• Replace

    From Robert Pear and Jonathan Weisman:

    Republicans are dusting off proposals that date back more than a decade: allowing individuals to buy health insurance across state lines, helping small businesses band together to buy insurance, offering generous tax deductions for the purchase of individual policies, expanding tax-favored health savings accounts and reining in medical malpractice suits.

    Many of these ideas were included in a package offered by Republicans in November 2009 as an alternative to legislation pushed through the House by Democrats. The Congressional Budget Office found that the Republican proposal would have reduced health insurance premiums by 5 percent to 10 percent, compared with what they would otherwise have been.

    The budget office said that the Republican proposal, offered by Representative John A. Boehner of Ohio, who is now the House speaker, would have provided coverage to 3 million people, leaving 52 million uninsured.

    We should welcome 5-10 percent savings, though the other effects (how many remain uninsured, for one) matter a great deal to many Americans too. More than that, we should welcome a diminution in the rate of growth of health care premiums (costs, spending), again, provided we’re comfortable how that diminution is achieved. In any case, if that curve isn’t bent, 5-10 percent savings would be overcome by health care inflation in a few years, a cautionary note for interpreting enthusiastic pronouncements (from across the political spectrum) of one-time reductions in spending.

    I hope all policymakers look carefully at the myriad of options, in the ACA and not, that would help public and private insurers spend more wisely, more efficiently, over time. Indeed, it is not the spending level we should be so concerned about, but how the money is spent, what it buys. Health is important and worth paying a lot for, provided that’s in fact what we’re getting for our money.


    • The Republicans are the only group to at least address the malpractice problem. That has to be done or the ordering and ordering and ordering goes on.

      • The “malpractice problem” was addressed in Texas when G.W. Bush was governor with tort reform limiting damages.

        The result? Nada. Premiums have continued to rise like everywhere else and Texas has highest percentage of uninsured in the nation.

        You can check it out. Tort reform is a Republican chimera.

        • Also, this has been covered on this blog. Search and ye shall find.

          • Yes, I’ve done a search on this site about malpractice.

            And I’m still laughing about that pie chart from June 13th showing that medical spending savings from malpractice reform would only save less than 1 % of spending.

            C’mon, that’s ridiculous.

            The attorneys really love it when stuff like that is passed around.

            • Do you have any type of source for that belief Ron?

            • CG–
              My malpractice premiums account for 5 % of my income. I’m sure I could cut out 10% of my orders for labs and xrays without the threat of malpractice claims.

              It’s really not rocket science here.

            • If this isn’t rocket science, why do you think there is so much disagreement?

              I can’t speak to your 10% reduction claim, what’s your specialty?

            • My specialty is Family Practice, doing adult med which is 80% Medicare.

              My malpractice insurance is over $15,000 per year.

    • Two things.

      You might consider setting your spell checker to somehow check to make sure there is always a letter “l” after the letters “pub” if the last two letters of the word are “ic” (see last paragraph of posting).

      Much more importantly, I think your point about what money is spent on as opposed to how much is sensible but jettinsons smack into the argument that if this is a problem, let’s get the free market to sort it out via consumers directly. I know that this the health care market isn’t a traditional free market with comparable rational consumers relative to so many others (or that it is as competitive). Nevertheless, I do feel like those who understand this need to develop some short-hand heuristic/intuitive model to dismiss this inevitable counter challenge immediately. And I’m not sure why that isnt a higher priority. It would serve to hurt some of the GOP efforts to undermine the ACA. Thanks for your terrific blog.

      • Glad you caught that before my parents did.

        The trend has been toward more market-oriented solutions: Medicare Part D, the ACA, Medicaid managed care, Medicare Advantage, just to name a few. I don’t see why they can’t be made to work except for the obvious reason that there are legal and political obstacles. Same goes for public solutions, and pubic ones too.

        • Glad your parents didn’t see it first as well. And glad you don’t limit yourself to public solutions (and include pubic ones in the mix).

          Not to argue but clarify. I’m in no position to quarrel about the trends in health care spending and the best approaches with you. I will defer to you on that and doubt that I have read many things you have written that I would quarrel much with (perhaps I haven’t read closely enough :)).

          My point was that some of the solutions from the libertarian folks who believe that the market solves all neglect that health care doesn’t lend itself to the same relatively competitive model that many industries do (or a close approximation of that model). That is, there are reasons why one doesn’t want to shift the dynamic to an American consumer and the medical establishment and get almost everyone else out of the picture. That may help in some ways but is as likely to shift the power balance as to bring down costs or improve care. What frustrates me is that there doesn’t seem to be a ready-made dismissal of the notion that if we got the government completely out of the picture, the market would look so much more like the market for iPods or tv dinners that would eventually block the intuitive mind from even going there (i.e. everyone knows that 2 + 2 doesn’t equal 5 and everyone knows that the health care market cannot be like the iPod market because of …). Thanks for your reply.

          • There are just as many ready-made arguments for government involvement as against. The problem isn’t the lack of arguments. The problem is that people only assimilate what they wish to.

            If the goal is coverage, the need for some government involvement is obvious, at least in the real world. If the goal is spending reductions, one can achieve that trivially without government.

            • Let me try as best I can to be clearer. Appreciate the engagement.

              What I am trying to say is not that there aren’t arguments in favor of government involvement but that believing that the health care market can work to the benefit of the consumer precisely the way the computer market can, at least in addressing most of our costs and getting better results, is simply a dishonest frame. It might be worth the tradeoff. But there is a tradeoff (I don’t know what tradeoff there is that has such an impact with letting the computer market operate as it does).

              I don’t know if you’ve read Daniel Kahneman’s book, “Thinking Fast and Slow” about how people think and their cognitive biases. What I believe is that there is a relatively strong cognitive bias towards certain things that have implications here. He labels some automatic, unthinking approaches as “system 1” where you know in an instant what is right and what is wrong (your intuition at work). In policy terms, from the view of the public the stimulus didn’t work, full stop, and I’m not sure that view will change. Bailing out banks will always likely be very very difficult politically for this reason. Thinking long and hard about the implications is not something one can expect of the average voter. If we entrust our leaders to do the best job they can and leave them to their task, that’s a different story. Its not how things look these days, not by some margin to me. And thus the mind of the individual matters and it matters a lot. And careful thoughtful analysis like the kind you regularly provide requires someone to be interested in the field and appreciate all the trade-offs involved. That’s work and a tall order for most people.

              I think the last two decades have played an important role in instilling in the mind of many Americans that the free market works and works well (and I think the financial meltdown looked to many like an example of the problem of government involvement, whatever the veracity of that view). I believe that that is part of the tug in the other direction that is automatic and naturally automatic.

              So, I am suggesting that with health care, the automatic response that is most natural, is “get the government out of the picture” and we’ll get to the system that got us iPods and the best high tech industry in the world. Yes there are plenty of arguments against that. I’m not talking about arguments, in the traditional sense, but appeals to that automatic way of thinking. We are, ultimately, in my view, a quite populist country, and so the individual voter has more power here than in so many places and that is nice but means we are much more vulnerable to the cognitive biases of that voter, much more in my view.

              So what I am suggesting is that there must be some sort of illustration that visually and viscerally tells us that health care doesn’t fit into that category we call “the competitive free market” in so many ways (perhaps the way, to pick an extreme, a cow may not seem to some in certain parts of India, like a source of food and no-one has to provide counterarguments, it just is and the reaction is part of the psyche of that community). Without that, I think, one will be very vulnerable to a good many people’s views that you let the free market address all issues and they will get resolved (this is not my view, not by a long-shot, for many things though for some it is much closer to my view). I think to many, the Democrats are against using the free market to address this health care issue because they are coddling their constituencies at a cost to the rest of the country.

              Let me add that my point is not about more or less government involvement but rather that the category health care fits into is just a different category altogether and while some elements need to be addressed by the free market, some elements won’t get better for the end-user if they are addressed that way. This isn’t only true of the health care field. However public opinion matters a whole lot in this field at the moment in terms of of the public policy hot plate going forward. Thanks again for all you share.

            • Health care is a credence good to a far greater extent than any other good I can think of. That pretty much destroys the idea of anything like a perfect market. Yet, no market is perfect. So the question becomes, can government intervention improve the market? For everyone who says “yes” you’ll find someone who says “no”.

            • “The problem isn’t the lack of arguments. The problem is that people only assimilate what they wish to.”

              yes, I’m not saying there aren’t enough arguments but that there are some approaches that shift the frame and make it hard to shift the frame back (so if people don’t assimilate this point they don’t get to not assimilate it without impunity). In other words, a health care market and a widget market aren’t the same, period and there must be ways of developing compelling analogies to help people assimilate this and address and demolish claims to the contrary. Isn’t there some sort of boiling frog equivalent available here to use when someone says, “well if we got the government out of this stuff, people would have more choices and the prices would be better and those who work can get coverage if they work hard enough.” Thanks.

            • Gee, I don’t know. Hand someone three or five insurance contracts. Tell them to make an informed, rational choice. Don’t have any handy? Go to medicare.gov and pretend you’re a senior citizen shopping for a Medicare plan. That will blow you away if you’ve never done it.

          • One thing that might help is emphasizing that getting the government out of the way might create a market for *insurance*, but it wouldn’t create a market for healthcare, let alone a perfect one. That’s a rhetorical sleight of hand that libertarians get away with it, but if you can make it clear that creating a market for healthcare and not insurance is what they actually mean, the unpalatability of their proposals becomes clearer.

    • “I hope all policymakers look carefully at the myriad of options, in the ACA and not, that would help pubic and private insurers spend more wisely, more efficiently, over time. Indeed, it is not the spending level we should be so concerned about, but how the money is spent, what it buys. Health is important and worth paying a lot for, provided that’s in fact what we’re getting for our money.”

      — Agreed!

    • Yes, a “credence good.” That’s precisely what I meant (naming the category and how it is different is one way to thread that needle)! Now if I (or you, perhaps :)) could only get Politico and Ezra Klein and Scott Pelley and Brian Williams and Robert Pear and David Axelrod and every elected Democrat to refer to it, prior to discussing health care and the challenges it poses, as a “credence good,” it would be much more difficult for the GOP to use it as a battering rod to pretend addressing this issue one way is remotely feasible. Thanks for your time. I need to let you get back to your day job. Thanks again.