By Lambert Strether of Corrente.
And never mind that the Democratic nomenhackura has redefined October 1 as a “soft launch”; it’s still the first chance people are going to get to see the Exchanges in action, and you never get a second chance to make a first impression. And never mind the whole defund ObamaCare slash government shutdown slash debt ceiling mishegoss and all the yammering and posturing and hostage-taking and fundraising appeals [whines] because they really need the money; after all, the Republicans looked crazy when Newt shut down the government and then impeached Clinton over a *******, and they went on to win the next two Presidential elections, at least for some definition of win, so really, who knows and who’s crazy?
Be that as it may, tonight I want to first look briefly at a modest proposal by Paul Krugman in his blog, “The Conscience of a Liberal“; then at the open bullshit purveyed by all parties in the ObamaCare debate and, more importantly, at the unspoken agreement between them; and finally I want to take note of a few orts and scraps I found along the way.
Here’s an extract from Krugman’s September 21 blog post, I Have Seen The Future, And It Is Medicaid:
I Have Seen The Future, And It Is Medicaid
… We have ample evidence that we do know how to control health costs. Every other advanced country does it better than we do — and Medicaid does it far better than private insurance, and better than Medicare too. It does it by being willing to say no, which lets it extract lower prices and refuse some low-payoff medical procedures.
Ah, but you say, Medicaid patients have trouble finding doctors who’ll take them. Yes, sometimes, although it’s a greatly exaggerated issue. Also, middle-class patients would surely be unhappy if transferred from the open-handedness of Medicare to the penny-pinching of Medicaid.
…. So, I’m not proposing that we turn the whole system into Medicaid any time soon. But what I take from the data is that if and when we feel the need to make tough choices — really, really make tough choices, not use the rhetoric of tough choices to justify what conservatives wanted to do in any case, namely privatize everything in sight — health cost control won’t turn out to be that hard after all.
“Any time soon“? Alrighty then.
While I’m sure there will be some readers who would take issue with “the open handedness” of Medicare, I want to focus on additional “ample evidence” not presented in Krugman’s post. Krugman knows about it, because it comes from an article he wrote:
And Krugman writes:
American Medicare is expensive compared to, say, Canadian Medicare (yes, that’s what they call their system) or the French health care system (which is complicated, but largely single-payer in its essentials); that’s because American-style Medicare is very open-ended, reluctant to say no to paying for medically dubious procedures, and also fails to make use of its pricing power over drugs and other items. So Medicare will have to start saying no; it will have to provide incentives to move away from fee-for-service, and so on and so forth. But such changes would not mean a fundamental change in the way Medicare works.Now, Canadian health care isn’t perfect — but it’s not bad, and Canadians are happier with their system than we are with ours in the United States. So anyone who tells you that Medicare as we know it — a single-payer system that covers everyone over a certain age — is unsustainable is ignoring the clear evidence that other countries somehow manage to make similar systems quite sustainable.
So it’s evident from Krugman’s own work that we can (a) have a single payer* system in the United States that would (b) save a boatload of money, (c) “say no”, and yet (d) still be “open-handed”, as David Himmelfarb notes:
A single payer system is better for patients and better for doctors. Canada spends $1000 less per capita on health care than the U.S., but delivers more care and greater choice for patients.
Canadians patients have an unrestricted choice of doctors and hospitals, and Canadian doctors have a wider choice of practice options than U.S. physicians.
Canadians get more doctor visits and procedures, more hospital days, and even more bone marrow, liver and lung transplants than Americans.
Here’s what Krugman’s first commenter says on the Medicaid model:
Have you noticed all the poor and homeless with missing teeth? (You will now that I’ve mentioned it.) That’s because in order to “control costs” in 2009, Medicaid (Medi-Cal here in CA) simply eliminated dental services for adults. Don’t worry though – they still pay for the teeth to be pulled before these people die of infection (generally).
(Note that in the United States, bad teeth are a class marker, so it’s harder to get a job with bad teeth, no matter your skills.)
So why on earth is Krugman advocating the Medicaid model, as opposed to the Medicare model, given that both can “say no”? (Never mind that under Medicaid, after 55, you pay for your care with your assets instead of passing them on to your kids; and never mind that a lot of Medicaid services are contracted out to private entities, which Krugman seems to think that only Republican practice; how droll.) I can’t imagine why; hating on the poors wasn’t my picture of Krugman’s worldview. Still, it has to be said that if you want to look for a Medicaid program that really got gutted, look at how Democratic governor Phil Bredesen (founder of HealthAmerica Corp.) “said no” with TennCare (hat tip Alexa), which I suppose could turn out to be a blueprint for “the future”:
(It’s quite a long video, but if you listen to it with your morning coffee you’ll hear a story of Democratic duplicity and treachery that rivals any story that can be told of Republicans.) Here’s the money quote from Democratic Governor Bredesen [13:53]:
[BREDESEN:] Well, um, I certainly don’t want anyone and don’t blame anyone who’s going to die as a result of any of this.
BWA-HA-HA-HA-HA! Except not. Why does Krugman want to climb into bed with this guy? Why go for a Medicaid model and not a Medicare model, especially when the Medicare model meets your expressed requirements? And poor people don’t end up with rotting teeth? ‘Tis a puzzlement!**
Let’s move on to the epic celebrity death cage match now taking place on Capitol Hill over ObamaCare. I wanted to find out what both legacy parties had to say, so I looked up Ted Cruz (on Limbaugh; his quasi-filibuster transcript wasn’t available), and I also looked at the comfy, Oprah-like conversation that Obama and his gracious host, Bill Clinton, shared with us at the Clinton Global Initiative (“I think President Clinton makes a really important point”). And — I know this will come as a shock to you — everything they had to say was bullshit. There’s so much bullshit I can’t hope to cope with it all, so I’ll just point out some of the more grotesque examples, starting with Cruz. (Cruz is a lot punchier than Clinton or Obama, and Limbaugh feeds him his lines effortlessly.)
[CRUZ:] Look, Rush, Obamacare, as you know, is the biggest job killer in the country, and the wheels are falling off of this thing.
Well, we keep hearing anecdotes, the most recent being UPS; and for sure the university administrators are abusing their adjuncts brutally. But for the “job killer” claim to be true, we’d have to see the figures show up in the disemployment reports somehow; Hugh’s been monitoring them, and we don’t see that.
[CRUZ:] [ObamaCare's] intent is to destroy the private insurance business, to cause people to lose their private health insurance and be forced, essentially, to move to single-payer, government-provided health insurance, which was Nancy Pelosi and Barack Obama’s plan from day one.
Except ObamaCare was RomneyCare was HeritageCare, originally devised with the exact purpose of heading off the dreaded single payer. Further, ObamaCare was crafted by Liz Fowler, a Wellpoint VP on secondment to Max Baucus as his CoS, so we’d have to believe that an insurance VP set out to destroy their own industry. Finally, if the Democrats really had single payer in mind, the White House would hardly have mocked and censored single payer advocates.
[CRUZ:] On January 1st, the subsidies are scheduled to kick in, and President Obama’s strategy is very simple. He wants to get as many Americans as possible addicted to the subsidies, addicted to the sugar, because he knows that in modern times, no major entitlement has ever been implemented and then unwound.
Well, those disenrolled from TennCare — granted, by a Democrat — might disagree. And ZOMG!!! Subsidies?! Shocked, shocked. (I myself would have framed this differently: I would have said that Obama wants to give as much walking around money as possible to his campaign apparatus, in the form of grants for Navigators, administrators, PR people, web site builders, trainers, and so forth, and get them “addicted” to their cut from the rental stream.)
Bill Clinton at the Clinton Global Inititiative, 2013-09-24. He’s so charming you’d almost believe him, if you didn’t know him:
[CLINTON:] I’ll give the President a chance to talk about all the good stuff that’s happened, but I just want you to know one thing. In the last three years, just as we started doing this, inflation in health care costs has dropped to 4 percent for three years in a row for the first time in 50 years. Fifty years. (Applause.) Before that, the costs were going up at three times the rate of inflation for a decade.
Wowsers. “Just as we started doing this” is — give credit — a spectacularly bold example of using the post hoc fallacy while saying outright that you’re using it! Clinton, that lovable scamp. But wait! Could there have been anything else going on in that same time frame that would account for lowered health care spending? Something like the worst economy since the great Depression in the 30s? Why yes:
Actuaries at the Centers for Medicare and Medicaid Services, who don’t answer to the White House, said yesterday in the journal Health Affairs that costs eased because of the economy, not Obamacare. … The report also contradicts independent economists who had attributed spending reductions more to the Affordable Care Act and changes in the health system, such as shifts in employer benefits. The CMS actuaries, who track medical spending by the government, individuals and insurers, examined 50 years of data and found no evidence of costs deviating much from the economy.
Back to the Explainer-in-Chief:
[CLINTON:] But I will close with a story. I told you all this morning that the employee that our health access program lost in the Kenya mall shooting was a Dutch nurse. And we spend a lot of time in the Netherlands; we get a lot of support there. Oxi is one of the biggest insurance companies in Europe. They’re one of our partners here. I went to celebrate their 200th anniversary with them. They started as a fire insurance company with 39 farmers, 200 years ago.
He is so good. Think about it. The man can domesticate an insurance company.
And we were out there in this big farm field in a tent in the shadow of a 13th century church and a big Dutch windmill. And I asked the chairman of the company, I said, do you write health insurance? Because in the Netherlands there’s no Medicare and no Medicaid, everybody is on an individual mandate and you just subsidize people based on their incomes.
Here’s a little information on the Netherlands the Big Dog left out (granted, from 2008):
Bottom line: The most important point for single payer advocates is that every country with universal coverage has a non-profit insurance system. …. Sickness or social insurance funds do not operate like insurance companies in the U.S.; they don’t market, cherry pick, set premiums or rates paid to providers, determine benefits, earn profits or have investors, etc. In most countries, sickness funds pay physicians and hospitals uniform rates that are negotiated annually (also known as an “all-payer” system). ** Many countries are tinkering with how sickness funds operate (e.g. Germany). The most extreme change is in the Netherlands, which since 2006 has allowed the non-profit regional sickness funds to become for-profit insurance companies, and new insurance companies to form, in the hope that “competition” would control costs. After just one year of experience, the country has experienced 1) a wave of anti-competitive mergers of the insurers 2) emergence of health plans that “cherry pick” the young and healthy and 3) loss of universal coverage and the emergence of 250,000 residents who are uninsured and 4) another 250,000 residents who are behind on their insurance payments. All of the positive data from the Netherlands (on costs, infant mortality, quality, etc) is based on the system pre-2006 (personal communication, Hans Maarse).
So, Clinton can have universal coverage, or he can have heartwarming stories of windmills and churches, but he can’t have both. Back to Clinton’s story:
[CLINTON:] He said, yes, I write it; we all do. And he looked at me and he said, but we don’t make any money on it. And he said, we shouldn’t. This guy is running a huge — can you imagine somebody saying that in America? (Laughter.) He said, we shouldn’t. If I can’t make money on this business doing traditional insurance business, I’ve got no business in the work. He said, look, health care is a public good and you’ve got to find a way to finance it for everybody. (Applause.) And he said, it’s just an intermediary function that somebody has to handle. But in the end, it’s how it’s delivered, how it’s priced, and how healthy you can keep your people.
So, why do we need insurance companies in the equation at all, then, Bill? Aside from getting “a lot of support,” that is.
And finally Obama at the CGI, 2013-09-24:
[OBAMA:] People generally don’t like to be told you’ve to get health insurance. And employers don’t like to be told you’ve got to give your employees health insurance. But as a society what we cannot do is to say you have no responsibilities whatsoever but you’ve got guaranteed coverage.
A classic false dichotomy, since employer insurance vs. mandated private insurance are not the only options. People have responsibility to pay taxes, too, and those taxes could fund a single payer system; that’s certainly possible in Canada.
[OBAMA:] I can tell you right now that in many states across the country, if you’re say a 27-year-old young woman, don’t have health insurance, you get on that exchange, you’re going to be able to purchase high quality health insurance for less than the cost of your cellphone bill.
So just think about that. Knowing you can offer your family the security of health care –- that’s priceless. And now you can do it for less than your cell phone bill. That’s what change looks like.
Second, neither claim is true. The average individual’s phone bill is $71 a month. According to the White House’s own doubtless self-serving figures, released today, “a 27-year-old with income of $25,000 will be able to get [silver] coverage [including subsidy] for $145 a month.” So Obama’s only off by 100% for young women. It’s even worse for families: The average family spends $139 a month on cell phones. Again according to White House figures, “a family of four with income of $50,000 will generally be able to buy a silver-level plan for $282 a month [including subsidies].” So Obama should really stop lying about this. Discrepancies like these actually matter to people who don’t have a lot of money.
Next, I’d like to talk about the unspoken agreement between both parties and the entire political class. Some of you may remember that there is an actual, principled argument against ObamaCare: People shouldn’t be forced to enter markets.
Government could mandate Americans to make deposits in or buy bonds or shares issued by financial institutions like Citibank or Goldman Sachs if, because of the next financial crisis, they don’t seem to have enough money. So, there’s plenty of experience to suggest that if the Obamacare mandate is upheld, we could find ourselves entering a strange new world where the word “contract” — traditionally meaning mutual agreement – comes to signify all sorts of things people don’t want to do.
Now, from where I sit, my first concern isn’t being forced to buy shares in anything. But I can see no reason at all why the ObamaCare “Exchange” model wouldn’t be rolled out to everything. Why not, after all, force people to buy “retirement insurance” on retirement “Exchanges,” where Social Security becomes “the public option,” and then is gradually starved? Why not force people to buy “intellectual property insurance,” in case they inadvertently violate some licensing agreement? Why not force people to buy Lottery tickets, Shirley Jackson style? I’ve tried to think of a sticking point, a swale on the slippery slope, and I haven’t been able to. (Needless to say, forcing people into a marketplace is abhorrent to both right and left so, strange bedfellows.)
However, and importantly, Cruz doesn’t make the critique, and so far as I know, no other Republicans do either. That means that both legacy parties share the most critical principal behind ObamaCare, which is that its OK to force people to enter a market. That makes ObamaCare perhaps the first open “market state” program, with market state defined as follows:
The role of the state is to determine which provider shall collect rents for delivering a service to consumers.***
It seems to me that’s what ObamaCare does — it structures the market, determines who collects the rents by entering it, and guarantees a rental stream by mandating consumers to purchase within that market — and therefore we can expect more programs like it if our transition from nation-state to market-state continues. Note that Krugman’s conversion from Medicare to Medicaid advocacy fits well with a market state approach, since so much of Medicaid is contracted out, and it’s now starting to be outright privatized. We should watch the terms of the Grand Bargain carefully to see if more market state programs emerge. In our brave new world, Bloomberg wouldn’t be stopping people from buying soda, he’d be forcing them to buy healthy bottled water!
Finally, a few random orts and scraps. First, ObamaCare’s timing is and has always been driven by electoral politics. Somebody let the cat out of the bag to WaPo:
Democrats point out that Obamacare’s implementation schedule wasn’t an accident. It was purposefully designed to begin in an off-year. That way there would be a year to work out the worst kinks, and by the time of the actual election, Democrats could point to millions of people getting insurance, running ad after ad highlighting constituents who now have coverage. If implementation didn’t begin until October 2014, all voters would know about Obamacare would be the early glitches, as insurance coverage wouldn’t begin until January 1, 2015.
Leave aside the utter cynicism of taking four years to implement a program that leaves half the target population uncovered, all for a bump at the polls. Which party really is the lesser evil, here? And as long as we’re talking about the election cycle, LBJ rolled out Medicare in one year, back when Don Draper roamed the earth, and if the Democrats had abolished the filibuster in 2009 and socked it to the Republicans, they could have rolled out Medicare for All in 2010, and had two years of covering the entire country to run on in 2012. So why didn’t they do that?
Second, how many single payer advocates are there, really? Heaven forfend that our famously free press should actually poll on this point, but we do have a proxy:
In the latest CNN poll, 54% of respondents opposed Obamacare, but of that group, 16% opposed it because they thought the bill was not liberal enough. There is a core group of progressives who do not like the bill because they feel it did not go far enough, which is, to a degree, hurting the president’s cause.
And it’s hard to see what “not liberal enough” translates into except Medicare for All (despite the “progressives” having polluted the discourse with “the public option” while running interference for ObamaCare). This contrasts to the approximately 22% of the population who are strong Tea Party supporters. So the strength of single payer on the ground is not neglible.
NOTE * Oddly — Times style guide issues? — Krugman doesn’t actually use the phrase “single payer” in his post.
NOTE ** I suppose the flip side of the “tough choices” — which never seem to involve tough consequences for the elite, oddly enough — is some sort of fiscal disaster or collapse so gross that it can’t be remedied by mothballing a few carrier groups or grabbing what the squillionaires have stashed away overseas, and other pleasant hitherto unconsidered policy options. But if that’s Krugman’s argument, he should make it.
NOTE *** As opposed to providing services for its citizens.