Category ►►► Health Care Horrors

April 29, 2008

Gee, He Really Is Conservative - Page 2: Health Care

A week ago yesterday, we posted about John McCain's economic policy speech delivered at Carnegie Mellon. We summarized thus:

What was refreshingly unexpected was how fiscally conservative McCain is, particularly in comparison to the last few GOP presidential candidates... by some measures, McCain is more fiscally conservative than Ronald Reagan, who never made much of a move to rein in spending (Reagan was more concerned with winning the Cold War and lowering taxes).

Today, McCain delivered his next big policy speech, this time on fixing the health insurance... well, "crisis" would be too strong a word; but certainly there's a vast unease in the air. He spoke in Tampa, Florida, at the University of South Florida; specifically, at the H. Lee Moffitt Cancer Center & Research Institute. And once again, I believe most of us would agree that McCain's approach is not only more conservative than either Democrat running -- it's intrinsically conservative on its face, not merely by comparison.

(I have placed the transcript of McCain's entire speech in the "slither on.")

Personalizing health-insurance decisions

McCain begins with a strong denunciation of socialized medicine, or "a nationalized health care system," as he puts it. He notes that when families make their own health-care decisions, that alone reduces the cost of the system: Patients become more frugal of expenditures when they're paying for it themselves... either directly, via a health savings account (HSA), or indirectly through paying their own premiums.

So the first change McCain proposes is the biggest and most radical. Right now, most Americans (158 million, according to Hillary Clinton) get their insurance through their employers. Employers offer one or more health insurance plans, and the government gives a tax credit to the employer for each employee who enrolls. John McCain proposes that this employer credit be eliminated -- and the same credit given directly to each person or family instead; it works out to $2,500 for an individual or $5,000 for a family.

This money would only be available for use in paying medical premiums or for building up an HSA; from the transcript of the speech:

Americans need new choices beyond those offered in employment-based coverage. Americans want a system built so that wherever you go and wherever you work, your health plan is goes with you. And there is a very straightforward way to achieve this.

Under current law, the federal government gives a tax benefit when employers provide health-insurance coverage to American workers and their families. This benefit doesn't cover the total cost of the health plan, and in reality each worker and family absorbs the rest of the cost in lower wages and diminished benefits. But it provides essential support for insurance coverage. Many workers are perfectly content with this arrangement, and under my reform plan they would be able to keep that coverage. Their employer-provided health plans would be largely untouched and unchanged.

But for every American who wanted it, another option would be available: Every year, they would receive a tax credit directly, with the same cash value of the credits for employees in big companies, in a small business, or self-employed. You simply choose the insurance provider that suits you best. By mail or online, you would then inform the government of your selection. And the money to help pay for your health care would be sent straight to that insurance provider. The health plan you chose would be as good as any that an employer could choose for you. It would be yours and your family's health-care plan, and yours to keep.

The value of that credit -- 2,500 dollars for individuals, 5,000 dollars for families -- would also be enhanced by the greater competition this reform would help create among insurance companies. Millions of Americans would be making their own health-care choices again. Insurance companies could no longer take your business for granted, offering narrow plans with escalating costs. It would help change the whole dynamic of the current system, putting individuals and families back in charge, and forcing companies to respond with better service at lower cost.

This is clearly a step towards a freer market in health-insurance and health-care, thus a good, conservative approach. But of course, it brings up a problem: What about those with pre-existing conditions?

Under the current system, employers buy group plans that include all employees and their families (or a significant portion of them). That's good for insurance companies, because it reduces the otherwise staggering administrative overhead. But the payback is that insurers cannot refuse coverage to people who are bad health-insurance risks; even if you or your spouse has, say, a heart condition, the group-plan insurer must still take you -- even if it knows in advance that you're going to be a net financial loss. The rest of the plan makes up for it.

But when insurance plans are held by individuals, not groups, how do we (as a country) prevent insurers from simply refusing to accept any bad-risk patients? Since a great many of us have pre-existing conditions for which we must take prescription medicine, insurers would naturally want to drop us and take only healthy people who will be big money-makers for the insurance company.

McCain's solution to this is about the least statist possible. Both Hillary Clinton and Barack Obama promise simply to force insurers to accept poor-risk members, thus forcing the companies to act contrary to their own economic self-interest, wrecking any hope of a free market that could reduce costs. From the New York Times:

Unlike Mr. McCain, the presumptive Republican presidential nominee, both Senators Barack Obama and Hillary Rodham Clinton would both make it illegal for health insurance companies to deny an applicant because of age or health status. The two Democratic rivals argue that such regulation is needed to end discrimination against those with pre-existing medical conditions.

McCain has a different approach: He will work with the states to create a pool of high-risk patients. The administration would contract with insurers such as Blue Cross to offer pool members special insurance -- more expensive than for healthy people, but the rates limited to prevent companies from completely excluding people with pre-existing conditions. Here is McCain, from his speech:

Even so, those without prior group coverage and those with pre-existing conditions do have the most difficulty on the individual market, and we need to make sure they get the high-quality coverage they need. I will work tirelessly to address the problem. But I won't create another entitlement program that Washington will let get out of control. Nor will I saddle states with another unfunded mandate. The states have been very active in experimenting with ways to cover the "uninsurables." The State of North Carolina, for example, has an agreement with Blue Cross to act as insurer of "last resort." Over thirty states have some form of "high-risk" pool, and over twenty states have plans that limit premiums charged to people suffering an illness and who have been denied insurance.

Personalizing health-care decisions

McCain also calls for government to deregulate both insurance companies and doctors so that they can provide services across state lines; and he wants new "transparency" rules to force health-care providers (doctors, hospitals, hospices, clinics, and so forth) to clearly post the cost of medical treatment, their safety records, and so forth, thus allowing patients to become better shoppers... and again, allowing the market to come into play. We can choose to go to a lower-tier facility and pay significantly less, or pay premium rates for the best care available; we'll have access to all the information we need to make wise decisions.

Removing money-sinks from the system

McCain calls for major tort reform to stop out-of-control malpractice cases -- the kind that made former senator and failed presidential candidate John Edwards a multi-millionaire. Currently, they drain tens of billions of dollars out of the system; but that's not the worst effect.

Far more insidious is that lawsuit-fever and jackpot justice forces doctors to prescribe likely hundreds of billions of dollars of "defensive medicine" -- tests and procedures with no real medical value in that cast, performed solely to stave off lawsuits in the event that a medical risk occurs... even one that was well known and thoroughly disclosed to the patient in advance.

Fostering healthier habits

I don't know how important exercise and preventative care are to McCain's health-care policy; they are of course vital to an individual's health, but they're things each individual must do for himself.

In this case, McCain says he will "work with business and insurance companies to promote the availability and use of these programs." I get the feeling this is mostly lip service -- bully pulpit stuff -- so it's really not relevant to the McCain health-care policy. (Besides, I'm sure that all three candidates would "work with business and insurance companies, blah blah.")

Interconnecting to the future

I like this point McCain makes, particularly because it doesn't really cost anything but can have a gigantic payoff. I'll just let McCain speak for himself:

We can make tremendous improvements in the cost of treating chronic disease by using modern information technology to collect information on the practice patterns, costs and effectiveness of physicians. By simply documenting and disseminating information on best practices we can eliminate those costly practices that don't yield corresponding value. By reforming payment systems to focus on payments for best practice and quality outcomes, we will accelerate this important change.

Finally, he favors lots of experimenting with different kinds of health-care delivery. Again, everybody promises this; but I trust McCain actually to do it more than I trust either Democratic candidate.

Gravitas (bottom)

Simply put, this is a very presidential health-care policy; it is a clear break from the past, even from President George W. Bush's policies; and it is distinctively conservative: The centerpiece -- switching from employer-based to consumer-based insurance plans to put more power into the hands of patients and their families, thus keeping cost down -- is anathema to the Democrats. From AP:

Democratic rival Hillary Rodham Clinton said under McCain's plan, millions of Americans would lose their health care coverage through their jobs.

"The McCain plan eliminates the policies that hold the employer-based health insurance system together, so while people might have a 'choice' of getting such coverage, employers would have no incentive to provide it. This means 158 million Americans with job-based coverage today could be at risk of losing the insurance they have come to depend upon," Clinton said in a statement.

Right... we'll lose the insurance we have come to depend upon; but we'll gain insurance over which we have much more control, and which is better geared to our needs.

But Obama is no better:

A spokesman for Democrat Barack Obama said McCain was "recycling the same failed policies that didn't work when George Bush first proposed them and won't work now. Instead of taking on the big health insurance companies and requiring them to cover Americans with preexisting conditions, Senator McCain wants to make it easier for them to reject your coverage, drop it, or jack up the price you pay."

In other words, both Mr. Change Agent and his cobelligerent argue against the McCain policy by saying we should reject substantive change towards a market-based system.

The Democratic position is Statism on parade. I don't know how he managed it, but McCain has somehow lured both his rivals into standing foursquare behind the current system... which everybody, even Democrats, know is inefficient, intrusive, impersonal, and ludicrously expensive.

Yet even while praising the status quo -- they continue to agitate for socialized medicine! I don't follow their point at all; a quick survey of socialized medicine in Great Britain, Canada, and Japan demonstrates that its most common result is to magnify all the bad parts of the current system, while adding no benefit (except for greater government control, which only seems like a benefit if you happen to be a member of Congress).

Socialized medicine is a twentith-century delusion for a twenty-first century problem; it simply doesn't fit. As I've seen many people put it, who wants to get his health care from the same kind, considerate, responsive, respectful people who staff the IRS?

Socialism: McCain denounces it; Democrats embrace it.

With every passing month and every new policy offering, McCain comes closer and closer to being a pure conservative on every issue except two: immigration and political speech. And even with those two, he is still more conservative than either Democrat who threatens to seize power in la Casablanca.

(Full text of McCain's speech is in the slither-on.)

Remarks By John McCain On Health Care On Day Two Of The "Call To Action Tour"

April 29, 2008

ARLINGTON, VA -- U.S. Senator John McCain will deliver the following remarks as prepared for delivery at the University of South Florida -- Lee Moffitt Cancer Center & Research Institute, in Tampa, FL, today at 10:00 a.m. EDT:

Thank you. I appreciate the hospitality of the University of South Florida, and this opportunity to meet with you at the Moffitt Cancer Center and Research Institute. Speaker Moffitt, Dr. Dalton, Dean Klasko, thank you for the invitation, and for your years of dedication that have made this campus a center of hope for cancer victims everywhere. It's good to see some other friends here, including your board member and my friend and former colleague Connie Mack. And my thanks especially to the physicians, administrators, and staff of this wonderful place.

Sometimes in our political debates, America's health-care system is criticized as if it were just one more thing to argue about. Those of you involved in running a research center like this, or managing the children's hospital that I visited yesterday in Miami, might grow a little discouraged at times listening to campaigns debate health care. But I know you never lose sight of the fact that you are each involved in one of the great vocations, doing some of the greatest work there is to be done in this world. Some of the patients you meet here are in the worst hours of their lives, filled with fear and heartache. And the confident presence of a doctor, the kind and skillful attentions of a nurse, or the knowledge that researchers like you are on the case, can be all they have to hold onto. That is a gift only you can give, and you deserve our country's gratitude.

I've had a tour here this morning, and though I can't say I absorbed every detail of the research I certainly understand that you are making dramatic progress in the fight against cancer. With skill, ingenuity, and perseverance, you are turning new technologies against one of the oldest enemies of humanity. In the lives of cancer patients, you are adding decades where once there were only years, and years where once there were only months. You are closing in on the enemy, in all its forms, and one day you and others like you are going to save uncounted lives with a cure for cancer. In all of this, you are showing the medical profession at its most heroic.

In any serious discussion of health care in our nation, this should always be our starting point -- because the goal, after all, is to make the best care available to everyone. We want a system of health care in which everyone can afford and acquire the treatment and preventative care they need, and the peace of mind that comes with knowing they are covered. Health care in America should be affordable by all, not just the wealthy. It should be available to all, and not limited by where you work or how much you make. It should be fair to all; providing help where the need is greatest, and protecting Americans from corporate abuses. And for all the strengths of our health-care system, we know that right now it falls short of this ideal.

Some 47 million individuals, nearly a quarter of them children, have no health insurance at all. Roughly half of these families will receive coverage again with a mother or father's next job, but that doesn't help the other half who will remain uninsured. And it only draws attention to the basic problem that at any given moment there are tens of millions of Americans who lost their health insurance because they lost or left a job.

Another group is known to statisticians as the chronically uninsured. A better description would be that they have been locked out of our health insurance system. Some were simply denied coverage, regardless of need. Some were never offered coverage by their employer, or couldn't afford it. Some make too little on the job to pay for coverage, but too much to qualify for Medicaid or other public programs. There are many different reasons for their situation. But what they all have in common is that if they become ill, or if their condition gets worse, they will be on their own -- something that no one wants to see in this country.

Underlying the many things that trouble our health care system are the fundamental problems of cost and access. Rising costs hurt those who have insurance by making it more expensive to keep. They hurt those who don't have insurance by making it even harder to obtain. Rising health care costs hurt employers and the self-employed alike. And in the end they threaten serious and lasting harm to the entire American economy.

These rising costs are by no means always accompanied by better quality in care or coverage. In many respects the system has remained less reliable, less efficient, more disorganized and prone to error even as it becomes more expensive. It has also become less transparent, in ways we would find unacceptable in any other industry. Most physicians groups and medical providers don't publish their prices, leaving Americans to guess about the cost of care, or else to find out later when they try to make sense of an endless series of "Explanation of Benefits" forms.

There are those who are convinced that the solution is to move closer to a nationalized health care system. They urge universal coverage, with all the tax increases, new mandates, and government regulation that come along with that idea. But in the end this will accomplish one thing only. We will replace the inefficiency, irrationality, and uncontrolled costs of the current system with the inefficiency, irrationality, and uncontrolled costs of a government monopoly. We'll have all the problems, and more, of private health care -- rigid rules, long waits and lack of choices, and risk degrading its great strengths and advantages including the innovation and life-saving technology that make American medicine the most advanced in the world.

The key to real reform is to restore control over our health-care system to the patients themselves. Right now, even those with access to health care often have no assurance that it is appropriate care. Too much of the system is built on getting paid just for providing services, regardless of whether those services are necessary or produce quality care and outcomes. American families should only pay for getting the right care: care that is intended to improve and safeguard their health.

When families are informed about medical choices, they are more capable of making their own decisions, less likely to choose the most expensive and often unnecessary options, and are more satisfied with their choices. We took an important step in this direction with the creation of Health Savings Accounts, tax-preferred accounts that are used to pay insurance premiums and other health costs. These accounts put the family in charge of what they pay for. And, as president, I would seek to encourage and expand the benefits of these accounts to more American families.

Americans need new choices beyond those offered in employment-based coverage. Americans want a system built so that wherever you go and wherever you work, your health plan is goes with you. And there is a very straightforward way to achieve this.

Under current law, the federal government gives a tax benefit when employers provide health-insurance coverage to American workers and their families. This benefit doesn't cover the total cost of the health plan, and in reality each worker and family absorbs the rest of the cost in lower wages and diminished benefits. But it provides essential support for insurance coverage. Many workers are perfectly content with this arrangement, and under my reform plan they would be able to keep that coverage. Their employer-provided health plans would be largely untouched and unchanged.

But for every American who wanted it, another option would be available: Every year, they would receive a tax credit directly, with the same cash value of the credits for employees in big companies, in a small business, or self-employed. You simply choose the insurance provider that suits you best. By mail or online, you would then inform the government of your selection. And the money to help pay for your health care would be sent straight to that insurance provider. The health plan you chose would be as good as any that an employer could choose for you. It would be yours and your family's health-care plan, and yours to keep.

The value of that credit -- 2,500 dollars for individuals, 5,000 dollars for families -- would also be enhanced by the greater competition this reform would help create among insurance companies. Millions of Americans would be making their own health-care choices again. Insurance companies could no longer take your business for granted, offering narrow plans with escalating costs. It would help change the whole dynamic of the current system, putting individuals and families back in charge, and forcing companies to respond with better service at lower cost.

It would help extend the advantages of staying with doctors and providers of your choice. When Americans speak of "our doctor," it will mean something again, because they won't have to change from one doctor or one network to the next every time they change employers. They'll have a medical "home" again, dealing with doctors who know and care about them.

These reforms will take time, and critics argue that when my proposed tax credit becomes available it would encourage people to purchase health insurance on the current individual market, while significant weaknesses in the market remain. They worry that Americans with pre-existing conditions could still be denied insurance. Congress took the important step of providing some protection against the exclusion of pre-existing conditions in the Health Insurance Portability and Accountability Act in 1996. I supported that legislation, and nothing in my reforms will change the fact that if you remain employed and insured you will build protection against the cost of treating any pre-existing condition.

Even so, those without prior group coverage and those with pre-existing conditions do have the most difficulty on the individual market, and we need to make sure they get the high-quality coverage they need. I will work tirelessly to address the problem. But I won't create another entitlement program that Washington will let get out of control. Nor will I saddle states with another unfunded mandate. The states have been very active in experimenting with ways to cover the "uninsurables." The State of North Carolina, for example, has an agreement with Blue Cross to act as insurer of "last resort." Over thirty states have some form of "high-risk" pool, and over twenty states have plans that limit premiums charged to people suffering an illness and who have been denied insurance.

As President, I will meet with the governors to solicit their ideas about a best practice model that states can follow -- a Guaranteed Access Plan or GAP that would reflect the best experience of the states. I will work with Congress, the governors, and industry to make sure that it is funded adequately and has the right incentives to reduce costs such as disease management, individual case management, and health and wellness programs. These programs reach out to people who are at risk for different diseases and chronic conditions and provide them with nurse care managers to make sure they receive the proper care and avoid unnecessary treatments and emergency room visits. The details of a Guaranteed Access Plan will be worked out with the collaboration and consent of the states. But, conceptually, federal assistance could be provided to a nonprofit GAP that operated under the direction of a board that i ncluded all stakeholders groups -- legislators, insurers, business and medical community representatives, and, most importantly, patients. The board would contract with insurers to cover patients who have been denied insurance and could join with other state plans to enlarge pools and lower overhead costs. There would be reasonable limits on premiums, and assistance would be available for Americans below a certain income level.

This cooperation among states in the purchase of insurance would also be a crucial step in ridding the market of both needless and costly regulations, and the dominance in the market of only a few insurance companies. Right now, there is a different health insurance market for every state. Each one has its own rules and restrictions, and often guarantees inadequate competition among insurance companies. Often these circumstances prevent the best companies, with the best plans and lowest prices, from making their product available to any American who wants it. We need to break down these barriers to competition, innovation and excellence, with the goal of establishing a national market to make the best practices and lowest prices available to every person in every state.

Another source of needless cost and trouble in the health care system comes from the trial bar. Every patient in America must have access to legal remedies in cases of bad medical practice. But this vital principle of law and medicine is not an invitation to endless, frivolous lawsuits from trial lawyers who exploit both patients and physicians alike. We must pass medical liability reform, and those reforms should eliminate lawsuits directed at doctors who follow clinical guidelines and adhere to patient safety protocols. If Senator Obama and Senator Clinton are sincere in their conviction that health care coverage and quality is their first priority, then they will put the needs of patients before the demands of trial lawyers. They can't have it both ways.

We also know from experience that coordinated care -- providers collaborating to produce the best health outcome -- offers better quality and can cost less. We should pay a single bill for high-quality disease care, not an endless series of bills for pre-surgical tests and visits, hospitalization and surgery, and follow-up tests, drugs and office visits. Paying for coordinated care means that every single provider is now united on being responsive to the needs of a single person: the patient. Health information technology will flourish because the market will demand it.

In the same way, clinics, hospitals, doctors, medical technology producers, drug companies and every other provider of health care must be accountable to their patients and their transactions transparent. Americans should have access to information about the performance and safety records of doctors and other health care providers and the quality measures they use. Families, insurance companies, the government -- whoever is paying the bill -- must understand exactly what their care costs and the outcome they received.

Families also place a high value on quickly getting simple care, and have shown a willingness to pay cash to get it. If walk-in clinics in retail outlets are the most convenient, cost-effective way for families to safely meet simple needs, then no policies of government should stand in their way. And if the cheapest way to get high quality care is to use advances in Web technology to allow a doctor to practice across state lines, then let them.

As you know better than I do, the best treatment is early treatment. The best care is preventative care. And by far the best prescription for good health is to steer clear of high-risk behaviors. The most obvious case of all is smoking cigarettes, which still accounts for so much avoidable disease. People make their own choices in this country, but we in government have responsibilities and choices of our own. Most smokers would love to quit but find it hard to do so. We can improve lives and reduce chronic disease through smoking cessation programs. I will work with business and insurance companies to promote the availability and use of these programs.

Smoking is just one cause of chronic diseases that could be avoided or better managed, and the national resources that could be saved by a greater emphasis on preventative care. Chronic conditions -- such as cancer, heart disease, high blood pressure, diabetes and asthma -- account for three-quarters of the nation's annual health-care bill. In so many cases this suffering could be averted by early testing and screening, as in the case of colon and breast cancers. Diabetes and heart disease rates are also increasing today with rise of obesity in the United States, even among children and teenagers. We need to create a "next generation" of chronic disease prevention, early intervention, new treatment models and public health infrastructure. We need to use technology to share information on "best practices" in health care so every physician is up-to-date. We need to adopt new treatment programs and fi nancial incentives to adopt "health habits" for those with the most common conditions such as diabetes and obesity that will improve their quality of life and reduce the costs of their treatment.

Watch your diet, walk thirty or so minutes a day, and take a few other simple precautions, and you won't have to worry about these afflictions. But many of us never quite get around to it, and the wake-up call doesn't come until the ambulance arrives or we're facing a tough diagnosis.

We can make tremendous improvements in the cost of treating chronic disease by using modern information technology to collect information on the practice patterns, costs and effectiveness of physicians. By simply documenting and disseminating information on best practices we can eliminate those costly practices that don't yield corresponding value. By reforming payment systems to focus on payments for best practice and quality outcomes, we will accelerate this important change.

Government programs such as Medicare and Medicaid should lead the way in health care reforms that improve quality and lower costs. Medicare reimbursement now rewards institutions and clinicians who provide more and more complex services. We need to change the way providers are paid to focus their attention more on chronic disease and managing their treatment. This is the most important care for an aging population.

There have been a variety of state-based experiments such as Cash and Counseling or The Program of All-Inclusive Care for the Elderly (PACE) that are different from the inflexible approaches for delivering care to people in the home setting. Seniors are given a monthly allowance that they can use to hire workers and purchase care-related services and goods. They can get help managing their care by designating representatives, such as relatives or friends, to help make decisions. It also offers counseling and bookkeeping services to assist consumers in handling their programmatic responsibilities.

In these approaches, participants were much more likely to have their needs met and be satisfied with their care. Moreover, any concerns about consumers' safety appear misplaced. For every age group in every state, participants were no more likely to suffer care-related health problems.

Government can provide leadership to solve problems, of course. So often it comes down to personal responsibility -- the duty of every adult in America to look after themselves and to safeguard the gift of life. But wise government policy can make preventative care the standard. It can put the best practices of preventative care in action all across our health-care system. Over time that one standard alone, consistently applied in every doctor's office, hospital, and insurance company in America, will save more lives than we could ever count. And every year, it will save many billions of dollars in the health-care economy, making medical care better and medical coverage more affordable for every citizen in this country.

Good health is incentive enough to live well and avoid risks, as we're all reminded now and then when good health is lost. But if anyone ever requires further motivation, they need only visit a place like the Moffitt Center, where all the brilliance and resourcefulness of humanity are focused on the task of saving lives and relieving suffering. You're an inspiration, and not only to your patients. You're a reminder of all that's good in American health care, and we need that reminder sometimes in Washington. I thank you for your kind attention this morning, I thank you for the heroic work you have done here, and I wish you success in the even greater work that lies ahead.

Hatched by Dafydd on this day, April 29, 2008, at the time of 8:40 PM | Comments (5) | TrackBack

March 13, 2008

Democrats Reject "Slashing" Medicare Down to a Scant 5% Increase

Here's a fun party game: Google the following phrase: budget 2009 slash

I got 135,000 hits... how about you?

Now, there are some false hits there -- "Lawmakers vote to slash Florida budget," for example. But if you just keep clicking Next, you'll see page after page of links with titles like "Bush Budget Slashes Women's Health Funding | Reproductive Health" and "Bush's 2009 Budget Calls For Slashing Public TV Funding"... but especially ones like "Bush budget would slash Medicaid, Medicare budgets."

If they don't say "slashes," nearly all these pieces generally include some equivalent; here's a typical example, from the Associated Press today, that talks about "huge cuts" rather than "slashes":

A Republican alternative that largely mirrored a plan by McCain to permanently extend Bush's tax cuts and eliminate the alternative minimum tax was expected to fail badly, with party moderates distancing themselves from the GOP plan's huge cuts in popular programs like Medicare, housing, community development, and the Medicaid health care program for the poor and disabled. Such cuts were needed to make room for big tax cuts and still project a balanced budget.

So why the obsession with how President Bush's budget or John McCain's budget "slashes" (or inflicts "huge cuts" -- get a bandage, ow!) in "popular programs like" [fill in a series of "entitlement" programs that Americans now rely upon, after decades of "liberal fascism" under both Democratic and Republican administrations]? Why is any cut -- rather, any reduction in the rate of increase -- denounced as draconian, ruinous, and thuggish? Read on to find out...

Pay no attention to that budgetary black hole behind the curtain!

Quite simply, the inflammatory rhetoric is designed to take our minds off of the real story:

• Democrats fully intend to vastly raise taxes -- by stealth. Allowing the Bush tax cuts to expire at the end of 2010 will jack up income taxes by $683 billion over five years, or $137 billion per year. Yet even so, Democrats propose even more spending increases than the tax increases, so the deficit will explode as well, probably triggering a real, live recession (and lowering tax receipts even further).
• Democrats have no intention whatsoever of doing anything to restrain the growth of putative "entitlement" programs -- Medicare, Medicaid, and Social Security. They will allow the programs to rise at more than double the inflation rate until the cows come home to roost.
• Therefore, in fewer years than most folks realize, either Congress must enact tax increases on the level of trillions of dollars... or else the "entitlement" programs will grow to the point where they literally gobble up the entire rest of the budget. All revenues will go for entitlements, leaving nothing left over for anything else -- no more national defense, education, NASA, scientific research, or any other discretionary spending.

The Bush budget (unveiled last month) will at least "slash" the Medicare growth rate from 7.2% per year to 5% -- which is still more than inflation: Inflation has averaged 2.69% per year during Bush's presidency, but will probably rise to around 3.5% this year. This "huge cut" -- which still leaves the programs advancing more than retreating, even in constant dollars -- would trim about $10 trillion, about a third, off the unfunded liability of the program, currently estimated at $34 trillion.

But that still leaves the unfunded liabilities of Social Security, Medicaid, and other "entitlement" programs. Estimates vary, but a figure I've often seen is that all of them add up to about $75 trillion dollars... a staggering amount that equals the entire gross domestic product of the United States for 5.7 years. In budgetary terms, it represents the entire annual federal budget for a quarter century.

Unfunded liability stems from the fact that the cost of the programs rises so much faster than the inflation rate; this will only get worse as baby boomers begin to retire in mass numbers in 2011, just three years from now, and as retirees live longer and collect benefits for many more years.

John McCain has not yet proposed a serious solution to the problem, but there are quite a few very good ideas out there. I expect he will make entitlement reform the centerpiece of the domestic part of his campaign... because he has no choice. The retirement time-bomb is ticking, ticking, ticking; and neither Barack Obama nor Hillary Clinton has made -- or will make -- any serious proposal.

Social Security

There are two serious problems; eventually, Congress must fix both in order to make the program sustainable into the future:

• The return on investment (ROI) for an individual's payroll-tax contribution to Social Security varies due to a number of factors, including lifespan, how much he contributed while working, when he retired, and so forth. But the Heritage Foundation calculates that the ROI for a person born in 2006 is no more than 1%... and it can even be negative, meaning you literally pay more than you ever receive. (This is especially true for men, who tend to have shorter life expectecies than women.)

  In other words, the Social Security Trust Fund is a terrible, miserable investment. Your retirement money would do better in virtually any private investment imaginable.

  The ROI may go up if lifespan increases significantly, as I expect it will; but that means the cost of the program will again become unsustainable, since it does not generate any wealth, as a real investment would, thus cannot pay for itself over the long run.

• Even the pittance we earn on our "investment" (not much better than stuffing the money into a mattress) has been systematically raided by past Congresses, Democratic and Republican, to finance current expenses.

  There is no trust fund. There is no "lockbox." There is no money; there is only a wad of hand-scribbled IOUs.

  Social Security is a pay-as-you-go program. We paid as we went... but we also spent that money on a vast array of other "popular programs" besides Social Security, and it's all gone. C'est la vie.

Both problems can be solved by a single change... but it's going to hurt. Social Security must be fully privatized. Not the namby-pamby partial privatization proposed by President Bush (and shot down in a green-eyeshade second by the Republican Congress), but the whole kit and kaboodle. We do it like this:

Each payroll taxpayer gets an individual Social Security Retirement Account; the SSRA can be maintained by any brokerage firm, which sets up any number of SEC-approved investment funds... divided into three tiers of investment: 1 - Safe, 2 - Moderately Aggressive, and 3 - Aggressive.

All Social-Security "contributions" by a taxpayer are poured into his own personal SSRA. The taxpayer picks the tiers and the funds to invest in; when he retires, that's his own money -- to spend, to reinvest, or to pass along to his children.

And there you have it:

• The ROI is the same as for a 401K, so the SSRAs will be self-sustaining;
• And since they're in the name of the taxpayer, the government cannot raid them.

That's about the only way to permanently solve the problem -- as numerous countries have already discovered, including Argentina, Australia, El Salvadore, Great Britain, Hong Kong, Hungary, Mexico, Peru, Poland, Sweden, and many others.

The feds will have to skim off the top to partially subsidize the program for those folks who, for whatever reason, have SSRAs deemed too small to live... and also to pay the transition cost of all the past contributions by taxpayers into the current system, spread over some period of time to avoid bankrupting the country. Alas, the transition costs will be very, very high; payroll taxes will have to rise, though hopefully not damagingly so.

Such a fix would be market-positive, since it would increase America's "net worth." It's like paying to put a new roof on your house: The money you pay now will increase the value of the house for later resale by more than you put into it.

Will John McCain have the guts to propose it? I hope so; but I know for a fact that neither Hillary nor Obama will.

Medicare/Medicaid

Medicare is basically health insurance for senior citizens of any income level. Medicaid is a group of needs-based state-run (under federal guidelines) medical welfare programs for the poor, which is currently gnawing away at state economies, gobbling up 20% to 30% of state budgets.

With these entitlement programs, the real problem is the rising cost of health care itself. But the cost is being driven to a large extent by factors external to medical care:

• Medical malpractice lawsuits, which force doctors and hospitals to practice "defensive medicine," ordering unnecessary tests for the purpose of covering themselves in the event of a lawsuit.

• The vile practice in other countries (especially Canada) of legally requiring prescription drugs to be sold to their citizens below manufacturer's cost... forcing Big Drug to jack up the price here to avoid going out of business.

  (Were we to follow suit -- an idea that McCain has flirted with in the past, alas -- we would likely lose many pharmaceutical manufacturers... and all the lifesaving and life-enhancing drugs they would have produced.)

• Increasing lifespan: Just as with Social Security, when people live longer -- as they have been, due to medical advances, the decreased rate of smoking, and so forth -- the government must pay more money per person. Thus, if the taxes paid by future recipients don't rise as fast as the increased payments due to living longer, any system will eventually become insolvent.

The solution has several components. First, we need major tort reform, especially in the area of medical malpractice. The reforms must include loser pays; barring "expert witnesses" hired by the plaintiffs' attorneys (let them come from a pool hired by the court, with no financial incentive to lie); and ending the practice of expanding liability further and further outward until one finally reaches a parent company with enough money to satisfy the trial lawyer's greed.

Second, patients are just going to have to be responsible for more of their own medical costs; this will force them to budget their medical dollars more wisely. A very, very good first step is to introduce medical savings accounts (MSAs) into the Medicare system in a big way, particularly for affluent seniors. Getting fiscal responsibility into Medicaid is harder, because it is by definition a program for the poor; but we should put some thought into it.

Third, rather than pay doctors and hospitals directly, perhaps Medicare and Medicaid should pay the patient -- then let him pay the bills. If doctors charge more than the government pays, they will have to get the rest from the patient himself.

This gives patients a huge incentive to shop around and think twice about going to the doctor for minor problems; and it likewise gives doctors a huge incentive to reduce costs by bringing the free market into the equation. At the moment, they simply get paid according to a government "schedule"... which encourages medical professionals to spend money on lobbyists to increase the scheduled payment rates, rather than on finding ways to contain their own costs and remain competitive, as every other business must do.

Fiscal responsibility

If Republicans want to regain control of Congress someday -- and if John McCain wants to get elected president -- then both must offer bold, permanent solutions to the entitlement crisis. There is no more time for tepid "can-kicking."

Even if the Democrats shoot down the GOP proposals, that will give us a vital and future-oriented issue to run on, buttressing our claim to be the party of great new ideas. And this issue will be one that clearly differentiates between the European-style socialism of the Left and the American tradition of personal responsibility on the Right.

Let's hope that if the GOP can ride this issue back into power (this election or the next), that this time, the reality of Republican governance will actually live up to the stirring rhetoric of personal responsibility.

Hatched by Dafydd on this day, March 13, 2008, at the time of 8:14 PM | Comments (3) | TrackBack

October 15, 2007

Psst! Dems Hint They Haven't the Votes to Override SCHIP Veto

The Squeaker squirms

Speaker of the House Nancy Pelosi (D-Haight-Ashbury, 95%) has as much as admitted yet another Democratic failure: They don't have the votes to override President Bush's veto of the bloated and metastisized Democratic version of renewal of the State Children's Health Insurance Program, or SCHIP.

But let's not start backways-round; before we jump into the current Democratic travails, let us dress the stage...

We commence with the first oddity: In the current bill, the massive Democratic expansion of SCHIP into a middle-class entitlement program would be funded by an increase in the federal tax on cigarettes and cigars -- which, funnily enough, would be a very regressive tax that primarily hits the poor. Thus, under the new Democratic plan, the poor are taxed to subsidize the middle class.

Worse, if smokers respond to the tax hike by cutting back on smoking, the feds lose the revenue stream that is supposed to pay for the expansion; this would turn the federal government into a cheerleader for increased smoking.

This element fits a growing Democratic-Party pattern: The use of taxes to force social change. Now, this is not the exclusive property of Democrats; consider the home mortgage interest tax deduction, the purpose of which is to get more people to buy homes instead of rent. Its origin in shrouded in mystery, but no Congress or president since, Democrat or Republican, has actually pushed for its abolition (several have talked the talk).

However, rather than use tax incentives to encourage good behavior, Democrats have made a fetish of using punitive taxation to punish behavior they don't like, such as smoking. But not just cigarettes:

• Many Democrats (Mort Kondracke, for one) have argued in favor of huge taxes on gasoline to "force" people to drive less; similar ideas include a "gas-guzzler" tax or specifically an SUV tax.
• The proposed "carbon tax" is suppose to punish people for using energy.
• Democrats have also proposed taxes on fatty foods and transfats;
• Guns and ammunition;
• Luxuries (including the infamous yacht tax that led to a collapse of the yacht-building industry, resulting in mass layoffs of middle-income workers -- and the swift repeal of the yacht tax);
• A proposed tax on houses larger than 3,000 square feet;
• And taxes on alcohol.

In each case, Democrats have proposed the tax primarily for the purpose of controlling behavior, not raising revenue. (And except for the proposed taxes on fat or transfat, these nanny-state taxes are aimed squarely at Republicans.)

Punitive, behavior-modifying taxes distort the market, thereby damaging the economy. But that's not the worst market distortion caused by the Democrats' proposed expansion of SCHIP.

The program was originally intended to cover the gap between children below the poverty line, who can get health-care through Medicaid, and children whose families earn up to 200% of poverty (twice $21,000 per year, or $42,000) but still have a tough time paying for health insurance. But when it came up for renewal, Democrats forced through a massive expansion of the program to cover children whose families earn far above the previous ceiling -- in some cases, up to four times the poverty line, or $84,000 per year -- as well as covering these "children" well into their twenties. Thus, they took a program aimed at helping the working poor and transmogrified it into a new middle class entitlement program.

[Corrected Medicare to Medicaid above; thanks, commenter Cdquarles!]

Worse, analyses by many economists showed that with such an expansion, the most likely outcome would be that many upper-middle income families who already have private health insurance would simply drop it and take the much cheaper, smoker-subsidized SCHIP insurance instead; that is, the net effect would be to shift millions of families away from private health-care insurance and onto government-run health care -- basically, Medicaid for all.

Republicans argue that this was precisely the reason the Democrats want to expand SCHIP in the first place: To shift health insurance from the private to the public sector, thus vastly expanding the reach of government... and creating thousands more government workers, who will join the Service Employees International Union and raise more millions for Democrats.

SCHIP was originally crafted in 1997 by Sen. Ted Kennedy (D-MA, 100%) and then First Lady, now Sen. Hillary Clinton (D-Carpetbag, 95%); but the Politico recently reported about a White House memo from four years earlier, 1993, in the swirling aftermath of the failure of Hillary's first attempt to nationalize health care.

The memo was from Hillary's staff, arguing that the best way to push socialized medicine onto the American people was first to expand government health-care programs for poor children into the middle class, then use that as the camel's nose, pulling the rest of the beast into the tent:

In a section of the memo titled “Kids First,” Clinton’s staff laid out backup plans in the event the universal coverage idea failed.

And one of the key options was creating a state-run health plan for children who didn’t qualify for Medicaid but were uninsured....

“Under this approach, health care reform is phased in by population, beginning with children,” the memo says. “Kids First is really a precursor to the new system. It is intended to be freestanding and administratively simple, with states given broad flexibility in its design so that it can be easily folded into existing/future program structures.”

It's hard to read this memo, note the SCHIP program enacted three years later, and then study the expansion pushed by Democrats today, and not see a pattern unfolding, just as in the memo promises.

President Bush repeatedly warned Democrats during the current debate -- from which negotiations the administration was shut out -- that such an expansion and change from the original intent of SCHIP (covering poor kids) would force him to veto the bill. He kept his promise. This gave the Democrats what they appeared to want... a big confrontation with President Bush over health care.

The idea was that Republicans, frightened and gunshy of being attacked for wanting children to die through lack of health care, would vote to override, and Bush would be crushed. Certainly all the inside-the-beltway pundits, including those on the Right (such as the Republican side of the "Beltway Boys," Fred "the Grump" Barnes, and syndicated columnist Charles "the Sauerkraut" Krauthammer) opined that Republicans would be mauled so badly they would have to relent. The Democrats decided to delay the override vote by two weeks, to give the natural paranoia of Republican senators and representatives time to flood their nerve endings, reducing them to lime Jell-O.

But now it appears the opposite has happened: The two-week breathing space gave the GOP time to calm themselves, marshall their arguments, and find a spine... and the Democrats have as much as admitted they will lose the fight. From the AP article linked above:

House Democratic leaders said Sunday they were working to gather votes to override a veto on a popular children's health program, but pledged to find a way to cover millions without insurance should their effort fail....

In talk show interviews, Speaker Nancy Pelosi and Majority Leader Steny Hoyer did not dispute claims by Republican leaders that the GOP will have enough votes to sustain Bush's veto when the House holds its override vote on Thursday.

But the confrontation gets even more churlish -- and even more surreal. Consider this:

At the same time, the White House sought to chide the Democratic-controlled Congress as the obstructionists in reauthorizing the State Children's Health Insurance Program. It said Democrats were the ones who had shown unwillingness to compromise.

Deputy press secretary Tony Fratto quoted President Bush as saying he is "willing to work with members of both parties from both houses" on the issue....

Pelosi and Hoyer promised to pass another bipartisan bill if needed....

"We'll take one step at a time. And, again, we'll maintain our bipartisanship and our fiscal soundness," she said. "And we'll talk to the president at the right time, when he makes an overture to do so, but not an overture that says, 'This is the only thing I'm going to sign.'"

Fratto said it was untrue that Bush had never sought compromise in the vetoed legislation, contending that Democrats had shut out administration officials in the original negotiations. House Democrats have countered that they had already compromised enough because they wanted $50 billion [extra] for the program but dropped it down to $35 billion to appease Senate Republicans.

In other words, Democrats admit that they did not trouble to consult with the president while crafting the bill; they decided instead to treat him like a beggar at the window, presenting him with a take-it-or-leave-it fait accompli. Presumably, they thought this would be more likely to force a confrontation, which (at the time) they were confident of winning.

But now that they have failed, they still won't admit there was anything wrong with the first approach. Rather, they're trying to make lemonade out of a sow's ear by passing a completely new bill... on which they will presumably make the very compromises they refused to make on the first bill!

The tenure of Nancy Pelosi in the House and Senate Majority Leader Harry "Pinky" Reid (D-Caesar's Palace, 90%) has been disastrous for the Democrats. Rather than become a strong and effective voice opposing the White House and serving as a springboard for Democrat-written bipartisan legislation, the Not Ready for Prime Time Congress has become a laughingstock:

• Failing to pass critical legislation (such as any of the appropriations bills required to run the government);
• Frittering their time away with endless partisan "investigations" of the president's policies, attempting to criminalize political differences;
• And lunging for more Legislative power at the expense of the Executive -- trying either to end or at least micromanage the Iraq and Afghanistan wars, creating huge new middle-class entitlement programs, and trying to conduct their own shadow foreign policy in opposition to the president's.

In 1994, when the Republicans led by Newt Gingrich took over Congress following Hillary's failed socialized-medicine coup d'état, they immediately set about passing actual bipartisan legislation... and they worked closely with President Bill Clinton on such critically needed reforms as tax cuts, protecting traditional marriage, reducing the welfare rolls, health-insurance portability from job to job, lobbying disclosure, and the first major telecommunications act in more than six decades. Each of these acts was passed by a Republican Congress with Democratic support and signed by a Democratic president.

But when the Democrats took over Congress last January, they appear to believe that meant the president and congressional Republicans were now irrelevant. Like the Jacobites of the French Revolution, the Democrats' battle cry seems to be "We are the masters now!"

And not unexpectedly, their results have been nonexistent and their impact nil. Democrats may still coast to a few more pickups in November 2008, though it's far to early to rule out Republicans recapturing one or both houses. But it's clear that Democrats are unable to do the heavy lifting and make the compromises necessary to turn their perfect-storm victory last year into a lasting majority: Their tenure will be brief and unremembered, like the two-year Senate interregnum caused by Jumpin' Jim Jeffords' defection.

The only legacy that will be left from the Pelosi-Reid Congress -- will be the Boehner-McConnell Congress.

Hatched by Dafydd on this day, October 15, 2007, at the time of 12:12 AM | Comments (22) | TrackBack

September 5, 2006

Schwarzenegger Will Veto California HillaryCare

According to famed Bee-blogger Daniel Weintraub, California Gov. Arnold Schwarzenegger will veto the ghastly socialized-medicine bill enacted by the sinister California legislature.

Thank goodness. There is no way the legislature can override the veto, and I doubt they'll even try -- as that would give the Republicans running for the Assembly and state Senate another good campaign issue.

As the dumb-looking guy in a fedora says (and I don't mean Roger L. Simon!), "developing...."

Hatched by Dafydd on this day, September 5, 2006, at the time of 3:29 PM | Comments (1) | TrackBack

August 31, 2006

How 2 Fix Soaring Health-Insurance Costs...

...in 3 EZ lessons!

Having trashed the liberal-left proposal to "fix" the California health-care system by implementing Canadian, Swedish, Japanese-style socialized medicine, I would be remiss not to offer a counter plan; in fact, it would be Democratic.

("We have none but evidence for the prosecution and yet we have rendered the verdict. To my mind, this is irregular. It is un-English. It is un-American; it is French." -- Mark Twain, "Concerning the Jews.")

So here are my three modest proposals...

1 Encourage high-deductable "patient pays" plans via Medical Savings Accounts (MSAs).

One of the biggest factors raising insurance cost is the overuse of doctors, treatments, hospitals, and especially testing. Necessary medical care is -- well, necessary; annual physicals (or even biannual for older patients) are not only necessary, they actually reduce costs by catching problems early, when treatment is cheaper and more effective.

But running to the doctor for every small cut or sniffle is a luxury; and if you want that, you should pay for it yourself... not pass the cost along to everybody else on your insurance plan. The easiest way to bring this about and make patients think carefully about their treatment is to encourage widespread use of MSAs: tax-deductable savings accounts that can only be used for medical expenses. This way, patients can have a high deductable -- $5,000, say -- and use their $5,000 MSA to pay for increased deductables and for larger co-pays on minor medical expenses (office visits, gynecological exams, prescription drugs).

Since the MSA comprises money that they, personally, paid in, they will likely be more cautious about spending it... since they're the ones who will have to fill it up again.

Counter-intuitively, a huge chunk of insurance cost comes from small payments that would be well below a large deductable. With a high deductable, premiums drop enormously.

I went to the Blue Cross/Blue Shield website and worked through some quotes. Here are three plans, each a PPO (not an HMO). The coverage is more or less the same with one exception:

• Each plan has a deductable that must be met before major expenses are covered; the deductables are listed on the table below.
• Each plan requires a co-pay of about 30% for major expenses, up to an annual maximum.
• Each plan has a total annual out-of-pocket maximum you must pay before the plan takes over competely; this maximum is the annual deductable plus the co-pay maximum (see below) and is shown in the table below.
• The only major difference is that, with the non-MSA plans, the co-pay for minor expenses (office visits, pap smears, prescriptions, and such) is a fixed amount -- $35 for an office visit or gyno; $10 for generic drugs, $35 for brand-name -- while for the MSA plan, the minor expenses are also subject to the 30% co-pay.

I selected a family of two with no kids for all three plans. The point is not exactly how much the monthly premium is, but rather how the use of MSAs affect monthly premiums:

How MSAs affect premiums

Health-Care Plan	Annual Deductable	Total Annual Out-of-Pocket	Monthly Premium
Shield Spectrum PPO Plan 750	$750 per individual $1,500 per family	$4,750 Individual $9,500 Family	$992.00
Blue Shield Life PPO Plan 1500	$1,500 per individual $3,000 per family	$6,000 Individual $12,000 Family	$914.00
Shield Spectrum PPO Savings Plan 4800 (MSA eligible plan)	$4,800 per family	$3,200 Individual $5,800 Family	$363.00

Wow, not only is the premium much, much lower with the MSA plan -- but the total annual maximum out-of-pocket expense is much lower, too! All this savings, and the only major difference is that the insurance company subsidizes office visits and prescription drugs much more substantively in the ordinary PPO than the high-deductable PPO coupled with a Medical Savings Account.

Isn't that amazing? In other words, a huge chunk of the money paid out by insurance companies are for those diddling, little office visits and prescription drugs.

The difference in monthly premium between the MSA plan (where you pay for the minor stuff yourself) and even the mid-range deductable plan is $551/month. In a single year, you save $6,612... which is more than your total yearly max out-of-pocket costs with the MSA plan. In other words, you could fill up your MSA with the difference during the first 10 months of the year. Since you're not likely to deplete the entire account every year, you will end up with a very significant monthly savings.

And the most important point is that, since each patient pays for his own medical needs (up to the deductable and co-pay maxima), he has a financial incentive to keep the cost down by avoiding unnecessary visits to the doctor, unnecessary testing, and unnecessary treatment.

So how does the government help more people migrate to MSA plans? By getting out of the way! Currently, businesses can deduct from their taxable income what they pay in insurance premiums for their employees; but the employees cannot deduct what they pay. We need to allow people to deduct from their taxable income all payments into an MSA (up to the max for the plan), even if they take the standard deduction.

No new bureaucracy is required; just a couple of lines on the IRS 1040 form and on the equivalent state tax forms.

2 Reform malpractice tort law to lower physician costs and prevent unnecessary "defensive testing."

There are several elements of malpractice law -- and general tort law -- that are in dire need of reform or elimination, starting with...

1. Completely eliminate the abomination of the class-action lawsuit: such settlements invariably do nothing but make millionaires of the attorneys, while each member of the class gets $48.65 and a couple free sample boxes of Viagra. There is no good reason that individual plaintiffs cannot combine their lawsuits into a single suit... but it should include only named plaintiffs, and it should not preclude other plaintiffs suing later.

2. Create a list of neutral, court-appointed, medical expert witnesses: these doctors and medical researchers would be established experts in various fields of medicine, and they will be paid exactly the same regardless of whether their testimony helps the plaintiff or the defendant. When an expert witness makes his living testifying exclusively for plaintiffs' attorneys -- or for hospitals and doctors -- his testimony is irretrievably tainted by financial interest. But as a professional witness, he will be much better able to sway the jury than if he's just a doctor hired by an individual doctor to testify on his behalf. Thus, juries are inordinantly biased by people whose only incentive is to say whatever will win the case for one side or the other.

   Since doctor defendants typically have less money available to fight a lawsuit than the legal firms bringing the lawsuit -- the plaintiffs' lawyers expect to make millions, while the doctor's attorney only gets an hourly rate -- this generally means ruinous judgments against doctors and hospitals on dubious medical theories. Which leads to...

3. Expunge "junk science" from courtroom testimony: "expert witnesses" of any kind will only be allowed to testify to theories that are the current consensus opinion of the relevant scientific or medical field. No more "power lines cause cancer" and "silicon breast implants cause connective-tissue disease" testimony, unfounded on any scientific study -- yet very persuasive from the mouths of professional witnesses.
4. A hard cap on non-compensatory damages: pain and suffering, punitive, and so forth. A good cap would be a multiple of the proven compensatory damages; the exact multiple is beyond my competence.
5. Loser pays: if you bring a malpractice lawsuit and you ultimately lose, or even if you prevail but the award is no more than the final settlement offer of the defendant, then you (the plaintiff and his attorneys jointly and severally) are responsible for all of defendant's and his attorneys' costs associated with the case, including his time, all of his witnesses' time and compensation, and any loss of business associated with the case -- but only that portion that wouldn't have occurred if the settlement offer had been accepted.

Note that all of these steps should be part of a general tort-reform package that would be applied to all civil suits, not just to medical malpractice; but the latter is the subject of this post.

These changes would have two salutory effects on medical costs:

• Since good physicians will be in less danger of runaway juries socking them with cripping malpractice claims arising from perfectly acceptable care, their insurance premiums will be much less. Since annual premiums for surgeons currently (2001 figures) run from a low of $25,000 in California to a high of $111,000 (!) in Florida, and for OB-GYNs from $48,000 to $173,000 (!!), it's clear that high med-mal insurance costs are driving medical-care costs upward -- and also driving doctors out of business.

  Reduce the risk, and the med-mal premiums drop; reduce the doctor's cost, and the cost of medical care drops. (Also, if you reduce the number of doctors who leave the profession, then you have more doctors; increased supply of any commodity means lower cost.)

• Doctors who are terrified about being sued for medical malpractice typically prescribe scores of unnecessary medical tests, for no purpose other than to mount as a legal defense in case a patient dies or is injured (despite proper care) and he or his heirs run to a lawyer. Each of these tests costs a bundle... and all that cost is of course passed along to the patient.

  Reduce the fear, and unnecessary testing drops; reduct unnecessary expenses, and medical cost drops.

And again, I call for no new "rights" suddenly discovered; I call for changes to existing law to make malpractice suits more balanced, rather than being so biased towards plaintiffs that in some localities, doctors -- especially OB-GYNs, have completely disappeared.

3 Eliminate government health-care "mandates."

Nearly every state in the United States, plus the federal government itself, mandates that health-care plan include coverage for a large and increasing number of conditions, including mental and emotional problems. Each individual mandate may only be appropriate for one narrow class of people; but the aggregate greatly increases the cost of coverage to the insurance company... and since a company that goes out of business doesn't cover anybody, that means the insurers must raise their premium costs.

That is another major source of high premiums. Eliminate the mandates and allow the market to decide what coverage is offered, and premiums will decline dramatically.

For people whose conditions make them medically uninsurable except for colossal premiums, it's probably cheaper for the government to subsidize those persons than to force insurers to accept them for lower premiums. But if not, then something akin to the "assigned risk" mandate for automobile insurance would likely work better than mandating that everybody receive coverage for every imaginable illness, condition, or emotional turmoil.

Yet a third time, this is a rollback of bureaucracy and government control; no statism here.

And no Democrats here, neither!

So there you go, the Big Lizards Grand Unified Plan for Everything Related to Health Insurance. And note please that not a single one of these suggestions requires the creation of any new federal or state bureaucracies, government programs, or the expansion of any "entitlement" programs. No pork; no earmarks; no opportunities for legalized bribery.

So I reckon it would have no constituency in Congress.

Hatched by Dafydd on this day, August 31, 2006, at the time of 4:59 PM | Comments (15) | TrackBack

August 30, 2006

California HillaryCare

As anyone who reads Captain's Quarters knows, the California Assembly just approved a bill, SB-840, which was previously approved by the state Senate, to implement "HillaryCare" style socialized medicine throughout California.

The bill was voted out of both chambers on essentially party-line votes, and you can find the complete text as amended here. The next stop is the state Senate again, where approval is pro-forma, and then to the desk of California Gov. Arnold Schwarzenegger... who is widely expected to veto it, thank goodness.

I'm astonished that there has been so little reporting about this. I live in California, and I had heard nothing about it until I read Captain Ed's piece, which he picked up from SFGate.com, which is the web version of the San Francisco Chronicle. Aside from the Comical:

• The bill and vote was covered by the Sacramento Bee (Sacramento is the state capital), and it was covered by various other small newspapers;
• But as of this moment, I can find absolutely nothing on the website of the Los Angeles Times, the largest newspaper by far in the entire state. (I'm sure Patterico is shocked at the utter incompetence of the L.A. Slimes);
• The San Diego Union Tribune published an opinion piece in favor of this socialized-medicine bill by a representative of the main group that wrote it, Health Care For All - California; but I cannot find any actual news story about its passage;

• The San Jose Mercury News put a story up yesterday -- under the marvelously opaque headline, Demo bills highlight contrasts. Yeah, that sure makes clear that the subject is socialized medicine!

  The other bill referred to by the Mockery News, just passed by the state Assembly, was -- no, really, I'm not making this up -- a bill to allow illegal aliens to obtain California drivers' licenses. In case anyone here doesn't know or has forgotten, that is the issue, more than any other, that led to the recall of our previous governor, Gray Davis. California Democrats... the gift that keeps on giving;

• I can't imagine this wasn't carried on AP, Yahoo, and Reuters -- or at least on Agence France-Presse -- but darned if I saw it on any of the feeds I read, and I can't find any reference via Google... except for a press release from another "consumer rights" group that supports socialized medicine, the Foundation for Taxpayer and Consumer Rights, which Yahoo ran on Monday.

It is astonishing how low this bill and the illegal-alien drivers' license bill have flown under the radar. I make no doubt of the reason why: because Californians, while leaning liberal, notoriously despise both HillaryCare and also giving illegal aliens a government ID card they can use to fake legal residency. So no wonder the elite media -- which "has bones in the fight," as a (legal) immigrant friend of mine said a long time ago, when she was still learning English -- are doing their bestest to keep mum about the bills.

The Democrats will happily tout their leftism at the appropriate venues: fund raisers, rallies, and speeches to the nurses and prison-guard unions. No reason to let real voters find out just how radical their own state senators and assemblymen are!

It is absolutely critical that the governor veto this bill.

The following is an e-mail I sent to the Office of the Governor, where I hope it will buck Gov. Arnold Schwarzenegger up to veto this monstrosity of a bill (all emphasis added, since the e-mail form used by the Office of the Governor does not allow HTML code, for obvious reasons):

I am very sure that Schwarzenegger will veto this bill; and there are not enough Democrats in the Assembly, or (it appears) in the state Senate, to override a veto.

According to the story in the San Francisco Comical, the vote in the Assembly was 43 to 30; currently, the California State Assembly comprises 48 Democrats and 32 Republicans, with one vacancy.

Overriding a veto requires 2/3rds of each body, I believe, just as with the U.S. Congress. That requires 54 votes in the Assembly; but there are far fewer Democrats than that -- and not even all of them voted for this despicable bill: even assuming all 30 of the Nays were from Republicans, that means five Democrats (at the very least) abstained or failed to show up. If more than two Republicans failed to vote against SB-840, that means even more Democrats demurred.

Still, however, the main bulk of the Democrats don't want Sachi and me to be able to get the health-insurance plan that we want, but instead want to tell us what we'll get, good and hard.

The state Senate is dicier; but even there, with 40 members, you need 27 Ayes to override... and there are only 25 Democrats. There were 25 votes in favor of SB-804, and I wouldn't be surprised if those two groups, Democrats and Ayes, were coterminous.

Thus, for either body to vote to override a Schwarzenegger veto (assuming he's mensch enough to veto), the Democrats would have to lure some Republicans over to the dark side, to embrace socialism as the solution to our health-care woes, such as they are.

And really, the woes are neither deep nor wide: very few people are unable to find adequate health insurance; considerably more are unwilling... and as I noted in a previous post, given the current system, this may be a rational response for young singles or even married couples with no children and a reasonably high income.

And nobody has made a good argument why consolidating all health-care plans into a single buyer, that buyer being the state government, would make health insurance cheaper. The only pseudo-rationalization is the "argument by repeated assertion" used by the various socialist groups who push "health care for all": that everything will be cheaper because socialism eliminates all the "wasteful competition" you find in capitalist systems.

Yup; and it's worked great in Sweden, Mexico, Canada, Japan, the Democratic People's Republican of Korea, and of course the old Soviet Union, all of which have become absolute economic powerhouses. In fact, the only quasi-socialist countries with strong economic growth that I can think of are China and India... and both of those economies started growing only when they jettisoned much of their Marxist, Maoist, and fatalist socialist systems and embraced a significantly more robust capitalism than you find in the failed European social-welfare states of Scandanavia.

So yeah; brilliant conclusion, Mr. Democrat: let's solve our economic problems by becoming more like the economic basket cases of the world. That makes perfect sense -- to a liberal: if socialism fails everytime you try it, then the natural reaction is to redouble your efforts.

Let's hope that a single man, Arnold Schwarzenegger, a self-made capitalist, can see clearly enough to veto this bill... and the illegal-alien drivers' license bill as well.

Hatched by Dafydd on this day, August 30, 2006, at the time of 4:40 PM | Comments (7) | TrackBack

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