Economics

Talmudic-Like Studies of Republican Health Reform Ideas

After doing Talmudic-like studies of the doctrines on health reform promulgated by Republican health-policy makers and the conservative economists who inspired them during the past two decades, I am devastated to discover that all of those studies have been for naught. We are now told, sometimes by the same prophets of yore, that these doctrines were not only wrong, but outright heretical, which in this context means un-American.

New doctrines are rumored to be in the making, but the first word on them has yet to be committed to new, sacred tablets, mainly because there have not yet emerged any new ideas worth committing to tablets.

Do not take my word for it. Newt Gingrich, one of the Grand Old Party’s aging prophets, said so himself in his recent speech to the Republican National Committee.

Comes now conservative commentator John R. Graham of the Pacific Research Institute, telling us that Republicans seem lost in the desert even in their hit-and-run insurgency against their sworn enemy, the Affordable Care Act of 2010 (ACA).

What is a befuddled immigrant to the United States like me, eagerly trying to become a right thinking American, to make of it all?

My early introduction to the texts coming from conservative thinking on health reform was the Heritage Plan of 1989, Viewed through the prism of the ACA of 2010, its language seems eerily familiar. One provision, for example, proposed a:

“[m]andate all households to obtain adequate insurance. Many states now require passengers in automobiles to wear seatbelts for their own protection. Many others require anybody driving a car to have liability insurance. But neither the federal government nor any state requires all households to protect themselves from the potentially catastrophic costs of a serious accident or illness. Under the Heritage plan, there would be such a requirement” (p.5).

The Heritage Plan also called for income-related, refundable tax credits toward the purchase of private health insurance. Although it did not call for community rated premiums, it proposed means-tested public subsidies and toward high out-of-pocket expenses of individuals and families. It did not spell out the daunting administrative apparatus that would entail. But one can imagine the required new bureaucratic apparatus, replete with auditors to prevent fraud and abuse. Presumably, income-related subsidies would have involved the Internal Revenue Service (IRS) in some ways as well.

Next came a text put forth by conservative economist Mark V. Pauly and like-minded colleagues in Health Affairs. It is worth a reading again. Here’s the core of these prophets’ proposal:

“In our scheme, every person would be required to obtain basic coverage, through either an individual or a family insurance plan. …All basic plans would be required to cover specified health services; plans could, however, offer more generous benefits or supplemental policies. The maximum out-of-pocket expense (stop-loss) permitted would be geared to income, with more complete coverage required for lower-income people, to ensure that no one faced the risk of out-of-pocket expenses that were catastrophic, given their income.” Again, lots of government intrusion into health care, along with links to the IRS.

There then followed a real life health bill based on these ideas, the late Republican John Chafee’s antidote to the emerging Clinton plan. It was called the “Health Equity and Access Reform Today Act of 1993” and had an impressively long list of Republican co-sponsors, among them Senator’s Orrin Hatch (R-Utah) and Charles Grassley (R-Iowa), now fierce opponents of the ACA. As the folks at the Kaiser Family Foundation have shown, many of its provisions of Chafee’s bill have a striking similarity to provisions in the ACA of 2010 and comparing.


I know from personal conversations with former Congressman Bill Thomas (R-California) that in the late 1990s he and his colleague James McCrery (R-Louisiana), both of the House Ways and Means Committee, had crafted in the late 1990s a bill encouraging the gradual replacement of employment-based health insurance with individually purchased insurance. Apparently it could not be sold to the incoming Bush Administration, probably because it called for a slew of new regulations of the health insurance industry and the bill called for more federal money than the much smaller amounts that Bush Administration was willing to spend on expanding health insurance. Although a copy of the draft bill is not publicly available, I would bet that it continued the design parameters typically proposed by Republicans in the 1990s and incorporated in the ACA of 2010.

As late as 2003, Stuart Butler of the Heritage Foundation testified before Congress on health reform. In it he noted that

“Today there is a legal and moral obligation on society to provide some level of health care to those who become ill,” adding “It is also reasonable to expect residents of the society who can do so to contribute an appropriate amount to their own health care. This translates into a requirement on individuals to enroll themselves and their dependents in at least a basic health plan — one that at the minimum should protect the rest of society from large and unexpected medical costs incurred by the family. And as any social contract, there would also be an obligation on society. To the extent that the family cannot reasonably afford reasonable basic coverage, the rest of society, via government, should take responsibility for financing that minimum coverage.”

Finally, as late as May 2009 Republican Senator Tom Coburn (R-Oklahoma), a physician, threw into the legislative hopper Senate Bill S.1099, “The Patient’s Choice Act”. It had seven Republican co-sponsors. Evidently it was hastily composed, presumably as an antidote to the then brewing ACA as a platform from which Republicans could negotiate with Democrats.

Coburn’s bill calls for a benefit package like that given to Members of Congress, state-based health insurance exchanges based on some European models (Switzerland and the Netherlands), auto-enrollment into health plans with a chance to opt out, guaranteed issue, and so forth (see Expanded Summary of the bill here and here). I had commented on that bill in The New York Times in 2010, noting how the bill slouched towards the Affordable Care Act. The insurance exchanges called for in S.1099 all would have to have interfaced with the IRS, with the state Medicaid plans, and with employers – certainly small employers – just as do the exchanges under the ACA –roughly the same bureaucratic infrastructure.

So what are we to make of the spectacle of Republican anti-Obamacare insurgents, busily fielding hit-and-run attacks against sections of the very sacred tracts that their own prophets had promulgated as principles during the past 20 years? On what principles, new or old, are these hit-and-run raids conducted?

The amazing spectacle put on by this insurgency, however, can explain why Republicans now come across as nomadic tribe lost in the intellectual desert on this issue, as is being argued by Newt Gingrich, and also why now even their hit-and-run raids pick on the wrong targets, as John Graham argues. It seems that, like most insurgencies, this one knows what it is against but not what it stands for.

But history tells us that there is always hope. Eons ago the twelve tribes of Israel, under the leadership of Moses, reportedly were lost in the Sinai desert, in a random walkabout of some 40 years. A possibly apocryphal rumor has it that eventually an exasperated Mrs. Moses stamped her besandaled foot in the sand and shouted “I have had it with your leadership, Moses! I’m going to ask for directions.” And so she did, and so they got to the promised land.

Perhaps some day someone in the Republican Party will ask for coherent, principled directions on health policy – and this time follow these directions. Perhaps.

Uwe Reinhardt is recognized as one of the nation’s leading authorities on health care economics and the James Madison Professor of Political Economy at Princeton University. He is a regular contributor to The New York Times Economix Blog.

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John RiggsConradBob HertzBarry CarolJohn Ballard Recent comment authors
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Uwe Reinhardt
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Uwe Reinhardt

Je vous en prie!

Uwe

Barry Carol
Guest
Barry Carol

Bob – Not long after the Medicare Catastrophic Act passed in 1988, a large group of seniors literally mobbed then House Ways and Means Committee Chairman Dan Rostenkowski’s car in Chicago. Shortly after that, the legislation was repealed. Seniors balked at the income tax surcharge as the financing mechanism. This is all too typical of Americans who want entitlement benefits but they expect someone else to pay for them. This is just another example of why I get upset when liberals try to create the impression that we just need to soak the top 5% of the income distribution and… Read more »

legacyflyer
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legacyflyer

“Don’t tax you, don’t tax me, Tax that fellow behind the tree”

R. Long

Bob Hertz
Guest
Bob Hertz

I just finished Paul Starr’s excellent book ‘Remedy and Reaction’.

The political history of health reform is even more convoluted than I knew.

Richard Nixon proposed an employer mandate in 1972.

Russell Long of LA proposed national catastrophic insurance in 1974.

The Medicare Catastrophic Act of 1989 called for a monthly premium to seniors of $4.92 plus an income tax surcharge topping off at $2,100 per couple.

This country is a lot more new-tax-phobic than I thought before reading this book.

John Ballard)
Guest

Thanks for the review. After Starr’s big classic (Social Transformation of American Medicine) I have been reluctant to try another. Sounds like this is more digestible. I may give it a try.
http://www.abebooks.com/servlet/SearchResults?an=paul+starr&sts=t&tn=remedy+and+reaction

Conrad
Guest
Conrad

Uwe, making a living inside the walls of academia…. Never to know the mechanics of the real world… Ah, these “intellectuals”. “renowned researchers”. The only difference they have made is to screw the system up even more in the last 40 years. To show you how dishonest Uwe is, think about this. He blames Republicans because they had control more years. So, he assumes correlation. He assumes cause-effect from timeframes. WOW!! TALK ABOUT Not even allowed to pass a freshman course with such blanket correlation. Disgusting…. Yet he is an expert for on healthcare policy. One of nation’s best. Total… Read more »

Peter1
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Peter1

“These losers are driving the process.”

What process?

Barry Carol
Guest
Barry Carol

John Ballard – First, like Legacy Flyer, I don’t have a lot of respect for the Republicans either when it comes to healthcare policy, at least since about 2003. The only decent idea that they’ve offered that didn’t make it into the ACA is tort reform. Selling insurance across state lines would just drive a regulatory race to the bottom. Guaranteed issue without a mandate for people to buy insurance or for employers to provide it (the Nixon approach) can’t work because of inevitable adverse selection. I’m a strong supporter of IPAB conceptually but it will have its hands tied… Read more »

John Ballard)
Guest

Barry Carol, thanks for this. Sorry for getting defensive. It comes from growing up Liberal in the South. We are in broad agreement with most issues, and I agree with your mention of tort reform, a buzzword that needs a response. The popular “trial lawyers” trope gets trotted out repeatedly and the sooner we get safe harbor courts into the system the sooner that pesky matter will be put to bed. But related to that is a larger problem of “defensive medicine” which I believe is bigger than a fear of litigation. My gut feeling is that doctors over-treat and… Read more »

Bob Hertz
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Bob Hertz

Barry’s comment reminds me of a truism I read some years ago, I think the author was Louis Sullivan……. and it was something like this: “Pick out low cost, high quality, and fast access…….you can only have two of these, never all of them.” I was fascinated by Dr Reinhardt’s remark that the Democrats are paying dearly for trying to finance the ACA, unlike the 2003 Republicans who basically put the MMA act on the national credit card. Makes me wonder, would the Democrats be in worse trouble if they had just raised income and payroll taxes on any one… Read more »

Aurthur
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Aurthur

“Maybe”? Enough Senators that voted for The Act made public statements that they would not vote for it included levying taxes (particularly on the middle class). Senate went to extreme lengths to conceal the tax aspects of the bill they bastardized to get their 60 votes.

http://www.youtube.com/watch?feature=player_embedded&v=GbauqbkzeEw#

legacyflyer
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legacyflyer

Barry,

Agreed and probably put more clearly and eloquently than I did.

And please note that Bush and the Republicans (theoretically known for their business acumen) put forth an addition to Medicare that didn’t require Medicare to buy generic drugs, but instead required the government to pay “top dollar”. Gee, what a great idea – Medicare costs are unsustainable, but we add an expensive drug program on top of it.

It was at that point that I lost all respect for Republican Health Care Policy – what little I had. How do you spell PANDERING?

Barry Carol
Guest
Barry Carol

The rank ordering of medical services, tests and procedures that Oregon attempted a number of years back recognized that resources are finite and somebody has to say no, we can’t give everything to everyone. Numerous other countries that spend between 9% and 11% of GDP on healthcare implicitly made a political decision about how much healthcare each society can afford. It doesn’t necessarily square with how much healthcare people might need or want. We could lower healthcare prices in the U.S. if Congress could stand up to lobbyists and allow Medicare to specifically take costs into account in deciding what… Read more »

John Ballard
Guest

Ahem. I’m one liberal who doesn’t think that all we have to do is keep raising taxes on the top 1% or 5% of the income distribution and we can sustain the current system. And I don’t think I am an outlier. In terms of taxes, it is plain that the system which has crept into use over the last twenty or thirty years has torpedoed any real meaning to the notion of progressive taxation. Whatever the reasons (and they are many), new wealth has been and continues to flow overwhelmingly to the top quintile of the population. The arithmetic… Read more »

Dr. Rick Lippin
Guest
Dr. Rick Lippin

Thanks Vik Khanna for your above comments-AMEN to you! We are spinning our wheels in the mud going realy nowhere on Health Care reform and other pressing matters unless we address these systemic problems that you have identified and with which I fully concur.

I wouldn’t have singled out one Congressman or Senator- They are ALL stuck in a system of there own making at worst or complicity at best. I would also sadly include the White House.

Dr. Rick Lippin
Southampton,Pa

LegacyFlyer
Guest
LegacyFlyer

Barry Carol, Thanks for the (limited) support. My support for a single payor system may not be for what some would call a true single payor system. Basically, I believe that every American should have some kind of basic healthcare available. But, I do not believe we can afford to give “Cadillac” health care to everyone. I support some kind of single payor or Medicaid for all, but this would not cover everything. However, I do not think we can force all healthcare to exist within this framework – like the Canadians have. So I would propose that this be… Read more »

John Ballard)
Guest

Your mention of Oregon is worth underscoring. The famous but quickly forgotten “Oregon experiment” which happened when the state ran out of funding for Medicaid and awarded Medicaid randomly via a lottery. The result was an ideal control group and another experimental group which could be compared for efficacy of Medicaid. NEJM was dry but clear: This randomized, controlled study showed that Medicaid coverage generated no significant improvements in measured physical health outcomes in the first 2 years, but it did increase use of health care services, raise rates of diabetes detection and management, lower rates of depression, and reduce… Read more »

legacyflyer
Guest
legacyflyer

That was actually not the Oregon experiment I was referring to.

Nevertheless, an interesting piece of information in its own right.

Barry Carol
Guest
Barry Carol

Perhaps Dr. Reinhardt can tell us how patient expectations and the inclination to sue in the event of a bad outcome or the failure to diagnose a patient’s disease or condition differ between the U.S. and Western Europe / Canada / Japan. Defensive medicine pervades the medical culture in the U.S. but its financial impact is impossible to quantify with any precision because perceived patient expectations and, to a significant degree, financial incentives also influence doctors’ decisions to order tests and perform procedures. I think Democrats may have been able to pick up some Republican support for the ACA is… Read more »

John Ballard
Guest

This discussion has become a circular argument. No one has mentioned that Medicare does not “ration” drugs or treatments, it only determines how much it will reimburse for such. All that is being “rationed” is tax money, and even that is officially only for 80% of the charges (note — charges are not the same as costs). Medicaid actually rations treatments but here again it is a mechanism for stewarding tax money. And until physician payments finally become the same for Medicare and Medicaid — a first step in making the administration of care more equitable, as well as making… Read more »

Bobby Gladd
Guest

Wish TCHB comments had a “Like” button.

(And comment editing functionality.)

Michael Millenson
Guest

Uwe, as I write in my Forbes.com post just posted on THCB, Obamacare is almost identical to proposals made by the American Medical Association under the Nixon administration to avoid the dread socialized medicine of “single payer” favored by those noted communist sympathizers, the Kennedys. Meanwhile, there’s a Talmudic solution for your puzzlement. There is a famous Talmudic story about Moses being given the chance by God to see a class on the Torah taught far in the future by a great sage. Moses felt bad because he didn’t understand any of what was being taught — until the teacher… Read more »

Dr. Rick Lippin
Guest
Dr. Rick Lippin

All is trivial unless we get real campaign finance reform

Dr. Rick Lippin
Southampton, Pa

Vik Khanna
Guest

Amen, Rick. Campaign finance reform is critical, as are redistricting, term limits, and transparency about how government operates. Every single Rep’s or Senator’s schedule should be up on the web daily, as well as spending by their offices.

These arrogant, thoughtless (see, for example, Elijah Cummings of MD) people live gold-plated lives and slip easily into believing that they are simply above it all and have no need to answer for how they spend what is really OUR time and money.

Aurthur
Guest
Aurthur

Dear Befuddled Immigrant (btw, not even the snarky and chauvinistic French had the disingenuousness and gall to use the term “befuddled” on the Statue of Liberty), Since you have requested guidance on right thinking Americanism, please note Americans, historically, do not abide well any authority (particularly illegitimate) dictating how they will behave. While there are obvious and well documented problems with “The Act” aka PPACA, it is the lawless manner in which it was proposed, adjudicated, and now being implemented by this administration that invalidates everything else associated with it. The Act does not lawfully allow subsidies in federally established… Read more »

Peter1
Guest
Peter1

“it is the lawless manner in which it was proposed”

Take it up with the Supreme Court.

Aurthur
Guest
Aurthur

Actually, The Act that was upheld by SCOTUS was not the same as the law that was passed by congress and signed by the POTUS.

Peter1
Guest
Peter1

“the law that was passed by congress and signed by the POTUS.”

First it’s “lawless”, then it’s the “law” passed by Congress and signed by Obama. I see nothing “lawless” about the system of government the founders created.

You’ll need to win an election to get rid of Obamacare – you know, the legal way. But maybe that’s too much to ask.

John R. Graham
Guest

I’d go further and say that the “law” being implemented in 2013 is neither the one signed in 2010 nor as amended by SCOTUS in 2012, in important ways (e.g. employer-mandate delay).

Aurthur
Guest
Aurthur

I suggest it is not trivial to add that none of the legislation passed by congress, signed by president, or, “amended” by supreme court, legally allows the irs to unilaterally decide there will be subsidies in federally established exchanges (in direct violation of the wording and intent of the bill passed). Since the irs’s illegally fabricated subsidies will trigger penalties/taxes to employers to the tune of $700 billion, I do not consider this unconstitutional implementation of The Act to be splitting hairs.

Bobby Gladd
Guest

“the lawless manner in which it was proposed, adjudicated, and now being implemented by this administration”
__

Y’see, when I don’t get MY way, it’s “lawless.”

I thought it was now a “law,” One upheld by SCOTUS (also part of the “law” system). Silly me.

Aurthur
Guest
Aurthur

Same response. I call it The Act because it is not the law that was passed.

Bobby Gladd
Guest

Seek help.