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Category: health care

Published on Leave a comment on Another Example of the Washington Post’s Decline

If this is journalism, The Washington Post should just pack it in. Here is the opening sentence in an article from yesterday's paper on recent Trump Administration policy, by Amy Goldstein and Juliet Halperin:

President Trump is throwing a bomb into the insurance marketplaces created under the Affordable Care Act, choosing to end critical payments to health insurers that help millions of lower-income Americans afford coverage.

Note the incendiary language, "throwing a bomb." Paragraph nine of the same article reads as follows:

The cost-sharing reductions — or CSRs, as they are known — have long been the subject of a political and legal seesaw. Congressional Republicans argued that the sprawling 2010 health-care law that established them does not include specific language providing appropriations to cover the government’s cost. House Republicans sued HHS over the payments during President Barack Obama’s second term. A federal court agreed that they were illegal, and the case has been pending before the U.S. Court of Appeals for the D.C. Circuit.

I presume that the reporters knew the information they wrote in paragraph nine before writing the first sentence. Yet they characterize ending payments that a federal court has deemed illegal as "throwing a bomb." I expect more from professionals, so why, other than the fact that my local paper reprinted this, would I seek out The Washington Post?

I wouldn't. By contrast, read this post at Powerline by John Hinderaker. It provides a legal background, it quotes from the judge's decision, and links to another source about the likely effect of the policy change. If the amateurs can do a better job than the professionals, then it is no surprise that traditional news outlets are in decline.

Published on Leave a comment on How Successful Was the Tea Party Movement?

Over Dartmouth's recent spring break, I made some lunchtime remarks at a meeting of the Dartmouth Club of Dallas. The theme of my remarks was that we have recently seen, or will soon see, the poor outcomes of trends that have been a long time in the making. I used some examples that have been the subject of blog posts -- the depopulation of urban areas in the Midwest that put Wisconsin, Michigan, Pennsylvania, and even Ohio in play for the Republicans in 2016; the chronic underfunding of state and local pension plans; and the impending financial consequences of the Baby Boom generation shifting from being a large, productive cohort of contributors to old-age entitlement programs to being a large cohort of program beneficiaries.

On this occasion, I added a new outcome that we should have expected based on recent events. The election of Donald Trump represents the culmination of the Tea Party movement. Here's what I said:

As much as the media fomented stories about discord between the Trump campaign and the Republican establishment, Steve Bannon and Reince Priebus – reflecting the insurgent and the traditional elements of the Republican Party – were working together on Trump’s campaign since at least August 15th.
In light of this, I think we have to acknowledge that the Tea Party is one of the most electorallysuccessful political movements in our lifetimes. I say electoral success – this does not necessarily imply ideological or policy success. And it has achieved its success without much formal, top-down mobilization. Recall that this movement began in February 2009 in opposition to Obama’s early policies, particularly his announced plans to give financial aid to bankrupt homeowners but also including the stimulus bill and eventually Obamacare. Some elements appear to be for a smaller public sector and lowering the public debt, but others have shown up to town hall meetings with, shall we say puzzling, slogans like, “Keep your government hands off my Medicare.” (In fairness, though, we do refer to Medicare as an “entitlement program,” so eventually people might start believing that.)
As an aside, lest you think it matters as much to Trump supporters as it does to his critics, you may have been reading in newspapers this week articles with sensational headlines that contend that Trumpcare or Trump’s budget will disadvantage areas that voted for him. This is more misunderstanding of the phenomenon. Recall the origin of the movement – in opposition to a government handout that would have sent money to some of these same areas. I would argue that “nothing is the matter with Kansas” – it just doesn’t always vote its pocketbook. (We might even note that there are some positive social aspects of that approach.)
The Tea Party’s first victory was to strongly influence the outcomes in the 2010 midterm elections, flipping the House back to Republicans, which the Republicans have held since. The House turns over every two years, the Senate every six. In the first three Senate elections following the Tea Party’s formation, the Republicans picked up 13 seats: +6 in 2010, -2 in 2012, and +9 in 2014 to regain control before giving 2 back while retaining the Senate in 2016.  Given how many seats the Democrats will have to defend in 2018, the Democrats are unlikely to retake the Senate, despite what we are observing in Washington these days. 
And in 2016, the Tea Party elected a president. Much of what Trump considers to be his agenda – national security and sovereignty, economic nationalism, and (using Steve Bannon’s language) the deconstruction of the administrative state – appeals to the Tea Party movement. I don’t see how the other elements of the Reagan coalition – pro-business, libertarian, evangelical – can find their way back to power until, first, the Trump coalition organized around these nationalist themes surrenders its narrow Electoral College majority to a Democratic administration and, second, the population is ready to move on from that administration.

I made these remarks on March 17, before the debacle of the failure to move the AHCA the following week. What I take from that episode is that 2016 is this culmination of the Tea Party movement is also the peak of its electoral success. The rhetoric of criticism of the Obama administration was ill preparation for the realities of governing. Conor Friedersdorf describes the unraveling in riveting detail in the Atlantic yesterday. Save for appointments to the Supreme Court, President Trump is unlikely to accomplish anything fundamental that requires the Congress to participate. That includes the budget, walls on the border, and many other planks in his campaign platform. And the reason isn't that the Democrats refuse to cooperate -- it is that the Republicans will be unwilling or unable to move these initiatives along.
 

Published on Leave a comment on My Frustrations with the Health Insurance Debate, In One Paragraph

Outsourced, as it often is, to Ezra Klein:

That leaves the United States with the worst of both approaches: Prices aren’t set by the market, but they also aren’t set by the government. Consequently, Medicare’s negotiating power is weakened by the threat that drug companies or hospitals will opt to do business only with higher-paying private insurers. We simultaneously miss out on the efficiency of a purely private system and on the savings of a purely public one.

Read the whole thing.

Published on Leave a comment on If the Constitution Is a Living Document

Then we should expect it to be imperfect, like all other living things.  I think we could do a world of good for our mental health if we simply recognized that in a very small number of cases, the Constitution is simply not crystal clear on what is permissible and what is not.  A subset of those cases make their way to the Supreme Court, and the Supreme Court basically acts as a super-legislature.  And, along two dimensions, this week's ruling on the Affordable Care Act is a fine piece of super-legislating by Chief Justice Roberts.

The first is the question of a mandate to engage in commerce taken separately from the way it is enforced.  There is no way that I want the federal government to have that power.  That is a very different power from the power to regulate commerce conditional on an individual choosing to engage in commerce.  The question of law has nothing to do with the pigsty that is our method of delivering and financing health care to individuals at the margins of the system.  Regulating and requiring commerce are two different things.  I applaud Chief Justice Roberts for the decision to keep them distinct.

The second is the question of whether what is being legislated in the ACA with regard to enforcement of the mandate is something out of the ordinary that should be forbidden.  As I have written before, if paying higher taxes in the absence of favored behavior is not permissible, then the tax preference for IRAs and 401(k) contributions is not permissible.  Neither is the home mortgage interest deduction.  The so-called mandate is no more of a mandate than the mandate to contribute to a pension plan.  If you do it, you pay lower taxes.  If you don't do it, you pay higher taxes.  I applaud Chief Justice Roberts for simply calling it what it is and acknowledging the difference between mandating behavior and simply taxing the opposite behavior.

So where are we today?  Basically, the same place as we were after the Senate passed the bill in late 2009.  Here are my reactions at the time.  Going forward, Governor Romney would be a fool to expend political capital on trying to repeal the main pieces of the law if he should become President.  He won't have the votes in the Senate to make any progress, and there are welfare-improving elements of the law (particularly with regard to pre-existing conditions).  Should he have the opportunity as president, he should focus on the cost of the additional health care that the federal government is now obligated to support.  It won't take him long to figure that out, regardless of how the campaign plays out.

Published on Leave a comment on Concentration in Health Care Markets

This Policy Study by Barak Richman at AEI is well worth your time.  We purchase our health care in markets with a lot of potential (and actual) monopoly power.  For example, a large hospital system basically enforces collusion among what might otherwise have been many small, competing providers.  It is not a surprise that the prices are high, rising, and disproportionate to customer satisfaction.  Markets in which high fixed costs and monopoly are so pervasive invite government regulation, for good or ill.  Richman discusses any number of anti-trust strategies to address the problem. 

I have written on a related issue of insurer market power in earlier blog posts, here and here.

Published on Leave a comment on Another Look at the ACA and the Federal Budget

Chuck Blahous is on the case.  In one chart:

 His main point:

Why are these dire fiscal consequences not more widely understood? A great source of confusion lies in government scorekeeping methods, which compare the effects of legislation to a hypothetical baseline scenario rather than to enacted law. To understand the difference, it is necessarily to go briefly into the weeds of Medicare trust fund accounting.

The ACA contains many provisions designed to slow the growth of Medicare spending. This matters here because the federal Medicare program is financed in a particular way – from special, separate trust funds. The Medicare Hospital Insurance (HI) Trust Fund in particular is governed under law by certain rules. Medicare HI is only permitted to spend money on benefits as long as there is a positive balance in its trust fund. If that trust fund is depleted, then under law benefit payments must automatically be cut to the level that can be financed from incoming tax revenues.

This is relevant to an evaluation of the ACA because the CMS Medicare Actuary has projected that had the ACA not been passed the Medicare HI Trust Fund would have been depleted in 2016. If that were allowed to happen, Medicare HI payments would have been sharply cut in that year.

Due to the ACA’s Medicare cost-savings provisions, however, these automatic spending cuts are no longer projected to begin in 2016. Medicare HI is now projected to remain solvent until 2024, postponing forced outlay reductions until then. In other words, the ACA’s Medicare provisions decrease the level of Medicare HI spending prior to 2016, but then increase it from 2016-2024 relative to previous law. Considered separate and apart that would be a good thing, but it has inescapable fiscal ramifications in the context of the ACA’s other spending expansions.

Here’s a simple way to think of it: under law Medicare is permitted to spend any proceeds of savings in the Medicare HI program. If we cut $1 from Medicare HI spending in the near term, then an additional $1 is credited to the HI Trust Fund as a result. The Trust Fund thus lasts longer and its spending authority is expanded, permitting it to spend another $1 in a later year.

A core fiscal problem with the ACA is that the same $1 in Medicare savings that expands Medicare’s future spending authority by $1 is also assumed to finance the creation of a large new federal health program. Taken together, these two expansions of spending authorities – the new health program and Medicare’s solvency extension – far exceed the cost-savings in the legislation.

Read the whole thing.

Update:  Jonathan Chait has done so and concludes the study is bogus, since the more reasonable assumption is that Medicare Part A spending would have been authorized at projected levels even after the Trust Fund is exhausted.  The claims in Chait's post that "If Blahous’s assumptions are right, then we don’t really have an entitlement problem at all. Medicare can’t exceed its trust fund, so problem solved!" technically only apply to Part A.  Parts B and D are funded primarily out of general revenues and secondarily out of premiums, and their costs will continue to grow.

Published on Leave a comment on Handicapping Obamacare at the Supreme Court

This Opinionator blog post by Linda Greenhouse takes issue with the claim by the opponents of the Affordable Care Act that it is "unprecedented."  She describes the opponents' case as weak and wonders what all the attention -- six schedule hours of the Court's time -- is all about.

If I had to guess, I would say that the law will be upheld with 6 or more justices concurring and that the majority opinion written by Chief Justice Roberts will work very hard to narrow the legal scope of the ruling -- this law is okay but no others like it.  The extended hearings are to gather enough testimony to do that as well as possible.  Just my conjecture.

I am not a constitutional lawyer or any kind of lawyer.  I find myself in the position of thinking that there should be universal coverage but not through this law.  Even opponents of the law who have prosecuted these cases acknowledge that the government could have used its budgetary powers to obtain universal coverage.  My own suggestions were expressed in this post from December 2009 after the Senate passed its bill:

Specifically, I'd like to see everyone enrolled in Medicaid via the tax return as the default, unless they can prove that they had alternative coverage. They could then be charged an income-related premium for Medicaid on the tax return. I think this gets us to universal coverage more directly -- there is no need to separately impose penalties for those who violate the individual mandate and no need to provide a complicated system of incentives for those of modest means to be able to afford coverage through traditional markets.

That arrangement is no less constitutional than giving a tax deduction for a contribution to a 401(k) plan.  With a sufficiently steep income-sensitivity for the premium, it wouldn't cost much either.  The trouble is that the Congress didn't pass and the President didn't sign this bill.  They passed and signed one that relies on the government's regulatory powers to achieve universal coverage.  And that seems to me to be the reason why this case has gotten to the Supreme Court.

Published on Leave a comment on The Need for Efficient Public Institutions

I'll score this column by David Brooks, "Midlife Crisis Economics" as a win.  His thesis:

In the progressive era, the economy was in its adolescence and the task was to control it. Today the economy is middle-aged; the task is to rejuvenate it. 

He offers three pieces of evidence, which I'll summarize as:

  1. Our economy is not prone to creating jobs as much as it is to boosting productivity to grow without rapid job creation.
  2. Our government today has the tools to confront social challenges, but it lacks the institutional effectiveness to make progress against them.
  3. Our moral culture has deteriorated, requiring government institutions to carry a larger burden than in prior eras.

I think he is correct on all three.  You can read and judge for yourself.  The one that offers the most straightforward opportunities for better public policy is #2.  He mentions specifically:

The United States spends far more on education than any other nation, with paltry results. It spends far more on health care, again, with paltry results. It spends so much on poverty programs that if we just took that money and handed poor people checks, we would virtually eliminate poverty overnight.

Spending a lot to achieve paltry results is inefficiency on a large scale.  These three issues (and one other) -- health, education, the environment, and poverty -- are the big issues in domestic public policy.  More and more, they appear to be ones that our political system is incapable of handling.

There will always be an element of each one that remains in the public realm.  Our political system is set up for a split-the-difference approach among two factions that share a common belief that the policy outcomes should be improved.  That approach has broken down (and, in prior posts, I have laid the blame on the political right's connectedness problem.)  In its absence, the quality of the public institutions that are invariably tasked with addressing them has declined, leading to the inefficiency that Brooks is observing.

Published on Leave a comment on Insurance for the Nation’s Health

Mark McClellan will be on campus tomorrow to deliver the Rockefeller Center's first lecture in a series commemorating the 100th birthday of Nelson Rockefeller. (Read more here.) Mark's will lecture on "Universal Health Care," a topic that Governor Rockefeller championed more than four decades ago and that remains a leading policy issue today.

In doing some research for the event, I came across this Nixon-era article in Time magazine from May 11, 1970. Here's the big finish:

While every American may be entitled to at least adequate health care, he is not getting it, and will not, until a momentous national debate reaches election-year levels of acrimony and is somehow resolved.

The issue has already been injected into this year's elections by Democrat Theodore C. Sorensen, campaigning for the U.S. Senate from New York, who last week announced his own plan for "universal health insurance." Apart from such standpatters as the A.M.A. and its arch-conservative Republican allies, there is a growing consensus that some national insurance blanket must be thrown over the ailing body of health care.

It may prove to be more of a patchwork quilt, with multicolored squares for sections covered by contracts with a variety of private insurers. If administration is not made too cumbersome, that would be far better than the present non-system with its huge gaps. Walter McNerney, president of the Blue Cross Association and head of a task force soon to report to the President on the nation's health needs, believes that a monolithic system operated by HEW would be wildly inflationary—and not sufficiently innovative. He wants a flexible, pluralistic plan.

But when? The principal difference between proponents of progress is over whether to put the cart of medical-care delivery before the horse of manpower resources, and let the resources catch up with the overburdened cart—or to take the time to breed more medical horses. That means waiting years for the country's health education system to produce many thousands more doctors and tens of thousands more paramedical personnel. Secretary [of Health, Education, and Welfare Robert H.] Finch sincerely believes that the modest expansions of federal health programs that he has submitted to Congress are important steps in the right direction, but will not commit himself to true national insurance. His chief assistant for health affairs, Under Secretary Roger O. Egeberg, thinks that some such plan may very well evolve in "six to seven years." His prognosis is as good as any.

Read the whole thing, to get an idea of what has changed and what has remained the same in this debate, and be sure to stop by Mark's talk tomorrow evening if you are on or near campus.

Published on Leave a comment on Health Care 2008

This new page at HealthCentral compares the Presidential candidates' positions on health care, including reform, the uninsured, drug prices, prevention, technology, and stem cells. It also has an interesting graphical representation of the candidates, where you can plot your own views.

Enjoy!