This week, the Cato Institute released a 52-page report on health care reform titled: Bad Medicine: A Guide to the Real Costs and Consequences of the New Health Care Law.
The tract was written by Michael Tanner, a senior fellow at the Institute, and it rests on the thesis that the Patient Protection and Affordable Care Act (ACA) is both Unaffordable and Unfair. Inevitably, Tanner’s claims about affordability are shaky; in truth no one can project how much reform will cost over ten years—and how much it will save. There are too many variables involved. Nevertheless, Tanner seems sure: the legislation will add to the deficit, he asserts, and force insurance premiums higher. Moreover, he stamps the legislation “unjust”: it would turn private insurance companies into regulated “public utilities,” forcing them to insure sick people, while “redistributing income” from families earning “over $348,000” to families earning “$18,000 to $55,000.” Ultimately, he argues, reform represents yet another step toward turning the U.S. into a “Nanny State.”
Why a 52-page report on health care reform now? Tanner makes his purpose clear in the Introduction where he suggests that conservatives will make the new health care legislation the “centerpiece of Republican campaigns this fall,” as they lobby for repealing the Affordable Care Act, or at the very least, replacing it. Bad Medicine is meant to serve as a playbook for those who hope to kill reform.
With that in mind, The Century Foundation decided that the document deserves scrutiny. In the weeks ahead, I will be analyzing and rebutting the report’s many arguments against individual and employer mandates, insurance regulation, subsidies, reductions in Medicare spending, and the CLASS Act, a much-needed national long-term care program.
Cherry-Picking the Polls
To buttress the argument for repeal, the report begins by declaring that the reform “legislation remains deeply unpopular. Recent polls show substantial majorities support repealing it. For example, as a Rasmussen poll in late May showed that 63 percent of likely voters supported repeal, with 46 percent ‘strongly’ supporting repeal. Just 32 percent wanted to keep the law.”
To illustrate the point, page 2 of Bad Medicine features this chart:
Rasmussen Poll –May 22-23
Source: Rasmussen Reports, poll of 1,000 likely voters, May 22–23, 2010, margin of error +/- 3 percentage points, with a 95% level of confidence.
Some might object that Cato is offering a Rasmussen poll as its only evidence. Many liberals claim that Rasmussen tilts to the right. Last year, even TIME magazine called Rasmussen a “conservative-leaning polling group.” The Center for Public Integrity points out that Scott Rasmussen, the president of the organization was a paid consultant for the 2004 George Bush campaign.
Nevertheless, for the moment let’s accept Cato’s use of a Rasmussen survey. The group’s work is generally recognized as “reliable,” even if, as blogger Nate Silver notes, its “issue-based polling” tends to “elicit responses that are more conservative than those found on other national polls.”
What bothers me is not so much the pollster, but the fact Tanner has reached back to May to find a poll that supports his thesis. Keep in mind that Rasmussen has been asking the question about repealing the healthcare legislation every week since the bill passed in March. Bad Medicine was released July 12. Why didn’t Tanner include June numbers? Instead, he hand-picked the one poll, over a seventeen week span, that shows support for repeal running as high as 63%.
In May, Rasmussen commented on the spike: “Support for repeal of the new national health care plan has jumped to its highest level ever. Prior to today, weekly polling had shown support for repeal ranging from 54% to 58%. . . . this marks the first time that support for repeal has climbed into the 60s. It will be interesting to see whether this marks a brief bounce or indicates a trend of growing opposition.”
Indeed, the May 22 poll turned out to be a “bounce”—merely a blip on the screen. Over the next five weeks, support for repeal consistently dropped, while opposition to killing the bill rose.
Rasmussen Polls on Repeal of Health Care Reform: March –July
By late June, as the table above reveals, just 52% of voters favored repeal—down from 63% in that one May poll– while 40% were opposed. The most recent Rasmussen numbers, released Monday, July 15, confirms where public opinion is heading. As the pollster notes, “This is the second lowest level of support for repeal in 17 weeks of surveying since the health care bill was passed by Congress. It marks what appears to be a continuing downward trend in support for repeal since June.”
The More Americans Learn About the ACA, the Better They Like It
A survey taken at any particular point in time is not terribly meaningful. Trends, on the other hand, tell us where minds are moving. As I have argued in the past, ever since the reform legislation passed Congress on that Sunday evening in March, multiple polls have tracked growing support for the legislation.
Recent polls that go beyond the “favor/oppose’” formula to ask more probing question also have discovered that the public is keeping an open mind. For example, in June, a Kaiser Foundation poll discovered that 60% of Americans either support the ACA or prefer that it “be given a chance to work with Congress making revisions as needed.’” Just 27% favored repeal.
A June NBC/Wall Street Journal poll confirmed the wait-and- see attitude. When pollsters asked: “Would you be more likely to vote for a Democratic candidate for Congress who says we should give the new health care law a chance to work and then make changes to it as needed, or a Republican candidate for Congress who says we should repeal the new health care law entirely and then start over?’” 51% of respondents picked the Democrat, 44% picked the Republican. And as The New Republic’s Jonathan Chait notes, “this was in a poll showing a plurality (45-43) preferring a Republican-controlled Congress.” Chait adds: “One of the political benefits to Democrats of passing the Affordable Care Act . . . is that it shifted the debate to favorable terrain. Now Democrats are favoring the status quo, and Republicans are trying to pass a radical change.”
Finally, Gallup polling both affirms that the number of Americans who favor the ACA has been climbing over time, and suggests that opposition is now largely confined to the one group that already has universal coverage– seniors.
The Washington Post’s Ezra Klein comments on the divide: “Health-care reform, as you can see in the table, is comfortably popular with every demographic except for seniors. And seniors, of course, aren’t opposed to government-run health care. They love their Medicare, and insofar as they have a policy concern here, it’s that the Affordable Care Act will interfere with the single-payer system they rely on. The ACA does include some Medicare cuts, and the GOP was extremely effective at messaging on them . . . But insofar as there’s a policy message here, it’s comforting for health-care reformers. The Affordable Care Act is popular among the people it will actually affect, and unpopular among the people who are worried it will harm the much-more statist health-care system they depend on.”
In the end, whatever polls you look at—Rasmussen’s, Kaiser’s, Gallup’s–and however you slice and dice the numbers, it is very difficult to find evidence for the Cato’s initial claim, on the second page of its report that the “legislation remains deeply unpopular.”
Four months ago, few Americans knew what was in the 2,500 page bill, or what impact it would have on their lives. Uncertainty fueled anxiety. But with each passing week, the public learns more about health care reform. For instance, this week, the administration announced which preventive services insurers will be required to cover, free of charge. The rules will eliminate co-payments, deductibles and other charges for blood pressure, diabetes and cholesterol tests; many cancer screenings including mammograms for women over 40; routine vaccinations; prenatal care; and vision and hearing tests for children. The more Americans learns about the details of the legislation, and how reform will help them and their families, the better they will like it.
Thus Tanner has his work cut out for him if he hopes to persuade voters that the Patient Protection and Accountable Care Act represents “bad medicine.” In part 2 of this post, I’ll turn to his contention that individual mandates “violate individual liberties” and will “fall far short of the goal” of bringing “young and healthy individuals into the insurance pool.”
Maggie Mahar is an award winning journalist and author. A frequent contributor to THCB, her work has appeared in the New York Times, Barron’s and Institutional Investor. She is the author of “Money-Driven Medicine: The Real Reason Why Healthcare Costs So Much,” an examination of the economic forces driving the health care system. A fellow at the Century Foundation, Maggie is also the author the increasingly influential HealthBeat blog, one of our favorite health care reads, where this piece first appeared.
The Act will result in many hospitals going bankrupt, the number depending on the degree of gaming of the system by insurers, employers, and individuals. Premiums have already leapt to the sky. Maggie, wake up, that report is accurate and it has nothing to do with polls.
I am only on page 4 of the 52 page report and already learning new tricks… Here is how you “game” statistics:
“Slightly more than 35 percent of that state’s [Massachusetts] remaining uninsured are between the ages of 18 and 25″
“Before the mandate, those between the ages of 18 and 25 made up roughly 30 percent of the uninsured, suggesting that the young(and presumably healthier) are less likely to comply with the mandate.”
“…this does not bode well for the national plan.”
The latest uninsured figure in MA that I am aware of is 3.7%. Of those, 35%-30%(“roughly”)=5%(“roughly”) more are young and healthy, as compared to the situation before the mandate to buy coverage.
5% of 3.7% is 0.185%, or 12,198 people out of 6,593,587 in MA. This is within the margin of error for “roughly” and “bodes” absolutely nothing.
Not sure I want to read more, but I will anyway. It’s just campaign propaganda.
“Tanner seems sure: the legislation will add to the deficit, he asserts, and force insurance premiums higher.”
I agree with this unless costs are reduced, but not “reforming” the cost/payment system will “add to the deficit” as well. How much higher will premiums go than their historical 6% – 10% compounded increases per year without “reform”? But if the legislation had done any significant reduction of costs (cutting prices/procedures) CATO would be screaming government take-over.
“Moreover, he stamps the legislation “unjust”: it would turn private insurance companies into regulated “public utilities,” forcing them to insure sick people,”
Imagine, actually providing healthcare coverage to “sick people”, how un-American. No self respecting private insurance company can make money providing coverage to people that are actually sick.
“while “redistributing income” from families earning “over $348,000” to families earning “$18,000 to $55,000.””
I guess “redistributing” income from those earning $18,000 to $55,000 to those earning over $348,000″ is much fairer.
“Ultimately, he argues, reform represents yet another step toward turning the U.S. into a “Nanny State.””
Seems Wall Street likes a “Nanny State”.
CORREX
Forgot to label this diatribe as a “fact.” Instead of proof of political narrow-mindedness.
Somewhere, Geo. Orwell is LOL.
See you Nov. 2. That’s the only poll that matters. Unless the Chinese Commies cut off OWE-bama’s spending, like they did with the Greek Commies.
As doctors get screwed more, the costs go higher. Go figure.
Hard to avoid personal bias in this argument, regardless of where you come from. Maggie is already going to analyze and rebutt, which tells me she doesn’t agree with it and will be approaching from her angle. Not that it’s a bad thing, we all do it.
Opinions and statistics are like politicians. We all have them representing us, but nobody knows if they’re right.
Truth-seeker, Peter,Margalit
Truth-Seeker– I’m not sure how you think reform is “screwing doctors.” Medicare just hiked fees, across the board (by a small amount, but still it’s an increase.) Berwick, the new head of CMS, is liked and respected by physicians. He’s not a bureaucrat, he’s a doctors’ doctor.
Maybe you fear that reform will screw doctors at some point in the future. If so, I think you’re in for a pleasant surprise. Reform is going to reward a great many good doctors by paying them to talk to and listen to patients.
Peter:
Yes, you’re entirely right– without reform, we’ll definitely add to the deficit.
With reform, it’s quite certain that we’ll see significant savings under reform. We just don’t know how much– too many variables involved.
But we do know that roughly 33% of health care dollars are wasted. In order to “break the curve” of health care spending, we need to reduce spending by 5% to 6% a year. That means eliminating only about one-fifth of the waste.
We know it can be done. For about 5 years in the 1990s, health care care inflation dropped sharply and spending as a percent of GDP remained flat. This is because private insurers were making a serious effort to contain costs under “managed care.”
Unfortunately, they did this in a ham-handed way, focusing on costs rather than the effectiveness of treatment. Sometimes the refused to pay for ineffective, futile treatments, but sometimes they refused to pay for treatments that might have helped the patient.
Under reform, comparative-effectivness research will serve as the guide to what we pay for. (Note I say guide.) Private insurers won’t be making the decisions. Though, in insofar as Medicare trims waste, they will follow Medicare’s example.
Medicare is already beginning to address waste by limiting payments for tests done in the doctor’s office. (Reserarch shows that when doctors buy or lease a million dollars worth of testing equipment they do twice as many tests in order to pay for it.)
Medicare is also refusing to pay for an excessive number of
preventable readmissions. In response, the American Hospitalist Society is already working on redisigning what happens when patients are admitted, and when they are discharged to make sure that they or a caregiver has clear information about what meds they should be taking, to make sure they have a follow-up appointment with a doctor, to make sure that they’re not leaving the hospital with a hospital-acquired infection. . .
In other words, hospitals (and hospitalists) are going to be workign to try to eliminate waste in this area. The financial stick is making hospitals aware of the problem. Too many patients “bounce back” within a couple of months.
Similarly, Medicare is going to be looking at hospital infection rates, and ultimately, publishing them. This is likely to make hospital administrators begin to pay much more attention to doing all of the things they can to reduce infections. The Insitute for Healthcare Improvement and others have demonstrated that it is possible to cut infection rates sharply.
Private insurers will follow Medicare’s lead–they just want Medicare to provide political cover.
And it’s already happening. See this story from Bloomberg: ” CardioNet Inc. said Wednesday that UnitedHealth, one of the largest health insurers, will not cover CardioNet’s wireless heart-monitoring devices.
CardioNet said UnitedHealth Group Inc. is maintaining its view that “outpatient cardiovascular telemetry is unproven for managing cardiac arrhythmias.” The decision comes about a year after a Medicare administrator slashed reimbursement rates for CardioNet’s products and similar devices. That caused health insurers to lower their rates.”
In addition Medicare will be chaging how it pays for care–paying for quality, not volume, as they move away from fee-for-service and reward providers for better outcomes. Private Insurers will follow suit.
The reform legislation provides funding to double the capacity of community health centers, many of which will be open after hours. This provides a much less expensive, more patient-centered alernative to the emergency room; they goal is to siphon off the patients who now get their care at ERs and redirect them to community cencers staffed by a combination of doctors, nurse practioners and physicians’ assistants. These centers will become medical homes–and provideres will be paid extra for providing that home.
All of this is bound to lead to savings– we just don’t know how much.
But everyone is going to be more cost-conscious–including insurers. They will no longer be able to pay whatever a hospital or a drug-maker demands and pass the cost along in the form of higher premiums. States are already beginning to block premium increases, insisting on proof that they’re necessary. And since insurers will have to pay out 85% of premiums for medical expenses (when covering large groups, 80% when covering small groups) jacking up premiums won’t do them that much good. If they raise premiums 10%, they get to keep only 1.5% to 2% of the increase–they rest must be paid out in reimbursements or they have to refund customers.
Health care reform is going to put a lid on health care inflation in many different ways.
Margalit–
Good catch.
It’s worth reading the report just to become familiar with how conservatives distort numbers, and make things up out of whole cloth. That’s why I’m taking the time to deconstuct the whole report.
The Century Foundation hopes that when people consider quoting the Cato report they’ll also take a look at our report (we’ll be putting my posts together in one document) as a way of fact-checking.
stop somking help–
Good to hear from you.
I have to disagree that “nobody knows whether statistics are right.” It’s always worth analyzing statistics. In her comment, Margalit, for example, makes a good catch.
And there is such a thing as “true” and “untrue.”
For instance, it’s just not true to say :”reform legislation remains deeply unpopular.” This statement implies that it’s just as unpopular as it was in March–and that’s not what the polls show. It would be far more accurate to say “some Americans remain strongly opposed to reform legislation, but the percent who want to see it repealed has fallen since March.”
Also, picking one outlier poll from May to demonstrate that “63%” of the public wants the legislation repealed is misleading.
On the other hand, some things are a matter of opinion.
The report says that reform will redistribute income from people earning over $348,000 to people earning $18,000 to $55,000. This is true.
Is it a good thing? That’s a matter of opinion and depends on what you call one’s “angle”–i.e. their political perspective.
I’m completely happy to identify myself liberal and to say that I look at these things from a liberal perspective. I think it’s a good thing to redistribute income downward because we have been redistributing income upward for nearly 3 decades. It’s time to right the balance–that’s an opinion.
But that doesn’t mean that everything is a matter of opinion or perspective. 2 + 2 equals 4, not 5.
To say that slightly more than 35% of Mass. citizens who remain uninsured between 18 and 25 –and not putting the number in context (only 3.7% of the population remains uninsured)– is a classic case of using numbers to distort the truth. 35 percent sounds like a lot of people. As Maragalit points out 35% of 3.7% is not a lot of people. The overwhelming majority of young peole in Mass. are part of the pool.
Similarly, picking the one poll out of 17 weeks of polling that strongly supports your argument is misleading. This isn’t a matter of opinion–it’s a fact.
Note that I showed you all 17 weeks– including the weeks where it looked as if support for repeal might be rising. That’s called putting the numbers in context rather than cherry-picking them. That’s the way statistics should be presented. Again, not a matter of opinion, it’s a fact.
So my analysis will be a combination of opinion and fact. I’ll true to make it clear when I’m offering an opinion –for instance some people say the Rasmussen polls are biased, but others say they they are “generally reliable.” So I decided to go with the Rasmussen polls, at least as the first example, and to quote the Rasmussen pollsters analyzing their own data–talking about the trend through June, etc.
“Similarly, picking the one poll out of 17 weeks of polling that strongly supports your argument is misleading. This isn’t a matter of opinion–it’s a fact.
Note that I showed you all 17 weeks”
Why don’t you show the sampling spread between Dems and Repubs? If a poll claims there is a 12% spread when there is not then the liberal position will appear to be more popular. IN FACT, and this really is a fact, Amoungst a representive slice of the US population it is less popular. Amoung liberals it has much higher popularity but that isn’t what your claiming. I took Matt and you to task for this last week. Your knowingly using a bias poll to project opinions on the public at large that only apply to liberals.
If you really want to be transparent and have your opinions respected then share the data that matters and that is poll internals.
Read this from your gallop poll;
“Samples are weighted on the basis of gender, age, race, education, region and phone lines.”
As far as we know Gallop called 1014 names of the DNC contributor list. And you hold this up as honesty?
I don’t have a problem with anyone’s political leanings. I just wanted to point out how things are phrased and how they can be interpreted by us readers and commenters.
I just like to challenge people (and what they believe) by making them see how their perspectives may color their approach to a given topic. Are they being unbiased? Are they taking an open mind with them or are they already closed. Don’t get me wrong, I do it all the time too.
I guess I’ll pull the curtain back a little and say I’m more conservative than liberal. I don’t like change unless, as my 5th grade English teacher told me, you can back it up with objective data. Make your point, but be prepared to back it up.
That’s why I started my website. It’s unbiased, literature-based smoking cessation information. I don’t promise anything or make outrageous claims. I know these blogs cover much bigger issues than my rinky-dink website. I have really come to enjoy the “lively banter” and information given here and on other blogs.
So I can better understand these issues, is there a place that has the reform legislation posted? And when I say posted, I mean where a political novice (like myself) can actually read and hope to understand most of the high points without someone else telling me what I’m reading? I’ve looked without a lot of success. Thanks!
Nate–
Yes, Democrats and liberals are more enthusiastic about reform than conservatives and Republicans.
This is a very well-known fact.
If you want a break-down by party, all you have to do is click on the link I gave you to the Gallup poll which includes a table showing that in June:
17% of Republicans thought the reform legislation was a “good thing”–up from 10% in April.
Among Independents, 43% saw it as a good thing, roughly teh same as in April (41%)
Among Democrats, 76% saw it as a good thing, down slightly from April (81%)
Margin of error +/- 4 percent.
So the increase in Republicans favoring reform is statistically significant, the drop in Democrats just barely significant. Other Gallup polls tell us that some Democrats dont’ like the bill becauase they feel it didn’t go far enough. They want single payer or a public option.
But what matters is what percentage of ALL Americans (and particuarly Americans who vote–which is the group Rasmussen tries to capture) favor repeal or oppose repeal.
This will have an effect on how the Republicans and conservatives fare in the elections this fall. If they continue to push for repeal, this will factor into whether voters vote for them or against them.
It seems that the majority either favor or reform or want to see how it works out. They may well be alarmed by conservatives who want to repeal or replace it.
And if public sentiment continues to move against repeal, even Republicans will back away from the idea.
They would like to win elections in November even more than they would like to repeal the bill.
stop smoking help–
I totallly agree with your English teacher. That’s why I include so many links in my post–as evidence. Gallup polls are generally considered to be objective. They call a random sample of people and have been doing this for a long, long time. As I noted, some people think Rasmussen polls lean to the right, and that Kaiser polls lean to the left (as an organization it’s a fair guess that Kaiser favors reform.)
That’s why I included all three: Gallup, Rasmussen, Kaiser. When they all agree on the general trend (moving away from favoring repeal), that’s telling.
I don’t realize you had a smoking cessation website. That isn’t “rinky-dink”!
The single thing we could do that would lower premature deaths in this country–and improve overall health–would be to help people stop smoking.
I’m very glad that, under reform, new insurance plans will not charge co-pays or deductibles for smoking cessation counseling. I wish we would also put the cost of patches and smoking cessation drugs on a sliding scale based on income so that everyone could afford them.
Summaries of reform: For a readable summary of reform that is arranged as a time line telling you what happens in 2010, what happens in 2011, etc. see this Commonwealth Fund timeline. It goes into quite a bit of detail and is very readable: http://www.commonwealthfund.org/Content/Publications/Other/2010/Timeline-for-Health-Care-Reform-Implementation.aspx
Kaiser offers an even more detailed summary. It may be more detailed than you want, but it’s well-organized into sections like “individual mandate”
and “tax changes related to health reform” so that you can read the sections that interest you. You’ll find it here: http://www.kff.org/healthreform/upload/8061.pdf
“But what matters is what percentage of ALL Americans (and particuarly Americans who vote–which is the group Rasmussen tries to capture) favor repeal or oppose repeal.”
This is correct, and if your going to claim 42% of ALL americans oppose repeal based on a poll of 1000 people I want to know the D/R ratio of those 1000 people. If you call 500 D and 500 R and got a 42% opposition that is completly differnt then calling 800 D and 200 R and only getting a 42% opposition to repeal. I spent a good 20 minutes looking for this info for the gallup poll and am pretty certain they didn’t ask the question and their poll oversampled Dems.
If your asking how many people like apple pie we don’t need this info, any poll asking a hyper-politial question like for or ahgainst repeal of healthcare reform that doesn’t ask this question and prominently provide the internals is not journalistically quotable. We don’t need a poll to tell us how the dailyKos feels about HCR. If they can’t prove they are a scientif poll they shouldn’t be quoted like one.
“And if public sentiment continues to move against repeal, even Republicans will back away from the idea.”
And this is exactly why liberals publish inaccurate polls that sample Dems 12% higher then Reps. Its not fact its propoganda. They are trying to trick people into thinking the public wants to give it a chance, it is 100% false. All accurate polls show HRC losing popularity.
Here is some comical relief regarding insurers strategies to avoid people with pre-existing conditions:
“… or they can locate their offices on the top floor of a building with no elevator; or provide free health club memberships while failing to include any oncologists in their network.”
I guess they could also make their ID cards become invisible when exposed to light….
did you make this up margalit or did this actually come from somewhere? Not saying we don’t trust you but if your going to post attacking quotes, some context and sourcing is nice.
Curious who actually visits their insurance company? just trying to establish some relavancy.
Nate, it’s from page 6 of the CATO paper that Maggie is discussing here – right column, one paragraph before last….
Thanks. Looks like I have some “light reading” to do.
BTW – I too believe insurance should cover the out-of-pocket expense for FDA approved cessation aids (including counseling). There was a nice article in the Sacramento Bee about that not too long ago.
Think what our healthcare system would be like if we took the $194 billion/yr in direct/indirect costs associated with smoking related illness and put them somewhere else. As a respiratory therapist, I wouldn’t mind it at all.
I’m on page 24, reading about “Growing the Nanny State” and I just learned that requiring restaurants to post calorie counts on menus “represent[s] yet another blow against individual responsibility” and this in itself is the sole reason for the growth of the Nanny State because there’s nothing else other than restaurants in this section.
Margalit, that quote about relocating to the top floor of a building with no elevator is a howler. I suppose the insurance company will also eliminate its customer service by phone and internet just to stick it to the infirm. But the remarks about offering wellness programs and not offering oncologists are a bit more serious.
Insurers definitely look at how attractive their specialty networks and benefits are compared to competitors and don’t want their benefits+network combination to be too attractive, in order not to set off an actuarial death spiral. There is nothing new about that, of course; it’s been happening for years.
The wellness program point is actually one I’m willing to defend. Why shouldn’t an insurer make a big effort to create attractive wellness programs for its members? I think this is right on many levels:
1. The healthy get the least out of their health insurance. This enhances fairness by giving them something tangible in return for the premium they pay.
2. To the extent the wellness programs work, they lower health care costs, which is a win-win outcome.
3. Health insurers need to compete and differentiate on something. Wellness is a much better place to do this than is, say, risk selection through making health benefits more difficult to access.
4. An obese diabetic who hates the thought of exercise or self-control isn’t pushed out of a health plan with a strong wellness benefit. It just means that a small (1%?) proportion of the premium is going to pay for these things that other people do take advantage of, perhaps lowering that diabetic’s premiums in the long run anyway.
jd, I am all for free gym memberships and wellness programs, but even a 100% healthy person would (or should) think twice before getting a plan with no oncologists, or other expensive specialists. Previously very healthy folks are diagnosed with cancer every day. After all it is supposed to be an insurance plan, for all those unforeseen horrors.
BTW, I think every office building or factory or whatever should be mandated by code to have an appropriately sized exercise facility. Just like they must have bathrooms or fire safety.
Maggie,
In your rebuttal I figure you plan to include Figure 2 on page 6. That’s a doozy of misinformation.
Just from the perspective of intellectual cleanliness, creating a chart which shows “possible” premium increases from various sources and then giving point estimates rather than ranges is, well, unclean. As far as RAND was concerned, there were lots of “possibilities” other than 17%. I haven’t read the RAND study, but if they gave a standard 95% confidence interval you could have used those values as well and been just as correct in stating “possible” outcomes according to RAND. Tanner’s approach is especially indefensible for the CAHI estimate, which was a range from 75% to 95%, yet the figure only shows the 95% top end. A work of political hackery.
The bigger problem is that this chart misleads by looking only at the individuals who have insurance right now in the individual market. This conveniently excludes those who could not get insurance or for whom the cost was too high due to pre-existing conditions. The cost of coverage for them will go down substantially.
These studies easily can mislead people (as Tanner is doing deliberately here) into thinking that everyone’s costs will go up by 17% or more.
To put it another way, the analyses do not look at the cost of a particular benefit set before and after reform for the average person who must use the individual market for insurance (including the currently uninsured who don’t have access to group insurance, Medicare or Medicaid). From what I’ve read, the average cost of a given benefit set will go down after reform. This makes sense for several reasons: reduced administrative cost through guaranteed issue and elimination of underwriting, as well as greater efficiencies of scale.
“BTW – I too believe insurance should cover the out-of-pocket expense for FDA approved cessation aids”
Why? This is where I think people suffer a huge disconnect between what sounds simple on paper and what makes sense big picture. By paying for this via insurance you just tacked 20% onto the price tax. What have you gained by adding 20% and having insurance pay for it? And that isn’t even the expensive part of your fallacy. If it is now “free” from your insurance company the individual has nothing at stake. Providers will push it on everyone rather they smoke or not and people will try one day then throw the rest in the medicine cabinet.
You could easily increase spending on cessation aids 50-100% with no improvement in outcomes. cessation aids cost a fraction of an actual smoking habit, if they can afford to smoke they can afford their own cessation aids.
” the analyses do not look at the cost of a particular benefit set before and after reform for the average person who must use the individual market for insurance”
How do you define benefit cost? If you are referring to what XYZ insurance will pay for a vision exam it might stay flat or drop with the increased volumn. If you are talking how much XYZ will charge in premium for a vision exam it not only will skyrockets but already has. The average premium in existance today, we can’t project for premiums that don’t exist, will double in 5 years for sure. Your removing the remaining few personal cost controls, capping out of pocket and deductibles, creating an endless benefit to providers, remove annual and lifetime caps, giving coverage away to the sickest people without any controls, and promising to cover just about everything, trials. The premium cost of benefits for those curretently covered are going to inflate like no time in history.
So “only” 53% of voters in the latest Rasmussen poll favor repealing the law. Perhaps in the next one, it will “only” be half. Sounds like the thing is still pretty damned unpopular to me.
This was the least important part of Tanner’s argument- the political part, and a waste of Maggie’s and our time. The important parts are that it was absolutely misrepresented to voters as deficit neutral, and whether we’ll actually be able to afford to implement it.
The law isn’t going to be repealed. There is simply too much “puppies and ice cream” in the health reform bill. The real question will be what the Republicans do with it when they regain control of things and begin actually setting fiscal priorities. On top of the unfunded mandate of MMA, which, along with the Iraq war, started us down the path to insolvency under George Bush, the federal budget saturnalia Obama has thrown is coming to an end. Where we go next- where we really need to put our scarce resources- is the next great budget battle.
Nate: I wrote an article about why it’s not a bad idea for insurance to pay for the out-of-pocket cost for smoking cessation aids. Here are the highlights.
1. Smoking is the most expensive preventable healthcare cost in the world. One case of cardiovascular disease, COPD, and lung CA will cost the insurance company more than the cessation aid cost for probably more than 500 people.
2. Not every smoker will take advantage of the benefit.
3. Cessation aids have very low success rates, so it’s important for those who want to stop, to be able to keep trying with no hinderances. It takes the avg. smoker 7 attempts before they finally quit. Why not make it as easy as possible for them to try?
4. Although, it doesn’t sound very conservative to mandate insurance companies pick up the nominal expense, it is very fiscally responsible in the big picture.
5. One role of government, it can be argued, is to look out for the little guy, who is poorly educated. Studies show that those with less education are more likely to smoke. So why not use this to help the little guy who doesn’t know better. Again, you’re taking one of his excuses away. That is another conservative plank – help people so they can make better decisions.
6. I am tired of paying higher medicare taxes for the > $90 billion in direct medical expenses to treat smoker’s diseases. I’d rather pay $1 billion for cessation aids and lets say only $50 billion for those direct medical expenses. That’s outside the box, medical reform. Another conservative idea.
If nothing else bev should be happy to see some wonkish debate.
“One case of cardiovascular disease, COPD, and lung CA will cost the insurance company more than the cessation aid cost for probably more than 500 people.”
True, but if you’re going to make the cost argument, 15 years of continued living then dying from a protracted battle with prostate cancer cost 100 times more than COPD. Dying early from smoking actually saves money in the long run. Not that I advocate spiking cigs, more than they already are, with poison to kill them off but you are not saving me money by doing this, in fact your costing me considerably more.
“Not every smoker will take advantage of the benefit.”
True, if it is a required benefit even some non smokers will though. This is the type of benefit medicare fraud loves, high volume, no accountability, no risk to member. Steal a HICN you could bill 3-4 of these a year for 10 years.
“Cessation aids have very low success rates, so it’s important for those who want to stop, to be able to keep trying with no hinderances. It takes the avg. smoker 7 attempts before they finally quit. Why not make it as easy as possible for them to try?”
Because it is my money they are wasting every time they fail. When you waste someone else’s money your motivation is not nearly that if you are spending your own.
“Although, it doesn’t sound very conservative to mandate insurance companies pick up the nominal expense, it is very fiscally responsible in the big picture.”
I disagree, it is a terribly inefficient and fraud prone way to achieve little to no added benefit.
5 and 6 can be accomplished without opening it up to fraud and a 20% insurance add on. I would start by pointing out the word, what risk are you insuring against with smoking cessation aids? The person smokes, this is known. It will take 7+ tries and most still won’t stop, this is not an insurable item and there is nothing conservative about trying to make other people pay for someone else’s shortcomings and weaknesses.
Don’t take this as I am against smoking cessation aids. Insurance is just the worst possible way to accomplish this. Off the top of my head I would say a national smoking cessation program would be far more efficient. No premium taxes, claim paying, broker fees, fraudulent providers etc. Fund it 100% with a new tobacco tax, non smokers shouldn’t be funding a penny of this. People get to choose as many and as often from the approved treatments at no cost besides what they pay in additional taxes. Direct from the manufacturer delivered through the agency to track who is using what and outcomes. This will also reduce fraud. A couple years after it starts I would add a tobacco tax to all smokers equal to the cost of treating smoking related illness. Anyone actively in a program trying to quite would get a waiver.
I just cut the cost of the program to a quarter or less, eliminated cost to taxpayers and non smokers, and would likely achieve much better results.
the added tabacco tax later would be an insurance premium tax, not just another tax that disappears once it hits the states, we all know how well that turned out
Hospitals are closing, care is deteriorating, doctors are angry, hospital administrators are desperate. The Cato report is spot on.
tcoyote–
First,
If the popularity of repeal isn’t important to Tanner’s argument, then why did he chooose to put the Rasmussen chart on page 2 of his report and say that Republicans will make repeal the “centerpiece” of their campaigns this fall?
I agree that the legislation will not be repealed. And this means that by pushing the idea, Republicans will be hurting themselves.
My larger point is that over time, as voters learn more about what is in the bill, support for reform is growing.
Here’s the newest numbers I’ve seen: Wed., Bloomberg released a poll showing that 61 percent of respondents don’t have any interest in repealing the health care legislation that Congress passed earlier this year (47 percent want to see how it works, 14 percent say it should be left alone).
Igor Volsky adds: “Just 37 percent want the bill repealed (as is the wish of the Republican leadership).
The numbers underscore increasing public approval of the health care reform law. It also illustrates the potential dangers the Republican caucus assumes by make the repeal agenda a major plank of its campaign platform.”
The fact that so much of the opposition to the legislation comes from seniors also is interesting. Conservatives have done a good job of making seniors fear that reform will be funded in part by cutting Medicare benefits. In fact, the funding will come from cutting Medicare waste: reducing hospital errors, paying for outcomes instead of volume, etc. Meanwhile, Medicare benefits will be expanded insofar as preventive services wil become available without co-pays and dedcuibles.
As seniors see this, their feelings about reform are likely to soften.
Also, conservatives and some doctors have been trying to scare seniors by saying that docs will stop taking Medicare patients. In fact, Medicare is not cutting docs reimbursements across the board; unlike most American workers, they’re receiving a small raise.
And the Medicare Payment Advisory Commission has just come out with a new report showing that, in 2009, that when compared to privately insured individuals, Medicare patients report “as good or better ability to get timely appointments with physicians” and they also report having an easier time finding a new physicain than privately insured patients. Both groups report more difficulty finding a primary care doc, though 88% of Medicare beneficiaries report that finding a new primary care doc was “no problem” or “only a small problem.”
As my associate Naomi Freundliche pointed out on http://www.healthbeatblog.org, large numbers of doctors are NOT dropping Medicare patients or refusing to take new patients. The idea that docs in Texas were “boycotting Medicare” made headlines, but when you look at the numbers you discover that just “two hundred doctors are opting out of Medicare in Texas–really just a drop in the bucket: There are nearly 60,000 non-federal physicians practicing in the state already.” (Naomis’ post is cross-posted on TCHB here http://www.thehealthcareblog.com/the_health_care_blog/2010/06/are-doctors-really-boycotting-medicare.html
As Medicare patients realize this,they’ll be less fearful of reform. And I think Berwick will be extremely effective when it comes to communicating with seniors.
This is important because as support for reform grows, it will become increasingly difficult for Congressional conservatives to weaken the legislation.
As for the argument that reform will add to the deficit–I’ll get to that when I get to that part of the report. Here, let me just repeat: Projecting costs and savings 10 years out is impossible. There are too many variables involved. As CBO explains “A wide range of changes could occur—in people’s health, in the sources and extent of their insurance coverage, and in the delivery of medical care—that are almost impossible to predict but that could have a significant effect on federal health care spending, both under the legislation and under prior law.”
I’m glad you acknowledge that the “unfunded mandate of MMA, which, along with the Iraq war, started us down the path to insolvency under George Bush . . .”
I’m not sure why you think that the Republicans would set better fiscal policy when/if they regain control; the leadership of the party really hasn’t changed.
There is also a serious question about Republicans re-gaining control. By moving so far to the right, they are turning themselves into a minority party.
And Obama remains surprisingly popular despite a recession, the fact that the real unemployment rate remains over 10%, and that we’re mired in two unwinnable wars . . . Over the next 2 1/2 years, I expect he will manage to create jobs, and that we will begin withdrawing from the Middle East (which is all that most Americans want–few expect we can “win”.)
I expect he’ll tackle the deficit through a combination of continuing to raise taxes for the wealthy and Medicare reform–which is already beginning.
Even if Obama loses support, I’m not at all convinced that Republicans could win by running another conservative candidate. Yet the leadership of the party seems determined to steer to the right. I still can’t quite believe that they gave Harry Reid the great gift of Sharon Angle as his opponent. (Reid was supposed to have no chance; he’s ahead by 7 points in latest poll.)
Looking ahead, there are reasons to believe that President Obama’s election may mark the beginning of a long run of Democratic victories, in part thanks to shifting demographics: “A new report by Ruy Teixeira (co-author of The Emerging Democratic Majority) argues that huge demographic shifts in the United States will see ‘the Democratic Party become even more dominated by the emerging constituencies that gave Barack Obama his historic 2008 victory, while the Republican party will be forced to move to the center to compete for these constituencies. As a result, modern conservatism is likely to lose its dominant place in the GOP.”
I don’t know whether Democrats will be able to hang onto the House this Fall, but if Republicans continue to present themselves as the party of No, Dems might hold the House. But I’m less concerned with which party dominates than how many conservatives win vs. true moderates and liberals.
.
This is my first such debate, so please pardon me if I reply one more time – no disrespect meant.
So your best argument for the most important part of the wonkish debate is that you’d rather people die from one disease because it’s “cheaper” than people living longer where they might contract some other worse disease which costs more to manage? Do you know how much 10 ER visits per year, daily chronic breathing treatments, oxygen, pulmonary rehab, pulmonary testing, blood work, radiological workups, pneumonia admits, antibiotics, LTAC admissions, ICU days, invasive and non-invasive ventilator support, comorbidity disease management, etc. costs a COPD patient every year? Now multiply that by 20 years. I can’t imagine it is that much less than your prostate cancer patient. I averaged about 35 patients per day that had smoking related illnesses in the hospital and maybe only 1-2 per week with prostate cancer. Plus, 90% of all lung cancers are related to smoking. So there’s your chemo and radiation cost.
Also, so you would rather us practice reactive medical care than preventive medicine? It’s a risky proposition to continue with healthcare that only treats disease rather than trying to prevent disease. That’s why I came up with my website. I was tired of being reactive only, I wanted to do something proactive for a change.
With regards to your fraud argument, fraud is everywhere. As long as there are dirtbags in this world, people will try to defraud us. How different is that than the San Diego physicians who self prescribe hundreds of prescription pain relievers and then dole them out to athletes at a $$. Should we outlaw the ability for physicians to prescribe medications? No, that would be ridiculous. Point is, rules can be written to limit fraud, not prevent it altogether.
Regardless of which side of the argument you find yourself, this is yet another great example of how well intentioned people have seemingly wonderful ideas, but they can be argued to the point of “give-up”. So we continue to stand pat because we’ve all got tired head. Like Dr. Jones said, we continue to get angry, care falls off and hospitals look for ways to squeeze more out of the orange (which sets up yet more ideal situations for fraud, as people become desperate).
I think we’d both agree, we can’t just stand pat. Something has to be done. The question is, can we get beyond the arguments?
Okay, this is my last posting. I forgot the last point you made about the National Cessation Program. That sounds like a great idea. However, you say we, the taxpayer, should not pay for a penny of it. I guess I didn’t make my point clear last time, we’re already paying for it, in spades. Why not take some of that money that we’re already paying and use it to fund a program.
Also, smokers who are addicted suffer from a chronic illness – nicotine addiction. It’s not like they can just quit as easily as they started. Anyone who has been addicted can tell you how hard it is to stop, hence the definition of clinical addiction. It is beyond their control, which is hard for us nonsmokers to comprehend. We think “the lousy smoker did it to himself”, and to a point, that’s true. But just because we don’t understand it, doesn’t make it less real for those who suffer from it, and believe me, they suffer. Much like depression or other psych. illnesses. Many don’t want to pay for mental illness because it’s all in their mind. But we’ve come to understand it and thus, we help fund support and treatment for it.
Will we ever get to that point with nicotine addiction?
jd–
Yes, the figure 2 is a joke. Luckily, when I was at Barron’s I did a lot of work on charts, collaborating with the person in our art dept. who did charts. (Barron’s readers LOVED charts and I like them too. If done right, they can be very informative.)
I’ve actually been working on a post on whether premiums will rise. There are many variables involved . . .
First, Cato and others assume that young people will pay the penalty rather than join the pool because they don’t feel they need insurance. It turns out that many young people don’t have insurance not because they think they don’t need it, but becuase they cannot afford it. If you look at the wealthiest third of 18 to 29-year-old fully 88% of them have insurance. The share drops sharply as you go down to the middle third and bottom third.
Under reform, the subsidies will make insurance very affordable for the bottom third and pretty affordable for the middle third. Moreover, under reform many 20-somethings will be getting insurance through their parent’s employer–and their parents can pay the extra premiums with before-tax dollars, making it a very attractive deal.
This suggests that we’ll have more young people in the pool than many predicted; because they use less care, this will bring premiums down.
OF course many of the uninsured are poor, and since poor people are sicker than the rest of us, this would bring premiums up. But, the poorest (and presumably sickest) won’t be in the pool with everyone else–as Medicaid expands, they’ll be going into Medicaid. (We’ll have to pay for Medicaid with taxes, of course, and ultimately, I think we’ll make it a federal program. The states can’t afford it. To fund it, this administration is likely to continue to raise taxes for the wealthy–capital gains taxes, inheritance taxes are at historically low levels.
In any case, the expansion of Medicaid won’t cause insurance premiums to rise.
You are right that insurers will be cutting admnistrative expenses because they will no longer be charging sick peolple more. In fact insurers have already begun cutting expenses–layoffs in many places.
The rule that they must pay out 85% of premiums in medical reimbursements (to large groups, 80% to small groups) also means that premium increases are less valuable to insurers. If I’m an insurer and I raise premiums for small groups by 10%, I get to keep only 2% of that 10% increase. . .
And state regulators are begin to take a very close look at requests for premium increases; I think that regulation will be tough in many states. No one likes insurers. A governor who doesn’t take a tough stance will be risking his political future.
Some states will be tougher than others, and I think we’ll see sharp differences in premiums in different states. Also, in some states (like California) more people with pre-existing conditions who have been denied insurance in the past will be joining the pool, while in other states (like Minnesota) a much larger percentage of the population already has insurance.
Finally, Medicare is already beginning to cut spending on tests and re-admissions, and private insurers have indicated they will follow Medicare’s lead. As Medicare changes how it pays (paying for quality rather than volume) private insurers will adopt Medicare’s reforms.
There are many unknowns. For instance, how much care will the newly insured Want? We know that the newly insured will Need quite a bit of care, in part because many are poor. But needing care and going for care are two different things. Of course we should do everything we can to deliver needed care to poor people. But I’m just not convinced that low-income diabetics will be as eager to engage in chronic disease management as higher-income, better educated diabetics.
Most people don’t enjoy going to the doctor, undergoing tests and procedures, etc. so they may not consume as much medical care as projections suggest. You can look at Massachusetts as a model, but it’s a unique state–much wealthier than most, higher levels of better education, significantly more liberal . . .
Bottom line– there is much waste in the system, many places to save, as well as many unknowns about the cost of universal coverage. But there is every reason to believe that we can put a lid on healthcare inflation. We did it in the 1990s.
Margalit, Nate–
I have read articles suggesting that under reform some insurers will try to avoid cancer patients by having few oncologists in their network–a subtler from of cherry-picking.
But insofar as that happens, both patients and oncologists will protest, and regulations and laws will be revised. For instance, see this ruling:
“Blue Cross Blue Shield Healthcare Plan of Georgia must allow Northeast Georgia Cancer Care of Athens to participate in its health maintenance organization network, according to statements issued April 7 by the state’s Dept. of Insurance.
“I’m sure consumers want to see more doctors in their health networks, not fewer,” said Insurance Commissioner John W. Oxendine. “More doctors mean more choice for patients, and I think it’s clear that’s the intent of the any-willing-provider law.”
“The state’s any-willing-provider law, much like those in many other states, grants doctors and health care providers licensed to practice and in good standing the right to become health insurance participants. But the law did not necessarily require an HMO to take in any physician who wanted to join it. Oxendine’s ruling was the first time a regulator said it did.”
Undoubtedly, some insurers will try to “game the system” in various ways and both regulators and Congress will have to revise the rules and the law as problems crop up. It won’t be too hard to spot what’s going on; if oncologists or other specialists are excluded from networks, they’ll let us know.
stop smoking help, Nate-
Yes, nicotine is an addictive drug–much more addicitve than many other drugs. As Stop Smoking no doubt knows, most people who begin drinking don’t become alcholics; they are able to have one or two drinks and stop. The vast majority of people who begin smoking aren’t able to have 1 or 2 or even 5 cigarettes a day.
Quitting smoking is often compared to quitting cocaine.
It’s that addictive.
In the 1960s we had a national campaign to get people to quit smoking. I remember see movies featuring diseased lungs in junior high. No doubt the campaign was expensive, but it waas hugely successful. A great many upper-middle-class and middle-class kids of my generation never started smoking. By the time I went to college, smokers were in the minority. (It was a private college– mainlyl upper-middle class and upper-class students.)
Today, the vast majority of smokers come from low-income, less well educated households. A significant share suffer from one or more psychological diseases: depression, anxiety, etc. (Google “Steve Schroeder” for exact numbers.) Smoking is a form of self-medication.
Once smoking became a problem that, to a large degree, was confined to the poor, we stopped spending large amounts of public money on anti-smoking campaigns or smoking cessation clinics.
In the 1990s, however, smoking increased among all teens–except black teens. (For some reason, black culture seems to have rejected smoking as a white person’s disease.) This rise in smoking among white teens has attracted attention, and could lead to another National Anti-Smoking campaign, funded with taxpayer’s dollars.
Yes, smokers die earlier. How much money we do or dont’ save if we reduce the number of smokers depends on what eventually kills people who quit (or never started.) If they die of Alzheimer’s, that’s very expensive. If they’re struck down by liver cancer (fast-moving, no cure) that’s a relatively cheap death.
I have no idea how to calculate cost or savings, and absolutely no interest.
Helping people to quit smoking is a public good.
stop smoking help, Nate
In addition to a national compaign funded with tax dollars, I think insurers should cover nicotine patches much as they cover aspirin for people suffering from heart disease, or artifical knees for people whose joints are going. (Often, the bad knee can be traced back to playing sports; one could argue that the athelete is to blame because he wasn’t more careful about running on hard surfaces or whatever. We’re all guilty of doing something self-destructive, even if it’s only worrying too much, or working too hard. . . Let’s stop blaming the victim and focus on creating a healthier society. )
Margalit,
I totally agree that anyone should be wary about health insurance that doesn’t include any oncologists. My point wasn’t that insurers do this (I don’t know of any that do), but that they pay attention to relative attractiveness for cancer. An insurer may very well knowingly limit its number of oncologists so that their plans don’t become known as the best place for cancer patients to go. Now, that should change in the new world of risk-adjusted premium for Medicare and Medicaid. It won’t change, and in fact may be accentuated, in the products on the exchanges that appear in 2014.
Maggie:
I’m worried about how increased government scrutiny of insurer premium hikes will play out. The best case scenario is that state or federal governments are hard on large hikes and tell insurers to go back to the drawing board, but don’t go out of their way to demonize the insurers and in fact back them when insurers do the only things they can do to keep premiums under control (including, first and foremost, reduce rates for providers and pharma.). The fact remains that insurer margins are now and have always been lower than most industries, so I hope government will dramatically cut down on accusations of profiteering and see insurers as their enforcers and partners in cost control.
My nightmare scenario is that government keeps going to the well on this tried and true bit of profiteering demagoguery, and fights insurers when they enact utilization controls, network reductions and most of all fee schedule reductions. If that happens, we’ll have a far uglier, stupider and less effective period of transition to a lower medical cost trend. It will cost the nation hundreds of billions of dollars to score a few cheap political points. Right now I’m not optimistic, but I’m not a full-blown pessimist either, yet.
“First, Cato and others assume that young people will pay the penalty rather than join the pool because they don’t feel they need insurance. It turns out that many young people don’t have insurance not because they think they don’t need it, but becuase they cannot afford it.”
Can you expand on where this belief comes from or why if it is an opinion you feel this way? As someone that actually sells the insurance I feel I have a pretty good source on why they don’t buy, the person not buying tells me themself. If there is a more accurate source I would like to see what it is. Insurance for most young, especially if it is in a state that doesn’t require maternity, is under $100 per month. That is less then the cell phone bill for the iphone monthly. Insurance is affoirdable but it is not a priority.
That is in the indivudual market, I also see this in the group market where the young decline even though the cost is under $50 a month. They don’t see it as a good value for the money, seldom is it ever not affordable.
” If you look at the wealthiest third of 18 to 29-year-old fully 88% of them have insurance. The share drops sharply as you go down to the middle third and bottom third.”
Wouldn’t the wealthiest also have the best jobs, those most likely to offer insurance at the lowest cost? This data set also doesn’t allow you to deduct affordability, you would need to know their whole financial picture outside of work to determine what is affordable and what is not.
“Under reform, the subsidies will make insurance very affordable”
Strongly disagree with this claim. Young are getting a HUGE cost shift from the old and sick. Correct me if I am wrong but didn’t the new bill limit the spread in premium between young and old to 4 times or something? Long gone are the days of a 20 year old male getting a policy for $60 a month. The new bill also eliminate pre-ex which means total cost will skyrocket as the pools become considerably less healthy.
“and since poor people are sicker than the rest of us, this would bring premiums up.”
I don’t think this is accurate. Poor insured people use more care then insured wealthier people. The healthy poor just don’t buy insurance so they don’t show up in nay data to measure. If I have very limited means and am healthy I sure aint going to waste it on insurnace. I don’t see how they could have accurtly measured the realitve health of those not in the system.
“In any case, the expansion of Medicaid won’t cause insurance premiums to rise.”
This already is inaccurate. As Medicaid cost expands States shift more cost to private plans to offset what they can’t afford. Ohio and many other states already require dependents be covered till age 28-30, this was done specifcially to get disabeled adults off Medicaid and onto private insurance. They also have bed and other taxes that are passed onto private insurance. Medicad expansion has been causing insurance premiums to rise for the past 5 years and will continue to cause them to rise in the future.
“The rule that they must pay out 85% of premiums in medical reimbursements (to large groups, 80% to small groups) also means that premium increases are less valuable to insurers. If I’m an insurer and I raise premiums for small groups by 10%, I get to keep only 2% of that 10% increase. . .”
This is inaccurate, it assume most carriers already aren’t at or near 80-85% loss ratios. Rate increases will be just as beneficial to carriers going forward if not more. Right now of the 20-25% admin cost brokers are getting 8-10, after taxes carriers are only left with 7-12% under reform and getting rid of brokers they most likly will actually have a higher proportion then before meaning they would benefit more from rate increases.
“Helping people to quit smoking is a public good.”
No disagreement there at all, but using insurance to pay for it is still a terrible idea. Tax smokers to pay for the cost of smoking and do it outside insurance.
Lets look at the other side of GA any willing provider law. Everyone on the left is talking about the 33% of waste and how if we get rid of that we can pay for unicorns for every school kid and solve every other problem in the world. What if Northeast Georgia Cancer Care of Athens is the worst praticing provider in GA?
“Insurance Commissioner John W. Oxendine. “More doctors mean more choice for patients, and I think it’s clear that’s the intent of the any-willing-provider law.”
Commiss doesn’t seem to make any allowance for denial due to pratice paterns. It seems any provider willing to accept the reimbursement level must be allowed in. Wouldn’t the worst most unethical providers be the most willing to take any reimbursement since they are crooks any ways? This is an example of poor regualtion driving up cost because regualtors don’t see the full picture. How does an insurer avoid bad providers under any willing provider??
self serving post follows
” I hope government will dramatically cut down on accusations of profiteering and see insurers as their enforcers and partners in cost control.”
How about they actually support self funding for a change, almost absent of insurance profit and by far the most efficient insurance plans in the country. We are still hearing of efforts in DC and some states to kill it off.
this is what will happen if we cover smoking cessation under insurance.
“In 2008, Medicare paid $520 million to Miami-Dade home healthcare agencies for treating diabetic patients — more than what the agency spent in the rest of the country combined, according to federal authorities.”
I would like to believe someone. For that, that person should be able to demonstrate ability to see pros as well cons of their approach. I look forward to see that happen with Maggie and Nate.
neo cons Vikram or the criminal type…I see both all the time:)
“The rule that they must pay out 85% of premiums in medical reimbursements (to large groups, 80% to small groups) also means that premium increases are less valuable to insurers. If I’m an insurer and I raise premiums for small groups by 10%, I get to keep only 2% of that 10% increase. . .”
Isn’t this a double edged sword? If I can only keep a small percentage, I would prefer a small percentage of a much larger premium… If the MLR is fixed on the bottom, maybe premium increases should be capped somehow too.
The more Americans learns about the details of the legislation, and how reform will help them and their families, the better they will like it.
I think that you are right that individuals are gradually coming around to the healthcare reform that was passed last year; however, it does not follow that a) people really know what is in the entire bill b) it is good for the overall healthsystem c)PPACA does not drive the budget into the deepest red ever seen before. Polls are fickled and not reliable. I think the weakest argument you can make for healthcare reform are the polls. Once rationing begins with this new two-tiered model, individuals will dramatically shift away from Obamacare
The minimum medical loss ratio is a dumb idea. Profit margins in the health insurance industry are low and the industry is highly competitive. More than 40% of the customers are insured by non-profit entities.
The problem with the minimum MLR is that it is likely to stifle innovation. Suppose, for example, that an insurer develops a more effective way to weed out the high cost doctors and hospitals from its network without sacrificing quality. Suppose it does a better job of fraud mitigation and a better job of getting its members to execute living wills and advance medical directives in order to minimize unwanted futile care at the end of life. Suppose it did this by investing significantly in information technology and the development of better analytics as well as more aggressive outreach than its competitors. If it drives its MLR below the regulatory minimum and below what its competitors can achieve, it now has to pass the entire savings on to policyholders. Knowing that in advance, it is unlikely to ever make the upfront investments in IT and analytics needed to reduce utilization of healthcare services.
Rules to establish minimum creditable coverage are reasonable, though I think even these could be waived for those who want a higher deductible and can prove they have either the income or assets to handle it. Minimum MLR rules are stupid and unnecessary.
To clarify and amplify my last comment, it’s possible that by pursuing the strategies I outlined, an insurer’s administrative costs could actually rise by 200 or even 300 basis points. However, if the result of that investment were to reduce utilization of healthcare services by 10 percentage points or more without sacrificing quality, it would clearly be a good thing. If half to two thirds of the net savings from lower utilization were passed through in lower premiums, insureds would save money while the innovative insurer would earn a higher profit margin and, presumably, increase its market share. None of that could happen, however, if it had to operate its business to live within the newly established minimum MLR rules. Ah, there are those annoying unintended consequences again.
Barry and aaron
Barry–
You write: “The problem with the minimum MLR is that it is likely to stifle innovation. Suppose, for example, that an insurer develops a more effective way to weed out the high cost doctors and hospitals from its network without sacrificing quality. Suppose it does a better job of fraud mitigation and a better job of getting its members to execute living wills and advance medical directives in order to minimize unwanted futile care at the end of life. . .
Innovation? What innovation? For-profit insurers have had 20 to 25 years to learn how to do all of those things–and none have succeeded.
As for IT–insurers haven’t helped providers buy IT, even though the insurer would reap much of the savings if Providers used IT in a meaningful way.
Non-profits like Kaiser in NOrthern California have learned how to reduce heart disease, help people stop smoking, etc–but no for-profit has been terribly successfuly in these areas. When for-profits decided to stand up to doctors and hospitals and “manage care”–the did it by refusing to pay for expensive care without really trying to figure out what was safe and effective for patients.
Thus they continued to pay for Vioxx, bone marrow transplants for women with breast cancer and hormone replacement (all dangerous) while refusing to pay for some treatments there were, in fact, effective, though expensive. (Some non-profits stopped coverging Vioxx, bone marrow transplants and hormone replacement much sooner.)
Rather than investing money and energy in figuring out how to deliver higher quality more affordable care, insurers put great energy into cherry-picking healthy patients, and recinding policides sold to patients who became sick.
Meanwhile non-profits like Geisinger have attracted excellent doctors willing to work on salary. They’ve been innovating–finding new ways to pay doctors and hospitals (bundled payments) and now Geisinger CEO is talking about setting up a network of accountable care organizations across the nation. This is innovation.
See Steele’s fairly recent interview with Susan Dentzer in Health Affairs online–it’s very exciting.
The model where the insurer and providers work together seems to work well. Since every state has to have at least one non-profit, I think we’ll see non-profit accountable care organizations springing up around the country. They may well begin floating blonds and buying up hospitals. If Geisinger wanted to borrow money to buy more hospitals, I would invest. . .
Tanner is right that health reform aims to turn insurance companies into regulated public utilities.
This is what private sector insurers are in Europe, and they manage to deliver care that is at least as good, often better than U.S. care for 50% less.
European countries realize that healthcare is a necessity–like heat and light–and thus insurance companies need to be regulated and ask permission from the govt to raise premiums just as utilities need permission to raise rates.
aaraon–
First, I agree that the polls don’t tell us whether healthcare reform will be good for the nation, they just tell us whether people think it will be good.
I would say it will take ten years before we see the full results of the legislation.
But I began with the polls because that’s where TAnner began. The big chart on p. 2 of his report is teh Rasmussen chart that I reproduced here. He rests his argument on the notion that “the people” want to repeal health care legislation and “the people” are right. The conservative argument is that President Obama crammed “Obamacare” down our throats, ignoring the will of the people.
I don’t agree, but I’m going to rebut his argument on his ground, point by point. And in part 1 I’m trying to show that public opposition to the legislation was based on uncertainty and fears (often fear ignited by misinformation.) As people learn more about the bill , we see that opposition is melting, especially among people under 65 who will be most effected by the legislation.
But of course that doesn’t tell us if it will add to the deficit over the long term, and whether it will be good for the nation.
But a close reading of the legislation does tell us that reform will not lead to “rationing.” In fact in several places the legislation very specifically states that comparative effectiveness reserach cannot be used to “ration” care or limit benefits.
Comparative effectiveness reserach will be used to spread informaiton about which treatmetns are most effective for patients who fit a particular profile, however, and the hope is that doctors and hospitals will use that information–and share it with patients– when making decisions. Medicare and the preventive services task force and other groups (for instance the Breast Cancer Coalition) will be putting that information on line so that patients can learn more about what is safe and effective. We know that when patients have more information, they tend to chose less aggressive, less risky and more conservative care.
I’m also not at all sure as to what you mean by a two-tier system? Would it be something like what we have today–the poor get no care or subpar care under Mediciad while the rich and well-insured are overtreated?
The legislation is taking a step in the right direction by insisting that Medicaid pay as much as Medicare does for preventive care (Medicaid now pays about 30% less) and by insisting that private insurers pay at least as much as Medicaid when reimbursing community health plans (now they often pay less–community health plans don’t have the clout to demand more.)
Ultimately, many liberals in Washington would like to see the federal government take over Medicaid and raise standards of care nation-wide.
Meanwhile generous funding to double the capacity of community health plans, equip them with electronic medical record, etc. will create “medical homes” for a great many low-income and middle-class people. The quality of care at community health plans that meet federal requriments is already very high in many places. (I’m thinking of the plans Dr. Neal Calman runs in and around NYC, for instance.) Accountable care organizatoins like Geisinger offer the same quality of care to low-income and high-income families. This is the direction that we’re heading in: toward evidence-based medicine delivered by teams of health care providers who are collaborating with each other.
Finally, on the deficit: healthcare did not create the deficit. We had a surplus when President Bush came to the White House. Tax cuts for the wealthy and the wars in the Middle East created the deficit.
What will happen to the deficit over the next 10 years?
Will reform add to the deficit? There are so many variables involved here that it is very difficult to know. How much money will reform save? How much waste will Medicare manage to squeeze out of the system? How successful will Medicare be in using financial carrots and sticks to persuade hospitals to reduce errors and infections and pay more attention to patient safety ?(errors and infections are very, very expensive and the latest MedPac report shows that when it comes to patient safety in hosptials, things are getting worse, not better.) How successful will medical homes and accountable care organizations be in managing chronic diseases so that patients don’t end up in the hospital?
The legislation provides generous loans and scholarships to increase the number of nurses, nurse practioners, physicians’ assistants, primary care doctors etc. They will be working together to lift the quality of prventive care. How successful will they be?
How much will this save?
As Medicare and Medicaid move away from paying fee-for-service (encouraging providers to “do more”) and toward rewarding better outcomes, not volume, how much will this save?
You can see why any estimates of savings as well as the costs of reform is simply a wild guesstimate. CBO greatly underestimated the savings that would come from the last Medicare reform.
But here’s what we do know: that other countries manage to provide universal coverage that is as good or better than care in the U.S. for 50% less. And we do know that in some regions of this country, and in some medical centers, providers are able to deliver higher quality care much more efficiently, making it much less expensive.
So we know it can be done.
margalit–
Under the reform legislation insurers cannot hike premiums without justifying increases to state regulators. So they won’t be able to hike premiums 30% in order to gain 6%.
That’s why they’re already beginning to downsize, cutting their administrative costs.
I dont know why I didnt think about this website. Here is the realclear politics average for polling for the past months about Obamacare. Realclear is unbias and has been a great resource during the elections I have worked on.
http://www.realclearpolitics.com/epolls/other/obama_and_democrats_health_care_plan-1130.html
Support for Obamacare has hovered from 35-40. Even has people continued to be more educated about ACA, support has remained the same.
I really wish I could reply to your entire argument (currently at work) but since you are talking about polling and refuting CATO (who I do not like most of the time), I will isolate my rebuttal to polling data.
As well, Rass Polling apparently has done more polling about this issue than other polling websites. RealClear combines all polling. Rass Polling does show a gradual decrease; however, I do not think it is fair to attack him a bias because he is conservative. Other polls, as listed by RealClear, show similar numbers.
Over the next five weeks, support for repeal consistently dropped, while opposition to killing the bill rose.- I do not think this is true by the polling data by realclear.
Should we point out that less than 20% of people polled by CBS thinks that Obama has actually helped their life get better?
“See Steele’s fairly recent interview with Susan Dentzer in Health Affairs online–it’s very exciting.”
Maggie – I read that interview in Health Affairs a couple of weeks ago and I was, frankly, disappointed. Geisinger is supposed to be one of the models for the future of care delivery in the U.S. They use electronic records. They have salaried doctors. They have a collegial and collaborative culture. They are also an insurer that covers 30% of their patient population. Yet, according to CEO, Glenn Steele, they have only been able to reduce care costs for their more complex, sicker patients by about 7% from what it would have otherwise been. While 7% is not nothing, it’s a far cry from the 30% to as much as 50% waste widely perceived to permeate our healthcare system.
Waste is in the eye of the beholder. If it were up to me, I would focus on the following areas:
1. To reduce defensive medicine, especially expensive diagnostic imaging, I would pass robust tort reform which I define as strong safe harbor protection from lawsuits for doctors who follow evidence based guidelines where they exist. Medical disputes would be decided by judges in specialized health courts instead of juries of ordinary people with no medical expertise.
2. To combat provider fraud in the Medicare and Medicaid programs, I would require every provider with the authority to bill either program to have a unique numerical identifier as well as an ID card with a picture, a biometric identifier and an address. Both Medicare and Medicaid should be able to track spending by individual providers who either performed or ordered the service, test or procedure or prescribed the drug.
3. To reduce wasteful end of life care, I would strongly encourage everyone, especially the elderly, to execute living wills or advance directives. I would change the default protocol from do everything because we’re afraid we’ll be sued if we don’t to either apply common sense depending on circumstances or no heroics. People who execute directives that choose heroics should pay more for their health insurance.
4. Create good, user friendly price and quality transparency tools so both patients and referring doctors can more easily determine who the most cost-effective providers are.
You will note that it is not within the power of insurers, including Medicare, to change the rules outlined in #1, 2, and 3 above. Only Congress or state legislatures can do that and then the legislation would need to be signed by the president or individual state governors.
Care does not cost half of what it does in other countries than it does here because insurers are regulated utilities. It cost less because they have a different culture – less litigation, less fraud, less useless and expensive end of life care. Moreover, prices per procedure are lower elsewhere because doctors earn less and they order fewer tests. In short,it has little or nothing to do with insurers including whether they are for profit or non-profit.
“Innovation? What innovation? For-profit insurers have had 20 to 25 years to learn how to do all of those things–and none have succeeded.”
I’ll try to be nice but this statement is just partisan ignorance. Al Gore hadn’t even invented the internet 25 years ago, EDI has completely changed the way claims are submitted and processed. The data mining and analysis we do today didn’t exist outside of government 25 years ago. Our ability to compare facilities based not only on price but outcomes wasn’t even technologically possible 10-15 years ago let along 25. Comments like this remind us why you have no creditability outside your partisan circles.
“As for IT–insurers haven’t helped providers buy IT, even though the insurer would reap much of the savings if Providers used IT in a meaningful way.”
More ignorance. Carriers can’t have profit margins over 7-10%, if providers reduced claim cost carriers couldn’t pocket that, market forces and competition would reduce it back to historical profit margins. Basic economics 101 you should have learned in high school.
“insurers put great energy into cherry-picking healthy patients, and recinding policides sold to patients who became sick.”
Followed by yet more ignorance. It is illegal to cherry pick and hasn’t happened in group in 10+ years. 5000 rescinded policies and most of them meet the new guidelines this is Dogma.
“The model where the insurer and providers work together seems to work well.”
Oh really Maggie Partner and BCBS in MA worked well? For who exactly.
Can’t believe I go away for one day and you get away with posting crap like this. Your knowledge of health insurance and reality should be far better by now. These 2003 lies you keep peddling need to stop.
Barry’s 2 should be number 1 on every politician running for office priorities. Personally I think tort reform needs passed but certain people will oppose that. I can’t imagaine anyone but the criminals would mind we eliminate fraudlent billing. The level of fraud in plain sight in miami and other cities is unbelievable. People will register with CMS, bill 40 million then disappear. Years later Medicare will get around to auditing and notice that looks a little fishy by which time any chance to recover the money is gone.
Something like that doesn’t happen in private insurance. It is also something that could be fixed in a matter of months not years. Makes you wonder by they talk about it for 10 years but never actually do anything.