dr. Therdchai Jivacate and the Prostheses Foundation of Thailand is an inspiring example of this. Over the years, they have developed and delivered over 25,000 affordable and appropriate artificial legs to amputees in remote areas of Thailand and surrounding countries. In the U.S., an artificial leg costs about $10,000 and the delivery time is 7-10 days. The Prostheses Foundation of Thailand is able to do it for less than $100, about 1% of the U.S. cost, and their delivery time is 1-3 days.
Though Dr. Jivacate spent four years as a resident of physical medicine and rehabilitation in Northwestern University, he understood that conventional artificial legs were unaffordable and inappropriate for the majority of Thai amputees. There are several reasons. First, customers in rural Thailand simply cannot afford to pay a high price. For the poor making $2 a day, a $10,000 product would require 5,000 days of income. (With 200 working days a year, that amounts to an incredible 50 years). Second, the context and functional requirements for amputees in Thailand are vastly different from those in the U.S. Thai people do many of their daily activities with bare feet, sitting squat on the floor or cross-legged, and many work in wet paddy fields. Furthermore, while many roads in the U.S. are paved, Thai people walk on uneven roads. Finally, the expensive artificial legs are only available in Bangkok, thus making it virtually inaccessible to the rest of the population.
Dr. Jivacate defined the most essential customer problem: to be able to walk without pain. He set out to develop a solution. His mission was not just to reduce costs — but to shift the price-performance paradigm. Actually, the artificial leg has to be higher-quality than in the U.S. to meet the more demanding functional requirements in Thailand, yet it has to be ultra low-cost. How did he achieve such an impossible goal?
There are two major cost drivers in an artificial leg — raw material cost and the cost of technicians.
Dr. Jivacate realized that he could not achieve his goal with expensive materials such as titanium, which is used in rich countries. One of his technological breakthroughs was to make artificial legs from recycled plastic yogurt bottles. These artificial limbs were extremely cheap. Raw material cost was close to zero since he used waste. More importantly, the limbs were lightweight, durable and comfortable. Dr. Jivacate converted waste into wealth.He also knew that professionally-skilled technicians were in short supply and too expensive to hire. Dr. Jivacate therefore instituted training programs for those amputees who showed a special interest in the fitting process. He hired amputees as technicians to do the fitting and help with rehabilitation and training with new patients. This approach had several benefits. First, it dramatically reduced costs. Second, the amputee-technicians approached their work with passion since they personally benefited from the product. Third, it stimulated the demand for the product since these technicians could credibly convince patients that the product works. Fourth, it improved quality since Dr. Jivacate's technicians understood, based on personal experience, how to fit the prosthetic leg without pain and discomfort. Dr. Jivacate's technicians were thus most customer-centric. Fifth, they understood customer feedback, which led to continuous process improvements. Sixth, it created an instant empathy and a high degree of trust between the amputee-technicians and the patients. Finally and most importantly, it created much-needed job opportunities for the poor.
He also re-invented the delivery model. Patients in remote areas of Thailand could not afford to travel to clinics in an urban setting. So, Dr. Jivacate innovated highly-efficient mobile clinics and 27 satellite workshops in local areas. Between 1992 and 2011, the mobile units have made more than 115 trips serving over 16,000 amputees. It has recently broken the Guinness Book of World Records by serving 864 amputees in 13 days.
Finally, Dr. Jivacate tailored the devices to meet unique local needs — for instance, he custom-built artificial legs specifically for farmers who worked in wet fields.
Originally targeting the poor, continuous innovations have drastically improved the quality of the artificial legs over time (ISO certificates pending). The limbs are now also used by more affluent amputees in Thailand and in other neighboring countries such as Indonesia, Malaysia, Laos, and Burma.
In addition to treating humans, Dr. Jivacate fabricated a prosthetic leg for Baby Mosha, a 7 month-old elephant, who was injured in a landmine in 2009 — a remarkable medical achievement captured in the award winning documentary film The Eyes of Thailand.
If we can make an artificial leg for an elephant for less than $100, why does a less complicated procedure for humans have to cost $10,000?
Continued in article
Comment at the end of the article by SVNert
Interesting article, although not particularly any new insight. :) As a patient with emergency needs and proper insurance coverage, it is better to be in the US (maybe Japan or UK are also good places to be....) As a patient with some wealth and no insurance and in need of emergency care, India (and some other countries) would be good places to be ... although in India pre-op/post-op care is currently lacking and slowly improving.
In my opinion, short of socialized care, even these two diametrically opposite US/India situations are primarily driven by capitalism - of course the parameters of population, disposable wealth etc etc will play into the equation.
Whereas lawyers 'run' the US healthcare, countries like India seem to be driven by patient processing factories, and as factories, economies of scale and low cost come into play, whether its the services or locally copied/invented devices/systems. From device (software/hardware/materials etc) invention perspective, the new generation of technological advances and scientific discoveries surely will make some of these innovations cheaper - a lot cheaper.
Comment from Ned Keit-Pride
You do not seem to account for the crippling malpractice insurance costs of most healthcare providers in the US. It is these costs and the fact that their transactions are largely with insurance companies rather than patients that drive much of what physicians charge here. Until healthcare services are sold more directly to patients, I believe comparing the relative practices of US and Indian physicians to be very apples-to-oranges.
"Canadian Malpractice Insurance Takes Profit Out Of
Coverage," by Jane Akre, Injury Board, July 28, 2009 ---
Click Here
http://www.injuryboard.com/national-news/canadian-malpractice-insurance-takes-profit-out-of-coverage.aspx?googleid=267890
The St. Petersburg Times takes a look at the cost of insurance in Canada for health care providers.
A neurosurgeon in Miami pays about $237,000 for medical malpractice insurance. The same professional in Toronto pays about $29,200, reports Susan Taylor Martin.
A Canadian orthopedic surgeon pays just over $10,000 for coverage that costs a Miami physician $140,000. An obstetrician in Canada pays $36,353 for insurance, while a Tampa Bay obstetrician pays $98,000 for medical malpractice insurance.
Why the difference?
In the U.S., private for-profit insurance companies extend medical malpractice coverage to doctors.
In Canada, physicians are covered through membership in a nonprofit. The Canadian Medical Protective Association offers substantially reduced fees for the same coverage, especially considering that their payout is limited by caps in Canada just as in some U.S. states.
In 1978, the Canadian Supreme Court limited pain and suffering awards to just over $300,000, circumventing the opportunity for a jury to decide on an award depending on the case before them.
Canadian Medical Protective Association
Here’s how it works.
Fees for membership vary depending on the region of the country in which the doctor works and their specialty. All neurosurgeons in Ontario will pay the same, for example. The number of claims they have faced for medical malpractice does not figure into their premium
"We don't adjust our fees based on individual experience; it's the experience of the group,'' says Dr. John Gray, the executive director, "That's what the mutual approach is all about, and it helps keep the fees down for everyone,” he tells the St. Petersburg Times.
If a doctor is sued, the group pays the claim and provides legal counsel.
In the U.S., the push has been on for limiting claims, no matter how egregious the medical malpractice. President Obama was booed in June when, before the American Medical Association, he said he would not limit a malpractice jury award.
"We got a crazy situation where Obama is talking about the cost of medicine but he said, 'I don't believe in caps,' " complains Dr. Dennis Agliano, past president of the Florida Medical Association. "If you don't have caps, the sky's the limit and there's no way to curtail those costs.''
But the importance of limiting jury awards may not play into the big picture on health care reform.
Malpractice lawsuits amount to less than one percent of both the Canadian and the U.S. healthcare system, meanwhile between 44,000 and 98,000 Americans die each year due to medical errors in hospitals alone, while 16 times as many suffer injuries without receiving any compensation, reports the group Americans for Insurance Reform.
Major Difference
In Canada, an injured patient is often required to pay for the initial investigation into his case. In the U.S. the contingency fee basis, usually in the range of 30 percent, allows the injured party to proceed without a financial downside.
In both the U.S. and Canada, the definition of medical negligence is that a duty of care was owed to the patient by the physician, there was a breach h of the standard of care and the patient suffered harm by the physician’s failure to meet that standard of care.
A bad outcome in itself is not the basis of a lawsuit.
The Canadian Medical Protective Association insures virtually all of the country’s 76,000 doctors, as opposed to the U.S. where private for-profit insurance companies cover physicians for medical malpractice.
In Canada, the median damaged paid in 2007 was $91,999 and judgments favored patients 25 times, doctors 70 times.
In the U.S., many physician groups are requiring patients to waive their rights to a jury trial, even though malpractice litigation accounts for just 0.6 percent of healthcare costs.
Public Citizen, the consumer group, charges that the facts don’t warrant the “politically charged hysteria surrounding medical malpractice litigation.”
For the third straight year, medical malpractice payments were at record lows finds the group in a study released this month. The decline, however, is likely due to fewer injured patients receiving compensation, not improved health safety.
2008 saw the lowest number of medical malpractice payments since the federal government’s National Practitioner Data Bank began compiling malpractice statistics. In 2008, payments were 30.7 percent lower than averages recorded in all previous years.
In the report titled, The 0.6 Percent Bogeyman, the nonprofit watchdog group states, “between three and seven Americans die from medical errors for every 1 who receives a payment for any type of malpractice claim.”
Public Citizen previously reported that about five percent of doctors are responsible for half of the medical malpractice in the U.S. that can result in permanent injury or death. #
Read more: http://www.injuryboard.com/national-news/canadian-malpractice-insurance-takes-profit-out-of-coverage.aspx?googleid=267890#ixzz0W0Z71JOP
"Providential Design A study shows that Medicaid reform is working in
Rhode Island," The Wall Street Journal, April 5, 2012 ---
http://online.wsj.com/article/SB10001424052970204632204577126650419797954.html#mod=djemEditorialPage_t
In his parade of Republican horribles, President Obama poured special scorn this week on the idea of handing Medicaid to the states with a fixed annual federal payment. He says it wouldn't save money without hurting "poor children" and "middle-class families who have children with autism and Down's Syndrome." Someone needs to tell Mr. Obama about the results of Medicaid reform in Rhode Island.
The experiment dates to the final days of the Bush Administration, when Health and Human Services granted a Global Consumer Choice Waiver exempting Rhode Island from many of Medicaid's federal rules and mandates. The state used it to move to managed care from traditional fee for service, in return for accepting a spending cap over five years of $12.1 billion, including federal matching payments.
How's that working out? Well, a study released late last year by the Lewin Group, a consulting firm, found that the Ocean State's reform with a federal waiver has been "highly effective in controlling Medicaid costs" and improving "access to more appropriate services."
Rhode Island's Medicaid spending, which had been projected to reach $3.8 billion, came in at $2.7 billion for the 18 months following the introduction of the waiver, according to Rhode Island's Office of Health and Human Services. The state benefited in part from one-time stimulus money, but it also saved money from such reforms as better case management by private insurers and competitive bidding for health-care providers.
For example, Lewin examined the state's shift to home and community-based care from nursing homes for long-term care patients. Lewin found the reform helped save $35.7 million over three years, $15 million in 2010 alone.
The Lewin study also "found evidence of lower emergency room utilization and improved access to physician services" from "care management programs" for Medicaid patients with asthma, diabetes, heart problems and mental health disorders. Emergency room care is a major driver of Medicaid costs.
The total savings from all of Rhode Island's reforms were more than $55 million—a big deal in such a small state. According to an analysis by Gary Alexander, who ran the Medicaid program in Rhode Island when the federal waiver was granted and who now serves as the Secretary of Public Welfare in Pennsylvania, if these savings were extrapolated for all 50 states, they would exceed $200 billion in lower Medicaid costs over the next decade.
These findings contradict predictions from liberal critics like the Center on Budget and Policy Priorities, which in 2008 called the Rhode Island waiver a "radical" and "perilous" plan that would hurt the poor. On quality of care, Lewin found that the waiver ensures that "Medicaid members in Rhode Island receive the right services, at the right time, in the right setting." In other words, Down Syndrome children are not roaming the streets of Woonsocket.
Not every Rhode Island idea has worked, and critics say some reforms may not be applicable to larger, more diverse, and less population-dense states like Texas. Perhaps so. But that's why letting 50 states tailor their own service-delivery reforms is the best model for controlling a program that cost the feds and states a combined $404 billion in fiscal 2010. State experimentation is how welfare was reformed so successfully in the 1990s.
Our guess is that President Obama's real objection to Medicaid black grants is political. He doesn't want Washington to lose control. He and most Democrats want to use Medicaid to cover as many people as possible as a way to pave the road to single-payer national health care. It's no accident that ObamaCare was written to add about 15 million more people to the Medicaid rolls, most of whom will be middle-income earners.
The nation's governors are looking at this imminent new burden in horror, and more than half of them have signed a letter pleading with the Obama Administration to give them less Medicaid money in exchange for fewer rules and mandates. Medicaid now costs the states $159 billion a year. Without reform the federal cost will double to $587 billion in 2021 from $274 billion last year, according to the Congressional Budget Office.
If the Obama Administration won't grant more waivers, then Republicans ought to investigate the Rhode Island results and educate the voters during this election campaign.
A Historic and Dysfunctional Alternative to Expensive Malpractice Claims
"Violent Crimes in China’s Hospitals Spread Happiness," by Adam
Minter, Bloomberg, March 29, 2012 ---
http://www.bloomberg.com/news/2012-03-29/violent-crimes-in-china-s-hospitals-spread-happiness.html
Last Friday afternoon, Wang Hao, a young internist at the First Affiliated Hospital of Harbin Medical University in northeast China, was brutally murdered by a disgruntled patient. It was a spectacular crime, but it was not an unusual one: Violence against doctors, including murder, is commonplace and reportedly increasing. In 2006, the last year for which detailed records on patient-doctor violence was reported publicly (including violence perpetrated by patient family members and friends), the Chinese Ministry of Health stated that 5,519 medical personnel had been “injured” in disputes -- a substantial increase over previous years. And on March 29, the China Daily cited an “official source” who said that in 2010, 17,000 violent incidents took place, affecting roughly 70 percent of all public hospitals in China.
Why so much violence against one of the caring professions? Chinese media, and microblogs, are filled with theories.
In 2007, Xinhua, the state-owned news agency, explained it as a function of “patients' families and friends [becoming] more likely to use violence to vent their rage over hospital errors.” There’s some truth to that. China lacks a credible and independent medical malpractice system to determine compensation for medical errors. But that’s just the beginning. The more critical issue relates to the comically low compensation medical professionals receive (the starting salary for a doctor is around $500 per month). To supplement their income, they legally receive commissions on prescriptions and medical services. On Thursday, Shanghai media reported that the city’s doctors also commonly notify funeral homes of impending patient deaths in exchange for kickbacks.
Chinese patients often enter a hospital prepared to pay bribes for the care that they need. I’ve personally witnessed a “tip” handed to a doctor in advance of a surgical procedure at a top Shanghai hospital. They can also be tricked into undergoing unnecessary but revenue-generating procedures. Three years ago, for instance, at another Shanghai hospital, I was told I should get a CT scan so as to better understand the causes of a sinus infection, and then asked to purchase a Percocet prescription to manage my pain. I didn’t need either. Combine this norm, however, with crowded waiting rooms, high and expensive hurdles to see specialists, and a pointed lack of means to civilly contest malpractice and one can see why resentment against the Chinese medical profession has boiled for decades.
Last Friday’s murder, even in the context of other Chinese patient-doctor murders, doesn’t reveal much about the scale of patient bitterness in China. That proof is provided by an astonishing online poll posted by People’s Daily, the official mouthpiece of the Chinese Communist Party, a few hours after news of the murder went viral in China. The now deleted survey (posted as an attachment to this article) asked readers to express their feelings about Wang Hao’s murder by clicking on emoticons symbolizing feelings ranging from anger (a red fuming face) to happiness (a yellow smiley face). Shockingly, of the first 6,161 readers to respond to the poll, 4,018 --- 65 percent -- chose happiness. Anger came in a distant second with 14 percent. The third choice, sadness (a teary, yellow face) received 6.8 percent.
Continued in article
Jensen Question
What do extreme alternatives of violence versus multi-million dollar malpractice
recovery claims have in common?
Answer
Both can lead to physicians and hospitals refusing high risk medical services.
For example, when Romney Care was implemented in Massachusetts it made
obstetrics unprofitable to hospitals having to bear enormous expenses of
obstetrics malpractice insurance. It's common for courts to pass on costly
judgments in sympathy for parents who had a defective baby even though the
hospitals and doctors did nothing wrong. As a result of not being able to cover
expenses of malpractice insurance and lawsuit risks, quite a few hospitals in
Massachusetts closed down their obstetrics services. They would probably do the
same under risk of being damaged by disgruntled Chinese parents.
"Looking for Solutions in a Rapidly Changing Health Care Environment,"
Knowledge@wharton, University of Pennsylvania, March 28, 2012 ---
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2963
Hi Zafar,While the U.S. health care system is not yet on life support, it remains a fragmented and unwieldy structure whose rising costs bear little relation to improvements in access or quality. This is despite the introduction of patient management programs, some restructuring of insurance models and efforts to adjust incentives for decision making all across the care continuum.
But during the keynote presentations and panel discussions at Wharton's 18th Annual Health Care Business Conference titled, "Innovation in a Changing Health Care Environment," the emphasis was on solutions. Participants analyzed some of the ways that individual companies are digging deep into the system to come up with approaches that rely on new technology, new business models and new marketing strategies.
Two keynote speeches served as thematic bookends to the day's discussions. The morning kickoff keynote by Glenn D. Steele Jr., president and CEO of Geisinger Health System, defined the scope of the problem in dollars and disease. Steele focused on the inverse relationship between cost and quality, citing several studies that found that more than 50% of health care spending in the U.S. is wasted or actually harmful. The conference ended with a keynote by Robert Pearl, president and CEO of The Permanente Medical Group, who stated that the survival of the U.S. depends on reining in health care costs. He challenged the audience to save the country from economic collapse by redesigning how health care is delivered and paid for.
Overall, conference presenters provided a ground-level view of what some of the problems, and solutions, look like in this transformative time.
Strategizing for Survival
The cost of health care is directly related to our larger national economic health, as noted by Pearl. "Our problems go back 40 years.... Costs have been rising 7% to 8% a year; health care is 18% of GDP this year, and it is set to double again, to 36% of GDP, by 2030.... That leaves no money for education, infrastructure, police and fire." The current players, he added, are strategizing for survival today because the trajectory is unsustainable, and change will come. "Currently, we are fragmented, piecemeal, paper-based and leaderless."
According to David Jones, Jr., chairman and managing director of Chrysalis Ventures, a private equity and venture capital firm, the days for tinkering around the edges are gone. "The provider side re-engineering is doomed to failure because of a fundamental governance problem. You heard in the keynote this morning that 40% to 50% of the money spent is useless or actually harmful to outcomes. All of the change initiatives are focused on solving it in an incremental way."
Jones described that as a "pants-on-fire problem.... I don't think there is a possibility in the world that a bunch of ungovernable non-profits with no motivation to change quickly will go after that problem. I think the solution ultimately -- like the Greek [economic bail-out] solution or the GM solution -- is that you must have restructuring in the traditional financial sense. Everyone talks about hospitals going bankrupt because of politics. That is nonsense. Bankruptcy is a restructuring, and the system is going to change dramatically."
This urgency, and a new economy driven by information technology, have created an environment in which change is happening no matter what laws are passed or what the courts uphold or overturn, conference participants stated.
"Good regulations, bad regulations: Change has thrown the pickup sticks into the air, and they will come down in other ways," Jones said. "The iPhones have taken over the world. More than 80% of doctors use an iPhone or a smartphone. You can't wall off change. The health plans are changing fast. As a venture capitalist, that is exciting stuff."
Aetna CEO Mark Bertolini told the conference that his firm is evolving into a health technology company with a big insurance vehicle attached. Bertolini discussed Aetna's competitors' similar investments in electronic health record software that is transforming the nature of the health insurance industry. "UnitedHealth recently announced its Optum healthcare cloud which is meant to be a collaboration platform. It's not Epic, it's not Cerner, it's not McKesson [referring to some of the dominant electronic health record software companies]. It's got a lot of resources behind it; it's got a lot of cash flow, and I think it's worth watching."
Jones of Chrysalis also referred to insurance company investments in software that are changing the way patients are cared for. As an example, he cited Humana's platform called Vitality, an incentive system to encourage individuals to make good choices about eating, exercising and other health issues. While the problems remain, solutions are starting to emerge either through creative new business models, technological advances or creative patient engagement initiatives, he said.
Recovering Costs
According to Jones, Congress did not offer true health reform with the passage of the Patient Protection and Affordable Care Act, but instead offered health insurance reform that will address how consumers pay for health care. "Health insurance is a dysfunctional, shrinking market on the private side. Plans aren't changing voluntarily; they are changing because their old business model was crushed and destroyed. We are getting rid of the chokehold that insurance brokers have on health care. An 8% to 12% commission goes to Joe Box-of-Donuts," he said, referring to the fact that health insurance brokers get a commission that is built into the cost of the price of health insurance. The regional health insurance exchanges (HIEs) that have been established under the Affordable Care Act eliminate health insurance brokers -- and their commissions - and allow patients to buy insurance directly from a pool of health plans, Jones added. "The health exchanges will drive out that cost and will focus on brand value."
By eliminating the insurance brokers -- the middle men in the system -- patients will focus on the value of the insurance product and choose a tool that works for their situation out of a menu of options offered through a health insurance exchange, Jones said. As direct consumers of health insurance, he added, patients will be required to ascend a learning curve about their options.
According to John Keith, a principal at Deloitte, "No matter how exchanges evolve, when consumers start looking at their local networks and what they are getting for their dollar, there will be chaos for a few years. There will be a period of adjustment as people realize they are responsible for those costs, and that will drive change down the road."
Providers and suppliers will compete for business in this new paradigm, where cost and quality are expected to be in alignment, said Keith. "This is truly an opportunity for real change. ACOs (Accountable Care Organizations) aren't anything new," Keith added, referring to the outcomes-based payment system being piloted by Medicare as mandated in the Patient Protection and Affordable Care Act. "Bundled payment systems have been around since DRGs (Diagnosis Related Groups), and there have been lots of revolutions, like HMOs (Health Maintenance Organizations). They all resulted in very minimal change. Fee for service abhorred information, but economic duress is causing price pressure, and it opens the door to an industry focused on value, and demands collaborative tools. We're going from a feudal system to a Renaissance."
Response to Consumers
Consumers as patients are still at the nexus of change, either as they gravitate toward providers who are convenient and effective, or as they learn to manage the health dollars that are spent, if not directly out of pocket, then on their behalf either by an employer or a government program, conference participants suggested. "People will behave like they do in normal consumer markets," said Ashish Kaura, a partner at Booz & Company. "What are the cornerstones of the consumer markets? Three things: One is value in product design, which is standardization and driven by what most people need. Two is simplicity: It must be easy to navigate to get the information you need. You don't want to spend five hours on the phone. Three is trust: The biggest value for payers today is trust."
Permanente's Pearl also noted the influence of consumers on the direction of health care. Consumer demands will need to drive innovation, since the current uncertainty in the regulatory and financial environment has many investors waiting on the sidelines for a clear signal, he said. "Find a single business able to achieve success if R&D and finance are fighting each other."
According to David Kirchoff, president and CEO of Weight Watchers, products like Weight Watchers' online tracking system -- which engages patients in their ongoing care -- have succeeded because they work: Patients use them, they get results and tackling obesity bends the cost curve down in a host of related diseases, especially diabetes.
"The challenges of obesity are complicated to solve," he added. "People have difficult choices surrounded by a sea of temptations. What's at stake? The future of the health care system. There is a strong link between obesity and diabetes. If you have a BMI (Body Mass Index) over 30, you are 500% more likely to have diabetes." Today, 10% of Americans have diabetes, he says. "By 2050, it is expected to be one-third. This is not a vanity [issue]. This is a health condition that is a function of the choices we make in our daily lives."
Ultimately, providers and suppliers -- the pharmaceutical and medical device companies -- will be required to prove their value in the marketplace or face extinction, according to conference panelists. Payment systems continue to move at accelerated speed toward a value-based model with payment for quality and outcomes, and move away from a fee-based system that simply pays for individual services or products for which there is no proof of efficacy. Due to this proof-of-concept stringency, the pharmaceutical sector is financially riskier than it used to be, but there is still opportunity. That means bio-pharmaceutical investors are keeping their wallets buttoned until later in the clinical trial process, panelists said during a discussion about the risks of biopharma investment.
Luke Duster, a principal at Capital Royalty, a private equity firm providing royalty-based financing to health care companies, reported that "last year, there were $90 billion in royalties [paid to biopharma investors]. There are late stage investment opportunities, but smaller companies are starved for cash flow because there is less investment in early stage. We are still raising capital, but only raising one-third as much as [we did] at the peak. Only the strongest are surviving."
Duster said he sees more cooperation between the FDA and industry to move products through the pipeline. He identified drugs with companion diagnostics as a growth area. Companion diagnostics represent an opportunity in that market segment because the diagnostic test identifies genetic markers and so takes the guesswork out of whether the drug will be effective in a particular patient with an identifiable genetic mutation. This assures outcomes and, by extension, guarantees the value of the product to the payer. In companion diagnostics, a genetic test is developed to identify whether a patient has a particular marker that indicates a specific drug will work in that patient -- thus the name "companion diagnostic" -- because the diagnostic is tied directly to the efficacy of one particular pharmaceutical product.
As to the role the FDA is playing in creating a risk-averse pharmaceutical sector, Ronald W. Lennox, a partner with CHL Medical Partners, a venture capital firm that focuses on seed and early-stage companies in the medical sector, said it is the FDA's own aversion to clinical risk that is trickling down to investors. "FDA approvals ought to be a balance of risk and benefit. If one million people benefit from a drug, how many shouldn't? Are we willing to risk one adverse event? We are tilting toward no adverse events at all, with little regard to patients who will benefit. Partly it is because of the litigious U.S. population and partly because we have trials on a small population and we try to extrapolate from 2,000 clinical trial patients to millions of patients. That is hard to do."
Finding that Magic Mix of Providers
Panelists discussed the way that transformed payment models based on outcomes are half of a solution; it is incumbent on providers to transform what the payers are paying for. Moving from a fee for service system where a product or service is paid because it was delivered to an individual patient, to an outcomes-based value model -- where the payment is determined by overall performance delivered at a population level -- requires systems to generate the metrics to support reimbursement, panelists noted.
Emad Rizk, president of McKesson Health Solutions, talked about what that looks like from a provider's perspective. "Down here at the execution level, it is ugly. So let's just look at where delivery systems can go. Supposedly, you have managed populations, which means you have to have the data. You have to stratify; you have to put processes together to intervene, measure outcomes and then demonstrate those outcomes. Then you have to go show the payer that you did it.
Continued in article
"Canadian Malpractice Insurance Takes Profit Out
Of Coverage," by Jane Akre, Injury Board, July 28, 2009 ---
Click Here
http://www.injuryboard.com/national-news/canadian-malpractice-insurance-takes-profit-out-of-coverage.aspx?googleid=267890
The St. Petersburg Times takes a look at the cost of insurance in Canada for health care providers.
A neurosurgeon in Miami pays about $237,000 for medical malpractice insurance. The same professional in Toronto pays about $29,200, reports Susan Taylor Martin.
A Canadian orthopedic surgeon pays just over $10,000 for coverage that costs a Miami physician $140,000. An obstetrician in Canada pays $36,353 for insurance, while a Tampa Bay obstetrician pays $98,000 for medical malpractice insurance.
Why the difference?
In the U.S., private for-profit insurance companies extend medical malpractice coverage to doctors.
In Canada, physicians are covered through membership in a nonprofit. The Canadian Medical Protective Association offers substantially reduced fees for the same coverage, especially considering that their payout is limited by caps in Canada just as in some U.S. states.
In 1978, the Canadian Supreme Court limited pain and suffering awards to just over $300,000, circumventing the opportunity for a jury to decide on an award depending on the case before them.
Canadian Medical Protective Association
Here’s how it works.
Fees for membership vary depending on the region of the country in which the doctor works and their specialty. All neurosurgeons in Ontario will pay the same, for example. The number of claims they have faced for medical malpractice does not figure into their premium
"We don't adjust our fees based on individual experience; it's the experience of the group,'' says Dr. John Gray, the executive director, "That's what the mutual approach is all about, and it helps keep the fees down for everyone,” he tells the St. Petersburg Times.
If a doctor is sued, the group pays the claim and provides legal counsel.
In the U.S., the push has been on for limiting claims, no matter how egregious the medical malpractice. President Obama was booed in June when, before the American Medical Association, he said he would not limit a malpractice jury award.
"We got a crazy situation where Obama is talking about the cost of medicine but he said, 'I don't believe in caps,' " complains Dr. Dennis Agliano, past president of the Florida Medical Association. "If you don't have caps, the sky's the limit and there's no way to curtail those costs.''
But the importance of limiting jury awards may not play into the big picture on health care reform.
Malpractice lawsuits amount to less than one percent of both the Canadian and the U.S. healthcare system, meanwhile between 44,000 and 98,000 Americans die each year due to medical errors in hospitals alone, while 16 times as many suffer injuries without receiving any compensation, reports the group Americans for Insurance Reform.
Major Difference
In Canada, an injured patient is often required to pay for the initial investigation into his case. In the U.S. the contingency fee basis, usually in the range of 30 percent, allows the injured party to proceed without a financial downside.
In both the U.S. and Canada, the definition of medical negligence is that a duty of care was owed to the patient by the physician, there was a breach h of the standard of care and the patient suffered harm by the physician’s failure to meet that standard of care.
A bad outcome in itself is not the basis of a lawsuit.
The Canadian Medical Protective Association insures virtually all of the country’s 76,000 doctors, as opposed to the U.S. where private for-profit insurance companies cover physicians for medical malpractice.
In Canada, the median damaged paid in 2007 was $91,999 and judgments favored patients 25 times, doctors 70 times.
In the U.S., many physician groups are requiring patients to waive their rights to a jury trial, even though malpractice litigation accounts for just 0.6 percent of healthcare costs.
Public Citizen, the consumer group, charges that the facts don’t warrant the “politically charged hysteria surrounding medical malpractice litigation.”
For the third straight year, medical malpractice payments were at record lows finds the group in a study released this month. The decline, however, is likely due to fewer injured patients receiving compensation, not improved health safety.
2008 saw the lowest number of medical malpractice payments since the federal government’s National Practitioner Data Bank began compiling malpractice statistics. In 2008, payments were 30.7 percent lower than averages recorded in all previous years.
In the report titled, The 0.6 Percent Bogeyman, the nonprofit watchdog group states, “between three and seven Americans die from medical errors for every 1 who receives a payment for any type of malpractice claim.”
Public Citizen previously reported that about five percent of doctors are responsible for half of the medical malpractice in the U.S. that can result in permanent injury or death. #
Read more: http://www.injuryboard.com/national-news/canadian-malpractice-insurance-takes-profit-out-of-coverage.aspx?googleid=267890#ixzz0W0Z71JOP
Bob Jensen's threads on health care ---
http://www.trinity.edu/rjensen/Health.htm
March 31. 2012
Graphic: How Much People Pay for Health Care Around the World ---
http://visual.ly/how-much-people-pay-health-care-around-world
Page Readings on Affordable Health Care Act --- http://www.youtube.com/watch_popup?v=HcBaSP31Be8&vg=medium
"Looking for Solutions in a Rapidly Changing Health Care Environment,"
Knowledge@wharton, University of Pennsylvania, March 28, 2012 ---
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2963
While the U.S. health care system is not yet on life support, it remains a fragmented and unwieldy structure whose rising costs bear little relation to improvements in access or quality. This is despite the introduction of patient management programs, some restructuring of insurance models and efforts to adjust incentives for decision making all across the care continuum.
But during the keynote presentations and panel discussions at Wharton's 18th Annual Health Care Business Conference titled, "Innovation in a Changing Health Care Environment," the emphasis was on solutions. Participants analyzed some of the ways that individual companies are digging deep into the system to come up with approaches that rely on new technology, new business models and new marketing strategies.
Two keynote speeches served as thematic bookends to the day's discussions. The morning kickoff keynote by Glenn D. Steele Jr., president and CEO of Geisinger Health System, defined the scope of the problem in dollars and disease. Steele focused on the inverse relationship between cost and quality, citing several studies that found that more than 50% of health care spending in the U.S. is wasted or actually harmful. The conference ended with a keynote by Robert Pearl, president and CEO of The Permanente Medical Group, who stated that the survival of the U.S. depends on reining in health care costs. He challenged the audience to save the country from economic collapse by redesigning how health care is delivered and paid for.
Overall, conference presenters provided a ground-level view of what some of the problems, and solutions, look like in this transformative time.
Strategizing for Survival
The cost of health care is directly related to our larger national economic health, as noted by Pearl. "Our problems go back 40 years.... Costs have been rising 7% to 8% a year; health care is 18% of GDP this year, and it is set to double again, to 36% of GDP, by 2030.... That leaves no money for education, infrastructure, police and fire." The current players, he added, are strategizing for survival today because the trajectory is unsustainable, and change will come. "Currently, we are fragmented, piecemeal, paper-based and leaderless."
According to David Jones, Jr., chairman and managing director of Chrysalis Ventures, a private equity and venture capital firm, the days for tinkering around the edges are gone. "The provider side re-engineering is doomed to failure because of a fundamental governance problem. You heard in the keynote this morning that 40% to 50% of the money spent is useless or actually harmful to outcomes. All of the change initiatives are focused on solving it in an incremental way."
Jones described that as a "pants-on-fire problem.... I don't think there is a possibility in the world that a bunch of ungovernable non-profits with no motivation to change quickly will go after that problem. I think the solution ultimately -- like the Greek [economic bail-out] solution or the GM solution -- is that you must have restructuring in the traditional financial sense. Everyone talks about hospitals going bankrupt because of politics. That is nonsense. Bankruptcy is a restructuring, and the system is going to change dramatically."
This urgency, and a new economy driven by information technology, have created an environment in which change is happening no matter what laws are passed or what the courts uphold or overturn, conference participants stated.
"Good regulations, bad regulations: Change has thrown the pickup sticks into the air, and they will come down in other ways," Jones said. "The iPhones have taken over the world. More than 80% of doctors use an iPhone or a smartphone. You can't wall off change. The health plans are changing fast. As a venture capitalist, that is exciting stuff."
Aetna CEO Mark Bertolini told the conference that his firm is evolving into a health technology company with a big insurance vehicle attached. Bertolini discussed Aetna's competitors' similar investments in electronic health record software that is transforming the nature of the health insurance industry. "UnitedHealth recently announced its Optum healthcare cloud which is meant to be a collaboration platform. It's not Epic, it's not Cerner, it's not McKesson [referring to some of the dominant electronic health record software companies]. It's got a lot of resources behind it; it's got a lot of cash flow, and I think it's worth watching."
Jones of Chrysalis also referred to insurance company investments in software that are changing the way patients are cared for. As an example, he cited Humana's platform called Vitality, an incentive system to encourage individuals to make good choices about eating, exercising and other health issues. While the problems remain, solutions are starting to emerge either through creative new business models, technological advances or creative patient engagement initiatives, he said.
Recovering Costs
According to Jones, Congress did not offer true health reform with the passage of the Patient Protection and Affordable Care Act, but instead offered health insurance reform that will address how consumers pay for health care. "Health insurance is a dysfunctional, shrinking market on the private side. Plans aren't changing voluntarily; they are changing because their old business model was crushed and destroyed. We are getting rid of the chokehold that insurance brokers have on health care. An 8% to 12% commission goes to Joe Box-of-Donuts," he said, referring to the fact that health insurance brokers get a commission that is built into the cost of the price of health insurance. The regional health insurance exchanges (HIEs) that have been established under the Affordable Care Act eliminate health insurance brokers -- and their commissions - and allow patients to buy insurance directly from a pool of health plans, Jones added. "The health exchanges will drive out that cost and will focus on brand value."
By eliminating the insurance brokers -- the middle men in the system -- patients will focus on the value of the insurance product and choose a tool that works for their situation out of a menu of options offered through a health insurance exchange, Jones said. As direct consumers of health insurance, he added, patients will be required to ascend a learning curve about their options.
According to John Keith, a principal at Deloitte, "No matter how exchanges evolve, when consumers start looking at their local networks and what they are getting for their dollar, there will be chaos for a few years. There will be a period of adjustment as people realize they are responsible for those costs, and that will drive change down the road."
Providers and suppliers will compete for business in this new paradigm, where cost and quality are expected to be in alignment, said Keith. "This is truly an opportunity for real change. ACOs (Accountable Care Organizations) aren't anything new," Keith added, referring to the outcomes-based payment system being piloted by Medicare as mandated in the Patient Protection and Affordable Care Act. "Bundled payment systems have been around since DRGs (Diagnosis Related Groups), and there have been lots of revolutions, like HMOs (Health Maintenance Organizations). They all resulted in very minimal change. Fee for service abhorred information, but economic duress is causing price pressure, and it opens the door to an industry focused on value, and demands collaborative tools. We're going from a feudal system to a Renaissance."
Response to Consumers
Consumers as patients are still at the nexus of change, either as they gravitate toward providers who are convenient and effective, or as they learn to manage the health dollars that are spent, if not directly out of pocket, then on their behalf either by an employer or a government program, conference participants suggested. "People will behave like they do in normal consumer markets," said Ashish Kaura, a partner at Booz & Company. "What are the cornerstones of the consumer markets? Three things: One is value in product design, which is standardization and driven by what most people need. Two is simplicity: It must be easy to navigate to get the information you need. You don't want to spend five hours on the phone. Three is trust: The biggest value for payers today is trust."
Permanente's Pearl also noted the influence of consumers on the direction of health care. Consumer demands will need to drive innovation, since the current uncertainty in the regulatory and financial environment has many investors waiting on the sidelines for a clear signal, he said. "Find a single business able to achieve success if R&D and finance are fighting each other."
According to David Kirchoff, president and CEO of Weight Watchers, products like Weight Watchers' online tracking system -- which engages patients in their ongoing care -- have succeeded because they work: Patients use them, they get results and tackling obesity bends the cost curve down in a host of related diseases, especially diabetes.
"The challenges of obesity are complicated to solve," he added. "People have difficult choices surrounded by a sea of temptations. What's at stake? The future of the health care system. There is a strong link between obesity and diabetes. If you have a BMI (Body Mass Index) over 30, you are 500% more likely to have diabetes." Today, 10% of Americans have diabetes, he says. "By 2050, it is expected to be one-third. This is not a vanity [issue]. This is a health condition that is a function of the choices we make in our daily lives."
Ultimately, providers and suppliers -- the pharmaceutical and medical device companies -- will be required to prove their value in the marketplace or face extinction, according to conference panelists. Payment systems continue to move at accelerated speed toward a value-based model with payment for quality and outcomes, and move away from a fee-based system that simply pays for individual services or products for which there is no proof of efficacy. Due to this proof-of-concept stringency, the pharmaceutical sector is financially riskier than it used to be, but there is still opportunity. That means bio-pharmaceutical investors are keeping their wallets buttoned until later in the clinical trial process, panelists said during a discussion about the risks of biopharma investment.
Luke Duster, a principal at Capital Royalty, a private equity firm providing royalty-based financing to health care companies, reported that "last year, there were $90 billion in royalties [paid to biopharma investors]. There are late stage investment opportunities, but smaller companies are starved for cash flow because there is less investment in early stage. We are still raising capital, but only raising one-third as much as [we did] at the peak. Only the strongest are surviving."
Duster said he sees more cooperation between the FDA and industry to move products through the pipeline. He identified drugs with companion diagnostics as a growth area. Companion diagnostics represent an opportunity in that market segment because the diagnostic test identifies genetic markers and so takes the guesswork out of whether the drug will be effective in a particular patient with an identifiable genetic mutation. This assures outcomes and, by extension, guarantees the value of the product to the payer. In companion diagnostics, a genetic test is developed to identify whether a patient has a particular marker that indicates a specific drug will work in that patient -- thus the name "companion diagnostic" -- because the diagnostic is tied directly to the efficacy of one particular pharmaceutical product.
As to the role the FDA is playing in creating a risk-averse pharmaceutical sector, Ronald W. Lennox, a partner with CHL Medical Partners, a venture capital firm that focuses on seed and early-stage companies in the medical sector, said it is the FDA's own aversion to clinical risk that is trickling down to investors. "FDA approvals ought to be a balance of risk and benefit. If one million people benefit from a drug, how many shouldn't? Are we willing to risk one adverse event? We are tilting toward no adverse events at all, with little regard to patients who will benefit. Partly it is because of the litigious U.S. population and partly because we have trials on a small population and we try to extrapolate from 2,000 clinical trial patients to millions of patients. That is hard to do."
Finding that Magic Mix of Providers
Panelists discussed the way that transformed payment models based on outcomes are half of a solution; it is incumbent on providers to transform what the payers are paying for. Moving from a fee for service system where a product or service is paid because it was delivered to an individual patient, to an outcomes-based value model -- where the payment is determined by overall performance delivered at a population level -- requires systems to generate the metrics to support reimbursement, panelists noted.
Emad Rizk, president of McKesson Health Solutions, talked about what that looks like from a provider's perspective. "Down here at the execution level, it is ugly. So let's just look at where delivery systems can go. Supposedly, you have managed populations, which means you have to have the data. You have to stratify; you have to put processes together to intervene, measure outcomes and then demonstrate those outcomes. Then you have to go show the payer that you did it.
Continued in article
Bob Jensen's threads on health care ---
http://www.trinity.edu/rjensen/Health.htm
"5% of patients account for half of health care spending," by Kelly
Kennedy, USA Today, January 20, 2012 ---
http://www.usatoday.com/news/washington/story/2012-01-11/health-care-costs-11/52505562/1
"How the Chevy Volt Is Like ObamaCare," by Merrill Mathews, Forbes,
March 9, 2012 ---
http://www.forbes.com/sites/merrillmatthews/2012/03/09/how-the-chevy-volt-is-like-obamacare/
March is an important month in the ongoing saga of President Obama’s abject policy failures. First, Chevrolet announced that it would temporarily cease production of the president’s much-touted car for the green economy, the Chevy Volt. Second, the U.S. Supreme Court will hear the state-led challenge to the president’s health care legislation. And while “ObamaCar” and ObamaCare may seem like unrelated topics, in this case they have at least three elements in common.
Both were sold as a key to creating jobs and economic growth. Only last year the president predicted that there would be 1 million electric cars on U.S. roads by 2015—just three years away. And New York Senator Chuck Schumer doubled down on that economic vision: “We need a business model based on cars of the future, and we already know what that future is: the plug-in hybrid electric car.”
Similarly, Obama defended his takeover of the health care system by proclaiming, “We must lay a new foundation for future growth and prosperity, and a key pillar of a new foundation is health insurance reform.” Speaker Nancy Pelosi saw health reform as a jobs factory: “In its life [health care reform] will create 4 million jobs, 400,000 jobs almost immediately.”
Well, that economic wave of the future can wave goodbye. Green energy isn’t creating jobs and boosting the economy. Indeed, many green energy companies are cutting back, laying off or closing down—even with billions of dollars in taxpayer subsidies.
Meanwhile, oil and gas production—the left’s biggest nightmare—is resurgent, and the U.S. is once again becoming a global leader in energy production. Several state economies are booming because of the energy explosion, with low unemployment and high wages—everything the president promised from the green economy, but has failed to deliver.
However, left unrepealed the health care law probably will create jobs—government jobs! Thousands of new government employees will be added to the federal payroll to manage the millions of people put in the government-run Medicaid program, and IRS agents to ensure Americans are buying ObamaCare, or slap them with a penalty if they don’t.
The government has heavily subsidized both. Neither Obama’s green energy or universal health care visions would work without pumping in billions of taxpayer dollars—and they probably won’t work even with the subsidies.
The administration has created an $80 billion clean-energy investment program to subsidize green companies—$5 billion just for electric cars—many of which, as the Washington Post recently reported, also happen to be big Obama donors. And did I mention bonuses? ABC News reports that Beacon Power Corp. of Massachusetts “paid cash bonuses of $259,285 to three executives in part due to progress made on the $43 million energy loan … Last October, Beacon Power filed for Chapter 11 bankruptcy.”
Hmmm, so our taxes paid big bonuses based in part on executives’ success in siphoning off our taxes from the Obama administration.
But green energy subsidies are chump change when it comes to the federal dollars Obama will pour down the health care drain. Official figures calculated a cost of about $1 trillion over 10 years, both from new taxes and robbing from Medicare. But if you can find a federal official who tells the truth, such as Medicare Chief Actuary Richard Foster, you’ll discover that Democrats way underestimated the costs.
Continued in article
The Amish are exempt from the entire health care reform law.
Catholics are not exempt.
"Amish, Ok. Catholics, No," by Maryann Walsh, Rhode Island Catholic
Conference, March 9, 2012 ---
http://www.faithfulcitizenri.org/2012/03/amish-ok-catholics-no/
The Amish are exempt from the entire health care reform law. So are members of Medi-Share, a program of Christian Care Ministry. Yet, when the Catholic Church asks for a religious exemption from just one regulation issued under the law – the mandate that all employers, including religious institutions, must pay for sterilization and contraceptives, including abortion-inducing drugs – the Administration balks.
The government respects the First Amendment that guarantees the right to freely exercise one’s religious beliefs, but only to a point. In the health care law it picks and chooses which beliefs it respects. The Amish do not believe in insurance, and the government understands. Christian Care Ministry believes people should form a religious community and pay medical bills for one another, and the government says okay. Yet when the Catholic Church opposes being forced to pay for services that violate its beliefs, the Administration says “tough.”
What is so special about this mandate that it cannot be touched? It was added after Congress passed the health care law and offers no exemption for religious charitable or educational institutions. It will not accept Catholic charities and schools as “religious enough” unless they hire only Catholics, serve only Catholics, have the narrow tax exempt status granted to houses of worship, and teach religion as their purpose. Amazingly, this mandate has more force than the overall health care law. In fact recent regulations allow states to decide which “essential health benefits” to require in health plans, such as hospitalization, prescription drugs and pediatric services. At the same time, all insurance plans must include the objectionable services mentioned above. Here federal law trumps state law and threatens to fine into submission institutions that dare oppose it. The going rate is at least $100 per day per employee.
What has the government got against the Catholic Church? Has it forgotten the contributions the church has made to the poor and needy for centuries?
Catholic elementary and secondary schools provide the only real alternative to public schools in many parts of the nation. Catholic colleges offer outstanding education, be it at the university or the community college. The contribution has a long history, back to 1789 when Georgetown University was founded by the Jesuits. Yet under the health care law, if these schools and colleges wish to remain faithful to their religious principles the government will fine them into submission. There’s a thank-you note.
Many Catholic hospitals were founded by religious orders of women, and today one out of six persons seeking hospital care in the United States goes to a Catholic hospital. Until now, religious background of the patient has not been an issue. “Where does it hurt?” is the first question, not “Where is your baptismal certificate?” This approach threatens to deny hospitals any real protection as “religious employers” under the new rule. Yet their Catholicity means many of these hospitals have an added benefit. At Providence Hospital in Washington, DC, for example, patients not only get medical care, they can get clothing too if they need it. It comes through the Ladies of Charity, an auxiliary of the Daughters of Charity who founded the hospital in 1861. Catholic social service agencies, including adoption and foster care agencies, parish food banks, and soup kitchens, meet human concerns. Services depend on need, not creed. Church sponsorship means the services have a little extra, be they volunteers from parishes, financial donations through diocesan appeals, or the dedication that comes from working for God as well as paycheck.
Continued in article
"Will Employers Undermine Health Care Reform by Dumping Sick Employees?"
by Amy Monahan and Daniel Schwarcz, Virginia Law Review 125 (2011) ---
http://www.virginialawreview.org/articles.php?article=321
Thank you Paul Caron for the heads up.
This Article argues that federal health care reform may induce employers to redesign their health plans to encourage high-risk employees to opt out of employer-provided coverage and instead acquire coverage on the individual market. It shows that such a strategy can reduce employer health care expenditures without substantially harming either high-risk or low-risk employees. Although largely overlooked in public policy debates, employer dumping of high-risk employees may threaten the sustainability of health care reform. In particular, it potentially exposes individual insurance markets and insurance exchanges to adverse selection caused by the entrance of a disproportionately high-risk segment of the population. This risk, in turn, threatens to indirectly increase the cost to the federal government of subsidizing coverage for qualified individuals and to exempt more individuals from complying with the so-called individual mandate. The Article concludes by offering several potential solutions to the threat of employer dumping of high-risk employees.
Jensen Comment
Since it's illegal to dump sick employees without justifiable reasons, the
impact of Health Care Reform may be to both increase the number of law suits and
increase the number of hurdles that employees must surmount to obtain and keep
jobs. For example, factory employees and store clerks must be able to stand
without a break for x minutes, diabetic and epileptic bus and taxi drivers may
be dropped at the first episode of unconsciousness, drug testing may become more
common, Mental health patients may be particularly vulnerable to dismissal.
Then there is an even bigger risk that employers will drop health coverage of all employees
"No, You Can't Keep Your Health Insurance: A new study by McKinsey
suggests that as many as 78 million Americans could lose employer health
coverage," by Grace-Marie Turner, The Wall Street Journal, June 7,
2011 ---
http://online.wsj.com/article/SB10001424052702304432304576371252181401600.html?mod=djemEditorialPage_
"'The Flight to the Exchanges': The Wall Street Journal
writes that ObamaCare may cause small businesses to drop insurance coverage,"
The Wall Street Journal, July 25, 2011 ---
http://online.wsj.com/article/SB10001424053111903554904576462010405702984.html#mod=djemEditorialPage_t
McKinsey & Co. made itself the White House's public enemy number—well, we've lost count—after releasing a survey last month showing that nearly one in three businesses may drop insurance coverage as a result of the new health-care law. The real offense of the management consultants seems to be accurately portraying reality.
Consider a suggestive new survey to be released today by the National Federation of Independent Business, the trade group for small businesses. William Dennis, a senior research fellow who has conducted the study for 35 years, reports that 57% of a cross-section of companies that employ 50 or fewer workers and offer coverage may stop doing so. Look out below.
About two of five small companies sponsor insurance—a share that, according to NFIB, has on net held mostly stable or declined very slightly since the passage of the Affordable Care Act. Yet 12% of these companies—one of eight—have either had their plans cancelled or have been told that they will be in the future. This churn in the private small-group market is a direct result of ObamaCare's new rules and mandates—but a far larger destabilization could be in the offing, what Mr. Dennis calls "the flight to the exchanges."
Those would be the dispensaries of heavily subsidized insurance, and the NFIB finds that 26% of small businesses today sponsoring insurance are "very likely" to drop it should their employees start to flood government coverage. Another 31% of the 750 firms surveyed report they are "somewhat likely."
Small-business workers are eligible for exchange subsidies even if they can get job-based coverage. The incentive is for them to take it—given that the new government payments will be so generous, small-group coverage is generally costly and the insurance tax break for employers usually doesn't go very far when the employer is small.
If enough workers split, in other words, private coverage will soon erode and cease to exist as an option. Meanwhile, start-ups are constantly entering and exiting the market, and the ones with fewer benefits and liabilities will gain a competitive advantage. Businesses with fewer than 50 employees also aren't subject to any "play or pay" penalties. As Mr. Dennis put it in an interview, "Once you pull the string, everything may unravel."
ObamaCare's partisans claim none of this will happen because of the social norm theories of behavioral economics. Businesses offer insurance to attract workers, the thinking goes, and it's the right thing to do. But that assumes utter irrationality—that workers won't take a cheaper deal when they see it and businesses won't try to compete against their rivals.
Continued in article
Bob Jensen's threads on health care are at
http://www.trinity.edu/rjensen/Health.htm
"Guidance provided on electronic health record incentives," by Ken
Tysiac, Journal of Accountancy, January 6, 2012 ---
http://journalofaccountancy.com/Web/20124972.htm
"Health Reform Built to Fail How Medicare rigs competitive bidding and
hurts patients," The Wall Street Journal, February 6, 2012 ---
http://online.wsj.com/article/SB10001424052970204740904577193224024421442.html#mod=djemEditorialPage_t
Americans may not be familiar with the medical innovation called negative pressure wound therapy, though it has helped hundreds of thousands of patients with complex or chronic injuries like burns or diabetic ulcer complications that could never heal on their own. Now President Obama's Medicare team is about to severely damage this field, and many others too—all in the name of reforming how the entitlement pays for care.
Last week a Medicare competitive-bidding program went live in 91 metro regions—nearly all the U.S. population—for what's known as durable medical equipment. That bureaucratic jargon covers advanced devices like wound therapy, respiratory assist equipment for people who can't breathe, and feeding tube systems for people who can't eat. It also lumps in things like walkers, scooters and "support surfaces." Those would be beds.
The good intentions of this saga date to 2003, when Congress in a fit of sanity ended Medicare's price controls in favor of auctions. Both political parties soon rebelled when oxygen tank suppliers, scooter stores and such in their home districts started whining about being asked to compete on market prices, rather than plod along with the guaranteed revenue of the fee schedule. But the much deeper problem is that Medicare cooked up an auction process that defies all economic sense.
Normally when the government wants to buy something, it asks companies how much they can provide and to name their price. Winners are selected from the lowest bid up until the government has what it needs at the lowest possible cost, and thereby finds competitive equilibrium prices.
Under Medicare's highly unusual version of competitive bidding, it will pay the winners the median price of all the winning bids, rather than using the clearing price. Bids are also for some reason nonbinding.
This matters because it creates incentives for unscrupulous third-party companies to make low-ball "suicide bids." If the median price shakes out high enough, they automatically win the contract, buy the medical products from manufacturers and turn a profit. If it isn't, they can dump the contract since bidding involves no commitment.
Medicare will then offer the contract at the median price to the honest companies that have made bids aligned with their true costs, and they can take it or leave it. Medicare benefits because the median prices will be biased below the clearing price—in other words, the "auction" is merely another way of generating arbitrary below-cost price controls.
The Bush Administration road-tested this scheme in 2008 with pilot projects in nine cities. For illustration let's return to negative pressure wound therapy, a technique that involves a sealed dressing attached to a vacuum pump to prevent infection and improve recovery. Patients can recuperate at home but require 24/7 clinical and safety support, typically provided by the device's maker. Advanced wound treatment is far more complex than, say, a cane.
In 2008, only 17 of the 88 winning bidders bothered to supply wound therapy devices. Only 10 of them had any actual expertise in how the technology is used or in patient support. The supply crisis was so deep that for several weeks no Medicare patients in two of the cities could receive this treatment at home, and the government threw out the entire program and said it would retool competitive bidding.
Yet by one estimate, a 2011 reprise had roughly one-fifth of the bids going to companies that were on credit hold with device manufacturers—i.e., they couldn't buy if they wanted to. Medicare, meanwhile, boasts that it will reduce prices for durable medical equipment by 35% and "save" taxpayers $28 billion. All it is really doing is rewarding the fly-by-night operators while harming innovative companies and ultimately patients.
The current nationwide rollout has no substantive revisions from the failed pilots, despite the objections of 244 economists and auction scientists led by the University of Maryland's Peter Cramton. The consensus of basically everyone who knows anything about auctions is that the no-risk bids and median pricing are idiotic and designed for failure.
At a December meeting, a coalition of device makers and professional clinical groups even accepted these flaws but begged Medicare deputy administrator Jonathan Blum merely to accredit wound therapy bidders. He refused to apply any such basic quality control standards. The Administration does not care.
The larger tragedy is that market methods like auctions are the only way to rationalize the entitlement state. They're at the core of the reform ambitions of Paul Ryan and Ron Wyden—and they're already tough enough to achieve given the resistance of the providers that want more of Medicare's money. This fiasco turns on 1.4% of Medicare's annual spending, yet it risks discrediting competitive bidding for good.
Bob Jensen's threads on the health care mess ---
http://www.trinity.edu/rjensen/Health.htm
"Why Obamacare won't work:
Reason #4,566," Rick Moran, The American Thinker, January 13,
2012 ---
http://www.americanthinker.com/blog/2012/01/why_obamacare_wont_work_reason_4566.html
The crisis in health care is manageable - without the radical, extreme measures passed in the Affordable Care Act.
USA Today reports that just 5% of patients account for 50% of health care spending. And just 1% account for 22% of the spending.
That's about $90,000 per person, according to the Agency for Healthcare Research and Quality. U.S. residents spent $1.26 trillion that year on health care.
Five percent accounted for 50% of health care costs, about $36,000 each, the report said.
The report's findings can be used to predict which consumers are most likely to drive up health care costs and determine the best ways to save money, said Steven Cohen, the report's lead author.
While the report showed how a tiny segment of the population can drive health care spending, the findings included good news. In 1996, the top 1% of the population accounted for 28% of health care spending.
"The actual concentration has dropped," Cohen said. "That's a big change."
About one in five health care consumers remained in the top 1% of spenders for at least two consecutive years, the report showed. They tended to be white, non-Hispanic women in poor health; the elderly; and users of publicly funded health care.
Other studies have shown that most of this spending is on "end of life" care - that is, patients who have very little chance of recovery but who have numerous hospital stays and even surgeries that don't extend life, but deal with unrelated symptoms to their primary disease. Someone dying of heart disease getting a kidney transplant, for instance.
The question is how to manage our eventual demise in a compassionate, but reasonable manner? One thing for sure - government doesn't have the answer to that. Only families and their physicians should be involved in those decision.
Of course, insusrance companies will get involved and are likely to balk at paying for more and more treatments at this stage of life. But we can sue insurance companies if they refuse to pay for a necessary procedure. We can't sue the government.
In fact, the decisions of the government when it comes to Medicare spending will be above and beyond any legal review. Mona Charen:
All decisions about controlling Medicare costs will be decided by the Independent Payment Advisory Board (IPAB).
IPAB is a new thing in American government. Unlike most other boards and commissions, the panel's 15 members (appointed by the president and approved by the Senate) need not be bipartisan. Also unlike other boards, commissions, and federal agencies, the IPAB's decisions are virtually unreviewable. IPAB doesn't have to adhere to the notice and comment rules of federal agencies, which permit citizens to respond to proposed rule-makings. IPAB dictates automatically become law unless Congress itself intervenes. Ah, but they've thought of that and made it virtually impossible. The law prescribes that Congress has a limited period of time in which it can modify IPAB rulings and then it must do so by a three-fifths majority. Even ratifying treaties and proposing amendments to the Constitution require only two-thirds majorities. As for the courts, forget it. The judiciary is forbidden to review IPAB decisions.
The really bizarre part, reminiscent of the "I wouldn't do that, Dave" scene in 2001: A Space Odyssey, is that Congress can only repeal IPAB itself under strict conditions. Clint Bolick of the Goldwater Institute explains:
"Under the statute, any bill to repeal IPAB must be introduced within the one-month period between January 1 and February 1, 2017. If introduced, it must be enacted by a three-fifths super-majority no later than August 15, 2017. If passed, the IPAB repeal will not become effective until 2020 - leaving an out-of-control agency in operation for three years after Congress votes to abolish it."
December 31, 2011
Medicaid is America’s single biggest health
programme. This year roughly one in five Americans will be covered by Medicaid
for a month or more. It gobbles more federal and local money than any state
programme, other than education. Costs will rise even more when Barack Obama’s
health-care reform expands the programme by easing eligibility rules in 2014.
Congress’s “supercommittee” is already considering cuts. However, there are more
immediate pressures behind the present drive for change.
"Health Care: A new prescription for the poor: America is
developing a two-tier health system, one for those with private insurance, the
other for the less well-off," The Economist, October 8-14, 2011 ---
http://www.economist.com/node/21531491
“IT’S time for Dancing with the Stars!”, a woman announces enthusiastically. At this New York health centre, wedged between housing projects to the east and Chinatown to the west, “dancing with the stars” means dancing with a physical therapist. An old man stands up with a nurse and begins a determined samba.
Comprehensive Care Management (CCM), which runs this centre, tries to keep old people active. To do so, explains Joseph Healy, the chief operating officer, is in the company’s best interest. The government pays CCM a capped rate for the care of its members. If someone gets sick, his health costs rise and the company’s margin shrinks. Mr Healy argues that the system is the best way to provide good care at a low cost. Increasingly others seem to agree.
Medicaid, America’s health programme for the poor, is in the process of being transformed. Over the next three years, New York will move its entire Medicaid population into “managed care”, paying companies a set rate to tend to the poor, rather than paying a fee for each service. New York is not alone. States from California to Mississippi are expanding managed care. It is the culmination of a steady shift in the way most poor Americans receive their health-care treatment.
Medicaid is America’s single biggest health programme. This year roughly one in five Americans will be covered by Medicaid for a month or more. It gobbles more federal and local money than any state programme, other than education. Costs will rise even more when Barack Obama’s health-care reform expands the programme by easing eligibility rules in 2014. Congress’s “supercommittee” is already considering cuts. However, there are more immediate pressures behind the present drive for change.
Enrolment in Medicaid jumped during the downturn, from 42.7m in December 2007 to 50.3m in June 2010. Mr Obama’s stimulus bill helped to pay for some of this, but that money has dried up. Faced with gaping deficits, some desperate governors slashed payments to hospitals and doctors, or refused to pay for trips to the dentist or oculist. But much the most important result has been structural: the expansion of managed care.
States have dabbled in managed care for decades. The trend accelerated in the 1990s, with the share of Medicaid patients under this form of care reaching 72% by 2009. Now, however, there is a strong push for the remainder. States that did not have managed care, such as Louisiana, are introducing it. Other states are extending it to people previously deemed off limits: California and New York, for example, are moving the elderly and disabled into that system of care. Texas is targeting more than 400,000 Medicaid beneficiaries in the Rio Grande Valley. Local politicians had resisted the move, nervous that care might deteriorate. But the yawning deficit meant that they were overruled.
The result is a country with two distinct tiers of health care. Most Americans with private insurance are still horrified by thoughts of health-management organisations and prefer to pay fees for each medical service. For the poor, managed care is becoming the norm.
Advocates of managed care have high expectations. First, they hope that it will make costs more predictable. Second, they believe that the change will improve patients’ health. In managed care, a patient has a network of doctors and specialists. If the programme works properly, doctors can monitor all aspects of care, in contrast to the fragmented fee-for-service system. The contracts that states have with firms can set standards for quality. Texas, for instance, will cut 5% from a company’s payment if it does not meet what is required.
The next step is to integrate care for those eligible for both Medicaid and Medicare, the federal programme for the old. These “duals” account for almost 40% of Medicaid’s costs and just 15% of its population. “If managed care can really deliver better care than fee-for-service”, says Diane Rowland, chair of the commission that advises Congress on Medicaid, “this is the population that could prove it.”
But some, such as Norma Vescovo, are sceptical. As the head of the non-profit Independent Living Centre of Southern California (ILCSC), Ms Vescovo serves Medicaid patients with severe health problems. Over the years she has often sued California on policies that she thinks will hurt her vulnerable clients. On October 3rd her case moved to the Supreme Court.
The outcome of Douglas v Independent Living Centre will have profound implications for the future of Medicaid. Ms Vescovo’s suit concerns cuts to hospitals and doctors. But the case will also guide the course of managed care. If ILCSC and its co-plaintiffs win, private groups will continue to be able to challenge states on policies they think violate federal Medicaid law. Ms Vescovo, who argues that California’s payment cuts would eviscerate her clients’ access to services, worries that under managed care the disabled might not be able to see the specialists they need.
The question is how to supervise the experiments with managed care that are being carried out in various states. To date, Medicaid beneficiaries have been able to challenge the states in court. However, if the Supreme Court rules against ILCSC, that avenue will be closed. The Centres for Medicare and Medicaid Services (CMS) technically can intervene if states do not provide proper access to care. In reality, CMS has few tools to do so.
Continued in article
Jensen Comment
Actually various nations like Germany have a two-tier health system where those
who can afford it supplement the national health care program with private
insurance.
February 8, 2010 message from a friend in Germany
Hello Bob and Erika,
as it is Super Bowl Sunday I am sitting here reminiscing about my time in the US, and, of course, thinking about the people that I met. So I’m sending you an email as I am waiting for the Super Bowl to come on in about an hour. Once again they will show the big game on German TV. I have to take the rest of my vacation time from last year until the end of March of this year, so I decided to take tomorrow off to get rid of some of the vacation time (I have done this almost every year since I came back from the US, and two years ago I was even so lucky to be in the US for the Patriots-Giants Super Bowl, the greatest Super Bowl I have seen). So I am still quite busy at work, and still enjoy what I do very much. Since I am in an energy-related field, I am so to speak ‘part of’ this huge ‘push’ (for lack of a better word) that is going on towards renewable energy right now. Even though superconducting power cables are not a renewable energy source but rather one form of transmitting energy , there is a lot of interest in the technology right now. Taking a day off tomorrow turned out to be a good choice, as all public transportation workers in the city of . . . will be on strike, so I would have had to take the car to get to work.
I hope you are doing well in the mountains of New Hampshire, which I assume didn’t get hammered by the snowstorm the last few days, but are covered in snow anyway. I am reading Bob’s emails with great interest, especially regarding the banking situation and the health insurance situation. These are also two significant issues over here (you could actually argue that the strike tomorrow has a little to do with the bank bailout, see below….).
The new German government is trying to reform our health care system. Medical care in Germany is probably among the best in the world, and costs are quite high (so I guess it’s quite similar to the US in these manners…). We have this system of public option insurance, which covers ~ 80% of the population, and private insurance, which covers almost everyone else (except for the few percent that fall through the cracks). In any case, the underlying idea of the system is not so bad, but the administration is so complex that a) only the Germans could come up with it and b) only the Germans can run it without going nuts. What is interesting is that Germany is one of only a few countries in Europe that has this private insurance option, most have only the public option (or so I read in an article recently, I am not the expert on health insurance). The public option insurance had to curtail what they reimburse quite a bit in recent years to cut costs, so more and more people try to get into private insurance. This, however, is not so easy: You have to earn a certain amount of money, and the insurance companies can deny coverage or exclude certain pre-existing conditions. (I have pre-existing conditions, so for me private insurance would be almost useless, as they would exclude these conditions, or rack up my premiums, or both). Plus, my wife (while she is not working, when she is working she will be covered herself again, and have to pay the premium (percentage of income))) and kid are covered with no additional premium in the public option, so it is always a safe bet, despite the fact that it may not pay for all the treatments the private insurance pays for (they generally pay for everything that is medically necessary though, even quite complex and costly procedures). So in any case, if you are interested I can tell you a bit more about health insurance in Germany. (There is actually another similarity between Germany and the US: With Germany being the biggest economy in Europe, medication costs a lot more here than in neighboring countries (or so I’ve read), which to me seems similar to the US/Canada medication cost issue).
As I said before, there will be a strike here in . . . tomorrow as the greedy public works employees (part of which are the transportation workers) show little solidarity to all the poor bankers bailed out by government funds. Since German governments (state and federal) had to fund the solidarity fund for starving bankers to keep them from bankruptcy and local governments have lower tax receipts due to the economic crisis, there is very little money for pay raises for public works employees, which, of course, should be happy to have a job and be able to collect a paycheck. (But thanks to the banks and the great work the bankers do, they all have jobs (except for the ones that got laid off, of course, but hey, if we laid off some bankers or let their banks go belly up, more people doing real work would be sure to get laid off too, because it’s a trickle-down economy, as we all know)). Collecting a paycheck is obviously something the greedy workers couldn’t do if it wasn’t for banks having money (and handing it out via ATMs, and central banks printing as much of it as is necessary, or maybe even more), which goes to show that there is a true lack of solidarity from the general public towards the poor starving bankers bailed out by government funds.
So the poor bankers will have a hard time driving their BMWs and Mercedes to work tomorrow, as the roads will be clogged up by the cheap and smelly cars of people that would otherwise take public transportation to work (I assume that everyone that can take the day off will do so, just like I do. People were actually advised to take the day off if they can). Maybe I should check the newspaper again to make sure there isn’t an impromptu bank holiday tomorrow, after all, when bankers do so much good for us year-round they shouldn’t have to suffer through such a rough commute to work because of some greedy workers going on strike.
In any case, I would normally ride my bike to work if it wasn’t for this rather rough winter, which for me is the latest piece of evidence that global warming is maybe not all it’s cracked up to be. It’s pretty reasonable to assume that human activity has an influence on climate, obviously, but when almost every seasonal forecast is dead wrong, it’s hard to se how the source can be believed to be correct in forecasts over many decades. In any case, I hope to be able to live to see, and wouldn’t be surprised if indeed it gets warmer, but I wouldn’t be shocked if it gets colder or stays the same either). Nonetheless, energy efficiency and renewable energy development is a reasonable thing to shoot for anyway, whether there is global warming or not…
http://network.nationalpost.com/np/blogs/fpcomment/archive/2010/01/17/lawrence-solomon-bbc-drops-top-ipcc-source-for-climate-change-data.aspxSo the Hadley center in Britain predicted a winter with mild temperatures, but this may end up being the coldest winter in central-northern Europe in 30 years. We’ve had snow on the ground since mid-December, and the 15 day forecast right now has not a single day with a daytime high above freezing… (nonetheless, every now and then we have a day that is slightly above freezing, which usually leads to some melting of the snow and ice on the ground, and subsequently even more treacherous road conditions). The local governments were woefully unprepared for this winter, which is certainly not surprising when you are being told to expect a milder than normal winter. The road crews didn’t clear the roads properly in mid-December (probably assuming, like everyone else, including me, that this was going to melt rather quickly), and so we’ve had a mess on the ground ever since. I haven’t ridden my bike in 8 weeks now.
I am still traveling to Norway quite a bit, and I thoroughly enjoy these trips. I also travel to the US, but only maybe once or twice a year; I was in Tucson last June. I really enjoy these trips also, I am quite lucky that I get to go on business trips to the US as I really enjoy spending time there. Business trips to places you’d like to visit anyway are not such a bad thing. (Of course, at work I am trying to not let on that I enjoy business trips, but I think they have me figured out anyway…. Luckily my wife puts up with it too). Whenever I travel to the US, I wonder how my life would be had I stayed there six years ago. In any case, now I am a happily married man with a house and a kid, which you can see in the attached pictures.
Second Message on February 15, 2010 from my friend in Germany
Hi Bob,
the longer I am living in Germany again the stranger Germans seem to me. In any case, to understand the German attitude to health insurance I think it is important to bear in mind Bismarck's social legislation ( http://en.wikipedia.org/wiki/Otto_von_Bismarck#Bismarck.27s_social_legislation )
and the German mind in general. Germans are a rather risk-averse bunch that believes that things are likely to get worse rather than better.I have recently come across a few articles on health insurance in Germany that essentially say that the private insurance is facing problems, or rather private insurance is jacking up the rates for two reasons: Private insurers pay more for the same services than the public insurance option (except for their basic tariffs) does: there is a so-called multiplier which says what you can charge for a given procedure when charged to private insurance. I have seen the factor of 2.3 used, but the way doctors can charge for their services in Germany is rather difficult to grasp for me so this factor of 2.3 may or may not be the multiple of what a public option insured person is charged. The higher pay for the same services is one of the reasons privately insured people have shorter waiting times in doctor's offices.
The second reason for higher rates seems to be that privately insured patients do not care how much a procedure costs, as soon as they are above the co-pay limit (often there is a co-pay limit of a few hundred euros or so a year, above that there is no co-payment anymore for privately insured people). (There is an upper limit on how much a doctor can spend on average for publicly insured people, but I am not sure how much of a deterrent this is for a doctor to prescribe what is necessary).
In any case, recently it has been argued that the medical doctors are now charging private insurance patients more to make up for what they do not get from the publicly insured people.
So the issue of public health insurance in Germany remains an interesting one, and, as everywhere else, rates are likely to rise.....
Regards,
XXXXX
Health Insurance in Germany ---
http://www.toytowngermany.com/wiki/Health_insurance
Note that pre-existing conditions drive up the private insurance rates for
individuals.
Private insurance often leads to preferential treatment from physicians and
hospitals.
My friend also tells me that having private insurance is somewhat of a status
symbol in Germany.
"Research Roundup: Improving Intelligence Forecasts, Vertically Integrated
Health Care, and 'Worrisome' Health Care Costs," Knowledge@wharton,
December 20, 2011 ---
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2917
How can intelligence agencies improve accountability and forecasting accuracy? Can hospitals become more efficient through vertical integration with home health agencies and nursing homes? Do taxpayers fully understand how the expansion of health care will be financed? Wharton professors Philip Tetlock and Barbara Mellers; Guy David and Evan Rawley; and Mark Pauly, respectively, examine these issues -- and what they mean for business -- in recent research articles.
Helping Intelligence Agencies -- and Companies -- Avoid the Blame Game
When business leaders fail to make accurate forecasts, profitability is at risk. When intelligence agencies miss the mark on their predictions, however, the results can be far worse. In a new analysis of behavior in the intelligence community, with implications for business managers, Wharton management professor Philip E. Tetlock and Wharton marketing professor Barbara A. Mellers present a framework to improve accountability and forecasting accuracy, particularly in a politically polarized climate.
In their article, "Intelligent Management of Intelligence Agencies: Beyond Accountability Ping-Pong," published in the September 2011 edition of American Psychologist, the authors note that forecasts by intelligence organizations frequently are open to harsh criticism for either underreporting potential danger or overreacting to threats that never materialize. A clear recent example of underreporting would be the September 11, 2011, terrorist attacks on the United States, Tetlock says. At the other extreme, he points to reports -- which later proved to be unfounded -- that Iraq had developed weapons of mass destruction.
"The intelligence community is often whipsawed between these conflicting criticisms," says Tetlock. "The question is: Is it possible in this kind of political environment to learn anything beyond avoiding the last mistake?" The authors propose three steps to end the "blame game" in intelligence predictions and improve accountability and intelligence forecasting.
First, the authors argue that intelligence agencies and constituents in government and throughout society need to come together and agree to put an end to bitter, often ideologically driven, assignment of blame. Tetlock suggests that "thoughtful moderates" with a long-term view of policy will need to drive this part of the process, especially during periods of deep division.
Next, intelligence agencies need to step up and agree to have their forecasting assessed on clear metrics. Tetlock says that meaningful forecasts could result from reports that put a hard number on predictions. For example, analysts could be required to put specific percentage odds on the likelihood that a coup, or uprising in a given country, would occur in a certain period of time. Agencies would amass large databases of predictions that could, over time, be reviewed to assess which were accurate and why.
Finally, in the authors' view, intelligence groups and their overseers should acknowledge that ideology plays a part in forecasting. "If you want ... the left and right to hold back their fire on unfair criticism, the best way to do that is to reassure people on the left and the right that their points of view are at least being used in the prediction process," Tetlock notes.
Continued in article
The Wall Street Journal, in an investigational piece
(December 20, 2010), reported that five spine surgeons at Norton Hospital in
Louisville, Kentucky, who performed the third-most spinal fusions of Medicare
patients in the country, had received more than $7 million in “royalties” from
Medtronic, the nation’s biggest manufacturer of spinal implants.
"Physician Payment Sunshine Act Signals New Dawn for Compliance," by
Joseph J. Feltes, MD News, November 14, 2011 ---
http://www.mdnews.com/news/2011_11/05737_novdec2011_physician-payment-sunshine
Once upon a time, physicians and their families used to be able to enjoy exotic cruises sponsored by pharmaceutical companies where their only obligation, it seems, was to sign in briefly at sparsely attended meetings before embarking on offshore adventures. It’s been awhile since the sun slowly set on the wake of the last ship’s sybaritic junket.
Today, the Federal Physician Payment Sunshine Act — part of national healthcare reform — signals a new dawn of transparency, compliance obligations, and regulatory scrutiny. Beginning January 1, 2012, manufacturers of drugs, devices, biologicals or medical supplies, covered by Medicare, Medicaid or other federal healthcare program, must report to the Department of Health and Human Services all payments or transfers of value they make to physicians or teaching hospitals.
The Sunshine Act applies to payments or transfers of value covering a broad array of activities, including: consulting fees; compensation for services other than consulting; honoraria; gifts; entertainment; food; travel (including specified destinations); education and research; charitable contributions; royalties or licenses; current or prospective ownership or investment interests (other than through publicly traded securities or mutual funds); direct compensation for serving as faculty or as a speaker for medical education programs; grants; or falling within the catchall “any other nature of payment or other transfer of value as defined by the Secretary of HHS.” Additionally, if the payment or transfer of value relates to marketing, education, or research which pertains to a covered drug, biological, device or supply, that also must be reported, along with the name of the covered product.
Remaining outside the aura are certain excluded items that need not have to be reported, such as the transfer of items having a value of less than $10 (unless the items exceed an annual aggregate of $100); product samples for patient use not intended to be sold; educational materials that directly benefit patients or are intended for patient use; the loan of a covered device for 90 days or less for evaluation purposes; items or services provided under a contractual warranty; certain discounts and rebates; and in-kind items used to provide charity care, to name a few.
Covered manufacturers must disclose to the Secretary in electronic form the name of the physician (or teaching hospital); the physician’s business address, specialty and National Provider Identifier; the amount of payment or value of transfer; the dates on which payments or transfers are made; a description of whether payment or transfer was made in cash or cash equivalents, in-kind items or services, or stocks or stock options. This information will be stored in a database.
While the burden of reporting rests with covered manufacturers, access to and use of the electronic information stored in the database can be accessed by the media, consumers, the Office for Inspector General, and by prosecutors. That could pose potential liability risk to physicians for non-compliance with federal Anti-Kickback (illegal remuneration), the Stark laws (financial interest), or the False Claims Act (ill-gotten gain). It also could create potential reputational damage — fairly or unfairly — if it were to appear that research was flawed or a physician’s choice of drug was influenced by payments or other transfers of value.
The Wall Street Journal, in an investigational piece (December 20, 2010), reported that five spine surgeons at Norton Hospital in Louisville, Kentucky, who performed the third-most spinal fusions of Medicare patients in the country, had received more than $7 million in “royalties” from Medtronic, the nation’s biggest manufacturer of spinal implants.
The WSJ indicated that it had “mined” certain Medicare databases as the source of its exposé. The new Sunshine Act likely will eliminate the need to dig deeply, since the information will be collected in one database, there for the picking. Critics of the law, including Thomas Peter Stossel, MD, Professor of Medicine at Harvard Medical School, objects that the term “Sunshine” carries with it the “implicit aura of corruption,” which indeed is unfortunate.
Continued in article
Bob Jensen's Fraud Updates are at
http://www.trinity.edu/rjensen/FraudUpdates.htm
Bob Jensen's healthcare news threads are at
http://www.trinity.edu/rjensen/Health.htm
"ObamaCare Starts to Unravel: The real story behind the Class
program failure, and what to do now," The Wall Street Journal,
October 17, 2011 ---
http://online.wsj.com/article/SB10001424052970204479504576635200446357240.html?mod=djemEditorialPage_t
Now that one of ObamaCare's major new benefit programs has been scrapped, liberals are trying to make stone soup by claiming that the Obama Administration merely committed an act of "good government." They claim that when this long-term care insurance program proved to be unworkable, the Administration conceded as much, and now it's gone. So let's review the evidence, not least because it so perfectly illustrates the recklessness that produced the Affordable Care Act.
When Democrats were pasting it together in 2009 and 2010, the immediate attraction of the program known by the acronym Class was that its finances could be gamed to create the illusion that a new entitlement would reduce the deficit. Ending the complicated Class budget gimmick erases the better part of ObamaCare's purported "savings," but it's also worth focusing on the program's long-run political goals.
For decades Democrats have been trying to put government on the hook for middle-class costs like home health services ($1,800 a month on average) and nursing homes ($70,000 to $80,000 per year). On paper, Class was supposed to be like normal insurance, funding benefits through premiums with no subsidy. But since the budget gimmick and the program's larger structure meant that premiums could never cover benefits, Democrats were trying to force a future Congress to prevent a Class bankruptcy using taxpayer dollars.
As the costs to the federal fisc continued to climb, the Democratic gambit was that Class would gradually morph into another part of Medicare. Insurance depends on younger, healthier people signing up to cross-subsidize the older and sicker, but under the Class program as written almost all of its enrollees would soon also be beneficiaries.
So to fix this "adverse selection," the plan was for Congress to eventually make participation mandatory, with the so-called premiums converted into another payroll tax and the benefits into another entitlement. Former White House budget director Peter Orszag has been writing that the long-term care insurance market can't function without a mandate, while HHS Secretary Kathleen Sebelius declined to rule one out at a Senate hearing in February. Now they tell us.
The only reason the Health and Human Services Department pre-emptively called off this scheme is that former New Hampshire Senator Judd Gregg succeeded in inserting a proviso that required the Class program's reality to match Democratic promises as a matter of law. If HHS couldn't provide "an actuarial analysis of the 75-year costs of the program that ensures solvency throughout such 75-year period," it couldn't be legally implemented.
In other words, HHS had to prove that the Class program wouldn't go broke the way it was designed to—and actuarial analysis is a matter of math, not politics. In a 48-page report that HHS submitted to Congress Friday, the department concedes that it is literally impossible to create any kind of long-term care program under the law's statutory text in which revenues match expenditures. Such a plan would cost as much as $3,000 per month, which no one would ever buy.
The HHS gnomes even considered "features deviating from or going beyond a plain reading of the statutory language" that its lawyers didn't think could pass legal muster, and they still couldn't avoid violating the known laws of mathematics despite 19 months of trying. HHS lawyers also said the government would have to warn enrollees that the promised benefits weren't contracts and could be abrogated to "dispel any claims that the Class program had misled the public or had encouraged reliance on its programs under false pretenses."
Continued in article
Updates for September 30, 2011
"GOP lawmakers seek answers from Sebelius regarding CLASS Act," by
Tina Korbe, Hot Air, September 22, 2011 ---
http://hotair.com/archives/2011/09/22/gop-lawmakers-seek-answers-from-sebelius-regarding-class-act/
Last week, a report from a Republican working group revealed that administration officials, in the rush to pass Obamacare, ignored internal warnings from government experts about the fiscal sustainability of a long-term care insurance entitlement program included in the health reform law. Throughout the health care debate, officials within the Centers for Medicare and Medicaid Services, as well as the Health and Human Services Department, repeatedly warned that the CLASS Act would be a fiscal disaster. Yet, the final version of Obamacare not only included the CLASS Act; it even counted CLASS as a cost-saving measure.
Now, the Republicans behind the report want to know how high the warnings reached: Was HHS Secretary Kathleen Sebelius, for example, aware of the concerns about CLASS even before Obamacare passed? Amid rumors the administration might reassign CLASS personnel or close the CLASS office entirely, they also want to know what the administration plans to do moving forward to ensure — if the CLASS program is, in fact, implemented — that the program is sustainable.
To that end, House Oversight Committee Chairman Darrell Issa (R-Calif.) and House Energy and Commerce Committee Chairman Fred Upton (R-Mich.), along with key drivers Sens. Jeff Sessions (R-Ala.), John Thune (R-S.D.) and others, today sent a letter to Sebelius asking her to clarify how many people have been reassigned or asked to leave the CLASS office, to put forward a plan to make CLASS sustainable if the program is going to be implemented and to divulge when concerns about CLASS were first made known to her and what steps she took to address them.
. . .
As Sessions explained in a statement, the central question is “whether a deliberate effort was made by administration officials to conceal CLASS’s true cost in order to advance the president’s agenda. Accountability goes to the top. Lawmakers and the American people deserve to know when internal concerns over CLASS were first communicated to Secretary Sebelius and what, if any, actions she took to address them. Out of control government spending is threatening our nation’s future, making a prompt and thorough explanation all the more imperative.”
Thune said it appears the administration sought to uphold its own agenda with the inclusion of the CLASS Act in the PPACA.
“Our recent Congressional investigation revealed that the Obama Administration ignored repeated warnings about the fiscal insolvency of the CLASS Act in the effort to score a political win with the passage of the new health care law,” he said. “The time is long overdue for Secretary Sebelius to come forward with more details on what the administration knew about the insolvency of the program, when they knew about it, and how they propose to remedy this fiscal disaster for taxpayers. The American people deserve to know more about this massive new entitlement program.”
In the meantime, you can bet that, if Sebelius doesn’t provide adequate answers, the calls for a CLASS Act repeal will grow ever louder. In fact, the Senate Appropriations Committee has already decided not to fund implementation of the Act.
Update: Because of a scheduling error, this post appeared briefly on the HotAir.com homepage at around 11:25 a.m. ET today. At the time, the letter had not yet been sent to Secretary Sebelius. The post above is essentially unchanged, but the second and third paragraphs have been updated to include information that recently emerged that the administration might shuffle CLASS personnel.
"The Preferential Treatment of Employer-Provided Health Care," by Paul
Caron, TaxProf Blog, September 17, 2011 ---
http://taxprof.typepad.com/
Benjamin D. Gehlbach (J.D. 2011, Catholic), Note, The Preferential Treatment of Employer-Provided Health Care: Time for a Change?, 27 J. Contemp. Health L. & Pol'y:
This Note argues that the current treatment of employer-provided health insurance is inequitable and needs reform in order to drive down overall health care costs and to provide revenue for other provisions of the ACA (or for a replacement, should repeal be successful), or alternatively, to help bring down the budget deficit. Part II examines the history and scope of the exclusion, as well as the rationales advanced prior to its adoption. Part III studies criticisms of the exclusion to understand better the weaknesses of the current system, including job lock, excess insurance, and loss of revenue. Part IV evaluates some of the proposals for changing the current exclusion, including those proposed by members of Congress and by outside policy groups. Some of these proposals include repealing the exclusion, capping the exclusion based on income or value of the insurance policy, and providing new tax incentives altogether. Part V argues that the best option for reforming this flawed system is to cap the exclusion based on income and the cost of the insurance plan. A cap on the exclusion would accomplish the dual objectives of bringing overall health care costs down and providing necessary revenue to finance other provisions of the ACA or its replacement, or alternatively, to reduce the deficit. In addition, a cap would not create some of the drawbacks of the other proposals
"Mystery Diagnosis: An Era of Uncertainty for the Health Care Sector,"
Knowledge@Wharton, September 14, 2011 ---
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2847
The U.S. health care sector is experiencing a time of enormous change and uncertainty. Although President Obama's health care reform plan was signed into law last year, several legal challenges to the legislation are working their way through the courts. Questions also remain about whether the law will deliver on its promises of greater access to care and stricter containment of soaring health care costs.
Meanwhile, the pharmaceutical industry is also dealing with a period of insecurity, with generic markets soon opening up for some of the world's best-selling drugs. And although the health care sector is one of the few employment bright spots in a stagnant job market, questions arise as to whether it is in danger of becoming too bloated. Wharton health care management professors Arnold Rosoff, Patricia Danzon, Lawton Burns and Mark Pauly discussed their research on these issues and others during a recent presentation to incoming health care MBA students.
Politics over Policy?
After decades of debate over national health care reform, Wharton legal studies and health care management professor Arnold Rosoff warned that struggles over the Affordable Care Act (ACA), signed into law by President Obama in March 2010, may be far from over. It is uncertain whether the reform legislation, which was passed in a greatly compromised form after years of "partisan wrangling," can deliver on its promises of cost containment and expanded access to health care for the uninsured, Rosoff noted. "But before we get to that, we have to ask, 'Will ACA even stay on the books?'"
Continued in article
"When Health Insurance is Free," by John C. Goodman, Townhall,
September 10, 2011 ---
http://townhall.com/columnists/johncgoodman/2011/09/10/when_health_insurance_is_free
Did you know that an estimated one of every three uninsured people in this country is eligible for a government program (mainly Medicaid or a state children’s health insurance plan), but has not signed up?
Either they haven’t bothered to sign up or they did bother and found the task too daunting. It’s probably some combination of the two, and if that doesn’t knock your socks off, you must not have been paying attention to the health policy debate over the past year or so.
Put aside everything you’ve heard about Obama Care and focus on this bottom line point: going all the way back to the Democratic presidential primary, Obama Care was always first and foremost about insuring the uninsured. Yet at the end of the day, the new health law is only going to insure about 32 million more people out of more than 50 million uninsured. Half that goal will be achieved by new enrollment in Medicaid. But if you believe the Census Bureau surveys, we could enroll just as many people in Medicaid by merely signing up those who are already eligible!
What brought this to mind was a series of editorials by Paul Krugman and Health Affairs blog and at my blog) asserting that government is so much more efficient than private insurers. Can you imagine Aetna or UnitedHealth Care leaving one-third of its customers without a sale, just because they couldn’t fill out the paperwork properly? Well that’s what Medicaid does, day in and day out.
Put differently, half of everything Obama Care is trying to do is necessary only because the Medicaid bureaucracy does such a poor job — not of selling insurance, but of giving it away for free!
Writing in Health Affairs the other day, health policy guru Alain Enthoven and health care executive Leonard Schaeffer revealed some of the gory details of what people encounter when they do try to sign up for free health insurance from Medi-Cal (California Medicaid) in the San Diego office:
Continued in article
The Big Idea: How to Solve the Cost Crisis in Health Care
"What Health Care Really Costs," Harvard Business Review Blog, August 18, 2011
---
Click Here
http://blogs.hbr.org/ideacast/2011/08/what-health-care-really-costs.html?referral=00563&cm_mmc=email-_-newsletter-_-daily_alert-_-alert_date&utm_source=newsletter_daily_alert&utm_medium=email&utm_campaign=alert_date
Featured Podcast Interview Guest: Robert S. Kaplan, Harvard Business School professor and
coauthor of the HBR article How to Solve the Cost Crisis in Health Care.
"The Big Idea: How to Solve the Cost Crisis in Health Care," by Robert S.
Kaplan and Michael E. Porter, Harvard Business Review, August 2011 ---
http://hbr.org/2011/09/how-to-solve-the-cost-crisis-in-health-care/ar/1?referral=00134
. . .
Fortunately, we can change this state of affairs. And the remedy does not require medical science breakthroughs or top-down governmental regulation. It simply requires a new way to accurately measure costs and compare them with outcomes. Our approach makes patients and their conditions—not departmental units, procedures, or services—the fundamental unit of analysis for measuring costs and outcomes. The experiences of several major institutions currently implementing the new approach—the Head and Neck Center at MD Anderson Cancer Center in Houston, the Cleft Lip and Palate Program at Children’s Hospital in Boston, and units performing knee replacements at Schön Klinik in Germany and Brigham & Women’s Hospital in Boston—confirm our belief that bringing accurate cost and value measurement practices into health care delivery can have a transformative impact.
Continued in article (for a fee)
Jensen Comment
The article does not address all aspects of the cost of healthcare, including
the enormous cost of fraud in all aspects of healthcare from the funding of
unneeded medical procedures to phony medical equipment invoices to substandard
medications to medical services for people not eligible for funding of such
services such as undocumented aliens who enter this country for the purpose of
free obstetrics and other types of medical services.
There is also the cost of malpractice insurance which is often ten times what it is in Canada because of differences between how malpractice claims are processed in Canada versus the United States (where 80% of the world's lawyers practice).
"'The Flight to the Exchanges': The Wall Street Journal
writes that ObamaCare may cause small businesses to drop insurance coverage,"
The Wall Street Journal, July 25, 2011 ---
http://online.wsj.com/article/SB10001424053111903554904576462010405702984.html#mod=djemEditorialPage_t
McKinsey & Co. made itself the White House's public enemy number—well, we've lost count—after releasing a survey last month showing that nearly one in three businesses may drop insurance coverage as a result of the new health-care law. The real offense of the management consultants seems to be accurately portraying reality.
Consider a suggestive new survey to be released today by the National Federation of Independent Business, the trade group for small businesses. William Dennis, a senior research fellow who has conducted the study for 35 years, reports that 57% of a cross-section of companies that employ 50 or fewer workers and offer coverage may stop doing so. Look out below.
About two of five small companies sponsor insurance—a share that, according to NFIB, has on net held mostly stable or declined very slightly since the passage of the Affordable Care Act. Yet 12% of these companies—one of eight—have either had their plans cancelled or have been told that they will be in the future. This churn in the private small-group market is a direct result of ObamaCare's new rules and mandates—but a far larger destabilization could be in the offing, what Mr. Dennis calls "the flight to the exchanges."
Those would be the dispensaries of heavily subsidized insurance, and the NFIB finds that 26% of small businesses today sponsoring insurance are "very likely" to drop it should their employees start to flood government coverage. Another 31% of the 750 firms surveyed report they are "somewhat likely."
Small-business workers are eligible for exchange subsidies even if they can get job-based coverage. The incentive is for them to take it—given that the new government payments will be so generous, small-group coverage is generally costly and the insurance tax break for employers usually doesn't go very far when the employer is small.
If enough workers split, in other words, private coverage will soon erode and cease to exist as an option. Meanwhile, start-ups are constantly entering and exiting the market, and the ones with fewer benefits and liabilities will gain a competitive advantage. Businesses with fewer than 50 employees also aren't subject to any "play or pay" penalties. As Mr. Dennis put it in an interview, "Once you pull the string, everything may unravel."
ObamaCare's partisans claim none of this will happen because of the social norm theories of behavioral economics. Businesses offer insurance to attract workers, the thinking goes, and it's the right thing to do. But that assumes utter irrationality—that workers won't take a cheaper deal when they see it and businesses won't try to compete against their rivals.
Continued in article
College Financial Officers Contemplate Dropping Health Insurance Coverage
"Health Care Costs Up Again," by Kevin Kiley, Inside Higher Ed,
July 25, 2011 ---
http://www.insidehighered.com/news/2011/07/25/surveys_highlight_health_care_questions_on_the_horizon_for_hr_administrators
. . .
Because of these challenges, college administrators, like employers in other fields, are weighing the advantages and disadvantages of dropping coverage for some or all employees once several provisions of the Patient Protection and Affordable Care Act, the health care overhaul legislation passed by Congress in 2010, goes into effect in 2014.
"I don't think we're going to be able to provide that lifetime security like we used to," said Brad Kimler, executive vice president of benefits consulting at Fidelity Investments, during a presentation at the annual conference of the National Association of College and University Business Officers. "And I don't think it's realistic to expect that."
A recent Inside Higher Ed survey of business officers found that a large percentage of business officers, particularly at private universities and public baccalaureate institutions, listed health care liability as one of the most significant challenges of the next two to three years. Despite that concern, the question of how to manage these costs seems often to be going unaddressed. The CUPA-HR survey found that only a quarter of responding institutions had developed a strategy for what their health care benefits should be in three years.
The major question that hangs over administrators about upcoming health benefits decisions involves the components of the health care overhaul law that go into effect in 2014, notably the requirement that companies offer a reasonable level of health care benefits to their employees. Companies with more than 50 employees that don't offer health benefits will have to pay a penalty of $2,000 per worker. Individuals who do not not receive health benefits from their employers will receive income-indexed premium and out-of-pocket cost-sharing subsidies, enabling them to obtain private coverage they would not be able to afford on the current market. These options will be available in state or regional health care "exchanges."
It might be cheaper for employers, including colleges and universities, to pay the penalties and forgo whatever tax breaks come with offering employer-supported health benefits than to continue to provide benefits. "As a result, whether to offer ESI [employer-sponsored insurance] after 2014 becomes mostly a business decision," states a much-discussed survey conducted by McKinsey and Company, a management consulting firm. "Employers will have to balance the need to remain attractive to talented workers with the net economics of providing benefits -- taking into consideration all the penalties and tax advantages of offering or not offering any given level of coverage," the report states.
That survey found that 30 percent of employers will definitely or probably stop offering employer-sponsored coverage, a significantly higher percentage than the 7 percent of employers that the Congressional Budget Office predicted. Among employers who are well-versed in the law, the proportion increases to 50 percent, and 60 percent said they would pursue alternatives, the McKinsey survey found.
The report did not break down respondents by field, but did note it would be unlikely for only one company in a given field to dramatically alter its plans. Higher education institutions, on average, tend to be more generous with benefits than other types of employers, so the sector as a whole might see few shifts after the new provisions go into effect.
Getting out of the employer-supported health benefit game could be economically viable for some employers, but it could also be beneficial to employees. The McKinsey study notes that "because of the subsidies, many low-income employees will be able to obtain better health coverage, for less out of pocket, on an exchange than from their employer."
Aside from the economic decision, colleges and universities are also going to have weigh the cost of health benefits as a recruiting and retention tool. Kyle Cavanaugh, vice president for human resources at Duke University, said his institution would be hard-pressed to abandon its plan for that reason. "Faculty and staff tell us that one of the most significant things they value in working here is the health care plan we provide," he said. "The plan is highly valued, and because of that, we would have to very seriously weigh the cost of continuing to provide that."
But he noted that it is too early in the process to know what the exchange system will look like and therefore to actually make a judgment on that front. Most states have not even begun to design the health care exchanges (some have even said outright that they will not create them). A lot of politics remain between now and 2014, administrators say, including major deals regarding national spending and a presidential election.
Because so many factors will go into a college or university's decision on whether to abandon or modify its plans in three years, Cavanaugh stressed that institutions should be gathering and analyzing their data now. "Health care benefits have to, now more than ever, be managed in a strategic way," he said. "The combination of costs, faculty and staff expectations, and the ongoing evolution of national health care reform drive the need to be looking at this from a strategic standpoint."
Doing so could also show returns in the short term, if colleges find ways to drive down costs and measure the effectiveness of different programs. Cavanaugh said his college has found savings by increasing the use of generic drugs. By tracking conditions associated with avoidable and repeat hospital admissions, the university has also been able to work with providers to lower admissions. While Duke's costs have still gone up, Cavanaugh said they have been below the national average for the past few years.
CUPA's survey did find some notable widespread efforts to contain health care costs. More than 60 percent of colleges in CUPA-HR's survey said they offered wellness programs, but participation of employees at colleges was less than 20 percent at many institutions.
The survey also found the highest percentage of respondents providing same-sex domestic partner benefits -- 56 percent -- since the survey began. That is a significant increase from the 37 percent of respondents who reported offering same-sex benefits in 2005.
"A Federal Jump-start for Health IT: White House aide leads push to
improve health-care IT with billions in stimulus funds," by David Talbot,
MIT's Technology Review, September 6, 2011 ---
http://www.technologyreview.com/business/38475/?nlid=nldly&nld=2011-09-06
In a landmark government effort to drive American health care into the information age, the February 2009 stimulus bill earmarked about $30 billion in incentives for doctors and hospitals who install electronic medical records—paying up to $63,750 to individual physician and millions to hospitals.
Now comes the tough part: implementing "EMRs" and proving they really can reduce medical errors or get doctors to keep better track of chronically ill people. As National Coordinator for Health IT, Farzad Mostashari coordinates federal efforts to promote adoption of EMRs and to prod reluctant hospitals to share patient data.
Mostashari was recruited to take over the federal effort in February, after leading a patient-records initiative as an assistant health commissioner in New York City. He spoke with Technology Review's chief correspondent, David Talbot, about when we'll start seeing evidence that the technology is working.
TR: What problems are we attacking with this huge medical IT outlay?
Mostashari: Start with "First, do no harm." Right now we do harm to patients through health care. The estimates, conservatively, are 100,000 to 200,000 people killed each year by things like hospital-acquired infections and adverse drug events. Electronic medical records provide an opportunity to create standardized protocols, to provide decision-support and reminders for doctors, and to tell them about the patient's medications and drug allergies, as well as any dangerous drug interactions, at the point of care. Those are all proven interventions.
What else can software do besides cut back on accidental hospital deaths?
All too often, people come into the doctor's office with high blood pressure which will kill them from stroke or heart attack, but the patient is complaining about something else. Doctors can get distracted and not pay attention to the most important thing—which might be that the patient's blood pressure is out of control, or the flu shot that hasn't been given. Electronic records can make it easy to provide these reminders. It can also make a list of patients who have not come in, who have high blood pressure or diabetes, and must be seen.
Why is the health care industry so far behind other industries?
Unfortunately, the business case often has not been strong enough to support adoption and use of electronic records. But we have now reached a point where the incentives are turning the other way—with greater emphasis on paying for outcomes and value rather than volume.
Bring us up to date since February 2009, when the bill passed. What is the progress to date on getting the IT installed?
The ice has broken after decades of talk. Back in 2009, only 10 percent of hospitals and 20 percent of primary care providers used basic EMRs. Within a year, the doctors went from 20 percent to 30 percent. I expect it to get to 40 percent this year. We have about 10,000 new providers a month registering for incentives. About $400 million has gone out in payments already, and is expected to hit the $1 billion mark by early 2012.
But this is more than installing software—it's about a concept called "meaningful use." The health IT incentive payments are predicated on very specific criteria. For example, the electronic health record must contain blood pressure readings, height and weight, lab data, the patient's problem list, and allergies; the patients' preferred language will be recorded; and the system must have a whole series of functionalities around sharing information with] patients and public health agencies.
Continued in article
Bob Jensen's health care threads are at
http://www.trinity.edu/rjensen/Health.htm
Updates for June 30, 2011
"The Deficit Is Worse Than We Think: Normal interest rates would
raise debt-service costs by $4.9 trillion over 10 years, dwarfing the savings
from any currently contemplated budget deal," by Lawrence B. Lindsey, The
Wall Street Journal, June 28, 2011 ---
http://online.wsj.com/article/SB10001424052702304657804576401883172498352.html?mod=djemEditorialPage_t
Washington is struggling to make a deal that will couple an increase in the debt ceiling with a long-term reduction in spending. There is no reason for the players to make their task seem even more Herculean than it already is. But we should be prepared for upward revisions in official deficit projections in the years ahead—even if a deal is struck. There are at least three major reasons for concern.
First, a normalization of interest rates would upend any budgetary deal if and when one should occur. At present, the average cost of Treasury borrowing is 2.5%. The average over the last two decades was 5.7%. Should we ramp up to the higher number, annual interest expenses would be roughly $420 billion higher in 2014 and $700 billion higher in 2020.
The 10-year rise in interest expense would be $4.9 trillion higher under "normalized" rates than under the current cost of borrowing. Compare that to the $2 trillion estimate of what the current talks about long-term deficit reduction may produce, and it becomes obvious that the gains from the current deficit-reduction efforts could be wiped out by normalization in the bond market.
To some extent this is a controllable risk. The Federal Reserve could act aggressively by purchasing even more bonds, or targeting rates further out on the yield curve, to slow any rise in the cost of Treasury borrowing. Of course, this carries its own set of risks, not the least among them an adverse reaction by our lenders. Suffice it to say, though, that given all that is at stake, Fed interest-rate policy will increasingly have to factor in the effects of any rate hike on the fiscal position of the Treasury.
The second reason for concern is that official growth forecasts are much higher than what the academic consensus believes we should expect after a financial crisis. That consensus holds that economies tend to return to trend growth of about 2.5%, without ever recapturing what was lost in the downturn.
But the president's budget of February 2011 projects economic growth of 4% in 2012, 4.5% in 2013, and 4.2% in 2014. That budget also estimates that the 10-year budget cost of missing the growth estimate by just one point for one year is $750 billion. So, if we just grow at trend those three years, we will miss the president's forecast by a cumulative 5.2 percentage points and—using the numbers provided in his budget—incur additional debt of $4 trillion. That is the equivalent of all of the 10-year savings in Congressman Paul Ryan's budget, passed by the House in April, or in the Bowles-Simpson budget plan.
Third, it is increasingly clear that the long-run cost estimates of ObamaCare were well short of the mark because of the incentive that employers will have under that plan to end private coverage and put employees on the public system. Health and Human Services Secretary Kathleen Sebelius has already issued 1,400 waivers from the act's regulations for employers as large as McDonald's to stop them from dumping their employees' coverage.
But a recent McKinsey survey, for example, found that 30% of employers with plans will likely take advantage of the system, with half of the more knowledgeable ones planning to do so. If this survey proves correct, the extra bill for taxpayers would be roughly $74 billion in 2014 rising to $85 billion in 2019, thanks to the subsidies provided to individuals and families purchasing coverage in the government's insurance exchanges.
Underestimating the long-term budget situation is an old game in Washington. But never have the numbers been this large.
There is no way to raise taxes enough to cover these problems. The tax-the-rich proposals of the Obama administration raise about $700 billion, less than a fifth of the budgetary consequences of the excess economic growth projected in their forecast. The whole $700 billion collected over 10 years would not even cover the difference in interest costs in any one year at the end of the decade between current rates and the average cost of Treasury borrowing over the last 20 years.
Continued in article
"Shutting Up McKinsey: The White House vilifies a company for
reporting health-care reality," The Wall Street Journal, June 29,
2011 ---
http://online.wsj.com/article/SB10001424052702304070104576400004065859190.html#mod=djemEditorialPage_t
The White House routinely tries to intimidate its health-care critics, but the campaign against McKinsey & Co. is something else. The management consultants attempted to find out how U.S. business will respond to the government restructuring of 17.3% of the economy, Democrats don't like the results, and so McKinsey must pay with its reputation.
The firm's sin was to canvass some 1,300 companies and report that nearly a third will "definitely" or "probably" stop offering insurance to employees after 2014, dumping them instead into ObamaCare's subsidized exchanges. McKinsey conducted the survey as part of its routine market research.
Democrats immediately blasted the results, attacked McKinsey's integrity and demanded that it release its methodology and full responses. Nancy-Ann DeParle, the deputy chief of staff who is running ObamaCare from the White House, was withering. Senate Finance Chairman Max Baucus chimed in with questions like "Who are your biggest clients? Do you expect McKinsey & Co. to benefit financially from the results of this survey?"
So this week McKinsey opened its books, and what do you know, the survey was rigorous. Respondents were a representative cross-section of businesses of many sizes and across industries and regions, and the questions were impartial.
Ms. DeParle and others claimed vindication because McKinsey conceded it was not a "predictive economic analysis," while forecasters like the Congressional Budget Office think the law will have little effect on employer coverage. In other words, an analysis of business attitudes in the real world is less credible than CBO's macroeconomic models that depend on undisclosed assumptions. These are the same models that claim the stimulus "created or saved" millions of jobs.
The furor says less about McKinsey than about the politically damaging reality of the new law. As the McKinsey survey shows in detail, many businesses may be better off if they drop coverage and pay workers slightly more to compensate for fewer benefits, along with paying the new penalty for not providing insurance. Many workers earning up to $102,000 may also be better off because the ObamaCare subsidies are so much larger than the current tax break for employer coverage.
As more people partake of "free" health care, taxpayer costs will explode. Consumers will gradually lose the choice and quality of private insurance for the politically mandated policies that will be offered in most exchanges. Increasing the share of the insurance market operating under Washington command and control will increase costs and distortions in the health markets.
McKinsey's study merely echoes what economist Doug Holz-Eakin has also been shouting from the rafters about ObamaCare's impact on private coverage. Ditto for Eugene Steuerle of the Urban Institute. Is that left-leaning outfit now a GOP mouthpiece too? McKinsey isn't known for its partisan sympathies, and most top-drawer consulting firms deliberately avoid the political fray. Clients want intelligence, not controversy.
The White House method is nonetheless to assail even disinterested analysts as dishonest or motivated by bad faith, and the habit is especially pronounced against businesses that have something to lose. Think of the public trashing of the insurers WellPoint and Humana for accurately describing how costs will soar under the new entitlement, or the companies like AT&T and Verizon that ObamaCare forced to take huge writedowns last year.
The fact that the White House feels it must vilify businesses for telling the truth about ObamaCare shows just how destructive the law really is.
"Shutting Up McKinsey: The White House vilifies a company for
reporting health-care reality," The Wall Street Journal, June 29,
2011 ---
http://online.wsj.com/article/SB10001424052702304070104576400004065859190.html#mod=djemEditorialPage_t
The White House routinely tries to intimidate its health-care critics, but the campaign against McKinsey & Co. is something else. The management consultants attempted to find out how U.S. business will respond to the government restructuring of 17.3% of the economy, Democrats don't like the results, and so McKinsey must pay with its reputation.
The firm's sin was to canvass some 1,300 companies and report that nearly a third will "definitely" or "probably" stop offering insurance to employees after 2014, dumping them instead into ObamaCare's subsidized exchanges. McKinsey conducted the survey as part of its routine market research.
Democrats immediately blasted the results, attacked McKinsey's integrity and demanded that it release its methodology and full responses. Nancy-Ann DeParle, the deputy chief of staff who is running ObamaCare from the White House, was withering. Senate Finance Chairman Max Baucus chimed in with questions like "Who are your biggest clients? Do you expect McKinsey & Co. to benefit financially from the results of this survey?"
So this week McKinsey opened its books, and what do you know, the survey was rigorous. Respondents were a representative cross-section of businesses of many sizes and across industries and regions, and the questions were impartial.
Ms. DeParle and others claimed vindication because McKinsey conceded it was not a "predictive economic analysis," while forecasters like the Congressional Budget Office think the law will have little effect on employer coverage. In other words, an analysis of business attitudes in the real world is less credible than CBO's macroeconomic models that depend on undisclosed assumptions. These are the same models that claim the stimulus "created or saved" millions of jobs.
The furor says less about McKinsey than about the politically damaging reality of the new law. As the McKinsey survey shows in detail, many businesses may be better off if they drop coverage and pay workers slightly more to compensate for fewer benefits, along with paying the new penalty for not providing insurance. Many workers earning up to $102,000 may also be better off because the ObamaCare subsidies are so much larger than the current tax break for employer coverage.
As more people partake of "free" health care, taxpayer costs will explode. Consumers will gradually lose the choice and quality of private insurance for the politically mandated policies that will be offered in most exchanges. Increasing the share of the insurance market operating under Washington command and control will increase costs and distortions in the health markets.
McKinsey's study merely echoes what economist Doug Holz-Eakin has also been shouting from the rafters about ObamaCare's impact on private coverage. Ditto for Eugene Steuerle of the Urban Institute. Is that left-leaning outfit now a GOP mouthpiece too? McKinsey isn't known for its partisan sympathies, and most top-drawer consulting firms deliberately avoid the political fray. Clients want intelligence, not controversy.
The White House method is nonetheless to assail even disinterested analysts as dishonest or motivated by bad faith, and the habit is especially pronounced against businesses that have something to lose. Think of the public trashing of the insurers WellPoint and Humana for accurately describing how costs will soar under the new entitlement, or the companies like AT&T and Verizon that ObamaCare forced to take huge writedowns last year.
The fact that the White House feels it must vilify businesses for telling the truth about ObamaCare shows just how destructive the law really is.
"No, You Can't Keep Your Health Insurance: A new study by McKinsey
suggests that as many as 78 million Americans could lose employer health
coverage," by Grace-Marie Turner, The Wall Street Journal, June 7,
2011 ---
http://online.wsj.com/article/SB10001424052702304432304576371252181401600.html?mod=djemEditorialPage_t
ObamaCare will lead to a dramatic decline in employer-provided health insurance—with as many as 78 million Americans forced to find other sources of coverage.
This disturbing finding is based on my calculations from a survey by McKinsey & Company. The survey, published this week in the McKinsey Quarterly, found that up to 50% of employers say they will definitely or probably pursue alternatives to their current health-insurance plan in the years after the Patient Protection and Affordable Care Act takes effect in 2014. An estimated 156 million non-elderly Americans get their coverage at work, according to the Employee Benefit Research Institute.
Before the health law passed, the Congressional Budget Office estimated that only nine million to 10 million people, or about 7% of employees who currently get health insurance at work, would switch to government-subsidized insurance. But the McKinsey survey of 1,300 employers across industries, geographies and employer sizes found "that reform will provoke a much greater response" and concludes that the health overhaul law will lead to a "radical restructuring" of job-based health coverage.
Another McKinsey analyst, Alissa Meade, told a meeting of health-insurance executives last November that "something in the range of 80 million to 100 million individuals are going to change coverage categories in the two years" after the insurance mandates take effect in 2014.
Many employees who will need to seek another source of coverage will take advantage of the health-insurance subsidies for families making as much as $88,000 a year. This will drive up the cost of ObamaCare.
In a study last year, Douglas Holtz-Eakin, a former director of the Congressional Budget Office, estimated that an additional 35 million workers would be moved out of employer plans and into subsidized coverage, and that this would add about $1 trillion to the total cost of the president's health law over the next decade. McKinsey's survey implies that the cost to taxpayers could be significantly more.
The McKinsey study, "How US health care reform will affect employee benefits," predicts that employers will either drop coverage altogether, offer defined contributions for insurance, or offer coverage only to certain employees. The study concludes that 30% of employers overall will definitely or probably stop offering health insurance to their workers. However, among employers with a high awareness of the health-reform law, this proportion increases to more than 50%.
The employer incentives to alter or cease coverage under the health-reform law are strong. According to the study, at least 30% of employers would gain economically from dropping coverage, even if they completely compensated employees for the change through other benefit offerings or higher salaries. That's because they no longer would be tethered to health-insurance costs that consistently rise faster than inflation.
Employers should think twice if they believe the fine for not offering coverage will stay unchanged at $2,000 per worker. "If many companies drop health insurance coverage, the government could increase the employer penalty or raise taxes," according to the new study, authored by McKinsey consultants Shubham Singhal, Jeris Stueland and Drew Ungerman.
Continued in article
"The Accountable Care Fiasco Even the models for health reform hate the
new HHS rule," The Wall Street Journal, June 20, 2011 ---
http://online.wsj.com/article/SB10001424052702304520804576343410729769144.html?mod=djemEditorialPage_t
The Obama Administration is handing out waivers far and wide for its health-care bill, but behind the scenes the bureaucracy is grinding ahead writing new regulations. The latest example is the rule for Accountable Care Organizations that are supposed to be the crown jewel of cost-saving reform. One problem: The draft rule is so awful that even the models for it say they won't participate. ***
The theory for ACOs, as they're known, is that hospitals, primary-care doctors and specialists will work more efficiently in teams, like at the Mayo Clinic and other top U.S. hospitals. ACOs are meant to fix health care's too-many-cooks predicament. The average senior on Medicare sees two physicians and five specialists, 13 on average for those with chronic illnesses. Most likely, those doctors aren't coordinating patient care.
This fragmentation is largely an artifact of Medicare's price control regime: The classic case study is Duke University Hospital, which cut the costs of treating congestive heart failure by 40% but then dumped the integration program because it lost money under Medicare's fee schedule.
Intelligent liberals now concede this reality but claim that the government merely needs to devise better price controls. By changing the way it pays, Medicare under the ACO rule is effectively mandating a new business model for practicing medicine. The vague cost-control hope is that ACOs will run pilot programs like Duke's and the successful ones will become best practices. While the program is voluntary for now, the government's intention is to make it mandatory in the coming years.
But what if they had an ACO revolution and no one showed up? The American Medical Group Association, a trade association of multispeciality practice groups and other integrated providers, calls the rule recently drafted by the Department of Health and Human Services "overly prescriptive, operationally burdensome, and the incentives are too difficult to achieve." In a survey of its members, 93% said they won't enroll.
The Administration wrote its rule based on an ACO pilot program that started in 2005 among 10 high-performing physician groups, including Geisinger Health System and Dartmouth-Hitchcock. All 10 say they have "serious reservations" about the new rule and that without major revisions "we will be unable to participate." In other words, the providers that are already closest to being an ACO have rejected the Administration's handiwork.
And no wonder, since the 429-page rule is a classic of top-down micromanagement. ACOs will need to comply with a kitchen sink of 65 clinical measures that are meant to produce efficiencies, like reducing infections or ensuring that patients take their medications after hospital discharge. If care at an ACO costs less than Medicare predicts it will cost under the status quo, then the ACO will receive a share of the savings as a bonus payment. The rule also includes financial penalties if an ACO misses its targets.
Incredibly, the ACO teams won't know in advance which patients they're supposed to manage. Seniors will be "retrospectively assigned" to an ACO at the end of every year, based on an arbitrary algorithm, for the purposes of calculating costs.
Continued in article
"Vermont Gives the 'Public Option' a Clinical Trial The governor claims it
is 'all about containing costs.' The evidence is not encouraging," by David
Gratzer, The Wall Street Journal, May 21, 2011 ---
http://online.wsj.com/article/SB10001424052748703655404576293020190881258.html?mod=djemEditorialPage_t
In America's courtrooms, ObamaCare is on trial. A majority of states have filed lawsuits arguing that its mandate requiring individuals to purchase health insurance is unconstitutional. But in Vermont, ObamaCare is about to get a trial of a different sort—a clinical one.
This coming Thursday, Gov. Peter Shumlin will sign a bill doing what President Obama and his allies have hoped to do all along: sell a public insurance option alongside competing private insurance as a first step toward a single-payer, government-run system. Unlike the president, Mr. Shumlin has been up-front in his support for single-payer care, even on the campaign trail last fall. At least he can say he has a mandate from voters to do what he's doing.
The last time Vermont's health system gained national attention was in 2004, when Howard Dean, then governor of the state, ran for president. As governor, Mr. Dean expanded public insurance eligibility, struggling to get as close to single-payer health care as he legally could. New regulations pushed out private insurers, reducing competition. Vermont imposed a guaranteed-issue mandate, which requires insurers to sell to any applicant, and forced insurers to use community rating, which requires them to offer the same price to everyone, regardless of age and health. Both measures also appeared in the final ObamaCare law.
The result? The number of uninsured Vermonters barely budged. But costs sure moved—in the wrong direction. From 1991 to 2004, according to the Kaiser Foundation, Vermont's health costs grew by 7.6% annually. Across the U.S. comparable costs grew only 5.5% on average. From 2005 to 2008, in data cited by Dr. William Hsaio, a Harvard consultant studying this for the state, growth in Vermont's health costs grew 8.2%, against a national average of 5.7%.
The current governor says his plan is "all about containing costs," echoing Mr. Obama's absurd claim that increased health spending would mean lower deficits. Mr. Shumlin can talk about government health care and savings in the same breath because millions of Americans still believe the myth that socialized health-care models are immune from cost inflation.
Yet data from the Organization for Economic Cooperation and Development show that U.S. health inflation rates are roughly identical to those seen in European and Canadian systems. From 1990 to 2006, U.S. health costs grew an average of 1.66% faster than the economy vs. 1.62% for OECD nations.
Socialized medicine advocates say the point is moot because government-run systems start from a cheaper baseline. That's true, but that advantage is eroding quickly. A recent paper projected that Canadian health-care costs were growing so fast that they should consume 19% of GDP by 2031. The chief author of the paper is David Dodge, Canada's former deputy minister of health and a former governor of the Bank of Canada.
Single-payer countries also keep costs below U.S. levels by rationing care, not by being more efficient. Several weeks ago, the government-run, government-appointed health authority in the Canadian city where I was born admitted that a dozen patients died in the last three years while waiting for routine cardiac surgery. None was classified as an emergency case. In Canada's system, that made them "elective" surgery patients, triggering wait times that can delay treatment for weeks or even months. Yet single-payer activists persistently claim that "death by rationing" is a myth invented by insurance lobbyists.
In the U.S., Medicare hasn't seen much rationing yet, because it can rely on a privately funded reserve of resources to meet surges in demand. Whenever Congress flirts with serious cuts to Medicare fees, doctors push back. Then, Congress flinches—a sign that the program is more dependent on the private-sector than its champions admit.
Now Vermont is on course to repeat others' mistakes. For American liberals, there's no better place to test-run a public option. But if the new plan doesn't work, Vermont is so small that government-care supporters can pretend it's the state's fault and not a flaw in the concept. Darcie Johnston of Vermonters for Health Care Freedom fears the worst: "the largest tax hike in Vermont history" and a dysfunctional system.
It's a pity, because Vermont is an ideal place to run a very different experiment. Health-care policy thinkers are shifting focus to the potential benefits of a true wellness policy. Your health is as important to health outcomes as your health insurance, after all. Europeans have better life expectancy than Americans because they take better care of themselves on average, not because they get better care in their hospitals.
Through their own lifestyle choices, Vermont residents already have lower than average obesity levels and below-median smoking rates. With a more patient-centered insurance market, Vermont residents could receive, for example, cash incentives to prevent diseases caused by obesity, tobacco, and other lifestyle choices, all at a fraction of the cost of future treatments.
Continued in article
Jensen Comment
In this experiment Vermont suffers from a relatively small population over which
to spread health insurance costs for very expensive treatments such as AIDs
medications, organ transplants, premature baby care, and the costs of dying
(especially extended intensive care unit confinements while dying) for patients
not on Medicare. Medical cost In the 2010 census, Vermont only had 630,337
people, many of whom are children and elderly that will not pay medical
insurance premiums in Vermont's public plan ---
http://en.wikipedia.org/wiki/Vermont
Vermont residents also rely heavily on out--of-state medical providers such as physicians and hospitals in bordering states of New Hampshire (especially the Dartmouth-Hitchcock Medical Center), Massachusetts (especially in the metropolitan area of Boston), and Canada. This greatly limits cost containment initiatives that accompany Vermont's public medical insurance plans.
Freakonomics
"Here’s Why Health Care Costs Are Outpacing Health Care Efficacy," by
Stephen J. Dubner, Freakonomics.com, April 18, 2011 ---
http://www.freakonomics.com/2011/04/18/heres-why-health-care-costs-are-outpacing-health-care-efficacy/
In a new working paper called “Technology Growth and Expenditure Growth in Health Care” (abstract here, PDF here), Amitabh Chandra and Jonathan S. Skinner offer an explanation:
"Look who's getting out of ObamaCare," by Michelle Malkin, New York
Post, May 19, 2011 ---
Click Here
http://www.nypost.com/p/news/opinion/opedcolumnists/look_who_getting_out_of_obamacare_m4OxnfKVajFAfgKRCazP3H?CMP=OTC-rss&FEEDNAME=
Hear that? It's the escalating cry of American employers and workers trying to hold on to their health-care benefits in the age of stifling Obama health-insurance mandates: Gangway! Gangway! Save me! Waive me!
ObamaCare refugees first began beating down the exit doors last October. Waiver-mania started with McDonald's and Jack in the Box; spread to Dish Networks, hair-salon chain Regis Corp and resort giant Universal Orlando; took hold among major Big Labor outfits from the AFL-CIO to the CWA to the SEIU; roped in the nationalized health-care promoters at the Robert Wood Johnson Foundation; and is now gripping entire states
The latest to catch the waive? West Coast liberals.
Yes, amid House Democratic Leader Nancy Pelosi's congressional district, a cluster of San Francisco small businesses is among the latest waiver recipients. At least two dozen Bay Area companies -- including bars, restaurants, hotels, tourist shops, real-estate and auto firms -- have secured temporary, one-year reprieves from the federal law.
Another noteworthy waiver winner: Seattle-based REI. The trendy outdoor-equipment retailer's progressive CEO, Sally Jewell, appeared with President Obama in 2009 to tout White House health-care-reform initiatives. Two years later, REI snagged a waiver to protect the health benefits of a whopping 1,180 workers from the big-government bureaucrats that Jewell embraced at Obama's roundtable.
To date, the Health and Human Services Department has granted health-care-law exemptions to more than 3 million workers covered by more than 1,300 unions, companies and insurers who'd voluntarily offered low-cost health plans with annual benefits limits.
ObamaCare architects outlawed those private plans (nicknamed "mini med" plans) in the name of "patients' rights." Without waivers, the escapees would have had to hike premiums or drop insurance coverage for mostly low-wage, seasonal and part-time workers.
Among the most recent union affiliates to secure pardons:
* Teamsters Local 485 Health and Welfare Fund in Brooklyn
* Detroit and Vicinity Trowel Trades Health and Welfare Fund
* Communications Workers of America Local 1182 Security Benefits Fund
* CWA Local 1183 Health and Welfare Fund
* Bakers Union and Food Employees Labor Relations Association Health and Welfare Fund
* SEIU Healthcare Illinois Home Care and Child Care Fund
* United Food and Commercial Workers San Diego Employers Health and Welfare Trust
* Welfare Fund of the International Union of Operating Engineers Local 15, 15A, 15C, 15D AFL-CIO
* United Steelworkers Local 1-0318 Health and Welfare Trust Fund
* United Association of Journeymen and Apprentices Local 198 AFL-CIO Health and Welfare Trust
* Teamsters Local 617 Welfare Fund in Ridgefield, NJ
* Plumbers and Steamfitters Local 60 Health and Welfare Fund
* New York State Nurses Welfare Plan for New York City Employed Registered Professional Nurses
Pelosi and the Golden Ticket Administrators in Washington deny preferential treatment for waiver beneficiaries. But the stench of waivers-for-favors won't be dispelled until and unless the Obama administration releases a full list not only of those who won exemptions, but also of those who applied and were denied.
With San Francisco businesses caught with their hands in the waiver jar, Pelosi's office could do nothing else but pout: "It is pathetic," said Pelosi spokesman Drew Hammill, "that there are those who would be cheering for Americans to lose their minimum health coverage or see their premiums increase for political purposes."
It is far more pathetic to have cheered, as Pelosi did on the one-year anniversary of ObamaCare, the law's onerous benefits limits from which thousands of her own constituents have now been exempted.
Continued in article
"Liberal Washington State Tries to Kiss Medicaid Goodbye: The
governor and the legislature unanimously back a block-grant model similar to
welfare reform," by Nansen Malin, The Wall Street Journal, June 4,
2011 ---
http://online.wsj.com/article/SB10001424052702303657404576363812467438234.html#mod=djemEditorialPage_t
Medicaid has plunged Washington state into fiscal crisis. This fact was recognized by legislators from both sides of the aisle during a contentious special session that concluded last week. The result was Senate Bill 5596, a Medicaid block-grant bill.
The block-grant concept was remarkably nonpartisan: The bill, requiring the state to apply to the federal Department of Health and Human Services (HHS) for a waiver that would replace its current Medicaid program with a block grant, passed with unanimous support. On Tuesday, Gov. Christine Gregoire, previously an opponent of block grants, signed the bill. Now the waiver request will go to HHS Secretary Kathleen Sebelius.
A block grant would free state and local officials from being de facto appendages of the faraway federal government. Just the latest in the long line of unnecessary federal strings are the costly "maintenance of effort" requirements imposed by the federal stimulus bill and ObamaCare. This requirement will add an estimated 176,000 people to our state's Medicaid rolls by 2013 and prohibit the state from modifying eligibility rules without risking a loss of all Medicaid funding.
In contrast, SB 5596's authors explain that the block grant would "allow the state to operate as a laboratory of innovation for bending the cost curve, preserving the safety net, and improving the management of care for low-income populations." Rhode Island has had success under a similar waiver granted in 2009, saving $100 million within the first 18 months. With a block grant, state legislators will have the ability to alter eligibility and benefits to best serve the unique needs of their constituents without having to opt out of Medicaid entirely.
Continued in article
Bob Jensen's threads on health care reform are at
http://www.trinity.edu/rjensen/Health.htm
"Mediscare: The Surprising Truth
Republicans are being portrayed as Medicare Grinches, but ObamaCare already has
seniors' health care slated for draconian cuts," by Thomas Saving and John C.
Goodman, The Wall Street Journal, May 28, 2011 ---
http://online.wsj.com/article/SB10001424052702304066504576345732775990392.html?mod=djemEditorialPage_t
The Obama administration has repeatedly claimed that the health-reform bill it passed last year improved Medicare's finances. Although you'd never know it from the current state of the Medicare debate—with the Republicans being portrayed as the Medicare Grinches—the claim is true only because ObamaCare explicitly commits to cutting health-care spending for the elderly and the disabled in future years.
Yet almost no one familiar with the numbers thinks that the planned brute-force cuts in Medicare spending are politically feasible. Last August, the Office of the Medicare Actuary predicted that Medicare will be paying doctors less than what Medicaid pays by the end of this decade and, by then, one in seven hospitals will have to leave the Medicare system.
But suppose the law is implemented just as it's written. In that case, according to the Medicare Trustees, Medicare's long-term unfunded liability fell by $53 trillion on the day ObamaCare was signed.
But at what cost to the elderly? Consider people reaching the age of 65 this year. Under the new law, the average amount spent on these enrollees over the remainder of their lives will fall by about $36,000 at today's prices. That sum of money is equivalent to about three years of benefits. For 55-year-olds, the spending decrease is about $62,000—or the equivalent of six years of benefits. For 45-year-olds, the loss is more than $105,000, or nine years of benefits.
In terms of the sheer dollars involved, the law's reduction in future Medicare payments is the equivalent of raising the eligibility age for Medicare to age 68 for today's 65-year-olds, to age 71 for 55-year-olds and to age 74 for 45-year-olds. But rather than keep the system as is and raise the age of eligibility, the reform law instead tries to achieve equivalent savings by paying less to the providers of care.
What does this mean in terms of access to health care? No one knows for sure, but it almost certainly means that seniors will have difficulty finding doctors who will see them and hospitals who will admit them. Once admitted, they will enjoy fewer amenities such as private rooms and probably a lower quality of care as well.
Are there better ways of solving the problem? The graph nearby shows three proposals, including the new law, and compares them to the current system. For the past 40 years, real Medicare spending per capita has been growing about two percentage points faster than real gross domestic product (GDP) per capita. Since real GDP per capita grows at just about 2%, that means Medicare is growing at twice the rate of our economy—and is clearly unsustainable. If nothing is done, we'll see a doubling of the Medicare tax burden in less than 20 years.
There are currently an array of proposals to slow Medicare spending to a rate of GDP growth plus 1%. These include a proposal by President Obama's debt commission, chaired by Bill Clinton's former chief of staff, Erskine Bowles, and former Sen. Alan Simpson; one by former Clinton budget director Alice Rivlin and Rep. Paul Ryan (R., Wis.); and another by former Sen. Pete Domenici and Ms. Rivlin. Unlike the Medicare Trustees, the Congressional Budget Office (CBO) also scores ObamaCare at GDP plus 1%.
Of greater political interest is the House Republican budget proposal, sponsored by Mr. Ryan. This proposal largely matches the new law's Medicare cuts for the next 10 years and then provides new enrollees with a sum of money to apply to private insurance (premium support). Even though the CBO assumed premium support would increase with consumer prices (price indexing), the resolution that House Republicans actually voted for contains no specific escalation formula. A natural alternative is letting premium support payments grow at the annual rate of increase in per-capita GDP (GDP indexing).
In light of the heated rhetoric of recent days, it is worth noting that for everyone over the age of 55, there is no difference between the amount of money the House Republicans voted to spend on Medicare and the amount that the Democrats who support the health-reform law voted to spend. Even for younger people, the amounts are virtually identical with GDP indexing.
The law's spending path depends on making providers pay for all the future Medicare shortfalls. But since no one can force health-care providers to show up for work, short of a health-care provider draft this reform ultimately cannot succeed. The House Republican path, on the other hand, would make a sum of money available to each senior to choose among competing private plans—much the way Medicare Advantage provides insurance today for about one out of every four Medicare beneficiaries.
That's a good starting point. But we believe that a truly successful overhaul of Medicare will require at least three additional elements.
Continued in article
"How Medicare Was Saved What a future us will say about the Great Entitlement
Fight of 2011m" by Holman Jenkins Jr. The Wall Street Journal, May 27, 2011 ---
http://online.wsj.com/article/SB10001424052702304520804576349223226233288.html#mod=djemEditorialPage_t
News item dated May 28, 2041 at BataviaOnlineNow!, a news site devoted to Western New York: As they have for the past 30 years, the Democratic faithful in the 26th congressional district turned last night's Jefferson-Jackson Dinner into an opportunity also to commemorate Medicare-As-We-Knew-It Salvation Day. Last night's celebration was extra special, thanks to the presence of Barack Obama. "I just came for the wings," quipped the former president. (Nearby Buffalo, N.Y., of course, is the birthplace of the chicken wing.) On a serious note, Mr. Obama, 79, recalled the watershed Democratic special election victory of 2011 as a turning .point in his battle to save Medicare, the health-care program for seniors.
Earlier, dignitaries had visited the Hamburg Regional Medicare Center, specially unlocked by a janitor for the occasion. Normally the center is open between noon and 2 p.m. on Saturday to help a trickle of financially struggling local seniors apply for Medicaid.
The delegation also visited the Greater Hamburg Medical Megalopolis, adjacent to the Jack Kemp Retirement Community and Country Club. Many older residents, stopping in for discount knee adjustments or massage therapy, said they vividly recalled the 2011 congressional election. A high point was the visit of "Bowzer," of the singing group Sha Na Na, to campaign for the Democratic winner.
Historians say the race was a nationally watched referendum on the so-called Ryan Plan, which some critics likened to a plan to solve Medicare's then-pending bankruptcy by wheeling an elderly woman off a cliff.
"At the time, Medicare's fiscal shortfalls were very, very serious," says SUNY Geneseo Prof. DeWayne Wise Srinivasan. "But after NY-26, it was clear there would be no political will in Washington to address the problem. The senior lobby and other interest groups were too powerful."
However, that was not the end of the story. After the upset Democratic win in the 26th, both parties turned to the more politically palatable job of meeting a clamor from younger workers for tax-law changes to help them save for their own retirements.
Politicians had inadvertently tapped into a principle known as Ricardian Equivalence, says Prof. Srinivasan. "Polls showed nobody under 40 believed that Medicare and Social Security would be around to support them in retirement. So these younger workers were determined to increase their own savings to help pay for the long, healthy, active retirements they envisioned for themselves."
The result was the Tax Reform Act of 2013, which greatly reduced the burden of taxation on savings, investment and business profits. One upshot was what economists now call The Long Boom II, a period of unparalleled prosperity that continues to this day.
Not present for this week's festivities was the victor in that long-ago congressional race, former Erie County Clerk Kathy Hochul
"The Trouble with ObamaCare Counting the problems with the president's
health care plan," by David Harsanyi, Reason Magazine, June 8, 2011
---
http://reason.com/archives/2011/06/08/the-trouble-with-obamacare
Democrats will often get irritable when some clingy philistine refers to ObamaCare as "socialized medicine." It's simply not a precise phrase for the Patient Protection and Affordable Care Act. In any event, it's not socialized yet, you ignoramuses! Progress doesn't happen overnight. No worries, though, recent signs portend that ObamaCare will give us the state-run plan we proles deserve.
A new study published in McKinsey Quarterly claims that in 2014, the provisions of ObamaCare will induce 3 in 10 employers to "definitely or probably" stop offering health coverage to their employees. And we can only assume the companies have had the good sense not to read the legislation.
Sure, the president promised we could keep our insurance if we liked it. But why would you want to be mixed up with pitiless corporations that focus on profits, anyway? ObamaCare courageously forces states to implement concocted "exchanges" so that someone much smarter than you can pick participants, regulate prices and keep an eye on things. Sounds like a vigorous marketplace. It's only a wonder that more Americans aren't clamoring for government-run supermarkets, smartphones, and dating exchanges, as well.
You'll also recall that the un-socialized system allowed 20, 30, 40 million (please feel free to come up with any number you'd like; The New York Times won't care) people to go uninsured. Medicare's chief actuary estimated that 400,000 would sign up for these high-risk pools before ObamaCare kicked in. The Congressional Budget Office estimated that the budget would be able to handle 200,000, and others claimed that the program would need eight times the funding to meet demand. This was the driving reason for ObamaCare. But as Megan McArdle of The Atlantic points out, just as with the exchanges, folks have been standoffish, with only about 18,000 people signing up.
Victory, right? The success of a government handout is always measured by how little Americans need to use it, right? Well, judging from the food stamp administration's actions, that would be a big no. What this probably calls out for is more public service announcements or a wider net. Hey, we'll just get some toffee-nosed yacht jockeys to offset the cost.
That's not to say there aren't people out there who really need support. The president has generously handed out nearly 1,400 ObamaCare waivers to the neediest among us. About 20 percent of them have been awarded to an upmarket district in San Francisco that, by pure chance, is represented by Nancy Pelosi. Others, such as the AARP and local unions, had demanded we pass ObamaCare so they could not take part in it immediately.
We'll also soon be hearing more about the lawsuits challenging ObamaCare's individual mandate. Randy Barnett, a professor of constitutional law at Georgetown University Law Center, recently asked, "If Congress can impose this economic mandate on the people, what can't it mandate the people to buy?" Everything and nothing. And that's the beauty of it.
And let's not forget it was Obama, the newfound holy savior of Medicare, who pinned the key cost control component of health care reform on Medicare through his Independent Payment Advisory Board, or what bitter righties call a rationing board.
Continued in article
"The ObamaCare Bad News Continues: Projected costs escalate and tens
of millions will lose their current coverage," by Karl Rove, The Wall
Street Journal, June 16, 2011 ---
http://online.wsj.com/article/SB10001424052702304319804576387542318531626.html#mod=djemEditorialPage_t
A kerfuffle was stirred up last week by a devastating McKinsey & Company study that concluded up to 78 million Americans would lose their current health coverage as employers stopped offering insurance because of President Obama's Patient Protection and Affordable Care Act.
The report contradicted Mr. Obama's frequent pledge that under his reform, "if you like your health-care plan, you can keep your health-care plan." And McKinsey's was at least the fourth such analysis calling the president's promise into question.
In May 2010, former Congressional Budget Office (CBO) Director Douglas Holtz-Eakin concluded that employers would drop coverage for about 35 million Americans because of ObamaCare. A month later, in June 2010, the National Center for Policy Analysis (NCPA) pegged the number between 87 million to 117 million. And last November, Allisa Meade, a McKinsey analyst, told health-insurance company executives that 80 million to 100 million people might lose their employer-provided health insurance.
Simple economics is the reason. According to the Kaiser Family Foundation's Employer Health Benefits 2010 Annual Survey, the annual premium for an average policy last year was $5,049 for a single worker, with the company picking up roughly $4,150 and the employee the rest. For a family of four, the total cost was $13,770, with the company picking up $9,773.
Yet under ObamaCare, businesses can stop providing health-care coverage, paying a $2,000 per-worker fine instead. For small businesses, the trade-off is even more attractive: They are given a pass on the first 50 workers.
Workers losing coverage will be moved into the "exchange," a government-run marketplace to buy health plans. Those whose insurance costs were more than a specified share of their income (9.5% in 2014) could get subsidies. The exchange starts in 2014 and is fully operational by 2016.
Perversely, ObamaCare both drives up the cost of insurance with mandates and rules while making it attractive for companies to dump the increasingly more expensive coverage and pay a lesser fine. There will be huge ramifications for the country's finances if more workers lose coverage than was estimated.
When Mr. Obama's health-care bill passed in March 2010, the CBO and the congressional Joint Committee on Taxation predicted that 24 million workers would be covered by the exchange. Of these, nine million to 11 million would lose their employer-provided coverage, offset by six million to seven million who would be getting employer-provided insurance, for a net of three million workers losing company-sponsored coverage. The CBO said the exchanges would cost $511 billion over ObamaCare's first decade.
But what if more people are dumped into the exchange than originally estimated? Costs from the increased subsidies will explode.
Continued in article
Freakonomics
"Here’s Why Health Care Costs Are Outpacing Health Care Efficacy," by
Stephen J. Dubner, Freakonomics.com, April 18, 2011 ---
http://www.freakonomics.com/2011/04/18/heres-why-health-care-costs-are-outpacing-health-care-efficacy/
In a new working paper called “Technology Growth and Expenditure Growth in Health Care” (abstract here, PDF here), Amitabh Chandra and Jonathan S. Skinner offer an explanation:
In the United States, health care technology has contributed to rising survival rates, yet health care spending relative to GDP has also grown more rapidly than in any other country. We develop a model of patient demand and supplier behavior to explain these parallel trends in technology growth and cost growth. We show that health care productivity depends on the heterogeneity of treatment effects across patients, the shape of the health production function, and the cost structure of procedures such as MRIs with high fixed costs and low marginal costs. The model implies a typology of medical technology productivity: (I) highly cost-effective “home run” innovations with little chance of overuse, such as anti-retroviral therapy for HIV, (II) treatments highly effective for some but not for all (e.g. stents), and (III) “gray area” treatments with uncertain clinical value such as ICU days among chronically ill patients. Not surprisingly, countries adopting Category I and effective Category II treatments gain the greatest health improvements, while countries adopting ineffective Category II and Category III treatments experience the most rapid cost growth. Ultimately, economic and political resistance in the U.S. to ever-rising tax rates will likely slow cost growth, with uncertain effects on technology growth.
This paper strikes me as sensible, explanatory, and non-ideological to the max. It would be nifty if the people who work in Washington read it, and thought about it, and maybe even acted on it. (And it would be nifty if the Knicks beat the Celtics too, but I’m not holding my breath for either outcome …)
Here’s a very good paragraph from the paper:
The science section of a U.S. newspaper routinely features articles on new surgical and pharmaceutical treatments for cancer, obesity, aging, and cardiovascular diseases, with rosy predictions of expanded longevity and improved health functioning (Wade, 2009). The business section, on the other hand, features gloomy reports of galloping health insurance premiums (Claxton et al., 2010), declining insurance coverage, and unsustainable Medicare and Medicaid growth leading to higher taxes (Leonhardt, 2009) and downgraded U.S. debt (Stein, 2006). Not surprisingly, there is some ambiguity as to whether these two trends, in outcomes and in expenditures, are a cause for celebration or concern.
And the authors offer good specific examples of what they built their argument on, noting the …
Continued in article
"The Truth About Health Care Reform and the Economy: Separating economic fact from economic myth," by Veronique de Rugy, Reason Magazine, April 15, 2011 --- http://reason.com/archives/2011/04/15/the-truth-about-health-care-re
Myth 1: Health care reform will reduce the deficit.
Fact 1: Health care reform will increase the deficit.
The Patient Protection and Affordable Care Act includes many provisions that have nothing to do with health care: the CLASS act, a student loan overhaul, and many new taxes. These provisions don't change the health care system. They just raise money to pay for the new law. Strip them away and the law’s actual health care provisions don't lower the deficit—they increase it!
The chart below uses data from Congressional Budget Office (CBO) to clarify the fiscal consequences of health care reform.
. . .
As you can see, from 2012 to 2021, the Congressional Budget Office estimates that the health care act will reduce deficits by $210 billion (note that this estimate differs from the widely cited $143 billion figure used during the lead-up to the passage of the act). During this same time period, however, the actual health care reform provisions of the law will increase deficits by $464 billion.
Of course, one should not evaluate the health care legislation on its fiscal impacts alone. In theory we should get some fiscal benefits. But the key question is how they net out. Still, no matter what you think about the benefits of the health care legislation, it is incorrect to claim that health care reform will save money. It won’t.
Myth 2: The U.S. health care system is a free-market system.
Fact 2: Roughly half of all U.S. health care is currently paid for by the government.
. . .
Even in the absence of the health care reform law, government programs including Medicare and Medicaid already fund almost half of American health care. Roughly a third of the remaining expenditures are funded by private insurers—mainly through subsidized and highly regulated employee plans. Not exactly a free market.
As this chart shows, state and federal entities make up over half of the health insurance market. Of course, the Patient Protection and Affordable Care Act will only increase the share of government involvement in the health care market.
Myth 3: Medicare spending increases life expectancy for seniors. Reductions in Medicare spending will therefore reduce their life expectancy.
Fact 3: Increases in life expectancy for seniors are due to increased access to health care, not to Medicare.
While Medicare spending has certainly decreased seniors’ out of pocket health care expenses (by 1970, Medicare reduced out of pocket expenses by an estimated 40 percent relative to pre-Medicare levels), the program’s effect on mortality is much less clear.
. . .
Continued in article
Questions
Is it possible to eliminate a $1.5 trillion deficit by increasing rates for
taxpayers earning more than $250,000 per year?
Is it possible to eliminate the above deficit by increasing tax rates for all
taxpayers?
Answers
In theory no to Question 1 and yes to Question 2, but in reality, closing the
Federal spending gap with tax rate increases would be a total disaster on the
economy to a point where the government might take in less rather than more tax
revenue.
Firstly the answer is no unless you more than double what the poor and middle class pay in taxes. And since nearly half the households in the U.S. do not pay any Federal income tax, Congress would probably have to figure how to squeeze blood out of turnips. This would have an extremely adverse impact on middle and lower income families already deep in debt to to pay medical, housing, and education expenses.
Secondly, the answer is no if you anticipate that most taxpayers that have any form of savings would probably stampede to invest in tax free alternatives such as tax free municipal bonds and bond funds. This would be a disaster for business firms seeking capital.
Thirdly, many taxpayers now paying something into the U.S. Treasury would be thrown out of work and impact on the economy would be far worse than the Great Depression of the 1930s.
But if we could wave a magic wand and prevent all the dynamic reactions to
tax rate increases, one solution would look something like this --- keeping in
mind that all of this is pure fantasy since the dynamic reactions really cannot
be prevented. From Paul Caron's TaxProf Blog on April 18, 2011 ---
http://taxprof.typepad.com/
"Why Aren't The Rich Paying 50 Percent in
Income Taxes?" by Nick Gillespie and Meredith Bragg, Reason Magazine,
April 8, 2011 ---
http://reason.com/blog/2011/04/08/why-arent-the-rich-paying-50-p
Jensen Comment
Professor Blinder's main criticism is that the Ryan Plan is too long term and
does not do enough to reduce the trillions in deficits over the next decade. But
like most progressives he offers zero hints as to what will be a "better game in
town" to reduce deficits now. Presumably he wants to confiscate the incomes of
people now making over $250,000 per year, but he really doesn't want to discuss
a proposed game plan for tax increases because he secretly knows this will not
be enough to make much difference on the deficits and probably will be highly
dysfunctional in terms of unemployment. Secretly he most likely supports his
Princeton colleague's, Krazy Krugman's, solution of printing dollars to reduce
deficits and pay for my wife's forthcoming very expensive surgery.
Zimbabwe showed Ben Bernanke, Alan Blinder, and Paul Krugman the way to
reduce government deficits. Why can't they convince the rest of us that printing
presses are the answer to deficit reduction?
And, if we keep redefining inflation by taking more and more commodities and services out of the calculation, things won't look so bad while were printing $15 trillion dollars for starters.
Eventually, the "Core" CPI might only include empty houses and vacant yachts.
April 20, 2011 reply from Bob Jensen
Hi Louis and Linda,
I probably would never do research on privileged budget items because it is so complicated and confounded with externalities.
When it comes to government spending, one has to first distinguish those budget items that are discretionary versus non-discretionary. To do this we need some type of criterion. One criterion to consider is whether or not a contract would make the item binding in court. As I mentioned previously many retirement contracts allow beneficiaries to take breaches of contract to court, which is why Congress does not mess with cutting military pensions.
There are, of course, gray zones. Presumably Congress can choose to add surtaxes to all pensions that it pays, including military pensions and Social Security. Or it can choose to tax medical benefits that it pays such as taxes on usage of Veterans Hospitals or taxes and higher deductibles on Medicare claims.
Another gray area that makes non-discretionary budget items somewhat discretionary is already being practiced in Medicare. You can keep allowing less and less for medical services such that claimants can only get cheap and inferior doctors. For example, the surgeon who performed my wife's surgeries three and four under Medicare would not do surgery Number 5 because he stopped accepting any Medicare patients. This means by law that he cannot accept patients who are eligible for Medicare even if they are willing to pay his fees from private funds. May wife had to find another surgeon in another state.
Under the Romney Care "universal" health insurance plan in Massachusetts, some hospitals discovered the plan was not paying enough to cover out-of-pocket expenses, especially malpractice insurance premiums. So those hospitals dropped the services that had the highest malpractice insurance premiums. Read that as meaning that those hospitals dropped obstetrics departments and refused obstetrics services to all women. These women can still find hospitals that offer such services but the distances are further and the lines are longer and the services are not nearly as good in many instances.
Also the outstanding orthopaedic hospital in Boston where my wife now has spinal surgeries dropped its emergency room services. An externality of Romney care was reduced medical services for all patients, including those that have premium medical insurance plans from employers. Those on premium plans have fewer choices for emergency rooms and trauma centers because of Romney Care.
There's a huge difference between General Motors and the government when it comes to budget cutting. General Motors cannot print money and reached a point where it was impossible to meet pension and health care contracts with retirees. In that case the bankruptcy court modified the contracts. In the case of government pensions and medical benefits for retirees, rather than declare bankruptcy our Federal government will probably just print the money needed to honor the contracts. Welcome to Zimbabwe.
Our state governments like California are in more of a bind. State governments might have to declare bankruptcy and have the bankruptcy courts restructure retirement contracts. At one time Canada came close to losing its national government in favor of provincial governments that would, among other things, print their own currencies. This is no longer entirely out of the question for our 50 states in the United States who would like an option to print their own currencies.
As far as "privileges" within government budget items deemed discretionary, the top privileges typically go to public safety. Police, fire, and National Guard budgets are being cut somewhat but they are protected from enormous cuts by fears in the minds of voters. As far as Federal government military budgets are concerned, an extremely expensive item in budgets is for advanced warfare and defense technology. However, not many voters are willing to fall behind our enemies on warfare technology, including technology for blocking communications --- such as when an unnamed advanced-technology nation allegedly shut down the nuclear centrifuges in Iran.
Another extremely expensive budget item is our CIA, but not many voters will accept CIA budget cuts on the premise that "ignorance is bliss."
It's one thing to point out research about tax increases and spending cuts on a very broad scale, but when it comes to specifics it becomes an explosive debate that can be political suicide. We now have two choices with trillions in budget deficits. We can raise taxes and make huge spending cuts. Or we keep putting off remedies like we've done for the past two decades at reach a point where it's no longer possible to save the patient.
Some professors in ivory towers might think it is possible to totally eliminate our international fighting force in favor of a beefed up domestic police force. But the unfunded expenses of past wars will continue to linger over our heads. And it's questionable how many terror attacks this nation is willing to experience with an impotent international fighting force for prevention of future attacks.
But I really don't want to get into the question of line item budget cuts. This is also probably too explosive for the AECM in terms of politics. We can, however, debate broad issues like whether it's possible to tax ourselves out of trillion dollar deficits with very little serious budget cutting.
Respectfully,
Bob Jensen
Updates for March 31, 2011
Half of All States Now Suing to Stop Obamacare --- http://blog.heritage.org/2011/01/12/half-of-all-states-now-suing-to-stop-obamacare/
"Vt. House passes single-payer bill," by Dave Gram, Burlington
Banner, March 24m 2011 ---
http://www.benningtonbanner.com/ci_17695099?source=rss_viewed
Every Vermonter could sign up for state-financed health insurance under a bill passed by the House on Thursday that would put the state on a path to a single-payer health care system by the middle of this decade.
Senate next
"This bill takes our state one step closer to a system that ensures that all Vermonters have access to the care they deserve and contains costs," House Speaker Shap Smith said shortly after the House passed the bill 92-49.
The measure now goes to the Senate, where it is expected to pass, but with some possible changes.
Gov. Peter Shumlin, who made single-payer health care a centerpiece of his gubernatorial campaign last year, also praised the legislation. He said it would make Vermont "the first state in the country to make the first substantive step to deliver a health care system where health care will be a right and not a privilege, where health care will follow the individual, not be a requirement of the employer, and where we’ll have an affordable system that contains costs."
Costs are an open question. The bill sets up a five-member state board to design a benefit package to be called Green Mountain Care, but doesn’t require the governor to propose a way to pay for it until 2013. That drew fire from minority Republicans in the House, who said the hard partof reform -- paying for it -- won’t be tackled until after Shumlin campaigns for a second two-year term in
. . .
The Shumlin administration and supporters of the bill need to address numerous uncertainties as the process goes forward. One concerns the more than 100,000 Vermonters who get health coverage from employers who are self-insured, meaning they assume the financial risks of coverage, and are chartered under federal law.
The House defeated a proposed amendment to allow those employers, among them the state’s largest, like IBM, to be exempt from paying taxes to support Green Mountain Care. Rep. Anne Donahue, R-Northfield, said that would leave them in a similar situation to parents who send their children to private schools, but pay taxes to support public ones.
Jensen Comment
One enormous problem faced by such a small state is that so many of its
residents must go elsewhere for specialized medical care, including such medical
centers as Dartmouth Hitchcock in New Hampshire and the various medical centers
in Boston and Canada. Cost containment is more difficult when a provider of
insurance cannot regulate the cost of services.
There are other questions such as whether the State of Vermont will pick up the supplemental costs of Medicare. With such a small population, this can be troublesome when spreading the insurance risks among a small funding base. One of the heavy hits taken by supplemental insurers is for the high cost of dying when older folks must be hospitalized for lengthy stays, often in intensive care units. CBS on Sixty Minutes claims the major issue with Medicare and its supplemental insurers is the "High Cost of Dying."
On November 22, 2009 CBS Sixty Minutes aired a video featuring experts
(including physicians) explaining how the single largest drain on the Medicare
insurance fund is keeping dying people hopelessly alive who could otherwise be
allowed to die quicker and painlessly without artificially prolonging life on
ICU machines.
"The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009
---
http://www.cbsnews.com/stories/2009/11/19/60minutes/main5711689.shtml?tag=mncol;lst;1
"In Health Care, Cost-Cutting Pays Investors If you're looking to profit
from health-care stocks, start with companies helping to save money in the
sector," by David Bogoslaw, Business Week, January 13, 2011 ---
http://www.businessweek.com/investor/content/jan2011/pi20110111_604809.htm?link_position=link1
"Health Insurance Monopoly," by John C. Goodman, Townhall, March 22, 2011 ---
http://townhall.com/columnists/johncgoodman/2011/03/22/health_insurance_monopoly
The single most important feature of the Affordable Care Act (ObamaCare) is the establishment of a health insurance exchange where people will be required to buy health insurance if they are not insured by their employer or a government plan. As envisioned by its supporters, the exchange will be a model of competition.
But rather than moving toward a competitive world, we seem to be moving toward the opposite extreme: monopoly. Major consolidation is underway both on the provider and insurer sides of the market. And while this trend was already underway before Barack Obama became president, without doubt it is accelerating because of ObamaCare.
The following bullet points describe what things look like in the market for commercial insurance in major Texas cities:
·Blue Cross already has 70% of the market in three of the nine largest metropolitan areas.
·In all of them, and for the state as a whole, more than 60% of all customers buy from only two insurers.
Since the passage of the health reform bill, Harvard Pilgrim has announced its departure from the Medicare Advantage market (leaving 22,000 enrollees to search for coverage elsewhere) and the Principal Financial Group has left the health insurance market altogether (leaving 725,000 people behind). Many other small- and medium-sized insurers are struggling to hold on.
What is causing the immediate problem? One big problem is a new federal requirement that insurance companies spend no more than 15% of their revenues on “administration.”
In almost every state, rarely does a session of the legislature adjourn before someone files a bill to require the public schools to spend a certain percent of their income “in the classroom.” How well does this work? Here is Michael Barba’s description in a forthcoming NCPA Brief Analysis:
"Nationwide, schools spend an average of about $10,000 per student each year. On average, 60 percent of this is instructional, according to the National Center for Education Statistics (NCES). Instructional spending includes such things as teacher and staff salaries, extracurricular activities such as sports or academic clubs, and classroom supplies. However, each state can define instructional spending as it chooses, and expenses labeled as instructional are often not exclusively classroom expenses. In Texas, for example, the upkeep of vehicles, equipment and computers, as well as food service, travel, property insurance and refreshments for meetings are all considered instructional…
Continued in article
"Mayberry OMG: Those false ads cost taxpayers $3.5 million,"
The Wall Street Journal, March 25, 2011 ---
|http://online.wsj.com/article/SB10001424052748704604704576220640964310506.html#mod=djemEditorialPage_t
President Obama met with the winner of the "save award" in the Oval Office the other day, the contest for federal employees who find ways to make government more efficient. Trudy Givens, of Portage, Wisconsin, suggested that the feds stop mailing out paper copies of the Federal Register (available online since 1994) to the provinces. Her good idea will cut about $4 million a year in printing and postage.
We don't work for the government, but here's our "save" suggestion: How about not spending some $3.5 million to deceptively promote ObamaCare?
It turns out it cost the Health and Human Services Department $2.78 million to buy airtime for three cable TV ads last year, featuring Andy Griffith praising the new entitlement. The "Matlock" eminence rendered his services pro bono, but Porter Novelli didn't. The media consulting firm racked up 668 billable hours and earned $404,384.40 producing the spots, according to documents released by the outside GOP advocacy group Crossroads GPS through the Freedom of Information Act.
At least Porter Novelli didn't charge taxpayers for fact-checking. Among Mr. Griffith's many deceptive claims, he tells his fellow seniors that their Medicare benefits won't change (they will, most immediately in Medicare Advantage) and that ObamaCare strengthens the program's finances (it doesn't, according to the chief Medicare actuary). Lovable ol' Andy of Mayberry then says "that new health-care law sure sounds good" to him, in a transparent bid to win over senior voters in advance of the 2010 election.
The next time the President wants to run misleading ads ahead of an election, he might hit up the Democratic Party or use his bully pulpit, rather than passing the bill to taxpayers. Meantime, an Administration functionary says in a new promotional Web video for the save award—how much did that one cost to produce?—that "Something that seems relatively small if replicated over the full length of the federal government can really result in substantial savings."
How about we go one better and save several trillion dollars by repealing a health-care bill that Americans still hate despite Sheriff Andy's endorsement?
"Bachmann Exposes $105 Billion Secret," by Phyllis Schlaffy,
Townhall, March 15, 2011 ---
http://townhall.com/columnists/phyllisschlafly/2011/03/15/bachmann_exposes_$105_billion_secret
When ObamaCare was passed by the Senate on Christmas Eve of 2009, senators had less than 72 hours to compare a 383-page package of amendments to the 2,074-page bill. Public outrage over backroom deals (such as the Cornhusker Kickback and the Louisiana Purchase) led to the election of Scott Brown in Massachusetts.
Democrats then cooked up a plan to link the now-2,409-page Senate-passed ObamaCare bill to dozens of amendments contained in a separate 150-page Budget Reconciliation bill that could pass both houses by a simple majority. That's when then-Speaker Nancy Pelosi famously told the then-Democratic majority, "We have to pass the bill so that you can find out what is in it."
When President Obama signed ObamaCare into law, that set in motion a series of funding triggers and money transfers that add up to $105,464,000,000 in pre-authorized appropriations that are scheduled to be paid up through FY2019. In laymen's language, that means writing postdated checks that are guaranteed to be paid out over the next eight years.
This money was divided into dozens of smaller amounts so the big total would not be apparent. For example, Section 2953 of ObamaCare included a pre-funded appropriation of $75 million a year for five years to "educate adolescents" in "adult preparation subjects" such as "stress management" and "the development of healthy attitudes and values about adolescent growth and development, body image, racial and ethnic diversity, and other related subjects."
Section 4101(a) of ObamaCare prefunded $200 million a year over four years for the construction of school-based health centers. In Section 4002, a total of $17,750,000,000 will be deposited over 10 years to a discretionary account controlled by the HHS secretary (currently Kathleen Sebelius), who may spend that money "to provide for expanded and sustained national investment in prevention" and to "help restrain the rate of growth in private and public sector health care costs."
Continued in article
"How
to Live Freer in New Hampshire: With all eyes on Wisconsin this past week,
overlooked has been the conservative policy changes that are moving ahead in New
Hampshire," by Stephen Moore, The Wall Street Journal, February 25,
2011 ---
http://online.wsj.com/article/SB10001424052748704150604576166452052715900.html?mod=djemEditorialPage_t
With all eyes on Wisconsin this past week, overlooked has been the conservative policy changes that are moving ahead in New Hampshire. In recent days the New Hampshire House, where the GOP controls nearly three-quarters of the 400 seats, passed a bill to repeal the state cap-and-trade law that imposes a tax on energy use and a bill to make New Hampshire a right-to-work state.
Democratic Gov. John Lynch has vowed to veto both bills, but my sources in Concord say there's a chance that the vetoes could be overridden. Meanwhile, Republicans are also set to pass a spending reduction bill with the kinds of public sector pension reforms that have incited protests from the labor unions in the Midwest.
New Hampshire has always been the island of liberty and low taxes surrounded by a sea of Northeastern-style socialism. It's the only state in the region without an income tax or statewide sales tax, and per-capita spending is about half of what's found in New York and New Jersey. Republicans won huge majorities in both houses in November after turning blue in 2008 and voting for President Obama.
If New Hampshire becomes a right-to-work state, it would be the only New England state that does not force workers to join a union and pay dues. The bill passed by 221-131 but still lacks the two-thirds majority that's needed for a veto override. House Deputy Speaker Pamela Tucker said that becoming a right-to-work state "would help us become a haven for employers seeking a pro-business environment." She added: "Freedom is a core New Hampshire belief, and freedom of association and choice is a fundamental right of every New Hampshire citizen."
In 2008, New Hampshire joined something called the Regional Greenhouse Gas Initiative, a region-wide cap-and-trade system for state utilities. So far, it's resulted in about $27 million in higher electric costs for consumers, and the environmental benefits have been dubious. "It does nothing to reduce greenhouse gases because jobs and businesses just move to other states," says Corey Lewandowski, the New Hampshire director of Americans for Prosperity. His group is working to make New Hampshire the first state in the nation to repeal an existing global warming law. The repeal bill passed with a two-thirds majority, and the state Senate is expected to follow suit with the necessary margin to override a veto.
Jensen
Comment
In spite of now being labeled a conservative Yankee state, New Hampshire is
surprisingly liberal on many issues. It has had a succession of senators and
representatives that it sent to Washington DC prior to the 2008 election.
Governors have be Democrats for decades. And New Hampshire is not only one of
the few states sanctifying gay marriage, the Republican-controlled legislature
just turn down an effort to repeal the gay marriage law.
More notably, New Hampshire is one of the least friendly states to private sector corporate businesses in terms of business taxes and fees.
Medicare is the real killer. According to Eugene
Steuerle of the Urban Institute, an average couple retiring last year can look
forward to consuming Medicare benefits with a present value of $343,000, having
paid Medicare taxes with a present value of $109,000.
Holman W. Jenkins, Jr.
"Let's
Begin Obama's 'Conversation' on Entitlements: A couple retiring last year
paid $109,000 into Medicare but can expect $343,000 back from the system,"
by Holman W. Jenkins, Jr., The Wall Street Journal, February 26, 2011 ---
http://online.wsj.com/article/SB10001424052748703408604576164172865528158.html
Nobody should be surprised that public-sector workers in Wisconsin and elsewhere are fighting to preserve every penny of their promised benefits.
Nobody should be surprised that state governors—and it doesn't matter which party—are trying to trim those privileges and benefits.
Nobody should be surprised by anything.
News reporters may be naïve, and some of the protesters may pretend to be. But this fight was penciled in long ago, when politicians and union leaders made the strategic decision to negotiate benefits without negotiating for the funding to make good on them. The mock shock and horror is all the more laughable given that events in Wisconsin are a perfect microcosm of the battle that every sentient American knows, and has known for a generation, awaits Medicare and Social Security.
In keeping with the theatrics of naïveté, President Obama now calls for "beginning a conversation on entitlements." One wonders what it was, then, that G.W. Bush began at the 2004 Republican convention, or what thinkers and activist groups that have been pushing visions of entitlement reform for decades have been doing.
Has the president not heard of the private sector's pioneering work on "defined contributions"? Or Bill Clinton's landmark Medicare commission in 1999? One might as well wonder what pain is coming to those Obama followers who have yet to suspect their thoughtful liberal might be a visionless apparatchik.
Don't doubt that Mr. Obama's real impulse, like that of most Democrats, is to let things ride and then simply, amid a crisis, start slashing benefits for the "rich" while also raising taxes on "the rich." Unspoken has been a Democratic assumption that an aging electorate, in a crisis, would be willing to tax itself to the hilt to prop up an unreformed or barely reformed Social Security and Medicare.
Even if this assumption were electorally sound, economics won't oblige in the crisis that's coming. The necessary tax hikes would kill any hope of growth. The economy would continue its free fall without root-and-branch entitlement cuts all the more painful for having been delayed.
Let's lay down a couple of markers for "the conversation" Mr. Obama pretends he wants to have. The transition to a new system, in which workers save for their own retirement consumption, will have to be financed—that is, we'll have to borrow to settle the claims of those who are retired or nearing retirement and can't be left in the lurch.
Medicare is the real killer. According to Eugene Steuerle of the Urban Institute, an average couple retiring last year can look forward to consuming Medicare benefits with a present value of $343,000, having paid Medicare taxes with a present value of $109,000.
And don't let that figure get your hopes up, because even that $109,000 is not available today. That money was spent long ago. The government's trust funds are a fraud. Indeed, by some large amount, society missed out over many decades on domestic savings and investment that would have taken place had workers not been relying on unfunded government promises to support them in retirement.
The flip side of this depressing consideration, though, is a happier one. Moving toward a system of real savings, in which payroll taxes would flow into some version of personal accounts controlled by the worker, would bring a big improvement to incentives. We could expect a sizeable growth dividend to help finance the transition.
By "finance the transition," of course, we mean today's workers having to reach into their own pockets twice, paying for their own retirement while also making up for the saving their parents and grandparents didn't do. When people talk about generational injustice, this is what they mean. But the pain can be lightened and spread more evenly with borrowing. Here's where we should not be afraid of debt. The bond market can be trusted to distinguish between good debt and bad debt—between borrowing to fix the system and borrowing to prop it up.
Continued in article
Bob
Jensen's threads on entitlements are at
http://www.trinity.edu/rjensen/Entitlements.htm
"The
Next Repeal Target Kathleen Sebelius has some ObamaCare regrets," The
Wall Street Journal, February 10, 2011 ---
http://online.wsj.com/article/SB10001424052748704364004576132222496871828.html?mod=djemEditorialPage_t
No one should expect much real health-care progress for the next two years, but at least President Obama is now making concessions to the political mood, however minor. The White House is suddenly trying to pacify the critics it used to claim were partisans, or industry shills, or arguing in bad faith.
The latest penitent is Kathleen Sebelius, who has finally admitted that there are severe fiscal problems with a new entitlement for long-term care that was included in ObamaCare. Speaking Tuesday at the Kaiser Family Foundation, the Health and Human Services Secretary defended the new government insurance program, known by the acronym Class. But she also said that "The law, while the structure in the statute wasn't perfect, provided ample flexibility to make sure that Class is successful. . . . We at HHS are committed to using that authority to making sure that both the program meets people's needs while remaining fiscally sound."
In other words, Ms. Sebelius plans to use her administrative powers to rewrite the Class program so it doesn't follow Congressional orders and bankrupt itself by design. She even made a promise that her rewrite will be so complete that "no taxpayer dollars will be used to pay for Class benefits," period.
That would certainly be a first in entitlement history, which is why President Obama's own deficit commission recommended the "reform or repeal" of Class. It said the program will "require large general revenue transfers or else collapse under its own weight," while Senate Budget Chairman Kent Conrad has called Class "a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of."
The main reason Democratic liberals insisted on passing Class is because it will crowd out private insurance for long-term care like home health aides or nursing homes. But they also used it to rig the bill's budget math to make it appear to reduce the deficit.
The program will start collecting premiums up front in 2012 but won't pay out any cash benefits until five years later. The $70 billion or so accumulated during that lead time will finance other parts of ObamaCare, and then the Class program is scheduled to go broke sometime between 2020 and 2025 in part because the money can't be spent twice.
Continued in article
"The Repeal Vote An historic repudiation of an entitlement that is only 10
months old," The Wall Street Journal, January 20, 2011 ---
http://online.wsj.com/article/SB10001424052748704590704576091973130244618.html?mod=djemEditorialPage_t
Democrats are deriding last night's House vote to repeal ObamaCare as "symbolic," and it was, but that is not the same as meaningless. The stunning political reality is that a new entitlement that was supposed to be a landmark of liberal governance has been repudiated by a majority of one chamber of Congress only 10 months after it passed. This sort of thing never happens.
More House Members—245 in total—voted to rescind the new entitlement than the 219 Democrats who voted to create it last March. That partisan majority narrowly prevailed over all 178 Republicans and some 38 Democrats. The three Democrats who favored repeal yesterday confirmed the bipartisan opposition to the kind of vast new social program that historically has been built on a national bipartisan consensus.
Republicans across the country campaigned on repeal last year, and yesterday's vote showed refreshing respect for the often invoked, rarely consulted American people. Meanwhile, six additional states have asked to join the momentous constitutional challenge to ObamaCare in Florida, bringing the total to 26, plus Virginia's separate suit. A majority of states resisting this mandate is another "symbolic" threshold.
It's also telling that even many Democrats are now bowing to the public mood, conceding that the law needs fixing even if they oppose outright repeal. No less than President Obama declared that "I'm willing and eager to work with both Democrats and Republicans to improve the Affordable Care Act. But we can't go backward." House Minority Whip Steny Hoyer said on Tuesday that Democrats are "open to better ideas."
These feints toward conciliation would be more convincing if Harry Reid were willing to bring the repeal bill to the Senate floor. No doubt the Majority Leader fears defections when Republicans eventually do force an up-or-down vote, especially among the many vulnerable red-state Democrats standing for re-election in 2012. The retirement of North Dakota's Kent Conrad, the self-styled deficit hawk who voted for this fiscal disaster, may be a portent.
Various liberal sages chimed in with a prediction/hope that repeal will backfire on Republicans, usually based on outlier polls like those produced by the Kaiser Family Foundation. These are the same wise men who after Scott Brown's Massachusetts Senate upset a year ago importuned Democrats to pass the bill anyway. They claimed it would be a political winner, eventually, once voters were hooked up to subsidized coverage.
But such spin can't overcome the reality of premium increases and other damage in the insurance market that consumers can see in their own paychecks and that will only grow. Recall that reform was sold as a way to control costs and increase consumer choice. But underlying medical costs continue to climb, carrying premiums aloft in tandem. Even a nonprofit insurer like Blue Shield of California, a reliable lobbyist for progressive causes, says it must raise rates by as much as 59%, in part to comply with ObamaCare's mandates.
The law's central planning has also set off a wave of health-industry consolidation that is already reshaping medicine as providers try to shelter themselves from political risk. A Thompson Reuters survey released this week found that 65% of physicians believe the quality of care will deteriorate over the next five years, with only 18% thinking it will improve. Republicans could have done better in yesterday's debate by focusing more on this deterioration in choice and quality, rather than so much on the (admittedly real) harm to jobs and the federal deficit.
The GOP does need to craft a reform alternative based on competition and market incentives that is more than a return to the status quo ante. And while "repeal and replace" can't happen as long as Mr. Obama wields veto power, yesterday's vote sent an important signal to voters that ObamaCare can't be fixed at the margins when it is so destructive at its core. Next up: defunding the law's implementation and repealing some of its more pernicious parts.
"Health-Care
Investment—The Hidden Crisis When the stock market values companies that make
cosmetics and beer far above pharmaceutical companies, you know that incentives
are out of whack," by Michael Milken, The Wall Street Journal,
February 8, 2011 ---
http://online.wsj.com/article/SB10001424052748703959104576082150097021530.html?mod=WSJ_newsreel_opinion
Since 1820, world per-capita income has risen more than eightfold, thanks in part to the spread of democracy, open trading markets, and the rule of law. But a less-noted source of growth—improvements to health that have given us longer, more productive lives—has produced as much as half of the increase in the global economy over the past two centuries, as research by the late British economist Angus Maddison suggests. It would be logical to assume that companies whose products make us healthier would be among the most valued enterprises on the planet, but this assumption is wrong.
Consider companies that make consumer products—things like soft drinks, detergent, cosmetics and beer. While their price-earnings ratios will vary, in today's market their average will most likely be in the neighborhood of 20. But the average P/E of the largest American pharmaceutical research companies (Abbott Labs, Bristol-Myers Squibb, Johnson & Johnson, Eli Lilly, Merck and Pfizer) was recently near 10. Investors must have concluded that pretzels and eyeliner produce faster profit growth than prescription medicines.
Lower pharma P/E ratios are a recent phenomenon. A generation ago, drug firms regularly topped magazine lists of the most-admired companies in America, a reputation usually reflected in their stock prices. But facing the specter of regulated returns, enterprise values dropped sharply during debates about proposed health-reform legislation in 1993. When the proposals failed in Congress, valuations eventually recovered. In the last decade, pharma P/E ratios dropped again.
Contributing to these lower valuations are patent expirations, regulatory complexity, uncertainty about litigation exposure, and high U.S. taxes on repatriated foreign income. These factors undoubtedly influenced the decision by Procter & Gamble to leave the pharmaceutical business entirely in 2009 and concentrate on consumer products.
Procter & Gamble responded rationally to clear market signals that discouraged development of life-saving drugs. But for people whose health, and perhaps survival, will depend on these medicines—that includes you and me—the implications of the disparity in market valuations are ominous.
We can remove some of the barriers to growth in medical research through several public-policy steps:
• Match the inducements of other countries. Many nations offer generous tax incentives, easier recruitment of clinical-trial subjects, strong government partnerships and far less litigation. We cannot and should not stop American biopharmaceutical and medical-device manufacturers from expanding overseas operations. But we can reduce needless bureaucracy at home, implement tort reform, and restructure taxation of foreign income.
• Recognize the return on investment in federal health research. We clearly need spending restraint in Washington. But smart budgeting will factor in the economic gains that come from longer, healthier life spans and the savings from improved therapies. One 2006 study by Kevin Murphy and Robert Topel of the University of Chicago showed that life-expectancy gains since 1970 added $3.2 trillion per year to America's national wealth. A mere 1% reduction in cancer deaths would be worth $500 billion, they noted, and the present value to future generations of a full cure is a nearly incomprehensible $50 trillion—more than three times today's GDP.
Congress doubled the budget of the National Institutes of Health (NIH) between 1998 and 2003. It was money well-spent, and we're now seeing exciting announcements from the nation's medical research centers, including 39 new cancer drugs that have been approved since 2004. In our view at the Milken Institute's FasterCures, the past year has produced the greatest progress against cancer since I first began working with the research community in the 1970s. Progress is accelerating on a range of other diseases as doctors gain traction by using rapidly evolving technology and by collaborating across disciplines.
But the prospects for continuing this discovery bonanza are threatened. NIH funding has trended down in real terms since 2003. Current budget realities portend severe future cuts that will cause some younger medical scientists to either change careers or take their work to places like Singapore that put out the welcome mat for promising researchers. Whether continuing breakthroughs emerge from U.S. laboratories or somewhere else will profoundly affect America's role among nations in the 21st century.
• Support prevention. There's great concern with rising health-care costs, yet too often we overlook that the single best way to contain them is to keep people from getting sick in the first place. That starts with recognizing that lifestyles, not genes, are the biggest contributors to disease. Public and corporate programs aimed at even slight reductions in obesity, tobacco use and other damaging behaviors pay large social and economic dividends.
• Give the FDA adequate resources. At a recent New York conference hosted by FasterCures, Food and Drug Administration Commissioner Margaret Hamburg told me that imports of products subject to FDA inspection have increased to 20 million from six million shipments in a decade. In fact, an estimated 25% of the U.S. economy is affected by FDA oversight. And the new food-safety legislation that Congress passed in December further expands the agency's responsibilities.
Given all this, the FDA soon won't be able to keep up with the pace of innovation in such areas as medical-device development and regenerative medicine—the use of stem cells to repair damage to tissues and organs. That will further slow the movement of effective drugs and devices from laboratory to patient.
Continued in article
Maxine Says:
Let me get this straight . . . .
We're going to
be "gifted" with a health care
plan we are forced to purchase and
fined if we don't,
Which
purportedly covers at least
ten million more people,
without adding a single new doctor,
but provides for 16,000 new IRS agents,
written by a
committee whose chairman
says he doesn't understand it,
passed by
a Congress that didn't read it but
exempted themselves from it,
and signed by a President who smokes,
with funding administered
by a treasury chief who
didn't pay his taxes,
for which we'll
be taxed for four years before any
benefits take effect,
by a government
which has
already bankrupted Social Security and Medicare,
all to be
overseen by a surgeon general
who is obese,
and financed by a country that's broke!!!!!
'What the
hell could
possibly go wrong?'
Updates for December 31, 2010
Why did President Obama turn down IBM's offer to, for free, to detect
medical fraud?
Video: Did White House Snub Fraud Fighter?
http://news.yahoo.com/video/politics-15749652/did-white-house-snub-fraud-fighter-22352314
"ObamaCare's Incentive to Drop Insurance: My state of Tennessee
could reduce costs by over $146 million using the legislated mechanics of health
reform to transfer coverage to the federal government," by Philip Bredesen,
The Wall Street Journal, October 21, 2010 ---
http://online.wsj.com/article/SB10001424052702304510704575562643804015252.html?mod=djemEditorialPage_t
One of the principles of game theory is that you should view the game through your opponent's eyes, not just your own.
This past spring, the Patient Protection and Affordable Care Act (President Obama's health reform) created a system of extensive federal subsidies for the purchase of health insurance through new organizations called "exchanges." The details of these subsidies were painstakingly worked out by members of my own political party to reflect their values: They decided who was to benefit from the subsidies and what was to be purchased with them. They paid a lot of attention to their own strategies, but what I believe they failed to consider properly were the possible strategies of others.
Our federal deficit is already at unsustainable levels, and most Americans understand that we can ill afford another entitlement program that adds substantially to it. But our recent health reform has created a situation where there are strong economic incentives for employers to drop health coverage altogether. The consequence will be to drive many more people than projected—and with them, much greater cost—into the reform's federally subsidized system. This will happen because the subsidies that become available to people purchasing insurance through exchanges are extraordinarily attractive.
In 2014, when these exchanges come into operation, a typical family of four with an annual income of $90,000 and a 45-year-old policy holder qualifies for a federal subsidy of 40% of their health-insurance cost. For that same family with an income of $50,000 (close to the median family income in America), the subsidy is 76% of the cost.
One implication of the magnitude of these subsidies seems clear: For a person starting a business in 2014, it will be logical and responsible simply to plan from the outset never to offer health benefits. Employees, thanks to the exchanges, can easily purchase excellent, fairly priced insurance, without pre-existing condition limitations, through the exchanges. As it grows, the business can avoid a great deal of cost because the federal government will now pay much of what the business would have incurred for its share of health insurance. The small business tax credits included in health reform are limited and short-term, and the eventual penalty for not providing coverage, of $2,000 per employee, is still far less than the cost of insurance it replaces.
For an entrepreneur wanting a lean, employee-oriented company, it's a natural position to take: "We don't provide company housing, we don't provide company cars, we don't provide company insurance. Our approach is to put your compensation in your paycheck and let you decide how to spend it."
But while health reform may alter the landscape for small business in unexpected ways, it also opens the door to what is a potentially far larger effect on the Treasury.
The authors of health reform primarily targeted the uninsured and those now buying expensive individual policies. But there's a very large third group that can also enter and that may have been grossly underestimated: the 170 million Americans who currently have employer-sponsored group insurance. Because of the magnitude of the new subsidies created by Congress, the economics become compelling for many employers to simply drop coverage and help their employees obtain replacement coverage through an exchange.
Let's do a thought experiment. We'll use my own state of Tennessee and our state employees for our data. The year is 2014 and the Affordable Care Act is now in full operation. We're a large employer, with about 40,000 direct employees who participate in our health plan. In our thought experiment, let's exit the health-benefits business this year and help our employees use an exchange to purchase their own.
First of all, we need to keep our employees financially whole. With our current plan, they contribute 20% of the total cost of their health insurance, and that contribution in 2014 will total about $86 million. If all these employees now buy their insurance through an exchange, that personal share will increase by another $38 million. We'll adjust our employees' compensation in some rough fashion so that no employee is paying more for insurance as a result of our action. Taking into account the new taxes that would be incurred, the change in employee eligibility for subsidies, and allowing for inefficiency in how we distribute this new compensation, we'll triple our budget for this to $114 million.
Now that we've protected our employees, we'll also have to pay a federal penalty of $2,000 for each employee because we no longer offer health insurance; that's another $86 million. The total state cost is now about $200 million.
But if we keep our existing insurance plan, our cost will be $346 million. We can reduce our annual costs by over $146 million using the legislated mechanics of health reform to transfer them to the federal government.
That's just for our core employees. We also have 30,000 retirees under the age of 65, 128,000 employees in our local school systems, and 110,000 employees in local government, all of which presents strategies even more economically attractive than the thought experiment we just performed. Local governments will find eliminating all coverage particularly attractive, as many of them are small and will thus incur minor or no penalties; many have health plans that will not meet the minimum benefit threshold, and so they'll see a substantial and unavoidable increase in cost if they continue providing benefits under the new federal rules.
Our thought experiment shows how the economics of dropping existing coverage is about to become very attractive to many employers, both public and private. By 2014, there will be a mini-industry of consultants knocking on employers' doors to explain the new opportunity. And in the years after 2014, the economics just keep getting better.
The consequence of these generous subsidies will be that America's health reform may well drive many more people than projected out of employer-sponsored insurance and into the heavily subsidized federal system. Perhaps this is a miscalculation by the Congress, perhaps not. One principle of game theory is to think like your opponent; another is that there's always a larger game.
Mr. Bredesen, a Democrat, is the governor of Tennessee and the author of "Fresh Medicine: How to Fix Reform and Build a Sustainable Health Care System," just out by Atlantic Monthly Press.
"Yes, ObamaCare Still Worse Than You Thought." by Bruce Bialosky,
Townhall, December 13, 2010 ---
http://townhall.com/columnists/BruceBialosky/2010/12/13/yes,_obamacare_still_worse_than_you_thought/page/full/
If you believe that this is going to happen, then you also believe Nancy Pelosi is the tooth fairy. Medicare reimbursements paid to doctors are scheduled to drop 30% over the next three years. Doctors already complain about low Medicare fees – and how it is just a cost shift to private insurance carriers – but it gets worse. By 2019, Medicare fees are scheduled to drop below Medicaid reimbursements, and by 2050 Medicare payments will fall to 50% of the private sector. At these rates, most doctors will undoubtedly opt out of the system, further limiting the access and quality of medical care for senior citizens. Of course, this is all predicated on the revised reimbursement rates actually getting through Congress – which hasn’t happened in any of the last ten years.
One of the reasons the U.S. Chamber of Commerce opposes repeal is that the bill requires almost all employers to provide health insurance to even out the playing field. That is a mirage. There are penalties for not providing insurance, but they are estimated to be one-sixth of the cost of insurance. Thus, instead of more people having employer-provided insurance, there will certainly be less. The number of employees who will lose their coverage ranges from the Congressional Budget Office (CBO) calculation of 9 million to the estimate of a former CBO Director of 35 million – over 11% of the entire population! More people will be on the government rolls – which is exactly what the Democrats want to happen - as they force-feed us to a single-payer health care system.
Here is one of the truly spiritual revelations of this plan. Subsidies will be provided to uninsured employees by the government (or their employer) based on the employee’s income. But that would be the employee’s “family income,” not his/her wages. This means that the government will require every employee receiving subsidies to provide a copy of their tax return to their employer or insurance exchange to prove the “family income.” Yes, you read it right – this act not only allows the Department of Health and Human Services to look at your tax return, but it requires insurance exchanges and employers as well.
You will now have to attach to your tax return proof that you carry health insurance, or suffer penalties if you don’t. Your return will also indicate the amount of your subsidy, and, if God forbid you have previously been paid too much, the Feds will either seize your refund or send you a bill for the difference. It’s easy to foresee lots of money being lost in that shuffle, and lots of people receiving threatening letters from their favorite government agency – the IRS.
As for the sanctity of marriage, there is none. Because there is already a marriage penalty built into the tax code, you would think that the people who wrote this bill would make sure to avoid the same problem. But no – this plan awards higher subsidies for two single people than one married couple. Yet again the government discourages marriage. Does anyone wonder why 40% of Americans don’t believe in marriage when Washington penalizes it in your taxes and health care?
The treasure trove of insanity that’s contained in this legislation will ultimately appall and disgust the overwhelming majority of Americans. We clearly remember that this bill was only passed with Congressional shenanigans, bribes to wavering Senators, and the pathetic sellout of the Stupak Democrats, all of whom (except one) are now out of office. We all must work to make sure that those 159 (or 183) agencies don’t ever see a single dollar of funding, don’t ever start hiring a staff, and above all, don’t ever get the opportunity to destroy whatever sense of individuality we have left in this country.
Note: 222 companies and unions have opted out of ObamaCare, wouldn’t you like to also?
Continued in article
"PolitiFiction True 'lies' about ObamaCare," The Wall Street
Journal, December 23, 2010 ---
http://online.wsj.com/article/SB10001424052748703886904576031630593433102.html?mod=djemEditorialPage_t
So the watchdog news outfit called PolitiFact has decided that its "lie of the year" is the phrase "a government takeover of health care." Ordinarily, lies need verbs and we'd leave the media criticism to others, but the White House has decided that PolitiFact's writ should be heard across the land and those words forever banished to describe ObamaCare.
"We have concluded it is inaccurate to call the plan a government takeover," the editors of PolitiFact announce portentously. "'Government takeover' conjures a European approach where the government owns the hospitals and the doctors are public employees," whereas ObamaCare "is, at its heart, a system that relies on private companies and the free market." PolitiFact makes it sound as if ObamaCare were drawn up by President Friedrich Hayek, with amendments from House Speaker Ayn Rand.
This purported debunking persuaded Stephanie Cutter, a special assistant to the President. If "opponents of reform haven't been shy about making claims that are at odds with the facts," she wrote on the White House blog, "one piece of misinformation always stood out: the bogus claim . . ." We'll spare you the rest.
PolitiFact's decree is part of a larger journalistic trend that seeks to recast all political debates as matters of lies, misinformation and "facts," rather than differences of world view or principles. PolitiFact wants to define for everyone else what qualifies as a "fact," though in political debates the facts are often legitimately in dispute.
For instance, everyone can probably agree that Medicare's 75-year unfunded liability is somewhere around $30.8 trillion. But that's different from a qualitative judgment, such as the wisdom of a new health-care entitlement that was sold politically as a way to reduce entitlement spending. But anyway, let's try to parse PolitiFact's ObamaCare reasoning.
Evidently, it doesn't count as a government takeover unless the means of production are confiscated. "The government will not seize control of hospitals or nationalize doctors," the editors write, and while "it's true that the law does significantly increase government regulation of health insurers," they'll still be nominally private too.
In fact—if we may use that term without PolitiFact's seal of approval—at the heart of ObamaCare is a vast expansion of federal control over how U.S. health care is financed, and thus delivered. The regulations that PolitiFact waves off are designed to convert insurers into government contractors in the business of fulfilling political demands, with enormous implications for the future of U.S. medicine. All citizens will be required to pay into this system, regardless of their individual needs or preferences. Sounds like a government takeover to us.
PolitiFact is run by the St. Petersburg Times and has marketed itself to other news organizations on the pretense of impartiality. Like other "fact checking" enterprises, its animating conceit is that opinions are what ideologues have, when in reality PolitiFact's curators also have political views and values that influence their judgments about facts and who is right in any debate.
In this case, they even claim that the government takeover slogan "played an important role in shaping public opinion about the health-care plan and was a significant factor in the Democrats' shellacking in the November elections." In other words, voters turned so strongly against Democrats because Republicans "lied," and not because of, oh, anything the Democrats did while they were running Congress. Is that a "fact" or a political judgment? Just asking.
As long as the press corps is nominating "lies of the year," ours goes to the formal legislative title of ObamaCare, the Patient Protection and Affordable Care Act. For a bill that in reality will raise health costs and reduce patient choice, the name recalls Mary McCarthy's famous line about every word being a lie, including "the" and "and."
California Healthcare Foundation: Center for Health Reporting --- http://www.centerforhealthreporting.org/
"Not Dodging Health Care Law," by Terry W. Hartle and Steven M. Bloom,
Inside Higher Ed, November 1, 2010 ---
http://www.insidehighered.com/views/2010/11/01/hartle
Six months after passage of the Affordable Care Act (ACA), health care reform has finally moved off the front pages of America’s newspapers and is no longer the lead story on the nightly news. But below the surface, the controversy and political fights over the issue continue to roil.
Evidence of that came when higher education was recently drawn into the fight. On August 12, the American Council on Education and several other higher education associations wrote to the Department of Health and Human Services and the White House Office of Health Reform to ask for guidance regarding key ACA provisions to ensure colleges and universities could continue to offer students affordable, high-quality health care plans.
The response by the news media, spurred by interest groups following the issue, was almost immediate, and in the last few months organizations ranging from The Wall Street Journal to the College Parents of America have mischaracterized our effort as an attempt to carve out an “exemption” or “waiver” from ACA requirements. Some groups have suggested that we actually oppose efforts to enhance the quality of student health plans, while others say we’re only in it for the money.
They couldn’t be more wrong. Read the letter for yourself.
First, colleges are not seeking either an exemption or a waiver from the law. Historically, student health plans have operated under federal law as so-called “limited duration plans” because they provide coverage for a specific time period and are neither employer-based group plans nor plans offered on the individual market. These programs are tailored to meet the primary care needs of students as well as additional services such as mental health coverage.
Each is priced according to the eligible campus population and provide coverage to all eligible students and their dependents, do not vary premiums based on an individual student’s health status, and typically do not impose pre-existing condition exclusions. They are particularly important for international and graduate students. In short, these plans provide coverage that is responsive to the unique needs of the student population.
While the law specifically states that institutions may continue to offer student health plans, ACA is silent on how the law’s new requirements affect these unique plans. Federal agencies will need to write numerous regulations to implement ACA. Our letter seeks to include among them regulations that clarify how student health plans can continue operating as “limited duration plans” under a structure that incorporates reforms in the ACA -- and not, as some claim, to elude those reforms.
Specifically, we have asked HHS to provide rules of the road on two key topics:
- What insurance reforms in ACA apply to student health plans? ACA includes many insurance reforms, such as prohibiting preexisting condition exclusions or other discrimination based on health status, but it is not clear which apply to student health plans.
- Assuming student health plans incorporate required insurance reforms and provide at least a minimum ACA-defined level of coverage, will that satisfy the individual mandate to purchase health insurance under ACA?
We seek answers to these questions now because although many of the reforms in ACA don’t take effect until 2014, a number of institutions will soon be negotiating with insurers for new long-term contracts that will define the benefit coverage of their student health plans through 2014.
Are we opposing efforts to enhance the quality of student health plans? Absolutely not. In fact, we are following the lead of the American College Health Association, which has a longstanding set of standards to guide colleges and universities in structuring high quality coverage for student health plans. We also believe ACA will inevitably lead to improvements in the quality of student health plans, which is important because while the majority of institutions offer health plans of high quality — some continue to lag behind and must be improved. The key for us is ensuring that the changes brought about by ACA will result in plans that are both high-quality and affordable.
It is also wrong to characterize our efforts as an attempt to shield a major higher education profit center. The money made off these plans by colleges are modest, and revenue — if any — is returned to campus health centers or used to help maintain stability in the premiums paid by students.
In short, student plans respond to the unique health insurance needs of undergraduate and graduate students. They provide coverage over a limited time period for students under the age of 26 whose parents are uninsured and nontraditional students who are too old to access their parents’ plans. In some instances, student plans offer better coverage than students can get under parental plans, especially if they’re going to college hundreds or thousands of miles away from their parents’ networks or parental coverage does not adequately cover out-of-network care, making it prohibitively expensive.
Colleges and universities recognize the importance of ACA’s reforms and want high-quality health insurance options for their students. We are confident we can work with the administration on a constructive solution to ensure students have access to affordable, high-quality health coverage that is consistent with the reforms in ACA.
Terry W. Hartle is the senior vice president and Steven M. Bloom is the assistant director of federal relations for the American Council on Education.
"Postponing ObamaCare Second thoughts from the people who sold you reform,"
by The Wall Street Journal, November 26, 2010 ---
http://online.wsj.com/article/SB10001424052702304023804575566423288466654.html
Price controls for private premiums shouldn't cause insurance stocks to rise, so it's notable that the major insurers all gained on the ObamaCare regulations issued in the last week. The news is that the White House and HHS Secretary Kathleen Sebelius are shrinking from the logic of their own reform, at least for a while, in order to minimize the political damage when consumers lose the coverage they have now.
The latest rule-making—a mere 308 pages—deals with a complex but important accounting concept known as a "medical loss ratio." Starting in January, insurers will have to pay out between 80% and 85% of premiums in direct clinical benefits, while facing an arbitrary cap on profits and administrative costs. Defining what counts as spending on "health care," versus everything else an insurer does, is one more channel for politics to dictate insurance practices.
The imminent dangers are premium increases and disruption to coverage, especially in the individual market and for innovative plans that don't meet Washington's specifications. Smaller carriers won't be able to hit the targets and will fail, while the larger ones will retire some business or withdraw from states that hurt their balance sheets. Insurers are already pulling back, as shown in September by the overnight nationwide collapse of child-only policies, thanks to the imposition of ObamaCare's "consumer protections."
But don't take our word for it. The 50 state insurance commissioners—Democrats and Republicans—spent seven months debating these rules and warned HHS in draft recommendations that "consumers will not benefit from higher medical loss ratios if the outcome is destabilized insurance markets where consumer choice is limited and the solvency of insurers is undermined."
Those recommendations displeased liberals, and some Democrats like Jay Rockefeller of West Virginia were demanding a harsher standard in HHS's final rule. Based on Mrs. Sebelius's rhetoric, and HHS's many interventions in the state deliberations, it seemed as if she might oblige.
Instead, she loosened the standards in important ways. States can phase in the federal rules and make other adjustments, as long as they get an HHS waiver. Maine, Iowa, South Carolina, Georgia and Florida have already applied, though they're only at the front of the line. Some types of niche insurance will get exemptions too, such as the "mini med" policies that McDonald's and other low-wage businesses offer their workers.
The White House had to tamp down a national furor after the Journal reported that the medical loss rules would force McDonald's to drop its plans, and no doubt Mrs. Sebelius's sudden leniency is meant to mitigate further political damage as costs rise and consumer choices decline. Yet this is not some Road to Damascus moment. The dispensations last only until 2014, when the subsidies and the rest of the ObamaCare apparatus swing into place.
The obvious goal is to shield the plan from its own unpopularity until President Obama is re-elected and it is too late to repeal or replace ObamaCare. The goal of medical loss rules is still to change current coverage in favor of the government-approved version. Democrats thought they could blame insurers for every problem flowing from HHS's ObamaCare rules, but perhaps Mrs. Sebelius now realizes that she owns the health-care system, and so her new strategy is to postpone the disruptive pain as long as possible.
"ObamaCare and Voters: Clinton and Obama told Democrats it would be
popular. Whoops," The Wall Street Journal, October 30, 2010 ---
http://online.wsj.com/article/SB10001424052702303284604575582394262243272.html?mod=djemEditorialPage_t
Midterm elections amid a lousy economy are usually bad for the President's party, but it looks as if a neutron bomb may detonate on Democrats in 2010. And one of the major reasons that this year shifted from ordinary losses to potential catastrophe is ObamaCare. This election is a referendum on an entitlement the public never wanted and continues to hate, as evidence from around the country is showing.
Take almost any poll at random. Even this week's New York Times-CBS poll has repeal leading among likely voters, 47% to 43%. The latest Pew-National Journal survey shows that a majority of likely voters—51%—favors repeal, including 53% of independents. The Real Clear Politics average of all polling shows support for the law at 40.9%—and opposition at 50.6%.
The Kaiser Family Foundation—whose outlier tracking poll has consistently shown the most ObamaCare support—now reports that only 42% view the law favorably. That's a seven-point drop since September, and it happened to coincide with the start date for the "patients bill of rights," which Kaiser says is among the bill's popular parts. Voters are learning that mandates—like those that allow "children" to remain on their parents' health insurance until age 26—tend to increase costs.
There are many other such scales-from-the-eyes moments. The New England Journal of Medicine, another outlet for ObamaCare partisans, recently conceded in a "perspective" akin to an editorial that "it seems clear that Americans today have very negative views about the general direction of the country," in large part because of the health bill.
Speaking of the shock of recognition, there's the case of Earl Pomeroy. The nine-term North Dakota Democrat earned liberal plaudits for his numerous TV ads defending ObamaCare and his vote for it, as well as blasting Republican Rick Berg for ostensibly putting "big insurance first."
Now Mr. Pomeroy has cut a closing-argument TV spot that begins, "I'm not Nancy Pelosi, I'm not Barack Obama." (This may be the Democratic version of "I am not a witch.") Mr. Pomeroy adds that "I know I've disappointed you with a vote here or there," and while the ad doesn't mention health care, symbolically he's given up defending it.
Mr. Pomeroy was one of the few Democrats who bothered to run on health care at all. Another was Russ Feingold, who made ObamaCare the centerpiece of his re-election campaign. Yet the Wisconsin Senator continues to trail Republican Ron Johnson, a businessman and political novice who was motivated to enter the race because of the bill. In Washington, Dino Rossi is neck-and-neck with Patty Murray, and the final stretch of his campaign is almost exclusively about health care.
Even voting against ObamaCare is no guarantee of safety for Democrats. The Cook Political Report notes that the 34 Democrats who bucked their party are all in "lean Republican" or "toss up" races. But the candidates who are doing best are those like Ohio's Zack Space and Massachusetts's Stephen Lynch who voted for ObamaCare last November and then flipped to vote against it this March.
As for the eight Democrats who switched from nay to aye, they're getting hammered. Democrats may hold only one of these districts—and it's the Cleveland redoubt represented by Dennis Kucinich. Those soon to be collecting 99 weeks of jobless benefits include Betsy Markey (Colorado) and Suzanne Kosmas (Florida), both of whom have been left for dead by the national party, plus John Boccieri (Ohio) and Allen Boyd (Florida).
In the 92 most-competitive districts that matter for controlling the House, a Wall Street Journal-NBC News poll found that 55% of voters favor the candidate who wants to repeal ObamaCare. Only 42% will vote for candidates who want to keep the law. Opposition is most intense among crucial voting blocks like independents and seniors; those who called the law "very bad" outweighed the "very goods" by 24 to 34 points.
All this is particularly striking given that the President Obama, Bill Clinton and so many others assured the backbenchers that health care would be a political winner. Now even they have given up trying to spin that false promise, blaming voter hostility on TV ads and, er, the insurance industry that the public supposedly despises. The reality is that voters who oppose ObamaCare are far more knowledgeable about the law and its consequences than most Congressmen who voted for it.
Republicans must do more to advance a reform alternative to ObamaCare, but no one should mistake the implications of Tuesday's vote. Whatever the results, the public is telling Congress to repeal and replace this bill before it does any more damage.
"Big Insurance, Big Medicine: ObamaCare is already driving a wave of health-care consolidation—and higher costs," The Wall Street Journal, October 26, 2010 --- http://online.wsj.com/article/SB10001424052748704300604575554293656982422.html?mod=djemEditorialPage_t
ObamaCare's once and future harms have been well chronicled, but the major effects so far are less obvious and arguably more important: A wave of consolidation is washing over the health markets, and the result is going to be higher costs.
The turn toward consolidation among insurance companies is not new, and neither is it among doctors, hospitals and other providers. Yet the health bill has accelerated these trends, as all sides race to anticipate and manage political risk and regulatory uncertainty. This dynamic is leading to much larger hospital systems and physician groups, and fewer insurers dominated by a handful of national conglomerates. ObamaCare was sold using the language of choice and competition, but it is actually reducing both.
The first surge will come among the 1,200 insurers doing business in the U.S., given that a major goal of ObamaCare is to convert these companies into de facto public utilities. Those regulations are now being written—and once they're up and running some medium-sized carriers will collapse under the new mandates and higher overhead. State insurance commissioners warned the Administration this month that "improper or overly strident application . . . could threaten the solvency of insurers or significantly reduce competition in some insurance markets." They also implied that bankruptcies are likely.
With these headwinds, investors and Wall Street analysts are now predicting a lost decade for health insurance stocks. But it may be more accurate to say that there will be a lot of losers and some very big winners. Mergers and acquisitions will increase dramatically once companies get a better look at the regulation and figure out the valuation of M&A targets. Larger carriers will swallow smaller ones quietly before they fail.
Both publicly traded and nonprofit insurers have been heading in this direction for years, as in any industry where there are returns to scale. Size is also important in a low-margin business in which capital is costly and political clout vital. But scale is far more central now, because ObamaCare standardizes benefits. Once insurers lose the freedom to design their own products, they'll essentially be selling commodities, and survival will depend on enrollment volume and market share.
The same thing will happen to stand-alone and community hospitals—always a precarious business. Nearly a third of U.S. hospitals are currently operating in the red and will get steamrolled by ObamaCare, and many of them will be annexed by national chains and larger local systems.
This trend got a preview two weeks ago when Mercy Health Partners announced that it was seeking buyers for three Catholic hospitals in northeast Pennsylvania. CEO Kevin Cook told local media that ObamaCare was "absolutely" a factor in the decision to sell, only to backtrack once his comments were used in campaign ads against House Democrats Paul Kanjorski and Chris Carney, who voted for the bill.
Though it received little attention over a year of debate, ObamaCare actively promotes provider consolidation. Writing this summer in the Annals of Internal Medicine, Nancy-Ann DeParle and other White House health advisers argued that "The economic forces put in motion by the Act are likely to lead to vertical organization of providers and accelerate physician employment by hospitals and aggregation into larger physician groups."
Ask and ye shall receive. Across the country, providers are building giant hospital systems and much tighter doctor alliances like multispecialty groups to get out ahead of a concept known as "accountable care organizations," or ACOs. To modernize the delivery of medical services, ACOs would encourage doctors to work in teams to use resources more efficiently, streamline treatment and improve quality. The model is the Mayo Clinic and other large integrated systems.
At the moment ACOs are only a gleam in some bureaucrat's eye, and no one has a clue how they'll operate in practice until the government releases a working regulatory definition next year. Yet the percussive effects are already being felt across medicine.
Hospitals are now on a buying spree of private physician practices in the rush to build something that will qualify as an ACO. Some 65% of doctors who changed jobs in 2009 moved into a hospital-owned practice, while 49% of doctors out of residency were hired by hospitals, according to the Medical Group Management Association. In its 2010 census, the American College of Cardiology reports that nearly 40% of private cardiology groups are currently integrating with hospitals or merging with other practices.
Doctors are selling because complying with the ever-growing list of mandates has become more cumbersome; and while staff physicians on salary do gain predictability, they also lose the autonomy of independent practice. The other problem is price controls in Medicare, which are about 20% below private payments for doctors and 30% lower for hospitals. Hospitals are also scooping up practices to lock in referral sources and make up for ObamaCare's Medicare cuts. As it is, two-thirds of hospitals lose money today on Medicare inpatient services, according to Medicare.
ACOs are also driving consolidation among hospitals. Anecdotally, Marquette General Hospital and Bell Hospital formed a strategic ACO partnership in July that will dominate Michigan's upper peninsula. In Omaha, Methodist Health System and the Nebraska Medical Center recently followed suit. Similar alliances are underway in Detroit, Baltimore, Chicago, greater Boston, Roanoke and southwest Virginia—even Youngstown, Ohio.
The accountable care movement could do some good if it spreads best practices. But no one should entertain the illusion that it will reduce costs perforce and "bend the curve." In fact, the most concrete effect of this wave of consolidation may be to increase private health spending significantly.
Unlike Medicare and Medicaid, private reimbursement rates are determined by negotiations, often highly antagonistic. Insurers always attribute premium increases to the underlying cost of care, while doctors and hospitals always argue that there isn't enough competition among health plans. Both claims are "true," some of the time—but it depends on which side has more market power.
Continued in article
"How Medicare Killed the Family Doctor: Low government payment rates
became the private-sector benchmark, resulting in fragmented care," by
Richard M. Hannon, The Wall Street Journal, November 8, 2010 ---
http://online.wsj.com/article/SB10001424052748704353504575596140752021042.html?mod=djemEditorialPage_t
I work for a health-insurance company, and my brother is a primary-care physician. As he tells it, my industry is responsible for the death of his. Insurance companies, he argues, have killed primary care by grinding down reimbursement and compelling doctors to see more and more patients just to make a living.
I sympathize with my brother, because I know that doctors' business with insurers isn't always easy. I'm also aware of the market's price sensitivity—and reimbursement paid to doctors comes from premiums paid by customers. Insurers must keep costs down.
Remember Marcus Welby, M.D.? He defined the family doctor on TV in the 1970s, exemplifying the four Cs: caring, competent, confidant and counselor. In the mid-'60s, I remember my father-in-law, a real-life Dr. Welby, telling me the exciting news that the federal government was going to start paying him to see seniors—patients who before he had seen for the proverbial chicken (or nothing at all). That fabulous deal was Medicare.
Medicare introduced a whole new dynamic in the delivery of health care. Gone were the days when physicians were paid based on the value of their services. With payment coming directly from Medicare and the federal government, patients who used to pay the bill themselves no longer cared about the cost of services.
Eventually, that disconnect (and subsequent program expansions) resulted in significant strain on the federal budget. In 1966, the House Ways and Means Committee estimated that by 1990 the Medicare budget would quadruple to $12 billion from $3 billion. In fact, by 1990 it was $107 billion.
To fix the cost problem, Medicare in 1992 began using the "resource based relative value system" (RBRVS), a way of evaluating doctors based on factors such as education, effort and specialized training. But the system didn't consider factors such as outcomes, quality of service, severity or demand.
Today most insurance companies use the Medicare RBRVS because it is perceived as objective. As a result of RBRVS, specialists—especially those who perform a lot of procedures—do extremely well. Primary-care doctors do not.
The primary-care doctor has become a piece-rate worker focused on the volume of patients seen every day. As Medicare and insurers focused on trimming the costs of the most common procedures, the income and job satisfaction of primary-care doctors eroded.
So these doctors left, sold or changed their practices. New health-care service models, such as the concierge practice and the Patient-Centered Medical Home, drew doctors away from the standard service models that most patients rely on for coverage.
All of these factors have contributed to a fragmented, expensive health system with most of the remaining doctors focused on reactive instead of preventive care.
The solution to the problem is making primary-care physicians the captains of the ship. They must have the time and financial resources necessary to take care of their patients, tailoring care to patients' specific conditions and needs. And they need the data to track their patients' results, so they can guide patient progress. They will then be able to slow (and sometimes reverse) their patients' illnesses, keeping them out of hospital emergency rooms and specialists' offices. The end result: reduced costs and improved quality of care.
So who really killed primary care? The idea that a centrally planned system with the right formulas and lots of data could replace the art of practicing medicine; that the human dynamics of market demand and the patient-physician relationship could be ignored. Politicians and mathematicians in ivory towers have placed primary care last in line for respect, resources and prestige—and we all paid an enormous price.
Mr. Hannon is senior vice president of marketing and provider affairs for Blue Cross Blue Shield of Arizona.
"Physician Shortage Will Hit Sooner and Be Worse Than Expected, Medical Group Predicts," by Katherine Mangan, Chronicle of Higher Education, November 7, 2010 --- http://chronicle.com/article/Physician-Shortage-Will-Hit/125297/
The passage of national health-reform legislation means that the projected shortage of physicians will hit sooner and be far worse than medical-education experts were predicting two years ago, according to the Association of American Medical Colleges, which is holding its annual meeting here this week.
The legislation approved in March is expected to make 32 million more Americans eligible for health coverage and add millions more people to the Medicare rolls. In addition, patients are getting older and sicker, with the over-65 set expected to grow by 36 percent by 2010, according to the U.S. Census Bureau.
The bottom line, according to the medical colleges' association, is that the nation could face a deficit of about 91,000 doctors in 10 years, and 63,000 by 2015. Those projections are far worse than the shortage the association predicted two years ago, of 39,600 physicians by 2015.
The association supported the legislation and applauded the expansion of health-care coverage to millions more Americans. But it said it came with a price.
"This admirable increase in access to care will likely stress an already overburdened health-care system at the same time aging baby boomers will need it most," said Deborah E. Powell, chair of the association and an associate vice president at the University of Minnesota Medical School.
While primary-care shortages get the most attention, patients could have to wait longer and travel farther to see surgeons and other specialists who are likely to be in short supply.
The predictions come despite the fact that medical schools have been expanding their class sizes, and new schools have opened in recent years. While the focus of the AAMC is on the allopathic schools it accredits, osteopathic medical schools have been growing rapidly, and a large proportion of their graduates pursue careers in primary care. (Allopathic schools award M.D.'s and osteopathic schools award D.O.'s)
Among the latest predictions that Scott Shipman, a senior researcher in the association's Center for Workforce Studies, outlined on Sunday are the following:
- Ten years from now, there will be 45,000 too few primary-care doctors, and a shortage of 46,000 surgeons and medical specialists.
- Almost a third of all physicians will retire in the next decade, just as aging baby boomers need more care.
- Expanding and new medical schools will produce an additional 7,000 graduates a year over the next decade, but they're going to have a tough time finding enough places to complete their residency training, since Medicare's support for such programs has been frozen since 1997.
Darrell G. Kirch, the association's president, said that medical education has to change, and that educators can't be paralyzed by the "political whiplash" many may be feeling as the result of changing tides of health reform.
"Too often, we compete with each other to offer the most narrow subspecialties while at the same time we're not meeting the basic needs of people who are living right outside the doors of our medical centers," he said.
"Insurance coverage has expanded," Dr. Kirch added, "but day to day, we still work with financial incentives that focus more on the total volume of complicated sick care we provide than on well care."
One conference participant noted that community physicians will be busier keeping up with the growing number of insured people and may balk at taking on the added role of training the next generation of doctors.
"I'm afraid that fewer physicians will be willing to have medical students in their offices slowing them down," said David M. Krol, senior program officer for the Robert Wood Johnson Foundation, a major supporter of health-care research.
Updates on September 30, 2010
Americans stubbornly resist this landmark
legislation in part because virtually every major claim about its benefits is
turning out to be false—and people recoil when misled.
Karl Rove, The Wall Street Journal, September 30, 2010 ---
http://online.wsj.com/article/SB10001424052748704116004575522073624475054.html?mod=djemEditorialPage_t
Is Medicare a "Medicare is a good example of a government program that is highly efficient?"
-----Original Message-----
From: AECM, Accounting Education using Computers and Multimedia [mailto:AECM@LISTSERV.LOYOLA.EDU] On Behalf Of Peters, James M Sent: Thursday, September 23, 2010 10:37 AM
To: AECM@LISTSERV.LOYOLA.EDU,
Subject: Re: accounting basicsI think it is time to push back against all this anti-government rhetoric that just isn't based on observed evidence. Whether goverments work best or markets work best is a function of the task to be performed and the nature of the product. Governments have proven they can provide better health insurance and health care than the private sector. Medicare is a good example of a goverment program that is highly efficient and spends 97% of your tax dollars on health care while private sector firms spend only 70% to 75% of your premium dollars on health care. Some firms reach 80%, but they are the exception. Government run hospitals in the US are now rated as among the best, if not the best in the nation. The Veterans Hospitals have better records of treatment success and lower costs that the vast majority of private hospitals.
Market advocates seem to forget free market theory. Free markets only work when certain, rather restrictive conditions are met. Among the most frequently violated are equal power and knowledge among all market participants. Even Adam Smith in the Wealth of Nations advocated a strong role for governments in keeping markets free. When conditions are right, markets work brilliantly. However, (a rhetorical question) how many market in the industrialize world really meet the conditions of truly free markets? My answer is very few.
Governments do some things much better than markets. The key is recognizing the market conditions that lead to government advantage and letting governments handle those areas. Auditing is a prime candidate for government intervention because of no auditor can truly be objective when they are being paid by the client. The markets cannot function properly in auditing because the true customer, the general public, isn't a party to the transaction. Audits aren't just for the current owners, they are for perpsective owners as well, which means the general public. The general public needs to be represented at the table when auditors are hired.
The other key is to recognize that governments fail when people fail to be informed voters. All governments, like all markets, are not made equal. Some work better than others. In democracies, the effectiveness of the government is a function of the involvement and knowledge of the electorate. Thus, we are all responsible for our own government's success and failures. The fact that America seems to have a disfunctional government right now is that we have a disfunctional electorate that seems to enjoy mindless shouting matches over informed policy dialog. Other nations don't suffer from this disease.
Let's all join John Stewart in Washington DC for the "Return Sanity to America" rally. It is a start to building a government that can live up to its potential.
Jim
September 23, 2010 reply from Bob Jensen
Hi Jim,
If this is your idea of "observed evidence" then I've no hope for you in the academy. For one thing a good academic would be more precise about definitions like “better health care.” For example, some other nations come out “better” in infant mortality because they throw away very premature small babies and don’t count them into survival rates. What does “better” mean in terms of who invents the latest and greatest medications to fight cancer?
Medicare, for example, is one of the least-efficient government programs that arguably has the worst internal accounting controls of all other government programs except, possibly, the defense program. An "efficient" program would have stellar internal controls preventing fraud and error.
President Obama repeatedly asserts that "Medicare and Medicaid are largest deficit drivers" ---
http://www.politifact.com/truth-o-meter/statements/2009/jun/25/barack-obama/obama-says-medicare-and-medicaid-are-largest-defic/And Medicare is not a very good example of "government" efficiency since the private sector delivers virtually all the medical services. The Medicare service providers are notoriously inefficient by prescribing billions of dollars in unneeded services, medications, and even non-existent medical equipment.
I don't care to continue on in the AECM with debates over extreme political dogma since this is truly outside what subscribers expect from the AECM. They wanted to learn more about the PwC re-branding and the future of auditing/assurance services. I doubt that they want to hear a rant about joining a Glenn Beck-bashing by Jon Stewart in Washington DC. Most of us do not support the extremes of Beck or Stewart and certainly do not want the AECM to be a rallying call for either extreme. That is not in the mission of the AECM.
Also I see no need to censor the other subscribers of the AECM if they happen to disagree with Jim Peterson’s political dogma. Even if I were a Glenn Beck supporter (which I’m not) I would not urge AECM subscribers to join me in Beck’s big Washington DC rally (where you would never find me).
It’s a free country, and I suspect you will be among the Glenn Beck bashers at Jon Stewart’s rally for liberals. But I don’t think you should plead with AECM subscribers to join you in this political burning of Beck’s book.
Bob Jensen
"Cash-Poor Governments Ditching Public Hospitals," by Suzanne Satalite,
The Wall Street Journal, August 29 , 2010 ---
http://online.wsj.com/article/SB10001424052748703618504575459823259071294.html?mod=ITP_pageone_2
Faced with mounting debt and looming costs from the new federal health-care law, many local governments are leaving the hospital business, shedding public facilities that can be the caregiver of last resort.
Officials in Lauderdale County, Ala., this spring opted to transfer their 91-year-old Eliza Coffee Memorial Hospital and other properties to a for-profit company after struggling to satisfy an angry bond insurer.
"We were next to knocking on bankruptcy's door,'' said Rhea Fulmer, a Lauderdale County commissioner who approved the deal with RegionalCare Hospital Partners, of Brentwood, Tenn, but with trepidation. She said the county had no guarantee the company would improve care in the decades to come. "Time will tell.''
Clinton County, Ohio, in May sold its hospital to the same company. Officials in Kenai Peninsula Borough, Alaska, are weighing a joint venture with a for-profit company, similar to one the same company made with Bannock County, Idaho. And Prince George's County, Md., is seeking a buyer for its medical complex.
More than a fifth of the nation's 5,000 hospitals are owned by governments and many are drowning in debt caused by rising health-care costs, a spike in uninsured patients, cuts in Medicare and Medicaid and payments on construction bonds sold in fatter times. Because most public hospitals tend to be solo operations, they don't enjoy the economies of scale, or more generous insurance contracts, which bolster revenue at many larger nonprofit and for-profit systems.
Local officials also predict an expensive future as new requirements—for technology, quality accounting and care coordination—start under the overhaul, which became law in March.
Moody's Investors Service said in April that many standalone hospitals won't have the resources to invest in information technology or manage bundled payments well. Many nonprofits have bad credit ratings and in a tight credit market c