Monday, March 22, 2010

Health Care Reform: Sound 'n Fury Signifying What?

Last summer, I wrote about A Beta Male's Imminent Health Care Failure, and asked President Obama "to grow a pair."

I predicted that Congress would eventually pass something, but that without a government insurance component the promises of near-universal coverage and cost control would be empty. The Democrats would put lipstick on the pig, and the Republicans would walk away laughing, knowing that health care's grim future would now be universally deemed a Democratic catastrophe for their having passed health care "reform" to begin with.

Well, here we are. Obama and the Democrats are doing the victory dance. The Republicans aren't laughing for the cameras, anyway. I doubt they are laughing in private, either. While I still think it's a weak law that won't adequately address the crisis, it's equally true that the Democrats achieved a crucial political goal: The federal government will forever be visibly planted right in the center of health care.

The "Government Takeover" of Health Care?

In a political sense, the Republican opponents are correct: The feds have taken over health care for all to see. Once in, they won't be back out. Oh, and my prediction that this would lead the Republicans to pin all health care problems on the Democrats? Have a look at this.

But in real life, how different is it? On the day I write this post, with Obama yet to sign the legislation, government is already the 20-ton gorilla in the room, spending half of the health care dollars by means of Medicare and Medicaid, the Veterans Administration, and subsidies for medical research. 

We all had a chuckle at the signs seen last summer reading, "Keep your government hands off my Medicare." Anyone with a quarter of a brain knows that the government requirement for hospitals to open their emergency rooms to everyone established a de facto national entitlement at least to critical care, if at the cost of bankruptcy to anyone without insurance but possessing other assets. The VA is literally socialist: Government owns the hospitals, and employs the doctors and nurses. And if you believe the latest stories, the VA has an enviable record when it comes to both cost control and outcomes.

But for the civilian majority with jobs and insurance, the face of health care has been doctors and insurance companies. From here on out, there's a new sheriff in town, the federal government. Congrats, Democrats.

Responsibility Without Control: Be Careful What You Wish For

At some point, it's always worthwhile to have a look at the reality of a situation. Politicians hate it when people do that. The corporate-funded Tea Party, which has taken over the Republicans, would have people think we're headed for communism and death panels. The Democrats would have you believe that Barack Obama has driven the dragon from the cave's mouth.

Both views are bullshit to the moon and back, of course. The health care bill, for all the sound and fury, is limited in scope.  It symbolically puts Uncle Fed in charge, but the insurance companies will still be at the wheel, charging unregulated rates for the essential service of collecting premiums and denying claims -- and, far more importantly, for paying the outrageous prices charged by doctors, hospitals, and drug companies.

The dirty secret of the U.S. health care system isn't the gigantic bonuses given to insurance company CEOs. I'm as upset about that as anyone, but when analyzing a company or a system, you'd better look for the real money. And here's where the real money is -- in the U.S., doctors charge three times as much as their counterparts in Europe; diagnostic scans cost three times as much; drugs are double, triple or more.

The health care legislation just passed by Congress does nothing to control those prices. Nothing. Zero, nada, zilch. Unless and until anyone grows the stones to take on the real issues, "health insurance reform" will be a shell game. Oh, and without a government-operated "public option," the chances that the federal government will step up to the plate and do that are less than they otherwise would have been.

The Hope, and the Risk

This legislation is pretty bad, and it's going to have to be changed. For this Democrat, the hope is that, over time, the public will come to see where the real problems are, and will look to the federal government to address them.

In my view, only the government can do that. Big Health Inc. is too big for any one state to do it. The insurance companies? Forget it. Even if they wanted to take on the providers or the drug and device companies, they are too fragmented, and lack important regulatory powers. Bringing to heel the likes of Pfizer, Roche, G.E. Medical, every surgeon charging $1,000 for 15 minutes of his time, and every hospital gouging $2,000 a night for a noisy room -- that's a job for the federal government. The free market has failed abysmally.

The risk for Democrats is their usual timidity and fragmentation, not to mention corruption. The latter will only get worse in light of the recent Supreme Court decision declaring corporations to be "people" for political purposes, able to openly dump unlimited funds into the electoral system. It was hard enough for the Democrats to approve a timid start at health care reform. I won't hold my breath waiting for them to tackle the real issues, although now that federal government is widely seen to be at the center of things, they might find it tougher to hide than before.

As tough as this is for Democrats, I'd hate to be a Republican looking at the future.

The government is now in the game for all to see. All the Tea Party's horses and all the Tea Party's men won't be able to change that. Someone should have noticed along the way that George W. Bush failed to privatize Social Security, i.e., loot it and turn it over to the banks. The Republicans were forced to defend Medicare during the debate on this legislation, and the overtly socialist VA is untouchable.

The most the Republicans can now do is be sideline snipers. They've backed themselves into the "No" corner, a place occupied by only a small minority of Americans. They are no Republican solutions, only invective. From time to time, they'll make short-term gains with health care complaints, but the response (from their viewpoint) will be even worse: More government involvement. There'll be no other alternative, because the Uncle Fed is in it for keeps.

Ultimately, the Republicans will have to do what they did on Social Security in 1952. After two decades out of power, they turned to a popular general named Eisenhower. Along the way, that popular general beat out a Tea Party kinda guy named Taft. At issue was F.D.R.'s New Deal. Taft wanted to repeal it and Eisenhower wanted to keep it. The rest is history. That's what will eventually happen on health care, but it'll take a while to unwind all those wingnuts who they whipped up into such a frenzy. Democrats, being politicians just like the Republicans, will think they are smart and will grow fat and lazy, etc.

A Short-Term Political Note

When you go gunning for the king, better make sure to get him. Now that the Republicans have failed, they're in a pickle, at least for a while.

For the past year, they've allowed the Tea Party to set their agenda. Now the screamin' wingnuts are demanding that Republicans call for repeal. I think that's an electoral loser. The polls showing opposition to "health care reform" reflected public distaste for the messy battle. When it comes to the specific provisions, the public supports them. Moreover, once the "Ts" have been crossed and the "Is" have been dotted, most people are going to want their politicians to calm down and try to make it work.

But not the Tea Party. They'll continue to scream their heads off, and because the Republicans depend on them for votes, they will have to keep calling for repeal. I think that'll be a losing tactic this fall, and in 2012. But internal political realities will force the Republicans to stay in that corner.

Forgive me for feeling a little like the Japanese feudal leader in the James Clavell novel, Shogun, who meditated for a couple nights on the screams of the English sailor being boiled alive. Tea Party, keep wailing. Has anyone told you how beautiful you sound?

Okay, But What Does It Mean In Real Life?

Not a lot's going to change right away. The providers (doctors, drug companies, hospitals, device makers) will stay fat and get fatter. The insurance companies will keep their rakeoffs. If you're poor, you'll get help. If you're in the middle class, maybe you'll get some help but it's not going to feel very good. If you're rich, you'll have one more reason to bitch about your taxes.

Over time, I think the effect of health care reform will be to focus now-diffused complaints about health care onto Washington. The clamor will be to "fix" the legislation. The Republicans, locked into a stance of repeal and denial, will find themselves increasingly locked out of that debate. But, in the long run, it'll all depend on what's done about doctor's fees that are triple those in Europe, about scanner fees triple those in Europe, and drug prices double, triple, or higher than those in Europe.

Can we look those dragons in the face and bring them to heel? Your guess is as good as mine.


  1. As the sole card-carrying American among my friends here in Vancouver, I often have to explain the American health care system to others. Canadians understand your analysis quite intuitively: the standard anecdote up here about American health care is that if you have some chest pain when you're in the states, you'll spend four hours in the ER and get a bill for $50,000.

    The reason health care costs half as much (with better outcomes) up here is that everybody makes less money. Drugs cost less than the monopoly price because government regulates prices. People use fewer drugs because government says drug companies can't advertise them to patients. Doctors are paid less because the government sets their reimbursement.

    The advantage of the US system is that with less regulation, you should have fewer shortages. But even that's not really true. With the new health plan, 30 million people will have to buy health insurance, but there is a shortage of what they need most, which is regular primary care.

    This health bill won't last long. Healthy people will sign up for insurance and find out there's a shortage of primary care docs. They'll realize the penalties for not buying insurance are trivial. Only the sick will stick with the program, making the cost of a policy even higher.

    Maybe the next version will be better, and perhaps it will be worse. It really depends on the next election. Perhaps it's a good strategy to put a flawed product out their and improve it later, but it's a very flawed product.

  2. Yeah, Glenn, this is only the beginning of the health care wars, that's for sure. The issue is sure to dominate politics for a long time.

    The Democrats need to be careful (now there's an oxymoron for you, "careful Democrat") not to overpromise. They're walking a fine line, and unlike the Republicans, they'll have most of the media and all of the corporations shooting at them.

    But the Democrats have some guns here, too: The objective need of millions of people who are increasingly desperate. With Uncle Fed in the room, kimono removed, those people will be looking to government, and that's natural territory for the Democrats.

    You raise an interesting point on adverse selection, i.e., that the healthy people will be opting out because the penalties won't be sufficient to force them in.

    Over time, I think we'll see the "public option" come back in some form. Frankly, I think "Medicare for All" was the way to go, with private insurance companies selling wraparound coverage, as they do now here and as (I believe) happens up there.

    So, while there will continue to be big fights, I do think Obama and the Democrats, pathetic as they are, managed to make it across the Rubicon. I don't think there'll be any turning back.

  3. grinder where you been? have not seen you on Field's blog in some time. You were a calm rational voice of reason as this latest post proves. There have been thousands of posts, articles, news shows etc.. about the health care fiasco you summed it up pretty well in a few paragraphs thanks for this cogent article. So the problem is rampant profit no surprise there yet my doctor friend tells me he doesn't make enough money ha! Funny thing he never looks hungry to me it just proves no one is ever paid enough there is no one who has enough money greed rules!! Well I hope you are right and now the foot is in the door maybe this will create a slippery slope straight to single payer and a system that is like our neighbors to the north. This current bill is barely a band aid and we need surgery with sutures. hey people with kids are getting a good break with this deal and it will eventually end the egregious policy of recision so it is a start.

  4. Thanks for the good words, finefroghair. You are one of a handful of sane commenters on that site. I just tired of the same people making the same comments all the time. It was time to take a break. I do pop in there as a lurker from time to time, though.