Saturday, October 31, 2009

Disputing with Taraka

In a comment, Figment and Reality has pointed to HIPAA and COBRA as mechanisms for attempting to provide continuity of coverage. Read his comment and the link he provides to HowStuffWorks to get a sense of these programs. He’s right when it comes to group policies and Heaven knows I’ve benefitted from both HIPAA and COBRA. But however laudatory laudable the goals of both programs they are examples of a problematic relationship between government and corporations.

HIPAA and COBRA force private companies to serve societal goals - without society stepping up to pay the bill. It may all come out in the wash for insurers with regard to cost but it is another step down the road to private corporations acting as agents of the government rather than as independent entities. A road, obviously, that the health reform bills under consideration take us even further down.

I'm enthusiastically in favor of reasonable government regulation of corporations and I know the line where regulation becomes an unholy alliance is not clear and bright. Still I think it's important to remember the line exists and to understand when we are walking near it.

Why unholy? A private business should seek profit above all; in order to do so it must please its customers and compete with other firms. Those activities hold some of its more predatory urges in check. Government’s role should be to use regulation wisely to control the predatory urges that are not sufficiently controlled by market mechanisms.

Once a private business becomes an arm of the government, it no longer needs to please its customers and compete with other firms to make a profit; rather it needs to convince government to act in ways that make its business profitable. It will thus use every means at its disposal to persuade government to guarantee it market share by limiting competition from other firms and by making its customers captive. Government is inclined to go along with this because the firm is carrying out the government’s policies and it is in the government’s interest to insure the firm remains able to do so.

Now we have the worst of both worlds. We have a profit-driven firm that does not need to deliver a decent product in order to remain profitable and we have a government with no interest in checking the excesses of a private firm it now considers an arm of the government. Each party has contaminated the other.

Furthermore when the government forces private industry to serve government purposes doing so allows society to hide from itself the cost of a desired policy - even though knowing the cost of a government policy should be an important part of deciding whether to implement it. When New Jersey requires health insurance companies to provide excellent coverage the costs appear on insureds’ bills rather than on taxpayers’ returns. The costs of instituting the government policy were not openly borne by taxpayers through a government mechanism. Instead the costs were hidden in increased insurance costs for everyone who buys - or would like to buy - health insurance.

COBRA and HIPAA are the same thing although almost certainly with a smaller individual impact. As a society we can congratulate ourselves that we’ve forced insurance companies to provide more coverage and it hasn’t cost anything. It’s true that it hasn’t caused our taxes to go up (at least directly) but it must have caused a small increase in health insurance premiums. We don’t see that increase as driven by governmental fiat; we see it as a price increase by a private business and thus we can deceive ourselves about what we’ve done.

As I said, there is no hard and fast rule about when government regulation of business becomes an alliance of government and business. But we do ourselves no favors if we let government use private business to achieve ends more honestly achieved through direct government action. Neither do we do ourselves any favors if we let businesses use government intervention to achieve the profit that should come from fair competition in the marketplace.



On an - I think - unrelated note, what’s particularly odd about COBRA and HIPAA is that the government could have achieved the same goal more straightforwardly by simply allowing anyone who would be covered under COBRA or HIPAA to enroll in Medicaid and pay a premium. There was no need to force private insurers to provide the desired coverage.

The title of this post comes from Roger Zelazny’s Lord of Light. A (mostly) human man is possessed by Taraka, a powerful demon. The man eventually finds himself infected by Taraka’s evil, “disputing with Taraka” over which woman is most desirable, raising the wine cup or the dungeon whip by his own will. The analogy works nicely whether your ideology inclines you to assign the role of Taraka to private companies or to the government.

Local option

Reclusive Leftist has up a post about Harry Reid’s proposal to create a public option as part of health reform but let States opt-out. She is understandably irate that no one seems to know exactly how the opt-out would work but what caught my attention was her concluding paragraph:

And this whole states-opting-out thing is bullshit. Do people in red states not have rights?

Well, yes. And one of the rights they have - or are supposed to have - is to elect a governor and a State legislature to make decisions about what happens inside their State.

Let’s assume that everyone who voted for Barack Obama wants a public option in health reform. That means 53% of the people in the country want a public option. Okay, the majority of people want a public option which means the rest of us get it too. That’s fine, that’s how democracy works.

But what if the majority of the people in a particular State don’t want a public option? Why shouldn’t the the State opt out? If you follow the link in RL’s post you find yourself in a FiredogLake post that claims States which decide to opt out are “disenfranchising” the people who live in those States. But the opt-out will happen at the behest of the State governor and/or the State legislature both of which have been elected by the majority of voters in the State. If we go along with RL’s logic we must argue that if 53% of the people in the country want a policy everyone in every State must live under that policy - even if 95% of the people in a particular State don’t want to. But why? Some decisions cannot be variable across States - whether we belong to the United Nations, for example, or the use of the Armed Forces. But if a decision can vary across States I don’t see why we should insist on uniformity.

States making their own decisions drives people like Reclusive Leftist crazy but to me that’s the most brilliant idea embedded in our form of government. In a country this big and this diverse not everyone wants the same things and that’s where the States come in. They provide a means by which we can be a really big country and yet not try to force eveyone into the same mold. If the 53% of the people who want a public option are spread evenly across the country then every State will opt in. If the 53% of the people who want a public option are concentrated in “blue” States and the 47% who don’t are concentrated in “red” States then our form of Federalism lets us give most of the 53% what they want without forcing it on all of the 47% who don’t want it.

I know those who called themselves “progressives” will never buy the argument that States should have any say in such an important matter - or possibly in any matter - but there’s also a purely practical political side to this. Reclusive Leftist - and the articles at FireDogLake she links to - are concerned about the people in those red States. Red States have the highest percent of uninsured so they argue it’s wrong to allow their governors and/or state legislatures to cut them off from access to a public option. But if the public option works as well as its supporters believe it will, the States that opted out will want to opt in before too long. If I supported a public option, I’d rather pass a strong bill even if it didn’t include all the States than a weak bill that forced everyone to participate. Then I’d make sure States that opted out today could opt in further down the road, sit back, and wait for those silly red States to realize how much better off they’d be if they did it my way.

Of course the same logic applies to those who think a public option is the first step on the road to perdition. If the public option works as badly as its opponents believe it will, they can sit back and wait for the States that opted in to realize how much better things are going in the States that opted out. So if I opposed the public option, I’d make it my business to insure the opt out clause lets States opt out of the costs as well as the benefits and that States which opted in today can opt out further down the road. Then I’d sit back and wait for those silly blue States to realize how much better off they’d be if they’d listened to me in the first place.

Wednesday, October 28, 2009

Figment and reality

Figment and Reality has commented on my earlier “Rape is a pre-existing condition” post. As so often seems to happen my response to him has grown to post length. I don’t disagree with what F&R has written - with one exception - so I suppose this is not technically a response to his comment. Rather his comment has provided a springboard for me to expand on some thoughts.

F&R writes:

If we follow the conclusion of the insurance company, it would be best if she bought the drugs on the black market to prevent being labelled with the pre-existing condition tag. Should she later discover she indeed contracted HIV, then since they did not know about it, they would be required to cover it. Instead, by being responsible, she is being penalized.

I agree wholeheartedly that this situation is - for both society and Susan - stupidly arranged. Obviously Susan should be able to take care of herself medically and clearly society is best served when people at risk of serious illnesses - particularly communicable ones - seek quick and aggressive treatment. The disconnect comes when people use this story to condemn the insurance industry. It is indeed in Susan’s best interest and in society’s best interest for Susan - anyone - to seek medical treatment without fear it will keep her from getting health insurance down the road. But by what logic is it an insurance company’s job to serve either Susan’s interest or that of society? Insurance companies are profit-making entities. They exist to serve their paying customers and - if they have them - their shareholders.

If society believes pre-existing conditions should never prevent someone from getting health insurance then society needs to assume the burden of making sure that happens. To force that burden onto private companies is stupid and short-sighted - unless the goal is to see the companies fail.

It is perfectly logical to use Susan’s case to demonstrate the need to rework our health care/insurance system so that pre-existing conditions do not prevent someone from obtaining health insurance and therefore top notch health care. However, to use Susan’s case to “prove” the insurance companies are the villains of health care or that the “bastards have brought [health insurance reform] upon themselves with their despicable practices” reflects either a total lack of understanding of the really rather simple realities of pre-existing conditions or a regrettable willingness to demonize an industry to achieve a political goal. Leaving aside the moral problems of demonizing companies - which are, after all, made up of living, breathing human beings just like you and me - the practical problem is that demonization does not lead us to figure out where the problems in the current system really lie. In fact, demonization virtually guarantees we will misidentify the problem; it is designed to do just that. And if we misidentify the problems we have virtually no hope of designing solutions which actually fix the problems.

F&R continues:

She had to go to a Doctor to get the prescription, he/she recommended the meds as Prophylactic care and she is now being told that her potential exposure is now a pre-existing condition and obviously did not have insurance at the time of the Rape.

Actually Susan did have health insurance at the time of the rape. The story specifically refers to her losing her health insurance and seeking new coverage. We don’t know why she lost her health insurance: she may have lost her job; she may have gotten insurance through her husband’s job and he lost his job or they were divorced; the premiums may have become too much for her to handle and she was looking for cheaper insurance; she may have had private insurance at the time of the rape and lost it when she moved to another State. All of which lead to Figment’s next point:

From what I read, the one very important part of any health plan discussion has to be true portability. With portability, pre-existing doesn't occur, as long as you don't have insurance lapses.

Yes, but. There is a problem with true portability for the insurance companies. JustOneMinute is suggesting a plan he calls “Once Covered, Always Covered”:

My Tough Love approach would be to rank insurance policies and legislate that anyone with, for example, a Class One coverage cannot be denied Class One coverage by another insurer at prevailing rates. In other words, people only have to pass through the door once; after that first insurance company covers them, they can buy coverage for life. People who take their chances and don't buy insurance when they are young face the risk of getting the Tough Love message (which will be as tough as that faced by the current uninsured, namely, emergency room and clinic care.)

This sounds very fair to those of us who buy health insurance: if we’ve faithfully paid premiums for years why should we be denied coverage for a “pre-existing” condition just because we now want to - or need to - buy insurance from a different company? That condition didn’t exist previous to our ever buying insurance; it just exists previous to our buying this particular health insurance. And that, of course, is the sticking point. If I’ve paid premiums for years to, say, United Health Care and now I’ve got diabetes why should Blue Cross Blue Shield have to cover me? It’s UHC that got all those premiums for all those years when I was perfectly healthy; why must BCBS take me on knowing my premiums couldn’t possible cover what I’ll cost them? Insurance companies are not fungible.

The counter-argument would be, I suppose, that this will all even out. But it won’t. I can easily envision a situation in which ABC Insurance has really low premiums but achieves that by paying health care providers as little as possible (resulting in very few who take their insurance) and by denying as many claims as possible. Meanwhile XYZ Insurance charges substantially higher premiums but pays health care providers very well (and has a huge network) and processes claims fairly. Why wouldn’t I enroll with ABC Insurance as long as I was well and switch to XYZ Insurance if I ever became seriously ill?

A similar situation arises if I live most of my life in a relatively poor State with relatively unsophisticated medical care. My insurance premiums are low. Then I become seriously ill; let’s say I have cancer. Now I move to New York or New Jersey to be near the world-class medical care available there; my insurance premiums are high. Why do the New Jersey insurance companies have to take me on? They haven’t seen a dime from me for 40 years and I’m going to cost them a fortune.

We can get around this, of course. We can write government regulations that make sure JOM’s Class One designation not only includes what a policy covers but also takes into account reimbursement rates and how many providers are in a network and the percentage of claims paid and whatever else an insurance company can do to make its policies more or less desirable plus some kind of weighting by State. (We have now re-invented the Bronze, Silver, Gold, Platinum designation in the proposed “Exchange” - which was itself a re-invention of the Federal Employee Health Benefits Plan. She nagged.) We could require an insurance company to cough up some money when one of their policy holders switches to another company: prorate it based on years covered or something like that. Of course both of these ideas mean Yet More Government MicroManagement and so we’ve circled back around to something I’ve said before: if insurance companies are going to become public utilities we might be better off just going with a straight government program. It removes a layer of bureaucracy and cost and it puts government on the firing line rather than letting it blame all the intractable problems of health insurance on those horrible insurance companies.

F&R points out:

That was the intent of COBRA but it does not work as applied when the premiums under COBRA exceed your unemployment check.

Yes, COBRA is an idea that resulted from an attempt to do good without being willing to ante up any money.

Finally, the part of F&R’s comment that I do disagree with:

As far as the media playing to their audience, what else can we expect? They are rewarded financially by having larger audiences and our world runs on money. The headline caught me, just like the rest of us in this blog. If they (or you) had changed the title, few would listen or read about it. There is truth to the theory that "if it bleeds, it leads" in the newroom. Profits are what keep the news companies running but it is unfortunate that opionions get confused with real news.

I can buy that argument for newspapers and television which must capture readers to sell advertisements to stay in business. I don’t like it but I can buy it. I can’t buy it for your basic blogger who is - I assume - blogging in an attempt to add value to the very serious discussion we should be having about how our current health system functions, what causes the problems we see in it, and what we can do to fix those problems. I first found this story - and headline - at a blog that has done some helpful writing on cost shifting and malpractice - including an objection to Ezra Klein’s “Pollyanna-ish belief that ‘if doctors were just better, we wouldn't have these lawsuits’” because it “betrays a lack of real-world experience actually delivering health care.” I expect more from such a thoughtful blog than “if health insurance companies weren’t such bastards, we wouldn’t have a problem with pre-existing conditions like Susan’s.”



Megan McArdle is explaining how the public option can drive reimbursements for health providers below sustainability. (I discussed this problem here although McArdle is of course doing so much more pithily.) McArdle is also wondering how health care providers will react to health reform that will be bad for their reimbursement rates.

I’ve recommended David Mamet’s piece before but I think it’s worth re-reading in the context of demonizing insurance companies.

Monday, October 26, 2009

This sounds wrong

Either this doesn’t mean what is sounds like it means or the Senate is about to do something really dumb. In describing what the health bill put together by Senate Democrats is likely to look like the Wall Street Journal (via neoneocon) writes:

Details of the legislation could change, but its broad outlines are becoming clear. Employers with more than 50 workers wouldn't be required to provide health insurance, but they would face fines of up to $750 per employee if even part of their work force received a government subsidy to buy health insurance, this person said. A bill passed by the Senate Finance Committee had a lower fine of up to $400 per employee.

To me that means that if MidSize Company, Inc., doesn’t offer its employees health insurance the Federal government will leave it alone if none of those employees need government help to buy health insurance on their own. However, if even one of the employees of MidSize applies for a government subsidy to buy health insurance, the Feds will hit MidSize with a bill for $750 per employee.

If I’m right about what this means, has no one writing this bill considered that they are creating a very strong incentive for employers to refuse to hire anyone who seems likely to get government help to buy health insurance? Employers who don’t want to provide health insurance will favor applicants whose spouses have health insurance; applicants who don’t have children; applicants who are young; and applicants who have never had any health problems. Furthermore, if I understand the provision correctly, employers will have a very strong incentive to fire any employee who applies for a subsidy to buy health insurance. Worse yet, it will be a cold day in hell before a company with 50 employees and no company health insurance plan hires any more workers. So much for improving the employment picture.

I’ll be delighted to be told I’ve completely misunderstood this provision.

(I’ve written about what seems to be a similar provision in KennedyCare. See the footnote to this post.)

A worthy cause

When confronted with yet another maddening computer glitch, I tend to remark bitterly that I’m so glad computers are making our lives so much easier. Well, here’s someplace where computers really are making lives not only easier but better: the Soldiers’ Angels Valour-IT Project.

Here's the description of the Project from their Website:

Project Valour-IT, in memory of SFC William V. Ziegenfuss, helps provide voice-controlled/adaptive laptop computers and other technology to support Soldiers, Sailors, Airmen and Marines recovering from hand wounds and other severe injuries. Technology supplied includes:

* Voice-controlled Laptops - Operated by speaking into a microphone or using other adaptive technologies, they allow the wounded to maintain connections with the rest of the world during recovery.
* Wii Video Game Systems - Whole-body game systems increase motivation and speed recovery when used under the guidance of physical therapists in therapy sessions (donated only to medical facilities).
* Personal GPS - Handheld GPS devices build self-confidence and independence by compensating for short-term memory loss and organizational challenges related to severe TBI and severe PTSD.

From October 26 to November 11, Project Valour-IT has an inter-service fundraising competition going on: Air Force vs Army vs Marines vs Navy. Bloggers sign up for a particular team and the competition is reportedly fierce. If you want to donate to Valour-IT and have an affinity for a particular branch of the service, you can have your donation credited to that team during the competition.

Click here to donate to a particular team over the Internet. You can also see how the teams are doing. When I started writing this the Marines were ahead; now Army has a commanding lead.

If you prefer to mail in a donation write the name of your service branch on the check ALL IN CAPS and mail the check to:

Soldiers Angels Project Valour-IT
(Your service branch here) TEAM
1792 E. Washington Blvd
Pasadena, CA 91104

If you’re like me and don’t have an attachment to a particular branch of the service, you can donate without playing favorites. Go here to donate over the Internet or you can mail your donation to the same address as above but without the team designation.

Soldiers' Angels
Project Valour-IT Fund
1792 E. Washington Blvd
Pasadena, Ca 91104

If you want more information or to cheer on a team, three of the bloggers I read regularly are on the Marine team: Villainous Company (team leader!), Grim, and TigerHawk. I’m sure there are some perfectly nice bloggers on the other teams as well.

Sunday, October 25, 2009

Things that puzzle me on Sunday afternoon

I watched This Week with George Stephanopoulos and Inside Washington this morning and am puzzled about some things.

On IW Mark Shields thought that Harry Reid thought that he had between 52 and 55 votes for a robust (not just a trigger, no opt in or opt out) public option in the health reform bill. Therefore if Reid can convince all the Democrats (and Democrat-caucusing Independents) to vote for cloture, he can get a vote on a robust public option and the option is likely to pass. Over at This Week there seemed to be more concern that if Olympia Snowe could not be persuaded to vote for a bill with a robust public option the Senate Democratic leadership wouldn’t even try to pass it because they did not want to pass a bill with just Democrats; they needed cover for moderate Democrats and/or they wanted to look at least somewhat bipartisan.

First of all, if Reid has 52 to 55 votes he is already counting on losing a few moderate Democrats. As long as he can hold them for the cloture vote he doesn’t need them for the substantive vote. And I think any moderate Democrat of reasonable intelligence could make a cloture vote palatable to his or her constituents.

Second - and I imagine this is terribly naive of me - if the Democrats are convinced the public option is the right thing to do, will improve the insurance picture for most Americans, and is supported by a majority of Americans, then they should welcome the chance to pass it without Republican support. Assuming the bill does what they believe it will, the Democrats will be heroes for a generation and the Republicans will look like fools.

I’m also now totally confused about what a robust public option actually is. On This Week’s roundtable Cynthia Tucker said - if I understood her correctly - that only about 12 million people would be covered under the public option. I don’t know if she means that the public option would be written in such a way that only 12 million people would be eligible to enroll or if she simply anticipates that only about 12 million people would choose to enroll, the rest presumably having insurance through work or being happy with their private insurance.

In a side puzzlement, not directly related to the Sunday shows, I wonder what creation of the Exchange and/or a public option would do to insurance in States like New Jersey. New Jersey essentially requires insurance companies to sell insurance to individuals; limits their ability to exclude coverage for pre-existing conditions; and has an extensive list of treatments the companies must cover. One result is to drive up insurance premiums in New Jersey. I would think that if Federal health reform passes then New Jersey would figure individuals could now get coverage via either the Exchange or the public option and would be quite tempted to relax requirements for insurance companies to sell to individuals in order to bring down insurance rates in the State.

I was more amused than puzzled to hear Senator Claire McCaskill carefully point out that the health reform bills the Senate is considering will require members of Congress and their staffs to purchase their health insurance through the “Exchange”. Since as far as I can tell the Exchange simply re-creates the Federal Employees Health Benefit Plan this is sort of like announcing the Senate is going to build a second Senate Dining Room and start eating all its meals there rather than in the existing Senate Dining Room. It would have been much simpler to just let anyone who wants to buy into the existing FEHP. Cheaper, too, if we’re going to create a whole other bureaucracy to run the Exchange.

I’m also puzzled about Afghanistan. I know that General McChrystal has requested more troops; I seem to be hearing 40,000 although I also heard that there might be alternate plans for fewer (10,000 or 20,000) and for more (80,000). Obama has not decided whether to approve McChrystal’s request. The discussions this morning seemed to be about whether Obama is “dithering” or taking the time he needs to consider all options and make a prudent decision. What I don’t understand is what impact this is having on the troops already there. Colby King was asked specifically if Obama’s delay put the troops in danger; he said it did not. I don’t really understand that. Are we simply holding ground we already have in Afghanistan and as long as we continue to do that more troops aren’t really necessary? Or are we engaged in attacks (which is what I thought) but the scope of those attacks is such that more troops wouldn’t help?

The other thing that concerns - as well as puzzles - me about Afghanistan is that I’m not sure what range of options Obama is considering. If the troops currently in Afghanistan truly are not in greater danger because of the delay and Obama is simply deciding whether to hold troop levels where they are or increase them by whatever amount then so be it. But if Obama is seriously considering pulling all US troops out of Afghanistan then he needs to decide now before any more Americans die in Afghanistan.

Finally I’m puzzled by much of the reaction to the Obama Administration’s War on Fox. (I love that phrase.) I can understand that liberals and those who call themselves “progressives” would enjoy watching Obama go after Fox. (Although I do still hope that those on the Left will be attached enough to freedom of the press to realize this is a very dangerous road to start down, set aside their enjoyment, and oppose this war.) What I don’t understand is how they can claim with a straight face that the Obama Administration is justified in this war because Glenn Beck and Sean Hannity are so incredibly partisan (some say loony). Do they honestly not know that Keith Olbermann and Rachel Maddow were included in an Obama White House chat earlier this week? If they don’t know, they’re seriously uninformed. If they do know Olbermann and Maddow had a coffee klatch with the President, they’re seriously incapable of logical thinking. If Obama and his supporters are truly bad-mouthing Fox News because it’s partisan and not because it’s critical of his policies then there is no way to justify Obama meeting with Olbermann and Maddow - who can most charitably be described as “rabidly liberal”. This is hypocrisy on such a massive scale it’s almost incomprehensible.

A very puzzling day. I can only hope the Yankees beat the Angels and restore order to the universe.

I heart Colby King

This morning the panel on Inside Washington discussed the Administration’s moves to limit executive pay. Colby King suggested that the best form of financial regulation would be to essentially un-repeal Glass-Steagal. Put commercial banks back in the business of collecting deposits, loaning money, getting loans paid back, and being carefully regulated while letting investment banks take whatever risks they want and pay their guys ridiculous sums. Then when the investment banks did stupid things the government could just let them fail without crashing the whole world.

I heart Colby King.

Oregon Offers Terminal Patients Doctor-Assisted Suicide Instead of Medical Care

In July of 2009, RedState put up a story about Randy Stroup, a 53-year-old man with metastatic prostate cancer who applied to Oregon’s government-run Health Plan to pay for his treatment. The Plan refused to pay for the treatment but offered to pay for physician-assisted suicide. This, RedState tells us, is a look at “The Future in ... Barack Obama’s America”.

Well, not exactly. The RedState article lacked some important context. First, it did not explain that Oregon refused to pay for Mr. Stroup’s chemotherapy because:

Oregon doesn't cover life-prolonging treatment unless there is better than a 5 percent chance it will help the patients live for five more years

Back in the early 90s the State of Oregon established a tax-funded health plan to help the uninsured. This State health plan was intended to work within an established and limited budget while providing health care to as many needy people as possible. In order to do this the State figured out how much of the taxpayers’ money it was willing to spend on health care for the poor and uninsured. It then produced a list of treatments ordered by effectiveness. It determined how much each treatment would cost and estimated how many of each treatment it would have to provide. It calculated an extended price for each treatment on the ordered list, kept a running total, and drew a line when the total equaled the amount of money it had to spend. Everything above the list would be covered; everything below would not. It’s not clear that this approach succeeded: political pressures seem to have resulted in a rather small list of disallowed procedures and made the attempt to live within a set budget ineffective. One restriction that does survive is that the Oregon Health Plan will not pay for cancer treatment when there is less than 5% five-year survival rate. This is why Mr. Stroup’s treatment was not covered. (pdf; Prioritized List of Health Services, pp. 17-61)

There is another point about Mr. Stroup’s experience that was not made clear at RedState or at the Fox story RedState linked. The Oregon Health Plan does not offer terminally ill patients a choice between no medical care and State-paid physician-assisted suicide. Rather it offers terminally ill patients “comfort/palliative care” and - despite the title of my post (taken from the Fox story) - comfort/palliative care is medical care. Specifically, here’s what comfort and palliative care means under the Oregon Health Plan (same pdf; see page 93):


It is the intent of the Commission that comfort/palliative care treatments for patients with an illness with <5% expected 5 year survival be a covered service. Comfort/palliative care includes the provision of services or items that give comfort to and/or relieve symptoms for such patients. There is no intent to limit comfort/palliative care services according to the expected length of life (e.g., six months) for such patients, except as specified by Oregon Administrative Rules.

It is the intent of the Commission to not cover diagnostic or curative care for the primary illness or care focused on active treatment of the primary illness which are intended to prolong life or alter disease progression for patients with <5% expected 5 year survival.

Examples of comfort/palliative care include:
1) Medication for symptom control and/or pain relief;
2) In-home, day care services, and hospice services as defined by DMAP;
3) Medical equipment (such as wheelchairs or walkers) determined to be medically appropriate for completion of basic activities of daily living;
4) Medical supplies (such as bandages and catheters) determined to be medically appropriate for management of symptomatic complications or as required for symptom control; and
5) Services under ORS 127.800-127.897 (Oregon Death with Dignity Act), to include but not be limited to the attending physician visits, consulting physician confirmation, mental health evaluation and counseling, and prescription medications.

Examples of services which are not intended to be covered as comfort/palliative care include:
1) Chemotherapy or surgical interventions with the primary intent to prolong life or alter disease progression; and
2) Medical equipment or supplies which will not benefit the patient for a reasonable length of time.

Physician-assisted suicide is legal in Oregon and the State’s Health Plan offers it as one of a range of palliative options. Personally, I think legalizing physician-assisted suicide is a terrible idea; Ezekiel Emanuel’s 1997 Atlantic article makes the dangers inherent in such a policy quite clear. However the voters in Oregon have decided they want terminally ill people to have that option and since it is legal it is offered as one of the comfort and palliative care options. It is not, however, the only care option available to Mr. Stroup under Oregon’s Health Plan. The Plan is also willing to pay for Mr. Stroup to enter a hospice when his disease becomes more serious. If he prefers to die at home the Oregon Health Plan will pay for him to receive hospice care at home. The Plan will pay for him to receive pain medications. If he needs a wheelchair the Plan will pay for that. Mr. Stroup can choose from the full range of medical care usually consider comfort/palliative care.

The Oregon Health Plan is attempting to conserve a scarce resource: tax dollars available to fund health care for the poor and uninsured. The government of Oregon realizes that if agrees to pay for very expensive treatments with very little chance of success it will have to do one of two things: provide care to fewer poor and uninsured people or raise more money for the Health Plan through higher taxes. By focusing on physician-assisted suicide and failing to consider the broader offer of palliative care, the RedState story insures that anyone who reads Mr. Stroup’s story will insist the State should have paid for Mr. Stroup’s chemotherapy - and that their failure to do so is a condemnation of government-run health insurance.

Yet this formulation obscures the issue that is really at the heart of this story: are we willing to spend whatever amount of money it takes to make sure that everyone gets every possible treatment? Surely there must be cases like this under government programs where physician-assisted suicide is not an option, where the government has refused to pay for an expensive treatment that is likely to prove futile while offering to pay for all necessary comfort and palliative care. If we remove the option of physician-assisted suicide from our thinking, are we still prepared to argue that the government should have paid for Mr. Stroup’s chemotherapy? Are we prepared to argue that so long as there is any chance whatsoever that a treatment might save someone - or might prolong his life for a few months or might make his last few months more comfortable - we will pay whatever amount of money is required to provide him with that treatment?

If our answer is “Yes” then must understand what that means: higher taxes for all of us. If we are not willing to write a blank check for a government-run insurance plan then we need rules that tell the government how much we’re willing to spend and how we want that spending allocated. The Oregon Health Plan was designed to have a limited budget and allocates spending by covering some treatments and not others. If you flinch from this and believe everyone like Mr. Stroup should be given every possible treatment then we’re back to unlimited spending on health care and higher taxes. There is no magical third option.

Yes, you say, that’s a problem with government-run health insurance; people with private insurance don’t encounter the same problem.* Actually people with private insurance encounter exactly the same problem. In as nice a bit of sleight of hand as I’ve seen lately, ABC managed to report on the physician-assisted suicide issue in Oregon and turn it into a condemnation of insurance companies.

The ABC story begins with Barbara Wagner who also had metastatic cancer and who also was denied treatment by the Oregon Health Plan due to her poor prognosis. It took ABC eleven paragraphs of references to Ms. Wagner’s “insurance company” before it explained that the “insurance company” was actually “state-run”. After presenting Ms. Wagner’s case; briefly mentioning Mr. Stroup’s case; discussing the (undeniably) incredibly insensitive letter the Oregon Health Plan uses to deny care to the terminally ill**; and warning of the dangers of physician-assisted suicide in a cost-cutting setting, ABC goes on to discuss an executive who is fighting his insurance company to force them to pay for Sutent to treat his liver cancer. The executive is no different from Mr. Stroup except that the executive has a private insurer instead of a government one. But the private insurer faces the same dilemma as Oregon’s State-run Health Plan: the more extremely expensive treatments it covers the more premiums are going to rise. This will mean some people who could have afforded health insurance are not going to be able to do so and will become uninsured and -presumably - receive worse care. Just as is the case with Oregon’s government-run Health Plan, paying for every costly treatment available means either higher costs for everyone or fewer people covered or both.

The ABC story contains two quotes that make it clear people are unable or unwilling to see this reality. The first quote comes from the executive who wants his private insurance company to pay for Sutent:

Most of my objections are that some second rate guy on the staff of the insurance company is second-guessing one of the foremost authorities and trumping his judgment[.]

I’m pretty sure the guy on on the staff of the insurance company isn’t second-guessing the executive’s doctor’s medical judgment. I imagine that guy - whatever rate he is - believes absolutely what the executive’s foremost authority is saying: Sutent will cost $54,000 and might - might - extend the executive’s life by six months. However the insurance company guy also knows two other things: paying for Sutent was not something the insurance company included in its calculations when it set the executive’s premiums and if it starts paying for Sutent - and other drugs like Sutent - premiums are going to have to go up for everyone. It’s not the facts about what the drug might do that are in question; it’s whether the drug is worth the money it will cost. Understandably it’s worth any amount of money to the executive; if he had the money to pay for it himself he would. Equally understandably it’s not worth what it costs to the insurance company - and it may not be worth what it costs to the insurance company’s other policyholders.

The other quote that demonstrates an unwillingness to face the reality of the connection between more care and more money is this:

"[Ms. Wagner’s] case is hardly unique," said Michigan lawyer Geoffrey Fieger, who defended Dr. Jack Kevorkian's crusade to legalize physician-assisted deaths. "In the rest of the country insurance companies are making these decisions and are not paying for suicide," Fieger told "Involuntary choices are foisted on people all the time by virtue of denials."

"I am surprised there hasn't been a revolt in this country," he said. "It happens every day and people are helpless."

Let’s give Fieger the benefit of the doubt and assume he’s not suggesting revolt because insurance companies won’t pay for suicide. Then we have to ask: what would be the goal of his revolt? To force insurance companies to pay for every possible treatment? That doesn’t require a revolt; it just requires that subscribers be willing to pay higher premiums. To turn health insurance over to the government? That would simply transfer the problem from insurance companies denying treatment to the government denying treatment. And if we aren’t happy with that then we can force the government to pay for every possible treatment - so long as we’re willing to pay higher taxes instead of higher premiums. A revolt is not going to change the fact that if you want more care you have to pay more for it.

Like the dilemma of pre-existing conditions the conflict between our desire for all possible care and our desire to not bankrupt ourselves paying for it is a conflict inherent in the nature of health insurance. It is not an issue that arises only with private insurance companies or only with government-run health insurance. If we want private insurance and all possible care then we have to be prepared to pay higher premiums. If we want government health insurance and all possible care then we have to be prepared to pay higher taxes. If we’re not willing to pay higher sums to either private insurers or the government then we have to accept that someone, somewhere is going to have the power to decide that the treatment your doctor tells you might prolong your life, tells you might - if combined with a miracle - save your life, is simply not worth the money to your fellow taxpayers or your fellow subscribers.

I understand that most people want every possible chance at every possible moment of life. I stood where Ms. Wagner, Mr. Stroup, and that unnamed executive stood. My doctors went to bat for me and my private insurance company paid for me to get that less than 5% chance. That was ten years ago which means I got very, very lucky. If we as taxpayers or we as premium payers decide that we want everyone to have the chance I had, that’s our decision to make. But we have to realize the cost. And we have to stop kidding ourselves that if only we had private insurance instead of government-run or government-run insurance instead of private, the reality that more care costs more money would magically disappear. It won’t. Reality is stubborn that way.


* It’s a charming bit of irony that a Right-leaning Website like RedState is up in arms over the Oregon Health Plan being unwilling to treat Sam when - as their own post makes clear - Sam was “Uninsured and unable to pay for expensive chemotherapy”. In other words, Oregon was at least willing to pay for comfort/palliative care for Sam; the private market was unwilling to pay for so much as an aspirin.

** The ABC story quoted an Oregon Health Plan official as saying the Plan intends to increase sensitivity by having someone from the Plan phone patients to deny them treatment and suggest comfort/palliative care. I cannot imagine anyone staying in that job for more than a week.



I have written about Randy Stroup and Barbara Wagner in the present tense. However both the Fox story about Mr. Stroup and the ABC story about Ms. Wagner appeared in the Summer of 2008 - more than a year ago. As the Fox story makes clear, the Oregon Health Plan eventually agreed to pay for Mr. Stroup’s chemotherapy. Although it made an exception for Mr. Stroup, Oregon apparently was not willing to make an exception for Ms. Wagner. However Ms. Wagner’s doctor appealed to Genentech, the pharmaceutical company that makes the medication she needed. Genentech agreed to supply a year’s worth of the drug free of charge.

Randy Stroup died July 16 of this year. He was 54. I have also read that Barbara Wagner died although the blog that reported this did not provide a source. I am terribly sorry that neither Mr. Stroup nor Ms. Wagner shared my luck.

Thursday, October 22, 2009

Rape is a pre-existing condition

[Updated October 22, 2009, at 7:10pm: I fixed the Category. It should have been Med Stories.]

I hate stories like this. A woman (let’s call her Susan) believed she had been drugged and raped so she took anti-HIV meds to be on the safe side. When she applied for health insurance she was denied coverage because she had a pre-existing condition and told to try again in a few years if she was HIV-free.

What happened to Susan was terrible. She did the smart thing for herself medically by taking HIV meds and as a result she made herself uninsurable for three years. That certainly doesn’t seem fair.

However the reason I hate stories like this is that they rely solely on eliciting an emotional response and have no interest in the sort of long analysis that needs to be done to figure out what such stories are really telling us. In fact stories like this are intended specifically to keep us from doing any such analysis. The title of this post expresses this perfectly. It’s the title of the post at Movin’ Meat where I found this story; a Google search for that phrase plus “Susan’s” last name yields 800 hits. The title is certainly dramatic and enraging but is it accurate - or even defensible? No.

Let’s assume the insurance company is correct that it will be three years before Susan can know for sure whether she has contracted HIV. That is, latent HIV is a medically valid pre-existing condition. The insurance company has not made a medical error in its analysis of the situation. I do not know for certain that this is the case but Movin’ Meat didn’t argue otherwise so I’m taking it as a working assumption.

So Susan does have a pre-existing condition and the insurance company is treating it accordingly. It is not rape that is a pre-existing condition but latent HIV. Those who insist this is an example of rape being a pre-existing condition are saying that the insurance company was wrong to deny coverage to Susan since her exposure to HIV was a result of rape but would be perfectly justified in denying coverage to Susan if she had been exposed to HIV:

- as a result of one episode of consensual sex;

- through sharing a needle once;

- because she was a health care worker who treated a patient with HIV; or

- because she was a newborn whose mother was HIV positive.

So let’s talk about what these beliefs will look like when translated into health insurance legislation. We will forbid insurance companies to deny coverage to people whose pre-existing conditions were the result of rape. On the other hand, people whose pre-existing conditions were not the result of rape can be denied coverage.

Somehow I don’t think that anyone who is pushing the “rape is a pre-existing condition” line really wants that kind of legislation. Stories like this are not supposed to lead one to draw conclusions - or even to think them through. These stories are designed to make those who read them angry and sad and horrified at the villain of the piece - the insurance company - in order to achieve a goal - support for health insurance reform that is not in the interest of insurance companies. These stories do not lend themselves to careful consideration of exactly why we find them heart-wrenching which means they do not advance the cause of thinking through what we find objectionable in our current health care system. And they certainly don’t support attempts to consider what correcting the perceived horror will entail. They have no balance, no other side.

Susan’s story is not about rape. It is about - or should be about - how we want to handle pre-existing conditions. This in turn should lead us to a discussion of why insurance companies handle pre-existing conditions the way they do - because if they didn’t exclude people with pre-existing conditions they’d go out of business. From there we should consider whether we want to force insurance companies to accept people with pre-existing conditions. If we do then we have to realize that doing so will either drive health insurance premiums through the roof or put insurance companies out of business in short order. If we think putting health insurance companies out of business is a desirable outcome then we have to discuss how we’re going to handle health insurance instead. This almost certainly means some type of government intervention. The choices for government-run health insurance are the same as those for privately-run health insurance: everyone must buy in; buy-in is optional but pre-existing conditions get you excluded; or everyone who buys in is supporting those who wait to buy in until they’re sick.

On the other hand, if we want to avoid putting insurance companies out of business then we have to force everyone to buy health insurance from them. If we are not willing to do that then either we have to live with insurance companies denying coverage to people with pre-existing conditions or we have to live with sky-high premiums or we have to accept that government needs to provide health insurance in some way: either by taking it over completely or by providing health insurance for people with pre-existing conditions. If the former then we’re back to the same three choices: everyone must buy in; buy-in is optional but pre-existing conditions get you excluded; or everyone who buys in is supporting those who wait to buy in until they’re sick. If the latter then there is no choice: we all support those who wait to buy in until they’re sick.

Framing Susan’s story as “rape is a pre-existing condition” short-circuits that entire discussion. It makes it clear that the only decent responses to her story are to insist that no insurance company should be able to deny her coverage for her pre-existing condition and to accept that insurance companies are clearly rotten to the core. Only someone with ice in her veins would read Susan’s story and then point out that an insurance company needs to remain solvent and that providing coverage to someone who may have an extremely expensive pre-existing condition will make insurance more expensive for everyone else who buys it. And only a monster would point out that - whatever advantages government-run health insurance might have - it does not eliminate the relationship between required coverage and pre-existing conditions. A government-run plan that does not require everyone to enroll will face exactly the same issue: what to do about someone who is not enrolled in health insurance, who may have contracted HIV, and who now wants to sign up. Conversely if private insurance companies operated in a community where everyone was required to have insurance coverage this situation would never have arisen.

On paper the Baucus bill understands this relationship. It requires insurance companies to accept applicants with pre-existing conditions; this resolves situations like Susan’s. It balances this requirement with an individual mandate: everyone must buy health insurance. This gives insurance companies a big enough pool of healthy people to dilute the cost of covering those with pre-existing conditions. It also - and more importantly - means that there will no longer be people with pre-existing conditions who are not insured but want to become insured. So from that standpoint the Baucus bill looks reasonable.

There are reports, however, that the fines for the individual mandate are being decreased. If they are decreased to the point that they are no longer coercive or if they are not enforced we will have written exactly the kind of bill that Susan’s story could be expected to produce: one containing an emotional response to the problem of pre-existing conditions but lacking any understanding of the realities that cause that problem.

Wednesday, October 21, 2009

Job creation

Greg Mankiw has linked to an article by Steven Davis about how to spur employment in the United States. Davis presents four ideas for improving the unemployment picture in the United States:

1) do away with or circumvent State mandates for employer-provided health insurance

2) suspend the Federal minimum wage or allow States to do so

3) make it crystal clear that the Employee Free Choice Act will not pass

4) do a quantifiable study of the success of various attempts to lower unemployment.

The issue of the minimum wage interests me not at all. I can see both sides of the argument and I think fighting over a minimum wage is a waste of time so long as there are no effective bars to employers hiring illegal aliens for less than the minimum wage.

Of Davis’ other three ideas, the fourth seems pointless and the first seems unnecessary. I’ll look at those and then have more to say about Davis’ third idea.

In presenting his fourth idea, Davis argues that we should:

Experiment with how best to put the unemployed back to work and assess the results. [snip] Some programs focus on job search assistance and interviewing skills. Others provide counseling about education and training opportunities. Yet others rely on re-employment bonuses for job losers or financial inducements to hire the unemployed. There is much potential to learn from these programs about which approaches are cost effective, and which are not.

The programs Davis discusses break down into two categories: helping people get jobs (job search assistance, interviewing skills, education and training opportunities) and persuading employers to create jobs (re-employment bonuses and financial inducements). If unemployment is high because jobs exist but job seekers are not qualified for them then the former methods will be effective. Yet Davis himself seems to say that the problem is not that we have jobs and lack qualified applicants; the problem is that we lack jobs:

The job vacancy rate is mired at 1.8% of employment, the lowest level in the history of the series.

If I understand this correctly it means there simply are not very many open jobs. If that’s the case training workers who used to be in the Widget industry how to complete for jobs in the Doodad industry isn’t going to help: not only are the Widget jobs gone, there aren’t any Doodad jobs either.

The second approach - persuading employers to create jobs - seems to be more what we need. Yet Davis begins his article by claiming that paying companies to hire workers is a fool’s game:

Another proposal circulating in Washington would offer tax credits for employers to create new jobs. Under one version, an employer receives a tax credit of $8,000 in the first year of a new job and $5,000 in the second year. But this proposal is even more costly than the proposal for unemployment insurance benefits. [snip]

Plans to whittle down the cost by restricting eligibility for the new-jobs credit would inevitably favor some employers and harm others. Eligibility restrictions would also inject greater complexity into our already-byzantine tax code.

Davis himself is thus arguing that these tactics will do more harm than good in the long run. It also seems to me - independent of anything Davis said - that providing an employer a financial incentive to hire a worker can’t possibly be that effective.

Let’s say an employer could really use another Shipping Clerk but his revenue numbers don’t quite make him feel comfortable hiring that clerk for the $30,000 salary his other Shipping Clerk is getting. The Feds pop up and offer him $8,000 to hire the clerk and suddenly he’s happy to do so. My question is: why didn’t the employer just advertise for a Shipping Clerk at a salary of $22,000?

This would almost certainly be impossible in a unionized business but according to the Bureau of Labor Statistics:

In 2008, union members accounted for 12.4 percent of employed wage and salary workers, up from 12.1 percent a year earlier, the U.S. Department of Labor's Bureau of Labor Statistics reported today. The number of workers belonging to a union rose by 428,000 to 16.1 million. In 1983, the first year for which comparable union data are available, the union membership rate was 20.1 percent, and there were 17.7 million union workers.

It’s pretty clear that most businesses are not unionized and it is therefore not written in stone that all Shipping Clerks must make the same amount of money. So why is the government’s offer of $8,000 so persuasive? Maybe the employer is so thrilled at the idea of being able to hire a $30,000 Shipping Clerk for only $22,000 that he can’t resist but I would think that in a recession those $30,000 Shipping Clerks would be a dime a dozen (so to speak) and a job offer at $22,000 would find several takers.

I have the same objection to Davis’ first idea: his call to circumvent or do away with State mandates on health insurance coverage. Davis argues that the “high cost of health insurance acts as a drag on job creation and wage growth.” He therefore wants State governments to make it cheaper for employers to offer health insurance by doing away with mandates that require insurance policies to cover treatments like “... acupuncture, alcoholism treatments, chiropractors, fertility treatments, marriage counseling....” Even better he wants the Federal government to allow companies to buy employee health insurance across State lines in order to avoid State mandates because “employers in states with onerous benefit mandates are stuck with high-cost health insurance.”

I’ve said before that I think State mandates are the States’ business. If a particular State wants to impose onerous mandates and pay the price in higher insurance costs and (if Davis is right) higher unemployment, that’s up to the State; the Federal government should stay out of the matter.* So I obviously consider his idea about the Federal government allowing interstate health insurance shopping a bad one.

I have no such principled objection to the individual States doing away with requiring certain medical services be covered by health insurance if that’s what the citizens of the State want. I do, however, think his idea is unnecessary. Assume businesses want to hire workers - or raise wages - but cannot do so because employee health insurance is so expensive. They don’t need the State or Federal government to help them out of this mess. They can simply not offer health insurance to new hires.** Employers could also presumably stop providing health insurance to their current workers, thus freeing up more money to hire new workers. This would probably have a devastating effect on morale - particularly if the employers did not provide a raise or at least a one-time “bonus” to make up for some of the loss - but presumably employers can get away with this sort of thing in a tight job market: the employees have nowhere else to go.

If you think Davis’ idea to eliminate or undercut mandates is a good one but you cringe at the idea of hiring new employees without health insurance benefits, consider that withholding health insurance benefits from new workers is far less draconian that what Davis proposes. Under Davis’ plan, employers will be able to shop for the cheapest possible health insurance plan with few (possibly no) rules as to what it must cover - and all employees will have to live with that plan. Those who favor this approach tend to emphasize the ability to drop mandates like alcoholism treatment and marriage counseling while ignoring the ability to drop mandates like regular mammograms, prostate screening, and well child care. On the other hand, I will freely admit that an employer deciding to take existing health insurance away from current employees is quite extreme. However, even that approach might appeal to the current employees if the choice was between all employees losing their employer-provided health insurance and some employees losing their jobs. After all, those rising unemployment numbers are swelled by people who once had jobs so it’s a good idea to help people keep the jobs they have while we’re scrambling for ways to help people without jobs find work.***

So there is no need for either State government or the Federal government to bigfoot themselves into the issue of employer-provided health insurance to improve the employment picture. Employers can simply choose to stop providing health insurance, either to new employees or to all employees, in order to free up more money to hire more employees. Similarly there is no need for the Federal government to pay companies to hire new workers. The companies can simply offer those jobs at whatever salary they could afford without government intervention.

Davis’ third point is his most interesting:

It's unclear whether the [Employee] Free Choice Act [EFCA] and card-check provision will become law. Fears that the act might become law are enough to chill investment by firms that could be targets of card-check union certification. To allay these fears and remove the chill from investment, President Obama and congressional leaders should forcefully renounce the act now. If they won't, moderate Democrats should step forward and publicly announce their opposition to the act. By taking this step, they would help restore business confidence and set the stage for more job-creating investments.

This makes sense. A business that is likely to be targeted by unions if EFCA passes has to consider that when thinking about whether to hire new employees - especially if those new hires will be stretching the company thin. It’s one thing to hire five new workers if you can pay them low wages and you know you can fire them if they don’t work out or if your business takes a turn for the worse. It’s quite another thing to hire five new workers if you fear that six months from now you’re going to be unionized, the new guys will have to start getting union wages, and you’ll be operating under an arbitration-imposed contract that prevents you from firing them. In the latter situation, wait and see is the smartest move for any company considering hiring.

The situation would be the same if the legislation hanging fire was good for employers. Let’s imagine the Union Retention Act. URA requires that all union employees must continue to be treated as their union contract specifies but that new employee cannot join a union and are not covered by the contract. Now employers will hesitate to hire because it will benefit them far more to do their hiring after such legislation is signed into law.

The issue is not whether the pending legislation is good or bad for employers; the issue is whether the legislation will change the employer-employee relationship in a significant way. If so, then as long as the legislation is neither passed nor clearly dead employers will wait and see.

Davis focuses on EFCA but I don’t remember a time when so many large potential policy changes were hanging around. EFCA is one. Climate change legislation is another. We’ve got Waxman-Markey but it hasn’t gone anywhere and now I gather someone else is putting together a different bill. We’ve got n+1 iterations of a health reform bill. Every so often someone mumbles something about regulation of the financial industry then disappears for a month. Limiting executive compensation - for companies that took TARP, for all financial companies, for insurance companies, for everyone? - drifts in and out of focus. As far as I know, even poor old PPIP doesn’t actually have a stake through its heart.

If the government wants companies to hire and the best hope of persuading them to do so is to make the business climate as certain as possible then the Administration’s efforts should be focused on getting everything and everyone settled down. Instead it’s as if Washington is doing everything in its power to make the business climate as unsettled, uncertain, and insecure as possible. The problem is not that the government is passing laws that are bad for business nor that the government is passing laws that are good for business. The problem is that the government is hanging fire on an armful of policies that will change the business climate - whether the change will be better or worse for business is irrelevant. So long as businesses do not know which way that cat will jump, they’re paralyzed. Anything they do now as far as hiring or salaries or promised bonuses or health insurance might - a month from now or a year from now - turn out to have been the wrong decision.

I understand that there are issues the Administration and the Congressional leaders believe need to be addressed: climate change; health care/insurance; EFCA; executive bonuses. But those issues should have been addressed and settled rather than allowed to drag on and on. Obama came in with a solid victory in the November election and a Democratic Congress. We would be in much better shape today if Obama had used his pre-inauguration time and team to write bills addressing each of these issues; had demonstrated his commitment to transparency by posting those bills at on January 20; and had flexed his popularity - and Congress’ abysmal approval ratings - by announcing he wanted an up-or-down vote on each bill within, oh, say, 100 days. If they were passed we’d know what the rules were. If they weren’t passed, Obama should have made it clear that the issues were off the table for the rest of his first term.

For example, Obama should have been able to get a simple carbon tax with revenues used to offset the additional cost to families making under $250,000. Any revenues over that could have been used to bring down the deficit or fund health care reform or whatever. Especially if the tax started small and went up gradually this should have been doable.

Similarly, Obama should have pushed for an up or down vote on single payer. If it didn’t pass, he should have had a fallback position that simply insured the uninsured. Once that passed - and I think it would have - the issue should have been tabled until after his re-election.

EFCA should have been voted on way back in February - it’s not like this is some new idea. If it passed, we’d live with it; if it didn’t, Obama should have declared the issue dead. By the same token all the other ideas floating around out there - new financial regulations; limiting executive compensation; PPIP - should have been addressed by now. Either new laws should have been passed or the issues should have been packed away so businesses would know the rules wouldn’t change for at least the next three or four years.

Is that a lot to have gotten done in 100 days? Sure. But remember the legislation didn’t have to be as complicated as it’s gotten. A carbon tax bill would have been much, much simpler than Waxman-Markey; the single-payer bill runs to less than 16 pages (in Arial 12); EFCA was already written.

Obama and those who call themselves “progressives” wouldn’t have gotten everything they want. But if Obama had been able to get make some progress on his big issues and had been able to stabilize the business climate enough to encourage companies to hire, he would have won himself a lot of credit for putting people back to work. Credit that he could have spent in his next term when a prosperous economy would make his larger plans look more affordable.


“... anything that turns up in a footnote... takes on the character of divine revelation.” - Margaret Halsey

* The issue becomes more complicated because States which choose policies that cause higher unemployment are subsidized to some extent by States which don’t through mechanisms like Federal unemployment benefits. However, a disquisition on the pernicious effects of Federal funds on the issue of State responsibility is beyond the scope of this post.

** I am not aware of any Federal law that requires employers to provide health insurance. It does appear that Hawaii requires employers to provide health insurance to all full-time employees and California may or may not - I’ve found references to a 2003 bill but no discussion of it being currently in force. I have not seen anything indicating any other State has such a requirement although Massachusetts has its own thing going on.

*** This is actually how capitalism is supposed to work: when an employer is in a buyer’s market it can provide less compensation and still be able to hire and retain employees. As the employees receive less, the business frees up more revenue to lower prices, gain more volume, and expand. As the business expands it need more employees which means there are eventually more job offers than there are job applicants. At that point the business must begin offering better compensation to attract new workers and to retain existing ones. Now employees are in a buyer’s market so they demand more and more compensation to take a job or to stay in one they have. The business becomes less competitive as more of its revenue goes into employee salaries; layoffs begin - or the company fails - and the process cycles back to a buyer’s market for employers.

This process looks problematic to a country that increasingly wants security and stasis but I think of it as a variation on creative destruction - it is not industries that are being superseded but employees. I suspect that many people who abhor “creative destruction” when in comes to employees would be far more supportive of it when it comes to the large financial institutions that got themselves into hot water last year - even though allowing those huge institutions to fail would put thousands of people out of work. And vice versa: I suspect many captains of industry who can provide ten thousand reasons why their large companies absolutely needed to be saved by the government would also have ten thousand reasons why it’s preposterous for employees to expect their employers to save them from the normal ups and downs of a capitalist economy.

Profits and poison

I wrote yesterday about President Obama’s recent weekly address in which he threatened the anti-trust exemption for health insurance companies. There are two other aspects of Obama’s talk that also concern me: his dislike of profits and his concern that people will make the “wrong” decision.

The White House summary of his address highlights both those aspects.

In his weekly address, President Barack Obama praised the progress that has been made on health insurance reform, and spoke out against those who defend the status quo in order to score political points and protect their profits. With reform the closest it has ever been to becoming law, the insurance companies are rolling out deceptive ads, paying for misleading studies, and flooding Capitol Hill with lobbyists. Now, Washington needs to serve the American people, not the special interests.

Private companies are supposed to make a profit; that’s why they exist. If the President believes that health insurance should be the province of non-profits he should simply say so: that’s a perfectly reasonable position. Instead he attempts to keep one foot in each camp. He is unwilling to back the elimination of for-profit health insurance companies but he clearly believes that it is wrong for an insurance company to make a profit:

The fact is, the insurance industry is making this last-ditch effort to stop reform even as costs continue to rise and our health care dollars continue to be poured into their profits, bonuses, and administrative costs that do nothing to make us healthy – that often actually go toward figuring out how to avoid covering people. And they’re earning these profits and bonuses while enjoying a privileged exception from our anti-trust laws, a matter that Congress is rightfully reviewing.

It seems crystal clear from this that Obama believes a profit-making health insurance company is unacceptable. He should simply say so and push for either a single-payer system or the forced conversion of all health insurance companies to non-profits. As it is he is supporting the worst of both worlds: the continued existence of for-profit companies which are considered pariahs if they make a profit.

The other aspect of Obama’s remarks that troubles me is his concern that people will make the “wrong” decision. He is essentially arguing:

- the health reform bill that is going to be written by Congress is the right thing to do;

- the insurance companies are lying about what that legislation will do;

- the insurance companies are spending money to lobby legislators to vote against the legislation; and

- “folks on cable television who know better” are repeating insurance company lies.

As a result, Obama is afraid that Congressmen will be misled by the lies and tempted by the money and vote against the health reform bill that is going to be written.

This is distressing. Obama’s formulation leaves no room for a legislator (or for that matter an insurance company executive or a private citizen) who truly believes the health reform bill that is going to be written is not the “right” decision. Anyone who opposes the bill must be doing so either because he is so stupid he believes the lies of the insurance industry or because he is so venal he would vote against what he knows to be right in order to profit financially. There is no place in Obama’s formulation for a Congressman who prefers smaller government to larger; who thinks mandates are unConstitutional; who believes a different plan would be far superior; or who believes the health reform bill that is going to be written will end up costing money we can’t afford to spend. No, anyone who opposes the health reform bill that is going to be written must be stupid or venal or both because after all anyone who is intelligent and honest will clearly see that the health care bill that is going to be written is the only “right” thing to do.*

This is an attempt to poison the well. Those who oppose the bill cannot be doing so for valid reasons because the bill is clearly the “right” thing. Therefore anyone who opposes it must be doing so because they’ve been lied to or bribed. And of course the statement that “the bill is clearly the ‘right’ thing” cannot be challenged because anyone who challenges it is either stupid enough to believe lies or has been bought off.

This approach is very dangerous although hardly unique to Obama. It delegitimizes all political opposition. Ideological differences are recast as cover for stupidity and venality. Differing interpretations of data, different predictions about an uncertain future must always be lies. The idea that honest people can honestly disagree is found ridiculous. It is the very antithesis of John McCain’s request:

... if an American feels the decision was unwise, then they should state their opposition, and argue for another course. It is your right and your obligation. I respect you for it. I would not respect you if you chose to ignore such an important responsibility. But I ask that you consider the possibility that I, too, am trying to meet my responsibilities, to follow my conscience, to do my duty as best as I can, as God has given me light to see that duty.

Americans deserve more than tolerance from one another, we deserve each other's respect ...

If we truly reach the point where we believe those who disagree with us about how the country should be governed cannot possibly have any valid reasons for doing so; if we decide that all those who do not believe as we do are either stupid or venal; then we are one short step away from excluding our opponents from the political arena. If we know what is right and they cannot possibly have any legitimate reason to think otherwise, why should we even let them speak much less let them vote? After all, once we know what is right we really don’t need to hear what anyone else thinks.


* I suspect that Obama does not intend his denunciation to extend to those who argue against the health reform bill that will be written because they prefer a single-payer system or a public option. I don’t think Obama would consider people who support those positions either stupid or venal. I imagine he would consider them very smart and very honest - but unfortunately unrealistic.

Tuesday, October 20, 2009

Shame the Devil

On October 12, America's Health Insurance Plans, a trade association for the health insurance industry, released a report they had commissioned from PricewaterhouseCoopers. This report (pdf here) examined the Senate Finance Committee health care/insurance reform proposal (the Baucus bill) and concluded:

There are four provisions included in the Senate Finance Committee proposal that could increase private health insurance premiums above the levels projected under current law:

- Insurance market reforms coupled with a weak coverage requirement,
- A new tax on high-cost health care plans,
- Cost-shifting as a result of cuts to Medicare, and
- New taxes on several health care sectors.

The overall impact of these provisions will be to increase the cost of private insurance coverage for individuals, families, and businesses above what these costs would be in the absence of reform.

The report caused such a stir that President Obama used his weekly radio address, entitled Taking the Insurance Companies on Down the Stretch, to attack health insurance companies. The New York Times described Obama’s speech quite bluntly (emphasis mine):

President Obama mounted a frontal assault on the insurance industry on Saturday, accusing it of using “deceptive and dishonest ads” to derail his health care legislation and threatening to strip the industry of its longstanding exemption from federal antitrust laws.

In response to Obama’s address, Megan McArdle has up two excellent posts about the threatened use of government regulatory powers to punish AHIP for publishing the PwC report. In the first, McArdle makes a vital - and often forgotten - distinction between the Constitutional idea of freedom of the press and our current tendency to think that freedom applies only to those who call themselves journalists (emphasis hers):

Freedom of the press was not a right accorded to the profession of journalism ... Presses were owned by individuals, who engaged in all manner of speech, commercial and non. Freedom of the press was not the freedom to own a newspaper or magazine, and say what you wanted therein. It was the freedom to disseminate written speech.

She points out that those who think the Obama Administration doing this to the insurance companies is a good idea would probably be less enthusiastic if a Republican Administration engaged - or threatened to engage - in similar regulatory endeavors that targeted George Soros’ finances. Or would it be okay, she asks, for a Republican Administration to:

openly declare that if unions didn't stop issuing reports in favor of a higher minimum wage, the administration would have to revisit Taft-Hartley?

Her conclusion seems to me to be inescapable:

... I am very sure that changes in the laws should never be wielded as weapons to punish speech that politicians don't like.

Apparently it’s not as inescapable as I thought. The comments to her post make it crystal clear that a significant number of people are perfectly happy to have our government threaten unpopular industry groups to get them to shut up. McArdle must have been as surprised as I was to see this since she put up a second post in which she attempts again to make her point:

But it is not okay for the administration to say, "If you publish a report saying that our plan will make premiums go up, we will use our regulatory authority in an entirely different matter to punish you." I don't see how that's much different from saying, "If journalists criticize the administration, we will use our commercial speech authority to undercut your ad revenue".

Again there were a lot of commenters who saw nothing wrong with Obama’s threats. They raised all kinds of interesting points about the nature of freedom of the press and free speech and to what extent those apply to associations or corporations. They discussed whether the anti-trust exemption for the insurance industry is a “favor” the government has every right to take away. They even debated whether the insurance companies’ anti-trust exemption helps or hurts competition. In other words, they totally missed the point. Which is pretty simple:

The government should not threaten citizens who publish reports - or run ads or make speeches or send out mailings - that disagree with, criticize, or question the government’s claims.

It really doesn’t matter to me if those who disagree are individuals, political parties, journalists, or trade associations. It doesn’t matter to me if a Philadelphia lawyer could make a case that what Obama and Congress are doing is technically legal. It doesn’t matter to me if every word in the report, ad, speech, or mailing is an outright lie. What matters is that the government should not be threatening to use its regulatory power to silence its critics. This is - or at least should be - intolerable. It’s one thing for the government to decide that the insurance companies’ anti-trust exemption does not serve the national interest and should be revoked; it’s quite another for the government to decide that the insurance companies’ anti-trust exemption makes a handy stick with which to beat the industry to compel its silence. The former is governance; the latter is extortion.

Reading Obama’s comments on the insurance companies reminds me of nothing so much as George W Bush’ comments on the War on Terror. In Obama’s world though it’s the insurance companies who are America’s “evil and ... determined enemy.” It’s the “aggressions and ambitions of the wicked [insurance companies that] must be opposed early, decisively, and collectively, before they threaten us all.” It’s the insurance companies that “would be a threat to every nation and, eventually, to civilization itself.” Obama is “determined to fight this evil, and fight until we're rid of it.” He’s “got a job to do, and that's to explain to the American people the truth.” Bush’s truth was that “we're now facing a new threat”; that of Islamic terrorism; Obama’s truth is that we’re facing the old, old threat of the insurance companies:

The history is clear: for decades rising health care costs have unleashed havoc on families, businesses, and the economy. And for decades, whenever we have tried to reform the system, the insurance companies have done everything in their considerable power to stop us.

Still Obama has “made clear to America, that this great country will not let evil stand.” “We are [near the end] of what I view as a very long struggle against evil.” However this “is not the time to grow complacent” because “America faces an evil and a determined enemy.” Rather “[n]ow is the time to draw the line in the sand against the evil ones.” And just as Bush was confident “good will prevail” so is Obama: “I believe we can. I believe we will.”

The difference is that Bush was demonizing a foreign entity that violently attacked the United States; Obama is demonizing American companies owned and run by American citizens. Bush wanted to mobilize us to fight an outside enemy so he could prevent further attacks; Obama wants to mobilize us to fight each other to so he can achieve a political goal.

And it’s not just the insurance companies. The lengths to which Obama is willing to go to silence them is unprecedented* but the basic message is not new. I’m astonished at how often this Administration has badmouthed its own people. It is not the job of the national government to explain to me that American trade association members and American family doctors and American corporate executives and American small government ralliers and American television employees and American talk show hosts are bad, bad people and I should not trust them or listen to anything they say.

On the other hand, it may well be that the current Administration is not actually running a national government. Rather it’s running a political campaign which unfortunately has the power of the national government behind it. Even worse it may not know there's a difference.


* That whole pitchfork thing was a threat that government would fail to protect the bankers from attack rather than that government itself would attack them.

Wednesday, October 14, 2009

In the mail

I got an “Application For Vote by Mail Ballot” in the mail today. If I sign it and mail it in, my County Clerk will mail me a Mail-In Ballot for the upcoming election - New Jersey is voting for Governor soon. The Application came from the New Jersey Democratic State Committee and to make absolutely certain I know who my benefactor is, the Application has a full page color ad attached. It features President Barack Obama urging me to:

Vote from home and keep the change going.

Support President Obama by voting for New Jersey Democrats this year and New Jersey Democrats in Congress next year.

To make sure there’s no confusion, the ad helpfully includes the names of the Democrats I’m supposed to vote for next year. I don’t know if it was delicacy or law that kept them from urging me directly to vote for Democrat Jon Corzine for Governor next month. I suspect the latter.

Even without Corzine’s name I don’t much like the ad and I wouldn’t like it any better if the Application and the ad had come from the Republicans instead. This is a bit too much like a notice on the door of my voting booth that reads: “This voting machine proudly sponsored by the Democratic Party which urges you to show your appreciation for our help by voting for our guys.”

The Application already has my name and address filled in; has checked off that I want a ballot for the General election; and has the following information in the Assistor section:

Arthur Warner
1409 Francis Drive
Wall, NJ 07719-4459

The Application also has Mr. Warner’s signature - it doesn’t look like it was actually signed by an actual pen. I weirds me out that the disembodied Mr. Warner is helping me fill this out without my even asking. I wonder if in his spare time he helps little old ladies cross streets they’d prefer not to. Mr. Warner did leave a few sections blank however. For example, he didn’t fill in the section that lets me have my Mail-In Ballot sent to an address other than the one where I’m registered to vote.

Now, I don’t object to people voting by mail. I’ve done it a time or two back when it was called an “Absentee Ballot” and I understand that if a voter is ill or doesn’t drive or has a long commute or has small children it can be very difficult - even impossible - to get to the polls. I also gather there are some people who want to vote by mail to avoid the new voting machines. I don’t blame them - I miss the old “pull the lever, hear the ka-chunk, and the curtain flies open” ones myself. In my heart of hearts I’d rather that people only vote by mail when they have a good reason - there is something to be said for giving weight to the preferences of citizens who make the effort to show up - but I know that can be a sticky wicket. You end up with arguments over how long your commute has to be in order to qualify and so on. So allowing everyone to vote by mail is something I can live with.

I can even live with allowing people to apply by mail for a Mail-In Ballot. I’d rather they have to go to their Town Hall at least once to prove it’s really them asking to vote by mail; getting them there seems like a good project for voting drive type organizations. Still I can understand that if you’re an invalid, for example, it’s no easier to get to Town Hall than it is to get to your polling place so I can - very reluctantly - live with applying by mail for a Mail-In Ballot without so much as a trip to Town Hall to ask for the Application.

However, letting people apply by mail to have their Mail-In Ballot mailed somewhere other than the address where they’re registered to vote seems like a perfect setup for fraud.* What keeps some unscrupulous someone from applying for a Mail-In Ballot for me and having it sent to him? Sure he’s taking a risk but given the low turnout in many elections and the fact that anyone who reads Frederick Forsyth knows about accommodation addresses, it’s not much of a risk. Even if I show up at the polls and raise Cain, it’s unlikely the unscrupulous someone will be tracked down.

The Application’s provision allowing a Mail-In Ballot to be mailed to a different address is particularly odd since the section about using an Authorized Messenger to deliver an Application and pick up a Mail-In Ballot is rather strict:

Any voter may apply for a Mail-In Ballot by Authorized Messenger. Messenger shall be a family member of a registered voter of this County. No Authorized Messenger can (1) be a Candidate in the election for which the voter is requesting a Mail-In Ballot or (2) serve as messenger for more then TEN qualified voters per election.

The form goes on to say:

Authorized Messenger must sign application and show photo ID in the presence of the County Clerk or County Clerk designee.

Above the signature line for the Authorized Messenger is this promise:

“I do hereby certify that I will deliver the Mail-In Ballot directly to the voter and no other person, under penalty of law.”

Clearly the powers that be are worried sick that some unscrupulous someone will waltz into the County Clerk’s office with eleven falsified Applications and gather up eleven Mail-In Ballots for his own nefarious purposes. Apparently, however, if some unscrupulous someone is clever enough to mail in a thousand falsified Applications and have those thousand Mail-In Ballots mailed to him rather than to the voters who should get them, the powers that be don’t much care. Maybe this is some kind of voting intelligence test: if the guy collecting Mail-In Ballots in other people’s names is smart enough to hide his identity by having the ballots mailed to him instead of being stupid enough to show up in person to collect them, he’s smart enough to vote as many times as he wants.

It should be an interesting election.


* I know there needs to be some provision for military personnel but surely that’s what notarized signatures are for.