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Maxing out on health reform

Senate Finance Committee Chairman Max Baucus’ unveiling of a health reform proposal yesterday fed speculation about the possibility of Democrats tackling health reform from the get-go of the new Administration.

The Montana Democrat’s proposal is detailed in an 97-page "call to action" document. In his letter of introduction, Baucus says the plan is not a legislative proposal but his vision for policy reforms and the political process.

Baucus says the plan will require an initial investment, but doesn’t name how much. There are no cost figures in the plan, but the Senator writes, "It is my intention that
after ten years the U.S. will spend no more on health care than is
currently projected, but we will spend those resources more
efficiently, and will provide better-quality coverage to all Americans."

The Baucus proposal is very similar to the plan Sen. Hillary Clinton proposed while campaigning for president. Her plan was very similar to Obama’s plan, except that Clinton wanted to require people to buy insurance and Obama opposed such a mandate.

Regarding the mandate, Paul Krugman writes
that Obama’s opposition during the campaign was largely tactical
politics and "so he may well be prepared to do the right thing now that
the election is won."

Krugman’s logic here is that to achieve true universality in
coverage, and thereby avoid the death spiral of adverse risk selection,
it’s necessary to require everyone to purchase insurance.

Critics of a mandate argue that it punishes those who cannot
afford insurance, which is why Baucus and other supporters
must prove there are sufficient subsidies for low-and middle-income families if
they want support from consumer advocates and unions.

This same battle over the mandate was fought last year in
California. Eventually, opponents realized that if they wanted
community rating and guaranteed issue the mandate was necessary.

Until
the end, however, battles over the level of subsidies remained. Several
Democrats who killed the reform bill said they weren’t convinced
insurance would be affordable. But in reflection, several commentators said killing the reform was less about concern for the consumer and more about politics between the Assembly, Senate and Governor’s Office.

Anthony Wright, president of Health Access a California consumer advocacy group, wrote about the mandate issue yesterday on his blog:

We at Health Access have been skeptical of the individual mandate, but
not opposed to the notion that we all–sick and healthy–should
contribute to health coverage (as many health reforms, including
single-payer, include). Rather, our issues were more about the problems
in the inefficient and inequitable individual insurance market that
some may be forced into. It was only in the context of expanding group
coverage, shrinking the individual market, and placing new subsidies
and restrictions, that we and other consumer groups supported AB x1 1,
the negotiated deal between Governor Schwarzenegger and Speaker Nunez.

Politics of health reform at a national level will be no easier. The
Senate will have to secure 60 votes, and true reformers will have to ignore the cash pouring in from lobbyists.

I’ll admit that I’m somewhat glad the Clinton reform effort failed in the
1990s, when I was too young to care about health care. Now, I’ll have a chance to watch the sequel.

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12 replies »

  1. The VA and Department of Defense are Socialistic Health Care delivery systems where the doctors are employed and the hospitals are owned and run by the government. Single payer national health insurance based on Medicare would allow doctors and hospitals to remain private. Single payer national health care would also redirect the $750 Billion dollars a year that private health insurance companies waste for administrative purposes back into the hands of hospitals, doctors, nurses, therapists and pharmacies.
    http://www.pnhp.org/news/2008/february/what_government_does.php

  2. Don’t tell me you have a realistic proposal to revamp all of healthcare when the Department of Defense and the VA systems are a total joke!! Run those first. Don’t tell me you can cover everyone, because you don’t cover everyone you say you cover now. You can envision all you want, but you haven’t defined what it is you are proposing: What is “healthcare”. Define what it is you mean. If you mean access to the “system” we have, the reformers say that system is broken. Why would you want anyone to access a “broken” system?
    On another blog I asked 9 questions which have yet to be answered: Some of those questions are:
    1. Who doea NOT get a PEG tube?
    2. Who does NOT go on dialysis?
    3. Who does NOT get homehealth?
    4. Who does NOT get a total hip replacement?
    5. Who does NOT get resuscitated?
    If you cannot answer these and other questions like them, then you cannot be trusted to know how to revamp ALL of healthcare!

  3. 60% figure, Annals of Internal Medicine, 2008.
    Survey based on the AMA physician Database.
    $700 Billion insurance company wasteful overhead, well documented for years, check following website
    for references…
    http://www.pnhp.org
    60-65 Million uninsured.
    40 million under-insured
    Single payer infrastructure already exists almost all physicians, hospitals and clinics in the country contracted with Medicare and electronically connected. Needs to be technically upgraded.

  4. 60% figure, Annals of Internal Medicine, 2008.
    Survey based on the AMA physician Database.
    $700 Billion insurance company wasteful overhead, well documented for years, check following website
    for references…
    http://www.pnhp.org
    60-65 Million uninsured.
    40 million under-insured
    Single payer infrastructure already exists almost all physicians, hospitals and clinics in the country contracted with Medicare and electronically connected. Needs to be technically upgraded.

  5. Deron was being kind. Dr. Green’s list of “facts” was off the wall. Lowest mortality rates of any health insurer? $700 billion to $1 trillion in insurance overhead? That’s just sloppy.

  6. Dr. Green – With all due respect, many of your points don’t make sense or have a lot of spin behind them. Your point #6 is very odd to say the least. I didn’t know that 100 million Americans were uninsured and I also didn’t know that insurance company bureaucrats could care for patients.
    I also question your 60% of physicians figure. I would love to know a little more about the sample that was used to arrive at that.
    If it sounds like I’m giving you a hard time, it’s only because single-payer would be a major undertaking with significant up front costs. The concept has to be vetted a lot more than it has been to this point.

  7. The Call to Action/Health Care Reform 2009 proposal released 11/13/08
    (http://www.finance.senate.gov/) by Senator Max Baucus is a disaster.
    The Baucus plan is an expansion and continuation of the status-quo
    mixture of a government subsidized ineffective private health
    maintenance insurance industry operating parallel to and within Medicare
    Insurance.
    7 Specific Reasons Why the Baucus Health Reform 2009 Plan Fails…..
    1) The Baucus plan fails to enroll all Americans in a single payer
    National Health Insurance such as the most efficient health insurance
    plan (Medicare) which is already contracted with most doctors,
    hospitals and clinics in the Country. Medicare has the lowest operating
    expenses and the best morbidity (sickness rates) and mortality (death
    rates) compared to all other insurance companies. The Baucus plan will
    therefore divert $700 Billion to $1 Trillion per year away from
    patients, hospitals, doctors, clinics, nurses, pharmaceuticals,
    therapist and researchers into the overhead pockets of health private
    insurance company administrators and executives.
    2) The Baucus plan fails to technologically upgrade, integrate and
    centralize medical billing and records systems in order to optimize
    examination of clinical outcomes, pharmaceutical efficacies and monitor
    fraud and abuse. In addition, by failing to centralize and
    technologically upgrade billing and records systems within a single
    National Health Insurance plan, America will be unable to instantly
    monitor disease outbreaks and instantly respond to natural and man made
    disasters or bio-nuclear terrorism..
    3) The Baucus plan fails to control drug costs by failing to allow a
    single efficient national health insurance company such as Medicare to
    bid on pharmaceuticals. In addition, the Baucus plan by failing to put
    all Americans on a National Health Insurance Plan such as Medicare does
    little to shrink the ‘risk pool’ of insured, thereby failing to decrease
    insurance premium expenses for all Americans.
    4) The Baucus plan fails to provide funding for scientific, clinical and
    epidemiological research and development by allowing private private
    insurance companies to divert funds from medical research and
    development to instead support their massive and profitable
    administrative and executive bureaucratic overheads.
    5) The Baucus plan fails to provide physicians with the same legal
    protection from malpractice lawsuits which have been established for
    commercial health insurance corporations during the last 3 decades.
    6) The Baucus plan fails to explain where to find the 1.5 million new
    health care workers which will be needed once 100 million new Americans
    obtain health care insurance. Health care workers can be found easily by
    shutting down the wasteful and inefficient private health insurance
    companies, putting all Americans on National Health Insurance such as
    Medicare. The 1.5 million former private insurance company bureaucrats
    can then be remployed to actually deliver health care in hospitals,
    clinics, nursing homes, assisted living facilities, pharmacies and home
    health services such as Alzheimer family assistance.
    7) The Baucus Plan fails to address this problem of disenfranchised
    physicians. Many physicians in this country have left the practice of
    medicine, or downsized their practices due to private insurance company
    abuses, malpractice threats and direct pharmaceutical marketing. A
    recent national poll of physicians based on the AMA database
    demonstrated that 60% of physicians support a single payer National
    Health Insurance such as Medicare. A continuation and technological
    upgrading of our most fair Medicare Health Insurance for all based on
    the concepts outlined above, would undoubtedly motivate those
    disenfranchised physicians to return to the profession and bright
    younger physicians to invigorate the field.
    The Baucus plan is wasteful, inefficient, fragmented, creates a new
    redundant bureaucracy and will continue to provide no potential future
    health improvements for America. Only an efficient National Health
    Insurance carrier such as a technologically upgraded Medicare Insurance
    company will be able to provide low cost health insurance and pharmaceuticals
    for all Americans while maintaining the quality of private physician practices and Hospitals.
    H. Green, MD, FACP, FAAD, FACMS

  8. I won’t comment on whether mandates are a good thing, or whether single payer is the magic bullet as some claim. I will just balance out this argument by saying that we can’t do anything that increases utilization of healthcare services without first addressing the serious issue of our battered primary care delivery system. Successful reform has an order of priorities associated with it. If we go out of order, we risk creating even bigger problems than we have now.

  9. The Baucus plan too closely mirrors the current horror show playing out in Massachusetts. The MA scheme has done nothing to decrease the ever escalating costs of healthcare nor has it improved the quality of delivery. The “individual mandate” is severely punishing the middle class and depressing the state’s economy overall. While the plan has been a boon to insurers and some large health systems, it is a huge consumer boondoggle! I agree with Peter, let’s just move to a single payer system financed by an equitable payroll tax and get it done.

  10. “Critics of a mandate argue that it punishes those who cannot afford insurance, which is why Baucus and other supporters must prove there are sufficient subsidies for low-and middle-income families if they want support from consumer advocates and unions.
    The critical point here is; what is the cut-off income for subsidies? Is it graduated or just a financial cliff? How about there is NO cut-off, we just insure everyone and implement a health tax based on income that can be determined from exsisting tax returns. And do away with this notion that we have to risk pool regions/states/groups to arrive at a premium – that’s an insurance approach, not a healthcare approach. The system of income cut-offs leads to efforts to stay below the cut-off because that would produce an income reducing health liability, and it may encourage people to stop bettering themselves though better wage jobs. The trick is to get away from policy and culture that perpetuates poverty so that everyone can contribute. Does lack of medical coverage stop poor people from getting jobs to replace welfare?
    I don’t see the Baucus Plan working (for long) unless there is a massive effort to reduce costs – this needs to go hand in hand.

  11. http://www.reuters.com/article/newsOne/idUSTRE4AB67T20081112?pageNumber=1&virtualBrandChannel=10112
    So basically PWC answered the question with their recent analysis on the Obama healthcare plan – $75 billion next year and much continued spending in the near-future with long-term savings. Baucus plan is very similiar so it is safe that the price tag in the first year alone will be $75 billion at least and likely to be even greater than predicted because their are no true cost controls.
    So the question is this – does Congress come up with another $75 billion next year (and probably close to $100 billion in 2010) to expand enact the Obama healthcare plan? If they do, then some of the additional tax cuts that Obama promised for the middle class are going to have to go by the wayside too. Might also prevent other policy aims from being acheived including large-scale infrastructure funding and massive investment in government R&D for “green-energy.”
    If I was a betting man, I would be taking the “under” and that we don’t get something like the Obama plan enacted in 2009. Then again, Congress and the Fed are giving out money like it is going out of style. Maybe they won’t mind if we get to a point where the “AAA” credit rating of U.S. treasuries meets an improbable scenario and gets downgraded.

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