The recent demise of the health reform effort was killed in large part by Americans’ overwhelming demand for more and more, while wanting to take less and less responsibility.

Uwe Reinhardt’s recent column describes the problem quite well.

Americans want government to make sure that they have at their beck and call the most sophisticated health system in the world, without even a hint of a queue or rationing or balancing of benefits and costs (cost-effectiveness analysis).
At the same time, they rail at town hall meetings and in the voting booth against government intrusions into that health system, and wring their hands incessantly over the height of health insurance premiums and the taxes they pay to support the system.

Of late, many have turned to threats of violence, that is, if they can maneuver their Medicare-funded power wheel chairs close enough to get a shot.

While it’s easy to condemn the manipulators (60 Plus et al), their job wouldn’t be so easy if their pawns had even a modest grasp of linear logic – A (stuffing yourself with junk food and drink) leads to B (obesity) leads to C (diabetes, heart disease, and the need for a power wheelchair paid for by someone else).
Example:

These goals are mutually exclusive – the deficit cannot be controlled without drastic reductions in health care costs, which some will interpret as rationing. Yet these same pawns that protest against ‘government hands on their Medicare’ are also screaming about deficits, taxes, and the future burden on their children.
This terminal myopia will not prevent the inevitable – growing deficits driven in large part by their incessant demand for someone else to pay for their lifestyle choices and freedom to get whatever health care they think they want from whomever they want whenever they want.
There’s more than enough blame to go around over the demise of health reform; as I’ve written numerous times, the Dems passed bills that would have done little to actually control costs. But the Republicans didn’t offer any serious alternatives, when they could have made a clear and principled argument that the bills under consideration would add to the deficit, resulting in higher taxes and government borrowing.
Instead the GOP rallied around death panels, rationing, and keeping government out of healthcare, torching any pretense of leadership on the altar of political expediency. They’ve painted themselves into an unescapable political corner; when they once again gain control over Congress, they will be faced with a deficit that includes $8 trillion from the Medicare Part D program (a Bush 2 legacy) along with Medicaid and Medicare costs that are even more unsustainable due to their refusal to confront their supporters with economic reality.
As HL Mencken said, “People deserve the government they get, and they deserve to get it good and hard.”

A TV ad featuring former Surgeon General C Everett Koop is but the latest example of the depths some will slither to in an effort to smear health reform and scare the crap out of senior citizens.
These people are just disgusting.
In the ad, Koop claims:
“I’m here with two artificial joints, two pacemakers to keep my heart in rhythm, as well as a stent to keep my coronaries open.” He then says that “seniors in this country can get the same care I received, but in some places, like the United Kingdom, we would be considered too old and the cost to the state too high.”
He’s flat out wrong. In fact, 47 patients over 100 years old got pacemakers, Koop’s a mere 93.
According to FactCheck,
“NICE [the British health system’s National Institute for Health and Clinical Excellence] does have a formula used to assess whether or not a new drug or medical device is worth the cost. But it’s not a simple spending cap. And once a treatment is found to be cost-effective, it is available to all patients regardless of age.”
So who’s doing the lying?
The 60 Plus Association, a pharma-funded astroturf (fake grassroots) organization.
Here’s more:
“In 2002, 60 Plus received 91% of its total revenue – $11 million dollars – from one undisclosed donor, which the Washington Post reported lined up perfectly with “an unrestricted educational grant” to 60 Plus from PhRMa, the drugmaker lobby group. Jim Martin, the 60 Plus President, has acknowledged in interviews that it received money from pharmaceuticals, saying “I wish it was more.”
There are some very good, responsible pharmaceutical organizations, then there is PhRMa. They are neither.

President Obama’s recent visit to Baltimore to speak with (as he said, “not to, but with”) the House Republican Conference was one of the best things to happen in politics in recent memory.
Not that there’s a long list.
During the 90 minute dialogue, health care came up many times, first during the President’ opening remarks. There’s a lot there and much of it is encouraging, positive, and helpful. I’ve excerpted what I think are the most meaningful and interesting passages below, but for those disinclined to read this much, here’s my take.
This was an honest, open dialogue, with a bit of demagoging on the part of a couple (mostly freshman) GOP Congressmen. It was clear that the President had read most, if not all, of their proposals and ideas on health care, had considered them carefully, and some were included in the final bills. But let’s be clear – Congress came up with all the legislation, not the President. There was no “ObamaCare”, despite the use of that term by some in the media.
There is indeed opportunity for some common ground on health reform – perhaps around establishing national health insurance standards combined with opening insurance markets across state lines and perhaps tort reform, although anyone who thinks tort reform is a magic bullet hasn’t looked objectively at the issue.
But that said, both steps would help get something started, a ‘something’ that might break the legislative logjam currently preventing anything at all from getting done.
Here’s hoping the Baltimore dialogue will be viewed as the first step in meaningful health reform legislation.
The President’s opening remarks:

I know how bitter and contentious the issue of health insurance reform has become. And I will eagerly look at the ideas and better solutions on the health care front. If anyone here truly believes our health insurance system is working well for people, I respect your right to say so, but I just don’t agree. And neither would millions of Americans with preexisting conditions who can’t get coverage today or find out that they lose their insurance just as they’re getting seriously ill…I don’t think a system is working when small businesses are gouged and 15,000 Americans are losing coverage every single day; when premiums have doubled and out-of-pocket costs have exploded and they’re poised to do so again.
I mean, to be fair, the status quo is working for the insurance industry, but it’s not working for the American people. It’s not working for our federal budget. It needs to change.
This is a big problem, and all of us are called on to solve it. And that’s why, from the start, I sought out and supported ideas from Republicans. I even talked about an issue that has been a holy grail for a lot of you, which was tort reform, and said that I’d be willing to work together as part of a comprehensive package to deal with it. I just didn’t get a lot of nibbles.
Creating a high-risk pool for uninsured folks with preexisting conditions, that wasn’t my idea, it was Senator McCain’s. And I supported it, and it got incorporated into our approach. Allowing insurance companies to sell coverage across state lines to add choice and competition and bring down costs for businesses and consumers — that’s an idea that some of you I suspect included in this better solutions; that’s an idea that was incorporated into our package. And I support it, provided that we do it hand in hand with broader reforms that protect benefits and protect patients and protect the American people.
A number of you have suggested creating pools where self-employed and small businesses could buy insurance. That was a good idea. I embraced it. Some of you supported efforts to provide insurance to children and let kids remain covered on their parents’ insurance until they’re 25 or 26. I supported that. That’s part of our package. I supported a number of other ideas, from incentivizing wellness to creating an affordable catastrophic insurance option for young people that came from Republicans like Mike Enzi and Olympia Snowe in the Senate, and I’m sure from some of you as well. So when you say I ought to be willing to accept Republican ideas on health care, let’s be clear: I have.

Next, in response to a question from Chaffetz, who said “…when you stood up before the American people multiple times and said you would broadcast the health care debates on C-SPAN, you didn’t. And I was disappointed, and I think a lot of Americans were disappointed.
Obama
” Look, the truth of the matter is that if you look at the health care process — just over the course of the year — overwhelmingly the majority of it actually was on C-SPAN, because it was taking place in congressional hearings in which you guys were participating. I mean, how many committees were there that helped to shape this bill? Countless hearings took place.
Now, I kicked it off, by the way, with a meeting with many of you, including your key leadership. What is true, there’s no doubt about it, is that once it got through the committee process and there were now a series of meetings taking place all over the Capitol trying to figure out how to get the thing together — that was a messy process. And I take responsibility for not having structured it in a way where it was all taking place in one place that could be filmed. How to do that logistically would not have been as easy as it sounds, because you’re shuttling back and forth between the House, the Senate, different offices, et cetera, different legislators. But I think it’s a legitimate criticism. So on that one, I take responsibility.”
Blackburn
“thank you for acknowledging that we have ideas on health care because, indeed, we do have ideas, we have plans, we have over 50 bills, we have lots of amendments that would bring health care ideas to the forefront. We would — we’ve got plans to lower cost, to change purchasing models, address medical liability, insurance accountability, chronic and preexisting conditions, and access to affordable care for those with those conditions, insurance portability, expanded access — but not doing it with creating more government, more bureaucracy, and more cost for the American taxpayer.
And we look forward to sharing those ideas with you. We want to work with you on health reform and making certain that we do it in an affordable, cost-effective way that is going to reduce bureaucracy, reduce government interference, and reduce costs to individuals and to taxpayers.”
Obama
“I’ve gotten many of your ideas. I’ve taken a look at them, even before I was handed this. Some of the ideas we have embraced in our package. Some of them are embraced with caveats. So let me give you an example.
I think one of the proposals that has been focused on by the Republicans as a way to reduce costs is allowing insurance companies to sell across state lines. We actually include that as part of our approach. But the caveat is, we’ve got to do so with some minimum standards, because otherwise what happens is that you could have insurance companies circumvent a whole bunch of state regulations about basic benefits or what have you, making sure that a woman is able to get mammograms as part of preventive care, for example. Part of what could happen is insurance companies could go into states and cherry-pick and just get those who are healthiest and leave behind those who are least healthy, which would raise everybody’s premiums who weren’t healthy, right?
So it’s not that many of these ideas aren’t workable, but we have to refine them to make sure that they don’t just end up worsening the situation for folks rather than making it better.
Now, what I said at the State of the Union is what I still believe: If you can show me — and if I get confirmation from health care experts, people who know the system and how it works, including doctors and nurses — ways of reducing people’s premiums; covering those who do not have insurance; making it more affordable for small businesses; having insurance reforms that ensure people have insurance even when they’ve got preexisting conditions, that their coverage is not dropped just because they’re sick, that young people right out of college or as they’re entering in the workforce can still get health insurance — if those component parts are things that you care about and want to do, I’m game…
The component parts of this thing are pretty similar to what Howard Baker, Bob Dole, and Tom Daschle proposed at the beginning of this debate last year...
But if you were to listen to the debate and, frankly, how some of you went after this bill, you’d think that this thing was some Bolshevik plot. No, I mean, that’s how you guys — (applause) — that’s how you guys presented it.
And so I’m thinking to myself, well, how is it that a plan that is pretty centrist — no, look, I mean, I’m just saying, I know you guys disagree, but if you look at the facts of this bill, most independent observers would say this is actually what many Republicans — is similar to what many Republicans proposed to Bill Clinton when he was doing his debate on health care.
So all I’m saying is, we’ve got to close the gap a little bit between the rhetoric and the reality. I’m not suggesting that we’re going to agree on everything, whether it’s on health care or energy or what have you, but if the way these issues are being presented by the Republicans is that this is some wild-eyed plot to impose huge government in every aspect of our lives, what happens is you guys then don’t have a lot of room to negotiate with me.
I mean, the fact of the matter is, is that many of you, if you voted with the administration on something, are politically vulnerable in your own base, in your own party. You’ve given yourselves very little room to work in a bipartisan fashion because what you’ve been telling your constituents is, this guy is doing all kinds of crazy stuff that’s going to destroy America.
And I would just say that we have to think about tone. It’s not just on your side, by the way — it’s on our side, as well.”
Price
“Mr. President, multiple times, from your administration, there have come statements that Republicans have no ideas and no solutions. In spite of the fact that we’ve offered, as demonstrated today, positive solutions to all of the challenges we face, including energy and the economy and health care, specifically in the area of health care — this bill, H.R.3400, that has more co-sponsors than any health care bill in the House, is a bill that would provide health coverage for all Americans; would correct the significant insurance challenges of affordability and preexisting; would solve the lawsuit abuse issue, which isn’t addressed significantly in the other proposals that went through the House and the Senate; would write into law that medical decisions are made between patients and families and doctors; and does all of that without raising taxes by a penny.”
[editorial comment – this is bald-faced BS. health coverage for all Americans that doesn’t raise taxes by a penny? What utter nonsense!]
Obama
” It’s not enough if you say, for example, that we’ve offered a health care plan and I look up — this is just under the section that you’ve just provided me, or the book that you just provided me — summary of GOP health care reform bill: The GOP plan will lower health care premiums for American families and small businesses, addressing America’s number-one priority for health reform. I mean, that’s an idea that we all embrace. But specifically it’s got to work. I mean, there’s got to be a mechanism in these plans that I can go to an independent health care expert and say, is this something that will actually work, or is it boilerplate?
If I’m told, for example, that the solution to dealing with health care costs is tort reform, something that I’ve said I am willing to work with you on, but the CBO or other experts say to me, at best, this could reduce health care costs relative to where they’re growing by a couple of percentage points, or save $5 billion a year, that’s what we can score it at, and it will not bend the cost curve long term or reduce premiums significantly — then you can’t make the claim that that’s the only thing that we have to do.”
What does this mean for you?
A glimmer of hope for change.

If you’re one of the ‘it ain’t over till the fat lady sings’ crowd, well, she just did.
With apologies to House Speaker Pelosi; (she may be many things but fat she is not) she’s just finished her aria on health reform, and it is officially over. Pelosi’s recent remarks confirm what I’ve been saying; health reform is dead.
Specifically, Pelosi said there aren’t enough House votes to pass the Senate bill (good on them), leaving two options – passing a slimmed-down bill or a completely different bill with some reform components. Here’s how Pelosi characterized those options (according to Talking Points Memo):

“I don’t see the votes for it [current Senate bill] at this time,” Pelosi said. “The members have been very clear in our caucus about the fact that they didn’t like it before it had the Nebraska provision and some of the other provisions that are unpalatable to them.”
“In every meeting that we have had, there would be nothing to give me any thought that that bill could pass right now the way that it is,” she said. “There isn’t a market right now for proceeding with the full bill unless some big changes are made.”

There is a third ‘option’; no bill at all. And that’s what is going to happen.
Any bill will have to get thru the Senate, and Sen Elect Brown (R MA) is not going to vote for anything like the current Senate bill, nor are any of his fellow Republicans. As Merrill Goozner reports: “…In other words, if President Obama and the Democratic Party leadership had an inkling to reengage the leadership of the Republican Party, there wasn’t much evidence on display to suggest anyone on the other side would be offering a receptive ear.
New York Times columnist David Brooks attended the session. He prefaced his question by commenting that the common ground between the two parties appeared to be more like “common pebbles.”
More like common grains of sand, I’d say.”
On the other side of the aisle, there just isn’t the energy in Congress to re-do another bill; there’s too much on the calendar, it is an election year, and the Dems darn well better focus on issues more central to voters’ concerns.
It is possible the Dems will work on Medicare physician compensation, do something about pharma prices for Part D, and perhaps push some mild form of insurance underwriting reform, but not terribly likely. Instead, look for much more populist rhetoric and politicking, starting with the State of the Union address.

Health reform won’t happen this year; ignore all the brave happy talk – there will be no bill that reforms the insurance markets, lowers costs, and/or expands coverage.
You can’t have insurance market reform – ending medical underwriting and risk selection – without a strong mandate. And you can’t force people to buy health insurance they can’t afford without big subsidies. The current budget deficit and recession mean subsidies aren’t a reality. There’s just no way a family making $75,000 can afford a $15,000 health insurance premium (plus out of pocket expenses) without a big subsidy.
As to cost reduction, Congress has shown itself fundamentally unable to enact meaningful cost reductions. The Republicans painted themselves into a corner with their ‘death panels’ and ‘government-controlled health care’ memes. They could have staked out a credible and creditable position as the responsible adults in the debate by getting tough on costs as a way to help business, reduce future costs and thereby deficits and tax burdens.
(But then what do you expect from the party that gave us Part D, the biggest entitlement program since Medicare, along with its $8 trillion ultimate unfunded liability.)
Not that the Democrats gave them much choice. Senate Dems thought they didn’t need the GOP, believing they could ram thru a bill they drafted on the strength of their supermajority. And perhaps they could have, if the Mass Senate race hadn’t interfered. Sadly, the Senate bill showed our political process at its worst, with glutinous Senators selling their votes for heaping helpings of pork larded with political sweets – clauses on abortion, immigration, and taxes.
The cost estimates were misleading at best; none factored in the quarter trillion deficit we are carrying due to the Medicare physician reimbursement fiasco. The quick fix that’s in place today has raised physician compensation by a whole percentage point, making it seven years out of eight that Congress has failed to restrain the growth of Medicare’s physician spending.
Given the present environment, I don’t see a meaningful effort to do anything different. Thus next year we’re going to face an even larger deficit, as our feckless elected officials kick the can further down the path.
No, reform won’t happen this year, and isn’t likely in 2011.
What does this mean for you?
Family insurance premiums of $30,000 in ten years.

Ten months of effort was blown away yesterday by an unprecedented electoral upset, a most unlikely end to health reform.
Yes, I did mean to write ‘end to health reform’. This afternoon the Senate Democratic caucus is meeting to figure out what to do next, but the outcome was pre-ordained when Senate Majority Leader Harry Reid announced earlier today that nothing would be done on health reform until Senator-Elect Brown (R MA) is seated.
Which means nothing will be done this year.
That doesn’t mean health reform won’t happen at all, but the ‘health reform hangover’ makes it very unlikely anyone will eagerly jump into reform anytime soon.
I’ll admit to being conflicted over the demise of reform. Covering another 30 million Americans would have been good progress towards addressing one of our country’s greatest shortcomings. But the cost of that expansion, the lack of any meaningful cost controls or an enforceable mandate, and the political thievery committed by key swing Senators selling their votes (I mean you, Nelson of NE, Lieberman of CT, and Landrieu of LA) made for a Senate bill just a whit better than no bill at all.
The House bill was better, except for the unfounded belief in the public option; at least it had a better mandate provision.
But the cost reported for both was too low by a quarter trillion, as neither included the cost of reforming Medicare physician reimbursement.
What happened?

The Dems could have had a bill last July, but liberal Senators refused to compromise, convincing Reid they could win without any GOP votes. This forced the more intelligent and intelligible Republican Senators to jump on the death panel/rationing bandwagon. Sure, the compromise necessary to get a bill with at least a few Republicans on board would have been a higher Cadillac tax, lower cuts to Medicare Advantage, and no public option, but a bipartisan bill would have been a huge win for both the Dems and the President.
Instead, we’re left with a wasted year.
What does this mean for you?
Without health reform, we’re looking at family premiums over $30,000 by the end of the teens. Good luck with that.
That’s not to say the House or Senate bill would have made much difference.

The growing furor over the tax on high-cost healthplans is welcome indeed, as it is exposing the tax for what it is – an unfair burden on some based on a superficial understanding of cost drivers.
First, lets clear up a common misconception about the tax. It only affects the value of your health plan above a specific level – the benefit value below that level is not taxable income. Here’s how it works in dollars.
The tax, which is in the Senate bill but not the one passed by the House, taxes the value of health benefits above $8500 for individuals and $23,000 for families. If you have an individual policy valued at $10,100, the amount subject to tax is the difference between $8500 and $10,100 – $1600. The Senate plan taxes that $1600 at 40%, so you would have to pay $640 in taxes.
I have no problem with instituting a tax on health benefits, but it should either be on all plans, or on those plans that fail to keep costs under control.
The Cadillac tax does neither, instead taxing benefits on two groups:
– bargaining units that have substituted benefits for wages in negotiated agreements with management; and/or
– individuals and families that live in high cost areas.
The ‘benefits’ themselves have little to do with whether or not you’ll hit the tax threshold; much more important is where you live.
For example – the interstate variation in health care costs – not insurance premiums, but per-capita costs – ranged from $3972 in Utah to $8295 in Washington, D.C. in 2004.
So a company in Utah could cover cosmetic surgery, private hospital rooms, laser eye surgery, $10 copays for office visits and $5 copays for all drugs, all without coming anywhere close to the ‘Cadillac tax threshold’. But an employer in the District with a high-deductible plan, $50/$100 drug copays, limits on PT and outpatient therapy, and high copays for out of network services would already be over the threshold.
The idea behind the Cadillac tax is a good one – make consumers more cost conscious of the value of their benefits, and hopefully more careful consumers. And there’s no question the additional tax revenue will help offset the costs of the reform bill. (I’ll not comment on whether that’s good or bad).
Instead of this blunt instrument, that forces people in DC to help fund health reform for no other reason than they live in the District, while doing nothing to encourage Utahans to control costs, Congress should institute a tax on health plans that fail to keep costs under a threshold – thereby motivating all health plans, employers, and individuals to work to keep costs down.
Such an idea was proposed last summer but didn’t make it into the Senate bill. It makes much more sense than the current proposal, would give President Obama and Democratic legislators political cover, and would not give the opposition any ammunition.
What does this mean for you?
Watch what happens in the reconciliation process; it looks like the C-tax is on shaky ground, and the Dems will have to find an alternative funding source.

The finish line is in sight, but it’s uphill and the path is icy.
The Senate and House conference committee will be working overtime to try to get to a health reform bill acceptable to 218 Representatives and 60 Senators by the end of the month. There are three main issues that will generate lots of outrage/posturing/excitement; abortion, funding, and the public option.
The cost of the two bills is also a major difference, with the House version priced at about $150 billion more over ten years (leaving aside the many criticisms, some justified, about the pricing process and methodology, at least it provides comparative differences). The difference is not as significant as it seems at first blush; according to the CBO, both bills would result in a net reduction in future federal deficits.
However, neither addresses the real problem – the coming battle over Medicare physician reimbursement. If this is resolved in favor of docs, we’re looking at the addition of a quarter trillion dollars to the deficit. That’s big money, even in Washington…
Public option
Deader than dead. There’s been so much hype from both sides on this issue, for reasons I still cannot fathom, when we could have been talking about and perhaps even addressing underlying cost drivers. The public option would not have materially hurt private insurers, nor would it have solved the cost/access problem. Downright amazing how much political capital and press has been expended on something so insignificant.
Funding
There are significant differences between the two bills on funding; the House version has a 5.4% income surtax on individuals earning more than $500,000 and couples earning more than $1 million; the Senate version uses two sources, an excise tax on so-called ‘Cadillac’ insurance policies along with higher Medicare payroll taxes for individuals earning more than $200,000 and couples earning more than $250,000. House Dems (and others) protest that the ‘cadillac’ tax unfairly charges some for living in high-medical-cost areas, such as Boston and New York, while those with richer benefits that live in cheaper areas get a break. There are other taxes, such as an excise tax on medical devices that will likely be on the table as well.
Expect the ‘cadillac’ tax to be modified in reconciliation.
Abortion
For the life of me I can’t see the logic in the arguments against using taxpayer dollars to pay for a legal procedure. This country is ostensibly a democracy where majority rules, a nation ruled by law and not by men and women. Except when it comes to abortion. I understand some people are vehemently opposed to abortion, some are opposed to abortion in certain instances, and others believe it is none of the government’s business. Regardless, abortion is the only issue where politicians have been able to prevent the use of taxpayer dollars to fund something that is entirely legal.
Jehovah’s Witnesses’ tax dollars pay for medical services, pacifists’ taxes fund the military, vegans pay taxes that promote US pork production and export, all expenditures that are anathema to those groups of individuals. Yet somehow abortion is different. If Sen Nelson, Rep Stupak et al are successful in maintaining the bastardized health benefit plan constructed to meet their demands, they will be building a case for every other group to protest the use of their dollars for things they don’t like. In addition to increasing the administrative expense load for health plans in the same legislation that establishes legal limits on those expenses.
Alas, it isn’t for me to understand. Given the political sensitivity of the issue and the need for every vote, there’s little doubt some version of the Stupak/Nelson amendments will become the law of the land.
There are several other key issues that may well determine the effectiveness of the bill in controlling cost and expanding coverage. I’ll address those tomorrow.
What does this mean for you?
Another trip to the sausage factory.

There are few Americans angrier or more frustrated than House and Senate liberals. They’ve made concession after concession on issues as dear to them as abortion, single payer, the public option, taxes on high income earners, and tougher regulation of insurers. And for what?
A bill widely applauded by Wall Street for it’s promise of millions more customers for the private insurers liberals believe are the problem, not the solution to our health care mess.
For now there us precious little the liberals can do about this. For now.
Later may well be a different story. I’d expect we have not seen the last of their efforts to alter the landscape, in fact the liberals will have learned their lessons well. The most important will be to avoid having to placate Nelson and Lieberman and Landrieu; if the Senate only needed 51 votes we’d have a very different health reform bill.
The obvious route is to use the reconciliation process to push thru legislation that wouldn’t survive the 60 vote test. I’d look for a requirement that the Feds negotiate drug prices for Medicare and lower payments for Medicare Advantage plans to start. These are both well within the boundaries of the reconciliation process and therefore will not need the support of any of the afore-mentioned Senators.
And it won’t stop there. There is a large and growing concern about the cost of entitlemt programs and Part D is particularly problematic. By attacking drug costs and thereby reducing Medicare’s future liability, liberal Democrats will make it very tough for their opponents to use the ‘big spender’ attack angle in November.