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POLICY: NCPA–the Manchurian think-tank?

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Most people think that John Goodman’s shop NCPA is made up of libertarians and conservatives—and their leaders and their donors apparently hope so. That’s what one of their number told me at the Vegas conference this week, where true to form they were all desperately pushing HSAs.

And they seem to mean it. After all they fired one of their number (Bruce Bartlett) because he criticized W for not being a real conservative and apparently because a donor was going to pull $100K in funding if he wasn’t canned!. By the way, a gig at NCPA isn’t a bad one to have. Apparently Bartlett was getting $172K a year, and between Goodman and his wife who also works there are on well north of $600K!

So I was a little bemused when my editor at Spot-on, Chris Nolan, got a blast email from them last week. See, Chris is a professional and she changed whatever wonky title I cam up with. now the article was called Risky Business: Bush’s Health Plan and it became the second highest rated story in Google News when you searched on “Bush’s health plan”. She’s smart that Nolan woman!  There were over 6,000 pageviews of that article alone. Apparently enough to stun NCPA into action. Chris got this email:

From: "Kelley Tway"Date: January 25, 2007 12:46:34 PM PST
To: cn****@*****on.com

Subject: Response to critics of Bush health plan
            

Almost immediately after President Bush announced his health care initiative critics in the media and on Capital Hill objected to the standard tax deduction, arguing it will lead to an erosion of employer-based health care as employees, particularly healthy employees, will be lured out of their employer-based coverage to seek coverage in the individual market.
            

The belief that employees would choose an individual, private health plan over their employer-provided coverage indicates a misunderstanding of how employer plans work. All employers pay at least one-half of the health plan premiums – most pay about two-thirds. So a group plan would have to be incredibly wasteful (i.e. expensive) for an individual plan to look more attractive than their employer’s coverage. With a level tax playing field, the employer still pays at the very least half of the premium, while an employee would pay 100% of the premium for an individual plan. So, which is the more attractive option?
 
            

The standard tax deduction simply makes insurance more affordable for those who don’t receive insurance through an employer.
 
            

Please let us know if you have any question about this or would like a response to any other criticism of the Bush health plan.
 

Kelley Tway
Media Relations Coordinator,Health Care
National Center for Policy Analysis
972-308-6488
ke*********@**pa.org 
 

or
 
Sean Tuffnell
Director of Communications

National Center for Policy Analysis972-308-6481
Se***********@**pa.org
 

I must admit I thought that was pretty funny. So I dashed off this quick reply to communications honcho Kelley Tway:
   

KelleyDon’t be scared–you can email me directly. I don’t bite, well not that hard.
    
    As to your "employers will pay for health insurance" line. It’s just not true given that virtually all employer based plans are relatively generous & expensive–especially compared to the individual market.
    
   

Where in the proposal does it say that employers have to pay for health insurance for employees? Nowhere of course. That would be "pay or play"–something only lefty Democrats like Arnie and Mitt Romney think is a good idea. If you make it attractive for employees to forgo their presumed current $7500 worth of employer-provided plan, ask for a small cash raise, take the deduction, and to leave the employer plan–then why won’t they do it? That’s what $7,500 deduction means when a 25 year old can buy a HDHP in California for well under $1,500 a year. Have you guys stopped believing in market forces?

If not it’s disingenuous to think that this proposal won’t make younger and healthier people leave employer based insurance.
  And if enough of them do it, of course that will eventually put the employer insurance plans in the same spot that the rest of the cream-skimmer underwriters whom you guys so ardently support (and who fund you) have put the individual insurance market–screwed.
    
    But like you I believe that we shouldn’t have an employer-based insurance market. But don’t worry, with reforms like this, the complete pissing-off of the middle class is closer and so is the consequent Medicare for all/single payer plan. Obviously you guys are keen to see that–as it’s the logical outcomes of your policies!
  — Matthew Holt

I haven’t heard back yet, of course.  Despite the fact that they were inviting “questions”.

But was I wrong? Perhaps I hadn’t delved into the mire of the proposal enough? If so I’m clearly not the only one. Because that very next day the organ of the Republican right the WSJ ran a piece called Bush Health Plan Shifts Onus to the Consumer which included this little nugget:

At a White House briefing on Tuesday, Joel Kaplan, deputy chief of staff for policy, acknowledged that the proposal could accelerate the trend of employers dropping insurance, but emphasized that workers left without coverage would, thanks to the new tax deduction, have the means to "buy insurance in the individual market in a way that they can’t now."

Really, who is NCPA trying to kid when it suggests that it’s not interested in promoting people buying individual insurance in a fully underwritten market. And given the state of the individual market that they want to introduce consumers into (more of that anon via some interested digging Don McCanne’s been doing), they’re just going to create more and more pissed off consumers—of the age and socio-economic status where an extension of Medicare will be a very appealing vote-getter.
So you’ve got to assume, that must be what they actually want? In which case I can see the movie now. Starring Frank Sinatra or maybe Denzel Washington as John Goodman, it’s The Manchurian Think-Tank!

POLICY/POLITICS: Bush’s Health Plan

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Bush_table
I’m up over at Spot-on discussing the basics of Bush’s Health Plan. Go read and return to comment.


I was awakened during my slumber through the State of the Union by a
mention from President George Bush of a health care proposal that I
almost agreed with.


No, I haven’t come around on health savings accounts, and association health plans.
Nor did I join the Republicans in their standing ovation for
malpractice reform. The Bush proposal that woke me up was the creating
a tax deduction for health insurance that would apply to everyone.
Potentially this really matters, and inside it is the germ of the right
idea. But I guarantee you that most Americans won’t have a clue where
this came from, and why it made it into the president’s speech.

Let me explain a little. Health insurance for the vast majority
of Americans (60%+) comes from their employers. 99.9% of Americans
think that this is a natural relationship that costs them nothing and
they, in general, have no idea what it costs their employer. This is
though a historical accident, with its roots in a wage freeze policy
during WWII when employers added benefits to attract workers because
they couldn’t raise pay rates. The idea became fixed after the Supreme
Court ruled that health benefits didn’t count as taxable income.


So, today, you’re better off getting insurance paid for by your
employer than taking the cash, getting taxed and buying the same
insurance yourself. Lately self-employed people have also been able to
deduct their health insurance costs so the only saps left paying for
health insurance with post-tax dollars are those who are not
self-employed, don’t get it from their insurers and actually buy it
themselves.


You may think that’s not very fair, and you’d be right. Which is why Bush’s proposal is interesting.Go on, Continue …

POLITICS: Obama seems to be coming at Clinton from the left

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Rt_obama_070116_sp_1
Although he’s regarded as a sell-out by Harpers, Obama seems to be taking the sensible tack that Hillary Rodham Clinton won’t survive the Democratic primaries based on her pro-Iraq war vote and her incrementalist health care strategy. Today he called for universal care by the end of the next Presidential term.

The AP report seems to think that makes him the same as Hillary and Dennis Kucinich. That’s just ignorance of the press. Clinton has been explicit about doing this incrementally and Kucinich has been explicit about wanting single payer. Obama is, my guess, too smart to lay out any specifics. But an incremental reduction over 10 years in the uninsured rate (as AHIP favors, for example) is not the same as universal insurance by 2010.

PHARMA/PHYSICIANS: Big joke-Free CME: Pharmed out doesn’t impress The Industry Veteran

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THCB regulars will be missing the delicate tones of The Industry Veteran. But never fear, he’s back and none the less caustic for his lay-off from these hallowed electrons. Here’s his take on the new CME for doctors.

No doubt you saw this article in the Washington Postdescribing the efforts of PharmedOut to make no-cost, continuing medical education sessions available to physicians.  As pharmaceutical companies sponsor a large proportion of CME sessions for physicians, the ostensible purpose of PharmedOut’s campaign lies in removing Pharma’s undue influence on prescribing behavior.It seems PharmedOut.org was created through a $21 million grant from Warner-Lambert (now Pfizer).  The money represents part of Pfizer’s 2004 settlement of the whistle-blower suit involving W-L’s off-label promotion for Neurontin.

Now it’s inevitable that if pharmaceuticals are discovered and distributed through a competitive market and a gatekeeper system, the competitors will try to influence the decision makers and compromise the latter’s fiduciary responsibilities in the process.  Is it too simple to suggest, however, that regulation should remove CME as a means for undue influence over prescribing by making the damn physicians pay their own way?  Do any of the influentials who peruse THCB see a sick absurdity in the fact that physicians need to receive their CME free if they are to remain current?  I’m not aware of settlement grants going for the continuing professional education of lawyers, accountants, or other self-employed professionals.  Instead of using that $21 million to pay for health care programs for the indigent, someone thought it a good idea for six-figure physicians to receive free CME. I’ll wager a used examination glove that physicians will irrationally offer more resistance to paying for their own CME than to many other things that have a far larger impact on their wallets.  The reason is their sense of entitlement. The boys and girls who cloak their black souls in white gowns feel they’ve worked so hard and “sacrificed their 20s” (as one cardiologist told me), that society owes them and should cover their CME.I’ll say it again.  At some point genuine health care reform will require breaking the power of organized medicine, making the profession overwhelming female, and reducing it to the status of government paid professionals akin to school teachers.  Until then, efforts to control cost, increase access and improve quality will have marginal results at best.

POLICY/PHARMA/HEALTH PLANS: Michael Cannon doesn’t understand market incentives

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Michael Cannon (sensible libertarian, Cato Institute) has noted that Those Who Sell Out Will Eventually Be Punished.  What he means is that once the pharmaceutical industry did the “deal with the devil” in 2003 for the creation of Medicare part D, it was only so long before real price controls will be instituted by the government. That’s because at some point the seat of power will be inhabited by those working on behalf of constituencies who dislike having their faces ripped off, as opposed to those looting the Federal treasury on behalf of the rippers-off of faces. Now that a mealy mouthed effort at negotiation has been passed by the new Democratic Congress—one that will be quickly vetoed anyway—the first signs of this “punishment” are coming.

Of course he could have said this about 1965. In fact many members of the AMA & AHA said just that at the time and bitterly opposed Medicare. Then they enjoyed 15 years of incredible rising incomes with no efforts to stop them before DRGs et al in the 1980s. And even then their incomes continued to rise for another 15 years, and haven’t rally stopped. So punishment can take a long, long time in coming.

And that is just the point. Who was the MMA passed in aid of? It was passed for the senior management at the companies it benefited—people like Hank McKinnell, Bill McGuire, Larry Glasscock. And what did they see after it was passed? Their stock prices rise when the program cut in for them (04 for United and the managed care cos, 05 for Pfizer and the pharmas) which of course sent the value of their retirement packages go through the roof ($200 mill for McKinnell, $1.6Bn sh for McGuire, I believe). That’s a pretty good market incentive if you ask me! I’m surprised Michael’s one of those Keynsians worried about the long run. After all none of the people “selling out” gave two hoots about it; they believe in the power of market forces.

Of course, there will be a long run, and Michael is kind of right. But it’s not those doing the selling out who will be punished. It’s the successors of McKinnell, McGuire et al who will have some cleaning up to do.

QUALITY/INTERNATIONAL: More confusing international comparisons

I don’t know much about medical care, but I do remember that in Lynn Payer’s Medicine and Culture the most amusing factoid was that German doctors put people whose blood pressure was too low on medication to raise it. Does that mean that the study of blood pressure control reported on by the AP, which suggests that it’s lower here because of more aggressive prescribing than in 4 other countries, means anything in terms of reducing poor health outcomes? I doubt it. What about in increasing or reducing costs? I suspect you can guess my answer!  Here’s the abstract.

This stuff always reminds me of the Philip Morris study of the costs of smoking in the Czech Republic. Hint: smoking lowers societal costs cause the smokers pay more taxes than anyone else then die off quick before they cost the taxpayers much!

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