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Do the Wrong Thing

Laszewski As the Democrats make their final push to pass their health care bill many of them, and most notably the President, are arguing that it should be passed because it is the “right thing to do whatever the polls say.”

Their argument is powerful: We will never get the perfect bill. If this fails who knows how long it will be before we have another big proposal up for a vote. There are millions of uninsured unable to get coverage because of preexisting conditions or the inability to pay the big premiums and this bill would help them.

Any big health care bill will be full of compromises—political or otherwise. But this bill doesn’t even come close to deserving to be called “health care reform.”But as an unavoidable moral imperative, enacting this bill would fall way short:

1. It is unsustainable. Promises are being made that cannot be kept. As the President has said many times, we need fundamental health care system reform or the promises we have already made—the Medicare and Medicaid entitlements, for example—will bankrupt us. What few cost containment elements the Democrats seriously considered are now either gone from their final bill or hopelessly watered down—most notably the “Cadillac” tax on high cost benefits and the Medicare cost containment commission.

2. It is paying off the people already profiting the most from the status quo. Many of the big special interests, that will have to change their ways if we are really going to improve the system, are simply being paid off for their support. The drug deal, the hospital deal, promises not to cut or change the way physicians are paid, all add up to more guaranteeing the status quo rather than doing anything that will bring about the systemic change everyone knows is needed.

3. Nothing in these bills will fundamentally change our current fiscal course. As the CBO, and every other expert has said, if this bill becomes law we will continue on the same cost trajectory we are already on. Yes, the CBO says the Democratic plan will reduce costs during the next ten years by about $100 billion—but that only means they would be $100 billion less than the $35 trillion they would have been anyway! That is merely a rounding error on the track we are already on.

4. There is nothing here that will stop unaffordable health insurance rate increases. Lately supporters have said this bill is the solution to the recent big individual health insurance rate increases we have been reading about in the press. But there is little in this bill that will mitigate or control any such increases because so little would be done to impact underlying health care costs.

We often hear the argument, “Let’s get this entitlement expansion bill passed and it will force us to deal with costs later.” If we don’t now have the political courage to face daunting health care costs in the face of exploding deficits how will we have that courage later? I will suggest that adding 30 million more people to an unsustainable system expecting it will create an even bigger crisis and thereby force real reform is tantamount to reboarding the Titanic in the hopes it will sink faster. It is also hard to see how doing such a thing is the politically courageous thing to do. Just where is the moral imperative in ramming a trillion dollar entitlement expansion through knowing full well it will make our long-term deficit nightmare even worse—for those now uninsured and for everyone else? The Democratic health care bill makes little if any systemic changes to the health care system—certainly not at the level we need. The Democratic health care bill makes promises we cannot keep. Proponents of the Democratic health care bill make the claim that it will make health insurance affordable, improve our deficit outlook, and make our health insurance system sustainable. None of those claims are even close to being true and everyone who knows anything about this debate knows that. Heck of a foundation for doing the “right thing.”

Robert Laszweski has been a fixture in Washington health policy circles for the better part of three decades. He currently serves as the president of Health Policy and Strategy Associates of Alexandria, Virginia. Before forming HPSA in 1992, Robert served as the COO, Group Markets, for the Liberty Mutual Insurance Company. You can read more of his thoughtful analysis of healthcare industry trends at The Health Policy and Marketplace Blog, where this post first appeared.

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  1. THIS IS A PETITION TO THE UNITED STATED FEDERAL GOVERNMENT
    FOR A INDIVIDUAL OPT OUT REQUEST FOR HEALTH CARE
    We The Undersigned Wish To Convey By Their Signatures Below That They Wish To Have The Same Rights Under The Current Health Care Legislation. That Allows The Individual States That If This Would Place An Economic Burden On That State They Have The Option To Opt Out Of This Mandate.
    Currently Over 35 Of The 50 States Have Or Will File A Legal Action Against Washington To Claim This Is An Unconstitutional Bill.
    If The States Are At 38 against and 12 Not Yet Heard From, It Would Seem That
    “We The People” Are More That 51% Against This Health Care Bill.
    THIS WOULD BE A CLEAR STATEMENT THAT IF AN UP OR DOWN VOTE WAS HELD TODAY BY THE GENERAL POPULATION OF REGISTERED AMERICAN VOTERS THIS BILL WOULD NOT EVEN SEE THE LIGHT OF DAY AND ANY LEGAL ACTION FILED BY THE INDIVUDAL STATES WOULD NOT EVEN BE REQUIRED.
    IF THIS BILL WOULD Place A ADDITIONAL ECONOMIC BURDEN ON THE STATE,
    If Would Seem Logical That It Should Also Be AVAILABLE TO THE INDIVIDUAL PERSON AS WELL.
    We the Undersigned Wish To Opt Out Of The Average
    $12,000.00 Per Year Price Tag
    The Current System We Have In Place by Law Already Mandates That Any Hospital Cannot Refuse Medical Treatment to Anyone That Is In Need Currently Any One Who Asks For Help Will Receive It
    This Bill Will Be Imposed By A Federal Mandate On Each Man, Woman, Child, And Even Unborn Children That Live In This The United States If This Bill Passes.
    That This Mandate Is Actually an Unconstitutional Bill in Many Ways
    The Federal Government Does Not Have the Right to Mandate that it’s Citizens Will Have to Purchase a Product Such As Health Insurance Policy.
    To Mandate That An Unborn Child Will Have To Purchase This As Well Is The Same Taxation Without Representation.
    We As Citizens Are Now Already Over Taxed the Federal Government It Takes the First 4 Months of Our Income
    The States Take Another Two Months Of Our Income.
    If You Live You Pay Sales Tax on All Purchase’s And Even More On Other Taxes Such As Property Taxes, City Taxes, Cigarettes, Alcohol, Death Taxes, And Soon Even A Carbon Tax On Breathing.
    At The Present Time With All Of The Visible Taxes And The Taxes That Are Hidden In Every Item That Is Purchased We Are Taxed At If Not More Than 50% Of Our Income’s An Additional $1000.00 Per Month $12,000.00 For A Federal Health Care Product That Once Implemented Will Only Cover 60% Of Medical Expenses After An Already High Deductable This Will Place A Large Burden On Any If Not All United States Citizen’s.
    WE CITIZENS OF THE UNITED STATE RESPECTFULLY REQUEST TO OPT OUT OF THE CURRENT HEALTH CARE BILL
    PLEASE COPY AND EMAIL TO ALL OF YOUR CONTACTS AND ON SUNDAY WHO EVER HAS A COPY FORWARD IT TO THE HOUSE,SENATE, AND THE WHITEHOUSE

  2. nonprofit health care insurance,when you take away the capitalist greed,and realize that one humans life no less/more important than the others. success is inevitable.besides the last time i checked china was footing the bill.health care is not what got us into this economic mess.war=major debt!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  3. non profit insurance companies. if you take away the capitalist greed from the health care system,and realize that one humans life is no less/more important any one person regardless of who’s paying the tab.the last time i checked,china was paying the tab.

  4. surprise Peter missed about 90% of it.
    rbar, few basic concepts fitted to each clients particular need, this theory being one of them, not all groups or individuals are the same and thus we shouldn’t try to force our menu of products on them.
    We identify our clients needs/wants then figure out the most cost effective way to deliver them.
    It cost money to insure risk, thus we advise clients not to insure non risk. Office visits, dental, and other such claims are not risky, I can usually tell pretty close how much they will cost you in a year. Group takes the risk, group saves the money.
    Insurance companies don’t like this becuase we slash their income, I don’t beleive anyone on here is particullary concerned about the plight of insurance companies. Unlike Peter I’m not trying to kill insurnace companies, they perform a very important role, I am however trying to send them back to where they belong, low margin assumers of risk. That task doesn’t require 8 to 9 figure CEO salaries or fancy offices or contributions to charity.
    Information, without data you can’t make educated decisions. Especially in smaller groups, they are expected to purchase insurance plans with little to no actionable data, critically flawed system. We capture, share, and analyize the data for them. This allows for obvious savings that both the group and member are happy with.
    For example by capturing a groups Rx claims I can tell employees by going to Giant Eagle and getting their Anti-biotic for free they could save the group $x and save themselves a co-pay. FYI Peter this usually makes employees happy.
    No idea what public programs Peter is talking about, think he is making things up again.
    Education, big insurance company telling you what to do doesn’t always go over very well. Education from employer or small family business offering advise goes over much better. Pre-Natal programs, weight loss, etc etc can all yield great savings if the person being told to make changes see the rewards. Some people need a more personal touch.
    thats just a few of hundreds of ways to save money. I have clients who total trend in the past 5 years is under 10%. i.e. less then 2% a year. Healthcare spending is like government, it grows as fast and big as you allow it. If you neglectHC spending it will consume every last penny, just like our congress will.
    If you define it’s role and manage it then you can control its cost and get great value for what you do spend.
    “but the fact that he says companies only come to him at a time of crisis shows they have to give up a lot.”
    Curious Peter, besides the fact you ignore my comment about forward thinking, do you feel the same way about government and if so what do you think we as a republic have given up for SS, Medicare, Medicaid, student loans, etc?

  5. rbar, Nate’s biggest contribution to lowering costs is the purchase of a high deductible health plan. He then does some micromanagment of some doc and drug spending and attempts to use public programs for some other savings. I’m not sure how happy the employees are under his managment, but the fact that he says companies only come to him at a time of crisis shows they have to give up a lot.

  6. From an outsiders point of view – and as a Brit well aware of the shortcomings of government and government run healthcare – I think the health care debate in the US has highlighted far more than health care insurance being close to meltdown; not forgetting the recent Wall St meltdown… the element that links both is that Wall St and the insurance companies effectively own the US government.
    US democracy is dead; the lobbying billions have killed it.
    God Bless America and I hope one day it becomes a democracy once more.

  7. Margalit has it right. Nearly everyone who opposes this bill is making the mistake of comparing it to politically impossible alternatives. I’ve been saying since 2007 here that universal coverage is the easy part (!) while deep cost controls are far harder because with these you cut into the revenues of very powerful lobbies that have public support (i.e., not insurers).
    Bob has shown me nothing to indicate that he knows how to get reforms passed which freeze or lower provider costs. We can all point to reforms that would lower them if passed. In effect he is opposing real imperfect reform with fantasied perfect reform.

  8. Nate, how exactly do you do all that (“This is despite the fact we have a 25 year track record of working, don’t change benefits, and drastically reduce cost.”)? Maybe I missed that in one of your past posts, but I cannot read all of them as I have a daytime job …
    Extraordinary claims require extraordinary evidence.

  9. great idea maybe following or maybe not…
    “They see the bill providing virtually no meaningful reforms that will translate to relief, so they’re hunkering down and looking more closely at products and programs that can hold down their costs without sacrificing quality.”
    This is a very important perspective that no one wants to dicuss. Most of these products and programs have been around for a while, yet they had very little adaption. The press and proreform lobby want to scream about how out of control cost are but the fact is it is not. If cost was as bad as propogandist want us to beleive these products and programs would have been implemented years ago.
    I still have 50-75% of the cases I quote turn us down and stay with the same old way of doing things. This is despite the fact we have a 25 year track record of working, don’t change benefits, and drastically reduce cost. The 25-50% that do go with us have come to a point of crisis, or a very small percent are forward thinking, and they address the problem. The fact that so many employers don’t feel compeled to fix it shows the problem is not that severe.

  10. Brian,
    Many blog pages ago, when I had my personal meltdown because this bill is a shadow of it should be and this President is not the radical agent of change that I hoped he would be, I learned something from reading and writing on this blog. I learned that what is right is almost always tempered by, so called, political realities.
    The political reality today is that there is zero chance for true health care reform to occur in one big push. It is impossible for the true reformers to go “huddling away from the lobbyists”, and even if it was possible, it is not possible to huddle away from an opposition party that is hell bent to derail this administration at all costs.
    If this bill does not pass, chances are great that we will see a Republican Congress in the fall and a Republican administration in 2012. If health care is approached again in the next six years, it will be in the form of tort reform and allowing insurers to sell their dubious wares across state lines in order to evade regulation. If the economy keeps wavering and it becomes imperative to do something about health care costs, the cuts will be directed to those with no power to fight back. The lobbyists are not going to retire after the elections, and the historical Republican propensity for big money and big corporations guarantees that the poor (former middle class) will bear the brunt of any reform legislation, while waiting for the goodies to start trickling down at home, instead of trickling out to cheap labor lands.
    So I made my peace with this reform bill, since it is as good as it gets and the alternatives are too bleak to contemplate…. in my opinion.

  11. Brian,
    Unprofessional it may be, but you didn’t convince me I was wrong.
    You wrote a very long post that manages to miss the key points. You believe this bill is worse than the status quo and you believe a better bill is politically possible.
    If that is the case, perhaps you should be running for office, your talents are being wasted.

  12. Spike, Matthew also publishes Nate, but I’m not sure that’s a great idea either.
    I can think of ways to disagree with Bob, but suggesting that he doesn’t know what he’s talking about is both unprofessional – this assumes that you are a health care professional – and inappropriate. Many people who make business and policy decisions listen very carefully to what Bob has to say.
    Now to the point. Remember the Republican Medicare D heist? Orchestrated by the US Chamber and the Employers’ Coalition on Medicare, the Republicans created an enormous windfall for 1) Fortune firms (through subsidies) and 2)drug companies (through protected, artificial pricing) at a cost of more than $750 billion. But it provided a long overdue and vitally needed benefit to seniors. It was just that it was at a vastly inflated cost that was onerous for the rest of us and to the benefit of those pulling the strings.
    This reform bill is not very different. After $1.2 billion in Congressional lobbying contribution on this issue alone, we have a bill that makes some important changes in insurance and offers the “promise” – no commitments, of course – that there could be more changes down the road. Naturally, that assumes that the health care industry is going to go to sleep and stop campaigning for more revenues, independent of appropriateness.
    What do I mean by this? No real changes in fee-for-service reimbursement. We MAY have some pilots that tinker with new ways of paying, but for the foreseeable future, nothing’s bound to really change, so the dramatic excess – PriceWaterHouse Coopers put it at 55% of total health care spending in 2008 – will continue.
    No more transparency. As far as I can tell, there’s nothing that will encourage the release of deeper health care data, so that health care that is paid as though there’s a market can finally begin to behave like one.
    No real payment increases that would empower primary care. Even though there’s no question this is critical, there’s only lip service here, and incentives so small they’re effectively meaningless.
    Bob, Alain Enthoven, David Kibbe and I talked about all this months ago. We’ve urged the President to start over, not because we’re against reform – we all have long histories of campaigning for reform – but because we all understand that structurally, the reforms suggested are so meager and so in the favor of the industry that it effectively will allow the status quo and exploding health costs to continue. We saw the possibility of his proposal development team huddling away from the lobbyists and shooting for a bill that could actually address the deep structural flaws that under gird the health care crisis.
    Passage of the health care bill, if it occurs, will come at great cost. Here I’m not referring only to the cost that’s calculated by the CBO – that’s meager by comparison – but the cost of continuing explosive growth in health care costs that are pricing growing percentages of mainstream Americans out of the coverage market.
    What you’ll see is a growing gridlock in an economic sector that is one-sixth of the US economy and one-eleventh of its job market. Subsidizing its ongoing expansion is sapping the lifeblood out of every other sector and governmental need. Those who think the current bill will substantively address this are wildly optimistic.
    If you want a different perspective, watch how the nation’s corporate benefits managers are reacting to this. They see the bill providing virtually no meaningful reforms that will translate to relief, so they’re hunkering down and looking more closely at products and programs that can hold down their costs without sacrificing quality. In other words, their confidence in this reform being any form of panacea is low in the extreme.
    One final comment, people like you and Ms. Mahar are fond of saying that people like us are “against reform.” That’s cheap. What we are saying is that, as terribly badly as its needed, the cost of this particular brand of reform is too high. The fact that we’re against the bill as it is currently constituted does not make us against reform and it doesn’t make us conservative. What I hope it makes us is practical and judicious in the way we hope to influence public policy (which, BTW, we apparently haven’t.)

  13. spike, Agreed. It is the ongoing problem with EVERY opponent of the health reform legislation moving through congress (except for Kucinich, who is now on board).
    They’re against the bill, but cannot tell us what they specifically support and how that would specifically benefit anyone.
    The best we get from their mouths is the mantra that “the free market works best.” Unfortunately, with the case of private health insurance, that’s been proven untrue by the American experience.

  14. It is unfortunate that there is not as significant an effort outlining the economic advantages of health care as their has been looking at the costs. One of the messages being lost here is that reducing health care costs makes the US more competitive globally. It is difficult to factor that into a CBO projection. It is also difficult to identify those aspects of health care that actually can and do reduce overall costs by virtue of their cost-effectiveness, but they are few and subject to controversy (cf: vaccines). We must be satisfied with the imperfect and not make the good the enemy if the mediocre.
    It is a start, albeit an alarming and potentially damaging one, it is better than doing nothing at all.

  15. Bob, I asked you this on your blog, of course you don’t publish my comments, but Matthew does!
    Are you saying the status quo is better than this bill? Are you saying that if this bill fails a better one is right around the corner?
    What exactly is your point in all of this? From past posts, it sounds like your point is that Democrats should scrap this bill and do something even more incremental than this, like limit reform to malpractice reform. Wouldn’t doing something so small make every problem in your list even worse than it would be under this bill?
    You’re starting to sound like someone who has been wrong from the beginning and is now grasping at straws, something to hold on to, to convince himself he was right all along, even though it’s become painfully obvious to anyone who is watching that you have no idea what you’re talking about.

  16. The trouble with the reasoning I read here is that the only “long term” thinking going on is about costs. What about long term thinking on how health care should be delivered for everyone in the country? Every other advanced industrialized nation has managed to figure out how to do that, at a siginficantly lower per capita cost than the United States and still manage to have a citizenry that is healthier by any broad measure of health measurement than the United States. Read that again: lower cost, better outcome.
    The only reason why the United States did not embrace that this time is because the opponents of the current health care bill are the same ones who scream the label “socialism!” when that is mentioned. The fallacy in thier argument is that it’s “socialism” that works for its citizens (BTW, just like roads, schools, and parks).
    I support this bill — warts and all – because we have to begin towards the path of providing adequate health care for everyone. We have to get to the point where everyone realizes we are all in the same health care system and not just individuals moving from one plan to another. When this country finally realizes that the private, for-profit insurance market only really cares about profits and just doesn’t care about individual’s health care, we will finally start talking seriously about scraping the for-profit insurance system in a constructive way. That may take ten years or more, but we have to start now.

  17. Besides this who bill just needs to be taken of the ballet. It is just such a crap idea it wont be funny.It will bankrupt every single middle class family in the US. And only a few will make it. so after this bill passes (if it does) and fails (if it does) the democrats will blame it on the republican party just to try to save themselves from the title of the party that destroyed the US. So to heck with this bill before its to late.

  18. My family is middle class and struggling but this bill will push us over the edge and into bankruptcy. So i am completely angst this bill.

  19. This plan is a crap idea and Kucinich is correct about it being a hand out to insurance companies.. unfortunately even he sold out..
    one should wonder what type of pressure would force once a most idealistic politicians to break under!
    on the other hand, having no change is not much better. or is it?.
    It is always easier to rally a change message when things are going like a train at 100 mph on the wrong track.. sooner or later the inevitable will occur. So ANY thing in exchange would be better. It is a natural human psychology to put the worst into the future and hope for best.. look at the past elections.. it is called self induced hopefulness (my term) or.. denial as it more often called..
    One positive that this change may lead to would be because of its unintended consequences. Again, similar to the past elections, more people ultimately woke up to the good cop- bad cop politicians play than did during the past administration.
    This positive would be a real reform in the area of health care, where doctors, hospitals, patients, liability provides on both sides, and maybe even some pharmaceutical companies would come together and create their own smaller networks that would be self sustaining. They would get rid of insurance companies or any other health management companies (3rd parties) and benefit from the mutual relationship, AND make examples for others to follow. (Assuming they won’t be imprisoned for doing so). Doctors would get monetary incentive to keep patients healthy and as long they are healthy, getting paid. This would dramatically decrease the cost, unnecessary procedures and tests and created a healthier, happier patients that would be encouraged to practice preventive and healthy measures rather than relying on a give me a pill solution.
    I can even say that it may become possible on the state level too, but I won’t hold my breath on that.
    Personally, I say don’t wait for you know what to hit the fan, although it may already have.. gut this bill and get together to create a reform that most people on both sides want.
    AG

  20. It is wrong to have a bill that will do more damage to the heath care.Can not pay for everyone’s health without people with jobs to pay for it. Can not tax unemployed people people and the one’s working with low income. Start over and make jobs and then think of health care.

  21. “You do have to be very careful that the potential of President Obama’s presidency not be destroyed by this debate,” said Kucinich. “Even though I have many differences with him on policy, there’s something much bigger at stake here for America.”
    Direct quote from the senator that is switching his vote to Yes. Did he really just admit that keeping Obama in with a JOB is more important than the fact that Americans will be saddled with this thing until the Republicans get in and change it???? Really??? Obama’s presidency is more important than the greater needs of American citizens? Really??? Not to me….how about Obama find JOBS (and not worry about his so much). The rest of us would like to work so that we can afford healthcare. This is the political process that Americans hate. The politicians do NOT represent us. TERM LIMITS!!!!!!

  22. It’s obvious that this bill is going to pass one way or another. Too many have too much at stake for it to fail at this point.
    I’m just dismayed by the process and the apparent disregard for what we, the American public, truly want. Our 2 party system is broken and this bill serves as further proof in my view.

  23. And what about those of us who choose to go more natural wellness routes? I have chosen not to interface with the traditional health system in any way for over 15 years + fortunately haven’t needed to because I have effective methods for managing my health. I’m not a Christian Scientist, but do have “spiritual” [I prefer to call them “evolutionary” + “energy-based”] reasons for not going the traditional route. Will I be forced to have health insurance or pay a stiff fine every year under this plan?

  24. I don’t understand the reasoning here. If we can add 30 million people to the insured ranks for “merely a rounding error” (a negative rounding error) to the current expenditures, why not do it?
    Also not sure what the $35 trillion is all about….

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