July 22nd, 2017

Reality and health care insurance reform

I saw the title of this article by James C. Capretta at the American Enterprise Institute (“The GOP’s collision with health-care reality”) and, before I read it, I expected it would cover the fact that any bona fide Republican effort to reform our health care insurance system would be inherently difficult because the public wants to have its cake, eat it too, and pay next to nothing for it—and in addition, the GOP is hopelessly divided between moderates and conservatives.

But the article wasn’t really about the basics; it was mostly about tactics. Capretta points out that the GOP promised repeal without having a plan for replacement, and that Trump the candidate and then president has been very hazy about giving any specific direction and leadership at all. These things are certainly true, but I don’t think they get to the heart of the GOP’s failure to confront reality, which I think is even more basic than that and goes under the heading of “there is no free lunch” and “the MSM will tear into any flaws in any system the GOP can devise,” as well as “the public has gotten used to the perks of Obamacare and would like those perks without the drawbacks” (maybe that last one is the same as the first one).

Which brings us to Capretta’s final suggestion for the GOP, a piece of advice that seems even more divorced from reality than the GOP’s actual behavior:

To get a better result with a renewed push, the GOP should include willing Democratic senators in the conversation. The party should understand that the goal should be a plan that costs less, reduces regulations, and injects serious market discipline into the system, even while ensuring all Americans have ready access to insurance. That may mean finding a compromise approach on giving individuals strong incentives to enroll in health insurance. The party should also work with GOP governors to find a reasonable and affordable compromise on Medicaid, one that provides for significant reform of the program, with more state control and clear federal budgetary restraints, while also providing a safety net to all Americans with incomes below the poverty line.

It would have been easier, and more fruitful, to pursue a bipartisan deal of this kind in the weeks after the election. That was when Republicans had the most power. But they still have some leverage. They should use it when the time is right to begin the process of moving health policy in a direction more to their liking. That will inevitably be less satisfying to some than writing a bill entirely on their own because of the compromises that will be necessary, but this kind of legislation would be far more likely to pass, and also survive when political control inevitably changes again.

The sole exception to the disconnect from reality expressed there is one sentence that makes sense to me: “The party should also work with GOP governors to find a reasonable and affordable compromise on Medicaid…”. Other than that, I’m not sure what world Capretta is living in, but it’s not the one I’ve been observing for well over a decade. I don’t see any possibility of compromise on the part of the Democrats, who threw down the partisan gauntlet when they passed Obamacare in the first place. On Obamacare, the only compromise they will accept is complete capitulation from the GOP.

And even if reasonable compromise were possible, I doubt the GOP’s base would stand for it.

We’ve reached a pretty pass, haven’t we?

30 Responses to “Reality and health care insurance reform”

  1. Geoffrey Britain Says:

    They’ll keep sticking fingers into the holes until the dike collapses. Given the dynamics at play, no other realistic possibility exists.

  2. The Other Gary Says:

    James C. Capretta at the American Enterprise Institute (“The GOP’s collision with health-care reality”) wrote:

    To get a better result with a renewed push, the GOP should include willing Democratic senators in the conversation. The party should understand that the goal should be a plan that costs less, reduces regulations, and injects serious market discipline into the system, …

    Neo politely referred to the excerpt from which the above was taken as “divorced from reality.” I’d say the above is so clueless as to be almost beyond belief.

    I seriously doubt there are more than 1 or 2 Dem senators even willing to consider working with the GOP to alter Obamacare so as to reduce costs and regulations while imposing “serious market discipline into the system.” The number of such Dem senators is very likely ZERO.

    I see that Mr Capretta is Resident Fellow and Milton Friedman Chair at AEI, specializing in health care. How does one get such an august position at an influential “think tank” while writing ridiculous nonsense like the above?

  3. huxley Says:

    To get a better result with a renewed push, the GOP should include willing Democratic senators in the conversation.

    My healthcare plan is to avoid getting sick or injured. I’m sure that will work as well.

  4. Doug Purdie Says:

    A little know fact – Obama the president had been very hazy about giving any specific direction and leadership towards the creation of the health care act which is nick-named after him. He was merely the point man for its promotion. The act was already pre-written by the Democratic majority in congress, who were just waiting for a president who would not veto it.

  5. AesopFan Says:

    “the public wants to have its cake, eat it too, and pay next to nothing for it” – Neo

    This is the source of all the difficulty, and why you should never let the government bake your cakes.

    This is about public unions specifically, but it applies to every aspect of government not directly related to its Constitutional mandates (the ones actually IN the Constitution, of course).

    https://amgreatness.com/2017/07/21/parasitic-public-employee-unions-pols-love/
    “Whenever A and B put their heads together and decide what A, B and C must do for D, there is never any pressure on A and B. They consent to it and like it . . . The pressure all comes on C. Now, who is C? He is always the man who, if let alone, would make a reasonable use of his liberty without abusing it.”

  6. Big Maq Says:

    “And even if reasonable compromise were possible, I doubt the GOP’s base would stand for it.

    We’ve reached a pretty pass, haven’t we?” – Neo

    Yep we have.

    We can all look in the mirror to see who is at fault here.

    We let the GOP, for years now, get away with pushing “Repeal” without having to explain their alternative.

    While, in the short term, it may have seemed politically expedient to let that slide, it also meant that they were not focused on a plan, nor selling it.

    We let them call out “Repeal and Replace” during past two big elections, and gave them free reign to define it, later.

    There is little accountability in that.
    .

    The other part is, if one were to dig deeper, that most of “us” really don’t want to give up the benefits “we” are enjoying to get us to a “market-based” solution, and the politicians know that too.

    Hence the tepid nature of several GOP members of Congress on any aggressive changes.

  7. huxley Says:

    Big Maq: I’m not fond of “we” formulations, especially when it comes down to assigning fault for what “we” have done or not done.

    Life and politics are complicated. Humans are complicated. Everyone has their own different beliefs, values and agendas. To me it’s amazing we manage to get much of anything done together.

    For a while I participated on a blog run by Neale Donald Walsch, the “Conversations with God” guy. Walsch was always in a tizzy asking:

    How is it possible that 7 billion people can all claim to want the same thing (peace, security, opportunity, prosperity happiness and love) and be singularly unable to get it?

    Well, we 7 billion, fallible, limited people don’t all want the same things in the same way and we are not all singularly unable to get what we want.

    Despite the many, many, sad, screwed-up and stupid things in the world, we are currently living in the Golden Age of Humanity when it comes to people eating, surviving and finding some joy for themselves.

    Humans seem to keep doing better, but it’s not a straight simple upward line. I don’t think there are shortcuts that if only “we” all saw things as clearly as, say, Neale Walsch thinks we should, it would all fall into place.

  8. Ymar Sakar Says:

    Witness the power of evil. Know this, even with a King elected by Americans to become a Winner in DC, it still won’t save you all.

  9. Ymar Sakar Says:

    Despite the many, many, sad, screwed-up and stupid things in the world, we are currently living in the Golden Age of Humanity when it comes to people eating, surviving and finding some joy for themselves.

    Want to know the other two Golden Ages of Humanity?

    The time of Jared and the time of Nimrod.

  10. Big Maq Says:

    @huxley – what you say is true in one sense, but ask folks here what their alternative for medical insurance market should look like, from top to bottom.

    Very likely you’ll find that, for all the talk here about how bad government intervention in the marketplace is, their answers all involves significant amounts of government intervention.

    Heck, question Medicare, and some folks here get rather touchy.

    So, yes, “we” indeed need to ask ourselves what it is we are really asking for from our politicians.

  11. Ymar Sakar Says:

    Humans seem to keep doing better, but it’s not a straight simple upward line.

    The things humans don’t know that they don’t know, is growing larger by the minute.

    For example, ancient technology was better than the bridge building capabilities of 1920s America. Because of that Great Pyramid of Giza, it is proof that somebody could measure heat expansion of stone. Something the US could not do until lasers came out to measure exact distances and the math to calculate rate of expansion of stone and concrete exposed to direct sunlight.

    The Giza pyramid is exposed to sunlight for many hours, only on one side of the face. That means the ability to put together stone that you can’t put a razer in between, without using mortar, is a lost tech. Especially since one side of the pyramid will be expanding and the other side cooling.

  12. Ymar Sakar Says:

    Very likely you’ll find that, for all the talk here about how bad government intervention in the marketplace is, their answers all involves significant amounts of government intervention.

    No gov healthcare for me, whatsoever. I use alternative healing, Tai Chi, and divine healing instead. It works out better in the long term. And costs 99.9% less.

    This is only a problem for artificial Westerners that think electing a King will fix DC or that giving more power to DC is a “solution” to “winning”.

    The System and game is rigged. When will Americans wake up? And no, re rigging the game to your favor, isn’t going to work for long.

  13. huxley Says:

    but ask folks here what their alternative for medical insurance market should look like, from top to bottom.

    Big Maq: But there are several problems involved, not just what healthcare *should* look like (which is complicated enough and depends on what economic models one buys into).

    One also must consider how a healthcare solution can be implemented in the byzantine, set-in-stone context of Obamacare and how such a solution can be passed at the levels of the GOP and Congress and sold to American voters.

    There is a phrase I like from the climate change debate: wicked complexity. That applies to American healthcare too.

    I’d agree that conservatives, the GOP and Trump didn’t really think through healthcare because everyone was so busy trying to get Congress, then the Presidency under control before healthcare reform became a possibility.

    Now they discover reform/replace/whatever is wickedly complex and the GOP isn’t sufficiently unified to make a go of it. It’s discouraging but I don’t see a “we” that gets the blame.

  14. Ymar Sakar Says:

    Getting the Dominion of the US President to enforce laws on recalcitrant states is what caused Civil War 1.

    Number 2 will be merely a continuation as with WW1->WW2.

  15. Big Maq Says:

    “One also must consider how a healthcare solution can be implemented in the byzantine, set-in-stone context of Obamacare and how such a solution can be passed at the levels of the GOP and Congress and sold to American voters.” – huxley

    Understand that all.

    But, I am talking about top to bottom.

    At a basic level, if we push for a “market based solution” for obamacare (something not personally affected by for some of us), but also request “please don’t touch our Medicare” (something that affects those same some of us), then “we” GOP voters already have an issue.

    As Neo said, have cake and eat it too.
    .

    Our politicians needed to surface a proposal and to sell it as an alternative long before we reached the point of trying to navigate the byzantine structure within Congressional rule making limits.

    We needed to have demanded that from them too, vs letting them get away with the numerous flim flam repeal resolutions.

    We didn’t, so they didn’t.

    Perhaps “we” didn’t because “we” really didn’t want a stronger market based solution to begin with.

    So, no surprise, then, that we have what we see today.

  16. BrianE Says:

    Big Maq,
    I haven’t been a regular reader for a long time, but I don’t recall anyone suggesting “please don’t touch my Medicare”.

    As to market based solutions, that depends on what you mean by market based.

    If you mean price transparency where consumers can seek out the best value for the healthcare services, there are the usual suspects at work to prevent that.

    Doctor’s, doctor’s clinics, hospitals, lobbying groups representing doctors, doctors clinics, and hospitals will all oppose such a change. Then add the drug industry and their lobbying groups, and it’s a formidable challenge.

    Then add to that with our current third party pay system, customers don’t have much incentive to seek value (which may or may not be the cheapest prices).

    That’s why I’m leaning toward a system of national catastrophic insurance. Make the deductible $10,000. Once you’re paying the bill, the incentive to make better economic/service decisions comes into play.

    Folks at or near the poverty line would have that expense subsidized.

    I have no idea if on a national level that would save money, but I’ve used that strategy with an HSA account effectively. Right now the problem is getting a clinic to tell me their fees.

    It’s theoretically possible now, as medical facilities do have prices associated with each of the medical codes. Imagine an app that sorted through the date and offered prices for various procedures based on criteria you set.

    The point I am making though, there are many groups, besides people receiving the subsidized health care service, to keep the system like it is.

    That’s one of the realities folks that are clamoring for single payer I think are missing, doctor’s in many of the EU countries are paid less than here, some fairly significantly. In exchange, they pay less for their training, and less for malpractice insurance– but if you pencil it out, doctor’s here are still better off.

  17. Big Maq Says:

    @Brian E – I don’t disagree with many of the points you make, especially about the vested interests of various groups, beyond us as consumers.

    For me it is well beyond just price transparency, but that is a big issue, for sure.

    But, I think if you ask around here (actually, probably in any crowd of GOP voters) what folks actually are talking about, it may be much closer to a traditional dem position than what is implied by all the rhetoric.

    Hence, our problem at coming to a place where the GOP can pass legislation with the majority they have.

  18. BrianE Says:

    Of course, price transparency is only one of the reforms needed.

    I was surprised when the AMA backed Obamacare. It seemed counter intuitive since an expanded Medicaid base with its low reimbursements wouldn’t be something most doctors would support.

    They were banking on a greater enrollment in the private insurance market, which never happened to the consternation of both doctors and insurers.

    If Rand Paul is correct that increased subsidies of premiums to the insurance industry will double their bottom line profits, it’s hard to get behind the kind of fixes that the Senate bill proposes.

    In 2008, the year that Barack Obama was elected as president, the combined annual profits of America’s ten largest health insurance companies were $8 billion. Under Obamacare, the ten largest health insurers’ annual profits have risen to $15 billion. This is another fine example of the natural alliance between Big Government and Big Business, which flourishes at the expense of Main Street Americans.

    And the profits will increase according to Paul. The senate bill apparently will increase subsidies to the insurance companies to keep them from leaving the individual market.

    But why are insurers leaving the individual market if profits have increased? According to the Weekly Standard:

    Despite these skyrocketing prices, most insurers aren’t making money selling Obamacare exchange plans. Rather, they are exiting the exchanges like fans heading for the stadium tunnels in the fourth quarter of a blowout. So where are they making their money under Obamacare? It’s hard to say with certainty, but it seems that two areas have been very lucrative for insurers: contracting with states to provide Medicaid managed care, which is a way for insurers to capitalize on Obamacare’s massive Medicaid expansion (the main source of new coverage under Obamacare); and providing administrative and consulting services to employers who—partly to escape some of Obamacare’s mandates—self-insure their employees but need help setting up doctor networks and navigating Obamacare’s byzantine rules. Insurers who specialize in either of these two areas seem to have done much better under Obamacare than they did in the pre-Obamacare era.

    http://www.weeklystandard.com/insurers-profits-have-nearly-doubled-since-obama-was-elected/article/2005073#!

    So, as the ACA moves money to the Medicaid market, insurers have gone to where the money is.

  19. BrianE Says:

    This does reinforce conservatives distaste for government control.

    Once the government controls anything, the natural progression is to control everything.

  20. Richard Saunders Says:

    Piece of cake, Big Maq:

    1. Eliminate all restrictions of the type of health insurance which can be sold.

    2. Eliminate all restrictions of interstate sale of health insurance policies.

    3. Eliminate the restriction on associations selling group health policies.

    4. For 60 days after enactment, anyone can sign up himself and his family for Medicaid, without any restrictions. Anyone over the poverty line must pay 5% of his adjusted gross income for Medicaid.

    Next question?

  21. Ymar Sakar Says:

    The AMA is a bunch of union corruptocrats interested in establishing death panels and monopolies based upon “taxation and death”.

  22. Ymar Sakar Says:

    Once the government controls anything, the natural progression is to control everything.

    Can’t stop gov control without killing 80% of people in gov. Pretty simple.

  23. Big Maq Says:

    @Richard – address those proposals to the rest of the crowd.

    As I’ve said, I’m for a much freer market.

    But, I doubt many here are.

  24. BrianE Says:

    “Perhaps “we” didn’t because “we” really didn’t want a stronger market based solution to begin with.” – Big Maq

    Please explain what you mean by market based solution?

    Would that include any level of government regulation and if so, where would you put the limits?

  25. Big Maq Says:

    @Brian E – where to start?

    How about the FDA?

    Should there even be an FDA?

    If you think so, how about we mitigate its impact?

    For instance, for drug and medical procedure approvals, must we only rely on FDA approval, or can we follow other country’s leads, say, if 2 or 3 of 8 (or 10) western countries approve of a drug or medical process, it automatically qualifies here?

    Perhaps a similar approach could be had for other types of FDA approvals?

    That is just a few questions, down one line, in a huge collection of areas where government regulation touches “healthcare”.

    Richard asked some others, though I think they are rather limited in scope. Do you agree with his proposals?

  26. BrianE Says:

    Big Maq,

    First, I would support Richard’s proposals. The idea of signing up for Medicaid is a novel idea– sort of national healthcare by choice. By using AGI, it’s in effect means tested. Clever.

    So you’re proposing we do away with the FDA and rely on some other countries FDA equivalent?

    I’m not sure you would want Canada responsible for drug safety in the US.

    North American patients have been put at risk by prescription drugs that Canadian pharmaceutical companies sold with knowledge that their products were defective, a Star investigation has found.

    Using records obtained through U.S. freedom of information laws, the Star also found other Canadian companies have:

    Hidden, altered and in some cases destroyed test data that showed their products were tainted or potentially unsafe.
    Not reported evidence of side-effects suffered by consumers taking their drugs.
    Since 2008, more than 40 Canadian drug companies, including Toronto-based generic giant Apotex, have been cited for serious manufacturing violations.

    All of these violations are detailed in inspection reports provided to the Star not by Health Canada but the American Food and Drug Administration (FDA), which also inspects Canadian facilities.

    The Star investigation found that while the FDA strictly and transparently enforces drug manufacturing laws, Health Canada leaves Canadians in the dark by keeping secret details of problems its inspectors find.

    https://www.thestar.com/news/canada/2014/09/11/canadians_kept_in_dark_about_defective_drugs.html

    Sure, the FDA is sometimes slow to allow new drugs onto the market, and possibly it should be easier for a patient to get a waver to use a promising drug that is still not allowed onto the market.

    The problem with the “free market” impulses you’re suggesting would leave the average consumer– and that’s you and me victim to unscrupulous drug companies located in countries that have lax controls.

    I have no way to determining a drug has been manufactured correctly. In this case, I accept that there is a role for the federal government to regulate drugs that I may need.

  27. Big Maq Says:

    @Brian E – If we dig enough, we can probably find similar types of stories in the US.

    It is not as if those people and their governments care a whole lot less.

    On balance, we’d probably find that 2 or 3 countries of say 10 western nations may well have covered the same ground the FDA would.

    But you fear that somehow only the US can do it right and the rest just bumble along.
    .

    Enough said.

    Ask the others here if they really can imagine significantly cutting government size and scope in healthcare.

    Bet it ends up rather close to where we are today or further left.
    .

    This is what I find issue after issue.

    It is that “everyone” nods their head that we need to radically cut back the size and scope of government, that we need to cut spending and reduce taxes, eliminate the meddling nanny state, but there always seems to be some objection about nearly each part on the table to cut.

    Few can let go.

  28. Brian E Says:

    Big Maq,

    You haven’t really given a good example of allowing the free market to work. Your just willing to outsource regulations to a third country.

    Yea, lets let the EU establish our drug safety regulations. Boy, the free market at work.

    While we’re at it, lets outsource the FAA, FHA, EPA, OSHA, etc.

    Bad example. There are plenty of ways to downsize government and make healthcare more affordable without giving up some of government’s essential role.

  29. Big Maq Says:

    Brian E – not outsource, but give a concession where you believe the FDA is required, that would mitigate one of the impacts the FDA has.

    The FDA is a great example, because it illustrates something about the debate on the scope of government.
    .

    “The problem with the “free market” impulses … would leave … you and me victim to unscrupulous drug companies…”

    So again, you want to argue one by one each piece, and your main argument is that we cannot leave it up to “free market impulses” as someone might have some consequences and suffer if the FDA weren’t there.

    There are clear tradeoffs, but you only count one side of the ledger!

    Nobody counts the people who die or suffer for the drugs and procedures that never see the light of day, because of the expense, or are delayed years because efforts need to be repeated just for the FDA.

    Heck, you won’t even consider such a mitigation strategy as suggested because you must think that only the US can do it right, and everyone else must be bumbling through it, or that they somehow care less about their own outcomes than we do.
    .

    “Sure, the FDA is sometimes slow to allow new drugs onto the market, and possibly it should be easier for a patient to get a waver”

    Ok, you give a nod to a single item on the other side of the ledger, but haven’t we seen by now that we cannot really tweak our way to solving those problems?

    This is part of why the tax code is huge and complex. Why obamacare is complex. Why, without some agreed upon alternative ahead of time means that the GOP in Congress only tweak what’s there.

    Haven’t we seen by now that this regulatory complexity benefits the big bad “unscrupulous” corporations who have the size to cover the hurdles (barrier to entry), and the expertise and connections (along with campaign money) to influence the regulations that are adopted?

    And, for every idea that you may have for rolling back some government scope, someone else will have a similar argument, as yours, as to why it is needed.
    .

    “I have no way to determining a drug has been manufactured correctly.”

    In fact, taken together, yours is essentially the type of argument that the left uses for justifying single payer systems – often looking only at one side of the ledger as their proof, and relying on fear of the big bad companies, where only the good people in government can be trusted.

    Can we? How often does a government program go out of business if it is not serving the public well?

    Ever heard of the VA?
    .

    Now, IIRC, you are a recent GOP voter. So, understandably you have this kind of a position.

    But, I still think anyone would have a hard time getting the rest of the crowd here to coalesce on any major scope reduction for government in healthcare.

    In the broad sense they’d all be on board, but that’s about where the agreement ends.

    This is the core of my point, but instead you want to debate whether a free market could be good.

    I’d be happy to – in other times.

    I already know that what I’d like to see won’t fly with most of them (or you).

    In the meantime, why don’t you see for yourself if there is consensus on anything like a free market or if it would look like more of the same?

  30. BrianE Says:

    Big Maq,
    You never did answer my original question.

    “Would that include any level of government regulation and if so, where would you put the limits?”

    This is essentially a yes or no question. If yes, what would be the limits?

    This was not intended to start a debate, but to make sure we’re talking about the same thing.

    As to my conservative bona fides, I did vote for McGovern (my first election) during my hippie years.

    I’m becoming less enchanted with conservatives as I’m realizing that my interests and multinational corporate interests aren’t the same.

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