Ezra Klein predicts

…if the Affordable Care Act falls apart, the next time Democrats get a crack at passing universal health insurance, they’re going to want to do it in a way that avoids Republican obstruction and can’t be questioned by the Supreme Court. The most obvious policy path that achieves both goals is to expand public programs like Medicare and Medicaid, as that can be done through the filibuster-proof budget reconciliation process and it can’t be touched by the Supreme Court.

At the link he asks for alternative predictions.  I am not sure the Democrats would have enough support — from other Democrats that is — to push through such a change.  Note by the way that Ezra is not endorsing his prediction, relative to ACA.

What are your predictions?


In the past, each time Democrats have failed to enact their health legislation, they have not been able to do anything about it for a decade or more. In this case, the problems are arguably more pressing. However, Democrats have lost credibility on the issue (since the bill they produced was popularly perceived as an ineffective mess and, in Klein's scenario, ends up being unconstitutional) and may well end up losing control of government because of it.

My best guess is that Republicans will be the next to take a whack at it. They are in the best political position to do so, and Democrats will be hard pressed to strongly oppose them after lots of urgent talk that "something needs to be done."

The only way that I can imagine Republicans taking a whack at it is to expand HSAs (already created in the Medicare Part D law and apparently fairly effective in holding down costs) and making them universal through a government contribution at least at low income levels.

On health savings accounts and their relation to health spending, here is Peter Orszag:

"[T]here is an inherent limit to what we should expect from increased consumer cost sharing, because health care costs are so concentrated among the very sick. For example, the top 25% most expensive Medicare beneficiaries account for 85% of total costs, and the concentration of health care costs among a small share of the population is replicated in Medicaid and in the private health care system. To the extent that we in the United States want to provide insurance, and insurance is supposed to provide coverage against catastrophic costs, the fact that those catastrophic costs are accounting for such a large share of overall costs imposes an inherent limit on the traction that one can obtain from increased consumer cost sharing."

In other words, there are diminishing returns to cost-sharing. Going from a plan with $0 copays or deductibles to a $1,000 deductible and/or hefty copays cuts costs as a RAND study showed years ago. Going from $1,000 to $5,000 does a lot less, though, because an ever larger share of your health spending will be concentrated among people with 5- or 6-figure annual medical bills.

"For example, the top 25% most expensive Medicare beneficiaries account for 85% of total costs"

We aren't talking about medicare. This doesn't mean I disregard your entire point based on one problem. I don't do that. What that statistic is probably talking about is the end-of-life fiasco that I've been talking about for years.

As for the rest of your point, and we will assume that the numbers are similar (basically an 80/20 rule), that 20 is still a big deal and that 80 is what the catastrophic insurance part is about, which should actually be called just insurance, but we won't get into that. The cost sharing part will be more effective than Orszag lets on because it will (1) do things like reduce pressure on high cost areas like emergency rooms (do your own triage) and (2) reduce marginal demand for a lot of things like defensive (which I have always found pretty damn offensive) testing. It may even reduce the catastrophic costs by pushing people towards prevention outside the hospital instead of subsidizing hospital visits where the doctors don't do prevention and only act after damage is done. You can tailor the deductibles any way you want, so why not promote health through prevention instead of promoting disease development through ignorance until it's too late? This also has implications for chronic diseases.

The point is in a short-term study it worked. Long-term I don't see how it wouldn't work even better. So, what are we doing?

Oh, and I almost forgot the most important point. It is perfectly compatible at a small scale with other systems and does not increase your costs by shifting, it reduces your costs even if you aren't on the system. You have already saved money from me being on such a system.

We simply need to stop subsidizing development of ever-more expensive technologies that do not restore people to health.

I'm not saying HSA's make no difference, but I think the situation is a little different that you suggest.

The big spending is generally not in private insurance and it is not all on catastrophic and end-of-life care. It is not spending for when someone gets into an accident and costs a huge amount all at once.

Most of the spending you're referring to is poor people with multiple chronic conditions. These are patients that see multiple doctors for all their conditions, often have a few emergency situations per year, and sometimes need home nursing care. They take expensive drugs. Many of these high-dollar patients are the dual eligibles, who qualify for Medicare--because they are either on Social Security Disability or because of a chronic condition--and Medicaid because of their income. They often have mental health issues, too. http://www.kff.org/medicare/upload/8138-02.pdf

I basically agree with Orszag's analysis. The expensive patients are in a spot where they don't have a lot of choices in how much health care they use and they don't have much income to speak of, so increasing cost sharing and offering HSA's as the solution is just going to mean they don't receive the care they need.

Though different, HSAs are always combined with catastrophic insurance which is exactly appropriate for things like car accidents.

We can even include end-of-life and chronic poor people in the pool and call that "insurance" though then it ceases to really be insurance. Even if we choose to do that it will be helpful to understand what we are actually talking about.

But by combining everything into "we will pay for whatever doctors come up with to charge for" you get exactly what is easily predictable by that system.

You missed the part where Orszag pointed out the distribution of costs is similar in the private market.

That aside, the point is simply that expanded HSAs are a distraction if they don't come with more fundamental reform -- it's the equivalent of claiming you are going to balance the U.S. budget by cutting foreign aid, the Mars rover and funding for the arts. HSAs won't do much about people with extremely expensive acute or chronic conditions and those are the conditions that are contributing so much to making health insurance as expensive as it is.

On the original topic, I think as a matter of prediction the Republicans probably will propose something like expanded HSAs. They can claim this will do something serious about health costs even when all the evidence suggests otherwise and kick the can down the road a few more years.

I don't think so. I'm not saying that all the cost comes from medicare, just that the high costs coming from a minority of the people probably involves major disease, probably last 6 months of life trying to keep people alive, which has been shown in other studies. As I said, we can go with that 80/20 type distribution across-the-board.


"The real traction, though, will come from building the results of that research into financial incentives for providers. In other words, if we move from a “fee-for-service” to a “fee-for-value” system, where higher-value care is awarded with stronger financial incentives and low- or negative-value health care is penalized with smaller incentives or perhaps even penalties, the effects would be maximized. The design of such a system is very complicated and difficult to implement, but that is where the largest long-term budgetary savings could come."

"My conclusion is that the combination of some increased cost sharing on the consumer side with a substantially expanded comparative effectiveness effort linked to changes in the incentive system for providers offers the nation the most auspicious approach to capturing the apparent opportunity to reduce health care costs with minimal or no adverse consequences for health outcomes."

What we have is the current high but manageable costs and we have the future projects. What we need to get from here to there is, as the saying goes, to bend the cost curve. Since today is manageable, we only have to bend it a little at the margin. How are you so sure that greater cost-sharing, including something like (but less punitive) Bill's idea of billing the estate (or the entitlement funds of relatives) for end-of-life treatments, does not represent this "fundamental" reform?

Orszag is treating cost-sharing as one thing and "catastrophic" costs as a separate thing. I'm saying they are related. First, he misuses the term "catastrophic." Catastrophe is what insurance is for. It has nothing to do with your income or net worth.

Second, cost sharing is used narrowly by Orszag to mean the typical out of pocket copays. That is currently small, it is why people like insurance, but cost sharing doesn't have to mean just out of pocket. For example, if you gave each person a $500,000 maximum coverage, then they would have incentive to conserve funds and to use funds for prevention- future conservation of funds. That is not a proposal, though insurance companies do similar things, it is an example. You haven't gotten very far because the incentive is for everyone to use up that $500k and die. So, I'd like to see something like transferable entitlements such as has been proposed with school vouchers.

The real problem is the development of low-value medical techniques that we cannot afford. But there is no reason not to use them no matter how low the value is when the "free-to-me" pricing pushes out any alternatives. We are developing them because the economic incentive is to develop them and administer them because everything is reimbursed. To close the loop between the economic incentives and the treatments you leave undone, you can propose comparative effectiveness research and a government panel to determine who gets what treatment, or you can align the incentives of the consumers. This could be easy. You already have 75% of the people only using 15% of the cost, per Orszag.

Orszag is implying that the way cost-sharing would work perfectly would be to drop the 15% to zero while leaving the 85% unchanged. I seriously doubt that's how it works. For example, chronic disease is largely related to behavior and prevention. We seem to be destroying the general practitioners because we reward late-stage surgeries and gimmicky gadget treatments. He simply needs interaction arrows in his model.

That's an interesting point, so far as it goes. It's hard to know how far it does go from that quote, though. What percentage of health spending is truly on catastrophic events? 25% is a pretty large portion of Medicare recipients. Is all of this 85% catastrophic spending? It seems doubtful.

For example, the top 25% most expensive Medicare beneficiaries account for 85% of total costs

I wonder, though, whether this is actually even worse than it seems. Of the other 75% of Medicare beneficiaries at a given time, how many of them end up, before death, as part of the 25%? By my experience, most of them. The same question applies to the other cohorts of medical care consumers.

The end of life costs are significant, though not the main problem. The "end of life counseling" proposed in earlier iterations of the ACA was designed to properly plan for people's end of life wishes. Sometimes this would include not unnecessarily extending life using any means necessary, usually very expensive means, when the person doesn't even desire that type of care.

The Republicans famously dubbed these optional counseling sessions "death panels." We can't have this cost and dignity saving measure because of that.


I am not even talking about just "end of life costs" here. My own experience in my family is that the relatives sometimes live years afterwards of consuming multi-hundreds of thousands of dollars before even reaching the end-of-life care which no one can be quite sure is the end until the end comes.

Guess all the healthcare economists who say the slowdown in growth is much larger than would be expected under the recession alone are wrong: http://www.nytimes.com/2012/04/29/health/policy/in-hopeful-sign-health-spending-is-flattening-out.html?pagewanted=all

I wonder what else has been going on in healthcare the past couple years that could explain this?

You are misremembering. The "death panels" were "denial of care" panels not the end of life counseling. You are mixing two different republican objections in your mind.

@Doc Merlin: Part of the problem with defining what exactly "death panels" means is that the inventor of the term seems to be Sarah Palin. Sarah Palin's statement using the term from August 7, 2009 defined it as a group of "[Obama's] bureaucrats" that is empowered to decide in individual cases who is or is not "worthy of health care" based on that individual's "level of productivity in society."

The problem with this stated definition is that, as far as any informed person can tell, it has absolutely no basis in any proposal that has ever been submitted to Congress. So people who follow the health care debate closely have to figure out just what the hell Mrs. Palin might have been referring to since the literal definition of the term she used appears to refer to a strawman proposal invented by Mrs. Palin herself.

If you google around with the term "end of life counseling death panel", you will find many links to mainstream sources from 2010 and 2011 that describe the controversy over "death panels" as originating in the end of life counseling provision of PPACA. Palin herself apparently described her original enigmatic statement by linking her "death panel" comments to the end of life counseling provisions according to factcheck.org.

However, since the original description of "death panels" was fantasy, the term could probably refer to either IPAB or end-of-life-counseling depending on the intent of the person using the term.

Agreed, the next move will be the Republicans'. It will probably be much less ambitious than Obamacare.

One element that is likely to face little opposition from interest groups (at least those that Republicans care about) will be a national insurance market, i.e. allow the sale of insurance across state lines.

It's also politically fairly safe for the Republicans to mess with Medicaid. They will probably move to block grants and allows the states to experiment. Alternatively, they could use the money to establish a combination of high-deductibility private insurance and subsidized HSAs for the poor. Both of these eliminate the incentive problem with the current system that those who decide whether to expand coverage (the state governments) only pay half the cost of their decisions.

It's not politically safe to mess with either Medicare or employer-based insurance, so big changes to those won't be on the table at first.

I could see employer-based insurance being on the table. It is increasingly perceived as part of the problem; people losing their jobs and consequently losing insurance is a compelling story that can drive change; and many people who have employer-based insurance are less and less satisfied with it as costs go up and benefits go down. Even John McCain, not exactly an ambitious proponent of conservative domestic policy, proposed ending the tax credit for employer insurance back in '08.

The administration has granted states great latitude to experiment with Medicaid as it is. See Vermont. They are going single-payer under a Medicaid waiver. If allow to experiment means allow cuts to Medicaid that don't require the same coverage levels as are mandated under Obamacare, yes, I would expect that to be on the table.

The interstate sale of insurance across state lines is an example of a "solution" which people haven't really thought through, and if they did, might reconsider, or at least put a federal regulatory framework on it.

There are several problems, some of which you haven't considered because today insurance is regulated in your state.

1. Interstate medical insurance means that the Texas insurance commissioner will be dealing with the problems of a Connecticut insured. Sure, you bet. Sorry, don't expect the Texas insurance commissioner to consider anyone's interest other than Texas citizens.

2. What do you mean by "insurance". You may think that is a silly question, but one of the reasons states regulate insurance is to define the insurance product--not that some insurer something he calls insurance (but which only covers a few things, has limits you don't know about, read realistically, or understand) but which isn't, isn't sold. Wanna buy some cancer insurance?...So, states regulate the product offering. (This also leads to problems the other way as well...medical specialists and non-medical professions lobbying to have THEIR specialty included in policies). So, unless you devise some way to specify the benefit package across all states, you may have a race to the bottom, as states compete to have insurance companies locate in their states, just as South Dakota banking laws were rewritten to attract national credit card issuers.

3. This brings you to something you may not want to hear, but is a solution: federal chartering of national insurance companies. This was a dereg proposal during the Nixon/Ford administration. Basically, interstate sales of the federal chartered insruance carriers and with federal specified products while retaining the system as we have it today of state insurance regulation for those products the carrier wants to list under that regime. This prevents the race to the bottom, and creates an interstate insurance market. It also puts pressure on states which set insurance products which contain some mandatated benefits that medical specialists lobbied to have included in the medical benefit package.

So, when you hear "interstate insurance" be sure to ask: will the Texas insurance commissioner intercede for me in my state if I have a dispute over my claim.

I heard a report on NPR yesterday that the state of Georgia passed a law allowing any insurance policy approved by any state to be sold in Georgia and that not a single company has tried to sell such policies in Georgia.

I do not know how accurate this report was.

But basically, health insurance is expensive because health care is expensive. There is no magic bullet that will make it insurance inexpensive.

The law hasn't even taken effect yet. Also, I'm not sure how NPR manages to prove a negative.


Anyways, virtually everyone gets their insurance through employers, and Georgia's not exactly a big market anyway. Not comparable to having a national, individual market.

It's not clear that insurers will want to sell across state lines. Georgia has legislation to allow interstate purchase, but so far no one wants to sell. In fairness, there is a high degree of uncertaintly right now, as we await the SC ruling. But it is conspicuous that insurers are not lining up for this historic opportunity.

A truly national insurance market, with consistent standards from coast to coast, might be attractive to insurers in a way that a semi-balkanized market (where it is hard to work out whether Montana or Florida law is going to govern) is not. We are willing to tolerate a regulatory race to the bottom when it comes to credit cards; I'm not sure health insurance will fare as well.

Georgia probably has much less restrictive mandates than most, so it's not really that surprising that insurers aren't leaping in with policies from New York or California.

If people are free to choose their insurance, they can get as much of the stuff that is currently mandated as they want. If I don't want to insure against needing a sex change or 20 years of psychotherapy...

The PPACA was *already* passed in a way that "avoided Republican obstruction." The problem was, as you note, what moderate Democrats would support. (And this was *also* the problem in 1993.) It's certainly true, however, that in the future Democrats would like to make an attempt while not having quite such a majority in the Senate as they had in 2009, and that Republican obstruction would be more significant then.

The budget reconciliation process is filibuster proof, yes, but the Byrd Rule makes it fairly easy to strike changes that increase the deficit unless three-fifths agree. An expansion of Medicare and Medicaid would have to be crafted fairly carefully to avoid increasing the deficit; to avoid being questioned by the Supreme Court, it would likely contain simply tax increases that might scare off moderate Democrats as well.

So Ezra predicts that a new transfer program should be rammed through over the objection of half the country?

I predict two Americas. John Edwards was onto something other than his photographer.

I don't think anybody will ever touch healthcare reform again.

I think this is a quote from 1994.

Trend is god. All that matters is medical cost trend.

If you could pass a law that reduced medical expenses 20% tommorrow, it wouldn't change what our situation will be like in 2030 if we don't change trend.

Medical cost trend will only go down if you squeeze doctors, again and again every year.

The only way to squeeze doctors is to have massive bargaining power over them.

Any health "reform" that doesn't give payers (whether individual, insurance, or government) massive bargaining power over providers is a waste of time, because it won't change trend.

There is a lot of confusion in these discussions over the difference between the costs of today (high, but manageable and actually converging with all the vaunted socialized systems which are mostly less socialized than we already are) versus the actual future trend as distinct from the chicken-little projections.

We don't have to squeeze doctors. In fact, I'd say that we cannot. We need to stop telling them "whatever you come up with to bill for will be paid, ad infinitum."

Easy way to squeeze doctors is to massively expand health care service providers. If you increase the # of med school seats, which are lower on a per capita basis than almost any time since WWII, you reduce their bargaining power. Allowing Nurse Practitioners to do more treatment and allowing them to prescribe drugs for certain conditions will also reduce their bargaining power, etc.

I think I remember reading at one point that schools were actually being paid to train fewer doctors.

Who controls the number of seats, anyway? AMA?

But I doubt it matters much until they actually compete on price.

But if there are enough of them (and especially if the scope of practice for paraprofessionals expands), they (or at least their employers) *will* compete on price.

Really, though, the key is the paraprofessionals. It wouldn't matter if MDs remained relatively few in number and expensive...so long as they had competition from lower cost providers. Break the grip on scope of practice of paraprofessionals, and you break the cartel. The problem is the AMA is fully aware of that, and they fight tooth & nail protect their turf.

Not necessarily. They might just work less rather than lower prices.

The state medical boards, which are advised by the AMA. In 1982, there were 16,567 med school matriculants in 2011 there were 19,230, a 16% increase. Over that same time period, US population grew by 35%, over double. Not to mention, the population got older (and therefore demand increased by more than what you would think just by looking at straight population).

Why do you think doctors would be immune to the same market forces that the rest of the economy faces?

Because they don't compete on price. Just try asking your doctor what something costs and enjoy the deer-in-the-headlights expression that generally follows.

Kling's book explains why -- doctors are insulated from price competition and consumers are insulated from cost/benefit decisions.

I ran into this once myself -- there was a laser version of a surgery available at 1/10th the cost to me (and a LOT less misery) but my doctor didn't even know about it. Later I asked why the insurance company didn't recommend it over the other, and was told that would be illegal. Gah!

Yes, the AMA.
Technically its the state licensing boards, but really its the AMA.


How about we stop letting currently operating hospitals block creation of new hospitals?

Medicare for all will lead to a three tier system where the rich receive medical care through boutique providers who refuse to accept medicare, the middle class is left standing in line to get to the providers who stay in the business, and the poor are left with their current situation of Medicaid where few providers want to bother with the poor.

Medicare for all will lead to a huge downsizing in healthcare and will turn healthcare into a career field similar to being a school teacher or DMV clerk.

I'd like to hear what doctors and other participants in single-payor countries have to say. All I hear from my Canadian friends, for example, is how great single-payor works in Canada.

Seriously, for half my income in taxes I'll spring for socialized medicine. And tell Europe, Korea, Japan, Qatar, Kuwait, Israel, Afghanistan, and a whole lot of other places they're on their own.

I predict they'll do the same thing again - that is try to pass whatever Heritage Foundation or another extreme right wing think-tank comes up with.

And I predict Republicans will likewise do the same thing - they'll immediately disavow any such plan, even if they proposed it just days before.

Fools always say this. It was a Republican idea. Wa-wa-wa...

It was an idea put forth by a few Republicans, that does not mean they are all held to supporting it.

It was never "general Republican doctrine" whatever the hell that means.

But keep repeating it.

Hey it's unconstitutional and designed to fail and bring on socialism, but IT WAS YOUR IDEA. 4-year old.

I'm shocked that Reason would advocate a health care plan that is designed to bring on socialism.

Nice name calling, bro.

If the mandate and other portions of the ACA are overturned by the Supremes, we are left with the current dysfunctional system. As others have noted above the key to solving any of this is to control health care inflation and do something about the cost differential between the US and the rest of the developed world. The only way to do this is through imposed cost controls and improvement in accountable care. This will be accomplished either by the move to a single payer system as is prevalent in may parts of the world or through affordable private-based insurance (Netherlands and Switzerland) where the insurance companies will pressure providers to control costs. Private sector insurance will be guaranteed issue and those who cannot pay will be subsidized. I'm agnostic about which approach is "better" but the conundrum about adverse selection has to be solved at some point in time.

The other interesting thing is what will happen to the expected $1.1 B that is scheduled to be rebated by insurance companies so that they comply with the 80/20 rule in the ACA. One would expect that this is extremely popular.

The only other point I would note is that Medicare ain't free! My wife and I are turning 65 this year and we were shocked to see what our Part B premium is going to be. It's means tested and based on one's adjusted gross income in the tax year preceding the one where you are enrolling. As members of the 5% club (unfortunately we are not in the 1% :-) ), our premiums for this year are quite high (though they should go down next year because retirement kicked in and we drop down to the 10% club). A bit shocking to find out there is no free lunch!

Cost control means fewer healthcare workers, lower pay for healthcare workers, and the shifting of healthcare from a good career field to a career field similar to being a public school teacher.

If the U.S. goes to single payer, would anyone invest in a healthcare company or bother to even participate in medical research or try to get new products to market. Maybe Switzerland or the Netherlands currently do not have to care because they are freeriders on research in the U.S. However, if the U.S stop going medical research or bringing new drugs/devices to market which country will pick up the slack?

A lot of medical research is done in Canada and the UK, which have single payer. In fact, a lot of our data comes from them since we have less ability to centrally collect data. We get lots of nifty new devices, but we dont know if they are working or not. Fortunately, we have other countries collecting data so we can find out. Total joints are a good example.



The number of clinical trials is a misleading number since many (if not the majority) are sponsored by either the government or by individual investigators as part of their NIH grant. Most pharmaceutical companies conduct registration trials overseas these days because it's quite frankly a lot cheaper and less bureaucratic. And it's not the Federal regulations that cause the problems here but the individual institutions in the US that require separate IRB approvals as opposed to accepting a centralized IRB so you cannot blame the FDA on this one. The geographic regionalization of clinical trials has little or no impact on the FDA's approval decision. (and in fact the FDA has many more employees than does the EMEA).

Who they're sponsored by wasn't the question.

"According to a competitiveness report published in November 2006 by the European Commission's high-level Pharmaceutical Forum, the US has established itself firmly as the key innovator in pharmaceuticals since 2000."

The Nature study specifically points to price controls as the reason companies choose to do the trials here. Do you have some factual basis for claiming the Nature study is wrong?

I would love to see a legit citation for that little state there. What we do know is that over 80% of new drug applications that go to FDA rely on foreign clinical trials: http://oig.hhs.gov/oei/reports/oei-01-08-00510.pdf

After FDA approves drugs more quickly than other regulatory agencies, the U.S. pays twice as much for drugs as the other nations where they have price controls and negotiations. Fools.

Not so, Steve. A lot of countries piggyback on America's R&D.

The location of research companies is not what is relevant here. The question is where they make their money in sales.

Our heath care costs have a high base but are growing in line with OECD countries. Our problem is that we are not getting life expectancy increases value for the dollars.

James Kwak:
"One thing you can see is that, in percentage terms, health care costs have not been growing in the United States much faster than in other comparable countries.** If you exclude countries starting with a small 1992 base (Korea, Turkey, Ireland, etc.), our rate of health care cost growth has been above average, but it’s not an outlier. So the reasons why our health care costs are growing rapidly are probably at least somewhat different from the reasons why they are high to begin with."

"The other thing you see is that our life expectancy gain was the absolute lowest of the whole group (and we weren’t starting from a particularly high level, as you can see in the previous chart)."

This is consistent with over-spending on end-of-life treatments that do not appreciably extend life. This is the work of Medicare which accounts for all of the increase in spending since inception.

A lot of healthcare dollars are not even aimed at extending life, and apart from antibiotics and vaccines, healthcare dollars have little to no detectable effect on LE in aggregate anyway.

That's why the U.S. can do so much more healthcare yet have similar ethnic LEs to other OECD countries that spend a lot less.

Our current dysfunctional system is still far better than all the other dysfunctional systems. Let's not trash our healthcare system to solve imaginary problems with access.

A better solution doesn't involve more failed government intervention, but rather something like Goodman proposes in which price signals are re-introduced and consumers are freed to shop for the insurance that best fits them.

An imaginary problem with access. What is that? 50 million people without health insurance? Is it like that?

Yes, that's a great example of an imaginary problem. The number is more like 5M and most of those people have chosen not to insure.

What are you talking about? Who says that? What is your source? Please, please send me some Hoover Institution blog post that says it's 5M.

I guess my friend who works at the Massachusetts helpline enrolling thousands of people in Medicaid and subsidized plans for the past 6 years has been lying about all these uninsured people calling her everyday. You are seriously misguided.

by the time this becomes relevant american politics will have completed its slide away from the random state of the parties c. 1960 (in which eg democrats care about voiceless uninsured single moms) into the local minimum we're approaching where they only do what's necessary to be elected, and since giving 50 million people health insurance paid for with taxes is, apparently, a politically thankless pursuit, they won't touch it again. perhaps we can divert the cost savings directly to sheldon adelson, which policy would have defined benefits to legislators.

It's more like 5 million, and they appear to have chosen not to insure. Did you notice that the high-risk pools got about 1/50th of the number of people they were supposed to?

Exactly. And I was one of them. I lived in a state where a person (as an individual) couldn't purchase a high-deductible plan. Then I moved to a state that allows it, and now I have the maximum deductible plan. All I care about, at this point in my life, is that I'm covered against catastrophe. I DON'T want all the rest of the crap that I'd have to pay for.

It's actually 30+ million, but who's counting?

No, it isn't. That includes illegal immigrants, people with incomes over $70K, and people who qualify for Medicaid. The actual number of uninsured is more like 5M.

A fair number of people wth incomes over $70k who are uninsureable, but your basic point is correct.

medicare expansion had 59 votes (excepting #60 joe lieberman--what a beautiful man). 59>50

I think this sportscasting approach to political issues trivializes healthcare reform to the point of paralyzing the entire issue. (OMG what will Dems do?! What will Repubs do?!?!? What happens next!!??!! Well, Wolf, people on the ground are saying that the president is blah blah blah, which can only lead to speculation about blah....)

The media and the blogosphere alike would be well advised to stop treating issues this way. It's offensive to what's left of the nation's collective intelligence.

Little Ezra Klein is always amusing. PPACA had the structure it did because Democrats didn't want to fund the entire bill with tax increases, so they tried the mandate along with fantasy, heads-up-the-ass projections about the actual costs. This isn't likely to have changed the next time Democrats get a whack at the issue, but we will see.

As I have gotten older, and family members have gotten older and sicker, I can tell you what the problem is: almost no one is funding their lifetime consumption, with end-of-life care being the capstone of that over-consumption. Every close relative I have over the age of 65 has consumed far more health care dollars than they funded through insurance premiums and health care taxes plus the accrued interest over their lifetimes.

Any reform that doesn't explicitly cap what can be spent on your behalf is going to founder on over-consumption of means. However, I suspect we will continue to pretend otherwise, just like PPACA did.

It's funny, half the left seems to think all PPACA's problems are the fault of the zero Republicans who voted for it.

Even if people who were in their 30s and 40s the 1960's and 1970's had saved for 40 years worth of of average healthcare costs for an elderly person at that time, with inflation, they still wouldn't have saved nearly enough. How much do we tell people to save? 20% of their income for healthcare, 30%, 50%?

Luckily, the cost curve has started to turn down the past couple of years. Due to recession and due to reforms that PPACA instigated. Bending this cost curve in smart ways is what needs to happen. I don't think arbitrary limits will do the trick.

There is no way PPACA has had an effect on the cost curve yet. You are seeing the effect of the recession only.

Also, your first paragraph makes my point for me- if they aren't/can't be saving for it, it can't be sustained. There are no free lunches.

A lot of drugs are coming off-patent, which will help.

I guess all the healthcare economists who say the slowdown in growth is much larger than would be expected under the recession alone are wrong: http://www.nytimes.com/2012/04/29/health/policy/in-hopeful-sign-health-spending-is-flattening-out.html?pagewanted=all

I wonder what else has been going on in healthcare the past couple years that could explain this?

Then be specific, Jan. What part of PPACA has turned the cost curve down? Almost none of the provisions are even in effect yet, and those that are actually increase costs, not decrease them a priori. A lot of people of losing jobs and health coverage will decrease the amounts spent on health care due to a simple decrease in means to pay. Your link suggests to me a lot of wishful thinking, or outright lying about the effects of a bill that hasn't yet come into much force.

Yanc, here are a few provisions that have contributed to decrease in health care spending. Let me know what you think. All these went into effect in 2010 or 2011. Thanks.

They have mostly closed the Medicare Part D donut hole. Getting seniors more access to meds certainly seems it would keep them out of the hospital and better maintain their chronic conditions.

States have expanded Medicaid, covering people who would otherwise probably get a lot of their care in the ER, the most expensive way to treat anything.

Health plans must provide free preventative care, no co-pay. That helps catch serious and chronic conditions earlier.

Rate review. Insurers have to justify to state boards increases of 10% or more. Many states have already exercised this authority.

Started requiring that insurers spend 85% of premiums on health care, not administration or profits.

It's a mistake to outsource your thinking on healthcare to Ezra Klein. Try reading John Goodman's book "Priceless" instead.

If the Democrats try reform again soon, I believe that they will recognize that their plan will have to pass without GOP support. They will not waste months trying to get the GOP on board. I think the filibuster has been so frustrating that one party or the other will do something soon to diminish its impact, so they will not need 60 votes. I think they are more likely to try to model it on the Swiss or German system, with an outside shot at a Singapore type program. They could also look at a modification of the Japanese system, which has cost controls with about the same number of docs per capita we have and good research. (Read your medical journals) I can also see the Dems doing something to give insurance companies the political cover to institute value based insurance.

I think they would also look to do more with modifying Medicare. Allowing Medicare to price discriminate in its payments and drug purchases wold give big savings. Stricter rules on utilization will be hailed as rationing, but are really just refusing to subsidize not needed, inefficient care.

I do not see the GOP doing much as it is not generally interested in health care reform unless the Democrats are trying to pass something. The only thing I could see them push for is selling across state lines, as some have mentioned. As a physician I guess I should support this as I would make more money (think market power), but I dont really think we need more medical spending.


Re: the filibuster - what happened to the good old days when the threat of a filibuster meant you actually had to filibuster? Why haven't the Dems forced Mitch McConnell to stand up and read from the phone book at 3 am?

Because keeping a quorum is tougher on the anti-filibuster faction. McConnell can rotate speakers- one person doesn't have to carry the load.

There already was a perfectly constitutional way to enact an individual mandate: levy a healthcare tax and offer an exemption to those people who purchase approved plans. The Obama administration was, however, wedded to maintaining the appearance of no new middle-class tax increases. The Supreme Court challenge is pretty conclusive proof that our democracy, contra James Fallows, is alive and kicking.

+2, It seems that a tax combined with a tax exemption (or credit for the amount spent on healthcare.) would have been an obvious solution. The current expansion of the commerce clause was always a pure political play.

I expect the requirement to purchase to be ruled unconstitutional but the penalty/tax if you don't to be allowed as taxes have nearly unlimited reach constitutionally. The whole issue to be moot but allowing both sides to claim victory and the court to have their say and the last word without changing anything but in the way of preserving language without affecting substance.

Not a chance. The individual mandate will either be upheld, or tossed in it's entirety. You can't toss the mandate and keep the penalty for not following it.

This can absolutely be done and lawyers love to make these distinctions without a difference. The substance is tossed while the form is preserved or vice versa depending on your view. All you need do is examine the tax code to see it in its glorious complexity. No one would be forced to buy insurance but if they don't they will have to pay, government can't compel but can motivate. Not that there are no restrictions on taxes, no income leaves nothing to be taxed, but there are next to no restrictions on taxes and that is enshrined in the constitution and decisions to date.

Ezra's prediction is pretty amusing. That wasn't even considered remotely possibly in 2009, and they'll be lucky if the stars align for Democrats that favorably again anytime this generation.

The Federal legislators are by and large desultory. The tendencies are to "tack on" to something existing that seems to be "working" (in the sense that it satisfies a segment of the populace without greatly agitating the remainder). Thus, some perceptive staff members (not the elected) are likely to hit upon the Community Health Centers, with their legal immunities and established systems, as a more viable means of distributing "health-care" services, and vier off the course of "insurance" to plug one of the most persistent sources of "annecdotal" flooding of the information that drives public responses.

When you get an oil change in your car, does your car insurance pay for it?

What we call health insurance is really a cost distribution pool. By giving coverage to everyone by design, those that can afford it least will use it most.

Real health insurance should be a list of options such as types of cancer, heart attack, different organ transplants, etc. you pay premiums based on the level catastrophic coverage you want, and you have to prove that you take decent care of yourself to remain covered. Check ups and and other preventative care should be paid in cash by people that care enough about themselves to try to stay healthy.

Btw, the preventative care argument is problematic because we are trusting the majority of non-insured today to participate in the preventative care that will be available to them when the common characteristics of the uninsured (poor, uneducated, chronic poor life choices, illegal immigrants) mean they may not be able to properly use the resources available to them.

Preventive care is a misnomer. There are a few things you can do or avoid: don't smoke, exercise, drink moderately if at all, minimize starches and sugars, keep yourself clean, don't be promiscuous. None of these lifestyle choices require a doctor's visit.

Other than that, you are going to die from cancer, Alzheimer's, pneumonia or some combination thereof and there's not really anything we can do about it.

And it turns out most preventative care is actually not cost-effective. Medical diagnostics are expensive!

Demand-side measures can only delay the inevitable reckoning, unless they are combined with effective efforts to remove supply-side constraints on availability of healthcare professionals and supplies. It is the constrained supply in inelastic market, driven by the very effective lobbying by the AMA and the drug makers, that has been the prime cause of the cost escalation.

Note that most technological advances in healthcare have been aimed at extracting more resources from the economy, usually for ever-decreasing marginal benefit, and very little innovation has been aimed at increasing efficiency and cost-reduction. The reason for this is that there have been no economic incentive to do so: all cost increases have been absorbed without sacrificing margins.

More at http://mythdesisyphus.wordpress.com/2012/06/26/on-healthcare-and-its-costs/

Who cares what Ezra Klein thinks on such a big issue. He's 28 years old!

I wish the dialog were about tort reform. That would help all Americans except the lawyers. I'd vote for that.

Well if history is a guide. The Republicans will propose something. The president will compromise and say he'll sign the bill. At which point the Republicans will turn on the bill and start calling it socialism. And bizarrely enough I don't think this dynamic changes if Obama or Romney is elected.

I think any change in healthcare (productive or otherwise) can only come from Democrats.

You'll have to remind when Obama signed on to the idea of a national health insurance market or doing away with the employer tax credit so individuals are on a level playing field.

In fact, Obama ran against much of his own plan in the Dem primary.

We have tort reform in Texas. It lowers insurance premiums for doctors. It does jack for overall medical costs. Because they budget problem there is still about actual expenditures.

Bringing this up is like bringing up mentioning cutting the NEA or NPR. While you can argue for and against the legislation for various reasons, it has no meaningful impact on the overall budget.

I'm glad someone mentioned tort reform.

We can afford a tort system, or we can afford a compensation system. We can't afford both.

My prediction is that Tyler will continue to give way too much credence Mr. Klein's mediocre thinking (really only about a half-notch above Thomas Friedman), wasting precious MR space that could otherwise be used to discuss more thoughtful insight, from people who are smarter, wiser, and in numerous other ways, better than Ezra. Klein is hit and miss at best, but has been abysmal on health care issues.

"Court. The most obvious policy path that achieves both goals is to expand public programs like Medicare and Medicaid"

This has already happened.
Furthermore disability is the new thing now.

We already have socialized medicine, you just don't get any because you are upper middle class and young.

What is the fascination with cost controls? Have they ever worked, anywhere?

The problem with our current system, and with ACA and single-payer, is that neither the provider nor the consumer of health services has any real incentive to control costs. Sure, they have regulations and controls, but those can be and are effectively gamed. In the industries in which innovation and competition drive prices down and quality and access up, there is a strong incentive to both the provider and the consumer to optimize on quality and cost.. Why do we insist on removing those forces from the healthcare equation?

Somewhere along the line, the idea that we as a society must never, ever, allow someone to be denied health care frfor any reason entered the national consciousness. We don't even discuss it anymore; it's simply taken as granted. And so we work that assumption in to our formulation of the problem: "How do we pay for a health care system that provides all the care anyone wants, regardless of their ability to pay for it?" Is it any wonder lots of parties are lining up to receive a portion of that largess, and few are lining up to pay? What other industry works that way?

Am I missing something?

Yes I think you are missing something -- your basic notion -- the idea that there is a common assumption that "...a health care system that provides all the care anyone wants, regardless of their ability to pay for it."

I don't think that is remotely part of the zeitgeist.

Also, I think Ezra's forgetting Obamacare was passed through reconciliation.

So basically he's just arguing that instead of passing something that got zero Republican votes and split their own party, they would pass something that even more Democrats would oppose -- and this, even after the centrist Democrats who signed on for Obamacare were promptly massacred by angry voters in the next election.

"On December 23, the Senate voted 60–39 to end debate on the bill, eliminating the possibility of a filibuster by opponents. The bill then passed by a party-line vote of 60–39 on December 24, 2009, with one senator (Jim Bunning) not voting.[161]"

You are correct. But they still went through reconciliation, as that senate vote wasn't the final one, as the House's language was different. They had to vote again, and this time there were 41 republican senators (Scott Brown had won his election). So they passed it through reconciliation.

How many different ways can the Democrats use the taxpayers money to buy votes?

1) the individual mandate is unpalatable and unpopular; I saynothing about its constitutionality, it is just a "wedge" issue
2) other parts of obama care - pre existing conditions not a ban to gettting insurance, no life time cap, etc hugely popular
3) when P Ryan etal tried to reduce medicare costs thru vouchers not indexed to health care inflation, there own voters said NO, and the GOP retreated rapidly (election in buffalo, NY)
4) therefore
a) we will keep all the popular , $ stuff in health care reform that every one loves
b) no money from individual mandate, which gets all the young health people to contribute
c) to make up the funding gap, congress will kick the can down the road a few years, while simultaneously thundering about the horrible burden we leave our children.
In other words, SNAFU

One of the side effects of democracy.
Each part may be popular, and the whole could still be unpopular. I know that isn't the case with this bill, but something to remember. Democracies are inherently irrational.

Any attempt to improve American healthcare that presumes the problems lie with insurance is doomed.

We need to make it easier to become a doctor or nurse or X-Ray technician or pharmacist. And we need to make it easier for these people to set up shop and do business. We also need to make it harder for lawyers to get rich off of them.

Do this, and the improvements will be rapid and staggering. Of course it will never happen, because it would require Government to relinquish some power, and the entire purpose of reform is to give it more.

Nope. What you are proposing is a good idea, but won't happen because of the AMA, not the government.

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