Health Care Legislation

Health care legislation passed while I was in Canada on business. The subject did come up once. Those who lived their life in Canada were confused about how controversial it was, and that led to an intelligent discussion on the pros and cons of the reform – something that apparently is difficult, if not impossible, to achieve back here in the States. My Canadian co-worker referred to their system as “free” health care and my American co-worker and I pointed out that it isn’t free, it’s pre-paid. It’s pre-paid much like we pre-pay for a level of security provided by local police or the military. It is a matter of policy opinion whether health care should be prepaid or not, and that should have been the focus of national discourse. The Republicans purposefully avoided that discussion in favor of fear-mongering and the Democrats demonstrated their long-held incompetence at controlling the discussion. The media, looking for sensationalism, failed to increase the intellectual level of debate as well. We are left with a lot of misinformation, anger and fear on the topic. I am certain my perceptions of the bill aren’t entirely right, either.

First, I would like to talk about what the bill isn’t. The health care providers, for example hospitals and doctors, are in the private sector, so we didn’t socialize health care. The heath insurance industry is no less privatized than it was prior to the bill, so we don’t have anything approaching socialized health insurance, either.

The Office of Management and Budget (OMB) models suggest that it will be budget neutral or will slightly reduce the deficit. Of course, those are financial models based on assumptions – the same technique used by businesses to provide financial outlooks – and they could be wrong. However, the OMB is generally considered non-partisan. The OMB report is not “the big lie” as one of my conservative friends characterized it.  The OMB models for the Bush tax cuts were correct in modeling the large deficits they would produce. Where were the fiscal conservatives, then? The Republican argument that Democrats are the only party of fiscal irresponsibility were entirely dashed by the spendthrift Republicans in the decade past.

So it’s not socialized medicine. It’s not socialized heath care and it’s not a budget-buster. What is it, then?

The most important facet of the bill for me is the removal of exclusion for pre-existing conditions. That’s something that anyone – except for health insurance executives perhaps – should herald as a positive outcome.

It’s also an entitlement program in the sense that medical care will be provided for lower-income families. Republicans have a long history of opposing social safety nets and that is a position that is worthy of an intelligent policy discussion. That safety net, along with mandatory insurance, should significantly ease a serious dysfunction in our current health care system. People who can not afford health insurance often wait until they are very sick and then seek treatment in emergency rooms, which is a very expensive form of health care delivery, compared to doctor office treatments early in the disease process. This and the other systemic dysfunction in our health care system create the largest per capita cost in health care services for Americans, while leaving us 37th in health outcomes in the world. This, too, should be heralded as an improvement over the current situation.

I haven’t read the bill, of course. I am certain there are items with which I would disagree and items that I could add to the list of benefits. Instead of picking through reams of blogs and news articles to create a pros and cons list, I would like to close with an issue that is larger than the health care debate and is considerably more important.

Policy differences aside, I believe the most basic role of government is to first recognize problems and evaluate the scope of those problems. When a problem is recognized and the scope is appropriate for governmental action, our elected leaders should work together to create policy that strives for efficacy to resolve or ameliorate the problem. The gift of our democratic governmental structure to our society is the structure of checks-and-balances that encourages debate and pushes outcomes toward moderation. After the policies are put into play, there needs to be a governance model and checks for the efficacy in the field in order to adjustments as needed.

Republicans have lost the ability to recognize problems. The last Republican to do so was Ronald Reagan, who recognized the problem of an over reach of regulation and a tax structure that limited economic growth. He worked with Democrats in Congress and resolved that problem. The culmination of that solution subsequent to his presidency resulted in an over reach in the other direction and led to the economic failures of 2008. Today Republicans fail to see the problems in the current health care situation and most important, the demographic trends that were clearly unsustainable without action. Republicans fail to see the effects of global climate change. Republicans fail to see the effects of globalization on the middle class.  On the rare occasion where Republicans can not dismiss the reality of a problem, they are opposed to putting a governance model in place because that would imply a regulatory environment that enforces the policy, measures outcomes and supplies the information to make needed adjustments.  In spite of the economic failures 2008, caused by a lack regulation, there is no willingness by Republicans to put a governance model in place.  Simply put, Republicans don’t want to govern.

Democrats on the other hand seem to be able to recognize problems, but are ineffective at implementing policy. The financial system is still encumbered by the risks that led to the financial collapse in 2008. Climate change policy seems to be going nowhere. For what seemed to be the longest time, it appeared that Democrats – even with their man in the White House and majorities in both houses of Congress – were going to be ineffective at solving the problem of health care in this country. It is that effete nature of Democrats that prevents me from calling myself a Democrat.

While it is unclear if this health care reform will be effective, it shows that Democrats can still govern in spite of the recalcitrant and dysfunctional opposition party. That, at the very least, makes the health care bill – in the words of Joe Biden – a big fucking deal.


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13 Responses to “Health Care Legislation”

  1. Gary Murphy Says:

    It occurred to me after I posted that another Republican after Reagan was able to see a problem and effectively deal with it. George H.W. Bush saw some fiscal problems and raised taxes to be fiscally responsible. How do contemporary Republicans view that decision?

  2. jeano Says:

    Good blog posting. Just a note on the pre-existing conditions portion of the bill. Its great for kids as it should take effect shortly, however it doesn’t come into play for adults until 2014 – not good for those of us with those pre-existing conditions (asthma)

  3. Kim Krostue Says:

    Key words in any democrat “recognition” of a problem: tax, spend, control, entitlement

    • Gary Murphy Says:

      That is a stereotype of a Democrat, not a modern Democrat. You seem to have forgotten that the last president to have a balanced budget was a Democrat. George W proved there is something worse than tax and spend – it’s spend and don’t tax to compensate. Of course, the answer is also to cut spending. We should start with the Pentagon budget, but that seems to be off limits for both parties.

      “Control” in the form of minimum, effective regulation is a good thing. A “hands off” approach to governance that we have seen from conservatives since Reagan is the root cause of the 2008 economic woes.

      Entitlement is too complex for a response here, so perhaps that will be a future blog.

      • Kim Krostue Says:

        Actually I think both parties signed up to repeal the depression era Glass–Steagall Act in 1998. Turns out they were pretty smart in 1930 and looking in the rearview mirror it was a big mistake and started us down fin industry disaster.

        Control: You can never underestimate greed. I continue to be fascinated by Enron. We do need reasonable regulation. Those who are greedy exist in both the private and public sector.

      • Gary Murphy Says:

        I am fascinated by Enron as well. If you haven’t seen the documentary “The Smartest Guys in the Room”, you should treat yourself.

      • Kim Krostue Says:

        As I get ready to write a response based on facebook post from yesterday, the modern dem balanced the budget with a republican congress. If you can show me how the current modern dems in the white house and congress are going to do that, I am all ears.

      • Gary Murphy Says:

        True… and Clinton presided over a high-growth economy (dot com bubble) which helped a LOT. However Bush w/ Rep Congress deficit spent the whole 8 years. No one could balance the budget in the current (Republican-created) economy.

  4. Kim Krostue Says:

    Am going to focus my response just on the health care bill. Its not a bill anymore it’s the law. I believe the Obama administrations priority on healthcare has been completely misplaced. The focus for the past year should have been on jobs. Bob Herbert, columnist for the NY times and certainly no conservative, wrote an excellent column about this March 9th. “The Obama administration and Democrats in general are in trouble because they are not urgently and effectively addressing the issue (unemployment) that most Americans want them to: the frightening economic insecurity that has put a chokehold on millions of American families. “ (and not wanting to repeat the entire article here would urge all to read) The effective unemployment rate still hovers around 17%. Caterpillar and AT&T have both done an analysis of the cost of HC to their companies. 150M after tax for Caterpillar, 1B in charges for AT&T. For these two companies it means that additional Cat and AT&T employees will either lose their jobs or have their jobs sent overseas. And what about the rest of the fortune 500 much less small business. Pelosi said the HC bill would almost immediately create (hope she meant private sector) 400K jobs. I have seen other projections that say the HC bill will not create US jobs but will cost 700,000 US jobs. For the sake of the US, on this one, I hope Pelosi is right. I do not feel this administration has effectively recognized and understood the significance of the unemployment problem. In fact I don’t think there is anyone at the top of the administration that understands creating private sector jobs in a global economy. If the dems get an election pounding this fall it will be because of jobs and the state of the economy not healthcare and the swing groups will be independents and seniors.
    Lets move on to the healthcare financial model that I called the big lie. Your first sign is that the model is based on 10 years of collecting taxes for effectively 6 years of benefits. The second sign is the medicare mandates for the states. Again the NYT on Sat March 27th had a good article on the dilemma this creates for the states. In particular, California which is already close to bankruptcy will over the years be hit with massive new Medicaid outlays which are unaccounted for in the CBO model. Your third sign is this legislation creates 159 new agencies, commissions and bureaus. (plus 16K new IRS agents) Even if you somehow believe these will be value adds to health care delivery the complexity of putting these in place on time and on budget with quality is mind boggling. The fourth sign is the administrative compliance costs (and it will be billions) that will be absorbed by the private sector and individuals. These are never accounted for in a govt financial model. For example the Caterpillar and AT&T numbers will include this burden. The fifth sign is experiential. Name one government entitlement program that has ever reduced cost over its life. Basically, it is counter intuitive to believe this new HC law is revenue neutral or will reduce costs. And since you quoted Biden so will I, the 159 new government entities will create one gigantic fXXKing mess. (“If you have ten thousand regulations you destroy all respect for the law.” Winston Churchill).
    One last point on the financials. The California delegation (Pelosi, Harman, Feinstein, Boxer, Waxman, et al) are the leaders of the dem party in California and leaders in the HC push. Dem party in California has been in charge of the legislature for 30 or 40 years. And California is close to bankruptcy. How does one kill the goose that laid the golden egg?? Traditionally one sixth of the US economy. (Actual13.2% unemployment rate in CA in Jan, effective was higher) Ask them because they did it. Then move onto the City of Detroit. Now there is recognition of the ability of democrats to govern.
    Moving back to the 159 new government entities and the number new federal agencies to be created. You are right we do not have a public option. What we do have is the creation of a massive new bureaucracy to directly control the insurance companies and health care delivery. I wonder what if any analysis has been done to determine the value add of each new federal job to health care delivery. I wonder if it will ever be done. What we do know for certain is that if a bureaucracy is ever put in place it will always spend vast amounts of energy justifying itself and attempting to expand its reach. And I consider the 16K new IRS agents to be reflective of the intimidation factor in this law. Exactly why do we need these when this country has a high degree of voluntary tax compliance. Its interesting that Waxman is already demanding hearings and requesting internal documents from Cat and AT&T on their cost projections. Intimidation, you bet. Do I think Waxman is clueless about the details of this legislation? Yes. You and I both know that major corporations have been all over this legislation. They wouldn’t have gone public without doing extensive homework. But Congress passed a law that many members didn’t read with a financial model that many members didn’t understand.
    This bill is now law in a time when this country is running massive deficits. For the first time this year social security will take in less money than it pays out. Virtually every state has revenue shortfalls and budget problems. I believe Missouri’s revenue projection is 1B short of the money required for the budget. Last Friday, CNBC said the most recent deficit projection for the decade is now 8 trillion dollars worse than in 2008. Much like the unemployment rate, this is a catastrophe for every American. The best thing we can do for each other is improve the economy. Yet Healthcare mandated 14 new taxes (one article I read said the largest tax increase in US history) including payroll taxes on a barely recovering economy. And the legislation itself didn’t do the simplest of things to save hundreds of thousands of Americans money. Dorgan of North Dakota introduced an amendment to allow for the importation of drugs and it was voted down. And the stench of the special deals gives new meaning to slopping the hogs. In the end what can make this bill work is heavy focus on improving the economy, no special deals, everybody in, reasonable regulation, and a relentless focus on cost take out and process improvement in the entire healthcare landscape.
    But then I am attempting to argue like this law is actually about healthcare versus income redistribution, government control, taking care of dem special interests (ie government employee unions, lawyers), a government power grab, and the first step to getting a public option. (and the dems make laws for the masses and want out clauses for themselves) NYT had a good recent article on this (wealth inequality). Income redistribution is one of the driving forces behind any Obama administration legislation. In any case, we now have to live with this healthcare bill. The near term chances of repeal are slim and none. The real question is will anyone really attempt to make improvements to this legislation that should be made.
    I predict the American public will react negatively as the details of the bill become known. The devil is in the details and the American public will recognize the devil. This will be particularly true of seniors. We will have to see what this means in November. If the economy and unemployment rates haven’t improved dems are toast regardless of HC.
    Finally, combining the HC bill spending with the current and projected federal deficits can mean only one thing with the dems in power: new taxes. Besides letting the Bush tax cuts expire I believe you will hear the dems call for something like a VAT tax. When you want European style safety nets you will get European style taxation.

    • Gary Murphy Says:

      Kim. Thank you for taking the time to put your thoughts together.

      I won’t have the time to track down the source of the statistics you asserted, but for the sake of argument, I will assume they haven’t been spun. That said, Cat and AT&T numbers are based on models, just like the CBO numbers. You can choose which to believe, I guess.

      The bigger point is that the Republicans chose a strategy to ignore the very real health care problem. Instead of constructive engagement to address those concerns, the strategy was to make this “Obama’s Waterloo” and poison the well with fear.

  5. Kim Krostue Says:

    Support my view on the HC financial model

    Steny Hoyer comments on the HC financial model.

    Hoyer acknowledged Republican concerns that those savings may not be realized, as they’re based on measures lawmakers may be reluctant to enact. The health bill’s savings come through Medicare cuts, which Democrats said won’t affect seniors’ quality of care, and through new taxes on high-income earners.

    He called on lawmakers to have the “courage” to stick by them.

    “Those savings are contingent on Congress keeping its pledge to take hard votes,” Hoyer said.

    “Congress does not have a good track record on that objective,” he added.

  6. Kim Krostue Says:

    Gary, HC is tax, spend, control, and entitlement. Back to the future.

  7. Patricia Rich Says:

    I feel a bit talked-out on the topic, but did read and appreciate the comments here.

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