RSS Feed MenuFriday morning David Frum interviewed the Republican Senatorial candidate in Oregon, Jim Huffman, about his thoughts on policies that would accelerate the economic recovery, health care reform, tort law, and Huffman’s vision for bipartisanship in the U.S. Senate.
Huffman started by asserting that regulatory uncertainty was a main driver for business timidity:
There are such high levels of uncertainty resulting from the regulatory regimes that have been put into place, or are being anticipated by a lot of businesses. And, I think the tax rates, particularly here in Oregon, where we’ve had a high increase in state taxes recently, I think all of that has combined to worsen the employment situation
The key, then, Huffman said, was to create a business environment that includes such things as “regulatory certainty, reasonable taxes, predictable taxes, and a climate in which people have some reasonable expectation that they’re going to get a return on their investment.”
Perhaps most important to Huffman was his focus on bringing down regulatory barriers. “I think we need to turn our focus significantly to regulatory reform – there’s only so much we can do through the tax system,” said Huffman, who pointed out that the health care bill’s regulatory burdens would be especially disastrous.
Frum pointed out that regulatory changes tend to take a long time, and asked Huffman what policy he would offer to address the currently unemployed.
Huffman agreed with Frum, saying that payroll tax holidays were a viable option, but emphasized the need to listen to business owners. “If we can assess what it is that a small business needs to have – and I think that’s short term regulatory certainty, and short term tax relief – then I think we’ll get some response in terms of investment and job creation,” he said.
In terms of Obamacare, Huffman said that defunding the program “would be one positive step in the sense that it would make it impossible for some of this stuff to be put into place.” Huffman told Frum that the health care problem that most urgently requires attention is the high cost of care, rather than universal coverage.
Frum and Huffman also discussed the idea of selling insurance across state lines, and whether interstate competition would significantly decrease health care costs; as well, they talked about the increasing restrictions on BMOs.
When Frum brought up the idea that stronger insurance companies could hold down medical costs by imposing strict price discipline on health care providers, Huffman agreed:
I think that’s a big piece of it, yes. It seems to me that the argument for interstate insurance is only part of a much broader argument about getting more competition into the health care industry.
Drawing on his legal background – Huffman is a former dean at Lewis and Clark Law School – he said that one of his priorities as a U.S. Senator would be to refer constantly to the constitution:
One thing I would do as a member of the United States Senate is demand that we ask ourselves… ‘does the federal government have the authority to do this?’ – whether or not it is a good idea, whether a health care mandate to individuals to purchase health care is a good idea… is that something the federal government has the authority to do?
Asked what lessons he’s learned as an observer of politics over the last few decades, Huffman stressed the importance of bipartisanship:
Politics has a lot to do with the failure of government over the last couple of decades… and that’s the lack of any effort or success in working across party lines to solve problems. The last time we had real tax reform in this country was 1987, and that was a real bipartisan effort…
The driving force is party discipline, is party success, is reelection of members of the party – and we’re not getting into solutions to the problems that we face in this country… what we need is the kind of bipartisan legislation that we had going back to the civil rights era, the early environmental law era.
“The central thing that I would like to do is to bring more policy expertise [to the Senate]… I think when politics drives everything and policy analysis does not, we get what we deserve,” Huffman concluded.
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Oragone // Sep 4, 2010 at 8:59 am
I was wondering who won the Republican nomination. Sorry this looks like just the same old talking points. It’s Wyden for me.
sinz54 // Sep 4, 2010 at 9:50 am
When Frum brought up the idea that stronger insurance companies could hold down medical costs by imposing strict price discipline on health care providers, Huffman agreed
That was tried–and it failed, but for an interesting reason:
In the 1990s, insurers tried to hold down soaring costs by creating “managed care”. HMOs would require you to have a primary care physician as gatekeeper; if you needed to see a specialist, you had to get a referral from your primary care physician.
And the insurers were very strict about whether to pay for certain medical treatments.
For a while, this worked to reduce costs. But it amounted to rationed care.
In one notable example, Tufts Health Care stopped paying for prescription minimally sedating antihistamines, telling patients to buy over-the-counter antihistamines instead. Patients and their physicians screamed bloody murder; those over-the-counter antihistamines can be quite sedating, which can cause automobile accidents when drivers taking them doze off at the wheel.
The public rejected it. They demanded the right to have the absolute best medical care on demand, and that the insurers should pay for it.
And the insurers pulled back their restrictions–and costs started rising again.
“Strict price discipline” when supply is fixed leads to rationing. The public didn’t like it.
And the public wouldn’t like it no matter who does the rationing: HMOs, ObamaCare, or single-payer.
The only real way out of this dilemma is a combination of expanded supply (more doctors, more hospitals) and research that leads to breakthrough cures of chronic diseases. Once you cure a disease, the cost basically drops to zero from then on.
Huffman agreed with Frum, saying that payroll tax holidays were a viable option, but emphasized the need to listen to business owners. “If we can assess what it is that a small business needs to have
What a small business needs to have is CUSTOMERS.
I’m not fan of Robert Reich’s proposed solutions, but he sure got the problem right: Americans have become poorer. Their homes have collapsed in value so they can’t borrow against them anymore to buy things. Many have had to declare bankruptcy, after which they can’t get financing to buy big-ticket items. The stock market has declined by about 30% from its peak, so Americans’ 401(k) and IRA plans have taken a hit.
We’ve now got the inverse of the old “wealth effect” from the 1990s: Americans feel poorer and so they won’t spend their remaining cash reserves.
There is no answer to that. Homes must decline in value till they reach an equilibrium point at which new buyers, like young college graduates, decide those homes are cheap enough to buy.
CAPryde // Sep 4, 2010 at 10:32 am
+1 for the sinz54 analysis. Neither tax breaks nor regulatory reform will make people feel more wealthy, and the health care status quo (rapidly rising costs) is actively making them more poor.
The one thing that ObamaCare gets right is to create a more transparent market where buyers can assess and compare costs on an exchange. If only we could end the anachronistic, tax-subsidized, health-insurance-through-work model that divides consumers from pricing choices and let individuals make their own purchasing decisions on exchanges, we might finally start to see some market discipline in health care.
baw1064 // Sep 4, 2010 at 1:26 pm
In one notable example, Tufts Health Care stopped paying for prescription minimally sedating antihistamines, telling patients to buy over-the-counter antihistamines instead. Patients and their physicians screamed bloody murder; those over-the-counter antihistamines can be quite sedating, which can cause automobile accidents when drivers taking them doze off at the wheel.
The public rejected it. They demanded the right to have the absolute best medical care on demand, and that the insurers should pay for it.
What I want is to be able to buy antihistamines that don’t put me to sleep OTC, without having to see a doctor first.
Presumably they will cost more, and I can decide when I’m in the pharmacy aisle whether not being groggy is worth spending the extra money.
drdredel // Sep 4, 2010 at 4:30 pm
@baw1064
In this instance you’re obviously right, but I think the vast majority of prescription medication is not stuff Average Joe should have to pick out in the isle. Granted, many of us are qualified to know when we really do need an anti-biotic, but many more are not and would be popping them every time they sneezed which would lead to the place we’re approaching where antibiotics don’t work because the microbes have all adapted to them, even sooner.
@sinz
I agree with your general assessment, but you’re leaving out some very crucial problem’s that contribute to the medical problems circle of woe. Namely, the obscenely sized malpractice settlements that are awarded to people, which force malpractice insurance through the roof, which force doctors to charge much more than they otherwise would, or drop out of certain fields altogether (obstetrics being a very notable one). And the way in which American companies gouge us while selling the same products overseas for a fraction of the cost (sometimes orders of magnitude less). Granted, this is capitalism and they should get what we’re willing to pay, but the “we” in this is not you and me. If hospitals could purchase the same things they do, but from Japan (after Japan pays 100 times less than we do), the prices would come down pretty quickly.
I don’t mean to make this sound simple… this is a horrible mess, but I’m just adding to your description of what the actual problems are.
Oldskool // Sep 4, 2010 at 5:47 pm
When Frum brought up the idea that stronger insurance companies could hold down medical costs by imposing strict price discipline on health care providers, Huffman agreedI’m going to assume stronger means more powerful. And you both agreed even though both of you are probably aware of how they’ve operated for the last 20 years. Oh well.
Someday we’ll wake up from this national nightmare and decide that our health care should be treated the same as our housefire care and our crime care: best left to professionals that taxpayers are happy to subsidize.
PracticalGirl // Sep 6, 2010 at 7:15 pm
“I think that’s a big piece of it, yes. It seems to me that the argument for interstate insurance is only part of a much broader argument about getting more competition into the health care industry.”
Huffman has obviously talked with a lot of conservative party-liners, insurance executives and a number of attorneys. I doubt, however, that he has spoken with very many physicians in Oregon. If he did, he would certainly see the folly of “interstate-insurance-as-big-piece-of-cost-control” argument. The doctors-especially the smaller practices-have a difficult enough time negotiating the codes of the five or ten insurance companies that are common in Oregon. What makes Huffman-or anyone-think that a doctor’s costs will go down and efficiency go up when he needs to staff up to deal with 50,100 even 150 different companies, their rules and their codes?
Huffman is a dead stick in Oregon, completely out of step with the majority of voters in the state.