Tuesday, June 23, 2009

Health Care: Can They Be Taught? Edition

Krugman: The medical-industrial complex and the public option Fascinating statistical work by Nate Silver. It doesn’t support the crude view that it’s all about special interest money, but suggests that the money is making the odds substantially longer.

Krugman: Competition, redefined

Great catch by Digby, who quotes Sen. Blanche Lincoln about how terrible it would be if a government-run insurance plan undermined free-market competition, then links to this:

The Justice Department considers an industry to be “highly concentrated” if one company has 42 percent of the market. In Arkansas — Senator Lincoln should take note — Blue Cross Blue Shield has 75 percent of the market. If you take government self-insurance plans out of the equation, it’s higher. The state ranks as the ninth most concentrated in the country. Is it any wonder that insurance premiums have risen five times as fast as wages?

The truth is that the notion of beneficial competition in the insurance industry is all wrong in the first place: insurers mainly compete by engaging in “risk selection” — that is, the most successful companies are those that do the best job of denying coverage to those who need it most. But in any case, Arkansas is in effect a one-insurer monopoly state, with no competition at all — unless a public plan is created.

In fact, I may have a new hypothesis about the political economy of the health care fight. One thing that’s obvious, if you look at the balking Democrats I chided in today’s column, is that almost all of them come from states with small population. These are also, by and large, states in which one or at most two private insurers dominate the market.

So here’s a suggestion: while the opponents of a private plan say that they’re trying to defend market competition, what they’re actually doing is defending lucrative local monopolies.
The problem with health care June 22: Former Gov. Howard Dean discusses why it's been difficult for members of Congress to devise a health care reform plan that can win enough votes to pass and still be worthwhile.

Krugman: Two reactions to Ezra Klein

Ezra takes Meet The Press to task, rightly, for totally misinforming viewers about the health care debate:

Less forgivable was Nina Easton’s performance on the actual program last weekend. She explained to the viewers that “the big speed bump this week, of course, was that CBO, Congressional Budget Office, study that said that the costs of a public plan are going to be well beyond what they expected.” Later, she said that the CBO estimate “showed that 16 to 23 million people would lose their private or other type of health insurance if that public plan went through.” One problem: The bill that the CBO scored didn’t have any public plan in it at all. Her statements were simply untrue.

I’d just add that this kind of laxness amounts to malfeasance. Here we have the most important domestic policy issue on the table — one that will deeply affect the lives of of Americans, probably for generations to come. And they can’t get even the most basic facts straight?

Elsewhere, Ezra asks,

Are Republicans in this to preserve the healthy functioning of a competitive private market or preserve the profits of the currently dominant insurance companies?

That’s a rhetorical question, right? Bear in mind that in most small states there’s hardly any competition among insurers. It’s not “the market” that’s being protected; it’s the 21st-century equivalent of the old New York steamboat monopoly.
SGW: Democrats Are The New Repubicans
I want to fully associate myself with everything that is said on this clip from Bill Maher and also Cenk Uygur. At some points we are going to need for Democrats to get back to being Democrats and for the media to start being honest with their coverage of the health care debate!

dday: Learn, Damn You, Learn!!!
Something fairly interesting happened today. It doesn't mean we will get a public health insurance option to compete with the insurance industry, but it doesn't exactly hurt. Apparently some Democrats thought that if they only watered down such a public option to nothing, they would get that vaunted bipartisan support, and everybody could go back to their districts and claim they did something when they in fact would have done nothing. But as those of us who have been observing this have known for some time, these aren't your father's Republicans, or your grandfather's, or any other relative. They are the rump conservative party, openly hostile to using government for any means other than profit-taking, and preferring to tell their constituents "good luck" instead of making any tangible difference to their struggles. And somehow, Democrats just discovered this.
Some Senate Democrats have considered nixing the public option proposal in order to win Republican support for the bill.

Schumer's role is important because he had been acting as an intermediary between liberal Democrats and moderates who are trying to strike a deal on the issue with Republicans on the Senate Finance Committee. Of the five House and Senate committees working on health care, Finance is the only one that appears to have a chance at reaching a bipartisan agreement.

Schumer said Finance Republicans had rejected several proposals designed to beef up the suggested nonprofit insurance co-ops. These included setting up a national structure for the co-ops, $10 billion in government seed money, power to negotiate payment rates to medical providers nationwide and creation of a presidentially appointed board of directors.
The Democrats tried to basically bury the public option as long as they could get any manner of support for the weak substitute. And the Republicans wouldn't budge. Like in 1993, their mission is to kill health care reform, period. Why anyone would think that any alternative would be true is beyond me, but Senate Democrats obviously needed to play Tic-Tac-Toe with the computer endlessly until they realized what a strange game it all is, and that "the only winning move is not to play." Ezra Klein comes to the same conclusion.

Republicans, (Schumer) suggests, are standing lockstep even against efforts to create a private co-op system that could offer an alternative to for-profit insurance. Their concern with the co-op plan is not that the government would be taking over the health-care system. It's that the current insurance providers would face unexpectedly aggressive competition in the marketplace. Which raises an interesting, and potentially clarifying, question: Are Republicans in this to preserve the healthy functioning of a competitive private market or preserve the profits of the currently dominant insurance companies?
Further proof of that learning experience came today from Kent Conrad, the man who devised this health co-op plan by throwing a dart against a board, as he appeared to acknowledge its limitations.

The wheels looked to be coming off with health care reform last week. But a poll showing huge public support for a public health care option and a strong bill from the House of Representatives have changed the dynamic.

Schumer and other backers of a public option insist that any plan must be national in scope, have substantial funding at the beginning from the federal government, and include national purchasing power in order to negotiate lower prices.

Conrad ticked off the areas of agreement that were reached Monday.

"National structure: I believe to be effective there has to a national entity with state affiliates and those affiliates have to have the ability to regionalize. I think his concern there can be addressed," said Conrad. "Second, he believes there needs to be national purchasing power. I think that's a good point that the national entity would be able to do purchasing on behalf of the state and regional affiliates and on behalf of the national entity itself."
Now, Schumer's vision of a public plan is a compromise from the House vision of a public plan, which is a compromise from single-payer health insurance. But things are moving in a better direction today than yesterday, when DiFi flat-out said Democrats don't have the votes to pass anything.

This teachable moment has a value for those outside the system who want to push for a real public option that can use bargaining power to force competition from insurers. Because now, as Matt Yglesias says, there's no excuse for Democrats to water down their bills in order to "seek bipartisanship" and make them durable. Republicans have revealed themselves. And given budget reconciliation and the imminent fact of 60 votes in the US Senate, Democrats have nobody else to blame. They can talk about political realities but those have essentially been voted out of existence, with respect to Republicans. Whether it's because of health industry campaign contributions or a desire to limit competition in small, rural states, a desire to get the glory for saving policy from the brink or just an ideological disinclination, individual Senate Democrats will have the collapse of any health care reform on their hands.
And yes, I mean Democratic senators. The Republicans, with a few possible exceptions, have decided to do all they can to make the Obama administration a failure. Their role in the health care debate is purely that of spoilers who keep shouting the old slogans — Government-run health care! Socialism! Europe! — hoping that someone still cares [...]

The real risk is that health care reform will be undermined by “centrist” Democratic senators who either prevent the passage of a bill or insist on watering down key elements of reform. I use scare quotes around “centrist,” by the way, because if the center means the position held by most Americans, the self-proclaimed centrists are in fact way out in right field.

What the balking Democrats seem most determined to do is to kill the public option, either by eliminating it or by carrying out a bait-and-switch, replacing a true public option with something meaningless. For the record, neither regional health cooperatives nor state-level public plans, both of which have been proposed as alternatives, would have the financial stability and bargaining power needed to bring down health care costs.
It helps to have clarity on who is blocking what the public desires. The grassroots will redouble their efforts, doing to the rest of the wayward Democrats what Change Congress did to Ben Nelson. Blue America are lining up a similar pressure Campaign for Health Care Choice on Blanche Lincoln, and you can contribute to that cause at this link.

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