Romneycare Sure Looks Like Obamacare

March 12th, 2010 at 12:20 am David Frum | 22 Comments |

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Click here for all of David Frum’s blogposts on Mitt Romney’s “No Apology”.


I have to say I got a big chuckle out of Romney’s healthcare chapter. Two years ago, I published a book on conservative reform that urged conservatives to pay more attention to the social costs of obesity. Those lines prompted National Review‘s book reviewer to ceremonially drum me out of the conservative movement. Two years later, the candidate endorsed by National Review in 2008 has this to say: “One of the biggest behavioral contributors to sickness and death is our big waistlines, and the cascading negative health impact of that excess weight.” (191) Romney then proceeds through a very well-informed discussion of the obesity problem, culminating in a suggestion that health insurers be allowed to discount premiums for the non-obese.

Romney sharply distinguishes his healthcare preferences from Barack Obama’s. For him, the red line is the public option. He adamantly opposes it. Yet in many other respects, there is common ground. Like Obama, Romney worries about the malign incentives of fee-for-service medicine. Like Obama, Romney regards the status quo as unsustainable. Like Obama, Romney is a big fan of the healthcare journalism of Atul Gawande.

And of course, the public option has now vanished from the Obama plan. Which means that the federal plan bears a closer family resemblance than ever to Romney’s idea: regulated health insurance exchanges, mandates to buy insurance for those who can afford it, subsidies for those who cannot. Romney’s preference would be to omit the mandate for those who “can demonstrate their ability to pay their own health-care bills.” (176) That would be precious few of us. And he wants to allow states ample leeway to innovate without hindrance by the federal government.

Romney frames the distinction between his preferences and President Obama’s as “free enterprise and consumer-driven markets or government management and regulation.” (193)

It’s hard to avoid the suspicion that these two technocrats have more in common with each other on this issue than either does with his party’s more fervent supporters. With this one difference: shout outs to CEOs in Ch 7 – 3, including one to the CEO of drugmaker Novartis.

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22 Comments so far ↓

  • mlindroo

    > It’s hard to avoid the suspicion that
    > these two technocrats have more in common with each other on this issue
    > than either does with his party’s more fervent supporters.

    Yup…

    The difference is that left-wing partisans at least have valid reasons to feel disappointed, if not angry. The pragmatic Senate bill borrows lots of stuff from Romney and 1990s Republican proposals, after all.

    Romney ought to be proud of Massachusetts health care reform. Yet if he decides to run again in 2012, he’ll undoubtedly turn himself into a pretzel while explaining why the plan he campaigned for as Massachusetts governor is actually a socialist plot that must be opposed. The man’s Kerry-like lack of political courage is as annoying as his track record as businessman/governor is admirable.

    MARCU$

  • joemarier

    I probably COULD pay a greater percentage of my family’s health care bills myself if I had, say an extra 400-500 dollars a paycheck… say! That’s how much I pay for health insurance!

  • sinz54

    Frum: Romney sharply distinguishes his healthcare preferences from Barack Obama’s. For him, the red line is the public option. He adamantly opposes it.
    I live in MA.

    RomneyCare does have a public option: Network Health. It’s subsidized so its premiums are quite low. BUT, unlike the public option that liberals wanted in ObamaCare, Network Health is strictly means tested. You have to be really poor to qualify for it. Thus it can never compete with private insurers for the middle-class and upper-class markets.

    http://www.network-health.org/visitors/

    So how is RomneyCare doing?

    Good news: Thanks to the mandate to get insurance, 95% of Massachusetts residents are now covered by some kind of health insurance. It provides for guaranteed issue: You cannot be dropped or rejected for a pre-existing condition (which has been tremendously helpful to me with my pre-existing condition). And Network Health, the state health plan for the poor, seems to be efficient and user-friendly for applicants and policyholders.

    Bad news: RomneyCare has failed to contain costs. While insurers in MA continue to lose money on each policyholder due to the skyrocketing costs of folks like me with serious conditions, premiums continue to rise sharply. (Blue Cross/Blue Shield of MA just raised my own premium by 44%. That’s FORTY-FOUR percent.)

    Partly this is by design: If Romney had proposed strict cost controls at the outset, any number of stakeholders might have been scared away and the whole thing would have failed to pass the MA legislature. But also it’s because everybody talked themselves into the idea that forcing lots of new people into the system with universal coverage would pay for it all. That has NOT worked.

    The lesson that RomneyCare has for ObamaCare, is that the “Grand Bargain” of universal coverage in exchange for guaranteed issue is NOT economically sustainable. Bringing in all those young healthy policyholders into the system did NOT pay for all those sicker policyholders with pre-existing conditions, and for all those folks who end up in Emergency Rooms.

    The hard truth is that with Social Security, Medicare, or the putative ObamaCare, there just aren’t enough young healthy people to pay for it all. That’s due to the huge size of the baby-boom cohort (who as they age are picking up various expensive chronic illnesses) and America’s declining birth rate (which produces fewer young healthy policyholders).

    My situation provides a good example of the numbers involved. My dialysis costs about $65,000 a year, every year. That’s not counting prescription drugs, visits to specialists, and surgeries, which can push that total to perhaps $90,000 in a bad year. (This compares with $100,000 for Bill Clinton’s quadruple bypass, when he had a bad year.)

    $90,000 would equal the insurance premiums of some 15 young MA families. The base of the American pyramid–the young–is too narrow to pay for the ever-widening top of the pyramid–my generation.

    Medicare attempts to control costs by cutting reimbursements to dialysis clinics. As a result, a number of dialysis companies have gone out of business, forcing patients to travel farther to find one.

  • balconesfault

    BUT, unlike the public option that liberals wanted in ObamaCare, Network Health is strictly means tested. You have to be really poor to qualify for it. Thus it can never compete with private insurers for the middle-class and upper-class markets.

    In other words, it does not provide any cost competitiveness to most of the insurance market.

    Meanwhile, what do you think about pushing for more home dialysis, as many other nations are doing both for reduced costs and better results (from being able to do more frequent dialysis treatments)?

  • LFC

    balconesfault asked… Meanwhile, what do you think about pushing for more home dialysis, as many other nations are doing both for reduced costs and better results (from being able to do more frequent dialysis treatments)?

    I’m a fairly recent kidney transplant recipient. I did a form of home dialysis called peritoneal for several months. You can look up details, but the gist is that you fill your abdominal cavity with a solution and the abdominal membrane helps filter out the toxins into the clean solution. You drain and refill 3-5 times a day, depending upon how bad off you are. The company that provided the supplies charged roughly $20,000 per month. I don’t know if that’s what the insurance company paid (I doubt it), but that was the quoted price … which took us nearly 6 months to wring out of them.

  • PracticalGirl

    balconesfault:

    Home care and after-care should be a no-brainer for those who can benefit from it. Many hospitals stays are extended by several days, simply because in-home after care isn’t provided for with most insurance plans. I don’t know about dialysis, but it makes sense to look at the many instances where in-home care would be more confortable for the patient and (under a nurse directed by a physician) much less expensive for either the self-pay or the insruance company.

    Problem? When this issue is addressed, it’s all too common for the knee-jerk reaction (similar to the death panel frenzy) to overtake reason. Too many hear “home care” and equate it to being “kicked out”of the hospital and to sub-par care.

  • PracticalGirl

    Sinz:

    “Bad news: RomneyCare has failed to contain costs”

    It seems as though many provisions that are supposed to bring down costs have the opposite effect, including tort reform. The bottom line is that cost containment should be the only reason for HC reform and we should take the steps necessary to get to the goal. What, if anything, is being proposed/has been tried in MA to address the issue, and does it have any national appplication?

  • sinz54

    PracticalGirl: The bottom line is that cost containment should be the only reason for HC reform and we should take the steps necessary to get to the goal.
    But that’s not what motivates any liberals, including Obama and Pelosi.

    They see HC reform as a moral imperative to help the disadvantaged. And bringing lots of disadvantaged people into the system–people who have to be subsidized–is the exact opposite of cost containment. And so ObamaCare goes for universal coverage–cost containment is an afterthought.

    What you’re proposing is similar to the GOP approach, which attempts to control costs but does NOT attempt to expand coverage. What you’re proposing is what we might have gotten if McCain had been elected President.

    What, if anything, is being proposed/has been tried in MA to address the issue, and does it have any national appplication?
    1. Raising taxes–specifically the cigarette tax, to cover the budget shortfalls.

    2. Requiring that doctors paid under Commonwealth Care (that’s MA’s own insurance exchange) must be salaried as part of a group, rather than individuals in fee-for-service medicine. (That’s in ObamaCare too.)

    3. Capitation. Yes, capitation, once a hated feature of HMOs till they dropped it, is now being flirted with by both MA and by Medicare. Under capitation, a provider like a hospital department gets a fixed budget. If doctors spend more money and time on one patient, they will be forced to spend that much less money and time on another.

    And some hospitals on their own recognize that paper work and coding errors are contributing to costs. Doctors at a major MA hospital told me that over half their workload is paperwork, rather than seeing patients. But hospitals are slow to change. That hospital has a program to computerize its operations–by the year 2017. Part of the problem is the need for total security and privacy. If some hacker were to break into a mental hospital’s computer database and download the private psychiatric files of all the patients, the result would be catastrophic.

    Personally, I think that these types of reforms, which fundamentally change how hospitals and doctors do their business, hold the greatest hope for cost containment.

  • Independent

    Sinz54 writes: “They see HC reform as a moral imperative to help the disadvantaged.”

    Let me fix it for you: “They see HC reform as a way to extend the Welfare State.”

    There’s no moral imperative. Obama already told the Black Congressional Caucus “damn the poor underclass, the public option is out and I’m not dealing with GOPers on other things to get any version of the public option back into HC reform”.

    It’s all about rescuing the failed Welfare State mentality that Clinton helped nail into the coffin with the GOP on Welfare-2-Work.

    The Democrats have had to suffer with just having a Victimhood Industry instead of a full blown resurgent Welfare State these last few years.

    They want it back and that’s why they’re willing to pass ObamaCare even though 60+% of American voters don’t want it. Democrats know, the American voter didn’t like Welfare State programs, either, and that’s why voter anger is immaterial to the Democrats.

  • PracticalGirl

    Thanks, Sinz.

    Not sure that coverage for all isn’t a component to cost containment, as the costs to providers for the uninsured simply gets passed to the insured (in the form of skyrocketing premiums), tax payers and care costs tomake up the difference. But is only one component, for certain.

  • balconesfault

    And bringing lots of disadvantaged people into the system–people who have to be subsidized–is the exact opposite of cost containment.

    Maybe, maybe not.

    First of all, the people without jobs already have healthcare. It’s called Medicaid. And if Medicaid means they have to wait a lot in waiting rooms for service, etc, no big deal, since the unemployed aren’t contributing to the economy.

    But then we have all those people who are working … but don’t really make enough money to pay for insurance, and whose usually avoid needed primary care because a $75 office visit fee puts a serious dent in the monthly budget, and whose finances could be wiped out in an instant with any real medical emergency.

    People say “there are free clinics” … sure, that is a great option for someone who has to work 40 or 50 hours a week at barely above minimum wage, and also get home to take care of kids. They have soooo much time to travel across town and sit around and wait for a free clinic to be able to see them. And societally, those workers having to miss work, either due to untreated illness, or even to having to take too much time to get medical care at an overswamped free clinic, has a cost that we all bear.

    People say “if they get sick, they can go to the emergency room”. Yeah, that’s an efficient allocation of societal resources.

    Not to mention the societal burden created whenever anyone has to declare bankruptcy.

    The problem is that our current system causes a myriad of costs that get buried. Hell – even the “administrative costs” of insurance are vastly understated by just talking about the costs embedded in the insurance companies budgets … since hospitals and larger medical practices all end up having to dedicate a serious amount of administrative overhead time to fighting with insurers, filing and re-filing paperwork. And I can only guess how much having to deal with a patient who declares bankruptcy must be.

    Overall societal costs are improved if we go to universal insurance. The alternative is just continuing to play chicken with healthcare system meltdown.

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  • Chekote

    Sinz

    How are you feeling? I want you to know that a group of us have introduced resolutions to change the GOP party platform in Texas. We have been nominated to the State Senatorial Convention as delegates and have interviewed to become delegates to the State Convention. We will change that crazy Texas GOP platform.

  • aDude

    Health care finance reform (whether RomneyCare or ObamaCare) is always easier than health care cost containment because the net effect on 80% of the population is minimal. They have health insurance through their employer before reform, and they have exactly the same plan after.

    Cost containment affects everybody. Here in Cleveland we have an excellent model of cost containment – the Cleveland Clinic. Best health care in the country and at a much lower price than the national average.

    But the reason for this is that it is a very large organization with salaried doctors, lots of medical specialists, and a highly trained administrative support staff. It is therefore the antithesis of the model of the individual entrepreneur.

    In a typical private doctor’s office, you will have the doctor, two nurses, a receptionist who doubles as appointments secretary, and four or five people in the back who’s sole duty is to deal with insurance companies. The doctor will also spend at least two hours of every eight hour day on the phone arguing with insurance companies. In the end it is a very inefficient way to run a business.

    Cleveland Clinic has 2000 doctors and just 1400 insurance admins. The doctors rarely have to spend any time on the phone dealing with insurance companies. It is medicine that works.

    However, if all doctors were required to accept the same level of payments that the Cleveland Clinic can accept, then they would rather quickly be forced out of individual practice and into ever larger group practices. And that would affect just about everyone. That is much more difficult to achieve.

  • kevin47

    “Not sure that coverage for all isn’t a component to cost containment, as the costs to providers for the uninsured simply gets passed to the insured (in the form of skyrocketing premiums), tax payers and care costs tomake up the difference.”

    Studies have shown that care for the uninsured has little impact on premiums. Not a non-existent impact, but not enough that eliminating the problem would make a dent in the cost of healthcare. People who are uninsured tend to receive less care. If they are insured, they are going to receive more care, which will drive up costs.

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