Reform: Round 2

Joe flower It’s coming back!

The health care reform debate is only through the first round. In a few years, as early as 2013 or 2014, we are likely to see another round, with at least as much whacked-out drama as this one. But the cry will not be, “Bring back the good old days!” The cry will be, “These costs are killing us! Do something! Now!” This next round will be entirely focused on draconian cost-cutting.

The push for reform was about three things: Cost, quality, and access. Well, one out of three is not bad. The bill we got will eventually do a pretty good job on access, but it does little substantive or forceful about the other two. Quality is not a political issue with any grip; despite what we wonks and practitioners know, the public still doesn’t think that quality is a big problem. But cost? Big time. Look at the trends: Health care inflation continues unchecked (the cost of each item continues to rise faster than general inflation). The Baby Boom is hitting its 60s (I turn 60 this year, and I am a pretty good marker for the pig entering the python), so utilization will rise rapidly – we will each use more health care items, and there are more of us at the age of increasing usage. Obesity and other markers for chronic illness continue their decades-long rise. Medicine is increasingly able to save us from death, but not cure us, meaning we need decades of continuing care that our great-grandparents did not live long enough to need. Meanwhile, even as they have saved themselves from annihilation or even serious government competition, the private health plans have entered a slow “death spiral,” as even those who have insurance increasingly back away from high-cost comprehensive plans in favor of ever-skinnier high-deductible plans. As costs rise, individuals (that is, voters) are more and more personally exposed to those costs, even deferring needed treatment because of costs. The forced inclusion of sick kids (though a great thing) will also add to the costs.

But…but…all those new people!

Full implementation of the act in a few years will bring tens of millions of new rate-payers into the system spreading the cost over more people. But that may actually add to the pressure for cost reform. There are, roughly, three chunks of uninsured. One chunk has been priced out or tossed out because they have a serious health problem. They will certainly welcome coverage. A second chunk is poor or near-poor. They will certainly welcome the subsidies to help them get coverage. The third chunk, though, are not necessarily poor or unemployed. They work for themselves or for an employer who does not offer insurance, and they have made a rational economic decision that the benefits of health insurance are not worth the cost, because they are, for instance, young, healthy, and childless. They are likely to feel dragooned into paying for something that they already decided is not worth it. And the new rules will have a leveling affect: If you can only charge the near-elderly three times what you charge the youngest, those youngest (the ones most likely to feel they don’t need health care coverage) will be paying considerably more than they would have under the old regime.

So the next few years will see a “perfect storm” of factors pushing up the costs of healthcare – particularly as expressed through private insurance premiums.

Is our political system capable of real cost reform?

That’s a good question. Any way you cut costs cuts into someone’s livelihood and someone else’s gravy train. Nobody thinks of what they are doing is “waste.” Nobody. And much of the public has what Ian Morrison calls a “Pimp My Ride” attitude toward healthcare: Bring on all that magic stuff! Don’t you dare take any away before I get mine!

So the political difficulty is quite real. But the pain felt by the public is also quite real, and will become more real and obvious as the months go by.

What if the Republicans regain power? What if the Democrats lose their majority in the House or the Senate, or lose the White House? That is not really a problem for this scenario: The underlying forces are so great that whoever is in power will have to at least appear to be doing something about the cost of healthcare. The Republicans will frame it as fixing the mess the Democrats made.

The clash between the public demand for cost reduction and the public demand to “Pimp My Ride” will mean that the cost-cutting legislation will not be shaped as across-the-board, government-imposed cost controls. Instead, it is more likely to be shaped in a complex of measures that allow politicians to take credit for “doing something” about costs while distancing themselves from what is actually being done. The measures would include such things as:

–   a Medicare rate commission with teeth, able (like the military base closure commissions of the last decade) to make decisions that can only be overturned by Congress en masse, not piece by piece.

–   Mandated bundling: Call it “beyond DRGs” – all common, definable interactions, procedures, goods, and services bundled into packages: A compound fracture of the tibia, an uncomplicated birth, a diabetes care subscription, a medical home.

–       Mini-caps: Certain services, especially ones dealing with wellness, prevention, or chronic illness, not only bundled into subscriptions, but priced by the year in a kind of mini-capitation: Well-baby care, diabetes services, pregnancy and birth.

–       Common carrier rules: As in transportation and telecommunications, the provider can set whatever prices and offer whatever inducements and discounts and special offers they want, but they must give the same price, the same special deals, to all comers, large or small.

–       Real and transparent prices: A prime reason to establish bundling and common carrier rules is simply that you can’t have competition on price and quality if you can’t know what the price is. So put up a menu: Having your baby here costs this much, a cholecystectomy that much, a new knee this other amount, the whole thing, soup to nuts, diagnosis to rehab to drugs to scans.

–       Real quality transparency: You also can’t have competition on price and quality if you can’t tell how good the product is. Put up a scoreboard: How many hearts did you do? How many came back to pump? How many infections? Unless you’re Michael Jordan, nobody really likes a scoreboard hanging over their head. But we need scoreboards, or we (individuals, employers, health plans, government) can’t possibly be smart shoppers for healthcare.

–       Comparative effectiveness research with teeth: Today, a procedure, drug or device can be reimbursed if it is safe and effective. We may get to a point where a procedure, drug or device can be reimbursed if it is safe and cost-effective. If your elaborate billion-dollar surgical/genomic/interventional/whatever scheme turns out, after a great deal of study and evaluation, to be 5 percent more effective than rest, aspirin, and yoga, the Medicare rate board will say, “That’s nice, but you’re on your own. We’re not going to pay for it.” And private health plans, under that cover, are likely to follow suit. Such schemes will become like cosmetic surgery: legal, perhaps even somewhat common, but paid for by Visa.

–       De-tortified malpractice: Now, the only way to be compensated for a medical mistake is to pin the blame on someone, sue, win, and win big enough to give a big chunk to the lawyers. And there is little to no evidence that suing doctors improves their skills. Take malpractice claims out of the tort system altogether into a medical compensation scheme like other countries use, and you will help more wronged patients, run the rare incorrigibly “bad” doctors out of the system, and help the rest improve – at about 10% of the cost of our current system.

–       Regional bidding to health authorities: Consider one detail of the Canadian system. The government does not simply say, “Here’s how much we will pay for diabetes services, or long-term care services, or emergency services.” Instead, each province establishes a set of regional health authorities. A metropolitan area may have half a dozen or more. These authorities take bids: Organizations (many of them not-for-profit or religious) step forward and say, “We can provide (for instance) diabetes services for X thousand patients per year for Y dollars, and here is our track record, our quality statistics, our patient satisfaction numbers.” They compete on price and quality. Cost down, quality up. Can the system be gamed? Certainly. But our system comes pre-gamed.

There are probably many other possibilities for fine-grained cost reductions, when the time comes that the public is howling enough for help. For us in the industry, now is the time to get ahead of this curve by figuring out how we can get control of our own processes and drive down our own costs.

With nearly 30 years’ experience, Joe Flower has emerged as a premier observer on the deep forces changing healthcare in the United States and around the world. As a healthcare speaker, writer, and consultant, he has explored the future of healthcare with clients ranging from the World Health Organization, the Global Business Network, and the U.K. National Health Service, to the majority of state hospital associations in the U.S.  He has written for a number of healthcare publications including, the Healthcare Forum Journal, Physician Executive, and Wired Magazine.  You can find more of Joe’s work at his website, www.imaginewhatif.com, where this post first appeared.

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56 replies »

  1. Vicram,
    I am curious. When you went to India, how did you decide what tests to have done? Did the lab company offer you any guidance in making your selection? Was there any guidance offered to you about how to interpret those results or how to go about fixing a particular problem?

  2. You don’t think Quest would do the same thing, if you could ever reach a person there

  3. “This one, you will have to hand it to conservatives. ”
    I think you have to hand it to the fact that the cost of professional labor in India is about 1/5 of what it is here, and the big corporations haven’t established their monopolies just yet. Don’t worry, it will come….

  4. Echo Joe’s sentiment on demand being infinite. Just returned from vacation to India. Got tons of test and dental procedures, I wouldn’t have done here. If my vacation had been longer would have got few more procedures as well. Some of the service there is mind boggling. Test lab guy came at home and discussed tests available. Took blood samples for 6 people for about 20 test procedures such as Lipid, blood group, liver etc. Total bill for all tests- $200. Results available on internet the same evening.
    This one, you will have to hand it to conservatives. That is the result of free market enterprise. As the test lab guy quoted the price guy quoted prices I compared the prices against other test labs in the area on net and forced 10% price reduction. We bartered and that made me very warm and fuzzy. Couldn’t imagine doing that with Quest Diagnostics.

  5. Barry, I don’t have all the answers, but here is what I know.
    There are about 20% inner city kids. The school district is rather small. There are less than 1000 kids in the high school. There are three elementary schools and one middle school feeding the high school. The high school is an open campus.
    There are numerous tutoring and special classes for reading and math in particular open to all students. There is no zero tolerance policy. Kids get disciplined the usual way. Most common is in school suspension, followed by out of school suspension, followed by transfer to a special “collaborative” school in very few and hard cases, not necessarily just for the bused kids. I am only aware of one kid being expelled and that was because of committing a felony. Kids are not expelled for disruption, not even drugs and drug use is more common amongst the local residents anyway.
    Parents can play a significant role in the PTO and various boosters. Some do. Most do not. And this applies to all the kids. The inner city kids come from a variety of homes. I don’t have statistics, but my kids have friends from traditional families, one parent families and no parent families. The ones with a more stable home, do better in school.
    The program is not unique to our school. There are multiple suburban schools in the area accepting transfer students, and even some suburban kids choosing city Magnet schools. It started in 1983 as part of a desegregation agreement and it is administered by a non profit organization.
    Unfortunately, the state is not fully reimbursing the districts for each transfer student, which lead some districts to drop the program. I hope we can keep ours going. It’s been extended to 2013-14 right now. It is money well spent.
    The school district is one of the two premier school districts in the area. The district has a very successful business area (law firms, financial institutions, hospitals and other businesses). Tax revenue is excellent and property value is ridiculous. The schools are well funded and teacher salaries are way above average. Turnover is minimal and almost all have graduate degrees.
    Busing has had no ill effects. Quite the opposite.

  6. Margalit – I’m curious to learn a little more about integration in your local school district. In Northern NJ, I’ve heard from people on the scene report that at least one former very high performing district declined considerably in quality after poor kids from nearby towns started to be bused in.
    Specifically, I wonder how many poor kids are there in a given class and what is the total class size for both elementary and high school grades? Is tutoring available to help kids that are having trouble academically? How is discipline handled? Is there basically a zero tolerance policy for disruptive behavior and what becomes of kids who are removed from the classroom and/or the school because of disruptive behavior? What role, if any, do the parents play? Are the poor kids from single parent or two parent households? There are a lot of issues here. If the program in your area is as successful as you say, why hasn’t it been widely replicated?

  7. There is a big difference between educating children and assessing the results. My statements regarding the lack of opportunity were assessment of results, not lessons to children.
    The simple fact is that de-facto segregation does not promote equality of opportunity.
    The other simple fact is that McDonald’s ain’t no Harvard Business School and no amount of demagoguery will change the fact that some kids are placed on the McDonald’s track at the age of 5.

  8. “In my opinion, it’s expectations.”
    How do you build expectations? By telling kids;
    “Being born in the projects means that barring unusual circumstances, you will have a miserable life.”
    “Upwards mobility is a legend nowadays. It didn’t use to be, but there is nowhere to “go west” and “make something of yourself” anymore. The doors, and windows, are shut.”
    or by telling them they are going to have to work their ass off but they have every opportunity to make it out and it is all up to the decisions they make. The choices they make will determine if we are having the same conversation with their kids or not.
    Why would a kid listening to you bother even trying, you already wrote them off. A kid listening to me isn’t going to have it easy but at least they are left with hope and pointed in the right direction.
    “kids will live up to your expectations in most cases.”
    I agree 110% and thats why I find liberal policy murderous. If my inner facistious had his way you would all be rounded up, tried for murder, and put away forever to never again ruin another generation of lives. Between public housing, welfare, SOCIAL PROMOTION, who the hell ever thought that was a good idea, and countless other liberal policies you have set expectations so low you ensure failure.
    What is ironic is how you argue one side then turn around and do the exact opposite. Your inner Obama is showing, you might want to put that away. Let me paste your words once again;
    “Being born in the projects means that barring unusual circumstances, you will have a miserable life.”
    “Upwards mobility is a legend nowadays. It didn’t use to be, but there is nowhere to “go west” and “make something of yourself” anymore. The doors, and windows, are shut.”
    What expectations do those two quotes set? Are you running for office and forgot to tell us?
    “So why are the expectations so low in the inner city?”
    Becuase you and other liberals spend billions making them all into victums and setting them that low. NEA only cares if they show up to be counted so they get their maximum funding. Parents treat them as paychecks and not offspring. You are to blame for the low expectations. 40 years of failed socialism and liberalism acheived exactly what you wanted, a voting slave class you pay off with trinkits.

  9. Nate, the kids I was talking about that go to college and go to Ivy League Schools are the kids that are bused out of their neighborhoods to the school district my kids go to. The collective dreams and goals of the kids in this environment are to become lawyers, doctors, presidents of the US, scientists and so forth. Going to college is a given. They don’t all succeed, but over 95% go to college right after graduation. A few go later. McDonald’s is not in their repertoire.
    In contrast, the kids that do not get bused (about 20 minutes ride, if that), and I know some of them too, have no dreams at all, McDonald’s or otherwise. They drop out in droves, some get caught up in criminal behavior, others just loiter or have babies and a few find the mostly dead end McDonald’s type of jobs.
    Why is that? They are the same type of kids in both cases. Some are siblings and members of the same family. What is the difference?
    In my opinion, it’s expectations. In our school district, everybody, everybody is expected to go to college. They are expected to get good grades. They are expected to engage in extra curricular activities. They have evening buses to get everybody home after debate, mock trial, football, or whatever.
    In the city the expectations are that they show up and it’s a great accomplishment if they don’t drop out. Going to McDonald’s after high school is the top of the mountain.
    I don’t know if you have kids, but if you do, you know that kids will live up to your expectations in most cases.
    So why are the expectations so low in the inner city? Because of the pure concentration of poverty and weak homes and crime who lives right outside the door. There are very few role models around and peer pressure is all negative.
    If you disperse these centers of failure and integrate the kids into systems that have different expectations, different standards and different peers, you will pull most kids up and give them something achievable to dream about. And, no, it does not hurt the “rich” kids at all. If anything, it makes the entire school better, academically and socially.
    It may take a generation or two, but this is the only way. Mix them up, shake them well and watch the magic happen. Just like making a good cocktail….

  10. notice you tempered your argument a lot, you started with all poor kids where a lost cause with no chance of ever getting out and now most of them go to college and some even the ivy league. See just in the period of two days my yes you can rehtoric has changed lives. Kids are already moving out of the projects into Ivy league schools. Few weeks I’ll have ended poverty as we know it.
    Wait and see what I have planned for May

  11. Why isn’t it good enough? I had Naugles, ghetto version of Del Taco, I managed to make it from there. Actually that was after a stint washing dishes some place else. I would have been lucky to start at a McDonalds instead. McDonalds paid better and had some sembelance of management structure.
    Very few kids from my school went to college and I’m sure not one made it into an ivey. We only graduated 70% of the total class in a great year. Sounds like your poor are doing a lot better then where I grew up. But your comment supports my point, they do have equal opportunity. They might not have equal starting places but yu said yourself they aren’t denied the chance to screw it up.
    Name me what opportunities you think are denied to those from poor neighborhoods. Sounds like your confusing opportunity and assistance. I’ll give you the benefit of the doubt till I see your list.
    How does working prevent you from harvard or any other opportunity? Are you saying every kid should have a free ride fully paid all the way through PhD? FYI jobs are great ways to pay for school so you don’t graduate in debt.
    Please define equal and integrated, are you trying to fit all 50 million school kids in one school? There is not suck thing as not-seperate. You must divide them somehow, what is your plan to make every school achieve exactly the same results. Besides passing a bill called America’s Equal Results in Education brought to you by Liberals and the NEA, I know how exicted your kind gets about promising names and bills with no chance of success.

  12. Nate, let me set a few facts straight first. I went to school with people that had no food at home. I was the only person in my elementary school class to go to college. Please don’t lecture me about poverty.
    My kids go to school with kids from the inner city because I chose this district. A while ago I was driving my son’s friend and some of his “cousins” home and I realized that the kid sitting next to me, talking on his cell, was arranging to pick up some crack once I dropped him off in his bombed out neighborhood at 11PM. I gave him a blast, but he was laughing the entire time. He was not being bused.
    Very few of the bused kids in my district don’t go to college and many of them go to nationally recognized good schools, including the Ivies. I can tell you that what sets apart the ones that fail, regardless of getting 13 years of the best education in the state, is a crappier than usual “home” environment. They are all exposed to drugs and guns and criminals, but it’s the home that makes the biggest difference.
    As Barry said, it is unfair to the babies and we don’t know how to fix it.
    My problem with your entire line of reasoning is that you seem content because these kids have the option to work at McDonald’s and succeed from there.
    It’s not good enough.
    And the kids know it’s not good enough.
    Kids should have equal opportunity and if you are born in the ghetto you don’t have anything equal to suburban children, least of all opportunity.
    I do agree with you on the projects. Horrible idea. They ought to be blown up and the residents provided with housing all over town in all sorts of neighborhoods, so the kids can go to regular schools like in Japan where they have 100% Japanese in the class. We ought to have 100% American. Equal and separate does not work. You can have it equal or separate. Never both.

  13. “All we need to do is tell them that they can, right before we drive home to our safe gated community on the other side of the tracks..”
    That’s the difference Margalit, your the lily white person living on the other side of the tracks who speeds through the hood with their head down to scared to experience reality but the first to jump on their soap box as soon as they cross the tracks.
    My house isn’t on the other side of the tracks. I am surrounded by public housing, not on the other side of guard gates, not 5 miles away, but 3 of them within 1-2 miles. On top of that my friends live in those projects, people I went to school with, friends I have made since school. I’ve started businesses with friends from the side of the tracks that scare you. Like Maggie and healthcare when you talk about the poor you talk about what you read or what the NYT tells you to think.
    When I talk about the poor I am talking about actual conversations and real life experiences I had. In a less fiscally coherent time in my life I wanted to be the Suge Knight of the Vegas rap scene. Promoting shows, paying for studio time, a website that had fewer visitors then albums for sale. I saw a ton of young poor kids trying to make it, the difference between those that did and didn’t wasn’t talent it was work ethic. I have demos of incredible rappers that never went no where because they wouldn’t put in the work. Those that did put in the work seldom made it as rappers, very few ever did, but that work ethic carried over to their life and other talents developed that lead them out. Production, graphic design, promotion, etc etc.
    Its you complete detachment from the poor that prevents you from seeing what makes a difference and what doesn’t. If you work hard at McDonald’s your not doing it so you can be serving fries 10 years later, you do it to learn personal responsibility, work ethic, time management, money management, connections, and those lead to real careers and jobs. Your just like all the other do good liberals promising salvation, you don’t have the slightest idea how to make it in life cause you never had to. This is the same problem poor people that don’t make it have, it’s a major separator between left and right, if you sit around waiting for someone to serve you success you seldom will find it. If you learn how to succeed it will almost always come to you.
    First you say poor people have no chance at success then you talk down a career at McDonald’s, do you really not see how arrogant and condescending that is? What message does that give the kid that worked their way off the streets and now supports a family on McDonald’s paycheck? Somehow their success is less meaningful then yours because they work for McDonalds? Your reconfirming every despicable limousine liberal stereotype out there.
    “If he wouldn’t be talking about it, it wouldn’t be there.”
    If he wouldn’t be shaking down companies for contributions to his rainbow fraud which benefits him and his family and does nothing for the community we could concentrate on solving real problems. Sorry if I don’t feel keeping Jessie and Al in the lifestyle they have become accustomed to as progression in racial equality. Screw the poor black kid trying to make it at McDonalds that ain’t illustrious enough, real equality is when Jessie and Al can live it up like a Kennedy.
    “and it’s their fault that they cannot pull themselves out of that sewer that we created for them over hundreds of years of exploitation and degradation.”
    We didn’t create any sewer you and your liberal friends did with your brilliant public housing. The poor would be far better off today if you had never shown up in the first place. Public housing and welfare have destroyed 10 times as many lives as it helped. Life use to be hard but atleast they weren’t locked in public housing to be preyed upon by criminals and liberals with limos full of meaningless promises. This builds on Bev’s comment and why situations like them so frequently fail, when you promise someone your going to show up every day to feed them they count on that visit to eat. When your to busy or lose focus and stop showing up they starve to death. It is better to have never made the promise, to not have feed them for 3 months, then to make them dependent on you and abandon them. You see this with wild animals that never learn to hunt and you see it with people of all social classes, if mom always takes care of them when mom is gone they don’t know how to. Compare that to the 16 year old that runs away or is thrown out, I know many of them, and they might have it hard but they are self reliant. They can take care of themselves. Problem with that is you liberals don’t get all warm in size and can’t throw yourself self congratulatory parties for allowing someone to make it on their own. Actually most of you are so self aggrandizing I bet you could.
    “If a handful of exceptional people can get out on their own,”
    A handful, if I know 50 alone it would seem far from being a handful but actually a large minority that are capable of doing it. But then again if that got out, people can make it without liberal handouts, people might start questioning your value, then goes the excuse to fleece the public in the name of your failed ideology.
    “All we need to do is tell them that they can”
    Your right it is so much more productive to tell them they can’t!
    “Every little child should have the ability to ignore the crack and the hunger and the neglect and the criminals and the complete disintegration of family units.”
    Exactly every poor kid should have the ability to not repeat the same mistakes their parents made. Every kid in this country deserves that opportunity. Sadly not all, in fact a majority of them, won’t take it, but they all deserve the opportunity and they all deserve to believe, to be told, to be told repeatedly, by other adults in their life, by their piers, by anyone that comes across them in life, that they can. They aren’t a slave to their circumstance, they aren’t born poor they are born into poverty but hard work can get them out. Poor is not an ethnicity you can’t leave behind, its just an adjective that describes a point in time. Ignore the Margalits in life, ignore the Jessies and Als, work hard and they can live on the other side of tracks.
    But how do you educate when the kids go home to a total disaster?
    How do the kids that do graduate and go on to college do it? Like I said I sat in class with dirt poor kids that took advantage of the opportunity, learned and got out. If they could do it why couldn’t the kid sitting next to him on the bus?
    “our education system is largely segregated both by race and by class,”
    More liberal mythology to justify failure and convince the kids it isn’t their fault. Did you know if you go to Japan almost 100% of the kids are Japanese, doesn’t stop them from learning. Not as high but it is the same for almost every other country with schools better then ours. Guess the racial make up of schools in China or Ireland. Racial segregation means nothing. There is no scientific reason a school 100% black can’t learn as much as a 100% white school. The only variable is what you put in. Seeing as how inner city schools spend far more then rural schools it is not money. Where per pupil spending is highest results are poorest. Thanks the NEA and liberals for that.
    Sitting a kid on the bus for an hour and a half before and after school does not help. 3 extra hours of classroom time would. Kicking out those not there to learn would. Disbanding the NEA would.
    “The alternative to selling drugs shouldn’t be McDonald’s. It should be Harvard Medical School.”
    And how exactly do you think someone gets into Harvard and excels; waiting for a race based admission?

  14. I remember reading sometime back that three factors most highly correlated to poverty are (1) no father in the household, (2) mom didn’t finish high school, and (3) mom had children as a teenager, out of wedlock and long before she is able to adequately support them. Before welfare reform, the welfare check increased with each birth further encouraging a cycle of dependency even though working people don’t get a raise just because they have another mouth to feed. While I feel for the kids who are brought into the world under these circumstances, I think their mothers and their absent fathers showed a clear lack of personal responsibility. On the positive side, teenage pregnancy has declined in recent years.
    It is also not helpful when kids, especially in the black community, try to learn so they can go to college one day; their peers often tease them for “acting white” and refuse to be friends with them. This is a cultural problem that I don’t have an answer for. The late New York Senator Daniel Patrick Moynihan, once said that the defining issue in America isn’t race, it’s class. He was referring to the inner city urban underclass and its often self-destructive behavior.
    Regarding those who make their living serving the poor, Ed Koch, who was Mayor of NYC in the 1970’s, often referred to them as “poverty pimps and poveriticians,” an apt description.

  15. bev, I completely agree with what you wrote. Adopting a poor family is not the answer, just like any other charity is not the answer (as I said above – I hate charity). Charity begets degradation and dependency.
    Education must be the answer. But how do you educate when the kids go home to a total disaster? It’s a vicious cycle. Inculcating a culture of self sufficiency sounds good, but how do you do that?
    Whether we like to admit it or not our education system is largely segregated both by race and by class, and that is a huge problem. I have seen the power of mixing kids up in my own school district. It works, but there aren’t too many districts like this one and even ours, to my chagrin, voted recently to discontinue the busing program.
    Maybe it’s too late for the adult generation, but we can change things for the children and it drives me nuts that we are not even trying.
    The alternative to selling drugs shouldn’t be McDonald’s. It should be Harvard Medical School.

  16. Margalit (and Nate);
    Nate has made his point very harshly, but I have also heard it said elsewhere that the well intentioned efforts of “liberals” (again, for lack of a better word) to “help” the poor actually enable a culture of dependency. I think this is part of what he is trying to get at. I kind of experienced that myself as a teenager, when my mother, through our church, “adopted” a poor family (who happened to be white). She took me along for the experience. The difficulty was that for every problem we solved for them, they had another problem to solve. It just seemed to run on and on in an unending cycle and they looked to us to make it all go away. My mother finally gave up in frustration.
    Now one might argue that every single one of those problems was not their fault, but their complete lack of ability or even desire to solve it themselves was an education in itself.
    So I think Nate is saying that somehow we have to “help” by inculcating a culture of self sufficiency, much as Habitat for Humanity tries to do, than to simply give handouts. I don’t disagree with him, although I might disagree with his methods. (:

  17. This would be funny, if it wasn’t so sad, Nate.
    I’m so happy to hear that everybody has the great McDonald’s opportunity open to them. Go tell that to kids in Bell Air. I’m sure they’ll be thrilled with that knowledge.
    I am sure that this sort of rationalization makes a good many conservatives feel very righteous. After all the system is working great. It’s the inherent laziness of the poor that keeps them from an illustrious career at McDonald’s. And it’s Jesse Jackson’s fault that racism is still rampant. If he wouldn’t be talking about it, it wouldn’t be there. And it’s the liberals and the civil rights advocates who created the lack of civil rights. Heck, we wouldn’t have any problems if MLK didn’t bring all that crazy stuff up…. Front of the bus, back of the bus, who cares… a bus is a bus and you’re in the bus and nobody’s making you walk… don’t see a problem here….
    There’s no need to do anything about millions of people who have a better chance to end up dead or in jail by the age of 20, than to land a job at McDonald’s, because it’s all about personal responsibility and it’s their fault that they cannot pull themselves out of that sewer that we created for them over hundreds of years of exploitation and degradation. If a handful of exceptional people can get out on their own, it’s solid proof that all of them should be able to. All we need to do is tell them that they can, right before we drive home to our safe gated community on the other side of the tracks..
    Every little child should have the ability to ignore the crack and the hunger and the neglect and the criminals and the complete disintegration of family units. It’s a matter of personal responsibility and I guess it starts at birth.
    Would you like some fries with that, Nate?

  18. Have you ever read Freakonomics? Levitt spent a considerable amount of time with the gangs analyzing the business of drug dealing, a very common profession in the projects. The vast majority of said drug dealers are making less then minimum wage. Why would they engage in a dangerous and short lived profession for less then they can make at McDonalds. Two reasons, first being they are told repeatedly that and sports are their only way out. Second being told it is all they can do.
    The time it takes to start at the bottom working McDonalds, get promoted to shift manager, then start on a career path is less then it takes to go from runner to drug king pin. The money they would make at McDonalds would also be considerably more during that same time. Its not limited to fast food, construction, lawn care, etc etc, there are tons of entry level jobs open to any poor person willing to make the effort.
    What convinces these kids selling drugs for less then minimum wage is their only option are the same people running around holier then though claiming to represent them and care more about them then everyone else. In their lust for power and money and self righteousness they willing destroy the very lives they claim to want to save so badly. If its not poverty its race, Jessie Jackson and Al Sharpton prove this every time they put together a march. Without racism and poverty those that make their living off it would be out of work, thus they make sure it continues, far more concerned about their job fighting it then actually stopping it.
    The Epilogue also would be very enlightening to your apparent write off of 25% of our future.

  19. “Upwards mobility is a legend nowadays. It didn’t use to be, but there is nowhere to “go west” and “make something of yourself” anymore. The doors, and windows, are shut.”
    Thank you Margalit for clearing showing why liberals are such evil people. It is this exact mentality that enslaved generations of people. If I was a poor kid living in the ghetto and listened to you why would I even try to make my life better, as you clearly pointed out to me I have no chance, I’m a poor victim deprived by circumstance of any chance for a good life.
    Lucky for society some poor kids run into asshole conservatives like me who cruelly tell them the only thing keeping them in the ghetto is their lazy ass not walking itself out. I’ll point out all the people that worked hard and made it out and ask why they think there so F’n special they don’t have to work equally hard. I’ll point out all the opportunities they have to make it out and how they really aren’t more then 1-2 years of hard work from a decent life.
    Unfortunately for society most poor kids don’t live in vacuums and thus get to listen to both sides, yours telling them to accept their place at the bottom and if they show up and vote like you tell them you will throw them some crumbs and mine telling them the only thing keeping them down is themselves and they choose the easy way out, they believe you. Think about that, think about what you said and how true it is, then hopefully be disgusted by it.
    I can name a dozen close friends in Vegas that came from the projects. 50 friends of friends, all living nice middle class or better lifestyles because they worked hard. Everything from cocktail waitresses, dancers on shows, fast food mangers to engineers. Thank god none of them listened to people like you growing up.

  20. Margalit;
    I don’t disagree with your last 2 sentences, but I think we may be talking about different populations. I suspect you largely have the “hard core poor” (for lack of a more charitable term) in mind, whereas I have the employed but un-self-disciplined population. I can think of several examples among my own friends within a few seconds. The latter are much easier to deal with in terms of tax nudges and employer incentives. The poor have many, many problems, of which unhealthy lifestyles are only one. I can’t pretend to have those answers.

  21. bev, I somehow missed your comment earlier. The voice of reason, as usual 🙂
    I don’t disagree with the need to educate people so they change unhealthy lifestyles. On the contrary, I think what the First Lady is doing now, for example, is great and so is the NFL campaign to get kids to exercise. And we can, and should, do much, much more.
    I just think that as long as we have disparities of the magnitude we currently have, some folks are set up to fail from the get go.
    So maybe we should wait a little before wielding the whip. There may be better ways.

  22. Nate, this is a philosophical argument. People are imperfect and people are influenced by their environment.
    There is a huge difference in outcomes between folks that start out in a three bedroom ranch with a tire swing in the backyard and a mom that insists that you eat your veggies and a dad that goes to work everyday to make sure there are veggies on your plate, and folks that start out in a one bedroom hellhole with a mom that on the very best day gives you a dollar to buy some food, but most days you wolf down as much as you can during school lunch because you know there’s nothing else coming until tomorrow.
    When you start out with two strikes against you before you even reach kindergarten, chances are much worse that you will somehow do the right thing. It is of course possible and we all revel in the stories of “The Pursuit of Happyness”. I guess it makes us feel good, but nothing short of heroics is required. They wouldn’t make movies about this if it was a common and very likely occurrence. It isn’t.
    Being born in the projects means that barring unusual circumstances, you will have a miserable life. Being born in suburbia means that barring disaster, you will have at the very least a comfortable existence.
    Upwards mobility is a legend nowadays. It didn’t use to be, but there is nowhere to “go west” and “make something of yourself” anymore. The doors, and windows, are shut.
    As to charity, I hate charity. Strong word, I know, but charity is there to make the givers feel redeemed. You can steal and pillage 364 days a year on Wall Street, but all is well because you served the unwashed on Thanksgiving, not to mention the valuable life lesson you are imparting to your spoiled little brats by making them put down their electronic toys for a couple of hours while “giving back to society”.
    And the receiving “society” although grateful for the meal, is pushed down one more humiliating step towards complete lack of self worth.
    And finally regarding the “right” thing. What is the right thing, and who gets to decide? It’s pretty simple when you discuss binging on Twinkies. How about other things? How about, maybe, being homosexual is not exactly the “right” thing and we should let them all die from AIDS? Been there recently, remember?
    Maybe the right thing is abstaining from sex and alcohol. Maybe the right thing is going to church every day and twice on Sunday. Maybe a particular church….
    I don’t want to go that route again. I know history repeats itself, but that’s one part I have no desire to repeat.

  23. “I don’t believe the reason it “SUDDENLY” exploded is somehow related to an equally sudden deterioration in personal responsibility in the US.”
    We saw the same thing with crack, LSD, Coke, and other drugs, why don’t you believe it with food? All of them are over induligence and living for the pleasure minus the responsibility. You can do a line now and then and be responsibile just as you can eat a twinke now and then and stay thin. When your doing 4-5 a day now you got a problem and you have no one to blame but yourself.
    Joe I’ll have to go back and read the studies but in regards to the last point I thought MRIs were clustered were there was people with the means to pay for MRIs. The old on Medicare, the poor on Medicaid, and those with liberal state legislation or rish Union plans can consume them in masse. Areas with middle to low middle class and low unionization don’t have a third party paying for them so the demand is less and thus fewer of them.
    Barry I would add that our poor live better then most countries middle class. The cost of other life necessities has decreased, rent isn’t much more now then it was 30 years ago, they get more public assistance now then they did in 1980 so they have more to spend on food, usually junk food. Our poor have it better then any other time or place in history and their BMI proves it.
    “More likely it has to do with idiotic subsidies”
    The government will give me $7500 to buy an electric car, yet they still don’t sell. Cleveland would give me a house if I would move into it as would Detroit yet people don’t take it. Humans are very capable of irnoring bribery/subsidies when they don’t offer a good deal. People choose to eat junk food becuase it taste f’n great not becuase it is cheap and they can’t afford anything else. Water is still free at most restruants yet they still drink soda, even with it’s subsidies.
    “Poverty causes people to value quantity over quality,”
    Please have you seen how they dress in the hosuing projects? Have you seen the sneakers and jackets? They prefer quality when it doesn’t matter. Do you know any poor people? I never meet a poor person who ate off the value menu becuase they couldn’t afford to buy healthier food or were more concerned about quantity.
    “and poverty has a very adverse effect on education attainment,”
    Incorrect, education attainment, or lack there of, has a very adverse effect on one’s poverty. The poor kids all rode the same bus to school, some chose to clown around learn nothing and be poor, others kept their head down, learned and got out of the hood and had a good life.
    “it’s not as simple as it looks from the clubhouse,”
    And it isn’t nearly as hard as you dream it is sleeping in the ivory tower. thousands of people rise up from poverty, there struggle proves all your beliefs about poverty limiting education and being forced to eat fast food are wrong. People have options and they choose not to take them, no one is to blame but them.
    I shop at a whole foods in a so so area surrounded by fast food. As I walk in and out of whole foods the line at little ceasers and the other fast food is twice as long as whole foods. Even with the option sitting right next door they don’t make the better choice. Why can’t you accept it is their own fault and caused by decisions they make?
    “we not provide public education or student loans to fat people or that we charge mischievous or lazy kids premiums for education because they lack personal responsibility.
    So how is health care different?”
    but we do deny higher education to those that don’t take advantage of the lower education. Your comapring apples and oranges and wondering why they are different. mischievous or lazy kids aren’t handed good jobs, becuase the penalty matches the crime. The logical penalty for not taking care of yourself is higher charge for the resulting higher cost.
    “It sort of means that one is personally responsible for their health care expenses, no matter how large those expenses become”
    Again it is the misaligned way you look at it. Are you responsible for collecting your plastic bottle, melting it down to pellets, then recasting it into new items? Of course not. Are you expected to work to buy your kids whatever they want no matter how expensive? No. Your are expected to provide a reasonable effort and fulfill your share. That means collecting the bottles so they can be recycled and earning enough to get your kids what they need.
    In healthcare you are expected to take care of your self to minimise the need for healthcare, when you do need healthcare consume it wisely so you don’t waste money, and expected to carry insurance. something like 17 million people are eligible for medicaid and didn’t bother to sign up, that is illresponsible. 10 million could afford to buy insurance and choose not to, that is illresponsible. People take brand name drugs when generics are available, that is illresponsible.
    A person who does all the right things and still gets in trouble is never looked down on. In fact this country has incredible capacity to help those. Churck bake sales, donation accounts. We as a country have always looks out for those that did right and bad things still happened. THe problem is to many people are making the effort to do the right thing to start with.

  24. Nate, I hear what you are saying about demand. Clearly the docs and the medical providers do not create demand out of whole cloth. There is a deep demand out there – in some ways, an infinite demand, in that consumers/patients have heard from friends and on TV about all kinds of medical miracles, but really have no clue how to evaluate what they actually need, what would actually help – and their ability to pay for all this wonderfest is completely disconnected from their need. If you absolutely need a car to get to work, you’ll somehow come up with the cash for one, even if it’s an old beater. But there are no “old beater” mitral valves or MRIs or neuro consultations.
    Your argument that the demand arises from the customers, and the supply is just there to meet that demand does not explain why there is such large variation in supply – and in utilization of that supply – that, according to the Dartmouth studies, does not correlate with anything in the population. Nor does it explain why most of this regional variation shows up in things for which the absolute medical necessity is arguable. If you get a broken leg, it gets set, wherever you are, one per customer. If you have a problem that might get a little more info out of an MRI, whether you get one or not has a lot to do with how many MRIs there are in your town.

  25. “Why should you be able to behave as you want and expect others to pay for it?”
    This is really a key point and as bev M.D. also said, “They get that better in Europe than here.”
    Regarding obesity, it has exploded in the last 30 years or so and isn’t nearly the issue in Europe and Asia that it is in the U.S. The incidence of poverty in 1980 wasn’t much different from what it is today and we had cheap food farm policies then as we do now. The two key differences between now and then, I think, are (1) the huge proliferation of fast food restaurants from McDonalds and Burger King to Dunkin Donuts and Starbuck’s and (2) the significant increase in food portion sizes since 1990 or so. Most people who purchase food in restaurants have no idea how many calories they are consuming, at least outside of NYC. That will change under health reform for restaurants with 20 or more locations and that’s a good thing.
    I also have no problem with incentives and penalties from employer financial incentives to improve health status and participate in Health Risk Assessments to higher taxes on cigarettes, alcohol, soda and other unhealthy food. Conversely, perhaps we should increase subsidies for fruits and vegetables to make them cheaper to the consumer.

  26. I did not say “principally” genetic. There are multiple causes, one of which is genetic. People have different metabolic rates and since we are animals, we tend to eat more when there is more to eat.
    I don’t believe the reason it “SUDDENLY” exploded is somehow related to an equally sudden deterioration in personal responsibility in the US. More likely it has to do with idiotic subsidies for empty calories in this country, coupled with a powerful and sustained marketing campaign.
    Also, unlike Europe or Asia, we built our cities around the assumption that everybody has a car. Nobody here walks to the grocery store, because there is none within walking distance and many streets don’t even have a sidewalk.
    And it is about money. Poverty causes people to value quantity over quality, when it comes to food. It’s the mentality of scarcity. Also, junk food is cheaper and more readily available to the poor. Every poor neighborhood has multiple fast food “restaurants”. How many have a Whole Foods?
    Taking care of yourself is also a function of education, and poverty has a very adverse effect on education attainment, which in turn perpetuates poverty as a generational phenomena.
    Bottom line, it’s not as simple as it looks from the clubhouse, and limiting health care availability by the pound is not going to fix the problem.

  27. Margalit;
    I think the idea of personal responsibility for health is an important one and has been long neglected. I think that if we all agree to share responsibility for helping pay for access to health care for everyone, then we are justified in expecting each other to accept incentives to become more healthy. Sure, some obesity is genetic, and susceptibility to alcoholism also – but that doesn’t mean you HAVE to become fat, or to drink. Take smoking as an example – once the health risks were known of both primary and secondary exposure, peer pressure to not smoke began to take hold along with societal intolerance (e.g. smoke free work environments, etc.) Smoking rates have been on a downward spiral ever since. I see nothing wrong with this. I see nothing wrong with employers incentivizing people to lose weight, control their diabetes, watch their cholesterol, etc. I see nothing wrong with governmental nudges, such as taxes, on fast food as well as cigarettes and alcohol.
    Why should you be able to behave as you want and expect others to pay for it? I can’t think of another example where this happens without some penalty. In education, for instance, we try to help lazy or misbehaving kids but ultimately, if they do not accept the help, they either drop out or are kicked out – for the good of the others trying to learn. The good for everyone is not always equal to the good for the individual – isn’t that what a liberal also believes? They get that better in Europe than here.

  28. If obesity were principally genetic, why did it SUDDENLY explode starting around 1980, and why, when I travel in Europe or Asia, so rarely see it? I think the wealth argument is specious. It is skewed toward lower income folks, but so is cigarette smoking, another public health problem. It isn’t about money, it’s about taking care of yourself.
    It doesn’t matter who you are- if you consume more calories, especially empty calories, than you burn off, you gain weight and, eventually, you’re trapped. Personal decisions play a very large role. I thought Mike Huckabee was very brave in trying to talk about this on the campaign trail, as it was a challenge he faced himself.

  29. I often wonder what personal responsibility has to do with access to health care services.
    Personal responsibility is not something that can be vilified or opposed by anybody, unless of course each side ascribes a different meaning to it.
    In my humble world personal responsibility means teaching my children well, working hard to support them, driving carefully, recycling plastics, saving energy, staying out of debt, obeying laws, paying taxes and respectfully advocating for what I think is right.
    For some reason, it seems to me that when it comes to health care insurance, personal responsibility has acquired a different meaning. It sort of means that one is personally responsible for their health care expenses, no matter how large those expenses become in a profit driven, unregulated and completely devoid of “corporate responsibility” industry.
    The obesity example is a bit flawed. Obesity can be genetic or driven by poverty. Obesity is also at least partially driven by skewed subsidies to unhealthy foods and partially driven by advances in science and technology. But all in all it is a manifestation of human weakness. Very few people choose to be obese. When you’re wealthy and obese, you’re a slob. When you’re poor and obese, you’re irresponsible.
    Of course people should eat less, exercise more, stop smoking, stop drinking excessively (and driving), abstain from promiscuity, watch less TV, be nice to each other and a host of other behavior changes to benefit society as a whole.
    But this desire for humans to become less flawed has very little to do with what social services we provide for individual citizens.
    Nobody is advocating (I hope) that we not provide public education or student loans to fat people or that we charge mischievous or lazy kids premiums for education because they lack personal responsibility.
    So how is health care different?

  30. Hear, hear, tcoyote; well said. although Halto’s Hades predates even me. (:
    And Nate – don’t be so suspicious.

  31. Agree w/core of Joe’s comments about the legislation being warm hearted but soft headed and unbalanced. Perhaps the warm hearted Dems will have enough sense of moral responsibility to cut other things in the federal budget to make room for the huge subsidy costs and Medicaid expansion that are at the core of the bill.
    If they don’t, we’re going to be Greece. We’ll have junk rated public debt, and our dollar will no longer be hard currency, and the middle class the Dems purport to care about will be inflated back into poverty. It’s the day after tomorrow . . .
    The Republicans made a pathetic contribution to the health care debate and continue to do so. They never really believed that there was a problem here.
    But are they EVIL? Sounds like in Maggie’s Kartoon Universe, if we let those nasty Republicans back into power, they’ll be rounding up the cripples, the gypsies and Jews and putting them in camps.
    Personal responsibility is not an ideological issue. It’s a real concern. If we have a right to healthcare, what are the corollary responsibilities that we have as citizens besides paying our taxes? Don’t we also have a responsibility to live healthy lives and minimize the use of a scarce public resource? Or is this all about what we’re entitled to, resources and needless costs be damned?
    Ken Thorpe is no Nazi. He worked for Clinton. He suggested that obesity was responsible for something like a third of our health cost growth in the 20 years 1980-2000. Rather than viewing as a disability, as Maggie seems to, or a character flaw, as she suggests her black hearted cartoon Republican friends do, obesity is a world class public health problem.
    If the legislation was unbalanced, part of the imbalance was a remarkable lack of focus on public health (other than flinging dollars at FQHC’s and fiddling around the edges of serious health manpower problem). Public health used to be a Democratic priority, before the cartoon stuff started. . .
    What a political culture we’re growing (like that green stuff on the meat in our fridge). You’ve got black hats and white hats shouting at one another, and turning off the rest of us hatless taxpayers who just want our society to work better.
    It’s no longer a civil society if it cannot solve problems like this without the devil cropping up in everyone’s rhetoric.
    Back in the 50’s, there was a great Sunday cartoon called Hatlo’s Hades, which was a cartoon Hell to which you could consign annoying people who would live in perpetuity suffering exquisite revenge for all the annoyance they caused the rest of us. Al Franken and Rush Limbaugh, or Maggie and Nate, locked in a tiny room with megaphones and an unlimited supply of mud to sling at one another . . .
    We can only dream.

  32. what is supply side then, can anyone offer up some examples of supply driving demand, solid quantifable examples not they built beds then the beds filled up, thats to chicken and egg.

  33. if you were to play an April’s fool joke on April’s fool calling it not an april’s fool joke wouldn’t that just be like a double april’s fool joke? I’m not buying it, sounds less believeable then Matt going into fly fishing

  34. You know I have to congratulate Nate. I am really learning from his comments lately, absent the gratuitous insults. Anyone’s honest differing political views I can handle. You’ve come a long way, baby. (although I know better than to argue with you so I didn’t pick up your last criticism) And this is not an April Fool’s joke, haha. (:

  35. “When I am working with wellness programs and distributing them how is that demand? I recently started doing some work to set up a clinic for an underserved neighborhood, that is 100% a supply project.”
    Wellness programs keep demand down. The demand (need) for healthcare was already in that community, as you admit (“underserved”), you’re not creating any demand but helping access to services needed but were unable to be accessed. The “supply” side Joe Flower and others were talking about is not giving previously underserved people needing healthcare access to services in a clinic, if that’s what this was. Anyway Nate, I thought you figured people who needed clinics are just lazy no goods who spend their money on cable and cell phones instead of health insurance?

  36. Peter if your going to make snide remarks at least have a clue what your talking about.
    When I am working with wellness programs and distributing them how is that demand? I recently started doing some work to set up a clinic for an underserved neighborhood, that is 100% a supply project.
    My business is controlling supply and demand and making sure the two meet and do it at an affordable cost.

  37. As with all insurance Nate’s business is controlling demand, so that’s all he sees.

  38. I would disagree joe, it was a good argument though. Supply isn’t built without demand, you need someone to loan money to build a sleep center before the supply is available. From personal experience we see these creep or grow like an invasive weed. This is common on not only unnecessary utilization but also fraud.
    Patient 1 tells patient 2 and 3 about the great test, Rx, study, etc they had. Patient 2 tells 2a, 2b, and 2c at the same time 3 tells 3a, 3b, 3c. Its not the supplier out there selling this it is the consumer passing it on.
    Using MRI as an example, exactly how many MRI commercials does the average person see in a year but you pointed out people show up asking for an MRI.
    Look at the investments Pharma and other corps make in work of mouth marketing and social sites.
    I do understand how someone like Maggie who has never actually worked a day in the field might misinterupt the data and think supply is driving demand but overall it just isn’t true. Their are other stronger forces at play here that drive much more cost then availability.
    To fall back on my weak argument of actually dealing with this every day for 18 years versus reading a couple reports and writing a book, we are very aware of employee perception and commiunication when we make changes to health plans. If we write a plan doc wrong and there is some odd loophole that allows employees to get something paid at a level not intended we know from experience, 30 years of it, that the rest of the group will know within weeks. The provider of said loop hole hasn’t told anyone and marketed anything but plan members talk amoungst themselves.
    Before any healthcare can be consumed a member must first show up and lay down their card. If as a healthplan we can prevent that encounter we know we saved money, i.e. all the bogus sleep studies being done 10 years ago.

  39. Hey, a lot of good, interesting, useful comments here. Thanks!
    I’ll just make one comment, to Nate’s comment:
    >> “Conservatives ignore the fact that the supply-side, not the patient, drives over-treatment,”
    > …who hasn’t walked into a doctors appointment and had their physician put a gun to their head and demand they accept treatment they didn’t want.
    Nate uses the time-honored Internet strategy of taking an argument to its absurdist extreme. What Maggie was referring to was the repeated studies by the Dartmouth Group on Healthcare (backed up by other studies from Rand and elsewhere) that show large regional differences (up to 60%) in the cost of health care, without any difference in outcome (or sometimes negative differences – the places that cost more have worse outcomes). These differences do not correlate with socio-economic status, with the education status of the population, average level of presenting acuteness, anything like that. They only correlate with the supply of high-cost medical resources: ICU beds, scanners, specialists.
    So with or without a gun to the head, when there are more ICU beds (5X as many per capita as in others), they get used – yet the docs in the lower-ICU areas do not report a feeling that they have too few. When they are more specialists, they get used more. When there are more scanners, people get more scans – yet per-case, per person, per year, you get no better outcomes.
    In many cases, the patient may be demanding the unnecessary scan, or the unnecessary specialist visit. A doctor was quoted in the NY Times the other day sayig that he had many patients whose presenting complaint was, “I need an MRI.” But in the lower-resourced areas, the primary doc more often is able to say, “That’s not available (or it would take months to get the appointment); meanwhile, let’s see what we can do with the problem.”
    So the healthcare system as currently constituted is an economic anomaly: In a system in which the perceived “health care budget” at the individual level is infinite, supply does indeed drive demand.

  40. I find the delineation of a plan with sequencial next steps to reform healthcare to be useful.. but as Mike Tyson said “everyone has a plan until they get punched in the mouth!”
    The CBO’s scoring of Medicare Part D was off by 40%. Massachusetts has clearly demonstrated that without ongoing subidies form the federal government for the unexpected costs of their healthcare reform plan, the program and the state would have been insolvent. The newly covered residents in the state report huge access problem and are raising the cost curve. Finally what we learned from Mass. is when costs accelerate all promises from the original legislation are off. 7 hospitals are suing the state for underfunding Medicaid and the there is a proposal to impose rate caps on provders and payers
    With all these cool invovative ideas what will happen when a massive number of physicians opt out of Medicare, What will happen when 40% of the hospitals in this country don’t have access to the private bond market and atrophy. What will happen when we see massive out of network battles between health plans and hospitals as the health plans try to recoup the losses imposed on them in the new reform legislation, what will happen when physicians refuse to take ED call unless a hospital pays them huge stipends to stablize their incomes at historical levels.
    The current healthcae debate reminds me of the time someone asked an economics professor how he would escape from an island in the middle the ocean..the economist began ‘well first assume i have a boat’..orderly tweeks to the current reform legislation are interesting but addressing the infinite number of unintended consequenses and massive disequalibrium in the market is where those of us with boots on the ground will be spending our time

  41. This point needed it’s own comment;
    “Think of the bi-partisan Summit: Republicans made it very clear that they would insure 3 million, but not 30 million. It would cost too much.”
    This is the difference between conservatives and Maggie Liberals. The right makes promises they can actually keep. The left will promise you rainbows and unicorns knowing they will never be able to deliver.
    Maggie do you really want to review Obama’s list of broken promises? Is anyone really going to be surprised when the 30 million covered turns into only 15 million yet the cost is still 3 times what they claimed?
    Do we really need to drag out all the liberal claims about what Medicare would accomplish and what it would cost. In fact Maggie, if the Liberal promises in the past 35 years of reform had lived up to half of what they claimed we wouldn’t need this latest round.

  42. Jd, allowing providers to bill what ever they want doesn’t limit plans from paying what ever they want. Scheduled benefit plans have been extremely effective at controlling cost and have a 30year proven track record. I’ll pay $40 for an office visit, I don’t care which doctor you see that is all I pay. The member then takes their $40 benefit and shops for a doctor that will either accept $40 as payment in full or a doctor who charges more then $40 but they are willing to pay the difference for a perceived value.
    In actuality it is the opposite of what you think, as a small player it is actually easier for me to enter the market because I am not forced to have contracts in place that guarantee me a competitive price. My ability to compete is no gauged by how much I pay compare to BUCA instead of how deep of discounts we each have.
    The FSA and HSA changes are great example of the irony in liberal reform think. They require carriers to cover preventive and claim they want to control cost then eliminate the OTC benefit. The reason for the OTC benefit was OTC is a fraction of the cost of prescribed medicine. What the industry found was people would fill an Rx because it was cheaper then buying OTC out of pocket. Common sense prevailed and insurance and tax code allowed for coverage of OTC to save money. Liberals prevailed and there went common sense.
    “They will also shift costs to middle-class patients”
    Unlike ObamaCare which shifted trillions in cost to the middle class? At least the right is honest about it and doesn’t tell you to your face no one making under $250,000 will see their taxes increase then blow your taxes out of the water. The problem isn’t that the middle class doesn’r have skin in the game, after this bill they have more then any time in the past 20 years, the problem is the growing “poor” who have yet another handout with no skin in the game. We have seen what happens when you give poor people unlimited healthcare with no responsibility many times, start with TennCare.
    “Conservatives ignore the fact that the supply-side, not the patient, drives over-treatment,”
    So true Maggie, I mean who hasn’t walked into a doctors appointment and had their physician put a gun to their head and demand they accept treatment they didn’t want. I just can’t figure out why pharma spends billions to advertise drugs when the public has no say in what drugs their doctor forces them to take. Its very easy to tell who has never worked a day in healthcare or studied actual claims data, they make comments like this.
    “Under the guise of “personal responsibility,” Republicans would also penalize the obese”
    Versus Maggies plan to reward them? Hey you gained another 50 pounds the tax payors will reward you with another 20% in healthcare spending to blow. Congrats keep up the good work. We should celebrate unhealthy, they should feel accepted and free to consume as much of the limited pie as they can, pun intended.
    “They’ll start with the obese, then move on to other “character flaws”–depression, etc.”
    Does the propaganda ever stop? This reminds me of all the liberal screaming heads crying at how violent the right is with the death threats after HCR passed but the only person arrested was a liberal Obama supporter. Lets see, who actually goes after those with character flaws, I seem to recall some talk of a soda tax? Didn’t some place outlaw transfat? I think I read something about requiring restaurants to limit their salt use. Who was behind all of those…..oh that’s right Democrats! Good thing your not a journalist Maggie you would spend more time on your corrections then your actual post, that opinion safe harbor is a life saver isn’t it?

  43. Gregg;
    Although our discussion is peripheral to the primary point of this post, I’ll continue it. I am talking about the psychology/politics of the situation and therefore its chances for utlimate success – not its technical feasibility, which I do not contest.
    The clinical docs already see the rads, paths and anesthesia (maybe not ER docs) as second class citizens and/or part of the hospital. In other words, we are “not like them.” (see MD as HELL’s reaction above.) Therefore, they will take no lesson from absorption of the rapers, thinking it could never happen to them. Far better for bundled payments to come out for everyone at once so the psychological and culture change of “we’re all in this together now, so we have to make it work” will hit hard.
    The other disadvantage of doing it your way is that it heralds giving control of the bundled payments to the hospital. This is guaranteed to FAIL since there is little trust between docs and hospital execs (for good reason on both sides.) Some structure must be constructed to share power.
    And last, rads and, increasingly, paths make most of their $$ outside the hospital setting. So strictly as a cost control method, the idea will not do much when restricted to the rapers.

  44. I don’t see any reduction in insurance premiums, but the opposite at the present pace of increases. Those thinking this legislation is “reform” will be very shocked when they are mandated to “shop” for insurance, more so for those not eligible for a subsidy. I’m not even including co-pays and deductibles. The inevitable will be a rate setting board(s), just like those “commie” single-pay countries. But before that happens look for intense protection of income at the expense of those forced to pay.

  45. jd,
    Who is this “we” in your sentence, “we can set global budgets or PMPM rates.”? Set whatever rate you wish. Those who wish to work for that will; those who won’t, won’t. Good luck with that labor gap. Maybe candy-stripers will do primary care.

  46. Fine,
    Bundle me with the RAP docs. They make more than I do, a lot more. I will not be here at 0145 as I am now for chicken feed, so plan on a fight over the naked chicken bone you plan on throwing our way.
    Abortion is not pregnancy reform and this is not healthcare reform. But you have admitted that. This is in no way any reform at all. It is massively overloading the system with new demand with no way to pay for it.
    You lefties have medicalized social problems for decades. This is nothing more than the biggest social program in our soon-to-be-over history. RIP, USA.

  47. I suspect the same, Margalit, with the obvious (to us) qualification that you only need to set procedure-based rates if you have a fee for service payment system. To the extent the US moves to a capitated or salaried system, we can set global budgets or PMPM rates.

  48. I suspect that sooner or later it will have to come to “an organization responsible for reviewing what rates are reasonable and tasked with keeping the growth in check”, no matter what convoluted contortions we apply to the system in the interim.

  49. I’m not sure how the version of a common carrier rule Joe describes would help control costs. If providers still get to set their rates, the real effect of this rule would seem to be to dramatically reduce the market power of large health insurers, and make barriers to market entry for small insurers much lower. Some hospitals and physicians would still be in a position to demand much higher fees than others, and I don’t see how this creates any pressure to reduce growth in rates, let alone reduce rates.
    As far as I’m aware, nations that use common carrier rules to control costs don’t leave it up to the providers to decide what rates they will take. There is an organization responsible for reviewing what rates are reasonable and tasked with keeping the growth in check. Right?

  50. May be off the beaten path per the point of the above post, but, it needs said to reflect the mentality at hand behind health care legislation.
    Obama has now opened up American Coastlines for drilling. He prior increased Afghanistan troop presence since starting office. Is this guy just Bush Jr and blurring the boundaries of the two party system at hand, or is it really just one party, Republocrats?
    And Waxman going after the companies that are trying to shed the burdens of cost this legislation would dump on them? There is no shame, there is no humility, there is no respect for the american public.
    And too many commenters at this site just follow this party per blind faith. Enjoy the cliff up ahead, you foolish lemmings!!!

  51. Hi Bev:
    Totally agree!
    ‘While I favor bundled payments, they have to include the clinicians as well..’
    Absolutely, but why not be proactive and begin the conversations that ‘grease the skids’ for legal/organizational mergers of the hospital based specialties into a cohesive multi-specialty entity vs. the typical single specialty silos we see today?
    Build a culture of ‘patients first’ collaboration and coordinated inter-dependency, and business processes specific to bundled payment risk assumption, and ‘equitable’ internal distribution (and yes, I get this will be a material challenge for many), is a more likely outcome. But aren’t these the financial incentives outlined in the Bill for demonstration purposes? If so, why not lead imaginatively, but firmly grounded in legal fact and business savvy?
    A merged HBP entity will be in a much stronger negotiating position with hospital administration; since a legal and clinically integrated entity, will likely remain a ‘safe harbor’ from potential anti-trust claims.

  52. Joe–
    I truly enjoyed reading this post– excellent information that clarifies the issues. Thank you.
    Just one comment– First, you write: “So the political difficulty is quite real. But the pain felt by the public is also quite real, and will become more real and obvious as the months go by.”
    I totally agree. It will become more and more apparent to everyone that we can’t let the nation’s health care bill continue to grow as a % of GDP.
    You go on to say: “What if the Republicans regain power? What if the Democrats lose their majority in the House or the Senate, or lose the White House? That is not really a problem for this scenario: The underlying forces are so great that whoever is in power will have to at least appear to be doing something about the cost of healthcare. The Republicans will frame it as fixing the mess the Democrats made.”
    Here I’m afraid I disagree. If Republicans regain power this will be a problem. (Here I’m talking about tthe conservative Republicans who now control the national party as well as primaries.) If the Republicans take over, they will “fix the mess,” first, by cutting dollars for Medicaid and SCHIP, making it more difficult for the poor to gain access to care.
    They will also shift costs to middle-class patients, so that they have “skin in the game.” Conservatives argue that this will ensure that patients don’t “over-consume” health care.
    Conservatives ignore the fact that the supply-side, not the patient, drives over-treatment, especially in the case of high-cost services: unncessary surgeries, unnecessary hospitalizations, futile chemo, dying in an ICU . . . But I’m sure you know the list.
    Under the guise of “personal responsibility,” Republicans would also penalize the obese (thus peanlizing many poor patients as well as people from other cultures where beauty is perceived differently, and where high-carb cheap foods (beans,etc.) stand the center of the ethnic cuisine
    They’ll start with the obese, then move on to other “character flaws”–depression, etc. (“First they came for the obese, then they came for the depressed, then they came for AIDS patients . . . “)
    This is why we must move as quickly as possible to show that progressive reforms can and will reduce costs while lifting quality.
    The good news is that Obama, Pelosi, Reid managed to pass health care legislation. The conservatives didn’t manage to “break Obama.” This means that, at this point in time, he has a good shot at a second term.
    I’m also hopeful that Medicare’s pilot projects and medical professionals on the ground will begin to rein in health care spending during his first term.
    (See http://www.IHI.org –“How Do They Do That” on communities that have succeeded.)
    But the Obama administration is going to need that second term to really demonstrate that we don’t need to ration care by income in order to rein in the nation’s spiralling health care bill.
    If the Republicans drive him out, they will, as Atul Gawande says in the April 5 New Yorker “gut” health care reform.
    Conservatives really don’t believe that everyone has a right to health care–or that a civilized society has an obligation to provide care for all.
    Think of the bi-partisan Summit: Republicans made it very clear that they would insure 3 million, but not 30 million. It would cost too much.

  53. Gregg;
    As a former “raper” (pathologist) I can say the rapers are already seen and used as fair game by many hospitals, with what amounts either to salaried employment or extorted huge “donations” for capital projects. Handled badly, it could also just send the rapers outside the hospital. While I favor bundled payments, they have to include the clinicians as well as the rapers to incent the docs who are not already tied to the hospital by a contract as the rapers are. Right now those docs are not at all aligned with the hospitals incentive-wise. And somehow the power of the bundled payment has to be shared between the hospital and physicians, not just $$-wise but in who controls the measures taken to control costs. Giving this power to the hospital administrators alone will not only nail the docs, but ultimately hurt patients. I have not yet figured out how this power-sharing should work.

  54. Good thoughts on how to cut costs. Had real cost-cutting measures been more of a focus than insurance reform in this round, the heated debate may have played out more amicably. IMO the Dems are making a big mistake by fighting flexible spending accounts, since a system where the users of healthcare face some degree of economic scarcity would incent providers to provide more cost transparency.

  55. Joe:
    Nice piece! My term for the ‘pimp my ride’ phenomenon is an industry with ‘whack-a-mole DNA’. Different image, same dynamics.
    On the ‘mandated bundling’ notion; I say amen brother, offering some perspective on the ‘RAPERs’, perhaps more affectionately referred to as ‘HBPs’, i.e., the traditional complement of ‘hospital based physicians’ – radiology, anesthesiology, pathology, and emergency room (department) docs, as bundling (aka collaborative) candidates. See: http://2healthguru.wordpress.com/2010/02/03/bundled-payment-lets-start-with-the-rapers/
    Clearly we’re witnessing a ‘managed care 2.0’ opportunity. The key question is at 18% of GDP, coupled with the ‘diminishing returns’ of comprehensive health benefits plans (to wit the individual market naively aspires), 25 million under-insured Americans, arguably 46 million uninsured, and the rather anemic market penetration of consumer directed health plans/HSAs, will it be different this time? Might we be at or near the assumed ‘tipping point’ where Government steps in and spanks the private sector with a ‘you had your run, now it’s our turn..’ message?
    Judging by the outcome of health reform, we’re not quite ready for universal coverage via a single payor or even Swiss model derivative with multiple payors albeit of the ‘non-profit and public utility’ variety.
    None-the-less, it’s gonna be ‘interesting’. Certainly health lawyers and strategy consultants should have a pretty bullish next couple of years.

  56. Astute article but a few questions and problems I see:
    1) Would it really be beneficial if congress could just throw out all authority of an independent medicare payment board. Say we have a Congress that is made up of individuals that really don’t want any more governmental control, do we really want to make it easier for them to reverse all progress in relation to medicare payments? And, I’m assuming Mr. Flower agrees the current IPAB is good enough, just the congressional voting procedure is flawed, though I think more clarification would have been nice.
    2) I don’t see how his CRE procedure has any teeth, especially considering his statement that no stakeholders want to cut costs, which seems a bit exaggerated. If it is true that no providers think there is waste in the system, how would new research telling them there is waste solve anything? Furthermore, I feel he’s making the old mistake of mislabeling CRE as being done in relation to cost-effectiveness. There are contentious debates regarding how to include costs into CRE research. The “purists” wanting CRE to just look at benefits of one treatment vs another, whereas “budget hawks” wanting CRE to just be a new form of cost-benefit analysis. But to conflate one with the other, as a matter of fact seems a bit problematic.
    Other than those I think he’s spot on, regional bidding has been one of the things I was most disappointed was changed in the reconciliation process. And a medical court system seems like a good middle ground for liberal and conservative differences on tort issues.