How Conservatives Are Winning the Health Care Fight

August 18th, 2010 at 1:45 pm | 16 Comments |

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Conservatives are out of sorts these days about the direction in which health care is headed. They think the new health reform law expands the role of government too much and spends too much at a time when they believe deficit reduction should be a higher priority. The claims about death panels and a government takeover of the health system aside, these are principled positions for conservatives to take – they are supposed to be for smaller government and less public spending. But for all of the frustration and even anger within the conservative movement about where health care is headed, the fact of the matter is that they are winning more than even they may realize in the current health care equation. That’s because the nature of health insurance itself is being redefined and moving gradually but seemingly inexorably in the direction conservatives have long advocated: more consumer ‘skin in the game’ through higher patient deductibles.

So begins Drew Altman, the President and CEO of the Kaiser Family Foundation, in his Pulling It Togethercolumn.  Altman, for the record, is not a conservative.

But he makes an interesting and, in the age of Obamacare, usual argument: that healthcare is changing and, in some ways, changing along conservative lines.

His evidence? He notes that more and more Americans find themselves with higher deductible plans – a major shift from the zero deductible, zero co-pay Blue Cross plans of old.

Altman notes, for example, that: “The percentage of workers facing high deductibles – $1,000 or more for single coverage – has been growing rapidly. It doubled from 10 percent to 22 percent between 2006 and 2009, and increased from 16 percent to 40 percent in small firms.”

High-deductible plans aren’t necessarily good news, nor are they necessarily conservative. On the right, people have espoused the idea of consumers, empowered with information and health dollars, being more involved in health decisions. High-deductible plans, without relevant information to the individual, can be chaotic and counter-productive.

That said, a well-designed plan with pricing and (some) quality information could be transformative. And – while few and far between – there are examples of that in the marketplace today. See, for example, this nice description of the Safeway experience.

It’s difficult to tell what impact Obamacare will have on healthcare insurance policies. If Washington takes a page from Boston, high-deductible plans will go the way of the dodo bird.

But I’m inclined to agree with Altman – the market is changing. And, regardless of who wins the Obamacare debates of the next few years, I’ll suggest three trends in health coverage:

1. More Information, Please

The health economy is changing the way the rest of the economy did decades ago – with savvier consumers demanding more and better information. Even if the single-payer advocates eventually have their day, it will be heavily influenced by the public’s demand for meaningful info. Sometimes my colleagues grouse about online doctors’ ratings. Here’s my advice to them: get used to it.

2. The Patient Will Pay

Obamacare proposes a host of “free” services (mainly preventive tests and screening). While the concept is popular, here’s the reality: health costs are continuing to spiral. When we get around to bending the curve, it will require Americans to be more involved in payment.

3. Employer-based Health Coverage Will Fade

Rising out of the wage and price controls of World War II, employer-based health insurance is the way most of us have our coverage. But the concept is slowly but surely fading, with just 60% of all firms offering coverage (and just 46% of firms with under 10 workers).  When Americans were born in a company town, went to work for that company, lived in the company houses, and then retired to the company pension, this all made sense. But with a mobile work-force, this type of coverage seems dated. That’s because it is.

Recent Posts by David Gratzer



16 Comments so far ↓

  • easton

    “they are supposed to be for smaller government and less public spending.” Yes, and let 50 million go uninsured and rescission and denial of services due to pre-existing conditions are but a small price to pay. Never mind the fact that reform will only add 1 to 3% more to health care (remember these people don’t just die, they go to ER’s and then not have enough to pay for treatment) and that a healthy society is a more productive society. And that the rest of the OECD nations with far more government involvement spend 9% compared to the US 16% and have as good if not better outcomes.

    Look, more information is nice, but unless the person is seriously invested in their illness (as some Cancer patients are) the information will be bewildering.
    Let us say you are a patient with a post right thoracotomy who has undergone an upper lobectomy, are you really prepared to instruct your Doctor on pain management? Will you ask, so Doctor shall I use:
    a. Relaxation and sleep
    b. Deep breathing and coughing
    c. Incisional healing
    d. Range of motion exercises

    I am not saying that more information is bad, just don’t expect most Americans to be savvy enough to make cost savings uses of it.

    “High-deductible plans aren’t necessarily good news, nor are they necessarily conservative.” Too many caveats. You can also just as easily say: High-deductible plans can very well be good news, and are they can very well be conservative.

    Other than that I agree with higher deductibles provided it is means based. And employer based health insurance is idiotic. Why don’t we have employer based public schooling or employer based National defense? Let Businesses focus on their core reason for existing, to provide a good or service without acting like a damn Social welfare agency.

    Health exchanges, managed at the state level, are, I think, the best solution. You can even have the insurance commissioners elected. Let them negotiate with the insurance companies and let the consumers choose the best plan for themselves and their family.

  • balconesfault

    The critical question becomes – will high deductables drive lower-income workers away from spending money on early diagnoses and preventative care?

    I’ve had a melanoma. Treated completely with a flick of a scalpel via a biopsy, costing my insurance company $250 or so, and me a $20 copay. Insurance did end up paying another $2500 for a larger outpatient biopsy to verify that the first one got everything once tests showed it was malignant.

    Had I put this off because my finances made the original $250 something I had to budget for along with car payments and rent and the grocery bill and creditors … I might have put it off for awhile. That would have resulted in eventual costs to the insurance company in the tens of thousands … or even hundreds of thousands … had I put it off too long.

    Or maybe in Gratzer’s idealized pre-HCR world, my insurance company could have dropped me and saved themselves a bunch.

    An acquaintance of mine who is a steadfast conservative wound up in multi-day hospital care recently for a diverticulitus perforation of his intestines. My wife had a bout with diverticulitis last winter – when she awoke with abdominal pain after feeling it the previous afternoon, we didn’t mess around and took her right in to the doctors office. Good antibiotics and a special diet prescription and she never had to set foot in a hospital.

    My acquaintance was apparently trying to tough it out for a few days to see if he’d get better, and again, this ended up costing the healthcare system MUCH more than had he rushed to see a physician upon first onset of symptoms.

    The high deductible thing might be fine for all us upper-middle class/upper class sorts who can slap $500 on our Visa without batting an eye about how we’ll pay the bill at the end of the month.

    With the working poor, high deductibles could be a prescription for healthcare system failure. Championing $1000 deductibles when there are so many people in America who require months of saving to scrape $1000 together makes Alan Grayson sound like he has his finger right on the pulse of the conservative movement.

  • Superdave12

    You’re correct, conservatives won the argument. But like so many issues, they did so only by media messaging, not on substance. This issue was the perfect example of the maxim, “If you’re explaining you’re losing.”

    I have serious doubt that any sizable portion of population (much less the Republican base) can articulate the aspects of the bill that passed through Congress. Yet Republicans won the media arguments by mischaracterizing the bill consistently and denying the need for it.

    Its pretty depressing & should give all of us serious concern about the ability of our political system in the future to resolve the serious structural deficit issues that are coming. Many of which are linked to our rising costs of healthcare.

  • easton

    balconesfault, yeah, but as I said, provided high deductible plans are means based then I have no problem with them. If middle class people can sock away the deductible in HSA’s, I see no reason why they shouldn’t be given the option. For poor people we can up the co-pay but limit the deductible. And trust me, even a poor person can get the 10 or 20 dollar co-pay. And if they can’t afford it at that moment they can be billed for payments.

  • busboy33

    @Superdave:

    “But like so many issues, [Conservatives] did so only by media messaging, not on substance. This issue was the perfect example of the maxim, ‘If you’re explaining you’re losing.’
    I have serious doubt that any sizable portion of population (much less the Republican base) can articulate the aspects of the bill that passed through Congress. Yet Republicans won the media arguments by mischaracterizing the bill consistently and denying the need for it. ”

    What was that “Conservative” point #1 David mentioned? Yeah, more information is the hallmark of the GOP.

  • JonF

    Re: Employer-based Health Coverage Will Fade

    Well, yes– but only if the ACA endures. In order to move people away from emplpoyment based benefits there has to be a robust market outside that model. The individual policy market has been profoundly dysfunctinal for years, and it’s no wonder people fear it. Non-discriminatory coverage must be guaranteed to all who wish it and at affordable rates (which means subsidies for most people, just as under employment benefits). The ACA does these things– and in fact is not dissimilar in its broad outlines to the plan the Heritage Foundation came up with in the 90s.

  • mickster99

    So much of what Health Care was gutted by administration capitulation to rightwing interest for virtually no rightwing votes that we should really call ObamaCare McConnellCare. Rightwingers forget the massive deficit spending regarding Bill Tauzin/Delay rammed thru of Medicare Plan D. And the lying, misrepresentation of the true costs. But no word yet of repealing BoeherCare. Rightwingers had 7 years in total control to pass healthcare reform, but instead passed the big Pharma giveaway that is Part D of Medicare. Now the leitmotifs of the rightwing are paranoia, hysteria e.g. death panels, obama as hitler, banners with Nazi death camps, moaist running the gov’t, prayer for divine intervention. Basically Glenn Beck’s mind in some form or another 24/7.

    The rightwing poisons everything.

    What a pathetic bunch of whining blaming deniers.
    Its always someone else’s fault.

    How does anyone forget the legacy of the Bush Republican administration whilst reading the latest opinion pieces from the cojones of the rightwing.

    Some winning strategy. Sad, sad, sad.

  • armstp

    David Gratzer,

    A funny nonsensical post.

    A few comments:

    1) the healthcare bill that passed according to the non-partisan CBO is paid for and will actually reduce spending. It helps the deficit and debt. In fact, many believe the CBO was conservative and that the cost savings will be greater.

    In fact, the new Medicare Trustees report out recently, suggested the costs savings under the healthcare bill will be greater than first expected. See link below.

    http://krugman.blogs.nytimes.com/2010/08/05/bending-the-curve/

    2) Regardless of this bill or not, what you outline is a trend that has been happening for a long long time. Consumers have had to put “more skin in the game” for while now, well before this healthcare bill. The challenge is that if healthcare insurance costs continue to go up and the insurance companies continue to abuse their power there will be increasing pressure to get rid of the insurance companies and go to single-payer. The public will only be able to stand so much in terms of healthcare bills. What healthcare reform did was it put a spotlight on the insurance companies like never before and in fact it put them on notice. Insurance companies must now tread very carefully, as the public has gotten a taste of the possiblity of a public option and many will increasingly think of single payer.

    3) Safeway is a terrible example. That is a company that all it has done is increasing pushed off the cost of healthcare on to its employees. No magic in that. There claims of having reduced healthcare costs are BS. They just gave less of it to their employees. All they have been doing is taking away benefits. In addition, there is a case to be made that they have decriminated in their hiring practices, choosing to hire more “healthy” employees. Non-smokers for example. That is a slippery slope.

    “But a review of Safeway documents and interviews with company officials show that the company did not keep health-care costs flat for four years. Those costs did drop in 2006 — by 12.5 percent. That was when the company overhauled its benefits, according to Safeway Senior Vice President Ken Shachmut.

    The decline did not have anything to do with tying employees’ premiums to test results. That element of Safeway’s benefits plan was not implemented until 2009, Shachmut said.

    After the 2006 drop, costs resumed their climb, he said.

    Even as Burd claimed last year to have held costs flat, Safeway was forecasting that per capita expenses for its employees would rise by 8.5 percent in 2009. According to a survey of 1,700 health plans by the benefits consultant Hewitt Associates, the average increase nationally was 6.1 percent.”

    http://www.washingtonpost.com/wp-dyn/content/article/2010/01/15/AR2010011503319.html

    “He said the union’s biggest issue with Safeway’s proposal is a move to impact health insurance benefits for new hires, extending the time it would take for them to get health coverage. Three contracts ago, employees got full family coverage after four months working. Today, employees can qualify for health coverage for themselves after seven months. In another 18 months the employee’s family can get health insurance coverage, and it takes about five years to qualify for full-family coverage that includes vision and dental benefits, Boehlen has said.”

    http://www.groceryworkersunited.org/NEWS_120309_Safeway_reduce_healthcare.shtml

    4) Sure, fine and dandy that employers will stop giving employees healthcare coverage and that might be ok in a competitive healthcare insurance marketplace. However, healthcare in America is anything but a competitive marketplace. First, most states are dominated in market share by only one or two insurance companies and that is not likely to change, even if you change the interstate insurance rules. Second, with the insurance companies standing in the way, as middle men, consumers have zero access to the type of information you would normally get in a free market. For example, consumers have no information about what different insurance companies, hospitals or doctors will actually charge for procedures. In addition, consumers have no measures of quality regarding treatment from doctors, labs and hospitals. So how are consumers going to make the kinds of pricing decisions based on value and quality like they do with everything else they buy, when there is zero information available. There is no free market in healthcare services in this country.

  • Oldskool

    I suggest another trend; The new health plan will be changed over the years to resemble Medicare. Just like the original Medicare was adapted to include more people and the way Soc Sec was adapted to include more people. The trend is toward “Democratic” ideas. When not labeled, their ideas always poll best. When labeled, polling is predictable.

  • anniemargret

    balconesfault: “The high deductible thing might be fine for all us upper-middle class/upper class sorts who can slap $500 on our Visa without batting an eye about how we’ll pay the bill at the end of the month. ”

    Thank you. So true. And why I would never vote Republican again. They don’t live in the real world. Out here in the real world, people are trying to keep up with two jobs, mortgages, car payments and breakdowns, and ‘budget cuts’ and job and benefit loss.

    And your point about the diverticulitis rings true too. Two years ago out of the blue, I had an acute diverticulitis attack. The ER doc said ‘it happens.’ (who knew? never had a problem with my insides before). Put me on the same big dose of antibiotics and that bland diet for awhile and I’ve been fine since.

    So much of basic medical care is denied to ordinary everyday working Americans. My younger son has no healthcare insurance because he has a serious chronic pre-existing condition. He has not yet found an employer to offer him one -so if he gets sick he goes to the ER.

    What a country. So idiotic. And has anyone looked at a routine hospital bill yet? The overpriced inanities? Like $200 for a pair of plastic gloves?

    We got a big problem here, and from where I sit and with all my family and friends, the ‘free market’ approach stinks. We need a single payer or Medicare for all. Period.

  • JoefromKansas

    From SUPERDAVE12: “You’re correct, conservatives won the argument. But like so many issues, they did so only by media messaging, not on substance. This issue was the perfect example of the maxim, “If you’re explaining you’re losing.”

    I have serious doubt that any sizable portion of population (much less the Republican base) can articulate the aspects of the bill that passed through Congress. Yet Republicans won the media arguments by mischaracterizing the bill consistently and denying the need for it.

    Its pretty depressing & should give all of us serious concern about the ability of our political system in the future to resolve the serious structural deficit issues that are coming. Many of which are linked to our rising costs of healthcare.”

    We’ve been talking about healthcare for months and NEITHER side has formulated a coherent position. If there is a miscommunication it should not take that long for the administration to clarify misinformation. A large portion of why conservatives won the debate is simply because EVEN IF they were spinning information with a negative slant the merits of the bill were not enough to stand on its own to rebutte the spin. Furthermore, if the misinformation could not be cleared up after months of debate you should be willing to admit that maybe, just maybe, they cannot refute some of these points because either A) as you pointed out few know what the bill actually does or B) the “misinformation” is actual information.

    I clicked on this article while perusing the internet because I was hoping to see some good discussion on the merits of the bill and why one group was winning or losing the debate based upon different approaches to fix the problem – but alas much like the national debate on this issue no one is really talking about the merits of the bill yet everyone continues to talk about the problem. It’s a bit like someone stepping over a ruffled floor mat in the doorway and exclaiming “Gee someone should fix that before someone trips”. Then center the debate on what happens when someone trips and all the problems that causes for everyone. Then someone writes a policy explaining how to straiten the floormat and people still want to talk about what happens when you don’t fix it. FIX THE DANG RUG stop talking about what happens when you fail to do so.

  • easton

    JoefromKansas, I don’t agree, while the bill is very large it is pretty straightforward in its aims. No more rescission, no more denial of coverage due to pre-existing coverage, health care subsidies for those at the lower income ladder, and mandates so there are no free riders (ie people who can afford insurance, risk not having it and then when disaster strikes hit the taxpayer with the bill)
    And it is completely paid for (not deficit funded)

  • unclereggie

    So, Conservatives won, huh? Won what? The legislation was passed. The law is being put into effect. The changes in the health care system of the nation are taking place. Regardless of the rhetoric and all the hoopla, what did conservatives win? NOTHING!!! Missouri voters spoke up as said they did not want to have an insurance mandate. So what? Prop C had no legal or electionary status. All it did was get more Republicans to the polls on Primary election day. If conservatives have won, you’ll have to dig a lot deeper to find out what. They have stopped nothing. They have accomplished nothing. They have made no progress in either delaying or removing any part of the health care legislation from implementation. No state will succeed in suing the feds over the law. None of the lawsuits against the new law will be upheld or even heard. Go ahead and keep up this message of victory if you want. It won’t get you anywhere.

  • busboy33

    Its funny how this post is here on FrumForum. Wasn’t David RINO’d out of the party for pointing out that by losing the healthcare reform debate the GOP suffered a staggering defeat?

    What is it about the modern Right-Wing that makes them think nobody can remember more than a a month into the past? We won the healthcare debate! We’re for reducing the deficit! We’re competent on national security! Hell, I started to doubt my sanity when the neocon pundits kept defending the Iraqi invasion because “AlQuaida in Iraq” was there . . . even though they formed AFTER the invasion and as a response to it. It “proved” the Saddam-AlQ link. WMD? We never said anything about WMD! It was all to free the oppressed people or something.

    Are there really people out there with “Memento”-like short term memory loss?

  • sdspringy

    Annie says,”We need a single payer or Medicare for all”.

    And Armstp provides the half truths and meaningless projections.

    http://www.washingtonpost.com/wp-dyn/content/article/2009/12/11/AR2009121102792.html?hpid=topnews
    A Senate plan to cut Medicare to pay for an overhaul of the health system would threaten the profitability of roughly one in five hospitals and nursing homes over the next decade, according to a new analysis by the government official responsible for monitoring the popular health program.

    In a report Friday, Rick Foster, chief actuary for the Centers for Medicare and Medicaid Services, questioned the sustainability of many of the proposed cuts, the major source of funding in a plan to extend insurance to more than 30 million additional Americans.

    What the Libs/Dems refuse to acknowledge that in order to make ObamaCare revenue neutral, a joke, the Dems had to cut Medicare reimbursements. The budget magic was to occur when the Dems then TRIED to reinstate those reimburesements through separate legislation which did not pass. Thus the misleading CBO projections.

    http://www.medicalnewstoday.com/articles/174004.php

    The Senate’s health overhaul plan would cover 33 million more people but fail to curb rising health costs, could threaten some Medicare patients’ access to care,
    The Associated Press: “A new report from government economic analysts at the Health and Human Services Department found that the nation’s $2.5 trillion annual health care tab won’t shrink under the Democratic blueprint that senators are debating. Instead, it would grow somewhat more rapidly than if Congress does nothing.” The AP continues, “More troubling was the report’s assessment that the Democrats’ plan to squeeze Medicare for $493 billion over 10 years in savings relies on specific policy changes that ‘may be unrealistic’ and could lead to cuts in services.”

    So the government attempt at providing healthcare results in INCREASED cost, CUTS in service.
    This is the government plan the Libs wanted, Gee thanks.

  • armstp

    Sdspringy,

    Who cares if profitablity is cut in only 1 in 5 of these healthcare companies? I think that is the point. Quoting from the article you reference. It will force them to adopt more efficient practices. Nothing wrong with that. The gravy train is over for the most inefficient operators who waste tons of tax payer dollars. Small price to pay to get 30 million more people insured and the new protections under the bill.

    “The proposal to reduce payments to hospitals and other providers, to force them to adopt more efficient practices, could prove particularly problematic for institutions that serve large numbers of Medicare patients, Foster wrote.”

    Again from the article you quote:

    “Bloomberg: “Republicans seized on the study, saying it shows the Democrats aren’t fulfilling a pledge to slow spending growth. Democrats dismissed the criticism, saying the report shows the bill would strengthen Medicare and cut costs in the long term.” Bloomberg adds, “Several features in the bill, including proposed reductions in Medicare payments, an independent Medicare advisory board to reduce spending growth rates and taxes on the most-expensive insurance plans, ‘would have a significant downward impact on future health-care cost growth rates,’ the report said.” However, the cost of expanding coverage would initially outweigh those savings (Dodge, 12/11).”

    Seems like there are much different interpretations of this government report.

    Let me repeat from the report:

    “would have a significant downward impact on future health-care cost growth rates,’ the report said.”

    The bill is a very good start to healthcare reform. Like what has happened in MASS, the bill will unleash all kinds of new forces which will put added pressures on getting the costs down. This is not an ending point, but rather a starting point.