“More than a third of Americans believe that Medicaid is akin to welfare, with the implicit subtext that racial and ethnic minorities are the principal beneficiaries.
“If that’s what they think, they’re dead wrong.”
Thomas Edsall, writing in the New York Times
“Nobody knew that health care could be so complicated,” the president of the United States said a while back. And he said that after promising during the last campaign that every American would have health care coverage and that the wallet impact of paying for health insurance will be a “lot less expensive” for everyone – taxpayers, consumers and providers. Who knew?
All that bluster and ignorance amounted to a pipe dream then and it remains a cruel joke now as Senate Majority Leader Mitch McConnell madly maneuvers to “repeal and replace” Obamacare with almost no regard for the wide swath of damage his legislation will inflict on millions of Americans. The Congressional Budget Office projects 22 million Americans will lose health insurance if the GOP plan is adopted.
That the Republican health care plan is almost completely disconnected from reality should be no great surprise. Republicans have been making political hay out of trashing Barack Obama’s signature legislative initiative for eight years, while never proposing any rational plan to replace what they succeeded in convincing their political base was nothing short of a socialist plot. It was a ruse. A big con.
Pennsylvania Republican Senator Pat Toomey provided a textbook example of a Washington political gaffe – defined as what happens when a politician stumbles and speaks the truth. “Look, I didn’t expect Donald Trump to win,” Toomey told voters this week. “I think most of my colleagues didn’t, so we didn’t expect to be in this situation.” In other words, demonizing the other party’s health care approach was really all about politics never about policy.
History will record, even if few Republicans acknowledge the fact, that the broad outlines of Obama’s Affordable Care Act were once the basis of conservative health care policy. I know its old news, but a guy named Mitt Romney implemented essentially the same policies as governor of Massachusetts and then spent the 2012 election trying to deny he had ever heard of the coverage mandate. But, admittedly that was way back when conservatives actually cared about policy. Or cared about something as basic as trying to get as many Americans as possible insured against the vagaries we all face regarding health and wellness.
Just a reminder: For health insurance to work, both in terms of actuarial soundness and individual affordability, you need to have the greatest possible number of people covered by an insurance plan. The whole idea of insurance is to spread the risk, flatten out the cost to everyone and control costs both for consumers and providers of care. This is why every state in the nation mandates that when you license your automobile you must provide proof of insurance. We don’t allow an individual motorist to avoid coverage that serves to protect their interest as well as the interests of the rest of us simply because some yahoo in a pick-up truck hates a “government mandate.” You either buy the auto insurance or you don’t drive, at least not legally.
Insurance isn’t about “freedom” to chose. It is about sharing risk and spreading cost. It is a responsible we are all in this together way to broadly address a greater public good, which is why the ACA mandated coverage and provided subsidies for the millions of Americans who would otherwise be priced out of the insurance market. At the same time, Obama’s health insurance plan expanded the existing government program called Medicaid in order to address the needs of millions of Americans – including many, many children – struggling to make ends meet on low incomes, living with disabilities or closing out their days in a nursing home.
The End of Medicaid as We Know It…
The legislation Republicans are attempting to advance in Washington, D.C. would end the individual mandate requirement and dramatically reduce the national commitment to Medicaid to the tune of $750 billion over the next decade.
As Thomas Edsall wrote recently in the New York Times, “Since its inception in 1965, Medicaid has become an integral and major part of the American safety net. Not only does it cover health care for the poor, it prevents millions of members of the working and middle classes from losing all their savings and falling into bankruptcy when they or their family members become too old, sick or disabled to work. Medicaid also provides essential help in family planning, preventing premature births and supporting infant and child health.”
Edsall correctly notes that a significant majority of Medicaid beneficiaries are the very people who elected Donald J. Trump last year and gave Republicans control of Congress. “In McConnell’s Kentucky,” Edsall wrote, a recent Georgetown University “study found that Medicaid has become a crucial source of coverage for adults. Before the passage of Obamacare in 2010, 13 percent of adult Kentuckians were covered; after passage, in 2013-14, the percentage more than doubled to 28 percent. Over the same period, the percentage of uninsured adults in Kentucky fell from 26 to 10 percent.”
The dog’s breakfast that is the GOP health insurance plan is in the sorry shape it’s in – polling indicates a tiny fraction of Americans support it – because Republicans have, despite what House Speaker Paul Ryan might contend, abandoned real policy for almost any mishmash of gobbledygook that seems to resemble a “fix” to Obamacare. So desperate are Republicans to have a political “win” that they willfully misrepresent what their proposals will accomplish, a strategy that increasingly appears to have caught up with them back home. With this approach – say pretty much anything and hope to get past the 2018 mid-terms – McConnell and Company have essentially embraced a Trump strategy – promise big change, fudge (or lie) about the details and hope against hope that the entire spectacle will make numb all but the most ardent and partisan believers.
It Will be Great, But If It Isn’t That’s OK…
One of the rich stories of the recent charade involved a made-for-television meeting at the White House where Trump invited all 52 Senate Republicans downtown for a chat about health care legislation. Trump, positioned with two of the most skeptical senators – Susan Collins of Maine and Lisa Murkowski of Alaska – on either side of him, promised that a great, great bill would emerge from McConnell’s log rolling. Then he stepped all over that message by suggesting that if it all fell apart, well, that would be all right, too.
As the Times reported in a story that Trump immediately decried as “fake news,” one supportive senator “left the meeting at the White House with a sense that the president did not have a grasp of some basic elements of the Senate plan—and seemed especially confused when a moderate Republican complained that opponents of the bill would cast it as a massive tax break for the wealthy.”
But, of course, the president displays next to no interest in the complicated, life-and-death details involved in these issues and is in fact almost certainly unable, thanks to intellect and disposition, to learn anything that might help fashion a path forward. He reportedly told lawmakers earlier this year that they should focus on the “big picture” and “forget about the little shit.” Essentially that is what Republicans have been doing for eight years.
Over the last eight years Democrats made a fundamental political mistake by never adequately and compellingly explaining what they were attempting to accomplish with the Affordable Care Act. There was no clear message from supporters of the Act beyond wanting to bring down the number of uninsured Americans. Little sustained effort was made to explain why more people being covered meant a better system and Democrats compounded their message mismanagement when they made Faustian bargains with drug and device manufacturers in order to pass legislation. Those bargains have clearly exacerbated the job of controlling costs.
Republicans filled this muddled communication void, filled it for years, by employing much of the same rhetoric they have been using since the American Medical Association opposed Harry Truman’s national health care plans in the 1940s.
The Republican message can be summed up succulently, if incorrectly: Democrats were putting us on the road to socialism. What American health care required, Republicans said again and again, was more competition. “We’ve got to do something to reinject free-market forces into this environment,” Utah Senator Mike Lee said recently on CBS’s Face the Nation. “If we can bring free-market forces to bear, we can bring down costs for middle Americans.”
That is, of course, another pipe dream and ignores the way the American system of health care actually works. Republicans seem to embrace, to paraphrase John Maynard Keynes, a health care economy that they wish existed rather than the one that actually does exist.
The “free-market” celebrated by Lee, Senator Ted Cruz and others actually serves as a major driver of the constant increases in health care costs. The American reliance on a fee for service market system provides outsized financial rewards to Big Pharma, specialty docs, many insurance companies and hospitals – including hospital CEO’s – even those who continue to claim they operate as not for profit organizations.
Vice President Mike Pence recently touted the “market based” system as the country’s only solution to a broken health care system, while in reality it is a major cause of the American health care mess. Pence and many embracing the market ignore all the vast data that proves the American system with its wacky incentives and general lack of accountability is wildly more expensive and delivers worse results than any county in the rest of the developed world.
Data compiled by the Organization for Economic Co-operation and Development, for example, shows that “the United States spends close to 20 percent of its gross domestic product on health care, nearly $10,000 per person [annually], roughly twice as much as countries like Britain, which has a nationalized health service. Americans, as a whole, pay more to get less.”
Costs More, Produces Less…
In an important new book on what’s wrong with American health care Elisabeth Rosenthal, the editor-in-chief of Kaiser Health News made an observation that most of us can identify with.
“Who among us,” Rosenthal writes in An American Sickness: How Healthcare Became Big Business and How You Can Take It Back, “hasn’t opened a medical bill or an explanation of benefits statement and stared in disbelief at terrifying numbers? Who hasn’t puzzled over an insurance policy’s rules of copayments, deductibles, ‘in-network’ and ‘out-of-network’ payments—only to surrender in frustration and write a check, perhaps under threat of collection?”
Rosenthal argues that the health care market simply doesn’t work the way Home Depot or Safeway works.
“More competitors vying for business doesn’t mean better prices; it can drive prices up, not down…. Economies of scale don’t translate to lower prices. With their market power, big providers can simply demand more…. Prices will rise to whatever the market will bear.”
As the New York Review of Books noted in a recent review of the book: “Rosenthal’s indictment extends well beyond insurance companies. She looks carefully at hospitals, and the reader learns how they have been transformed by marketing consultants and administrators with business degrees to generate large profits, though many still enjoy a tax-exempt status as ‘nonprofit institutions’—meaning that they pay ‘almost no US property or payroll taxes.’ Instead of profit, tax-exempt hospitals call it ‘operating surplus.’ In 2011, the US government calculated that hospitals were getting an annual tax advantage of $24.6 billion. Steven Brill, who highlighted the predatory pricing that occurs in calculating costs of care in America’s Bitter Pill (2015), recently listed the yearly pay of the CEOs of large hospital systems, which often amounts to many millions of dollars. Rosenthal points out that ‘total cash compensation for hospital CEOs grew an average of 24 percent from 2011 to 2012 alone.’”
Both parties – but Republicans more than Democrats – have over promised and under delivered on the matter of health care insurance. But now the GOP faces the stark reality that the dozens of votes to “repeal” Obamacare were, as Senator Toomey has now admitted, just so much political rhetoric designed to gin up confused consumers and build a partisan advantage in Congress. Republicans have never had anything like a “replacement” for the Affordable Care Act and that policy failure is now wrapped around Mitch McConnell like one of those flimsy hospital gowns with the ties in the back. Anyone who has donned one of those garments knows it doesn’t cover much. Now the majority leader’s inadequacies are all too visible.
Fact Free, Hyper-Partisan…
The debate over health insurance policy has tripped into the same fact free zone of hyper-partisanship that dominates virtually every public policy discussion these days. Yet, the real news for millions of Americans is both obvious and frightening. Millions of Americans are still without health insurance and Republican plans will only make things worse, with many folks just a paycheck or two away from economic disaster.
The “system” is hugely inefficient and rewards many of the wrong things such as paying providers for performing procedures rather than improving health. Costs for everything from a hospital stay to a blood test are often widely out of whack with what the service actually costs. Primary care doctors are overworked and under loved, while the local orthopedic surgeon – you can look it up – is doing very, very well thank you.
I have long felt that the mess of policy known as Obamacare was ironically both a political loser for Democrats and a vehicle to move health care policy in a better direction. In a real working political system, unlike our broken system, lawmakers would keep the best features – an insurance mandate that provides basic coverage centered on preventive care, for example – and work to put in place real incentives that actually bend the cost curve and improve affordability. But such pragmatism is another pipe dream and in the current political environment nearly impossible to contemplate.
It has also been clear to me that the ultimate “fix” for American health care will eventually lead to what exists in most of the rest of the western world – a single payer system that some have started to call “Medicare for All.”
It is generally the American way of politics to gradually chip away at the margins of a problem hoping to slowly, incrementally change things for the better. This approach has given us Obamacare as well as Mitch McConnell’s approach and left us with the most expensive health care in the world and some very marginal outcomes. This truly is not sustainable.
Better to vastly simplify the system with a program that covers basic and preventive care, regulates expensive medical procedures and drug costs the way we regulate public utilities and let insurance companies figure out how to offer gold plated supplemental plans for those who can afford them. We certainly have enough money in our health care “system” to do these things. What we have is problem of how the money is allocated across the health care landscape and, of course, we have a surplus of partisan political posturing that makes real solutions nearly impossible to craft.
This much is true: whatever happens with Republican plans to “repeal and replace” what Barack Obama helped create, the GOP will own the fallout for what comes next. It is not a huge surprise, in fact it’s quite obvious, that both parties have an interest in fashioning health care policy that insures coverage for millions, reduces costs and improves outcomes. The problem is that not enough people in either party are willing to admit the obvious.