Do you personally have a problem affording health care? Then you are nothing less than an American hero.
Listening to the Bushniks fanning out to confuse the media kittens in advance of the big State of the Union speech, I have seen the light: there is no health care crisis. (Well, I guess I'm ready to discuss it, with some facts and figures below...)
Look, I hate to steal our the President's thunder (no - really: seeing him present these points will be awe-inspiring; no one can deny that W has consistently outdone himself, setting new standards each year of his term), but as he will explain in the State of the Union, there is very little that is broken about American health care, and what is broken can be easily fixed by relying on private sector solutions and market forces.
Now you might think of the 46 million uninsured and 15 million under-insured as a problem. No, no, no.
In fact, these stalwart, uninsured citizens are the very vanguard of the consumer-directed healthcare movement. They are making healthcare better for all of us.
Without coverage, they will not be tempted to waste YOUR money on "frivolous procedures" (as one Bushnik put it on the radio the other day), procedures that only serve to drive up system costs. They may also save taxpayers money when they die earlier than they otherwise would have, but this is unclear, as many will end up making un-reimbursed emergency room visits and/or end up on Medicaid.
Spreading the Manure
As the Bush apparatchiks fan out to spread the (ahem) good news on health care, there will be lots of hard-hitting interviews on the cable news channels. They will all play out more or less like this:
Media kitten: Meow, mrow? (Fttt, fttt.)
Bush apparatchik: Though the health care system is just fine, there are ways we could improve it. The basic answer is to create private accounts. This will solve everything.
Media kitten: Mrow-row meow?! (Coughs up hairball)
Bush apparatchik: Wow - that's a tough question, but a good one! You see with private accounts, market forces will take care of everything. For example, unfettered market forces have fundamentally shaped the American media landscape. This has allowed Americans to enjoy the highest quality TV-journalism in the world.
Media kitten: Mrrowll-meow! (purrrrrr, purrrrrr)
In sum, the message is obvious: just put your trust the hands of our increasingly centralized massive health-care conglomerates nimble, efficient private sector providers, and it will all be taken care of.
Taken Care Of
Well, someone will be taken care of. I was just flipping through an analysis of the stock performance of a group of large managed care organizations (MCOs). Collectively, this group (Aetna, Cigna, Coventry, Health Net, Humana, Sierra Health Services, UnitedHealth Group, and Wellpoint) realized a 2005 stock-price appreciation of 54.5%. (Does anyone here know stocks? That's a good performance, right?)
The explanation: Medicare Part D. Around 45 million elderly are now eligible for this prescription drug benefit, and something like 10 million have signed up so far.
Now you may have heard about how well Part D is working. Many poor elderly who qualify for both Medicare and Medicaid - "dual eligibles" - were auto-enrolled in new Part D plans. Tens of thousands of these seniors showed up at pharmacies in January to get their prescriptions filled and were denied medications, or forced to wait for days, because of glitches in this process. States had to step in and spend unbudgeted $ millions to provide a stop-gap fix.
Fixing Markets
Under Part D, these drugs are being provided at a cost that is about 9% below list price (taxpayers foot most of this bill). To take the case of the dual-eligibles, when these same drugs were being provided to these same people (with us same taxpayers paying) prior to January 1, the average discount was more in the 30-40% range. For some categories of drugs, in those states that ask manufacturers for "supplemental Medicaid rebates" the discounts were north of 80% in some categories.
This is called leveraging bulk-purchasing power. It's a concept one encounters when free-market forces are at work - larger private sector providers also get much deeper discounts than the average ~10-15%, as well. In both cases, manufacturers are free to walk away from these rebate demands - and risk having their drugs knocked off of formularies if they are therapeutically non-distinct from other drugs in the same category.
Of course, with those "dual-eligible" Medicaid recipients (who accounted for half of Medicaid drug spend) now in Medicare Part D, the ability of state Medicaid programs to get these deep discounts -- the purchasing power -- will now be reduced.
So Republicans claiming to cherish the power of market-based solutions have basically undermined the market-mechanism that was saving tax-payers $ hundreds of millions on drugs for the poor. Imagine that. Shocking!
Figuring this out, of course, would require making several phone calls and, likely, doing some independent analysis with a spreadsheet. This is way beyond the charter of most modern journalists. Its way easier to just write down the talking points of both sides and call it "balanced reporting." And for most of those journalists who did likely figure this math out, there is little chance it would get past the editors of the newspapers in the modern right-wing corporate media conglomerate (and no chance at all it would end up on TV news). (In a select few cases, reporters have figured the basic storyline out, and it has actually gotten printed...)
Educating the Masses
Beyond the dual-eligibles, another 8-9 million low-income seniors qualify for Part D with subsidies (just not full subsidies). According to yesterday's USA Today, fewer than 300,000 of these seniors (around 4%) have signed up so far.
We taxpayers spent more than $125 million on programs to educate seniors about the benefit. That's about $417 per low-income sign-up so far. We used Republican-inspired private sector solutions to deliver this education, too. Now in Bush-Delay Washington, who do you suppose got those contracts? Well, let's just say they've done a heckuva job.
Part D Explained
To summarize, under Medicare Part D, drug prices are high, reimbursement is generous, and MCO profits grow substantially - enough that their stock prices rocket.
For the MCOs and pharmacos, this more than recoups the $675 million lobbying investment over the last 7 years. Private-sector, market forces at work. It's the American Way.
The Medicare Modernization act took care of regular corporations, too - in the form of an estimated $111 billion in subsidies over 10 years to employers that already provide retiree health care benefits (p 22 of the link).
But wait - that's interfering in the private sector! Those companies offered that health care benefit to attract top talent; now the government is interfering in the magical workings of the free market! The only solution I can see will be to pass those subsidies on through to CEO and senior executives in the form of bonuses - you figure the health care expenses were already budgeted, so the money is not needed there - and those executives will have to work extra hard, now, to keep our economy going in the face of all this gross governmental interference: they will deserve every penny!
People who need the drugs most (those eligible for subsidies) are not signing up, but the costs from the better-off seniors who are signing up in modest numbers, and the auto-enrolled dual-eligibles who used to be covered more cheaply, it will still cost us a fortune.
What will the total tab be for the Part D pork sluice? According to the Medicare trustees, the fiscal gap over the next 75 years created by the 2003 law - not the financing gap for Medicare as a whole, just the additional gap created by legislation passed 18 months ago -- will be $8.7 trillion.... That's about three times the amount President Bush proposed to save by cutting middle-class Social Security benefits. (Paul Krugman, NY Times, May 6 2005)
Severe Sclerosis
Krugman has written a lot about health care in the past year, but his first column in the series (April 22, 2005) summed up the key points about our system best.
...According to the World Health Organization, in the United States administrative expenses eat up about 15 percent of the money paid in premiums to private health insurance companies, but only 4 percent of the budgets of public insurance programs, which consist mainly of Medicare and Medicaid. The numbers for both public and private insurance are similar in other countries -- but because we rely much more heavily than anyone else on private insurance, our total administrative costs are much higher.
According to the health organization, the higher costs of private insurers are ''mainly due to the extensive bureaucracy required to assess risk, rate premiums, design benefit packages and review, pay or refuse claims.'' Public insurance plans have far less bureaucracy because they don't try to screen out high-risk clients or charge them higher fees.
And the costs directly incurred by insurers are only half the story. Doctors "must hire office personnel just to deal with the insurance companies," Dr. Atul Gawande, a practicing physician, wrote in The New Yorker. "A well-run office can get the insurer's rejection rate down from 30 percent to, say, 15 percent. That's how a doctor makes money. It's a war with insurance, every step of the way."
Isn't competition supposed to make the private sector more efficient than the public sector? Well, as the World Health Organization put it in a discussion of Western Europe, private insurers generally don't compete by delivering care at lower cost. Instead, they ''compete on the basis of risk selection'' -- that is, by turning away people who are likely to have high medical bills and by refusing or delaying any payment they can.
...At a rough guess, between two million and three million Americans are employed by insurers and health care providers* not to deliver health care, but to pass the buck for that care to someone else. And the result of all their exertions is to make the nation poorer and sicker.
* Outsourcing consultants will take care of this shortly - within a decade, I predict that half of these jobs will have been shed and sent to India, knocking the toll on our system down from 15% to, say, 11% - and tripling the stock prices of our our increasingly centralized massive health-care conglomerates nimble, efficient private sector providers! And adding another million or so people to the Consumer Directed Healthcare Vanguard!
We could also look under the rock of Health Savings Accounts (some observe that they are mainly a tax dodge for the wealthy, while others notice that they serve to further undermine our system of employer-based coverage), but W will speak enough about HSAs in his speech. And if W is touting the plan, well, you know what to make of it.
I also have not covered the fact that, despite our enormous healthcare expenditures, we get poor healthcare outcomes. But, as Scottie would say, this is old news.
Republican Diversity
By now we've become accustomed to thinking of Republicans as reasoning-challenged, lockstep automatons in the thrall of vile, kleptocratic con men. But it turns out they are not all in lockstep. Healthcare is an issue that proves there is diversity of opinion among Republicans.
"Enterprise" Republicans believe that if you have health problems, you should just take care of them. Got an unexplained ache? Shortness of breath? You simply ask around the country club to identify the best specialist, have your personal assistant make you a priority appointment with that specialist (and, of course, fax them your gold-plated health-insurance coverage details) and go get it taken care of, period.
Religious Republicans, on the other hand, argue that its probably inappropriate to take care of the problem. Are you hemorrhaging from unexpected places? Strange growth on your arm? Clearly you've sinned against God, and he is punishing you appropriately. If He wanted you to be able to treat it, He would have given you a job with good health coverage. There is no reason to despair, though. Just attend church more regularly and increase your donating to Pat Robertson - he'll put in a good word for you with God. (And, hey, if you do shuffle off this mortal coil, you get to spend the rest of eternity in heaven, singing Christian rock songs with Jesus himself!)
Ideologue-Activist Republicans are more focused on efficient, earthly solutions. Have lots of patients who have been diagnosed with cancer? Forget all those expensive drugs. Just have them get themselves copies of The Fountainhead by Ayn Rand. They can train themselves to will the cancer into remission. (If they accidentally pick up Atlas Shrugged, they will just die of boredom, instead, which will also be economically efficient.)
Rabid Militarist Republicans have an applied solution. If you are worried about health insurance, just join the Army, Navy, Air Force, or Marines. The military offers fine healthcare benefits (though, it must be said, military service may not be beneficial to one's health).
Conclusion
To be fair, I am not giving real citizen-Republicans credit. A recent Pew poll found that 65% of Americans favored government-guaranteed health insurance for all - including majorities of social conservatives.
And implementing smart single-payer systems can be done in mature democracies (Hillary Clinton, call your office). Taiwan recently shifted to a single payer system that has offered nearly-universal coverage at essentially no extra cost. They studied the problem, and solved it like adults. It is high time that we in the United States dispatch the legions of kleptocratic con-men occupying Washington and do likewise.