RSS Feed MenuThat’s a dangerously premature victory celebration the Democrats enjoyed last night.
Not only does the Senate loom ahead, but so does the encounter with reality.
If the House bill survives in anything like its present form, the U.S. government will soon be in the business of decreeing health care prices. That’s what the whole debate over the “public option” has been about from the start: price control.
The Democratic hope has been that if the government enters the insurance business, the government will gain the power to set prices. No more market competition: health prices will be set by order from above.
The bill powerfully incentivizes smaller employees to withdraw their own health coverage and push their employees into the government plan.
Small employers can now escape the obligation to provide health care for their employees by paying an 8% payroll tax. Many small employers will seize that offer. Their employees will have to go shopping for themselves in a very complicated and confusing marketplace. Many will opt for the seeming security of the government-run plan. Over time, the public option will grow, setting private insurance on the road to extinction – or at best to a tightly regulated new role as the health equivalent of public utilities. The big decisions will be made in Washington; the insurers will comply.
At any rate, that’s the House leadership’s hope: not a single payer, exactly, but a single administrator.
To anyone familiar with the history of administered prices, it might seem that this approach must invite a quality squeeze – just the way the chocolate bars shrank in size in the 1970s when the government tried to control their price.
Democrats assume that the health care system contains so much fat and waste that they can impose price restraints – and that providers will find ways to adjust while protecting patients.
But that’s a hope, not a plan. To borrow a phrase, Democrats replied to the Republicans “mission accomplished.”
Now the hope meets reality. What comes next won’t be pretty.
SpartacusIsNotDead // Nov 8, 2009 at 8:22 pm
Sinz wrote: “The studies I have seen suggest that tort reform would save about $60 billion a year.”
Can you cite any links for this? None of the studies I’m familiar with show a savings of anything close to that. Indeed, the CBO estimated that the savings would be only $54 billion over TEN years.
http://www.medscape.com/viewarticle/710364
SFTor1 // Nov 8, 2009 at 8:29 pm
“When insurers negotiate with physicians to get the cost of a cardiac stent to $9000, they’ve taken $7000 off the ‘list’ price.”
I used to do a lot of work in the medical devices industry. As far as I remember the wholesale price of a cardiac stent was $700 in 2001.
SpartacusIsNotDead // Nov 8, 2009 at 8:31 pm
Sinz wrote: “As I’ve pointed out before, Congress won’t allow the public plan to fail. If they see it losing market share to private insurers, they will subsidize it heavily, or even give it a guaranteed market, just like the Postal Service.”
Yet again, you’ve chosen to ignore the real-world model for a public option in the U.S. and, instead, have chosen a completely irrelevant model. None of the public option proposals call for a model that even remotely resembles the U.S. Postal Service.
For the Gazillionth time, the closest model for the proposed public option is the public option for workers compensation insurance in California. That public option competes with private insurers, is not subsidized by the state or any public funds, relies solely on premiums collected from businesses of their own free will, and it has not driven private insurers out of the marketplace. It has, however, put downward pressure on premiums for all policies and it has ensured that all businesses can obtain workers comp insurance.
Your repeated refusal to acknowledge these most basic facts suggests you are disingenuous in your criticisms of the reform proposals and, instead, looking only to try to score political points.
SpartacusIsNotDead // Nov 8, 2009 at 8:39 pm
Kanzeon at #15 asked Sinz: “Is this the best argument you have?”
It is his only argument and, when not reflexively attacking any idea that might be favored by people he views as liberal, I’m sure he knows it’s a silly argument. He’s just not capable of being serious and forthright.
SpartacusIsNotDead // Nov 8, 2009 at 8:47 pm
Acturian wrote: “And a note of correction, Oldskool. Police and Fire fighters are funded by local and municipal taxes. It doesn’t come out of the Federal Treasury . . . ”
How on earth is this pertinent to an analysis of the reform bill passed by the House? The bill passed by the liberal Democrats in the House actually REDUCES the federal deficit by $109 billion over 10 years.
I know that deficit reduction is contrary to the way in which conservatives and the GOP govern, but the rest of the country thinks deficit reduction is not a bad idea.
SpartacusIsNotDead // Nov 8, 2009 at 8:50 pm
Here’s the link showing the CBO concluded the Democrats’s bill would reduce the deficit by $109 billion over 10 years.
http://primebuzz.kcstar.com/?q=node/20468
Addie // Nov 8, 2009 at 9:15 pm
Spartacus – and you believe the CBO? Let me just say……. I’ve got a bridge in Brooklyn I’ll sell you. I remember what the government said about the Medicare Prescription plan and we’ve what…tripled the cost?
When is the last time the government (CBO is GOVERNMENT) actually got a cost estimate correct? How can something that covers the cost of health care and does nothing to reduce cost possible reduce the deficit? (Can we say death panels? Maybe that’s part of the reduction?)
Deficit reduction is NOT going to happen but you keep believing the government might actually get something right. LMAO!
Reason60 // Nov 8, 2009 at 10:36 pm
I find it ironic that the example used of how the heavily subsidized government option would drive the private carriers out of business is the US Postal Service.
The same US Postal Service that competes robustly with FedEx, UPS, and others. I don’t see them being swallowed up by the USPS Leviathan.
sinz54 // Nov 9, 2009 at 9:02 am
Reason60: The same US Postal Service that competes robustly with FedEx, UPS, and others.
Don’t you bother to read my posts?
For your information, UPS had to engage in costly litigation for FORTY YEARS (from the 1930s through the 1970s) to be allowed to be considered by the ICC as a common carrier, existing alongside the Post Office. The Post Office had gone to court to block them, again and again and again.
And the Postal Service doesn’t “compete robustly.” It would have gone out of business by now, if Congress hadn’t subsidized it heavily out of general revenues, and if it didn’t have a legal monopoly on delivering first-class mail. Despite these heavy subsidies, it raises postal rates year after year.
The Postal Service is kept in business by its legal monopoly on first-class mail. By Federal law, no private company–FedEx, UPS, or anyone else–is allowed to deliver stamped first-class mail. In the 1970s, a small startup company, Brennan Delivery, tried to challenge the Postal Service. They started a service to deliver first-class envelope mail cheaper than the Postal Service could. The Postal Service sued them and put them out of business.
SpartacusIsNotDead: In case you’re That public option competes with private insurers, is not subsidized by the state or any public funds
How much would you be willing to bet that if the public option for health care is signed into law by Obama, it will be heavily subsidized by future Congresses?
Once an entitlement gets approved, it becomes IMPOSSIBLE to cut it back. It becomes an endless black hole into which we pour money.
sinz54 // Nov 9, 2009 at 9:03 am
SpartacusIsNotDead:
You liberals have the votes in Congress, you’ve got a filibuster-proof majority in the Senate if you can pay off Lieberman. So do it yourselves.
For us conservatives, the public option is a deal-breaker. It is absolutely unacceptable. That’s non-negotiable. We’ll fight it to the end, and lose the fight if we have to–because we absolutely cannot accept it.
And that’s final.
sinz54 // Nov 9, 2009 at 9:50 am
SpartacusIsNotDead: Here’s the link showing the CBO concluded the Democrats’s bill would reduce the deficit by $109 billion over 10 years.
That CBO analysis assumed hundreds of billions of dollars in cuts to Medicare. (This was widely reported on the news media too.)
And no one in his right mind expects Congress to cut Medicare. There have been attempts, year in and year out, to rein in Medicare spending. All failed. All will continue to fail. No politician is going to buck the senior voters.
If you take out those hundreds of billions of dollars in cuts, the real cost will be far higher.
The CBO is not allowed to question the Congress’ stated plans. All they can do is cost them. They are not allowed to say, as I just did, that Pelosi is lying about those Medicare cuts.
But everybody except you knows she is. Even her fellow liberals.
sinz54 // Nov 9, 2009 at 10:02 am
SpartacusIsNotDead: Indeed, the CBO estimated that the savings would be only $54 billion over TEN years.
I believe the CBO study only considered the cost of the actual malpractice cases and malpractice insurance.
But the biggest cost by far is doctors’ overuse of antibiotics and lab tests to protect against possible malpractice lawsuits. The problem is that if a doctor fails to order a particular lab test, and you get sick, you could sue the doctor for failing to order the test that could have detected your illness in time to cure it. So they are constantly ordering a zillion screening tests for conditions you would probably never suffer from anyway–or if you did, you could be cured readily.
The current controversy over PSA screening for prostate cancer is a perfect example of this. The test isn’t very sensitive–it has about a 20% rate of false positives. That means that urologists are telling millions of American men that they could have prostate cancer when they really don’t. To make sure and avoid possible malpractice suits, the urologist has to order an expensive prostate biopsy (and most of the time, the biopsy will turn out negative).
Here’s a new report that analyzes just where the waste in our current healthcare system is. It’s in the practice of medicine, not in the courts:
http://www.reuters.com/article/topNews/idUSTRE59P0L320091026
And it’s even MORE costly than I thought.
If you like it, save a copy on your own computer because I have a feeling it won’t be around much longer.
sinz54 // Nov 9, 2009 at 10:15 am
Addie: When is the last time the government (CBO is GOVERNMENT) actually got a cost estimate correct?
Most of the time, it’s not their fault.
The CBO is only allowed to estimate the cost of the Congressional proposals they are given. They can’t question whether those proposals will be enacted as is, or amended later.
In this case, the CBO is correct that the Baucus bill will not add to the deficit and perhaps even slightly reduce it–if that bill is signed into law as is, and never amended over its projected life span.
But you and I know that’s highly unlikely. The Baucus bill takes hundreds of billions of dollars away from Medicare. Do you really believe Congress will allow that? Have they ever cut Medicare before?
DFL // Nov 9, 2009 at 10:57 am
Perhaps the Right can give the Left single-payer national health insurance and the Left can allow the Right to privatize or end many of the other poorly managed federal programs like the Post Office and the interstates.
SpartacusIsNotDead // Nov 9, 2009 at 2:54 pm
Sinz wrote: “How much would you be willing to bet that if the public option for health care is signed into law by Obama, it will be heavily subsidized by future Congresses?”
See Kanzeon’s post at # 15.
SpartacusIsNotDead // Nov 9, 2009 at 3:03 pm
Sinz @ # 34,
Your response does not address the issue raised by Reason60 in #33. No one questions whether the USPS requires federal funds; it certainly does and a history on USPS litigation is needed to confirm what we all already know.
The issue is whether the USPS, as a federally-subsidized entity, has run FedEx and UPS out of business, which is what you seem to fear will happen with a public option. Well, it’s abundantly clear that the federally-subsidized USPS has not run FedEx, UPS or any other private company out of business, and there’s no reason to think a public option will run private insurers out of business.
Again, the proof of this is the public option in the California workers compensation market. Until you reconcile that real life example with all the predictions about a public option, your concerns are nothing more than hyperbolic doomsday fear.
SpartacusIsNotDead // Nov 9, 2009 at 3:15 pm
Sinz wrote: “But the biggest cost by far is doctors’ overuse of antibiotics and lab tests to protect against possible malpractice lawsuits.”
You’ve jumped to a conclusion for which you have absolutely no substantiation. It’s widely accepted that there is overuse of medical services by providers. However, there is no evidence that fear of malpractice suits is substantial cause of this overuse. There is also no evidence that even if fear of malpractice suits was the cause of overuse that tort reform would result in less overuse.
Providers typically follow a standard of care that does not vary from state to state. That is, doctors generally prescribe whatever treatment is recognized nationally as the most efficacious. Those doctors in states without tort reform do not deviate from the nationally recognized standard because they know they will have lower liability in the event of a malpractice suit. And those doctors in states with tort reform also don’t deviate by offering more than the standard because they fear greater liability in a malpractice suit. Moreover, insurance companies won’t pay for services that are not reasonably medically necessary.
I’m sorry, but it’s pure nonsense to suggest that tort reform will have a signficant affect on the overuse of medical services. There simply is no evidence of this.
KL7212 // Nov 9, 2009 at 9:36 pm
>For us conservatives, the public option is a deal-breaker. It is absolutely unacceptable. That’s non-negotiable. We’ll fight it to the end, and lose the fight if we have to–because we absolutely cannot accept it…
Why?
You’ve argued eloquently about “market failure” in the medical insurance market. What’s wrong with having a publicly funded alternative to treat people who are “unprofitable” to the health care insurance industry?
I think you can see where I’m going with this…
The Rise of Single-Administrator Health Care? // Nov 10, 2009 at 6:12 pm
[...] Rise of Single-Administrator Health Care? David Frum made an observation on one of the potential bits of fallout from the House health insurance reform bill, assuming it [...]