Matthew Holt

In which I play Obama, answering Michael Cannon

6a00d8341c909d53ef0105371fd47b970b-320wi Last night I was busy spending two hours of my and my business partner’s time buying health insurance for our massive 4 person company. That means doing a multi-factorial equation between premiums, co-pays, deductibles, out of pocket maximums, & in & out of network costs. It’s no wonder that no one understands their health insurance, especially when eHealthinsurance.com still doesn’t bother putting half of the important variables on its front page. But no matter, it will be my pleasure to make Wellpoint or Aetna better off—they’re not having such great years and they can use the money.

But then I noticed from the tweets that Obama was doing a primetime townhall about health care. So having failed to find it on my TV (cos I’m on the west coast and we’re not alive at the same time as you east coasters), I looked on the ABC web site. There I didn’t find the TV version , but I did find what I thought was a most amusing article….and as I went all the way through I noticed that it was by my buddy Michael Cannon…the thinking man’s health care libertarian from Cato.

Obama’s too busy talking mush with the townhall to answer…but I thought I might.

So here’s Michael’s questions, and in italics are my answers

Health Care Reform: Questions for the President

Will Health Care Reform Improve Our Health?

OPINION by MICHAEL CANNON

June 24, 2009—

“Health care reform is on life support,” says Rep. Jim Cooper of Tennessee. And he’s a Democrat.

MH: Not really!  Or at least not in a sane country unless he has the word “Christian” in front of his party label

President Obama has spent months building momentum for health care reform. But when the Congressional Budget Office put the price tag near $2 trillion, it stopped reform dead in its tracks.

What Senate Finance Committee chairman Max Baucus, D-Mont., once called “nearly inevitable” now seems much less so — and that’s before supporters have confronted the really tough questions.

Before this debate is over, Obama should answer a few questions about his plans for reform, including:

Mr. President, in your inaugural address and elsewhere, you said you are not interested in ideology, only what works. Economists Helen Levy of the University of Michigan and David Meltzer of the University of Chicago, where you used to teach, have researched what works. They conclude there is “no evidence” that universal health insurance coverage is the best way to improve public health. Before enacting universal coverage, shouldn’t you spend at least some of the $1 billion you dedicated to comparative-effectiveness research to determine whether universal coverage is comparatively effective? Absent such evidence, isn’t pursuing universal coverage by definition an ideological crusade?

MH: Sadly Michael, universal coverage is not about improving public health. If you want to do that, go teach some kids age 1–5 and build some sewage systems. Universal care is about making sure that the costs of health care are fairly distributed. Under the systems you prefer and the one we now have they’re distributed to the poor and sick from the healthy and wealthy—many of whom we both know work in the health care system. But apparently there was NOT ONE MENTION from a questioner of the uninsured or sick people bankrupted by the system in the whole hour. (Update Fri: and the only time the moderator Charlie Gibson mentioned it was when he wondered how rich people like him would get access to a doctor with all these newly insured people wanting care–he spent the whole evening appearing to be a selfish git)

A draft congressional report said that comparative-effectiveness research would “yield significant payoffs” because some treatments “will no longer be prescribed.” Who will decide which treatments will get the axe? Since government pays for half of all treatments, is it plausible to suggest that government will not insert itself into medical decisions? Or is it reasonable for patients to fear that government will deny them care?

MH: Why should patients fear it? We know that less intensive care is better, and cheaper primary care is better than more extensive specialty care. As the taxpayer pays for training doctors and funds most medical facilities why shouldn’t they demand that the resources are better spent?

You recently said the United States spends “almost 50 percent more per person than the next most costly nation. And yet … the quality of our care is often lower, and we aren’t any healthier.” Achieving universal coverage could require us to spend an additional $2 trillion over the next 10 years. If America already spends too much on health care, why are you asking Americans to spend even more?

MH: Ah we agree. All the money should come from the current system, even if it means reducing the incomes of pundits, bloggers and those who sponsor them, and a few people in the system. Sadly the politics of the US means that apparently Obama can’t say that

You have said, “Making health care affordable for all Americans will cost somewhere on the order of $1 trillion.” Precise dollar figures aside, isn’t that a contradiction in terms?

MH: Well for a start it’s not $1 trillion, it’s $100 billion a year which these days will barely buy you 6 months invasion of a small country. Which we do without debate on a regular basis it seems. And if we take the money from somewhere else we’re spending the money in health care, it shouldn’t cost more. Ah ha, cant be done because well see last answer

Last year, you told a competitiveness summit that rising health care costs are “a major anchor on the ability of American business to compete.” In May, you wrote, “Getting spiraling health care costs under control is essential to … making our businesses more competitive.” The head of your Council of Economic Advisors says such claims are “schlocky.” Who is right: you or your top economist?

MH: Obama is. I just spent 2 hours figuring out a mess of health insurance decisions that not one of my international competitors has to do. Multiply that out by every business in America, and don’t bother adding the fact that what we actually pay for health care is more than double per head what everyone else does. We’re both political scientists so we know that economists don’t know squat.

You recently told an audience, “No matter how we reform health care, we will keep this promise to the American people. … If you like your health care plan, you’ll be able to keep your health care plan, period. No one will take it away, no matter what.” The Associated Press subsequently reported, “White House officials suggest the president’s rhetoric shouldn’t be taken literally.” You then clarified, “What I’m saying is the government is not going to make you change plans under health reform.” Would your reforms encourage employers to drop their health plans?

MH: So? If employers do drop coverage as there are only 3 or 4 health plans in most markets, it would still be the same plan that the citizen would get to buy if they wanted to keep it and the costs would be subsidized for the poor. But don’t worry too much Michael. Americans hate their health plans. For some strange reason though they apparently like their doctors. Of course the AMA tells them they do

You found $600 billion worth of inefficiencies that you want to cut from Medicare and Medicaid. If government health programs generate that much waste, why do you want to create another?

MH: You’re saying all government programs are the same? That means the US Marine Corps and the Iraqi volunteer EDF (or whatever it’s called) are the same. I could start a government program that saved $600b very easily in Medicare & Medicaid. I might make a few enemies

You and your advisors argue that Medicare creates misaligned financial incentives that discourage preventive care, comparative-effectiveness research, electronic medical records, and efforts to reduce medical errors. Medicare’s payment system is the product of the political process. What gives you faith that the political process can devise less-perverse financial incentives this time?

MH: See my above answer, oh and abolish the Senate

You claim a new government program would create “a better range of choices, make the health care market more competitive, and keep insurance companies honest.” Since when is having the government enter a market the remedy for insufficient competition? Should the government have launched its own software company to compete with Microsoft? Are there better ways to create more choices and more competition?

MH: Hmm…the government did launch its own software “company”, which was way better & cheaper than the private sector competition, and made the government agency that used it provide the “best care anywhere”—demonstrably superior to privately provided care.  And it was so good that the monopolists at Microsoft stole its name and never paid compensation! Or did you miss Vista in your health care system and software market analysis?

When government entered the markets for workers compensation insurance, crop and flood insurance, and disaster insurance, it often completely crowded out private options. Do you expect a new government health insurance program would do the same?

MH: I hope so because the current private options are lousy at keeping down health care costs, or satisfying their customers. Oops, Obama can’t say that, can he.

You have said there are “legitimate concerns” that the government might give its new health plan an unfair advantage through taxpayer subsidies or by “printing money.” How do you propose to prevent this Congress and future Congresses from creating any unfair advantages?

MH: I don’t know but I’ll make a deal. I’ll promise my health plan wont have use an unfair advantage if you promise that AHIP’s members will stop lobbying Congress to rip-off the taxpayer. This wonderful chart shows that the likelihood of being against the public plan is directly proportional to the bribes paid to Senators by insurance companies.

President Obama needs to address questions these directly. The health of millions depends on his answers.

MH: No it doesn’t. The health of Americans depends on a bunch of stuff. The wealth of a few millions who get royally screwed by the current system does depend on reform. The current system is aided and abetted by its defenders like Cato and others who advocate “solutions” that are not only unworkable but also politically un-feasible. Their only role is to be spoilers to keep the status quo in place.

Michael F. Cannon is director of health policy studies at the libertarian Cato Institute and coauthor of Healthy Competition: What’s Holding Back Health Care and How to Free It.

Matthew Holt is a vicious blogger who wouldn’t mind being President for a day or two but not without the ability to break Congress to his will in the first ten minutes.

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Roberto ZauschcaptnronCraig F KinghornspikeDavid Johnson Recent comment authors
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Roberto Zausch
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Hallo alle, ich bin neu in diesem Forum und ich habe eine Frage, die offensichtlich erscheinen wird Ihnen … Wie erstelle ich einen neuen Beitrag oder Themen, die in der New Posts Abschnitt erscheint …? Cauz wenn ich auf neue Beiträge auf, ich habe nicht den neuen Thread Buttons erhältlich …

captnron
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captnron

After a recent doctor’s office visit, I was given a prescription for a high cholesterol condition. The name of the generic (I’m told) brand name for this medication is SINVASTATIN qty. 90. I have used Walgreen’s for filling prescriptions. I heard about cheaper prices for meds at Wal-Mart stores. I called for a price on the above pills and told the price was $14.99. I then called Walgreen’s and was given a price of $179.89 for the same med. WTF? I do believe that this price disparity is just one more problem with our healthcare system. Just follow the money… Read more »

Craig F Kinghorn
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Craig F Kinghorn

Wow, as a relatively recent observer of health care reform-focused blog sites, I am stunned by what passes for enlightened debate here. With a few notable exceptions, I neither expected the paucity of facts nor the profusion of bumper-sticker insights – of which you, Matthew, seem to be the master purveyor. To address the issue of who subsidizes whom, it is not simply a question of the poor subsidizing the rich or vice versa. A large part of my work involves designing benefit plans (both public and private) and doing rate promulgation for insurers and health plans. I can tell… Read more »

spike
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spike

The quote is from Triumph The Insult Comic Dog’s appearance at the Star Wars Premier. Probably the funniest 9 minutes in television history.

Nate
Guest
Nate

Fun with HSAs;
There are some really attractive annuities available right now. I was looking at one that guarantees minimum 7% return a year, your principal at the start of each year is guaranteed. So you always keep what ever profit you have earned to date. In a great year you can make 15 to 20% in a bad year you still make minimum 7%. You can move your HSA to a self directed custodian like Equity Trust. Purchase one of these annuities and sit 25 years. Guaranteed to compound at a minimum 7%.

David Johnson
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David Johnson

Here is an alternative point of view in defense of liberty and capitalism. I appreciate you allowing me to post it.
http://justaddliberty.blogspot.com/2009/06/more-dmvs-please.html

Matthew Holt
Guest

Nate. Not a bad idea. I did something similar at the individual level a while back. Will try to dig it out. Matthew

Matthew Holt
Guest

Whoops. Mark thanks for proof reading my piece!! It should of course be “TO the sick and poor FROM the healthy and wealthy”. I’ve changed it in the piece and hope it makes more sense now

mark
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mark

“Sadly Michael, universal coverage is not about improving public health. If you want to do that, go teach some kids age 1–5 and build some sewage systems.” I am on Cannon’s side in this, generally. This is a tremendous concession you are making. You’re saying that there is no net utility to be had, just distributional issues involved. That’s a great position for Cannon’s side, believe me! “Universal care is about making sure that the costs of health care are fairly distributed. Under the systems you prefer and the one we now have they’re distributed from the poor and sick… Read more »

Nate
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Nate

Why didn’t you make your purchase into a series of post? It would have been a great opportunity to show exactly what a small business goes through. The majority of your readers never experience purchasing insurance at the group level, oddly this doesn’t prevent them from holding very strong opinions about what is wrong or right about it. What were your rates last year, what was the renewal offer, what were the HDHP quotes, are HDHPs really such a bad deal. This would seem to be the perfect opportunity to show a real world example of what goes on. And… Read more »

Nate
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Nate

Who are you using as your custodian? Legally you don’t need to keep it with the custodian your carrier uses. I use HSA Bank and it is all free. I further transfered my available funds to TD Ameritrade and invested my HSA funds in mutual funds to get higher returns. If your healthy and in it for another 25 years now is an excellent time to get into the market with an index fund or something large and stable.

Deron S.
Guest

I’d rather see rates for office visits remain at commercial market levels and drop rates for overused procedures to Medicare levels. Too much of the focus is on rates, when I think more of our problem is a volume issue. A public option, all other things equal, does not do anything to address the volume issue.

Matthew Holt
Guest

Nate, surely a group of 3 in a regulated market like Calif small group isn’t worth your time!
And I have a personal HSA. but now have regular coverage from my wife. And I cant spend the HSA or contribute to it.
The joke is that the monthly fees EXCEED the interest on the account….so when my HSA converts in 25 years or whenever they wont be anything in it to pay for all those out of pocket costs I have to look forward to. Hope the Brits let me back in then!

Nate
Guest
Nate

I’m really hurt Matt, we may argue here and there and on the rare occasion escalate to a spat but you didn’t even tell me you where shopping your insurance let alone ask for my help:(
Don’t discount the HSAs that is where the smart money is going!

bottld^
Guest
bottld^

I can’t even fathom the amounts of money these boys are tossing around. From now on we can just use play money for everything, even to pay back the Chinese. Big government = big control = big problems. Never worked and never will, especially in the land of the free. I am fine with my health coverage and so is illegal Jose, for whom I, and you, and you, will flip the bill when he needs to have his finger reattached after Under-the-table Jim-Bob drops him off at the emergency room doors. Now, he gets universal coverage and for some… Read more »