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A Quick Shot of Healthcare, Part 4 – Deconstructing Sarah Palin . . . Again
By Brian | September 9, 2009 | Share on Facebook
On the eve of President Obama’s address to a joint session of Congress regarding healthcare reform, the former governor of Alaska, Sarah Palin, has written an Op-Ed piece in the Wall Street Journal. What follows is an object lesson both in how news media must be consumed these days, and some enlightening facts (enlightening to me, at least) about the current healthcare debate.
First, I read the AP wire story
Topics: Political Rantings | 24 Comments »
First — the BRAC (Base Realignment Commission) was specifically developed in order to avoid NIMBY objections. Everyone agreed that we needed to cut down on domestic bases, but since a base shutdown essentially makes the area a ghost town, no representative can support it. The BRAC was an advisory panel, but it made its recommendations in blocks — Congress could accept or reject them, but there was a legislative agreement not to cherry pick to save the base in the district of a powerful representative. It wasn’t perfect, but it worked better than anything that had been tried previously.
So, in considering the IMAC, first you have to decide whether you want the 20″ or the 24″ model… no, sorry, wrong iMac.
The IMAC is meant to bring a technocratic input to a similar situation. Put it this way: let’s say two nominees for the IMAC were Sherry and myself. Whom do you think would be a better choice? I consider myself a lay policy expert, but hell, I’d vote for Sherry.
Here’s how it will work (because this is how it has to work): IMAC makes recommendations to the president. President can approve part or all of the recommendation. It then goes to HHS. That’s the Constitutional part of the equation. If Obama imposes limitations on his ability, such as a 30-day waiting period or the ability to accept recommendations only in full, that’s a gentleman’s agreement rather than a law.
On the other hand, his executive actions must be revenue-neutral, because all spending power is vested in Congress. He can make rulings which allocate discretionary funding, but he can’t change the allocations. Hence, the IMAC will get much more done if they stick to the powers which the president already has. Likewise, if the president makes an executive decision of which Congress disapproves, they can zero out funding for that choice legislatively.
So what Obama is proposing is this: “I’m going to appoint a panel of experts, and I’m going to listen to them. It’ll be my choice what to do, as is true with all executive decisions, but I’ll create a window for Congressional input.” Hell, that’s about the most reasonable presidential decision I’ve heard in a long while.
On to your scary scenario — and does Sherry read these things before you post them? I’d love to hear her input on this. Anyway, as I read it, your argument is a load of… your argument won’t happen for the following reasons:
1) the elderly are covered by Medicare. Medicare has strict guidelines for end-of-life issues which prevent “cost savings” from the sort of “let the elderly rot” scenarios you propose.
2) even if the IMAC has recommendatory power over Medicare, there is a huge debate going on in order to deal with end-of-life care, and no one is arguing in favor of “let them suffer so we can save money”. Hip surgery is expensive and dangerous — on the other hand, you can treat pain with morphine. Is it a big deal if someone with two months to live gets addicted to painkillers? That’s a debate worth having.
3) we already have a system which doles out health care based on ability to pay. This system will continue, unless someone introduces the idea that the law restricts doctors from providing treatment. (Of course, they’ve done this with abortion services, so if you want to avoid kill Granny scenarios, the track record for restricting care by law is Republican.) In any sane scenario, the wealthy will continue to pay for whatever they want; those without means will go from zero care to a level of care recommended by a panel of experts. In my book, zero plus something is usually considered to be a positive number.
Your 3 bullets about why my scary scenario won’t happen don’t ring true to me. To wit:
1) This describes how Medicare works today. The proposed IMAC would have the power to change that in order to “improve the quality of medical care received by the program
Even worse, the insurers get to deny claims at their discretion. It isn’t hard to turn up stories about people getting shafted by the insurance companies:
http://tinyurl.com/ms56s2 – a one sided press release, but interesting nonetheless.
http://tinyurl.com/mjz3a6 – got insurance? read the fine print!
Who’s currently making these “covered benefits” decisions for Medicare? If we don’t already have a panel of medical experts deciding what’s included in the coverage, we have to assume it’s being driven by bureaucrats and bean counters. Which group do you want making those decisions when you’re depending on them to provide a decent set of benefits?
When a private insurer defines benefits to minimize expenses and maximize profit, it’s the good old free market economy at work, but when the government does it to Medicare, it’s rationing by death panels. I smell a double standard.
Medicare does not vary state by state, and it’s coverage is very explicitly spelled out ahead of time (it has to be, since it covers such a wide range of patients). You also don’t lose your Medicare coverage when you experience life events, such as moving or changing jobs (can you be on Medicare and have a job, or do you have to be retired? Not sure about that…)
As I said above, I’m not against having a panel of medical experts determine what is covered under Medicare. I’m concerned about a presidentially appointed panel that is not accountable to anyone, however. Today, if Congress reduces Medicare benefits to unacceptable levels, we can vote them out of office. With the IMAC in place, we can vote the Congresspeople (and the President) who approved the change out of office, but the people who made the decision keep their jobs for five years (or until a new President fires them). Being accountable to the people is a powerful motivator.
As for this old saw about insurance companies denying claims to increase their profits – Suzanne, you were with me for two of my five years in that industry. Remember Loss Ratios? Combined Ratios? Loss Adjustment Expenses? Insurance companies don’t make money denying your claims. They make money by keeping you as a customer so they can invest your premiums (read this for more detail). There will always be anecdotal stories about incompetence, aggressive marketing, creative underwriting and outright fraud. These stories are horrific and an idea that minimizes them is a good idea. But that’s not the free market at work. That’s a flaw in the free market that needs to be addressed.
Today, the insurance companies are incented to do the right thing to keep their customers, and the government is incented to do the right thing (via Medicare) to keep their power. Who/What will incent the IMAC?
Once you include the question of limited public resources, if you started from first principles, you’d completely flip the system we have: provide universal care for the young and healthy when it is far cheaper to do so. When those young people become old people, you rely on the investments made on the long-term health of that population to lower their overall health costs.
Personally, it seems to me that the all-you-can-eat medical buffet model is unsustainable, whether it’s provided by private plans or the federal government; the sole exception seems to be Japan, where doctors make solidly middle-class wages. On the other hand, they’ve come up with a system where some procedures are 1/50th as expensive as they are here, as an innovate response to cost containment. We have no such restraints here, so we don’t bother with such methods. I’d like to know why we’re not borrowing their ideas.
Anyway, that’s merely a logical fallacy — you go off the deep end when you talk about unaccountable panels. The president is accountable, as is Congress; changes to a government system answer at the ballot box. That’s far more built-in oversight than exists in the private model, where companies answer to shareholders.
And I’ve heard you make the argument before that insurance companies desperately retain their customers for that sweet, sweet, investment capital; this seems in contradiction with the practice of rescission, and the enforcement of pre-existing conditions as a barrier to care. The counter-argument — that for-profit insurance companies want to maximize their premiums and zero out their payments — makes a hell of a lot more sense to me, and seems much more demonstrable by the numbers.
Finally, you make my overall point against pure capitalism better than I ever have:
But that
Property/casualty insurers are motivated to keep you because it’s very easy to switch insurers. An hour or two of shopping, a couple phone calls, and I’ve got new auto insurance.
If I want to change my health coverage because the service stinks, I’m stuck until the annual enrollment period, and then my choices are confined to whatever my employer offers (if I want something affordable). If I’m in the middle of a health crisis, I’ve got to worry about whether the new plan will cover my existing condition.
Getting health insurance through your employer basically makes you a captive audience, which lowers the incentive for the insurer to treat you well. It’s true that insurance companies make their profit from the float, not your premiums, but you’re ignoring the fact that a denied claim represents an amount of money that they’re retaining for investing purposes rather than paying to the policy holder, i.e. lowers claims payouts = lower reserves = more money for investing.
We’re hearing way too many stories about claims denials for it to be considered anecdotal. How about the Wendell Potter testimony?
http://tinyurl.com/lgajd2
Personally, I think a single payer system for all, decoupled from employment and geographic location, would improve the situation.
The alternative could be a completely free market solution similar to the way you get other types of insurance – directly from the insurer. No more group buying through your employer. We become one big collective of 300 million and the insurers compete head-to-head for every policy holder. With increased regulation of minimum benefits, coverage for pre-existing conditions, and the ability to change your coverage at will, the insurers would have more incentive to treat you well. Employers could make tax free contributions to healthcare savings accounts, which you would then use to buy coverage.
As for Medicare, yes, you can have a job and be on Medicare. You become eligible at 65, and your benefits are not affected by income level.
I’m still confused about your “concern”. Why do you expect the IMAC to be directly accountable to the general public? You don’t have that power with any other insurer. If you don’t like the benefits offered by Aetna, you can ask them to change, or you can try to go to another company, but you can’t really get Aetna’s executives fired, nor can you force them to do anything, can you?
The elderly are Medicare’s captive audience, just like the rest of us with the private insurers. If they don’t like the benefits offered by Medicare, they can buy supplemental plans. If you can’t afford better benefits, well, that’s life in the free market.
What we need is more transparency and accountability across the insurance industry as a whole, not just for Medicare.
You should watch the Bill Moyers interview I linked above. My buddy Wendell makes some very pointed remarks about medical loss ratios and how they affect profits and stock prices.
As for the accountability of those who control costs, your assertion that the President and Congress are held more accountable by the ballot box than companies are by their shareholders has no basis at all. Private companies are judged every quarter, and changes come swiftly when results aren’t achieved. The trick, of course, is to align those corporate (profit) incentives with the goals of the customers (the patients). This isn’t at all unique to healthcare – cf. the Chinese companies that were caught making shoddy children’s toys last year. They might have thought they were increasing profits by reducing production costs, but in a matter of months, there were recalls and boycotts all across their primary market (America). Could the government be forced to change that quickly?
Look – this has been an excellent discussion, and I totally concede the point that “death panels” or “cost-containment councils” or whatever you want to call them exist today, and will continue to exist in the future. The argument about which is better – having an insurance company deciding what’s covered or having the government deciding what’s covered is an interesting one to be sure.
But it wasn’t my original point. My original point was how quickly we jumped to “Liar, liar, pants on fire!” on both sides of the aisle. Sarah Palin obviously intended to derail Obama’s reform message with her inflammatory phrase (which, by the way, just screams Frank Luntz to me, no?), but President Obama and others are lying too when they claim that their plan has no such mediating group.
And finally, with regard to your constant bashing of the “free market,” criminal behavior and fraud are never part of any free market of any credibility and size. As I’ve said many times now, “free market” does not mean “free-for-all bartering.” All markets have rules – some established by government regulators, some established by the participants themselves. You can’t point to the existence of fraud and claim that the market begets it, but then ignore the existence of retribution for that fraud as something the market also encourages.
As for denied claims, you’re making two factual errors. First, denying a claim does not lower the loss reserve on that claim unless the claim is actually closed. And in the case of a health policy, a denied claim usually means the patient is following a different course of treatment, which means the reserve stays open for different reasons. Second, a denied claim and the associated continuation of that case leads, by definition, to increased Loss Adjustment Expenses, which comes directly off the investable balance (as opposed to a reserve, which can at least earn interest while remaining in allowable, liquid investments). We have both met claims examiners who’s principle goal was to settle claims quickly and accurately manage reserves. I don’t recall ever meeting anyone who’s primary goal was to lower the loss ratio.
As for Wendell Potter a, I think he’s telling the truth, but he’s severely cherry-picking his facts. For instance, the health fair he saw paints a powerful picture – long lines of people being treated in animal stalls because they can’t get insurance. But how long would the line look if you put it next to the 250 million Americans who are treated in hospitals or doctor’s offices? Why is he blaming Cigna’s policies (including, of course, the food service on its corporate jet) for the plight of people were are not Cigna’s customers? And why didn’t Bill Moyers ask him how Cigna’s customers were doing at that time?
And as for Michael Moore, please don’t let the fact that his political opponents tried to sink his movie lead you to believe that his movie contained an absolute truth. I’ll once again call on my friend Ilya to recount the story he told me about British health insurance (he lived in England for three years). The summary is this: if you’re healthy (regular exams, routine tests, etc.), NHS is terrific – no wait times, no bills, no rationing. And if you’re critically ill, NHS is also terrific – lots of resources go to the critical cases. But if you have a chronic condition, or a condition that might lead to something critical, you could be lost in the shuffle forever – years to see a specialist, half-hearted diagnoses, rules about what’s covered or not, etc..
Michael Moore picked the right people to interview and got his movie made. But you did a better job of laying out the two primary alternatives in one blog comment than he did in months of “research.”
Brian, you summarized it almost correctly. Actually, NHS is terrific for anything that requires a simple – often, involving a common remedy, – fix or a routine procedure (you would have to wait for a while for the latter, to be honest, but you wouldn’t be cross about it, I suppose). And yes, it does provide access to medical services for everyone, poor or rich. But just as it is in the States, the rich have advantages, in the form of “private” insurance, which gets them complicated treatment faster and arguably of higher quality, while going through NHS – the only route available to the poor – would involve waits of months, if not years, in cases of non-trivial treatment. And the quality of service you get on NHS dime is, well, exactly what you paid for it.
Unless – and this is where the example of Stephen Hawking was hilariously dumb – you have a condition like something Dr Hawking does, in which case you might expect to be taken care of rather well.
You can find anecdotal evidence to support either side of the argument, I suppose, so my personal experience with NHS – largely positive, do not get wrong! – is just as relevant as Moore’s selectively misrepresented poppycock. Anyhow, I don’t think it is awfully relevant to the argument at hand, only inasmuch as the notion of universal coverage is being at the heart of the problem, and of costs – not just in monetary sense – inherent in implementing it. I find myself largely on the same position as Suzanne @7, although I recognize that the quality of service under the single-payer system would plummet, expressly because of one of my biggest gripes with Socialism – removal of incentives to competition and advancement…
His first doctor told him the waiting list for the surgery was four years. When he told them he was 88, they said “we’ll see what we can do.” He wound up having surgery on the first eye (the eyes are done separately to avoid total blindness during recovery) about a year later. I’m not sure when (or even if) he had the second eye done. He passed away (from something unrelated) at the age of 94.
As for Suzanne’s points @7, I’m not thrilled at the single-payer option for the reasons you suggested. I like the other suggestion (make health insurance more like auto insurance), but President Obama explicitly ruled it out last Wednesday, calling it a radical departure from what we have now and too much simultaenous change.
Best bet at this point, in my opinion, is Newt Gingrich’s suggestion (I know, Newt Gingrich – not often my favorite, but he’s got a point here): break the problem into seven or eight separate bills, and pass each one separately. Then, even if only three or four pass, we start chipping away at the problem rather than winding up doing nothing & throwing political food at each other…
Sure, if you compare an untreated diabetic to someone who “suddenly drops dead.” But what are the cost implications of a 65-year old diabetic vs. an 85-year old diabetic? The same if not more, right? Preventative care extends life. It doesn’t guarantee that we’ll all live long enough to be killed by buses while crossing the street.
Christ, Brian. What organization do you think issues product recalls? Last time I checked, it was the federal government.
Check again. When the Chinese toys were found to contain lead, Mattel recalled more than 10 millions toys. The federal government’s role was to “warn parents to make sure children are not playing with any of the recalled toys” and to bitch about China to the press. Last I checked, Mattel was a corporation (you know, those folks who only care about profits?)
The difference between a doctor
Point being, with early treatment, you can prevent diabetes entirely. And since you asked, anyone who makes it to 85 likely has a mild case: life expectancy for those with diabetes drops by eight years.
When the Chinese toys were found to contain lead, Mattel recalled more than 10 millions toys. The federal government
Point being, with early treatment, everyone’s eventually going to get something. So, if you avoid diabetes entirely, you may just live long enough to get cancer. (Cheery discussion, ain’t it?) Oh, and the 8-year figure is comparing diabetes sufferers to non-diabetes sufferers, not 65-year olds to 85-year olds.
The article you pointed me to quoted the CPSC before anyone from Mattel. Last *I* heard, recalls are always coordinated through the CPSC, and sometimes initiated by them, depending upon how cooperative the company is being.
I can
Noted, and Sherry’s is one of the few opinions which I trust more than my own. If I happen to come across a reference to where I came up with this, I’ll post it. Until then, consider me disabused.
I
I hesitate to add anything when I haven’t (and won’t) take the time to link to everything, create spreadsheets, etc. But, tossing caution aside, I’m going to raise a different kind of point. And I do have a PhD – and while it isn’t in anything scientific, it does mean I know a fair amount about peer review, research standards, and university politics. I’m also about the only one in my family who doesn’t have the stats chops you both wish you had; what I know is far more from the dinner table than from that one class I took at Penn.
What I want to add is this: there’s another population of professionals involved here, and they work in public health. Some of them are MDs but lots of them are PhDs. One of them is my sister (a PhD) who happens to work for NCI at NIH. And her speciality is in prevention, risky behaviors, and cancer. I’d get her involved, but she has even less time than I do.
You’ve talked a lot about doctors, and about government panels. First of all, those government panels include doctors. And second of all, those panels are in a position to assess best practices in a way that clinicians aren’t always. Studies of medical practice have shown for a long time that doctors see the problems that they know how to handle – surgeons are more likely to think operations are necessary, etc. My sister’s been talking to me for years about the over-treatment of prostate cancer, for example; this year, finally, recommendations were made about not treating men over a certain age (75? I don’t remember). This is because lots and lots and lots of men – probably most men – will develop prostate cancer. The vast majority of them will die of something else. So for them, treatment is not only expensive – and it is – but it is also invasive, and is quite likely to have side effects with real impact on quality of life: incontinence and impotence. So most of the men who are treated for prostate cancer, at significant cost on a number of levels, would have been better off if they had not intervened. It would also have cost less. But there are the much smaller percentage of cases for whom prostate cancer is fast growing and will kill them if it isn’t treated aggressively. The trick is in telling the difference, and culturally speaking, we tend to have a great deal of difficulty waiting and watching – though that’s exactly what’s recommended. Why am I being denied my surgery? the patient asks; well, because you’re probably better off without it. I know my sister would move that recommendation against treatment to a much lower age if it were up to her; I also know that she does not have annual mammograms (because of her understanding of the data, not because she is busy) and strongly recommends that I don’t, either. (She is five years older than I am.)
About morbidity and mortality – yes, ultimately mortality is 100%, because we all die (even Walt Disney and Ted Williams). But a lot of the work now is being done on the compression of morbidity – the amount of time we are sick before we die. We can’t say that someone who dies at 100 will use more or less medical care than someone who dies at 70, but we can say that’s the goal, and that preventive care available throughout the life span is more likely to contribute to that than untreated chronic medical conditions. On a humane level as well as an economic one, that should be our goal; no one cherishes those days in hospitals at the end of life. We will be fortunate if we go quickly. Cancer is an obvious illustration of this; yes, if we live longer, we have more time to develop cancer. But if we have good preventative care, we might be less likely to behave in ways that increase our likelihood of getting cancer. If we understand more about best practice, we might be less likely to treat cancer if we get it later in life. All of these issues affect the costs of our end-of-life care.
I agree with Jeff that we are making moral arguments here. You guys went back and forth about whether the US health care system doesn’t work well for 15% or for more of the population. I have to say I don’t really care on one level, because “even” 15% is too much for me. I don’t really like those bumper stickers that talk about heath care being a “right” – I’m not comfortable with that language. But I do think it’s a moral obligation, one that our society should choose to make. Personally, I think that’s the more powerful case. It’s also why health insurance doesn’t parallel life insurance. Life insurance doesn’t benefit me; it protects people I care about. I am, indeed, sure to die (much as I’d rather deny it). So I don’t have life insurance in case die, the way I have car insurance in case I’m in an accident (and because the state of CT requires it); I have life insurance in case I die sooner than I would expect to, and specifically because I have dependents. When they are older, and self-supporting, I will drop the life insurance. I’ll have car insurance as long as I’m still driving. And I’ll always need health insurance (and am very fortunate to have access to an excellent plan – one for which I am eligible as a public servant, a state employee). We call them all “insurance,” but there’s a fair amount of apples and oranges here, especially when what we’re really debating on the moral level is about access to health care; “insurance” is both the conduit and the barrier to that access.
Finally, on a human note – my God, Jeff, I’m so sorry. What a horrendous situation for you to handle. My heart aches.
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