Intellectual fallout from the likely failure of Graham-Cassidy

by on September 23, 2017 at 1:53 pm in Current Affairs, Law, Medicine, Uncategorized | Permalink

1. The Democrats were debating single payer while this bill, which they dread, nearly passed (and still has some chance of passing).  This was not a random mistake, rather it reflects a more general tendency of the Democratic Party to focus on the wrong kind of expressive values, in a manner which does not seem remediable.  We need to re-model what they are, and build this kind of un-educability into the new model.

2. One lesson of Graham-Cassidy failure is that American health care, at the state level, is a race to the bottom not to the top.  Recall that the Canadian health care system also leaves key decisions to the provinces + block grants, but American Progressives love the results.  Most observers know the American states would not copy the Canadian provinces in their policies, and it is not only because fiscal equalization is weaker to the south.  The reality is that spending much more on health care would not make most American states much more desirable places for most people to live in.  If it did, Graham-Cassidy would be a better idea than in fact it is and a race to the top would ensue.  Better health care would brighten up states all around, attract more population, and increase the revenue going into governor’s coffers.

Democrats and Republicans both find this inadequacy of state-level outcomes difficult to accept, though for opposing reasons.  Democrats hate having to recognize that all the extra health care spending might be mainly redistribution rather than remedying a market failure or providing a broad-based social public good.  Republicans hate to see that giving states control over health care policy, and allowing them to revise Obamacare, won’t improve those states and probably would make most of them worse.

Of course my points #1 and #2 relate.  I agree Graham-Cassidy is a bad idea, but every time I hear the critics say it is heartless, or would “take away” people’s health insurance, or “kill people,” what I really hear is “If we let everyone vote again on Obamacare, with a real time balanced budget constraint, they wouldn’t vote for nearly as much health care next time around.”

Which is why you should not be obsessing over single-payer systems.

Across the board, pondering Graham-Cassidy, including its failure, should make you more pessimistic about economic and social processes.

1 A Truth Seeker September 23, 2017 at 2:03 pm

Will America’s health care quagmire ever end?

2 Dick the Butcher September 24, 2017 at 10:38 am

Only the dead have seen the end of the health care quagmire.

Seek this: Where is it “written” that someone else’s health care is my or the Federal government’s (where does it get the money? – me) financial responsibility?

3 Angryanalyst September 24, 2017 at 12:44 pm

The reality is that we do pay for healthcare for others – Medicare is non-controversial. If you wish to revisit that choice your comment makes sense, otherwise you would need to explain why it makes sense to pay for old people’s healthcare but not young ones.

4 static September 26, 2017 at 2:39 pm

It doesn’t make sense for poor young people to pay payroll taxes for rich people’s Medicare. It doesn’t make sense how much is spent futilely in the last months of life. It’s welfare, but Medicaid for All doesn’t seem to be the popular way to describe single payer (and Medicare is not even single payer, given the Medicare Advantage plan structure).

5 BC September 24, 2017 at 10:49 am

It will end when and if we ever get the federal government out of the business of deciding everyone’s health care. As McCardle points out, healthcare politics weren’t really that paralyzing until Obamacare made it a central issue [https://www.bloomberg.com/view/articles/2017-09-20/how-the-health-care-debate-would-change-if-graham-cassidy-passes]. Polticizing each person’s health turns a personal issue into a national one.

6 Carl Jones September 23, 2017 at 2:04 pm

You may want to change “pubic good” to “public good.”

7 Bill September 23, 2017 at 2:41 pm

I like pubic good better than public good.

That’s my preference, anyway.

What was he thinking of?

8 napoleon sansomite September 23, 2017 at 8:00 pm

The mission reached the northern shore of Lake Chad on 4 February 1823, the Britons becoming the first white men to see the lake; the party continued westward, reaching Kuka in the Bornu Empire, (now Kukawa, Nigeria) on 17 February. [6]

9 Anonymous September 23, 2017 at 2:18 pm

I am not a Democrat, but it seems over-reading to say they “are” anything specific. A party fully out of power, and without a named Presidential candidate, is very much in flux. There is no platform. There are only gambits for attention at this point.

I admit single payer is a popular gambit, and one that could end up with enough momentum for the platform 3 years from now. But that’s a long ways off.

The chance of bipartisan legislation is much more immediate and much more positive IMO. Anyone hoping for something better should support that, like right now.

On races to the bottom tho

https://twitter.com/jbarro/status/911298258403827713

10 Art Deco September 23, 2017 at 3:19 pm

A party fully out of power, and without a named Presidential candidate, is very much in flux. T

The floor leader in the Senate is 67 years old, never practiced law, and has held public office continuously since 1975 and has sat in Congress since 1981. His deputy is 72, has been collecting public sector salaries since 1969, and has sat in Congress since 1983. The floor leader in the House is 77, has sat in Congress for thirty years, and held a clutch of party positions prior to that; I think she was a schoolteacher or something 50-odd years ago; her brother and father were both Mayor of Baltimore. Her deputy is 78, has been in Congress since 1981, and has held elected offices or political staff jobs without interruption since 1962; I think he had a law practice 4 or 5 decades ago.

All the ‘flux’ is just so disorienting.

11 David Lareh September 23, 2017 at 3:35 pm

A silly red herring. Those are the leaders of the party’s representatives, who do high-profile negotiation and administration. It’s fitting that they be the most experienced, but they don’t dictate the policies the party and its supporters want.

12 Art Deco September 23, 2017 at 3:56 pm

but they don’t dictate the policies the party and its supporters want.

No, they dictate what those supporters are gonna get.

fitting that they be the most experienced

“Most experienced” would be a collection of gerontocrats two of whom are older than was Leonid Brezhnev at the time of his death. What’s notable about these ‘experienced’ individuals is that all of them have spent their adult life shucking and jiving in legislative bodies. The closest thing to executive experience any of them has is supervising their office staff. If you prorate seasonal and p/t work, they might have 10 years of law practice between them. Not one of them ever studied a quantitative discipline.

A silly red herring.

Rhetorical gamesmanship is bad form.

13 msgkings September 23, 2017 at 4:39 pm

“Rhetorical gamesmanship is bad form”

You would know you crusty old hypocrite

14 A Truth Seeker September 23, 2017 at 5:59 pm

“‘Most experienced’ would be a collection of gerontocrats two of whom are older than was Leonid Brezhnev at the time of his death.”

I guess it is another victory for capitalism. The Soviets did what they could to keep Brezhnev undead, thought.

15 Robert September 25, 2017 at 7:26 am

Likewise younger folk like the Speaker of the House who has barely held private sector jobs. In fact the family wealth was bolstered by government contracts and yet because he read Ayn Rand he is put upon a political pedestal?

16 Harun September 23, 2017 at 4:36 pm

Silly? No. Actually, its kind of interesting.

17 Harun September 23, 2017 at 4:38 pm

Noticing these facts in way says “So the GOP is better.”

Some of the GOP seems determined to emulate long Congressional careers, albeit more reliant on failure theater than actual policy success,

18 Art Deco September 23, 2017 at 7:18 pm

There are 15 current Republican members who were in Congress when Nancy Pelosi hit the town. Among them are several exemplars of failure theatre: Charles Grassley, Orrin Hatch, Hal Rogers, John McCain, and the granddaddy of failure theatre, Addison Mitchell McConnell.

19 Anonymous September 23, 2017 at 7:50 pm

It is hard to spot a Trump meltdown when meltdown is the new normal.

But I am going to say anyone blaming progressives, or even career congressmen, on the day Trump wars with Goodell, is rather ignoring what is going on.

Look to the madness that has become central to our politics to understand the dysfunction of our politics.

Duh.

20 Anon September 24, 2017 at 12:16 am

Instead of your Twitter link, you could have just said “Republicans are evil idiots! They are so stooopid!” which is what the link says. We’re never going to get anywhere with that attitude, which is exactly why we are in the situation we are in.

Your concern trolling and constant protestations that you are absolutely NOT a Democrat, you are a moderate centrist which just happens to be to the left of the Democratic party these days, is tiring.

21 Anonymous September 24, 2017 at 8:25 am

Oh boy, I can push back on that.

I “constantly trolled” that Trump was dangerously unsuited for the presidency, and everybody should mobilize in response.

What was the answer? That you didn’t want to hear about how bad Trump was every day.

And so we ended up here, with Trump and general stupidity running our country, because you didn’t want to deal.

Complacency? Or something much worse.

22 Anonymous September 24, 2017 at 9:08 am

By the way, since you like Twitter links.

https://twitter.com/Khubbard991/status/911705315758002176

All this was _very_ unnecessary, if Americans had just voted for a higher ideal.

23 Nick September 23, 2017 at 2:21 pm

This reminds me of that Megan McArdle tweet that could be equally well applied to nearly every Libertarian response to every political issue:

“To the extent this is a problem, I don’t think there is a solution.”

This seems to be the only response Libertarians ever give.

24 Art Deco September 23, 2017 at 3:20 pm

Meet ’em half way and don’t make things worse for once.

25 Bob September 23, 2017 at 3:32 pm

In this area, Tyler has offered arguments before: That the argument about single payer, insurance or out of pocket is far less important than making sure that healthcare itself gets cheaper. Tyler would probably choose options that increase supply: (Train more doctors, let more doctors come from abroad, make drug testing less onerous), while someone further to the right would talk less about the FDA, and more about price controls.

Either way, it’s a political non-starter, as the savings per treatment will come out of someone’s pocket, and that someone has lobbyists, and voters in every single congressional district. A braver political class might focus on this though, but healthcare probably has to get worse before people are willing to start disliking how much their doctor makes.

26 Art Deco September 23, 2017 at 3:38 pm

In this area, Tyler has offered arguments before: That the argument about single payer, insurance or out of pocket is far less important than making sure that healthcare itself gets cheaper.

He did? That would be a bad argument. Inefficiency incorporated into health care delivery is a consequence of opaque pricing derived in part from custom, in part from the occult character of components of the services provided, and in part from the haphazard financing scheme.

M. McArdle has, in the past, made a sketch of a public high deductible plan she thought would be salutary, so it’s not as if she hasn’t suggested solutions. (She may have repudiated that – not sure).

27 mulp September 23, 2017 at 5:54 pm

Obamacare is “FAILING” because of high deductible bronze plans! That is according to people like Megan. They argue broke plans don’t pay for medical care because of the high deductible and then propose high deductible plans as the solution, plus an income tax exempt savings account that workers too poor to pay income taxes can put money they don’t have into to pay the bills under the high deductible.

The law requires insurers to reduce the deductible for low income patients to bring total costs under 15% of income, and directs CMS compensate insurers for doing this, but conservatives argue that laws directing spending can not spend money unless authorized a second time.

Ie, the Air Force is required to buy a plane in a budget bill, but it can’t pay for it because the authorization bill cuts spending authority by 15% of past spending authority. This Rube Goldberg system was created by conservatives to do more with less money.

Liberals were not tax and spend, but instead spend and tax. Up until 1980, conservatives were tax and spend, so before Congress could spend money, they had to withstand the attacks of anti-taxers in the public sphere to do the spending. In the 30s and through the 60s, tax and spend was so successful that the majority voted for liberals in both parties to tax and spend more.

The breaking point was 1968 when tax hikes to fund all the war jobs were made that produced a budget surplus in 1969. While the majority of voters strongly supported war, they did not want to pay the cost of war. Conservatives promised war with tax cuts and no draft to pay for a bigger war to victory with no sacrifice. Repeated in 2001 was the promise of 1972 and 1980: Bigger war to victory paid for with tax cuts. And that is the GOP campaign promise since 2010.

Trump is unleashing the GOP and driving them to cut taxes and explode war spending.

Pelosi and Schumer are backing Trump on eliminating the guardrails conservatives impose on liberals, that Obama then turned on conservatives in another one of the “bad deals” of Obama, budget sequestration across the board, which lock taxes and spending cuts or hikes together.

Megan is a free luncher, pushing hard on free lunch economics. TANSTAAFL. On every topic she argues against herself, blaming liberals for failing to adopt her policies and magically delivering free lunches.

28 static September 26, 2017 at 2:45 pm

The only reason ACA is working at all is because of the bronze plans that the Democrats really did not want to include. Without that, there would be very little activity in the individual marketplaces by the healthy. High deductible with public pricing is the only way forward to getting a system with lower costs.

29 Art Deco September 23, 2017 at 3:40 pm

as the savings per treatment will come out of someone’s pocket,

Unless you fancy technology and process are absolutely optimal at this time, no they won’t (necessarily).

30 Jan September 24, 2017 at 7:47 am

There are certain things you can do on the margins, sure, but even cost saving some process improvements, etc., end up cutting some unnecessary spending on some service or product. As many have said, there is no silver bullet here. I think politicians need to admit that and own the downsides of bold ideas or strive for incremental improvements.

31 msgkings September 24, 2017 at 9:24 am

It’s almost tautological. If you want to spend less money on health care, people will receive less money for providing health care.

32 Robert September 25, 2017 at 7:34 am

Are most of the costs of health care actually going to the people who actually provide healthcare? Or to administration, insurance companies, and drug companies?

I fear we have to kill insurance as we know it to fix things, perhaps along with Medicare and drug company policy.

When it’s for profit and public companies are in the game they will make a profit not considering efficiency or affordability of healthcare.

33 msgkings September 25, 2017 at 11:40 am

Yes a lot of it is insurance companies. But the point remains, to spend less $ on health care, someone gets less $. Insurers, providers, hospitals, etc. Someone gets less $.

34 Nick September 24, 2017 at 8:15 am

> Either way, it’s a political non-starter

I mean, obviously not, considering a substantial number of potential Democratic presidential contenders are now signing onto single-payer legislation. 1/3rd of the Democratic senators have already signed onto it. (https://news.vice.com/story/heres-whos-backing-bernies-medicare-for-all-bill)

In terms of public opinion, it’s been trending upwards, with 53% of the public now in favor of some kind of government-involved healthcare (wording on the questions differ, to be clear. http://www.kff.org/health-reform/poll-finding/data-note-modestly-strong-but-malleable-support-for-single-payer-health-care/) Republicans have gotten to 49 votes on healthcare legislation that at one point was polling 17% approval; surely 53% wouldn’t represent a large impediment from the public by comparison.

And thanks to Republicans absolutely trashing the concept of minority power or the observance of rules and processes in the Senate, Democrats will be in a relatively easy rhetorical position to change the rules to a simple majority vote and/or claim it counts as ‘reconciliation’ and push it through if at any point they control the House, Senate, and Presidency.

Obviously that won’t be in the next 2 years, but I think this shift is going to end up being a lasting change in how willing Americans are to accept government involvement in healthcare.

35 Nick September 24, 2017 at 8:22 am

Oh yeah, and Republicans got to 49 votes repeatedly despite literally the ENTIRE healthcare industry opposing the legislation, so apparently special interest opposition might not be a problem either, if Democrats go as hard as Republicans have been going.

36 Robert September 25, 2017 at 7:29 am

It is less what my doctor makes and more what for profit health care administration, drug companies and insurance executives make.

37 msgkings September 25, 2017 at 11:42 am

It’s all of those. But what happens if drug companies make less, do we get fewer drugs?

38 Anonymous September 23, 2017 at 2:23 pm

“We gave them many of the things they asked for, including copper [catastrophic] plans and wide waiver authority,” said Matt House, Schumer’s spokesman. “The Republican leadership is so eager to pass Graham-Cassidy that they’re scuttling a balanced, bipartisan negotiation.”

http://www.cnn.com/2017/09/19/politics/alexander-murray-bipartisan-health-care/index.html

39 Harun September 23, 2017 at 2:37 pm

Show me the Republicans viewpoint. I’m going to guess schemer isn’t being honest.

40 Anonymous September 23, 2017 at 2:42 pm

Huh? The Republican viewpoint is the main feature of this discussion. They repeatedly self-impale on sequentially worse healthcare bills.

As someone said, they invent the “Jimmy Kimmel test” themselves, because they think it is good politics. They then flunk that test explicitly and .. wait for it .. blame Jimmy Kimmel!

What a flock of pigeons.

41 Harun September 23, 2017 at 4:41 pm

There is two sides to each story. What is Schumer asking for that they cannot accept?

When Schumer says its balanced, and non-partisan why should I believe him?

Any more than you should believe these weak-tea bills that keep the ACA largely intact: why isn’t Schumer accepting those? Its a bipartisan balanced approach according to McConnel’s spokesperson.

42 mulp September 23, 2017 at 6:29 pm

Schumer is asking Republicans to pay workers to do the work required under the existing law and the law after Graham-Cassidy. Graham-Cassidy can not change the “essential benefits” law, or EMTALA, because those are not strictly budget items.

Before Obamacare, Medicaid law provided hospital bailouts to prevent them going bankrupt from EMTALA. The GOP complained about the rising costs of EMTALA bailouts, demanding hospitals squeeze blood from stone poor working and sick people, getting bailouts pretty much only after the patients are dead. Obamacare changed the system, phasing out the hospital bailouts by mandating everyone have health insurance, subsidizing insurance for the poor with refundable tax cuts to working poor to buy private insurance that must pay hospitals, and State government run single payer to pay hospitals for the really poor.

But the GOP objected to paying hospitals with federal money, so Mississippi did not expand Medicaid. Now the GOP blames Obama for Mississippi hospitals going bankrupt because they can no longer be bailed out from the EMTALA mandate that is paid for by expanding State government single payer with 100% falling to 90% Federal dollars.

Note Graham-Cassidy conditions ALL Medicaid funding on complying with all the required benefits of existing law, and then has a hard cut off of funding in 2027. Mississippi did not expand Medicaid because they did not want to suffer from cuts in future Medicaid funding, so Mississippi will not expand Medicaid even with Graham-Cassidy, unless the real reason for not expanding Medicaid was the black man who signed it into law, while Graham-Cassidy money is OK because Trump is white.

Any exception to essential benefits under Graham-Cassidy can be made under Obamacare because those portions of the law can not be changed by only 50+1vp vote. A rule called the Byrd rule after the conservative who wrote it.

By the way, Obamacare was bipartisan, except to the left and right Stalinist history revisionists. Arlen Specter was never elected to anything by Democrats. He joined the Democratic Caucus when expulsion from the Republican Caucus by McConnell was certain. Specter’s crime was serving all residents of Pennsylvania, just like Murkowski who was kicked in the teeth by the right wing of the GOP in Alaska and then winning reelection by ALL Alaskans in the majority. Just like Joe Lieberman was kicked in the teeth by the left in the Democratic Party of Connecticut, then winning reelection by ALL voters in the majority. Remember Joe backed John McCain against Obama.

43 Harun September 23, 2017 at 4:42 pm

Oh, I agree that Cassidy was stupid and they are a flock of pigeons.
I’m just not convinced that because Schumer says he’s an eagle he’s not a pigeon, too.

44 Albus_Scirocco September 23, 2017 at 2:27 pm

I disagree with point #1 – they were debating single payer because it is more popular than ever, particularly with their base. If a law is passed through reconciliation, it isn’t permanent, and so energizing your base in such a way as to put your party back in power is arguably a better way to defeat a law you don’t like than debating it. It’s analogous to a politician answering the question he wanted you to ask, rather than the question asked.

In point 2, you make some unfounded assertions: “Recall that the Canadian health care system also leaves key decisions to the provinces + block grants, but American Progressives love the results”, where most progressives I know point to European models, particularly UK and Nordic countries, as their preferred implementation. I would be interested in the data you used to assert progressives love Canadian health care.

45 prior_test3 September 23, 2017 at 2:32 pm

If you don’t like the modelling, one can be fairly confident that Prof. Cowen will be able to remodel it for you.

46 Anonymous September 23, 2017 at 2:30 pm

When single payer comes around, everyone right of center pretends they have never heard the word “voucher.” What is that, a foreign tongue?

47 Anon September 24, 2017 at 12:20 am

?

48 Nick September 24, 2017 at 8:18 am

They’re saying that a single-payer system, where the government foots the bill but then the hospitals and doctors and such are private market, strongly resembles the idea of a ‘voucher’ program for public education.

In the realm of education, Republicans have long advocated a system whereby, and note the similarities here, government foots the bill but then the schools and teachers and such are private market, with consumers using their government money and choosing among the different private options.

49 prior_test3 September 23, 2017 at 2:30 pm

‘nearly passed’ – In a Republican controlled Senate, truly a rare accomplishment. Or not, considering recent history.

‘We need to re-model what they are’ – Coming from a putative libertarian, this is hilarious.

‘is a race to the bottom not to the top’ – Not just in American health care.

‘American Progressives’ – Are you modelling them now too?

‘should make you more pessimistic about economic and social processes’ – well, American ones, at least. Strangely, pretty much the rest of the world has figured out how to provide health care to virtually all citizens at a cost at least a third less than in the U.S.

50 Ray Lopez September 23, 2017 at 3:09 pm

Good points all, but I would say the unmentioned pachyderm in the room is PATENTS. Apparently the reason non-USA healthcare is so reasonable while USA healthcare is so expensive is that patents in medicine are weakly enforced outside the USA, so the USA has to pay for the rest of the world’s patented healthcare, analogous to how the US military pays for all other countries defense (look at Japan’s military expenditures to GDP, a mere 0.9%. USA at 3.3%, which, given the size of the US economy, is a lot of money.
Military expenditures as percent of GDP, for years 1960 and 2016, from https://data.worldbank.org/indicator/MS.MIL.XPND.GD.ZS

Once again, PATENTS is the key phrase missing in this debate. Next time you read a policy argument about technology, or even healthcare, do a Control plus F key and type “patent” and see how many hits you get. Typically zero. And even in articles where the subject is: “how can government increase innovation?” I kid you not. Clueless journalists interviewing clueless economists that are anti-patent, pro-perfect competition (i.e. perfect Malthusian trap).

51 Ray Lopez September 23, 2017 at 3:17 pm

Case in point: to rid myself of parasites I caught in the developed world (including the beautiful Ascaris l., the giant roundworm growing over a foot long, what a surprise that was in the toilet bowl!) I had to pay in the USA for the expensive drug albendazolum, at about $800 a pill. Why? Because only in the USA is this drug paid for legally, everywhere else they pirate it. The Pharma Bro had a point, in a way, though he was pretty flagrant about it. The USA pays for everybody else’s healthcare.

52 Pshrnk September 23, 2017 at 4:20 pm

Are you claiming Pharma sells its products at a loss everywhere outside the USA?

53 Ray Lopez September 23, 2017 at 10:53 pm

@Pshrnk – not at a loss, but the real profits are made in the USA and these real profits enable life-saving drugs to be distributed all over the world at a modest or no profit. The USA is subsidizing the rest of the world. Source: experts in healthcare interviewed by the Washington Post a few years ago.

54 mulp September 23, 2017 at 5:08 pm

Why is a drug invented in 1975 not a generic manufactured in generic form using ISO9000 standards certified by the FDA not sold for a few pennies per pill?

Oh, it is! It can’t be pirated!

Note, the drug was not approved in the US for humans until 1996 because the earlier FDA approval in 1975 of Mebendazole for humans meant the small US need was already served and the costs of doing the FDA approval for the US human market was not justified. The huge animal market was already allowed and OTC.

To hike the price:

“As of 2016, pricing has dramatically increased in the U.S. as Amedra Pharmaceuticals acquired the rights to this drug from Teva in 2013. It should also be noted that in 2010, Amedra also bought the U.S. Marketing rights to the only other interchangeable anti-parasitic medication, albendazole, from GSK. The result of these acquisitions created a monopoly for this 40+ year old medication and its alternative medication.[17] The retail price was approximately 380 USD per 100 mg tablet in Florida in September, 2016, and marketed under the brand name, Emverm, by Amedra Pharmaceuticals. In Taiwan, a package of 10 capsules (100 mg) sells for $3 US dollars.” — Wikipedia

Anyone can produce a generic or either for the US market by navigating the FDA rules created by Republicans controlled Congresses that were claimed to increase competition in generic drugs by giving extra rights to holders of FDA approval of manufacturing and distribution of a drug formulation. Teva and GSK have those approvals for the US, but assigned them to Amedra which has lots of incentive to sue anyone seeking FDA approval to manufacture and distribute generics in the US.

If Congress authorized CMS or NIH to either buy the rights to market or fund contracts to manufacture and distribute every out-of-patent FDA approved drugs with a small fee over contract manufacturing cost to fund this program, out sourcing distribution to any and all drug distributors or large customers, eg large hospital and clinic systems at that fixed price, US drug prices would fall to the global price levels.

Drugs covered by patents could be priced as high as the market will pay, but “me too” drugs will be forced down to cost and only be developed if they have significant benefit worth doing drug safety and efficacy testing to meet FDA standards for documentation. The FDA pretty readily approves giving drugs for free based on the efficacy being zero. Giving the unapproved drugs to test subjects, the dying, etc. Document what happens and get FDA approval even if the efficacy is effectively zero, as long as the drug states it has no benefit. The FDA has been approving minor chemical changes to existing generics that perform no better, with exclusive rights for a decade or more. The makers of the generics the stop making them and market only the higher priced no benefit versions. This Rube Goldberg system was created by conservatives so government can promote drug research without spending any money. Then conservatives defend the high prices from Wall Street rent seekers, while blaming the government regulations they created to enable high rents to fund drug research.

Let’s say patents and the FDA were eliminated: who would pay to do drug research? Invent a new drug and as soon as someone does a chemical analysis, they are selling it, just like is done today for meth, mdma, lsd, and hundreds of other street drugs

55 Ray Lopez September 23, 2017 at 7:52 pm

@mulp – dude, “albendazolum” is not “mebendazole”, though they are similar. As you may know, the reason they are prescribed is that if you try and kill the giant roundworm with other drugs, without immobilizing it first as these two drugs do, the worm will try and burrow its way outside your body, and that can get messy (some of the juveniles live in your bloodstream; the adults, in your gastrointestinal track, will start crawling out of your mouth; I only had two adults in me, but some people have so many worms inside them, from years of not taking anti-worm medication, which in the tropics should be taken once a year–the ascaris worm is asymptomless– the worms form, a giant ‘worm ball’ that can obstruct your gut, even when immobilized; imagine now these dozens or hundreds of worms all burrowing out of your body…aggghhh!)

But as to your point, you claim the Republican-backed FDA is making generic drugs cost more, contrary to the rest of the world. Fair enough, but that’s actually my point exactly. By raising the profitability of “off-patent” drugs, as you claim today’s FDA does, it makes the patented drugs more valuable (think about this). That’s in fact why they have “patent extensions” for patented drugs that took a long time to go through the FDA.

So, while me and you are on opposite sides of the patent debate, we both agree: US rules make patented drugs cost more, and the rest of the world is a ‘free rider’ so the drug companies are forced to ‘gauge’ the US market to make their R&D money pay back. I can’t see how you can possibly disagree with that, give what you wrote, but I’m sure you’ll think of something.

56 static September 26, 2017 at 2:54 pm

The absurd FDA rules were not created by solely by conservatives. Stop pretending it’s all about what team you are on, simpleton.

57 Larry Siegel September 24, 2017 at 2:36 am

No s**t, Sherlock.

We pay more for health care than other countries because we are paying for our own plus theirs.

58 byomtov September 24, 2017 at 7:45 pm

Good comment.

What exactly does Cowen think the Democrats ought to be doing about Graham-Cassidy, besides voting against it?

59 Bill September 23, 2017 at 2:37 pm

The Republicans, in control of the Congress,

Are unable

To Repeal

Socialism.

Sad.

60 Charlie September 23, 2017 at 2:58 pm

The whole post was based on the premise that this was just a Federalist reorganization of funds. It wasn’t. It was also a large cut in Federal health care spending.

61 Bill September 23, 2017 at 4:35 pm

+1 The Magician’s sleight of hand.

62 Harun September 23, 2017 at 4:43 pm

6 years of spending, 10 years of revenue.

That trick worked, though.

63 Bill September 23, 2017 at 6:38 pm

Harun, Evidently you did not read the CBO projections at the time of enactment and subsequent reports.

64 rayward September 23, 2017 at 3:06 pm

Single-payer is a distraction, just like Sen. Sanders himself. But Cowen reveals the status of himself and the people he associates with when he states that “the extra health care spending might be mainly redistribution rather than remedying a market failure or providing a broad-based social public good.” My brother had leukemia. He worked until he couldn’t. Having lost the health insurance with his job, he quickly exhausted his savings, even though he was frugal and a saver. He was a frequent in-patient at the local hospital, which couldn’t deny him treatment but didn’t provide it for free: a not for profit, it was aggressive with its collection efforts. phone calls day and night, adding to the stress my brother already was experiencing from declining health and exhausted savings. My brother died before Obamacare became effective. I don’t know if he would have survived any longer, but the time he did have would have been a whole lot better. My brother’s experience is not different from thousands, hundreds of thousands, who had the misfortune of getting a chronic disease before Obamacare.

65 mulp September 23, 2017 at 3:27 pm

The GOP does not believe workers should be paid. LBJ created a dependency of medical workers on getting paid by allocating lots of Federal money to pay medical workers. The GOP has been fighting that dependency by bankrupting public hospitals and privatizing them and then running them based on the capitalists getting paid, but not workers.

Unfortunately, costly regulation from the Federal government requires capitalists pay workers for working, and also mandates they have workers work on patients if they get any Federal money (EMTALA) but added the requirement in the 90s and 00s that the capitalists get blood from squeezing stone in order to get a bailout to prevent bankruptcy from EMTALA. Obamacare phases out the hospital bailouts.

If only the costly government regulations were eliminated and capitalists could put doctors in chains and whip them to get them to work better without malpractice torts.

66 TMC September 23, 2017 at 4:17 pm

So your brother died of leukemia and you are worried about his bankroll, the only thing Obamacare may have helped with. You indicated he did receive care, and if he were out of funds Medicaid would kick in.

67 Pshrnk September 23, 2017 at 4:26 pm

@TMC
“it was aggressive with its collection efforts. phone calls day and night, adding to the stress my brother already was experiencing from declining health and exhausted savings. ”
“I don’t know if he would have survived any longer, but the time he did have would have been a whole lot better.”
What part of these was unclear?
It is wrong to add unneccessary stress to an ill person’s burden. A point made years ago by Barak Obama, George Stephenapolous, George Will, etctera.

68 rayward September 23, 2017 at 6:30 pm

No, he did not qualify for Medicaid. You don’t remember the limited qualification for Medicaid before Obamacare. You have a short memory.

69 TMC September 23, 2017 at 8:07 pm

I agree with you on the aggressive collection calls, but if his funds were all gone, he most certainly did qualify for medicaid. Obamacare is about paying for care, not getting the care. You are not the first one to confuse the two.

70 mulp September 23, 2017 at 7:15 pm

” if he were out of funds Medicaid would kick in.”

Depends on the State, and on how long he lived while dying in order to jump through the hoops the States erect. Plus States get to use death panels, as long as they are secret, and not transparent like Colorado did by ranking medical care by patient criteria in priority order and then figuring out how far down the list to go before cutting off payments. For example, childhood vaccinations were high on the list, leukemia in children was lower but high, but leukemia in adults was much lower, and I believe cut off circa 2006.

EMTALA applies only in the case of eminent death, so treating leukemia with chemo and bone marrow transplant is not required, but life saving blood transfusion to prevent death is, as well as intensive care, if you can get to an ER or into a hospital. But if you walk into a hospital not immediately dying, they can order you to leave if you don’t have money, as a vagrant. Back then, hospitals got bailouts from the State using Federal funds, but Congress order hospitals to aggressively seek bill payment by any means like making patients and families homeless, hungry, and without transportation. It was called forcing individual responsibility.

At the same time, Congress was ordering all subsidizes for charity, non-payment, etc be eliminated from bills paid by government, as well as overhead. Ie, all CMS sourced money was paid at 90% of the lowest price paid by not government payers. As Congress tried to shift costs to the private sector, insurers got bigger to force cost shifting to smaller payers, like individuals.

Only the “leftist” States found ways to get Federal matching money for single adults by classifying them as Medicaid disabled quickly. Ohio simply paid welfare workers to get them approved for SSDI so that if they lived, they would get Medicare in two years and then qualify for SSI and Medicaid money at 53% match for the remainer.

71 mulp September 23, 2017 at 3:15 pm

Give Obamacare is extremely State controlled and the public hates it leading to the GOP seeking to implement Federal control with Graham-Cassidy based on that correcting the Federal control they claim Obamacare imposes, why isn’t the correct counter to the GOP Federal control the Bernie Federal plan which seeks to deliver on Trump’s campaign promise of true universal better health care that has no mandates to buy insurance?

States have so much control under Obamacare that two dozen States do not take Federal money to pay health care workers.

These states claim that paying workers will create a dependency by workers on getting paid, a dependency on those benefiting from the work of paid workers, and a dependency of the economy on paid workers, the it will be impossible for the State to stop paying workers. And the Congress might take away that money at any time.

So, Graham-Cassidy offers Federal money in fixed amounts under the same Obamacare rules to optionally pay workers less money with a fixed cut off date certain.

They then claim that Mississippi will now get more Federal money because they will take less money with an absolute cutoff date by Congress to create a dependency the State will be forced to fund in 2027 by raising taxes, except Graham-Cassidy prohibits States from imposing a list of taxes to fund the difference between Obamacare funds and Graham-Cassidy funding.

The biggest difference between the Medicaid funding in each State is based on how much each State imposes taxes to pay workers to get Federal matching funds.

And since 1965, the majority of the funding has been match at 50-55% for NY and California and 80-85% in Mississippi. In other words, to pay workers $100 in NY, NY taxpayers must pay $50 while Mississippi taxpayers only pay $20. What has happened is NY taxpayers pay $100 to get $200 paid to workers and Mississippi taxpayers pay $10 to get $50 paid to workers. Graham-Cassidy is offering every State $60 fixed with no requirement for a State match so Mississippi will pay workers $60 after cutting taxes, but NY will need to hike taxes from $100 to $140 to avoid huge job losses. Except Graham-Cassidy prohibits certain kinds of taxes.

So, Graham-Cassidy is much more Federal control over State payments to workers with the direction in pay being downward. It rewards States like Mississippi and Kansas where payments to workers are already quite low based on State control over paying workers. And punishes States like NY, California, Ohio, Kentucky where the local tax were higher AND the States took advantage of the 100% “match” that falls to 90% to expand Medicaid to mostly health working poor who need fewer services from paid workers than most of the people the State covered with Medicaid.

Medicaid and Medicare are jobs programs. The conservative GOP hates it when other people have decent paying jobs. It’s clear when you listen to them carefully.

Graham-Cassidy is all about killing jobs.

72 AnonFrogger September 23, 2017 at 3:26 pm

The fallout is that the Republican Party is preparing to enter what I am predicting will be a multi-decade long winter of irrelevance. The leadership is either too stupid to see why Trump won, or simply doesn’t care. People didn’t vote for Trump because they wanted less government spending on healthcare. They voted for Trump as a giant fuck-you to every busy-body university administrator, to every family court judge, to every businessman who hires illegal immigrants and to every Hollywood CEO who profits off of promoting degenerate behavior. To elect a clown as president was to turn the tables on those who had laughed at us, to watch them squirm in emotional pain.

And the GOP leadership goes to work on plans to cut taxes for wealthy people, the majority of whom didn’t even vote for them, which they can’t even pass because of their own incompetence. I voted for the first time in 2016, it will probably be my last.

73 Anonymous September 23, 2017 at 3:49 pm

Alex Fine wrote a flip side view of this:

“During the 2016 election, conservatives turned on the principles that had once animated them. Somehow a movement based on real ideas—such as economic freedom and limited government—had devolved into a tribe that valued neither principle nor truth; luminaries such as Edmund Burke and William F. Buckley Jr. had been replaced by media clowns such as Ann Coulter and Milo Yiannopoulos. Icons such as Ronald Reagan—with his optimism and geniality—had been supplanted by the dark, erratic narcissism of Donald Trump. Gradualism, expertise and prudence—the values that once were taken for granted among conservatives—were replaced by polls and ratings spikes, as the right allowed liberal overreach in the Obama era to blind them to the crackpots and bigots in their midst.”

Which makes it especially odd that Tyler “did it worse.” By that I mean he went with “tribe” and slammed “progressives” for what is clearly a disease from within.

http://www.newsweek.com/2017/09/29/right-lost-mind-embraced-donald-trump-668180.html

74 AnonFrogger September 23, 2017 at 4:23 pm

Tyler’s tribe seems to be the Left now, see this signalling article he wrote yesterday:

http://marginalrevolution.com/marginalrevolution/2017/09/londons-uber-ban-big-brexit-mistake.html

75 mulp September 23, 2017 at 7:35 pm

“liberal overreach in the Obama era” means making sure individuals are responsible and pay for the things they need or want, with government assistance if required.

Unless you can argue that the solution to working poor people with bullet wounds from drive by, injuries from road rage pickup drivers who think roads and streets were God given only to truck drivers, and suffering from cancer is to give them an organ donation form, and on signing, the loan of a gun with a free bullet and instructions on how to put a bullet in their brain, with bullet and instruction paid for by the NRA selling their organs.

Obama got the two off budget wars put on the budget, which were started off budget because they would turn a profit from pillage and plunder after really cheap but glorious shock and awe fireworks.

But I guess the idea of paying for what Congress authorizes is liberal overreach. Obama offered to sign any tax hikes to pay for increased war spending, but that is liberal overreach, I guess.

Trump says no war spending but loudly states the right wing America First by more war power at every turn.

Chuck and Nancy are engaging in liberal overreach by supporting Trump in getting rid of the debt limit forever so Trump can sign massive tax cuts and massive spending hikes, eliminating the Byrd rule named for a conservative Democrat.

76 TMC September 23, 2017 at 4:19 pm

AnonFrogger +10 Trump’s main attraction is that he really pisses off the assholes out there.

77 Pshrnk September 23, 2017 at 4:29 pm

Good to know Trump pisses off @TMC

78 TMC September 23, 2017 at 8:08 pm

Nope. I’m just fine with him 🙂

79 Boonton September 24, 2017 at 9:02 am

People didn’t vote for Trump because they wanted less government spending on healthcare. They voted for Trump as a giant fuck-you to every busy-body university administrator, to every family court judge, to every businessman who hires illegal immigrants and to every Hollywood CEO who profits off of promoting degenerate behavior. To elect a clown as president was to turn the tables on those who had laughed at us, to watch them squirm in emotional pain.

Yawn, yea ok. So people didn’t like TV shows with people having sex so they vote for a soft-core pornographer to….what? Stick it to those HBO executives who made sure Game of Thrones features plenty of boob scenes?

Busy body college administrators? Really? In the last 6 months what interactions have you had with any college administrators?

And while we are at it, remember, people did NOT vote for Trump. 63M voted for Trump and 68M voted for Clinton. Four years before that 66M voted for Obama and four years before that almost 70M voted for Obama. But yes keep telling yourself the biggest problem is the ignored out of work coal miner who is getting a monthly visit from a college administrator telling him he has to support gay marriage and can’t find his religious show on TV anymore because they put on girls in bikinis instead.

80 Vladimir September 23, 2017 at 3:37 pm

There are a couple of key differences between Canadian provinces and American states: 1) delivery of social services in Canada is interpreted to be a provincial constitutional power , they just don’t like turning money down from the Feds 2) the key beneficiary healthcare lobby -seniors or the AARP- won’t be affected because Medicare won’t be devolved otherwise single payer (some version of it) would be a politically viable option. Not every province has a universal drug plan. Ontario provides drug coverage to seniors , those on welfare and people with extremely high drug costs – and that is tested against income to require a significant co-pay.

81 mgregoire September 23, 2017 at 3:42 pm

I’ve been opining for years that the US health care system should be reformed state by state, since there isn’t even consensus on the underlying problems, let alone the solutions Let Vermont, Massachussetts, Texas try their own thing, see what works (for the local definition of “works”).

But TC seems to be saying that pushing control to the states would be worse than Obamacare. As a Canadian, I don’t understand why he thinks more local governments would not be able to run their health care systems as well as the Feds do.

If extra health care spending does little to make states more desirable to live in, then state control should be permit redirection of resources elsewhere. My own experience is that voters love the idea that they will be provided with health care, regardless of ability to pay; Canadians are even willing to accept higher taxes to protect their health care.

82 Art Deco September 23, 2017 at 4:01 pm

The trouble is that 27% of the gross output is financed by a federal agency. Another 23% is financed by federal distributions to state governments. Another 30% is financed by employers, many of whom are domiciled in multiple states. Many of the states have no second tier cities of a sort where university medical complexes are at home.

83 Anonymous Faggot September 23, 2017 at 10:57 pm

Also, I’m bending over to fart in 100% of your motherfucking face.

84 Jeremy Bancroft Brown September 23, 2017 at 4:10 pm

1. Hi Tyler, your aggressive condescension towards the Democrats on single payer is a little extreme for a policy that works well in many wealthy countries around the world, no? Perhaps you can “educate” us as to why these actually-existing single payer systems, that provide affordable healthcare to millions, focus on the “wrong kind of expressive values?”

2. How would you propose to achieve a race to the top in an industry that’s vulnerable to adverse selection with or without formalized insurance processes? You would probably end up with some sort of capitated reimbursement model with quality incentive payments.. but uh-oh.. that would require you to actually engage with the health care wonkosphere.

3. The only budget constraint that actually matters is the long run constraint containing the sum of all budget items. A “real time balanced budget constraint” is a standard that is inevitably applied to programs that one does not value, rather than programs that one does value. For example, we could save more money than every Obamacare repeal effort to date via cutting total “defense” spending by 5%. This would simply require cutting some desk jobs and negotiating actually-competitive defense procurement contracts for once in modern history. The rest is just politics, a pitched battle over resources. Get used to it.

85 jorod September 23, 2017 at 7:52 pm

And what is your experience with these health plans?

86 Harun September 23, 2017 at 4:48 pm

We all know the reason you can’t do single payer state by state: the taxes would scare the populace, and rightly so.

Why don’t we get costs down first?

For example, we know Switzerland has lower expenditures than the USA, so if we were to model our insurance market on theirs we’d instantly have savings!

Wait, we did just that with the ACA? Where did the magical savings go?

(seriosuly, ifyou want to save the ACA jack up the penalties and remove all the dumb mandates, and drop the hardship exemptions…Europe works because they are willing to put the screws to poor people.

87 Jeremy Bancroft Brown September 23, 2017 at 5:11 pm

Tyler, it was a shame that you didn’t express and debate more of these views in your interview with Atul Gawande. It might have been more risky for the brands of Tyler Cowen and Atul Gawande, but it would have been a real opportunity to debate important issues rather than just talking past each other in your separate worlds to your separate spheres of followers. The healthcare legislation at hand may not make for a timeless podcast episode, but the issues of optimal health policy and redistribution of the gains of social production in the 21st century are not going away anytime soon.

88 Hopaulius September 23, 2017 at 6:10 pm

From TC’s second paragraph: “spending much more on health care” does not necessarily lead to “better health care.”

89 buddyglass September 23, 2017 at 7:05 pm

Just musing here. I wonder if the Rs and Ds could agree to a sort of Faustian bargain, where they get single payer but with a catch. Some single number in the coverage is left “tunable” and is stipulated by statute to be tuned such that the total expenditure on health care doesn’t surpass some % of GDP.

So, for instance, maybe the single payer coverage covers things at a fixed percentage. 90%, 95%, 99%, whatever. That number is adjusted such that the total cost stays within its statutory limit. Or any other number you care to choose.

90 jorod September 23, 2017 at 7:51 pm

More hysteria. Has anyone read it?

91 jorod September 23, 2017 at 7:55 pm

In the Soviet Unions health care resources were diverted to the political elites and the military. General clinics lacked basic antibiotics. Some even had no thread for stitches. The doors to doctors’ offices had no doorknobs on the outside so no one could open them from the outside and sneak in. Wonderful thing socialized medicine.

92 buddyglass September 23, 2017 at 9:34 pm

Way to cherry pick.

93 Mike September 23, 2017 at 10:43 pm

Comparing Graham-Cassidy to Canadian healthcare is disingenuous. The essential flaw of Graham-Cassidy is that it moves us further, not closer, to universal coverage. FWIW the Canada Health Act, in addition to delegating healthcare to the provinces, also requires them to implement universal healthcare.

94 Boonton September 24, 2017 at 10:10 am

“Of course my points #1 and #2 relate. I agree Graham-Cassidy is a bad idea, but every time I hear the critics say it is heartless, or would “take away” people’s health insurance, or “kill people,” what I really hear is “If we let everyone vote again on Obamacare, with a real time balanced budget constraint, they wouldn’t vote for nearly as much health care next time around.””

I’m not really sure where this is coming from. People had no chance to vote for this. Trump campaigned on essentially providing more health spending….he promised premiums would drop so much that we’d essentially have universal coverage for the same reason we have universal Facebook access.

The Republicans have a budget constraint because any bill they propose that increases the deficit ten years from now would require 60 votes in the Senate. They want to do a big tax cut and need a boat load of savings to finance it. But note they are not bundling the two together, they want to pass an unpopular health bill in order to turn around and try to save themselves with a massive Hail Marry upper class tax cut. But if this represented the real time desires of voters the whole messaging is off. Cutting back on health spending means higher premiums, higher deductibles, less choice in docs. When voters challenge pensions they are ok with mayors and governors who raise the amount teachers and cops have to pay to those things.

On the Democratic side Tyler is missing a very important consideration. The War on Obamacare demonstrates the political danger with health payer diversity. Obamacare is remarkably conservative AND flexible as a health plan. In fact, it is downright innovative and the fact that it seems to keep going despite its lack of friends and multiple critics implies there’s probably more wisdom embedded in it than most are open minded enough to give it credit for.

Fact is Obamacare allows the market to evolve as it will (for example, employer based coverage can continue to be the norm with exchange policies being a niche for ‘gig’ type workers or it could change with many people buying from exchanges and employer based coverage decreasing as time goes by). It works off a very simple idea. The US has multiple healthcare systems. Ask what system is a person closest too and try to move them towards there. Hence if you’re poor it’s Medicaid, if you’re old its Medicare, if you can get it from you work get it there, if you can’t buy it yourself. So far so good, the problems all seem to have remarkably easy and cheap fixes. Not enough insurers in one marketplace? Add more to the subsidy. A mere $40M or so let Alaska turn 20% premium increases into 4% increases. Perfect? No but it offers a lot of room for experiments that could yield some pretty impressive coverage increases for minimal cost.

BUT what has the previous few years taught Democrats? It is that multiple systems means Republicans will try to divide and conquer the population. Cutting off Medicaid, for example, can be sold to voters as protecting *their* Medicaid. Scrapping exchanges can be sold to those on Medicare as protecting their slice of the pie. This is easy to do, go to Trump country and you’ll find lots of people on Medicaid who will tell you how the other guy down the street shouldn’t really be on it. It’s easy to win an election getting people to think you’ll save them personally by cutting off those other undeserving people. The Republican health bills are all trying to play that game. Cut people off of Medicaid, generate the billions to do a big tax cut, if people complain years later try to deflect it to their state governments (“well Gee we did give your Governor a huge block grant, if they cut you off of chemo Mrs Smith perhaps its because they wasted that grant on illegal immigrants!”)

From the Democrats point of view single payer is making more sense because if everyone has the same system then they become less able to be pushed around by Republicans. If everyone is in Medicare in some form, for example, then seniors on Medicare cannot be turned on, say, working class young families on Medicare. In other words, Republican intransigence has subverted the ‘New Democratic’ idea of mixing market based innovations into the welfare state’s goals.

95 Art Deco September 24, 2017 at 10:25 am

Blah blah blah

96 Boonton September 24, 2017 at 1:40 pm

Congratulations on exceeding your personal average in terms of your comment quality and substance.

97 Jeremy Bancroft Brown September 24, 2017 at 3:52 pm

+1

Tyler, like Avik Roy, would be fine with any bill that cuts Medicaid to zero. But it is difficult to come out and directly say so, and so many convoluted explanations are offered.

98 Boonton September 24, 2017 at 6:22 pm

Actually the reverse probably makes more sense. Let the Federal gov’t fully fund Medicaid instead of asking every state to try to come up with some type of joint funding system. Or simply scrap Medicaid with much larger Obamacare subsidies.

I think the test here is to use maybe not the Jimmy Kimmel test but this: How would this system apply, say, to a 45 year old single mom who happens to be unemployed and one day discovers a lump in her breast? If the answer is “well we gave her state a block grant based on its population 25 years ago so she should hope her governor has left enough room in the budget so she can have a biopsy and chemotherapy if necessary” then you’ve failed. The Republicans could, however, present a proposal that passes that test yet is not single payer. Odds are, though, it would probably look a lot like Obamacare.

99 Bob Hertz September 27, 2017 at 5:55 am

Health care is another episode in our long-running conflict between high-spending, fast–acting federal programs versus fiscally-cautious, uneven state programs.
This goes back at least to the 1930’s, when federal bureaucrats had to push the WPA and food relief over local bureaucrats who were
sometimes stingy and racist. (see the marvelous book The Hungry Years, by T.H. Watkins)

It is worth noting that Republicans and federalists have expressed next to zero complaints about the federal uniformity and high spending of Medicare.

The Medicare program has expensive risk adjustment, expensive reinsurance, and an open checkbook for a group that largely votes conservative. A senior citizen has no hesitation about moving from MN to Arizona when it comes to health insurance, no worry about drastic changes in their basic health premiums, et al.

By contrast, many Republicans would like to see the Medicaid recipients in their area just move on down the line. They do not want a program that makes them more comfortable where they are. Southern states have quietly cheered whenever their poorest people moved to a more generous welfare state in NY or Illinois.

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