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Con-ning Yourself

March 30, 2012 4 comments

I recently laid out my argument for the constitutionality of the individual mandate. Conceding that I’m not a constitutional lawyer, it’s entirely plausible that I’m influenced by the consequences of the policy. I think Obamacare is better than not having Obamacare. I think the individual mandate reasonably solves adverse selection in insurance and the free-rider problem. In contrast, people who think Obamacare is bad policy also just happen to think it’s unconstitutional.

As Jonathan Bernstein says:

[T]here are vanishingly few people who believe that the Affordable Care Act was a terrific piece of legislation except that it is unfortunately unconstitutional. Nor are there more than a handful who believe that the ACA is certainly permitted by the Constitution, but is otherwise a terrible idea.

So let’s put everyone to the test – not just with healthcare but with every policy.

Can you name any policy you favor but think is unconstitutional? 

Covering Controversy

November 9, 2011 2 comments

Obviously the media likes to cover political controversy, but Greg Sargent and others argue that the inflated media coverage of judicial rulings against the Affordable Care Act distorts the public’s view of the law. Of course, it’s possible it just seems like rulings against the ACA are getting more coverage. Steve Benen checked.

In every instance, conservative rulings received more coverage, longer articles, and better placement.

I took the liberty of graphing Benen’s numbers. First by individual news source.

Now, total coverage by ruling.

Even though rulings uphold the ACA by 5 to 3, casual news consumers probably don’t have that impression.

 

[update 14 November]: The Supreme Court will hear a challenge to the ACA.

Border Walls and the High Cost of Healthcare

May 12, 2011 2 comments

President Obama’s signature legislative achievement goes a long way toward improving America’s healthcare insurance system – now he’s calling on congress to fix our defective immigration rules. But healthcare costs still pose significant problems and America continues to overpay for medical services compared to other nations. So the president might as well aggravate the anti-immigrantion Right further and break down the wall separating these two issues. The GOP keeps saying they want more free market solutions for healthcare, President Obama should offer one.

The administration should seek an international agreement to recognize foreign medical accreditation, increase visas for qualified doctors, and encourage insurance companies to finance patient travel. Fred Hansen in an Institute of Public Affairs article writes,

Although up from 500,000 in 2006 to 750,000 in 2007, the number of Americans traveling abroad for healthcare is tipped to increase to 6 million by 2010.

Unfortunately I can’t find more up-to-date numbers, but it is clear that medical tourism will continue to grow. Of course, many people naturally fear the idea of foreign medicine, but if importing medical services or traveling abroad for them lowers prices or provides access to otherwise unavailable higher quality care to a suffering patient that xenophobia can be an expensive and dangerous delusion.

In 1993, the trade economist Jagdish Bhagwati wrote a piece for the Journal of Commerce advocating that Hillary Clinton’s healthcare task force open the borders for medicine and doctors.

The entry of more foreign doctors wouldn’t require anything as formidable as easing immigration restrictions. Temporary visas for providers of professional services can be made available readily to qualified doctors from abroad.

[…]

Economic research strongly suggests that the AMA makes [foreign medical] examination tougher when doctors’ earnings are under pressure, thereby reducing the pool of eligible applicants for visas. Limiting entry eases competition among doctors and keeps their earnings-and the cost of health care-higher than it might otherwise be.

As the healthcare cost graph (linked above) shows, Americans spend $64 billion in excess costs because of overpriced healthcare workers. As President Obama goes around the country to push for immigration reform he might think about how he can build on his previous success by tearing down a few walls.

When Unbearable Debt Meets Unsustainable Political Support

April 13, 2011 Leave a comment

Many idealists think we can just inform the public enough to understand the best policies to govern ourselves. Unfortunately tilting at windmills seems more productive. Policies gain and maintain support not by voter knowledge but by voter experience. I don’t care how many TV specials or column inches get devoted to explaining that congestion pricing is better for drivers – it will only reach a critical mass of support when drivers experience the benefits outweighing its costs.

As a pure political argument, do you think hugely slashing defense spending is a winner? Maybe right now. What about the months after 9/11? Voters have no idea what the practical differences are of a few hundred billion more or a few hundred billion less in spending on the military. If the country feels safe they’ll support a low level of defense spending (assuming that the level is compatible with actual and perceived safety). Are high tax rates politically sustainable? If there is strong economic growth, yes. Of course if they’re too high and they weaken growth they’re not sustainable. Bill Clinton easily won reelection and somehow maintained higher tax rates that many currently think would be politically reckless to advocate. Those tax rates even gave us a surplus and would do a lot to balance our budget. What’s the difference? Clinton didn’t explain it better – he presided over a growing economy. Clinton even won large percentages of wealthy voters (not majorities though). Today, growth is anemic.

What does this tell us about any debt reduction plan? Since future congresses will have to keep any policies in place that balance the budget, the policies can’t be incompatible with voters’ improving experiences. Paul Ryan’s medicare “fix” isn’t bad because it is unfair or ideologically conservative – even if you forced everyone to read and love Atlas Shrugged it wouldn’t fix the deficit. When the elderly start getting vouchers that decrease in value (they grow at the rate of inflation but healthcare grows faster) they’ll see their situation as steadily deteriorate and vote to change the policy.  That doesn’t mean that benefits need exponential growth to maintain support, but shifting the cost to consumers also doesn’t work. Public debt means higher taxes and less ability to spend elsewhere while private debt directly consumes personal wealth that reduces demand and economic growth. That’s why costs need to be contained not payments. Ezra points out that smaller versions of Ryan’s plan failed:

Various states have gotten waivers to radically remake their Medicaid program, and the consumer-driven model that Ryan is proposing for Medicare has been attempted in the Federal Employee Health Benefits Program and Medicare Advantage. None of these programs have worked, which is why we’re in our current predicament.

Voters need to feel that their overall well-being is improving which means holding down costs in a way that doesn’t prevent economic growth. A growing economy makes every policy sustainable; the trick is to pick solutions that don’t kill economic growth. Paul Ryan correctly realizes that medicare can’t be an open-ended commitment because doing so would eventually harm the economy. His numbers don’t add up, the distribution is unjust, and its prospects are inconceivable but we can debate the merits of it as policy. He should be commended for offering something tangible even as we reveal its flaws. Are there other solutions?

The Kaiser Family Foundation compares some proposals. Many Democrats think strengthening the Independent Payment Advisory Board holds promise. Introducing a dedicated VAT to government healthcare spending always made sense to me – that way it explicitly ties what we’re willing to spend to what is politically sustainable.

Politicians should remember that the single best thing they could do to reduce the deficit is choose policies that maximize economic growth (even if that means taking advantage of cheap borrowing now). Yet, our debt is so large more must be done. Since the major problem is too many retirees relative to able workers, we could change one policy that no one seems to notice would dramatically help. Increase the number of young workers… otherwise known as immigrants. Obviously immigrants age too so it’s not a magic bullet, but anything that keeps the dependency ratio at a reasonable level would be enormously helpful.

Another aspect of immigration policy that needs consideration (since we can’t feasibly let in enough migrants completely solve everything) are temporary workers. Temporary workers are great because they come at almost no cost to the taxpayer. We don’t have to educate them and we don’t have to pay for their retirement, but they grow the economy and pay taxes. As Matthew McConaughey might observe, high school girls and temporary immigrants have a lot in common: they “stay the same age.”

Much more needs to be done, but anything that passes must maintain support.

GTSCW: Health Care Edition

March 1, 2011 1 comment

In another installment of Graphs that Subvert Conventional Wisdom here’s a chart that surprised me and dispels a common fallacy about American vs other health markets.

Probably due to sheer repetition I always bought into the notion that one of the trade offs of expanding coverage usually had to be longer wait times due to doctors having to deal with more volume. Previously I assumed we’d just have to do our best to mitigate that inevitable downside – it doesn’t seem so inevitable after all.

Expanding health coverage continues to be a worthwhile goal and I remain convinced that a greater governmental role is necessary (a free market linked with guaranteed catastrophic coverage is a political impossibility). Wait-times was one of my bigger reservations about increased state involvement; I still worry about decreased competition arresting medical innovation. Is that another myth or is there more truth to that?

(via: Kevin Drum)

Categories: GTSCW, healthcare Tags:

Understanding Healthcare Reform

September 23, 2010 3 comments


(h/t The Daily Dish)



Here’s Ezra Klein on some of the cost savings measures contained in the bill.

Behind the acronym [IPAB] will be 15 presidential appointees, each confirmed by the Senate. They’ll be drawn from the health-care industry, academia, think tanks and consumer groups. Their reform proposals will have to pass through Congress, but they will have some advantages: If Congress doesn’t act, their recommendations go into effect. If Congress says no but the president vetoes Congress and the veto isn’t overturned, their recommendations go into effect. If Congress wants to change their recommendations in a way that’ll save less money, it will need a three-fifths majority. Oh, and no filibusters allowed.

The hope is that this will free Congress to permit cuts by making it easier for them to dodge the blame. “Putting the knife in someone else’s hand will be a relief,” says Robert Reischauer, director of the Urban Institute and a former director of the Congressional Budget Office. “It will allow Congress to rant against the cuts without actually stopping them.”

Zen and The Art of Dying

In another must-read piece, the indispensable Atul Gawande pushes readers into an uncomfortable subject in order for them to reconsider how they look at the end of life.  

The subject seems to reach national awareness mainly as a question of who should “win” when the expensive decisions are made: the insurers and the taxpayers footing the bill or the patient battling for his or her life. Budget hawks urge us to face the fact that we can’t afford everything. Demagogues shout about rationing and death panels. Market purists blame the existence of insurance: if patients and families paid the bills themselves, those expensive therapies would all come down in price. But they’re debating the wrong question. The failure of our system of medical care for people facing the end of their life runs much deeper. To see this, you have to get close enough to grapple with the way decisions about care are actually made.

[…]

Almost all these patients had known, for some time, that they had a terminal condition. Yet they—along with their families and doctors—were unprepared for the final stage. “We are having more conversation now about what patients want for the end of their life, by far, than they have had in all their lives to this point,” my friend said. “The problem is that’s way too late.” In 2008, the national Coping with Cancer project published a study showing that terminally ill cancer patients who were put on a mechanical ventilator, given electrical defibrillation or chest compressions, or admitted, near death, to intensive care had a substantially worse quality of life in their last week than those who received no such interventions. And, six months after their death, their caregivers were three times as likely to suffer major depression. Spending one’s final days in an I.C.U. because of terminal illness is for most people a kind of failure. You lie on a ventilator, your every organ shutting down, your mind teetering on delirium and permanently beyond realizing that you will never leave this borrowed, fluorescent place. The end comes with no chance for you to have said goodbye or “It’s O.K.” or “I’m sorry” or “I love you.”

People have concerns besides simply prolonging their lives. Surveys of patients with terminal illness find that their top priorities include, in addition to avoiding suffering, being with family, having the touch of others, being mentally aware, and not becoming a burden to others. Our system of technological medical care has utterly failed to meet these needs, and the cost of this failure is measured in far more than dollars. The hard question we face, then, is not how we can afford this system’s expense. It is how we can build a health-care system that will actually help dying patients achieve what’s most important to them at the end of their lives.

[…]

Curiously, hospice care seemed to extend survival for some patients; those with pancreatic cancer gained an average of three weeks, those with lung cancer gained six weeks, and those with congestive heart failure gained three months. The lesson seems almost Zen: you live longer only when you stop trying to live longer. When Cox was transferred to hospice care, her doctors thought that she wouldn’t live much longer than a few weeks. With the supportive hospice therapy she received, she had already lived for a year.

(emphasis mine)

Gawande makes us see it isn’t the soaring and budget breaking costs of prolonging
death “life” in the terminally ill that is the biggest problem, but rather it is that we’re making their own lives and those that love them worse. It isn’t a death panel to have patients voluntarily consult with a doctor before they can’t make decisions on their own about how they want to be treated near the end of their lives. Everyone and the medical profession itself has to think deeply about these difficult questions. 

More Evidence Reforming Healthcare Was A Good Idea

Seems the good continues to outweigh the bad. 

Clive Crook on Frum and Moderates

April 14, 2010 2 comments

Crook finds Frum’s thinking sound on the need for more moderate Republicans but fuzzy on healthcare:

He is simply inconsistent. On the one hand, Obamacare is a “vast new social welfare program.” On the other, “the gap between this plan and traditional Republican ideas is not very big…It builds on ideas developed at the Heritage Foundation in the early 1990s that formed the basis for Republican counter-proposals to Clintoncare in 1993-1994.” So was this a terrible plan that needed to be stopped? If so, the Republicans gave it all they had. Or was it a basically good plan that could stand some further improvement? If Frum thinks that–as I do–why would he have voted in the end to kill the reform?

I agree with Crook here that passing the bill could then be a platform for improvements to be added later. Frum is probably right that the Republicans could have achieved a more market friendly bill if they sought that during the fight. Does Frum think that the possibility of improving the bill after it passes in its current form is negligible or impossible? I suppose that would explain the inconsistency, but it wouldn’t be very persuasive. 


In the Financial Times, Crook also makes some further important points about the need to moderate the GOP

Meetings such as this are not campaign events aimed at voters at large. They are gatherings of activists, intent on maximum fervour. Even so, to call the Obama administration “socialist” is risible. If anything, “secular” makes even less sense. Do Republicans regard universal health insurance as a godless undertaking? And since when, even in the US, was “secular” an allowable term of abuse? 

A moderate and intelligent opposition to the Democrats’ policies is badly needed. Apparently, nobody in the Republican party aims to provide it. Republican leaders seem intent on presenting the party’s angriest, most stupid and least tolerant face. Some leading Republicans who are moderate by temperament and conviction – John McCain, for instance – are being pushed to the right in primary election contests with more conservative opponents. Others, such as Mitt Romney and Tim Pawlenty, are disowning their previously expressed views or just keeping their heads down.

Clive, it became “allowable” when the Republican Party became the party of the religious right instead of a party of conservatives. But, thank you, the question keeps needing to be asked. 

Support with Skepticism

As regular readers of this blog know, I supported Obama’s comprehensive healthcare reform. Yet, it’s important to continue to point out the problems not just the benefits of public policy even when (especially when?) one supports it.


From Ezekiel Emanuel’s Healthcare, Guaranteed: (Chapter: “The Mistake of Mandates”)

More importantly, over time the number of uninsured in mandate plans is more likely to go up than down. These plans would do little or nothing to reduce high healthcare costs or curb cost increases. The current financing system and high administrative costs of employer-based healthcare and Medicaid would remain. And although the Insurance Exchange would reduce administrative costs for some small businesses and the self-insured, this savings would be partially counterbalanced by the cost of income-linked subsides. 

[…]

Although the mandate approach aspires to near-universal coverage, it ignores other critical problems within the healthcare system. As evidenced by SCHIP, it is likely that covering the uninsured would improve primary care, preventive care, and continuity of care in the short run. But even that claim is debatable: Citizens may choose to buy only catastrophic healthcare policies from the Insurance Exchange and may not purchase preventive or other necessary services.

In the end, mandates would do nothing to improve the overall quality of healthcare in the United States. Without incentives for accountable and coordinated care-delivery systems, electronic medical records, best practices, preventive screening tests, and correct treatment of hypertension and high cholesterol, the mandate model would keep health outcomes as they are. In large part, mandated health insurance succeeds in perpetuating a fragmented, fee-for-service dysfunctional mess for a delivery system.

  From Gary Becker

The most important needed reform is an increase the fraction of total medical costs that come from out-of pocket expenses in the form of large deductibles and significant co-payments. Out-of-pocket spending accounts for only about 12% of total American spending on healthcare, whereas the share of out-of –pocket spending is over 30% in Switzerland, a country considered to have one of the better health delivery systems. Partly because of this major difference, health care takes 11% of Swiss GDP compared to the much higher American percentage. As far as I can discover, nothing in the new bill really tries to raise the out-of-pocket share, and some changes would reduce it even further. These include tax credits for individuals and families that earn up to 400% of the federal poverty level (up to about $90,000 for a family of four) that enable them to get coverage through newly created Insurance Exchanges.

Another desirable reform is to reduce the reliance of the American health system on tax-deductible employer-based insurance since tax deductibility has encouraged low deductibles and low co-payments. It has also locked workers with health problems into their current jobs since they may not qualify for insurance at other companies because of these pre-existing health conditions. The bill does propose to phase out tax deductibility for the more expensive plans by 2018, but who knows if that will ever be implemented.

Interestingly both authors view the purchasing of “only catastrophic healthcare policies” oppositely. Emanuel thinks it is better that people have more extensive insurance because that will lead to better health outcomes. Becker writes:

I do support a requirement that everyone has health insurance that covers medical catastrophes. Coverage limited to catastrophes would not be expensive for the uninsured since they are mainly young and are generally in quite good health. They could readily pay the premiums for catastrophic insurance from their incomes. The health care bill does make health insurance compulsory, but it does this in an unsatisfactory way by requiring rather extensive benefits, and by subsidizing coverage for individuals and families with incomes far above the poverty line. (my emphasis) 

Becker views the issue mostly through the prospective of costs (naturally as an economist) whereas Emanuel’s main focus is overall health. Neither is wrong to focus on what they have (they don’t ignore the other) it is just a matter of philosophy and perspective. Also, it is easy to think Emanuel’s approach is more appropriate but don’t discount the value of costs. Societies and individuals ignore cost/benefit analysis at their peril. No matter how much we pretend people’s health is infinitely valuable our resources are finite. Furthermore, when we choose to value health over “costs” we’re not just saying greater health is worth more than “money,” we’re saying it is worth more than what that money can buy: better education, nicer homes, more food, maybe greater happiness. Maybe health is more important than all these other things, but forcing people to decide on potentially greater health shouldn’t be an easy choice.


Despite these criticisms of the reform and with due respect to Becker, this bill improves the status quo. Emanuel’s plan, I’d agree, is better but as he recognizes, it just wasn’t politically possible at this time.  

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