Jon Walker: Roosevelt Institute Abandons Traditional Liberal Health Care Policies For Pete Peterson

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By Jon Walker, a senior policy analyst at Firedoglake. Cross posted from Firedoglake.

Worrying about long term deficits with official unemployment over 9 percent and treasury bonds rates at near-record lows is inherently an act of madness. It is the antithesis of both progressive policy and basic logic. Left to their own devices, liberals would relegate reducing the deficit to a very low priority in this economic climate. Of course when you’re a billionaire like Pete Peterson and you’re willing to spend millions promoting deficit hysteria, your can convince “liberals” to play into your deficit fetish at even the most illogical of times. Hence the Peter G. Peterson Foundations 2011 Fiscal Summit.

I’ve berated all the so called “progressive” groups that took part in the Peter G. Peterson Foundation 2011 Fiscal Summit for including health care reform in their deficit reduction proposals, yet totally abandoning the traditional progressive solution: a single payer health care system. If the United States simply adopted a system that was roughly as efficient as France, Finland, Norway, Australia, Denmark, England, or New Zealand, we wouldn’t have a deficit. Yet the clear and demostrable global precedent set by these nations somehow managed to escape inclusion by these leading liberal economic lights.

The Roosevelt Institute’s deficit plan, however, deserves special attention. Of the three plans, it is particularly bad on the issue of health care. The organization that prides itself on “carrying forward the legacy of Franklin and Eleanor Roosevelt” apparently thinks that mission is best fulfilled by mainstreaming corporate-friendly right-wing policy recommendations.

Lucky for Peterson, the Roosevelt Institute is willing to put the FDR legacy into the service of his and other lobbyist-friendly objectives. Let’s look at their proposal (PDF).

Many of the Roosevelt Institute ideas are either slightly harmful right-wing policies and/or will do effectively nothing to control health care costs:

[W]e propose the repeal of the monopoly exemption for health insurance companies.

The CBO looked at this and concluded any effect at cost from this policy would negligible.

[W]e propose allowing states to negotiate the sale of insurance across state lines. The left has argued that selling insurance across state lines would result in a regulatory race to the bottom, and the right has complained that insurers need economies of scale to sufficiently pool risk and lower premiums. We incorporate both concerns by giving authority to the states to create common markets for their health insurance through state partnerships.

This was the official position of the Republican Party during the health care debate, and the insurance industry put a lot of big lobbying money behind it. While this could potentially cause a regulatory race to the bottom, in terms of the deficit it will do nothing to reduce overall health care costs. This “economy of scale” argument is nonsense, and has never been substantiated by any real-world data. Small states don’t inherently have higher private insurance costs and if the economy of scale was important, you would expect large states with populations comparable to midsize countries like California, Texas and Florida to have much lower insurance premiums. They don’t.

[W]e will require all doctors, nursing facilities, pharmaceutical companies, and hospitals to post prices for their procedures both in a central location in their offices and on a government-run website.

A thoughtful and consumer-friendly idea, but one that will have little impact on health care costs for many reasons. For example the costs are dependent on what your individual insurance company has negotiated with the hospital and the amount they pay under your policy, so publicly posted prices will mean next to nothing to most individuals. When you are being rushed to the hospital in the midst of a heart attack, you really don’t have the time to devote to online price bargain shopping.

Limit awards for medical malpractice torts: The causes of medical cost inflation are varied, and Millennials do not believe that a single reform will be the silver bullet for the problems of the medical system. Nevertheless, tort reform will grant considerably more budgetary certainty for doctors and control some cost growth among medical professionals.

Even in its most extreme form, capping damages would produce roughly half a percent reduction in health care cost according to the CBO. It is truly disappointing that the Roosevelt Institute totally adopted this hard-right conservative plan, especially because there are other more progressive ways to deal with issue — to the extent that it even is an issue, and not just a smokescreen for corporate desire to escape any form of legal liability whatsoever.

If these systemic reforms fail to bring non-Medicare government health insurance costs under control by 2022, Roosevelt creates a robust, national public health insurance plan to compete with the private market.

To add insult to injury, while the Roosvelt Institute’s plan calls for immediately implementing bad right-wing ideas, the most progressive and effective element of their health care plan is left out for the next decade — and possibly forever. A truly robust public option open to everyone could reduce the deficit by hundreds of billions while dramatically reducing insurance costs for regular people. After acknowledging that this could play a huge role in fixing the deficit issue they claim is so urgent, they take the ridiculous position that we should first let the problem of high medical costs get worse for another 11 years. It is a massive and unjustifiable gift to the private insurance companies.

But most disturbing is their plan to eliminate the tax subsidy for insurance without explaining how it will effect exchange subsidies or be indexed:

Roosevelt recommends the replacement of the tax subsidy for employer-provided plans, with a tax credit of $2300 per adult, and $1700 per child, with a cap of $8,000 per family. The tax credit will be refundable up to $4,000. Removing the employer health insurance exclusion will enhance mobility—by allowing Americans to take their insurance with them from job to job—and wages—by incenting employers to offer workers better pay rather than better coverage as they age. Americans will be able to buy health insurance on the exchanges created by the Affordable Care Act, using their tax credit to subsidize this purchase and to help pay out-of-pocket expenses.

If this rebate isn’t indexed to medical inflation, it would slowly cover less and less care. The result would be that government “saves money” by transferring more and more of the burden of paying for rising health care costs onto middle class families.

While I hope Roosevelt Institute does understand that such a rebate would indeed need to be indexed, they failing to lay out if and how they plan to does that. I’m forced to assume the worst about the plan however because they claim the rebate is a major way they save the government money on health care. The only way the rebate would save the government large amounts of money is if they aren’t indexed probably.

Conclusion: Mission Accomplished for Pete Peterson

The health care section of the Roosevelt Institute’s plan also includes some traditional progressive policy ideas like funding cost effectiveness research, bundling Medicare payments and direct medicare drug price negotiation. But the overall package is practically center-right. It accepts the notion that reducing health care costs can best be achieved by encouraging individual personal shopping in the private market, which — given the complexity involved — is almost impossible for most people to do effectively. It’s a plan you would expect to come out of Republican Senator Olympia Snowe’s office rather than a “liberal” think tank.

It doesn’t mention single payer at all, and delays for a decade a tip of the hat to the compromise of a public option. As a result, the Roosevelt Institute’s plan falls dramatically short of the deficit reduction potential that would merely be the byproduct of truly progressive health care reform.

Of course that is probably exactly what the Peterson Foundation hoped for when he got the Roosevelt Institute to agree to play the part of “liberals” in his latest deficit-hysteria extravaganza. The center-right nature of their plan helps move the Overton window of the debate on both health care and the deficit dramatically to the right. By choosing groups that would exclude the most obvious health care cost-cutting option available, the one that has proven an unqualified success at efficiently delivering health care coverage to the industrialized world, Peterson never risked accidentally proving that the progressive goal of “Medicare for all” also just happens to be the best deficit reduction plan available. And of course by submitting any plan at all, these organizations allow Peterson to pretend “even liberals” embrace the decidedly non-Keyesian notion that now is the right time to worry about long-term deficits.

Overall, it appears Peterson spent his money well.

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  1. Dave of Maryland

    There really isn’t a window, Anderson or Overton, to move this way or that. We fixed health care, what was it, two years ago now. The fact that it keeps coming back indicates that right-wing attempts to define it this way or that failed to work.

    We will be at this, from now on, until we get single payer. Which makes this a war, like Vietnam, that the right can fight, but cannot win. But we like spending money for hopeless causes.

    Johns Hopkins, the self-proclaimed best hospital in America, has at least three tiers of pricing, from free, to soak.

    1. simplicimus

      But they are winning. 40,000 Americans per year (that have been counted) die prematurely from not being able to get health care. That’s more than many popular cancers. Many of them wind up in the emergency room, get treated for whatever emergency condition brought them there (not the underlying causes), and get sent home to die of the underlying cause. Many times, home is the streets, where they land after their illness bankrupts them and they get forced out of their home. (Most personal bankruptcies are from people who get sick and have insurance). Living out on the streets hastens their mortality even more.

      The really tragic aspect is that many of the things these 40,000 people are dying of each and every year could be cured for not too much money. That’s why doctors (other than some really greedy radiologists and anesthesiologists) and nurses overwhelmingly support single-payer.

      1. lambert strether

        Killing people is sound policy both from the perspective of profit-maximizing health insurance companies and Social Security actuaries. So what’s not to like?

        In other words, a drop in life expectancy, similar to that which happened in Russia after the collapse of the Soviet Union, is a goal the elite will happily buy into.

  2. abelenkpe

    Employers shouldn’t be burdened with providing Health care. It makes it more difficult to compete with businesses in countries that provide universal health care. It’s part of the reason work is off-shored. It isn’t just about the salary workers make in the US. It is about the additional cost of providing health insurance benefits.

    My pop use to work for a big insurance company. I remember back in the 70s (when I was tiny) him talking to a co-worker trying to convince him not to go into selling individual health insurance plans because he couldn’t make money at that because people wouldn’t buy health insurance no matter how much money they made. Even if they were well off! He said back then the only way to make sure families were covered was to make purchasing health insurance mandatory. Instead HMOs became the rage and employers began providing health insurance through work. That method will always leave a portion of society uninsured. The only way to lower costs for individuals is to have a large group. That’s a big part of the reason why health care costs less and covers more in countries that provide universal care.

    1. Paul Tioxon

      Yes, it is true, businesses should not be burdened with providing social welfare programs such as retirement pensions and health insurance. Capitalism around the world does not include much of these costs in the price of their goods and services, because they are provided for by the government. The advantages are twofold:

      1. Giving government the primary responsibility for providing health care reduces all direct cash outlays and indirect administrative costs of the HR dept. Global competition can be met at prices that do not need to account for this extraneous cost.

      2. If the government guarantees health care as well as pensions, the compelling need for unions is blunted. What do you need them for. Wages and work conditions because the lowest common denominator and quitting as an individual does not mean losing unvested pensions or hurting your family by losing health care.

      The private sector gets all of these costs moved off their books, and all of the animosity and political downside is shouldered by political parties in power who make the decisions to cut back pensions and health care. This of course aligns the workers against the government as adversaries, making the concentration of power greater for business. It does lead to a rise in specifically labor oriented politics and parties, but does not create long standing institutional alignments between workers and one party, such as the Dems in the US.

      American capitalism realized this as well, and got Social Security but fell short of socialized medicine, until Medicare came along. Medicare simply needs to be scaled up to include the whole population. American companies then will face apple to apple competitive practices when they do not have to face government subsidizes social welfare programs from the global market, when they are spending more money on health care than other private sector in any industrialized country in the world. Globalization will force the universal government health care issue, as the US aligns its practices with the rest of the world, which is not about to change the dominant role of government in health care.

      1. Procopius

        There’s certainly a lot of truth in what you say, but I had the impression that other countries, at least the ones which have extensive social safety nets, also have strong labor unions. However, looking at the deficit hysteria, here and in Europe, I marvel that anyone would suggest this intelligent approach. The Right keeps screaming, “America is broke!” even as they collect their bonuses.

    2. finlandstation

      actually, the reason why costs are so much lower in europe and japan is because providers make significantly less than what they do here – that is the single biggest cause of our higher health costs. a single payer system could squeeze reimbursements but it would also drive doctors out of business, or, at least, force them to turn away patients with public insurance and only service cash paying customers. this trend is already happening – try going to a specialist in the ny metropolitan area, many demand full payment up front, leaving the patient with the responsibility of dealing with their insurance companies for reimbursement. also, hard to see how a single payer system will cut down on er visits, as more people have access it’s only reasonable to expect more of them to go to the er for their care – this is especially true for
      low income and the newly insured because it’s where they know to go, and it’s where they get the best care. just take a look at the data in massachusetts, er utilization rates are way up, not down.

      1. country doctor

        I’m sorry, but specialist doctors in big cities are not going to be broke if they only make $150,000/yr vs. $500,000 that they made previously. $150,000/yr is still double what we country doctors earn, and adequately compensates for the higher cost of living in cities.

        1. finlandstation

          try operating a practice in manhattan, boston or washington, paying office, staff salaries and benefits, on $150,000 – i guess you have no idea how expensive things really are. to repeat, given the option of running a practice on a break even or worse basis, and going to work for some financial concern, a whole lot of physicians will opt for the latter – which, in turn, will lower the quality of care, and result in intolerable wait times. think you’ll have to come up with a better solution than the one offered, but glad to hear you’re doing okay out in the country. and just asking, but if government should limit the amount of income physicians make, what’s stopping them from capping incomes for plumbers, electricians, actors, writers or management consultants?

          1. country doctor

            That’s net income finlandstation, and gross income would need to be a lot less if one didn’t need a whole separate staff to deal with insurance companies. In addition, people wouldn’t wait until diseases were much more expensive to treat, and you wouldn’t have insurance companies second guessing and withdrawing funding for necessary procedures. The wrangling with insurance companies is far worse and more time consuming than medicaid paperwork.

            Also, single payer doesn’t cap wages. It sets a negotiated amount for various services. It’s possible that amount might be too low for certain treatments or procedures, but that can be fixed. It’s not much different from the way insurance companies disallow most of your fees now.

            Virtually everyone in the trenches actually trying to help cure patients wants single payer.

        2. finlandstation

          not sure how you propose to determine what’s gross and what’s net, since all you’ll be doing is cutting reimbursement rates. or, are you suggesting a whole new layer of bureaucrats be added just to distinguish between the gross and net, so that physicians in high cost areas can make sufficient income? again, i know it’s a convenient part of the prevailing narrative, but when was the last time your insurance company withdrew funds for a medical necessary procedure? most people who are group insured are quite satisfied with their insurance, what you are suggesting is a kind of urban legend, good for the campaign trail, and discussions among like minded people, but not up to the rigors of real world scrutiny. further, whether it’s a single payor system or what we have now, someone is still going to have to process claims, the degree of difficulty sorting through the different carriers isn’t really as great as you suggest. the work still has to get done.

      2. ambrit

        Dear finlandstation;
        One method tried and still viable is to tie the medicos license to practice to some verifiable ‘social utility’ index. If you don’t play nice, we take your ball away and send you home. Totalitarian Socialism? Yes, so what?

        1. finlandstation

          all fine and good, but that what stop the trend, in fact, it will accelerate it, forcing more doctors out of medical care. and what are the prospects of passing the kind of restrictions you call for – the democrats, with full control of government, couldn’t even pass a public option? to make matters worse, sorry to have to throw cold water on your romantic ideas, but without cost shifting between higher rate paying private insurance and public insurance, doctors practicing in high rent areas will have no choice but to close up shop, or just refuse to see anyone with public insurance. just the facts.

          1. Paul Tioxon

            You will be shocked to know just how many intelligent people there are who do not go to Ivy League colleges and their equivalent, who are just as qualified, but displaced from entry into Med school simply they because they come from fly over land, the wrong side of the tracks and their alma mater is some rinky dink Catholic, Historically Black or other minor league college or state U. While all of the rich kids will fall out of medical career tracks and head for Goldman and Hedge Funds, plenty of HI IQ, straight A students will gladly take their place and think they went to heaven to just earn a measly $150k/yr as a brain surgeon. Rich peoples problems are not real, they only play really damaged people on television.

          2. lurker


            The difference in healthcare costs between US and the rest of the developed world cannot be laid at the physicians’ doorsteps.

            There are other drivers for healthcare costs: hospital care, drugs and nursing home care. see

            McKinsey has done some analyses showing the main driver to be outpatient care: specifically, ambulatory surgery, procedures and radiology. This will come as no surprise to anyone who has noticed local hospitals building bright new shiny annexes for such procedures and treatments–in effect, creating demand.

            Price differentials across first world countries for drugs and radiology are huge. An MRI in Japan costs $200; in the US, $1200.

            There is a differential for physician income but it’s less than you would expect. I believe physicians in Belgium for example are paid very handsomely compared with ours.

            It’s a complicated subject.

  3. kernel alive

    deficit dramatically to the right. By choosing groups that would exclude the most obvious health care cost-cutting option available, the one that has proven an unqualified success at efficiently delivering health care coverage to the industrialized world

    Don’t get mad, Steven.
    Get even!

    Get a card that will give you health care for the rest of your life for no extra charge. Join the military before you are 28. Continually re-up until you have 20 years of tenure. That is all you have to do.

    Good luck

      1. simplicimus

        …or become a congress person

        …then you can get rich taking money from insurance companies who want to see to it that no one gets medical care. So while you are being treated to great medical care for free for life at the taxpayer’s expense, you can be happy knowing that you helped other people to die unnecessarily and prematurely, and you can be rich too. What a deal!

        1. ambrit

          Or become a Bankster. That or ‘real’ crook. Then you can support your medical expenses with a true ‘single payer’ model. (Single payers would include: local liquor store, out of town bank, wealthy yuppie in local strip club parking lot, local judge on ‘bag day’ preferably after lunchtime, etc…) If your ‘off book’ entrepreneurism ends badly you can still use option Bob above.

  4. KFritz

    It’s time for those names on the left side of their website to take them down. Or look bad.

    1. Yves Smith Post author

      I have Marginal Revolution and Greg Mankiw there too. Just because I read them does not mean I agree with them. I’ve had long-running rows with Krugman and shorter-runing ones with DeLong.

      1. Antipodeus

        As a Skippy, I would be interested in your impression/experience/opinion of the Australian public/private system.

        1. Yves Smith Post author

          I was in Oz in 2002-2004, so I’m sure it is different now, but I had no trouble finding good doctors and even paying 100% out of pocket (the uninsured rate) the cost was about 1/3 of that of NYC: $70 for a first visit to a GP, vs. $225 to $250 in NYC, and $110 for a specialist, v. about $300 to $350 then in NYC.

          There was clearly a problem with getting doctors to work in the bush, a lot of news coverage on that issue, but the US also has few doctors in remote areas and no one seems bothered by that.

          And the medical records were much better organized, everyone seemed to be required to use the same software program. No queuing issue, while you can have big time queuing here with specialists. Drugs vastly cheaper, I still get certain meds from Oz.

          And the doctors seemed happier too, but Syndeysiders generally are a chipper lot.

      2. KFritz

        I was too cryptic. The ‘names’ in question are on the left side of the New Deal 2.0 website. F’rinstance, Bill Black.

  5. Knute Rife

    Even setting tax credits aside, medical bills continue to be the leading cause of bankruptcy. Does anyone think that isn’t a drain on the system?

    1. youniquelikeme

      No, because that would take caring about something other then the individual. I swear that Americans must be on too much of something and sleep through the issues.

      Elizabeth Warren has been warning of that for decades and she is about to be silenced for working for “we, the people” for doing just that.

      People cannot look beyond their own nose to see they could be next on the chopping block… whether it be losing your home, job or health. But in America, we the people means me and mine… so any other thoughts causes finger in the ear denial. In other words, “we, the people” now means you are a Socialist, comrade…

  6. mayfair

    “If the United States simply adopted a system that was roughly as efficient as France, Finland, Norway, Australia, Denmark, England, or New Zealand, we wouldn’t have a deficit. Yet the clear and demostrable global precedent set by these nations somehow managed to escape inclusion by these leading liberal economic lights.”

    sadly, if there’s two things that ‘murrica does well it:

    1) not learning from other countries (eg health care, industrial policy, etc); and

    2) not learning from America’s own past (eg, the GIlded Age, 1929, Vietnam, etc).


    1. tts

      Learning has nothing to do with it.

      The problem is our gov. is corrupt and there is a culture of corruption and greed in our mega corps. Until you fix those problems other issues cannot be fixed.

  7. Jill

    Get in touch with reality!

    This kind of thing happens because there are no liberals in Congress. Both the Democrat and Republican parties are hoaxes. Here are the parties in Congress.

    I see in your next article you are advising folks to call their Congress persons about something. This is like begging a burglar not to rob your house.

    Congress folks should be renamed “Legislation Salespeople” because that’s all they are. No wonder they are dunces. The job requires no intelligence at all. Just take money from lobbyists, allow lobbyists to write legislation, and tell the voters whatever pretty lies your focus group research says voters would enjoy hearing.

      1. ambrit

        Mr Strether;
        Is that why the unfortunate gentleman from NY is in so much trouble? He forgot what his proper ‘position’ in the heirarchy was? And what was his ‘display’ all about? Showing the voters what was on offer for them?

  8. Hugh

    It really looks like the Roosevelt Institute is intent on digging itself a deeper and deeper hole. They really need to address the criticisms they have been getting in a coherent and thoughtful way, or they can kiss their reputation good-bye.

    Speaking of which, perhaps it is just me, but I find it very strange that firedoglake has suddenly become a defender of single payer. During the great healthcare debate it adopted the public option early and pushed it hard. In doing so, they backed the larger bill right up to very near the end. It was only when the public option, which was never clearly defined, had been multiply eviscerated and finally had a half dozen stakes driven through its heart that Jane Hamsher and firedoglake belatedly, and in an effort to salvage some credibility, came out against the overall bill.

    This is important to remember because the site and its posters didn’t just back the public option, they waged a war against single payer advocates. Indeed after it was all over Jane Hamsher and her posters had more animus toward the single payer advocates (who had been right on both the substance and the politics) than they had toward Obama, the Democrats, and more specifically the so-called “progressive” Democrats, who played them and then stabbed them repeatedly in the back.

    So while I applaud firedoglake for coming around to single payer now, I am not about to forget how anti-single payer they were back when it really counted.

    1. simplicimus

      Hugh, that’s a classic democrat move: claim to be for single payer when it doesn’t count, and when it does count try to railroad people into whatever plan to screw them over they are proposing. They also like to play one democrat against another, allowing some (but less than the number they need) to be “for” something, giving them cover and making them seem more liberal than they are.

      Firedoglake, Commondreams and every other blog that diverted people with the public option (and invariably supported Obama during his run, and censored negative criticism) is an accomplice to the current pro-insurance law.

      If you think they are rehabilitated, you’re dreaming.

    2. Jane Hamsher

      I know you were at FDL during this time Hugh so I have no idea why you are misrepresenting what happened.

      1) “firedoglake has suddenly become a defender of single payer” — we’ve always supported single payer. It was effectively marginalized during the health care debate for reasons having nothing to do with us, and to pretend that anyone thought the compromise that CONGRESS made — the “public option” — was superior to single payer is sheer delusion. There were two options Congress was considering, one had a public option and one didn’t. There was no “single payer” choice on the menu.

      2) “It was only when the public option, which was never clearly defined, had been multiply eviscerated and finally had a half dozen stakes driven through its heart that Jane Hamsher and firedoglake belatedly, and in an effort to salvage some credibility, came out against the overall bill.”

      We came out against the first House health care bill shortly after Pelosi released it in October 2009:

      We never backed that, or any of the subsequent bills that were voted on in Congress.

      Whether this mischaracterization springs from malice or some more debilitating cause I don’t know, but as you are someone who chronicles details extensively, it is not for lack of awareness. If you are still angry that you were challenged at FDL for saying things that you felt to be emotionally true yet were factually inaccurate, moving to another site and making the same mistake will probably only yield the same result.

      1. Petr Black

        There was no “single payer” choice on the menu.

        ~~Jane Hamsher~

        …which is why I support the lesser of two evils. Always.

      2. Hugh

        LOL. This is classic Jane Hamsher. Go into full fledged attack mode in the hopes that no one will notice the BS. The idea that Jane Hamsher and firedoglake were always for single payer is just dishonest and must come as a surprise to those single payer advocates who were banned from the site and the others who were excoriated there for their support of it. Actually I was one of the ones there who warned that persisting in support of the overall bill would seriously erode the site’s credibility.

        If Jane Hamsher had been a big supporter of single payer, I would have no problem saying so. But it is an Orwellian recasting of history for her to say that since she is a supporter of single payer now, she has always been a supporter of single payer. Oceania has always been at war with Eastasia, etc. The simple truth is that throughout the debate she and her posters were hostile to single payer and its advocates. She even went so far as to hire Jason Rosenbaum, a flack for HCAN, one of the biggest veal pen groups supporting the public option and Obamacare, to run part of her site during that time, and promote its views on healthcare. I suppose there were hundreds of posts she and her frontpagers wrote on healthcare during that time. I wonder how many she could find that were on single payer and were positive about it as opposed to those that were negative or didn’t mention it at all. I wonder the same, about not just the posts, but her comments and those of her frontpagers in the threads.

        The great healthcare debate had its official rollout on March 5, 2009 and Obamacare passed on March 25, 2010. Jane Hamsher cites a date in October or 7 months after its start when she came out against the overall bill. It is important to keep in mind that this was the House bill. There was supposedly a progressive caucus in the House and it was there that the public option supporters pinned most of their hopes to get a public option in the bill.

        It was actually kind of comical in a perverse way seeing House progressive after House progressive stating how they were for a public option, or even that they were for a “strong” public option. But as many of us pointed out at the time, the public option never had any agreed upon content. Jacob Hacker’s original version of it would have covered around 130 million. In his September 9, 2009 speech to Congress on healthcare, Obama indicated that it would cover around a tenth that number, and probably a lot less. But it wasn’t just the numbers. Ties to Medicare were cut. It would have to pay back any initial funding. Both of which made it unlikely to be competitive with private insurance. It would only be available to those without insurance. Its startup would be delayed until 2013. We used to talk about the great shrinking public option and opine that there was no there. It was whittled down even further and eventually it was just dumped. It was only when this ridiculously transparent ploy to silence progressive opposition was tossed that Jane Hamsher came out against the larger bill. At that point it was effectively game over. If she and her allies couldn’t get a public option in the House bill, it was even more unlikely that they could get one through the more conservative Senate. If memory serves, this did not stop them from floating various options for its re-introduction, as for example through reconciliation, after the public option was killed in the House.

        As for the rest of her comment, it is pure ad hominem, and that alone should tell you something about the argument and the arguer.

      3. Walter Wit Man

        Well, Ms. Hamsher’s justification for opposing the House version of the bill, per her link, seems to focus primarily on the drug issues–that “[i]t’s immoral for Congress to give endless monopolies to pharmaceutical companies on these cutting edge drugs in this bill.” I don’t see the public option even being cited as a reason to oppose the bill. Wasn’t the public option the main demand from progressives at this time (and hence the reason groups like POP [Public Option Now] were created)? I remember the general events as Hugh does, that “progressive” groups, in general, focused on the public option and attempted to shut down arguments for single payer, and then when the public option was yanked out of the bill these progressive groups failed to analyze in any self-critical way, how they got suckered in the whole health care “debate” and how they limited the options on the menu.

        And I will also note that the link Ms. Hamsher provides unintentionally proves Hugh’s main point and undermines her paragraph 1) response above. In comments at the link, Ms. Hamsher responds to a commentator (the 2nd comment), who is advocating for a single payer approach:

        “Medicare for all doesn’t do a damn thing for patent protection. Nor does it slice, dice, pickle or scramble inside the egg.

        Come back and lecture us ‘peasants’ when you’ve got a bit more information.”

        This is another response later on:

        “You know, it’s a good thing that I believe in single payer philosophically, because the arrogance and the stupidity of those who believe it will cure everything is enough to make you question anything they would support.”

        This is how I remember single payer advocates being treated on “progressive” websites at the time: with smug hostility. This hostility may not have been the sole, or even proximate cause, of single payer “not being on the menu”, but this hostility certainly contributed to it not being on the menu.

    3. A Good Bankster

      Listen up, support the lesser evil, or else….

      “So far you have been treated as an officer and a gentleman, but don’t think that this will go on if you don’t behave better than you have done. You have two hours left in which to confess everything. If you don’t, I shall hand you over to the Gestapo, who are used to dealing with such gangsters and criminals — you won’t enjoy their methods a bit.”
      – Reinhard Tristan Eugen Heydrich (7 March 1904 – 4 June 1942)

  9. Fred

    England’s NHS sucks. Always has, always will.

    Q: How did Dr. Shipman manage to kill 95 of his patients? (Convicted of killing 95, records review puts the total around 300.)

    A: His homicidal rampage didn’t look much different from the outcomes of normal care.

    1. Paul Tioxon

      How do cigarettes kill 500,000 people a year and still get US Agricultural subsidies? It is more than anecdotal corruption cases that kills the same amount of people that the Civil War did over 4 years with guns firing at you.

  10. Benedict@Large

    Wow, reading Jon’s selections from the plan nearly made my eyes bleed. Obviously, NO ONE on the Roosevelt team ever worked for a health insurer. The errors they’ve made just on these points are almost childish (and worse than even Jon paints them).

    Sorry, but when the question is, “Do you have any insurance experience,” “Yeah, I bought some a few times” is the wrong answer.

    BTW, did anyone see the McKinsey study. ObamaCare is going to cost 75+ million people their employer-provided group coverage. Way to go, Mr. Obama!
    [Note: McKinsey surveys employers for their results, but they match quite closely my calculations from back when they voted on the law, and McKinsey’s description of the employers’ thinking on this matches the flaw in the law I found back then. IE, this was built into the law from the start. (Probably by CATO, who wants to end employer coverage entirely, and was sniffing around at the time for a way to do so.)]

  11. Everythings Jake

    I keep thinking I should have lost the power to be shocked, but it feels like it actually gets worse every day. Like all “overnight” phenomena, the groundwork for this wholesale capture and corruption of every institution and level of society must have been long in the making – it’s just now that the masks are all coming off so quickly. I was only recently introduced to the “Powell Memorandum” (,_Jr.#The_Powell_Memorandum) which may now, it seems, turn out to be the most influential document in American history.

  12. Everythings Jake

    Bloomberg reporting today that the administration may seek a cut in employer payroll tax. This must be Immelt’s influence, because corporate profits aren’t high enough. It’s effectively off-book (the American people won’t see it, won’t seem to effect them really one way or the other). Since it seems unlikely this will create jobs when 14.2 trillion in government/Fed “aid” did not do so, I guess that what is really happening is that corporations felt they had not gotten their fair share of the booty (Wall Street took too much).

    I wonder if I can overtly hope that Geithner gets struck by lightning without getting a visit from the Secret Service. I guess I’ll find out.

  13. toxymoron

    If the United States simply adopted a system that was roughly as efficient as France, Finland, Norway, Australia, Denmark, England, or New Zealand, we wouldn’t have a deficit.
    Why look abroad? Apply the Veteran’s Administration policies & procedures to all.

  14. Dennis954

    A universal single payer system is not the panacea that many think it is. Government by its very nature has no profit incentive and as such, has no motivation to run anything effficiently. Just look at the post office. Even with a monopoly on letter delivery, it still runs a loss of over $7 billion per year. There are a few simple steps that could be taken which would make health care more affordable to all.

    1. Eliminate group health insurance. Group health insurance was first introduced in 1946, when employers, constrained by wage controls, offered health insurance to prspective employees in order to get the best workers. Health care costs began to increase from that point forward. When the end user of medical services does not have to pay the bill, no concern is paid to cost. Why is it that procedures such as plastic surgery, and lasix surgery continue to decline in price, when traditional procedures continue to rise? Simply because those procedures are not covered by insurance, so consumers shop around for the best price.

    2. Allow all 1500 health insurance companies to compete nationwide across state borders. Currently, because of over regulation on the state level, some states have only 2 or 3 ccompanies licensed to offer insurance in their state. That creates a quasi monopoly. Minimum standards need to be set to prevent abuse from the insurance companies. Let the consumer purchase health insurance as they purchase car insurance, which allows the consumer the flexibility to purchase the coverage that suits their individual needs.

    3. Torte Reform. The USA is a very litigious society. No ccountry in the world has anywhere near the number of mediccal malpractice lawsuits as the USA. This has resulted in huge malpractice insurance costs to medical professionals which are passed on to the end users or the insurance companies who pay the bills. Awards need to be capped, and state medical regulartory agencies need to take tougher disciplinary action against the 5% of medical professionals that generate 95% of the claims.

    4. Repeal the law that requires hospital emergency rooms to treat evveryone who comes in the door. If the consumer knows he will be treated for free, what is the incentive to purchase insurance? Government should provide subsidies to the poor who cannot afford health insurance, which would cost the taxpayers substantially less than a government administered single payer system.

    Unfortunately, none of this is likely to happen. The insurance industry lobbyists will fight to stop competition. Most of the Congress is made up of attorneys so they will protect their own; forget torte reform. It seems that like every other issue, a major crisis must occur before the politicians get off their butts and pass the meaningful reform that benefits the country and its people.

    1. grumpyoldvet

      ER…..did you even read the article. Everyone of your proposed ideas was mentioned in the article and refuted. You can now take your crayons and scribble pad and retire to the corporate boardroom and report “I did my duty, Sir”.

    2. lambert strether

      Ooh, tort reform! Here’s the only chart you need on health care policy.

      Incidentally, I’m a little unhappy with Walker’s headline, because of its Inside Baseball perspective. Who cares about what’s “traditional”? Well, people who track how the various factions in Versailles re-calibrate their talking points, that’s who. The point isn’t that single payer advocacy is “traditional” — though it sure wasn’t for FDL at this time last year — but that single payer works.

      On another note, it’s never (or at least often not) too late to come to one’s senses. So if everybody now knows that the “progressive” bait and switch operation for the public option zombie sparkle pony reeks of FAIL, and the FDL crew’s public option advocacy is now inoperative, then more power to them, say I. The grassroots pulled the Overton Window left on health care policy, and now the leaders are scrambling to catch up with their followers. ‘Twas ever thus.

      So, at this time next year, will FDL and Walker treat turning the banks into regulated public utilities as the conventional wisdom, instead of a totally unsavvy policy option advocated only at the margin? Or will events move faster than that? Time will tell….

    3. jonboinAR

      On your #1, I find compelling the argument that non-emergency elective procedures such as lasix surgery will be shopped for completely differently (shopping around carefully) than emergency heart-attack help (which-ever hospital’s closest and thought of in that desperate moment.) So trusting the customer to select for efficiency by looking for the best deal is not likely to be that effective regarding health care. Besides, although it may not be the best possible way in our theorizing imaginations, universal care, proven by the rest of the world to be at least twice as efficient as what we have,… Hey! That’s not too bad!

    4. Petr Black

      Total unmitigated sophistry and recycling of the most tired free-market cheerleading crap that’s been proven 5,000 times untrue.

      The government runs medicaid and the VA with absolutely minimal overhead (something like 1%), whereas insurance companies structurally (because they must assess risk and so forth) must run an administrative overhead of over 20%. Even the best competition doesn’t change the fact that adjustment, actuaries, price negotiation, and administration is expensive.
      Plus they have to turn a profit for their shareholders. Every quarter!

  15. TC

    This only reminds me how ticked off I still am about the heavy does of sophistry Kucinich used to rationalize his surrender to Obama’s healthcare reform giveaway to the top-heavy private insurance “industry.” The claim that he was switching his vote in favor of Obama’s plan because the power of the presidency was under attack simply appeared a capitulation making his ’08 Presidential campaign as equally unreal as “change you can believe.” Politics might be politics, but you don’t make a habit of holding up a copy of the Constitution, then abandon your most deeply held conviction whose intention in principle was to make affordable access to quality healthcare a right, rather than a privilege.

    That said, given increasingly strained financial circumstances among the citizenry and at all levels of government, I rather doubt the most business-wise alternative — single payer — can be kept bottled up much longer.

    1. lambert strether

      Aw, be kind to Dennis. Obama probably left a magic pony’s head in his bed.

      I mean, what else could explain Kucinich actually whipping for the bill on the House floor, when days before he totally opposed it, and on principle, too?

      1. ambrit

        As you well know, Politics makes strange bedfellows, even magical horsey ones.

  16. Dan Duncan

    The Walker Post is abysmal. Walker either has no idea what’s talking about, or he’s a liar.

    Walker states that there is no need for pricing transparency. “Don’t you worry about a thing, Little Patient. Just let the Insurance Company and Hospital take care of these little details.”

    As a result, Walker’s position is that the patient has no right to know what he’s being charged before being treated.

    Take some time and research the issue pricing transparency before simply talking Walker’s word that “you don’t need to know”.

    It all starts with the benign sounding, “Current Procedure Terminology” (aka CPT Codes).

    CPT Codes are essentially the currency of medicine. Doctors do not charge in terms of money for Procedure (ie $$ for a colonoscopy). Rather, they charge in terms of money for a Procedural Code. The distinction is very important.

    The key fact is the procedural codes are proprietary. The American Medical Association owns the codes.

    Think about that for a moment: The CPT System–upon which our Medicare System is based–is privately owned by the AMA.***

    The $$ reimbursement that Medicare (ie the US taxpayer) pays is copyrighted! The reason for this copyright, of course, is to strictly limit access to the codes so that licensing fees can be obtained.
    I’m not making this sh*t up, either. The American Medical Association makes over $70 million dollars a year by the hostage taking of the cost of medical procedures.

    This has the unfortunate side effect of keeping the general public from doing easy comparisons of healthcare goods and services. Of course this cozy arrangement benefits the insurance companies (who do not want those side by side comparisons because they promote competition and transparency).

    What’s more…there are over 87000 CPT Codes.


    We have a healthcare system where it is estimated that 20-50% is spent on Admin Costs.

    We have a COPYRIGHTED CPT protocol replete with 87000 codes that is straight out of Catch 22.

    We have a system where it is impossible to assess the cost of your medical care beforehand. You can only do this after the fact…but not beforehand. You have no way of examining the efficacy of your insurance company’s negotiation with the healthcare provider in the amount paid under your policy.

    And Jon Walker shrugs his shoulders and says, “What’s wrong with this arrangement? If you’re being rushed to a hospital for a heart attack you’re not going to go online and bargain shop. Ha!

    What a joke.

    In case the fact that AMA has a copyright on the coding (ie pricing) of medical procedures sounds far-fetched, a little more background:

    In 1977, Congress instructed the Health Care Financing
    Administration (“HCFA”) to establish a uniform code for identifying physicians’ services, to be used in completing Medicare and Medicaid claim forms. Instead of creating its own code, the agency contracted with the American Medical Association to adopt and use a code of medical procedures previously created by the AMA. The AMA code was embodied in a publication known as the Physician’s Current Procedural
    Terminology (“CPT”), to which the AMA held the copyright.

    1. Bryonie Pritchard


      The Dan Duncan Fan Club

      (Note: The Dan Duncan Fan Club is a tribute to the honored few and recognizes valiant service in the Pilkington Wars – and not just by Americans.)

  17. Daniel

    I grew up in Belgium under the universal coverage and it does work in providing universal quality coverage. However, the reality is that this system is also driving the country debt. A major difference between European countries and the United States is the access to good public higher education. All doctors in the US start their day 1 with about $200K of debts which translates directly to the fee charged for service (and then insurance). All doctors in Belgium and other countries start day 1 with zero debt. If we’re serious about reducing health care costs, it seems to me that the costs of med education should be at the top of the reforms list. This is not really being seriously discussed anywhere other than here:

  18. Susan Truxes

    I don’t understand why the health care debate disappeared. It was just shut down. I don’t buy it that it was shut down to protect the presidency and maybe salvage the better debate for coming elections. I certainly hope it stays on the front burner now until single payer is achieved. Without loopholes.

    1. JamesW

      Ms. Susan, I would say that it was shut down for the same reason I detailed below — the banksters own the media, period.

      As long as the two primary cost drivers of healthcare are ignored (leveraged buyouts and hedge fund speculation), we will never have any honest discussion on this matter of the utmost extreme national importance.

  19. JamesW

    The best way to illustrate the debt creation/profit stream – and how it ties in to the high cost of health care in the USA – is to feature the man who complains the most about the deficit and has for decades sought to eradicate Social Security, Medicare/Medicaid, and offshore as many American jobs as possible, Peter G. Peterson and the world’s largest private equity firm he co-founded, the Blackstone Group.

    Between 2005 to 2007, the top ten commercial and investment banks in North America made leveraged loans in the amount of $633.8 billion to private equity LBO (leveraged buyout) funds for a total of 956 deals.

    These “leveraged loans” were based upon securitized debt, financial instruments created and generated by the banks from debt (previous loans, commercial loans, auto loans, student loans, corporate loans and subprime loans — and it’s important to understand that subprime derivatives [which a portion of the loan amounts were derived from] constituted a drop in the bucket of total credit derivatives).

    So, debt created at that point, was utilized by the banks for LBO funds, which would be used to create ever greater mountains of debt. As an example, when the Blackstone Group did an LBO on Danish telecoms operator, TDC, in 2006, they put down only 10%, while taking out loans for the remaining 90% against their LBO target corporation, TDC. (In other words, their target, TDC, was also their collateral for their debt!)

    Because of this, there was an estimated 12% reduction in Danish tax revenues due to that major LBO in Denmark by Peterson’s Blackstone Group. Therefore, Blackstone created debt against that company, and further created more debt for the country and taxpayers of Denmark by that leveraged buyout purchase of theirs.

    So there was debt creation by the banks in those structured finance leveraged loans to the PE LBO funds, and further debt creation against their targeted takeover companies, and further tax reduction (i.e., more debt creation) from their LBO-type of takeovers.

    To add even more debt, many of those PE LBO targets were across the healthcare sector (and consider the extraordinary number of types of companies falling into that sector: clinics, medical instrument companies, R&D labs, hospitals, medical personnel, etc., etc., etc.); thus dramatically raising the price of healthcare sector costs in North America and elsewhere.

    To further add to the healthcare sector costs, there was considerable hedge fund speculation across the spectrum of the healthcare sector (there were an estimated 90 specific healthcare hedge funds during that period, plus general hedge fund speculators as well). Some of these major hedge funds are owned by the top banks (JPMorgan Chase, Goldman Sachs, B of A, Citigroup, Morgan Stanley) and some are financially interlocked with the top banks, as well as a few independents.

    Thus, we see how, just between 2005 and 2007 (according to GAO analysis of Dealogic data from a GAO report on private equity) two primary cost drivers in healthcare: hedge fund speculation and private equity firm LBOs, which was simply an item in the lengthy string of debt creation.

    And then that debt is socialized, i.e., shoved onto the public as exploding deficits and involved in increased deficit spending (with dramatic reduction in the tax base), further exacerbated by Peter G. Peterson, and his fellow debt-financed billionaires screaming for a reduction in the deficits which they created, profited from, then shoved onto the public!!!!

    And it was from debt they derived their fortunes, a most ill-gotten form of gain, which they will never pay back.

  20. Francois T

    Solutions like single payer and Medicare For All are impossible to implement within the current US political system. Contrary to all other advanced industrial countries, we do not have a fairly independent civil service in this country, nor do we have a parliamentary system of government.

    Imagine the Board of Directors of a big corporation which members would accept huge secret contributions from their own vendors. Does anyone think these directors could possibly give impartial and sound advice as far as running the corporation is concern?

    I don’t think so!

    Likewise, we have a “Board of Directors” of Medicare, called the House Ways and Means Committee. Given that 75% of the Fortune 50 are in health care, how much lobbying money do you think find its way in the accounts of the individual members? Remember also that Congressbandits have excluded themselves from the reach of insider trading laws. How bloody convenient! They make the laws and ooops! First thing you know, they’ve taken care of avoiding said laws.

    And…we are supposed to believe these clowns would be able to run a single payer system in a fair and efficient manner?

    Spare me!

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