Critical of Critical

Critical of Critical

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Like legions of other wonks when I discovered that Tom Daschle was going to be Obama’s point guy on health care, I sent off for a copy of his book Critical. It’s a fast and easy read, but in its examination of the problem it doesn’t add much to superior books on what’s wrong with health care (much of the first section reads like an undergrad’s attempt to summarize Jonathan Cohn’s Sick) and there are some pretty weak logic flows and basic editing throughout (he refers to the book Uninsured in America on p155 as though it’s already been introduced before it actually gets introduced on p161). But ignoring all that, what does Daschle suggest we actually do?

First, he promotes himself as a scholar of failed attempts at health reform past, and of course a witness to the most recent attempt.

The ill-fated & exclusive White House study groups of Feburary
to May 1993 are therefore only to be repeated in set of window dressing
home study groups & Internet bulletin boards—who’s participants
will have as little actual positive impact on health reform as Ira
Magaziner did in 1993–4. Still the process now is notably open.

Then there’s the rather odd parade of things Daschle likes and wants
to see more of. Mental health parity is one, dental insurance is
another, and long-term care a third. To be fair these are three areas
crying out for a better solution, but Daschle doesn’t make it clear how
we’re going to expand the current definition of insurance to include
them. In addition these are areas for which Medicaid is the current de
facto half-assed solution. Medicaid is a program Daschle likes, while
many health policy wonks (well me anyway) think it should be abolished
and rolled into a genuine universal social insurance system, or at
least (as Paul Krugman suggests) be Federalized and thus removed from
the vagaries of state budgets.

But the actual coverage solution Daschle proposes, which is pretty
similar to the ones emanating from Clinton & Baucus are basically
to expand FEHBP and give it both a Massachusetts Connector-type role
and include in it a buy-in to Medicare, and to impose a pay or play
option onto employers. Somehow he’d also expand Medicaid and S-CHIP,
and then add to all this an individual mandate with subsidies to those
who can’t afford to buy-in to FEBHP. The whole thing is tied together,
sort-of, by a Federal Health Board.

Daschle is damn lucky that he didn’t call his board Fannie Med, but
he’s also unlucky in that he links it to the success of the Federal
Reserve at a time when that “success” is looking, shall we say, shaky.
However, the main role of the Federal Health Board would be as a
cost-effectiveness review organization with teeth—in that Medicare,
Medicaid & FEHBP would all be bound to follow its guidelines. So
essentially he’s advocating the creation of a national benefits package
based in some measure on real research and EBM, and assuming that
pay-for-performance will work in getting doctors & providers to
follow along.

Critics on the loony right (and old reliable Sally Pipes is there in the WSJ yesterday)
will call this rationing. More thinking critics on both sides will call
it the slow emanation of a messy single payer system, which is
essentially what it’ll turn out to be as the private plans toss the worse risks into the pool and employers steadily get priced out of providing health benefits. Jacob Hacker’s been pretty clear about that.
Daschle, like Obama, Gruber and the rest, would be happiest with a
UK-style single payer with a trade up option, but they dismiss that as
unrealistic for the US. They also dismiss as unrealistic the moderate
Emmanuel/Wyden attempts to decouple health care insurance from
employment and create a truer “market” based on social insurance
(closer to the Dutch model).

So the problem with this always comes back to two things.

One; most of the uninsured are working poor and their employers are
the NFIB small employer crowd who are all for health reform until they
figure out that it means they have to pay for it
. Even despite the
incredibly confused rhetoric coming out of NFIB lately, my guess is
that only a puny Massachusetts type “pay” fine ($213 or so) will be
little enough to get them to willingly back a public and compulsory
plan for their employees. And of course at that point all but the
richest of the remaining 55% or so of small employers who offer
coverage will ditch it too, meaning that the public subsidy for the
working poor to get insurance will have to be much greater than Daschle
thinks. Not to mention the continuing administrative nightmare of
figuring out whether someone should be in Medicaid, the new plan, or
covered by their family member.

Second, while it may be getting harder and harder for the Sally
Pipes of the world to get people worried about rationing when it’s
clear that we already have it here but that they don’t really have it
in Switzerland, Germany or France, the Federal Health Board will be
fought tooth and nail by the industry.

As I’ve been saying for a long time, to rationally rationalize the
health care system, we need to make cardiologists in Miami behave like
cardiologists in Minnesota with a consequent impact on the incomes of
doctors, hospitals and stent & speedboat salesman in high cost
areas (Yes, Jeff, I do mean Louisiana, New York, Los Angeles and Boston
too). If the Federal Health Board has teeth, that’s what it’ll do, and
the AMA, AHA, AdvaMed, PhRMA et al know it. Which is why the PhRMA front organizations have been railing against cost-effectiveness for so long.

So my guess is that the Federal Health Board, if it gets
established, will get defanged by lobbyists immediately. The
consequence of that is that the mish-mash of an “expand what we got
now” system will cover a few more people at a lot more cost (as has
been the Massachusetts experience). That’s OK because suddenly we’re
rich (or at least suddenly the government is pretending it is!).

But in a few years the stimulus will end and health care costs will
have kept going up. Then we’ll realize that due to more cuts in
Medicaid & subsidies for the working poor, and continued cream
skimming and bad behavior by private-sector health plans, enough people
have fallen through the cracks of the incremental expansion that we’ll
be back where we are today again.

I still think that the odds of significant reform in the next
Congress are less than 50/50, although they’re well north of where they
would have been sans financial meltdown and recession. But
Daschle’s book and the picks Obama has made to run health care in the
White House suggest that modest incrementalism is all we’re going to
get. I’ve always been a believer that only a big bang reform will be
able to solve the core problems of our system (primarily the incredible
costs lumped on some of those unlucky enough to be very sick). How this
gets done without a clear social insurance system that everyone pays
into according to ability, and in which there’s no real distinction between
choice of services due to the individual’s ability to pay, I don’t know. And I’m
afraid neither does Daschle.

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51 Comments on "Critical of Critical"


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Todd Thorpe
Feb 21, 2009

Here’s a novel thought…how about all of you read the Constitution of the United States for once. And pay special attention to the enumerated powers granted our Federal Government. Or the “list of negative libertys” as our President “complains”.
How about we send social security and medicare to the recycle bin and do away with these plans altogether.
Do you really think they give a rat’s a.. about the 46 million uninsured? That’s chump change to somebody like George Soros. The lawmakers could throw 46 million on the problem right now and not blink and eye. That’s a lot less zeros than 800 billion last time I did the math. They want control…and you’re to stupid to see that.
Do you really think these lifetime politicians plan to take part in these programs themselves? Of course not; These programs are simply another way to remove your liberty and control you and your property.
That is why our founding fathers didn’t give them the authority to do such a thing…or bail out banks, home owners, or any other of these crazy notions these progressive socialists are now proposing.
Wake up people…what happened to “Give me liberty, or give me death”

Guest
Jan 25, 2009

“he promotes himself as a scholar of failed attempts at health reform past”
Not true. Senator Daschle focuses on two issues:
1. The politics of attempts at national healthcare reform in the recent past (mostly surrounding the Clinton Administration proposal in 1993-1994)
2. The reasons why a Federal Health Board is needed.
He does a good job on both in my opinion. No attempt at scholarship here at all. The writing style is journalistic, far from academic, a fact that makes the book quick and easy to read, but something that does not diminish its value.

Guest
Tom Leith
Jan 10, 2009

In Defense of Critical
Well, OK, so 137 (a whopping 67%) of 206 pages are devoted to history, and if the notions of a Federal Health Board and PPOs are the president-elect’s idea of “fresh thinking” great disappointment is just around the corner.
But this is an accessible read for non-wonks that, whether one favours a UK style system, a German-style system, or a Swedish-style system, describes a “necessary thing”: an independent evaluation and policy board. Senator Daschle points out a mostly-successful analog in our own political system, saying in effect “we have de-politicized money, we can de-politicize healthcare finance.” (I am aware that an argument may be made that money is not de-politicized and agree that improvement is possible, but compared to 150 years ago and even 75 years ago we’re better off, current difficulties notwithstanding).
On page 134ff, the senator says
Even though the Fed has to answer to the public, it is sufficiently insulated, so that its decision-making process hardly resembles what goes on in Congress or the White House. In Congress, every decision is political. It’s impossible to formulate policy without weighing the likely reactions of special interests, the other party, influential committee chairs, and the president. The next election is always just around the corner, so it’s hard to get lawmakers to think in the long term. The Fed, in contrast, can make decisions based on data and a thorough analysis of what’s best for the country.
So, the good senator has identified the chief problem with democracy. I wonder, then, whether he’d support repealing the 17th Amendment, incongruously made during the same Progressive Era that produced the Fed. And whether he’d support returning any real independence to the Electoral College. Probably not.
In any case, the book’s fine for the interested non-wonk. In some ways it ought to be required reading for any voter, but then we don’t require that voters can read, do we?
t

Guest
Jan 7, 2009

Wow this is too much fun to resist for one last time.
On the 30%, Nate’s “writing” is so confused that I thought he was talking about the variance in cost between what healthy people and sick people get charged. In fact he was talking about the 30% that I refferred to as the off the top cost taken by insurers in the individual market. Nate denied this was the number pointing to a report that in Minnesotta this number was only 9% but neglecting to point out that the average MLR for that year was between 25% (yes only 1 dollar in 4 going on actual care) and well over 100% (e.g. it included plans that got their underwriting wrong and surely wouldnt be there the next year). If Nate wanted to be honest he’d look at the overall MLRs of the big insurers which have ranged between 72% and 85% or so over the last few years, i.e. between 15% & 28% “off the top” and then he’ll tell me with a straight face that their average costs of the top are lower in the individual market than that.
Then onto Medicare in which he tells us that enrollment is both voluntary and mandatory/automatic at the same time. Nate may think I’m a liar, but at least I don’t say two contradictory things at once.
Meanwhile it’s good to know that we can “voluntarily” choose whether or not to make Social Security & Medicare payments (that’s the bit that’s meaningfully mandatory). I’ll let the IRS know and see how far I get.
But joshing aside, unlike the Nate’s of the world who appear to want to go on a tax strike, I dont think paying tax and supporting the community and country is unAmerican. He clearly does, so he should probably do what many conservatives have told us liberals to–love it or leave it.
OK, that’s the last, as I actually have work to do!

Guest
Nate
Jan 6, 2009

Seriously what does this say about government ran healthcare where they force you against your will to take the program they dictate? These individuals wish to opt out and pay for their own care and the government won’t allow it.
How more unAmerican can a system get?
http://www.ashevilletribune.com/MainPage/HowWarpedIsTheSystem.html
Other parties who have attempted to opt out have gotten letters from the
SSA saying the bureaucracy was “not going to make a determination” about
their request. An affidavit from David A. Nelson is included with the
filed suit. When applying for Retirement Insurance Benefits at the SSA
in Albany, Oregon, he told the clerical staff he refused to participate
in Medicare Part A, and he redlined all language pertaining to
enrollment in the program on the forms he signed. He maintained his
position in two followup phone calls with the SSA. After considerable
subsequent red tape, he was told his enrollment in Medicare was “automatic.”
The litigants claim they are capable of paying their own medical bills.
They do not want to be forced to participate in the Medicare entitlement
program. They claim services provided under the program would be
inferior to those they would otherwise receive, and are made available
as a function of government funding. In other words, they are
“effectively rationed.”
Is this what liberal reform will look like? You join the plan we tell you to or we cut off all benefits even those not related to healthcare? What’s next are they going to start arresting seniors for not participating in Medicare?
The plaintiffs charge that the Social Security Administration (SSA) and Department of Health
and Human Services (DHH) “improperly adopted illegal and coercive policies that deny otherwise eligible retirees their rightful Social Security benefits if those retirees choose not to enroll in Medicare.”
With its establishment under the Social Security Amendment of 1965, Medicare was supposed to be a voluntary program, available to – not mandatory for – eligible applicants.
They sell you reform as voluntary then without any say make it mandatory, there’s some change we can believe in.

Guest
Nate
Jan 6, 2009

Sorry couldn’t resist…
“It’s called Medicare. Heard of it? It’s got a total mandate. Everyone over 65 is in it.”
Um LIAR
http://www.daas.utah.gov/hiip_medicareA.htm#Enrollment
Persons age 65 and older who did not pay Social Security contributions, or were not “grandfathered” into the program by attaining 65 by 1967 may apply for Medicare Part A.
Individuals choosing to enroll in Part A must also be enrolled in Part B of Medicare which also carries a monthly premium.
notice choosing and may apply
In general, the Part A premium increases 10 percent for each 12-month period that enrollment, (effective coverage), is delayed past the seven-month initial enrollment period. There is no cap on this penalty; (e.g., a delay of five years will result in a penalty of 50 percent).
Don’t you find it odd they have penalities for late enrollment in a mandatory program everyone over 65 is in.
http://www.insure.com/articles/healthinsurance/heartland-senior-citizens.html
A bill before the U.S. House of Representatives and a lawsuit in federal district court both aim to overturn a government policy preventing payment of Social Security benefits to senior citizens who do not enroll in Medicare.
Norm Rogers of Illinois, one of the plaintiffs in the lawsuit, said the issue of forced Medicare enrollment hit home with him.
“It was really personal,” Rogers said. “Since I saw my parents die on Medicare, I decided I didn’t want to be a member. It’s not a good medical system. I don’t want to be in this system

Guest
Nate
Jan 6, 2009

One question Matt then I’ll accept your apology and let it rest. This is cut and paste from you;
“what exactly is the justification for the 30% off the top that individual insurers & the distribution channel (yes that’s the scumbag brokers like you) receive?”
Posted by: Matthew Holt | Jan 5, 2009 10:35:38 AM
Who can’t read and type?

Guest
Nate
Jan 5, 2009

Maybe you should move to a more conservative state like FL where they haven’t destroyed their market like CA has. CalChoice being a perfect example of poorly designed risk pools. Personally I think 200% is low and doesn’t adequtly allow for the risk variance but it has worked for them. Better then the 450% and 1000% CA tried to hit you for, whats wrong with the people running your state?
“After the COBRA period ends, a HIPAA-eligible person is provided one of two methods for continuing coverage, depending on the type of prior coverage that was terminated. If the prior coverage was under an employer’s insured plan, the group insurer or HMO must offer an individual conversion policy to persons who lose their eligibility for the group coverage. The group
insurer must offer at least two conversion policy options, including the standard benefit plan that Florida law requires small group carriers to offer. The premium for a conversion policy may not exceed 200 percent of the standard risk rate, a statewide average rate computed by the Department of Insurance.”
2 minutes with yahoo search someone with a little insurance knowledge can disprove just about everything you, maggie, and those with similar beliefs claim.

Guest
Jan 5, 2009

Nate. I understand your role. You sell health insurance. It’s an unneccesary role.
We miss Ron Grenier around here–he too sold bullshit underwritten HSA/HDHP policies and decided that THCB was good forum to advertise them. We were all amused for a while. Thankfully he left in the end, and his schlock will hopefully soon be out of business, as will yours. Having said that, you appear very similar in your inability to make an argument or stick to the point.
And while we’re discussing childishness, you were the one who started calling people liars. And now you say I’m using a “30%” figure that’s BS. You obviously can’t read or type. The number is the difference insurers charge high and low risk insurees in the individual market. I gave you the URL and the table number, and you still can’t find it? It’s 300% not 30% (even you said the difference is 85%) And it’s from a study written by Mark Pauly, the right wing free market professor who actually thinks that people like you add some value to the system! He’s on your side, buddy!
And let me point you to a system where there’s community rating, with no “personal responsibility” in your trite meaning of, you’re on your own pal.
It’s called Medicare. Heard of it? It’s got a total mandate. Everyone over 65 is in it. Of course you need a “mandate” to run a single insurance pool and the only effective one is majorly based on the tax system. Which is how Medicare does it, as does ever other country in the world.
Of course, you’ll be damn glad Medicare exists when you retire. That is if idiots like you and your buddies in the private cream-skimming insurance industry haven’t destroyed it by then.
On the other hand, wiser heads than yours in the private insurance business are seeing the writing on the wall, and will probably agree to put the cream-skimmers like your and your suppliers out of business. As I said, they and you don’t add any value, you’re just rearranging costs so they fall first on the others in the insurance pool and then on the taxpayer. Eventually the long term outcome will be that the taxpayer will take over everything. And your little gravy train will be over.
But really I don’t expect you to understand that, so I’m afraid our little fun spat is now over.

Guest
Nate
Jan 5, 2009

http://www.state.mn.us/mn/externalDocs/Commerce/Current_Loss_Ratio_Report_052104013421_LossRatioReport.pdf
Average Individual policy loss ratio 91%. Matt please explain how these carriers pay “30% off the top that individual insurers & the distribution channel (yes that’s the scumbag brokers like you” while at the same time returning 91% of premium in claim payments? That would be 121% on average. Is the State lieing to everyone when they publish these reports or have you just been caught once again making facts up to support your lies?

Guest
Nate
Jan 5, 2009

Matt,
I’m so disappointed you retreated to such childish arguments. It betrays your intentions of reform when you make such arguments. It’s interesting you would eliminate my role yet you don’t even know what it is. What’s that say about you?
Ironically I totally agree with Deron. That is exactly what I advocate and the best solution to the problem. Never in my career have I said or thought that someone who played by the rules shouldn’t have coverage. Unlike yourself I know how to define the word insurance, waiting till your sick to buy it isn’t insurance. The problem is everyone wants to bash insurance companies yet never discuss mandates or personal responsibility. You can’t have community rating without personal responsibility.
Please give even one example of a dishonest example…exactly
My role, I always get a laugh out of people like you that attack my role without even knowing what it is. When employers get sick of paying insurance companies high premiums they come to me. Usually they wait till they get to the point they can’t afford to offer insurance and need to make drastic changes. If they would come earlier it would make things easier but it’s the life I have chosen. So employer comes to me with a 40% rate increase in hand they can’t afford. We review their risk and potential liability and if the numbers work out self fund part of their risk. They do this by purchasing a high deductible plan like a 5K HSA plan. Before idiots like you complian about employees having a 5K deductible that is just the plan the employer buys. The employees keep the same lower deductible benefit plan they had before. The provider bills the insurance company who applies it to the discount then we get the bill and pay the amount between the lower employee deductible and the higher deductible the employer bought. Our clients usually save 30-60% of their premium by buying the high deductible plan and spend 20-40% paying the claims. THey see a net savings of 10-40%.
Yes Matt I am the evil bastard that helps employers cut their cost 10-40% so they can continue to offer insurance to their employees. The world would be so much better without me wouldn’t it? On the side I do sell individual policies, if someone calls asking to buy no reason not to.
Now that we are all clear how much of an idiot you are and how weak your arguments and knowledge of healthcare anything else you would like to say about my role?
FYI your 30% figure is BS not supported by any study or facts, caught you lieing again there buddy.
So the rate sheet from the insurance carrier is less relaible then a peer review study of said rate sheet….that’s interesting