Thursday, December 17, 2009

Health Care Reform

I mostly stay away from talking about policy discussions on this blog (at least policy discussions that doesn't concern other animals). But this post isn't going to involve either a discussion of theory or animal rights. Rather, it is concerned with the current health care reform debate raging on in the US.

And before I get much further into this discussion, I want to address my radicalism with my desire to see health care reform pass. I do not believe that important social transformation will occur within the state, or within the interests of capital. Those who want to see a 'fundamental' shift health care reform will actually be more disappointed and disillusioned than I am. This also, I think, shifts how I judge a bill. I do not weigh the present bill against a fictitious 'ideal' and then if it gets too far away from this platonic wet dream declare the present bill a failure and a fraud and not worth passing. Such a mindset seems utterly absurd to me. Especially coming from a crowd that until a few years ago were proudly calling themselves a reality based community. Instead, I compare the bill against the status quo. If the bill does a net good, we should probably pass it. A net bad, we probably should be opposed to it. From this criteria of comparing the senate bill to the status quo, not only does it do a net good, it is an exciting bill. So, I want to talk about some of the cool and interesting things about the health care bill that no one seems to want to talk about, and then I want to address some of the concerns that some liberals have regarding the health care bill.

(1) Long term, we are going to have to bend the curve of the cost. Otherwise, the whole thing falls apart. The major way this is going to happen, long term, is going to be changing the delivery system of health care. Right now health care in this country is a pay for service system. That means doctors and hospitals are reimbursed for specific services, aka procedures and tests. They get paid for what they do onto you, not for what they do with you. And not for smartly figuring out what is wrong. These tests have costs, both financially and physically. We have to move away from this system toward an integrated system (something like what is practiced in VA hospitals or the Mayo Clinic, for examples). We know this, but what we don't know is exactly how to change reimbursements on a large scale to make this happen. We have a lot of ideas, but very little data. What the senate bill contains is a wealth of pilot projects, funding for studies, and the mechanisms to gather the data from these projects and studies. It also contains mechanisms that allow programs deemed successful (both medically and financially) to be fast tracked for larger structural reform in medicare. This is huge. Systematic costs from a pay for service organization are hurting medical systems from all around the world. We have to face this, both for better medical outcomes and also for financial reasons. This bill puts us in the right direction to start dealing with these concerns long term.

(2) The bill also contains a lot of funding for data gathering and distributing for best practices for doctors. This is important, because there is very little out there that really centralizes what are considered best medical practices. But essentially a google brain for doctors is going to be built. This will likely save many lives, and will also improve the quality of care and treatment patients have.

(3) A compromise that will likely pass will be the implementation of national private non-profit insurers set up by the Office of Personnel Management. The details are not fully known, but this is important. The important part of the weakened public option was never the public part, but the non-profit part. Several health care systems with great results (Germany, Japan, etc) depend primarily on private non-profit insurers. I would love a system in which for profit private insurers, private non-profit insurers, and public non-profit insurers all competed against each other. But the system without the governmental insurers will still be a pretty good system.

(4) The senate bill also contains a provision that will require congress and all the staffers etc in congress to join the exchange. This is important because it directly means that Congress is invested in making sure the exchange is strong and competently working.

(5) Prudential purchasing power. One of Howard Dean's many factual errors in his recent op-ed against the health care bill is his claim that it doesn't have prudential purchasing power. He's just wrong, it does. Specifically what this means is that the exchange will not be a come one come all to insurers. There will be regulators who will get to decide what insurers get to be part of the exchange (and all of that potential money) and which ones don't. So, for example, if you decide to jack up your premiums in the exchange you have to submit that proposal to the regulators and publicly post the information on your website. The regulators can decide to bar you from the exchange for those practices. They can also bar you if they feel you are engaging in behaviors that discriminate against people who need health care, or are in anyway trying to rig the system to create more healthy people under your insurance system than people with chronic conditions.

(6) The senate bill also includes a series of regulations that make sure the people that need health care the most can get it, viz. abolishing annual and lifetime caps, banning discrimination based on pre-existing conditions, making sure premiums are collective rather than individualistic so you can't jack them up on particular individuals out of the market (some allowances are made here for smoking and age, but even those are fairly strongly regulated), caps on out of pocket expenses, making sure that all insurance products will cover certain things so that people are not routinely underinsured, and quite a few other regulations.

(7) The individual mandate is one of the keys to all of this. If you remember back to the primary, you might remember Paul Krugman siding with Hillary Clinton on the individual mandate over Barack Obama. Why? Because the economics are solid and crystal clear: the individual mandate is necessary if you want the exchange to work. Here is a short blog post from an economist on why the mandate is necessary. To make it even shorter, if only sick people are in the exchanges, then insurance prices skyrocket because the risk pool becomes too high for insurers. This is both how the model works out theoretically, and empirically. Furthermore, as Ezra Klein has remarked several times, the individual mandate makes everything in the exchange a public policy question. It means that things like keeping premiums lower will have a strong voter support, which otherwise could be lacking and allow insurance special interests to continue to rig the system in destructive ways. Being opposed to the individual mandate guts the only mechanism for providing health care insurance outside of an employer based system. Which means if you are opposed to the employer based system and believe the bill doesn't do enough on that front, being opposed to the individual mandate is plain incoherent. It dooms the exchange to failure, which means we cannot shift to an non-employer based system in the future (which is again, something we all want). Now, obviously there is a price concern with all of this. However, not only are there certain exceptions put into the individual mandate, but there are subsidies to help people pay for insurance. Which means the individual mandate also operates primarily as a progressive tax, the poorest will pay the least and get the most amount of help to pay, etc. This means that health care costs will stay below 10 percent of someone's income (and usually much more than under 10 percent).

(8) We currently have 46 million people uninsured in this country (that is roughly one is six). And uninsured people, among other problems, are more likely to die. The current estimate is that about 25 thousand people probably died because they didn't have insurance this year, alone. Medical bills are the number one cause of bankruptcy in this country, in 2007 62% of all bankruptcies were due to medical bills. While neither of these problems will be fully solved, both of them will be significantly reduced. I am dumbfounded how anyone on the left can be callous enough to not face these facts and want to do something about them. And yet it seems many people on the left hate insurance companies more than they care about those folks who are need.

(9) Obviously, the senate bill is far from perfect. But if we look at the history of some of our most important progressive bills, like social security or the Civil Rights Act, the original bill was not particularly great. However, by making things into necessary issues of public policy and laying down an infrastructure, they got better. These are the important elements we need in the original healthcare bill. Because the alternative has been everytime health care reform has been purposed, it has gotten less ambitious. Progressive victories mean that future structures have a chance of being improved in ambitious ways, meanwhile failure simply means that the next time around everyone dials down expectations.

(10) Right now we have a strange world where Howard Dean and Sarah Palin, Keith Oblermann and Glenn Beck, Markos Moulitsas and the 'fine folks' of National Review's The Corner are all in agreement: Kill the bill! This makes no sense to me, both sets of people cannot be correct on this one. Also, look at the objections from the left's bill killers. There are complaints about the political process, hatreds of the sith lord from Connecticut, feeling let down and betrayed by Obama, and things they wish were in the bill. What is missing? Policy objections. Or at least, policy objections that exist in reality instead of the land of death panels. Meanwhile, if you look at Ezra Klein, Jay Rockefeller, Kevin Drum, etc you see a concern for the policy implications of the bill. I don't understand how feeling disillusioned with the president translates into the bill being not worth passing. Also, this means we are not having discussions that could make the bill better, like the need to raise subsidies and lower the cap on out of pocket expenses.

If there is anything I can do to respond to questions I will. But if you care about progressive legislation, I have trouble understanding being opposed to health care reform as it stands.