Matthew Holt

What I want to happen and what I think will happen

Election day. At last it’s over. A gazillion dollars, mostly wasted making TV stations richer. Two years of
campaigning resulting up in 3–4 months where rushed decision making will create a future that we all have to live with.

It looks pretty clear that Obama will win, with an increase in Congressional control for the Democrats. Although we Dems are used to losing when it never seemed possible…

So what do I want to happen? Certain things need to be done straight away.

1) Guantanamo Bay must be closed & torture renounced.

2) Rampant spying on Americans, national security letters & government abuse of power must be ended.

3) We need a declared route out of Iraq, immediately. (And a truth commission to deal with the lying sacks of **** who got us in there to reward themselves and their now much richer friends wouldn’t be a bad idea).

4) America must rejoin the international community, including
abiding by the principals of Kyoto, the International Criminal Court
& the UN Human declaration of human rights.

5) The drug war should be ended and a rational system of regulation introduced (OK I know I’m dreaming on this one).

6) A Manhattan-type project should be set up to really push the development of alternative energy. (I have some hope this will happen)

7) Complete house cleaning in the Federal departments and agencies
like Justice, EPA, FDA and many more, which have been over-run by
politicization and an attack on science. And a re-adoption of a serious
role for government.

8)  A really broad effort to fix the discriminatory, unfair American health care system

But what do I think will happen?

Less than that I’m afraid. But let’s stick to health care reform
which (other than the drug war) of all the above is the least likely to

The conventional wisdom is still probably correct.

There’s not going to be much money in the Fed’s coffers, so the
expansion of government subsidies to enable the uninsured to purchase
either into an expanded FEHBP or an expanded Medicare, will be delayed
for a long while. In addition, the expansion of pay or play will look
like a big tax increase on employment. So it’ll probably be very hard
to expand that as well. Which all together means no significant change
in the number of the uninsured or in their overall situation.

And as I said a long while ago,
I fundamentally still don’t think Obama cares that much about health
care. And the appointment of David Cutler as chief health care adviser
reinforces that view.

Which means that when health care reform is on the table it’ll be an
incomplete version that passes. Insurance reform may result in the
banning of most of the more reprehensible practices of the big players
in the individual and Part D/Medicare Advantage markets. But it won’t
actually change the fundamentals of how Americans get (or don’t get)
their insurance, and it’s necessary but still totally insufficient for
real reform.

I think we will of necessity see big cuts in Medicare under any
scenario. But Obama has campaigned a little too much on keeping the
status quo in Medicare and employer-based insurance for understandable
reasons of political expediency. It’s hard to see how the radical
reform in payment and incentives, which most THCB readers (and almost
all its authors) think Medicare needs, will come from his
administration. So instead I think Medicare payment reform will equal
similar cuts as in the 1997 BBA, with more hatchet and less rapier. And
its likely that the cost-effectiveness commission proposed in the plan
will be killed by industry before it sees the light of day.

Which will all lead to a continued path towards higher costs and
more and more un-and under-insured. Which eventually will lead to a
baby-boomer revolt that will get us to a modified single payer system
somewhere between 2014 and 2020–-again something I’ve discussed at length  over the years.

So what might upset the conventional wisdom, besides of course a miracle comeback from McCain? I only see two possibilities

1) Obama and the Democrats win so big and take the Senate by so
much, that they really decide to take the opportunity to create the
social programs that Grover Norquist and his buddies fear. In which
case they may enact an Obama style program (hopefully with a little
more sense than what’s been proposed).

2) The recession/depression is so severe in 2009–10 that the
baby-boomer revolt, specifically over the security of health benefits,
becomes a roar. In that case all bets are off on the details, but my
guess is that if this happens in the next 2–4 years you might see the
clock advance on how to cover everyone. And then that modified single
payer will probably crop up too.

Either way, at least by tonight we’ll know the political
landscape. Well done on hanging in there this far, because from now on
the real fun starts.

9 replies »

  1. Wow, I agreed with every single one of your main points, but not fully with your thought on Obama and his health care plan. I think he cares deeply; what I also think is that he, like most other politicians, really doesn’t fully understand the issue, or who to really hire to take a good look at it. If it were me, I’d look at the upper levels of each health care organization in the country such as the AMA, HFMA, ACHE and AAHAM, and invite a couple of people from each of those organizations to participate in the process. Maybe name someone like Gail Walinsky to oversee things. Not going to happen, but I guess we can all dream a little bit.

  2. Here’s a thought: What if Obama and the Democrats adopted a principle–we will not pass any law to expand access to health care unless that same law includes reforms to care delivery that pay for the improved access (as judged by an independent third party).
    State the principle up front, and then you get fiscally conservative types more enthusiastic and you also tie access reform to utilization reform in the public’s mind. You increase the chance that there is only partial access improvement in 2009/2010, not fully universal health care. But you also increase the chance that there are meaningful reforms to incentives to providers, use of HIT, etc.

  3. Democrats stand for big government. They promoted the idea of “housing affordability” and promulgated institutions like Fannie and Freddie, which are big Democrat contributors. And now they blame the recession on unfettered free markets. Next they want to socialize medicine and essentially outsource innovation overseas. Once the American people find fault with these so-called social planners, the Democrats cannot blame the Republicans since they have control of Congress and the executive office… Healthcare 2.0 will go down in flames and by 2010, Dems will be considered a four-letter word.

  4. Brian, unfortunately the special interests you talk about helped put Obama in office. The labor unions spent $200 million (!) and provided the foot soldiers needed to turn out the votes in Ohio, Pennsylvania and Illinois. They are going to want to be repaid by what could be the first truly union friendly administration in thirty years. Look at the teachers, the plaintiff’s bar- many millions in contributions. They are going to want to be repaid. It’s a phenomenon on both sides of the aisle. Don’t hold your breath on the subjugation of special interests: we’re just sending in a new team.

  5. I am writting all blogs hoping to get the truth out about Massachusetts health reform law.The law is a sham.Discrimination based on income,the poor get health care,the wealthy get health care but not the middle income.The state is penalizing people who do not buy into exspensive plans with high dedutables.The fines are a “tax” how will the state enforce this law?Unpaid tax is a jailable offense.Will we be jailed?

  6. I agree wholeheartedly with both the elements and the order of Matthew’s agenda, as well as with Jeff’s reservations.
    But I think there’s a deeper, more important problem that Obama has an unprecedented opportunity to champion: the reduction or elimination of special interest dominance over policy. In one of the many ways that he tapped into a new sensibility and changed traditional campaign strategies, he financed (most of) his campaign effort without special interest contributions. Of course, Democratic Congressional Senators and Representatives didn’t follow his lead on this, but they’re probably amenable if they see the wind is blowing in that direction.
    In 2007, Congress received $2.8 billion in lobbying contributions from special interests, $445 million of it from the health care sector. Even the recent $700 billion credit crisis bailout was appended with $112 billion in earmarks for “pork,” including the Mental Health Parity bill, which supporters KNEW couldn’t pass except by attachment to a must-do Act.
    Lobbying is the deep substrate issue of many of America’s most serious problems. As a result, nearly every piece of legislation is crafted to favor donors, and the common interest consistently gets short shrift. The institutionalized bribery of our elected officials has paralyzed our ability to deal meaningfully with every other important issue of our time. We’ll be unable to address health care, global warming, energy, education, transportation, housing, finance or any other national problem in ways that are in the best interests of the nation unless we can change the way we deal with special interest influence.
    Senator Obama set the tone for a new agenda in the way he ran his campaign. If he wins today and if he chooses to, he could truly set America on a new path by rallying the charge to change the influence that America’s special interest have over public policy.

  7. Jeff, Hey I did read your book and interviewed you about it! (although admittedly I read it after the interview!). I just happen to think that not enough boomers will fit into your “rich kids” category and that the issue of uninsurance will loom larger for your scared middle class teacher than you think. They’ll start to identify with the ex-exotic dancer who’s scraping to get by….and when enough of them end up there with no insurance and a real fear of getting wiped out by health care costs, their overall traits of selfish dependence will outweigh their disgust with the concept of government.
    Don’t worry though, rich boomers, health care futurists, and successful ex-strip club bouncers will trade up to a better class of waiting room–on the other hand Bob Wachter tells me that you need to endow a chair with $50m to get an appointment with a primary care doc at UCSF these days anyway….

  8. Love Mathew’s list of to do items…..maybe, just maybe, we can get a couple off the list in the next few years.

  9. If you’d actually read my book, The Long Baby Boom, you’d understand that the last place boomers are going to look for salvation is a federal government they grew up hating. A boomer-led entitlement revolt is simply not in the cards, primarily because boomers will still be paying the taxes that would have to be raised to finance it. They will hate the Medicare program as almost incomprehensibly complicated and user unfriendly, and will be furious that it takes six months to get an appointment with their primary care doc.
    The absence of trust in government will be a very high hurdle for President Obama to surmount, particularly because the Congress with whom he will have to work has even lower approval ratings that Bush (or Nixon or Truman). Remember this is a Congress that was so obsessed with publicly castigating the malefactors of wealth who “caused” our financial meltdown that they almost took our financing system down before agreeing to refinance it. The role they themselves played in fostering high risk mortgage lending never surfaced the debate.
    BTW, get a picture where you are smiling! You look like a bouncer in a downscale Manchester strip club. You’re actually much better looking in person.