Category Archive for: Health Care [Return to Main]

Saturday, October 05, 2013

'Why Do Smart Republican Economists Continue to Claim that ObamaCare Is Causing a Significant Fall in Full-Time Employment'

I set this piece on part-time employment and Obamacare aside to post, but hadn't gotten back to it yet. Fortunately, Brad DeLong did it for me:

Why Do Smart Republican Economists Continue to Claim that ObamaCare Is Causing a Significant Fall in Full-Time Employment Right Now?: Max Sawicky shows up writing for the extremely useful Economic POlicy Institute: Obamacare Isn’t Causing an Increase in Part-Time Employment, in One Chart:
One of the more baffling messages in the current debate over the economy and “Obamacare” is the hue and cry over the trend in part-time employment. The fact is that since the end of the Great Recession, the trend in part-time employment has been down, not up…. The navy blue region show the level of workers who are part time due to “non-economic” reasons (health, child care responsibilities, etc.). The vertical bars denote recessions, from peak to trough.

Obamacare Isn t Causing an Increase in Part Time Employment In One Chart Economic Policy Institute

Under the Affordable Care Act, employers will be required to provide insurance to workers who work for more than 30 hours a week. This mandate does not take effect for another year. There is no reason why anticipation of it should increase part-time employment in the meantime. And at any rate, such employment has been falling before and after the passage of Obamacare. For more on this, see articles by Jared Bernstein and Paul Van de Water and Helene Jorgenson and Dean Baker. For more on the employer mandate, see this post from EPI’s Josh Bivens.
Yet we have Michael Boskin...[quote]...
And Greg Mankiw:
A Striking Labor Market Fact: John Lott points out the following: "So far this year there have been 848,000 new jobs. Of those, 813,000 are part time jobs.... To put it differently, an incredible 96% of the jobs added this year were part-time jobs."
What are they thinking?
I mean, some employers are going to drop hours below 30 a week once the employer pay-or-play hits. But we won't see that until the February 2015 employment report, and there is no reason for employers to start that eighteen months in advance. It isn't there in the data. And nothing would lead anybody to expect that it would be visible in the data right now.
So why are they claiming that it is?

I should also note that the figure Mankiw cited is wrong.

Friday, October 04, 2013

Paul Krugman: Reform Turns Real

Bad news is good news:

Reform Turns Real, by Paul Krugman, Commentary, NY Times: At this point, the crisis in American governance has taken on a life of its own. ... But this confrontation did start with a real issue: Republican efforts to stop Obamacare from going into effect. It’s long been clear that the great fear of the Republican Party was not that health reform would fail, but that it would succeed. And developments since Tuesday, when the exchanges on which individuals will buy health insurance opened for business, strongly suggest that their worst fears will indeed be realized: This thing is going to work.
Wait a minute, some readers are saying. Haven’t many stories so far been of computer glitches...? Indeed, they have. But everyone knowledgeable about the process always expected some teething problems, and the nature of this week’s problems has actually been hugely encouraging for supporters of the program. ...
The ... glitches ... for the most part, to be the result of the sheer volume of traffic, which has been much heavier than expected. And this means that one big worry of Obamacare supporters — that not enough ... would ... sign up — is receding fast. ...
What we still don’t know, and is crucial for the program’s longer-term success, is who will sign up. Will there be enough young, healthy enrollees to provide a favorable risk pool and keep premiums relatively low? Bear in mind that conservative groups have been spending heavily — and making some seriously creepy ads — in an effort to dissuade young people from signing up for insurance. Nonetheless, insurance companies are betting that young people will, in fact, sign up, as shown by the unexpectedly low premiums they’re offering...
And the insurers are probably right. To ... get a description of the typical person Obamacare needs to enroll, just take the description of a typical Tea Party member or Fox News viewer — older, affluent, white — and put a “not” in front of each characteristic. These are people the right-wing message machine is not set up to talk to, but who can be reached through many of the same channels, from ads on Spanish-language media to celebrity tweets, that turned out Obama voters last year. ... Enrollment is probably going to be just fine.
So Obamacare is off to a good start, with even the bad news being really good news for the program’s future. We’re not quite there yet, but more and more, it looks as if health reform is here to stay.

Sunday, September 29, 2013

'Creating a New Responsibility'

David Warsh:

Creating a New Responsibility: Between the political posturing in Washington, and the excellent nuts-and-bolts reporting of the major news organizations, it is easy to lose sight of what is about happen on Tuesday.
When the Affordable Care Act takes effect, October 1, requiring most US citizens to obtain health insurance one way or another or pay a tax penalty for going without, a new obligation of citizenship will have been recognized by law.
The responsibility to take care of oneself will have been joined, however loosely, to the long-established right to emergency medical care.
Something like 25 million citizens, more than half of those who are currently uninsured, will enter into a relationship with a medical practice within the next few years. They’ll join more than 250 million Americans who are currently insured in the biggest undertaking to improve public health since the days of city sanitation and the war on communicable disease more than a century ago.
In many states, collective well-being will begin to improve almost immediately (the initial enrollment period extends through the end of March). In other states, especially those in the Southeast, where Republican governors have dug in against implementation of the law, a more complicated political game will play on. Everywhere, changes within the enormous health care sector, already underway, will gather momentum.
No wonder the fuss is so great...
On Tuesday the Affordable Care Act goes into effect. It was passed by the Congress and upheld by the Supreme Court. The White House holds all the cards. The Defunders, the operating arm of the Tea Party in Congress, are certain to lose if the president remains firm. He should simply state: you don’t negotiate with terrorists.
As if to underscore the point, Senator Tom Coburn (R-Oklahoma), a veteran of the government shutdowns of 1995-96, told Politico last week that if If the Republicans succeed in shutting down the government Tuesday, “they’ll fold like hotcakes” after a week or two, when constituents begin to complain about the lack of service. “You do not take a hostage you are not going to for sure shoot. And we will not for sure shoot this hostage.”
And in the longer term? My guess is that Tea Party dissidents will lose ground in the midterm elections next year; that the GOP will split in the 2016 campaign and that a Democrat will be elected president; that in 2018 the Tea Party will further fade. And by 2020, the Republican governors who are successful in implementing the Affordable Health Care Act will be running for president, strongly, on the strength of their records.

Friday, September 13, 2013

The Debt Ceiling Once Again

As we head for yet another political clash over government debt, one where Republicans are threatening a government shutdown and the health of the financial sector in an attempt to defund social insurance programs -- Obama care in particular -- a few things to keep in mind.

First, the long-run debt crisis is, and always was, primarily about health care costs.

Second, and importantly, it is a problem "driven in large part by increasing costs in the private-sector delivery of health care goods and services." That is, it is not a problem that is caused by the government or unique to government sponsored health care programs.

Third, the evidence suggests that Obamacare is reducing health care costs.

Fourth, the social safety net -- the very thing Republicans want to scale back substantially or eliminate -- played a key role in limiting the severity of the recession. Without these automatic stabilizers, things would have been even worse than they were.

Monday, September 09, 2013

Paul Krugman: The Wonk Gap

The disinformation on the right -- the wonk gap -- is hurting the conservative cause:

The Wonk Gap, by Paul Krugman, Commentary, NY Times: On Saturday, Senator John Barrasso of Wyoming delivered the weekly Republican address. He ... demanded repeal of the Affordable Care Act ... and he predicted “sticker shock” in the months ahead. ...
Mr. Barrasso’s remarks were actually interesting, although not in the way he intended. You see, all the recent news on health costs has been good. So Mr. Barrasso is predicting sticker shock precisely when serious fears of such a shock are fading fast. Why would he do that? ...
Mr. Barrasso was inadvertently illustrating the widening “wonk gap” — the G.O.P.’s near-complete lack of expertise on anything substantive. Health care is the most prominent example...
For the truth is that the good news on costs just keeps coming in. There has been a striking slowdown in overall health costs since the Affordable Care Act was enacted... And ... on average premiums will be significantly lower than those predicted by the Congressional Budget Office...
But do Republican politicians know any of this? Not if they’re listening to conservative “experts,” who have been offering a steady stream of misinformation. ... How many Republicans know, for example, that government employment has declined, not risen, under President Obama? ...
For that, surely, is what the wonk gap is all about. Political conservatism and serious policy analysis can coexist, and there was a time when they did. Back in the 1980s, after all, health experts at Heritage made a good-faith effort to devise a plan for universal health coverage — and what they came up with was the system now known as Obamacare.
But that was then. Modern conservatism has become a sort of cult, very much given to conspiracy theorizing when confronted with inconvenient facts. Liberal policies were supposed to cause hyperinflation, so low measured inflation must reflect statistical fraud; the threat of climate change implies the need for public action, so global warming must be a gigantic scientific hoax. Oh, and Mitt Romney would have won if only he had been a real conservative.
It’s all kind of funny, in a way. Unfortunately, however, this runaway cult controls the House, which gives it immense destructive power — the power, for example, to wreak havoc on the economy by refusing to raise the debt ceiling. And it’s disturbing to realize that this power rests in the hands of men who, thanks to the wonk gap, quite literally have no idea what they’re doing.

Thursday, August 29, 2013

Medicare Spending Growth Slowdown

Via Austin Frakt at The Incidental Economist, a chart showing the slowdown in the growth of Medicare spending:

Chart of the day: Medicare spending growth slowdown: From recent analysis by Michael Levine and Melinda Buntin of the CBO:

Mcare spending growth

...To try to identify the causes of that slowdown, we performed a series of descriptive and statistical analyses based on a diverse array of data sources. However, those analyses did not yield an explanation for most of the slowdown in spending growth.
Fully 75% of the 3.2 percentage point difference between 2000-2005 and 2007-2012 per beneficiary spending growth cannot be explained by payment rate changes, beneficiary demand due to age and health status, Part A only enrollment, prescription drug use, the financial crisis and economic downturn, supplemental coverage.
Needless to say, this is a big and important mystery.

Wednesday, August 21, 2013

Health Care Fantasies

Paul Krugman:

They Can’t Handle The Health Care Truth: Aaron Carroll talks about the Republican health care dilemma, and makes a good point: it runs deeper than the specific fact that Obamacare looks the way it does because it has to. At the most fundamental level, you can’t guarantee adequate health care to everyone unless the people who don’t need help right now — the young, healthy, and affluent — are induced, one way or another, to contribute to the care of those who do need help. You can do this purely with taxes, via a single-payer system (and maybe even by having the government act as provider), or you can do it, Swiss or Massachusetts style, via a combination of regulation, taxes, and subsidies. But some way of corralling the lucky healthy into contributing is necessary.
For the vast majority of this group, this is still a good deal — as Ezra Klein says, nobody stays young and healthy forever, and only a very small number of people are so rich that they are better off on a lifetime basis with no guarantee of insurance at all. But conservatives balk at the notion of any kind of redistribution, even if it makes almost everyone better off. So they are unable to come up with an alternative.
What they have are fantasies — claims that somehow unleashing the magic of the marketplace can make health care so cheap that everyone can afford it. There is absolutely no reason to believe that this is true. ...

Monday, August 19, 2013

Paul Krugman: One Reform, Indivisible

Republican leaders who promised that Obamacare wouldn't work, and that it would be reversed, are headed for a big disappointment:

One Reform, Indivisible, by Paul Krugman, Commentary, NY Times: Recent political reporting suggests that Republican leaders are in a state of high anxiety, trapped between an angry base that still views Obamacare as the moral equivalent of slavery and the reality that health reform is the law of the land and is going to happen.
But those leaders don’t deserve any sympathy. For one thing, that irrational base is a Frankenstein monster of their own creation. Beyond that, everything I’ve seen indicates that members of the Republican elite still don’t get the basics of health reform — and that this lack of understanding is in the process of turning into a major political liability.  ...
So let me help out by explaining, one more time, why Obamacare looks the way it does.
Start with the goal that almost everyone at least pretends to support: giving Americans with pre-existing medical conditions access to health insurance. Governments can ... require that insurance companies issue policies without regard to an individual’s medical history... But we know what happens next: many healthy people don’t buy insurance, leaving a relatively bad risk pool, leading to high premiums that drive out even more healthy people.
To avoid this downward spiral, you need to induce healthy Americans to buy in; hence, the individual mandate, with a penalty for those who don’t purchase insurance. Finally, since buying insurance could be a hardship for lower-income Americans, you need subsidies to make insurance affordable for all.
So there you have it: health reform is a three-legged stool resting on community rating, individual mandates and subsidies. It requires all three legs. ...
You see, this thing isn’t going to be the often-predicted “train wreck.” On the contrary, it’s going to work.
Oh, there will be problems... But the basic thrust of Obamacare is, as I’ve just explained, coherent and even fairly simple. Moreover, all the early indications are that the law will, in fact, give millions of Americans who currently lack access to health insurance the coverage they need, while giving millions more a big break in their health care costs. And because so many people will see clear benefits, health reform will prove irreversible.
This achievement will represent a huge defeat for the conservative agenda of weakening the safety net. And Republicans who deluded their supporters into believing that none of this would happen will probably pay a large personal price. But as I said, they have nobody but themselves to blame.

Sunday, August 11, 2013

Shooting Down a WSJ Editorial on Death Panels in Oregon

Aaron Carroll:

Death Panels in Oregon, by Aaron Carroll: The WSJ editorial page is back today, with warnings of DEATH PANELS! in Oregon...
The piece then goes on to rail against Medicaid, and HERC, for trying to limit what Medicaid will cover.
First of all, I’m always a bit confused by the fact that it’s often the same people, and organizations, who rail against rationing within Medicaid while simultaneously railing against the Medicaid expansion. Evidently, they are fine with completely denying Medicaid to many of the poorest among us, but against making Medicaid less robust once they get it. Odd.
But my larger concern is one of philosophy. We simply cannot afford to pay for everything. ... And so, there will at some point have to be discussions as to what we might not pay for. ...[discusses the actual HERC document and the recommendations of the committee] ...
I wish we never had to have these discussions. I really do. But at some point, we probably should think in terms of prioritizing therapies. This isn’t the worst way to do it, and at least it’s in public.
I’d like to make a larger point. Although the editorial makes the case that this is the left’s one-size-fits all approach, that’s just not true. This is a discussion of Medicaid, not of Medicare, and not of private insurance (which also refuses to cover things, about which the WSJ doesn’t seem concerned). No one is prohibited from spending their own money on futile care. No one is prohibited from buying an insurance policy that will continue to cover futile care. What’s being discussed is how we will use taxpayer money to cover those at the lowest end of the socioeconomic spectrum. Recognize that anyone that qualifies for Medicaid will not be able to pay out of pocket for these services. Recognize that they will never be able to afford private insurance that covers these services. Recognize that we will never approve subsidies that will allow them to cover the services or private insurance that does. So either the government does, or no one does.
Have that debate. Have it in public. Have it civilly. But please don’t pretend to be outraged by that serious discussion while simultaneously being ok with denying much more to many more in the name of “fiscal responsibility”.

Monday, August 05, 2013

'Why is Free-Loading Now a Conservative Value?'

Good question:

...all those extra costs for the uninsured drove up premiums for everyone else, drove up hospital costs, giving them a reason to raise prices even further, and played a role in rendering healthcare unaffordable for many others.
What Obamacare does, like Romneycare before it, is end this free-loading.
The law is telling these young adults that if you want to go without insurance, you are not going to make everyone else pay for it if your risk-analysis ends up faulty. You have to exercise a minimum of personal responsibility to pay for your own potential healthcare. In other words, rights come with responsibilities in a liberal democracy. At least that is what I always understood the conservative position to be.
So why is an allegedly conservative organization actively encouraging personal irresponsibility? Why are they encouraging one sector of society – the young and the fearless – to rely on everyone else’s sacrifice to get bailed out if they have an accident, or contract cancer, or need a hospital to deliver a baby? This is not freedom as the Founders understood it; it’s recklessness, irresponsibility and short-sighted selfishness. Now, if the twentysomethings cannot afford it, it’s one thing – and part of our healthcare cost crisis. But now that Obamacare has removed that excuse and demands that every citizen actually contribute to the insurance pool, that completely defensible excuse is over. No more free-loading, in other words.
So I ask again: why is free-loading now a conservative value? ...

Social Security is similar. If people weren't required to contribute, many wouldn't (if for no other reason than the immediate financial demands for many families make it hard to save). But we, as a society, wouldn't let them starve and die when they are no longer able to work, and the rest of us would end up footing the bill. So we require people to contribute to their own retirement through withholding for Social Security. Like health insurance for the young, many people don't need Social Security to retire comfortably, but for those who do it's a lifesaver, one that is at least partially funded through their own contributions.

Sunday, August 04, 2013

'For Obamacare to Work, Everyone Must Be In'

I've made this point several times (e.g.), but it's worth highlighting again:
For Obamacare to Work, Everyone Must Be In, by Robert Frank, Commentary, NY Times: Two beliefs continue to shape debate on Obamacare. First, pre-existing medical conditions shouldn’t prevent people from obtaining affordable health insurance. And second, people who don’t want health insurance shouldn’t be forced by the government to purchase it.
These may seem to be reasonable positions. But they are incompatible. That’s been shown by historical events, and it’s now being strikingly confirmed by recent experience in the emerging Obamacare insurance exchanges.
The crux of the matter is what economists call the adverse-selection problem. ...
We must ask those who would repeal Obamacare how they propose to solve the adverse-selection problem. That problem is not an abstraction invented by economists to justify trampling individual liberties. As experience in most countries around the world has confirmed, it is a profound source of market failure that renders unregulated insurance markets a catastrophically ineffective way of providing access to health care.

Tuesday, July 30, 2013

'Howard Dean Sells Out'

This was in today's links, but it's worth highlighting:

Howard Dean Sells Out: Monday Health Care Lobbyist Smackdown Weblogging, by Brad DeLong: The government already sets rates for Medicare, through the RVS and the RUC process.
The Independent Payment Advisory Board--IPAB--is an attempt to set rates in a less-stupid and more evidence-based way.
Thus Howard Dean claiming that "the ACA's rate-setting won't work", thereby telling his readers that the creation of IPAB introduces rate-setting into some equilibrium of free-market prices for Medicare, is Howard Dean being mendacious to try to protect the profits of the clients of McKenna, Long, & Aldridge. It is not Howard Dean weighing in on public policy trying to make America a better place.
Shame on Howard Dean. Disgraceful. ...

Sunday, July 28, 2013

'Inequality of Opportunity Begins at Birth'

The beginning of health inequality:

Inequality of Opportunity Begins at Birth, by Bill Gardner: Equality of opportunity means that we are not a caste society. Who we will become is not fixed by the circumstances of our births. Some children will do better than others, but this should result from a fair competition. ...
But we don’t appreciate how deep inequality runs. The graph below is from a presentation by Angus Deaton which (I believe) reported data from the National Health Interview Survey. The horizontal axis is the logarithm of family income in 1982 dollars, running from about $3600 to over $80,000. The vertical axis is self-reported ill-health (higher numbers reflect worse health). The parallel lines represent different age groups of respondents.

Screen Shot 2013-07-25 at 8.59.04 PM

There are three important facts packed into this slide. First, the lines stack up in order of increasing age, meaning that older people reported worse health than younger people. Second, all the lines slope downward, meaning that the poorer you were, the more likely you had poor health. ...

Lastly, notice how the age lines are much more dispersed on the left (poorest) side of the graph than the right (richest) side of the graph. This means that health deteriorates more quickly with age among the poor than among the rich.

...there is substantial evidence that health inequality starts at birth, or even conception. As Janet Currie argues, there is

huge inequality in health at birth. For example, the incidence of low birth weight (birth weight less than 2500 grams) is more than three times higher among children of black high school dropout mothers than among children of white college educated mothers.

...the infants of the poor are also at risk because poor mothers have poorer health, are more stressed, and are more likely to be exposed to environmental toxins. Poverty gets underneath the skin, starting in the uterus.

Poor health deriving from inequality of economic well-being begins at birth and accumulates as children develop. We are farther from equality of opportunity than most of us acknowledge.

Friday, July 26, 2013

Paul Krugman: Republican Health Care Panic

The success of Obamacare is driving Republicans to yet another round of potentially damaging brinsmanship:

Republican Health Care Panic, by Paul Krugman, Commentary, NY Times: Leading Republicans appear to be nerving themselves up for another round of attempted fiscal blackmail. With the end of the fiscal year looming, they aren’t offering the kinds of compromises that might produce a deal and avoid a government shutdown; instead, they’re drafting extremist legislation ... that has no chance of becoming law. Furthermore, they’re threatening, once again, to block any rise in the debt ceiling, a move that would damage the U.S. economy and possibly provoke a world financial crisis.
Yet even as Republican politicians seem ready to go on the offensive, there’s a palpable sense of anxiety, even despair, among conservative pundits and analysts. Better-informed people on the right seem, finally, to be facing up to a horrible truth: Health care reform, President Obama’s signature policy achievement, is probably going to work.
And the good news about Obamacare is, I’d argue, what’s driving the Republican Party’s intensified extremism. Successful health reform wouldn’t just be a victory for a president conservatives loathe, it would be an object demonstration of the falseness of right-wing ideology. So Republicans are being driven into a last, desperate effort to head this thing off at the pass. ...
Over all,... health reform will help millions of Americans who were previously either too sick or too poor to get the coverage they needed, and also offer a great deal of reassurance to millions more...; it will provide these benefits at the expense of a much smaller number of other Americans, mostly the very well off. ...
And the prospect that such a plan might succeed is anathema to a party whose whole philosophy is built around doing just the opposite, of taking from the “takers” and giving to the “job creators,” known to the rest of us as the “rich.” Hence the brinkmanship.
So will Republicans actually take us to the brink? If they do, it will be crucial to understand why they would do such a thing, when their own leaders have admitted that confrontations over the budget inflict substantial harm on the economy. It won’t be because they fear the budget deficit, which is coming down fast. Nor will it be because they sincerely believe that spending cuts produce prosperity.
No, Republicans may be willing to risk economic and financial crisis solely in order to deny essential health care and financial security to millions of their fellow Americans. Let’s hear it for their noble cause!

Thursday, July 11, 2013

'The State of US Health Ain’t So Good'

Aaron Carroll highlights a new "ridiculously fantastic manuscript" on the state of US health:

The state of US health ain’t so good: There’s a ridiculously fantastic manuscript over at JAMA that you should go read right now. “The State of US Health, 1990-2010: Burden of Diseases, Injuries, and Risk Factors“: ... This study specifically looked at the burden of disease, injuries, and risk factors in the US versus other countries. The methods are amazingly detailed.
So how did we do compared to other countries? Not well. Between 1990 and 2010, among the 34 countries in the OECD, the US dropped from 18th to 27th in age-standardized death rate. The US dropped from 23rd to 28th for age-standardized years of life lost. It dropped from 20th to 27th in life expectancy at birth. It dropped from 14th to 26th for healthy life expectancy. The only bit of good news was that the US only dropped from 5th to 6th in years lived with disability.
There’s a chart I’d like to highlight. This is the rank of age-standardized years of life lost rates among the 34 OECD countries in 2010.  The numbers in each cell show the rank of the country in years of life lost for each cause (1 is best). The countries are sorted overall on age-standardized all-cause years of life lost.  The colors show if the age-standardized years of life lost for a country is significantly lower than the mean (green), indistinguishable from the mean (yellow), or higher than the mean (red) for all OECD countries (click to enlarge):

Ranks

Things don’t look so good for the US. There’s an awful lot of red there. A little bit of yellow. One green. Best in the world, my ass.
Some of you will feel the urge to blame this on the racial or ethnic makeup of the US. I encourage you to look at the variety of causes of years of life lost. They don’t favor just one group. They’re all over the place. And we do pretty badly in most of them. ...
I want to highlight one more table. It’s the deaths and years of life lost for the 30 leading diseases and injuries that contribute to overall years of life lost in the United States in 1990 and 2010. They’re ranked by the size of the relative contribution to overall years of life lost. In other words, those at the top cause the most years of life lost in the US, and those at the bottom the least...
What we have here is a prioritization issue. We spend a lot of time worrying about colon cancer. It’s ranked 11th in 2010. We spend a lot of time worrying about breast cancer. We have walks, and ribbons, and whole months dedicated to it. It’s ranked 13th. Prostate Cancer? Men are obsessed with it. It’s ranked 27th. But more years of life are lost to lung cancer than to prostate cancer, colon cancer, and breast cancer combined. Ischemic heart disease causes four times as many years of life to be lost each year as prostate cancer, colon cancer, and breast cancer combined. Stroke is 3rd. COPD is 4th. Traffic accidents are 5th. Suicide is 6th. None of these things get the national attention, or resources, that they deserve.
We could have the best health care system in the world. We’ve got the money and the necessary pieces to get really, really good outcomes. But we need to be much smarter about it if we’re going to do so.

Wednesday, July 03, 2013

'Putting Off the Employer Mandate'

As I sit in the Houston airport waiting for a connection, a quick one from Jared Bernstein:

Putting Off the Employer Mandate: Well, I didn’t see that coming. The Obama administration announced Tuesday afternoon that it was going to delay an important part of the Affordable Care Act for one year. The rule requiring employers with at least 50 full-time workers to provide them with coverage or pay a penalty (also known as the employer mandate) will now be enforced starting in 2015, not 2014 as originally planned.
Here’s a very brief look at why, what, and what it means. ...
Though the mandate will ultimately affect only a few employers, it is actually an important piece of the law’s architecture. Without it, employers who currently provide coverage to their workers could drop the coverage and send their workers over to the state health care exchanges..., the employer would be shifting what is now a private cost over to the government.
The penalty for such actions was supposed to kick in next year; now they’ll kick in the year after next. ...
How will this affect coverage? Hard to see it having much impact at all. ...

So... Is this delay just not a big deal? Um … this is Washington, folks, and we’re talking Obamacare. There will be much hay made of this delay in coming days. Conservatives will argue that this confirms that the law is unmanageable — which is a bit rich, since many of them have been trying to kill it, block it, and stop it in its tracks. ... Liberals may argue that the administration is caving to business, which just wants to put off the paperwork for a year.
I think it’s an unfortunate delay of an important but relatively small piece of the bill... But that’s not how it will play in the hurly-burly of the next few days of Washington politics.

Saturday, June 29, 2013

'The Body Economic: Why Austerity Kills'

I am hosting a Firedoglake Book Salon later today:

Introductory post and discussion (at 2:00 PST/5:00 EST today)

The book is The Body Economic: Why Austerity Kills by David Stuckler and Sanjay Basu.

Saturday, June 15, 2013

'What Sweden Can Tell Us About Obamacare'

Robert Frank:

What Sweden Can Tell Us About Obamacare, by Robert Frank, Commentary, NY Times: Last month, for the 37th time, the House of Representatives voted to repeal Obamacare, with many Republicans saying that its call for greater government involvement in the health care system spells doom. Yet most other industrial countries have health care systems with far more government involvement than we are ever likely to see under Obamacare. What does their experience tell us about Republican fears?
While in Sweden this month as a visiting scholar, I’ve asked several Swedish health economists to share their thoughts about that question. They have spent their lives under a system in which most health care providers work directly for the government. Like economists in most other countries, they tend to be skeptical of large bureaucracies. ...
Yet none of them voiced ... complaints about recalcitrant bureaucrats... Little wonder. The Swedish system performs superbly, and my Swedish colleagues cited evidence of that fact with obvious pride. ...
Congressional critics must abandon their futile efforts to repeal Obamacare and focus instead on improving it. Their core premise — that greater government involvement in health care provision spells disaster — lacks support in the wealth of evidence from around the world that bears on it.
The truth appears closer to the reverse: Because of pervasive market failures in private health care markets, this may be the sector that benefits most from collective action.

Wednesday, June 12, 2013

'They Can’t Help Themselves'

Paul Krugman:

Insurance Tyranny: Many of us wish that Obamacare were a simpler system... Political reality, unfortunately, ensured that many people will receive coverage from private insurers, selling policies — often with subsidies — on the "exchanges". And naturally enough, the Obama administration is teaming up with the insurers... to help inform Americans of the benefits to which they will be legally entitled, starting Jan. 1.
And in the eyes of Republicans, Bloomberg reports, this makes Obama a “bully” — dragooning those private companies into helping sell a public program that will increase their profits. Why, it’s tyranny, I tell you!
Yes, it’s ridiculous. But they can’t help themselves. I suspect that the idea of helping lower-income Americans in any way would drive the GOP bonkers; but the idea that this help might come from Obama (implementing a program originally designed by Republicans, but never mind), and that Obama’s plan might actually work, drives them crazy.

Friday, June 07, 2013

Paul Krugman: The Spite Club

Why are many Republican-dominated states opting out of Obamacare's federally financed expansion of Medicaid?:

The Spite Club, by Paul Krugman, Commentary, NY Times: House Republicans have voted 37 times to repeal ObamaRomneyCare... Nonetheless, almost all of the act will go fully into effect at the beginning of next year.
There is, however, one form of obstruction still available to the G.O.P. Last year’s Supreme Court decision upholding the law’s constitutionality also gave states the right to opt out of one piece of the plan, a federally financed expansion of Medicaid. Sure enough, a number of Republican-dominated states seem set to reject Medicaid expansion, at least at first.
And why would they do this? ... The ... only way to understand the refusal to expand Medicaid is as an act of sheer spite. And the cost of that spite won’t just come in the form of lost dollars; it will also come in the form of gratuitous hardship for some of our most vulnerable citizens. ...
A new study from the RAND Corporation ... examines the consequences if 14 states whose governors have declared their opposition to Medicaid expansion do, in fact, reject the expansion. The result ... would be a huge financial hit: the rejectionist states would lose more than $8 billion a year in federal aid, and would also find themselves on the hook for roughly $1 billion more to cover the losses hospitals incur when treating the uninsured.
Meanwhile, Medicaid rejectionism will deny health coverage to roughly 3.6 million Americans, with essentially all of the victims living near or below the poverty line. And since past experience shows that Medicaid expansion is associated with significant declines in mortality, this would mean a lot of avoidable deaths: about 19,000 a year, the study estimated.
Just think about this... It’s one thing when politicians refuse to spend money helping the poor and vulnerable; that’s just business as usual. But here we have a case in which politicians are, in effect, spending large sums, in the form of rejected aid, not to help the poor but to hurt them.
And ... it doesn’t even make sense as cynical politics. ... What it might do ... is drive home to lower-income voters — many of them nonwhite — just how little the G.O.P. cares about their well-being, and reinforce the already strong Democratic advantage among Latinos, in particular.
Rationally, in other words, Republicans should accept defeat on health care, at least for now, and move on. Instead, however, their spitefulness appears to override all other considerations. And millions of Americans will pay the price.

 

Monday, May 27, 2013

Paul Krugman: The Obamacare Shock

What does the new evidence on Obamacare tell us?:

The Obamacare Shock, by Paul Krugman, Commentary, NY Times: Obamacare goes fully into effect at the beginning of next year, and predictions of disaster are being heard far and wide. There will be an administrative “train wreck,” we’re told; consumers will face a terrible shock. Republicans, one hears, are already counting on the law’s troubles to give them a big electoral advantage.
No doubt there will be problems, as there are with any large new government initiative, and ... we have the added complication that many Republican governors and legislators are doing all they can to sabotage reform. Yet important new evidence — especially from California... — suggests that the real Obamacare shock will be one of unexpected success. ...
In ... California..., insurers have submitted the prices at which they are willing to offer coverage on the state’s newly created Obamacare exchange. And the prices ... are surprisingly low..., it looks as if Obamacare’s first year in California is going to be an overwhelmingly positive experience.
What can still go wrong? Well, Obamacare is a complicated program, basically because simpler options, like Medicare for all, weren’t considered politically feasible. So there will probably be ... administrative confusion as the law goes into effect, again especially in states where Republicans have been doing their best to sabotage the process.
Also, some people are too poor to afford coverage even with the subsidies. These Americans were supposed to be covered by a federally financed expansion of Medicaid, but in states where Republicans have blocked Medicaid expansion, such unfortunates will be left out in the cold.
Still, here’s what it seems is about to happen: millions of Americans will suddenly gain health coverage, and millions more will feel much more secure knowing that such coverage is available if they lose their jobs or suffer other misfortunes. Only a relative handful of people will be hurt at all. And as contrasts emerge between the experience of states like California that are making the most of the new policy and that of states like Texas whose politicians are doing their best to undermine it, the sheer meanspiritedness of the Obamacare opponents will become ever more obvious.
So yes, it does look as if there’s an Obamacare shock coming: the shock of learning that a public program designed to help a lot of people can, strange to say, end up helping a lot of people — especially when government officials actually try to make it work.

Tuesday, May 14, 2013

Bad News for Deficit Hawks and Opponents of Obamacare

Jon Chait notes some bad news for deficit hawks and opponents of Obamacare:

Give Back that Pulitzer, Wall Street Journal Editorial Page: The recent slowdown in health-care costs is one of those facts, like climate change or the rapid growth after Bill Clinton raised taxes, that flummoxes American conservatism. The slowdown of health-care costs is one of the most important developments in American politics. The long-term deficit crisis — those scary charts Paul Ryan likes to hold up, with federal spending soaring to absurd levels in a grim socialist dystopian future — all assume the cost of health care will continue to rise faster than the cost of other things. If that changes, the entire premise of the American debate changes. And there’s a lot of evidence to suggest it is changing — health-care costs have slowed dramatically, and experts believe it’s happening for non-temporary reasons.
The general conservative response to date has involved ignoring the trend, or perhaps dismissing it as a temporary, recession-induced dip... Yesterday, the Wall Street Journal editorial page offered up what may be the new conservative fallback position: Okay, health-care costs are slowing down, but it has absolutely nothing to do with the huge new health-care reform law. “It increasingly looks as if ObamaCare passed amid a national correction in the health markets,” the Journal now asserts, “that no one in Congress or the White House understood.” It’s another one of those huge, crazy coincidences!
Of course, it’s not just that the Journal didn’t predict the health-care cost slowdown. The Journal insisted ... that Obamacare would ... necessarily lead to a massive increase in health-care inflation. In a series of hysterical, freedom-at-dusk editorials which were, unbelievably, awarded a Pulitzer Prize for commentary, the Journal expounded extensively on this belief. ...
The ... fact that the right is being forced to fall back from predicting a staggering rise in health-care costs to explaining away the staggering decline in health-care costs represents real progress...

More bad news for deficit hawks from the CBO. Ezra Klein explains:

CBO says deficit problem is solved for the next 10 years: ...according to the Congressional Budget Office, the debt disaster that has obsessed the political class for the last three years is pretty much solved, at least for the next 10 years or so.
The last time the CBO estimated our future deficits was February– just four short months ago. Back then, the CBO thought deficits were falling and health-care costs were slowing. Today, the CBO thinks deficits are falling even faster and health-care costs are slowing by even more.
Here’s the short version: Washington’s most powerful budget nerds have cut their prediction for 2013 deficits by more than $200 billion. They’ve cut their projections for our deficits over the next decade by more than $600 billion. Add it all up and our 10-year deficits are looking downright manageable. ...

Saturday, May 04, 2013

Cowen: To Fight Pandemics, Reward Research

Tyler Cowen:

To Fight Pandemics, Reward Research, by Tyler Cowen, Commentary, NY Times: That frightening word “pandemic” is back in the news. A strain of avian influenza has infected people in China... The outbreak raises renewed questions about how to prepare for possible risks...
Our current health care policies are not optimal for dealing with pandemics. The central problem is that these policies neglect ... “public goods”: items and services that benefit many people and can’t easily be withheld from those who don’t pay for them directly.
Protection against communicable diseases is a core example of a public good, as is basic scientific research... Without government financing for such public goods, the capacity wouldn’t be there if a new pandemic produced a surge in demand. This would amount to an institutional failure.
The government could also take another, more unusual step: it could promise to pay lucrative prices for the patents on drugs and vaccines that prove useful in dealing with pandemics. ...
Over all, the American government seems to be turning its back on its traditional role of producing and investing in national public goods. ... Focusing government on the production of public goods may sound like a trivial issue... But, in fact, we have been failing at it, and the consequences could be serious indeed.

[This extract probably doesn't emphasize the idea in the second to last paragraph above -- offering prizes for ideas that prove useful in dealing with pandemics -- as much as Tyler would prefer.]

Thursday, May 02, 2013

How Medicaid Affects Adult Health

Following up on Brad DeLong's theme today, more on the Oregon Medicaid experiment (and whether expansion of Medicaid is a good idea -- DeLong has a more cautionary but ultimately positive take on the results -- Krugman comments here):

How Medicaid affects adult health, MIT News: Enrollment in Medicaid helps lower-income Americans overcome depression, get proper treatment for diabetes, and avoid catastrophic medical bills, but does not appear to reduce the prevalence of diabetes, high blood pressure and high cholesterol, according to a new study with a unique approach to analyzing one of America’s major health-insurance programs.
The study, a randomized evaluation comparing health outcomes among more than 12,000 people in Oregon, employs the same research approach as a clinical trial, but applies it in a way that provides a window into the health outcomes of poor Americans who have been given the opportunity to get health insurance.
“What we found was that Medicaid significantly increased the probability of being diagnosed with diabetes, and being on diabetes medication,” says Amy Finkelstein, the Ford Professor of Economics at MIT and, along with Katherine Baicker of Harvard University’s School of Public Health, the principal investigator for the study. “We find decreases in rates of depression, and we continue to find reduced financial hardship. However, we were unable to detect a decline in the incidence of diabetes, high blood pressure, or high cholesterol.”
A paper based on the study, “The Oregon Experiment — Medicaid’s Effects on Clinical Outcomes,” is being published today in the New England Journal of Medicine.
The findings bear on the expansion of the federal government’s Affordable Care Act (ACA), currently being phased in across the nation. The ACA provides funding for states to expand Medicaid coverage to low-income adults who are currently not part of the program.
Winning the lottery
The researchers analyzed the impact that Medicaid had on people over a two-year span. Among other things, they found about a 30 percent decline in the rate of depression among people on Medicaid; an increase in people being diagnosed with, and treated for, diabetes; and increases in doctor visits, use of preventative care, and prescription drugs. They also found that Medicaid reduced, by about 80 percent, the chance of a person having catastrophic out-of-pocket medical expenses, defined as spending 30 percent of one’s annual income on health care.
“That’s important, because from an economics point of view, the purpose of health insurance is to … protect you financially,” Finkelstein says.
The researchers did not find any change in three other health measures: blood pressure, cholesterol, or a blood test for diabetes. But the data does provide important indicators about the ways newly-insured people are using medical services.
“There was a big increase in the use of preventative medicine,” says Baicker, noting that Medicaid increased the use of services such as mammograms and cholesterol screening, as well as increasing doctor's office visits and prescription drugs.
Other health researchers say these findings correspond with a developing picture of how increased medical care addresses different kinds of problems over different spans of time.
“I would expect a more immediate impact when it comes to measures of mental health and emotional well-being, including depression,” says Thomas McDade, an anthropologist at Northwestern University and director of its Laboratory of Human Biology Research, who studies public-health issues. “Things like risk for cardiovascular disease, your lipid concentrations, your blood pressure, these are things that are really established over a lifetime of exposure to diet, physical activity, and psychosocial environment, so we don’t expect them to move as quickly.”
The study uses data from a unique program the state of Oregon founded in 2008, after officials realized they had Medicaid funds for about 10,000 additional uninsured residents. The state created a lottery system to fill those 10,000 slots; about 90,000 residents applied.
That lottery thus generated a group of residents gaining Medicaid coverage who were otherwise similar to the applicants still lacking coverage. Using this divide, the researchers compared to a control group of 6,387 people who signed up for the lottery and were selected to 5,842 people who applied for Medicaid but were not selected to enroll.
“We recognized the lottery as a literally once-in-a-lifetime opportunity to bring the rigors of a randomized controlled trial, which is the gold standard in medical and scientific research, to one of the most pressing social policy questions of our day, namely, the consequences of covering the uninsured,” Finkelstein says.
Or as Baicker puts it, “We would never accept a medical trial that didn’t have a control group.”
In particular, this kind of study, by matching two like groups of people, eliminates one longstanding problem in studying health insurance: that people in worse health may seek out health insurance more often than those in good health do, thus making it appear, at a glance, that having health insurance does not help improve medical outcomes.
“The whole tension with studying the effects of insurance is, you have to wonder why some people have insurance and other people don’t, and whether those reasons could be related to the outcomes you’re studying,” Finkelstein explains, “like the possibility that people who are sicker seek out insurance more. So you can get perverse results [on the surface], indicating that health insurance makes you sicker, not because it actually does, but because of the kinds of people who are seeking it out.”
As McDade also notes, “It’s a true experiment, and these kinds of opportunities do not come along very often.” ...

Monday, March 11, 2013

'What’s Driving Medical-Care Spending Growth?'

I'm still digesting exactly what this means for health care policy, but if the growth in health care costs is being "driven by the number of treated enrollees as opposed to the cost of treatment," is that a problem?:

What’s Driving Medical-Care Spending Growth?, by Adam Hale Shapiro, FRBSF Economic Letter: The United States spends more per capita on health care than any other developed country. In 2010, health care accounted for more than 17% of gross domestic product (GDP), more than double the average of other developed countries. In addition, the pace of health-care spending growth has been rapid, outpacing overall GDP growth. The Centers for Medicare and Medicaid Services (CMS) projects that, by 2020, health-care spending will total $4.64 trillion, representing approximately 20% of GDP (Keehan et al. 2011). Understanding the source of this growth is essential to control costs, or “bend the cost curve,” without sacrificing access to care or quality.
This Economic Letter summarizes recent research (Dunn, Liebman, and Shapiro 2012a, b, c) that pinpoints the distinct sources of medical-care spending growth in the employer-sponsored and private health insurance market. The privately insured health-care market is economically important. Total spending for employer-sponsored private health insurance was $709 billion in 2011 (Gaynor and Newman 2012), which was approximately 30% more than Medicare outlays that year. Unlike the Medicare market in which CMS fixes payments to providers, private-sector prices are set through negotiations between insurers and providers. As a result, those prices are sensitive to competitive factors. Thus, spending growth in the privately insured market can stem from a multitude of sources, including growth in negotiated services prices. ...
Conclusion
An analysis of the components of medical-care expenditures indicates that spending growth in the privately insured market is being driven by the number of treated enrollees as opposed to the cost of treatment. In fact, patterns of utilization of medical services held spending growth in check. This is most evident for cardiology conditions, in which the quantity of services per episode of care declined sizably over the sample period.
Thus, “bending the cost curve” does not necessarily imply reducing growth in the cost of treatment. Rather, it may also imply slowing the growth in the number of enrollees receiving medical treatment. Treatment growth is most pronounced for preventive care. But we are skeptical that holding down growth in this area would be beneficial. In fact, a higher percentage of enrollees receiving preventive treatment may lead to lower expenditures in the future, better health outcomes, or both. Ultimately, more research is needed to determine which forms of spending growth are wasteful and which are productive in terms of health outcomes.
A shift from inpatient to outpatient services has caused utilization of services for certain conditions to decline. At the same time though, some areas, such as cancer treatment, have seen growth in both service utilization and prices. In the case of cancer, we hypothesize that cost growth reflects extensive innovation in treating malignancies. A more comprehensive study of cancer treatment would lead to a better understanding of the rising costs in this area.

Friday, February 22, 2013

'Big Health Insurance Rate Hikes are Plummeting'

Some evidence that Obamacare is reducing the rate of increase in the cost of health insurance:

Big health insurance rate hikes are plummeting, by Sarah Kliff: The number of double-digit rate increases requested by health insurers has plummeted over the past four years, according to a Friday report from the Obama administration.
Researchers combed through data available from the 15 states that publicly post all requests for rate increases in the individual market. They found that, in 2009, 74 percent of all requests came in above 10 percent. By 2012, that number had fallen to 35 percent. Preliminary data for 2013, which only cover a handful of states, shows 14 percent of rate increases asking for a double-digit bump. Here’s what this looks like in chart form:

rate increases

Does Obamacare get credit? The administration thinks so...
One other possible explanation: Over this time period, there has also been a big slowdown in the rate of health care cost growth. That began in 2009, so it’s not completely impossible that the health insurance industry, noticing that trend, began pricing individual market products at lower rates.
The administration has considered that idea though and looked at the large group market to test it. If the health cost slowdown really was driving lower premiums, the thinking went, it would show up across all insurance products. It didn’t...

Speaking of Obamacare, from Brad DeLong: Douglas Holtz-Eakin and Avik Roy: "You Know All That Stuff We Have Been Saying for Four Years? Nevermind!", and from Paul Krugman: More Swiss Myths.

Wednesday, February 20, 2013

'Setting the Record Straight on Medicare's Overhead Costs'

I don't know much about the quality of the journal where this research appears, but it's still worth noting:

Setting the record straight on Medicare's overhead costs, EurekAlert: ...The traditional Medicare program allocates only 1 percent of total spending to overhead compared with 6 percent when the privatized portion of Medicare, known as Medicare Advantage, is included, according to a study in the June 2013 issue of the Journal of Health Politics, Policy and Law.
The 1 percent figure ... is based on data contained in the latest report of the Medicare trustees. The 6 percent figure, on the other hand, is based on data contained in the latest National Health Expenditure Accounts (NHEA) report.  ...
According to ... [Minneapolis-based researcher Kip Sullivan, there is] confusion about Medicare's overhead costs. "The confusion is due partly to the existence of two government reports," says Sullivan, "and partly to claims by critics of Medicare that the government fails to report all of Medicare's overhead costs." The paper addresses both sources of confusion. The article explains the difference between the yardstick used by the trustees and the one used by the NHEA and concludes both are accurate. ...
The 1 percent figure is the one that should be used to analyze several hotly debated health reform issues, including whether to expand traditional Medicare to all Americans and whether to turn Medicare over to the insurance industry, either by expanding the Medicare Advantage program of by converting Medicare to a voucher program as Rep. Paul Ryan has proposed. ... The average overhead of the health insurance industry is approximately 20 percent, he said.
The large difference between traditional Medicare's overhead and that of the insurance industry has caused some conservative critics of Medicare to assert that the federal government is ignoring numerous administrative expenditures incurred by various federal agencies that should be attributed to Medicare.
Sullivan's paper ... describes this criticism as the second major source of confusion about Medicare's overhead. Sullivan's study reports that the 1 percent figure includes all appropriate administrative expenses incurred on Medicare's behalf, including those by the IRS, the Social Security Administration, and the FBI, as well as the cost of numerous pilot projects that Congress orders CMS to conduct. ...

Tuesday, February 19, 2013

Good News on Health Care Costs and the Budget

The biggest driver of the "we must cut the national debt now, now, now" is the expectation that the cost of medical services (and hence the cost of Medicare) will escalate rapidly. But that argument is being undercut by new estimates from the CBO:

Here’s some good news on the fiscal front: projected Medicare spending over the 2011-2020 period has fallen by more than $500 billion since late 2010 — based on a comparison of the latest Congressional Budget Office (CBO) projections with those of August 2010. ...
CBO has reduced its projections of Medicare spending in response to a pattern of very low spending growth in the past three years. ... Medicare spending growth has slowed even more than costs in private health insurance, according to Standard & Poor’s and Medicare’s actuary. Although some of the slowdown stems from the recession, CBO Director Douglas Elmendorf and other experts have concluded that a substantial part reflects structural changes in the health care system. Professional associations, hospitals, and doctors are taking steps to curb costly and ineffective procedures and treatment. ...

The deficit hawks want to hurry and cut spending now. Their goal, after all, is smaller government and lower taxes on the wealthy needed to support it. Thus, they need to get the cuts in place before people figure out that they've been misled about the immediacy of the problem -- the scary projections are down the road, not tomorrow -- and that the problem is not as big as we thought.

(And who the hell cares what Bowles and Simpson think? I certainly don't. But apparently someone cares, because even though they couldn't get the committee they headed to agree on their previous budget plan, the unofficial plan they released was treated as official by the media. Now they are back in the news again with a another plan -- sanctioned by nothing but their own egos -- that tries to move the budget discussions more in the direction of what the GOP desires. Please just go away.)

Monday, January 21, 2013

Paul Krugman: The Big Deal

Progressives should cheer up:

The Big Deal, by Paul Krugman, Commentary, NY Times: On the day President Obama signed the Affordable Care Act into law, an exuberant Vice President Biden famously pronounced the reform a “big something deal” — except that he didn’t use the word “something.” And he was right..., if progressives look at where we are as the second term begins, they’ll find grounds for a lot of (qualified) satisfaction.

Consider, in particular, three areas: health care, inequality and financial reform.

Health reform is, as Mr. Biden suggested, the centerpiece of the Big Deal. Progressives have been trying to get some form of universal health insurance since the days of Harry Truman; they’ve finally succeeded. …

What about inequality? ... Like F.D.R., Mr. Obama took office in a nation marked by huge disparities in income and wealth. But where the New Deal had a revolutionary impact, empowering workers and creating a middle-class society that lasted for 40 years, the Big Deal has been limited to equalizing policies at the margin.

That said,... through new taxes ... 1-percenters will see their after-tax income fall around 6 percent... This will reverse only a fraction of the huge upward redistribution that has taken place since 1980, but it’s not trivial.

Finally, there’s financial reform. The Dodd-Frank reform bill is ... not the kind of dramatic regime change one might have hoped for… Still, if plutocratic rage is any indication, the reform isn’t as toothless as all that. …

All in all, then, the Big Deal has been, well, a pretty big deal. But will its achievements last? ... I ... think so. For one thing, the Big Deal’s main policy initiatives are already law. ... And ... the Big Deal agenda is, in fact, fairly popular — and will become more popular once Obamacare goes into effect...

Finally, progressives have the demographic and cultural wind at their backs. Right-wingers flourished for decades by exploiting racial and social divisions — but that strategy has now turned against them...

Now, none of what I’ve just said should be taken as grounds for progressive complacency. The plutocrats may have lost a round, but their wealth and the influence it gives them in a money-driven political system remain. Meanwhile, the deficit scolds (largely financed by those same plutocrats) are still trying to bully Mr. Obama into slashing social programs. ...

Still, maybe progressives — an ever-worried group — might want to take a brief break from anxiety and savor their real, if limited, victories.

Friday, January 18, 2013

'Health Care Rationing Is Nothing New'

On health care rationing in the US:

Health Care Rationing Is Nothing New [Excerpt], by Beatrix Hoffman: ... Opponents of the 2010 Patient Protection and Affordable Care Act warn that the new health care law will lead to rationing, or limits on medical services. But many observers point out that health care is already rationed in the United States. "We've done it for years," said Dr. Arthur Kellermann, professor of emergency medicine and associate dean for health policy at Emory University School of Medicine. "In this country, we mainly ration on the ability to pay." ...
Countries with universal health systems ration health care via controlled distribution, whether through national budgeting, government setting of prices and provider fees, restrictions on some services, or a combination of methods. The United States health care system rations primarily by price and insurance coverage—and ... many other methods as well. Americans have learned to fear European or Canadian types of rationing, but don't see that the United States practices both price rationing and other types of rationing in health care.
Rationing in the United States is ... practiced by government agencies, private health insurance companies, hospitals, and providers, in ways both official and unofficial, intended and unintended, visible and invisible. The American way of rationing is a complex, fragmented, and often contradictory blend of policies and practices, unique to the United States. ... Health care has been rationed by race, in the case of the Jim Crow health system and other types of racial discrimination; by region, in the case of the uneven distribution of health facilities and personnel throughout the country; by employment and occupation, in the case of the job-based health insurance system; by address, in the case of residency requirements for various kinds of health care; by type of insurance coverage, in the case of health insurance that limits benefits and choice of doctor and hospital; by parental status, in the case of Medicaid (childless individuals are often excluded); by age, in the case of Medicare and the State Children's Health Insurance Programs—and the list goes on. These types of health care organization ... have rarely been called rationing. ...

Thursday, January 10, 2013

Projected Medicare Spending

Via an email from Austin Frakt with the subject "should we worry a lot about Medicare growth?," and the answer in the text "It doesn't seem like it. Massively demographically driven. A bit more revenue and it's fixed for a long time." [Remember that projected health care cost growth is the main source of worry about future debt problems, and hence the driving force behind the push from deficit hawks for spending cuts and tax increases, well spending cuts anyway, the so-called deficit hawks are not so fond of tax increases which betrays their true motives.]:

Medicare growth

Chart of the day: Projected Medicare spending, by Austin Frakt: The vertical axis is percent of GDP. “Excess cost growth” means in excess of the rate of GDP growth. The chart is from a new ASPE report by Richard Kronick and Rosa Po. Description of OACT’s alternative scenario is here, beginning on page 12 (PDF). Note that in addition to assuming a perpetual doc fix, it also assumes “a gradual phase-down of the productivity adjustments [about which, see Figure 1 here] and the elimination of the IPAB requirements.” Given these, is an excess cost growth totaling three-quarters of a percentage point of GDP over two decades a lot?
UPDATE: Link to and quote from the OACT’s alternative scenario

Update: Austin adds a clarification:

I'm not sure I buy my own statement that we only need a bit more revenue. The demographics are costly. The real message is that there is nothing much we can do about it. Cutting beneficiaries or benefits amounts to a cost shift, and is probably net cost increasing, system-wide. So, we must spend the demographically-driven amount. We then just need a bit more to deal with health care cost inflation. One would like to reduce that to zero, but a modest increase won't kill us, and certainly not quickly.

Thursday, January 03, 2013

Health Exchanges: Competition versus Standardization

Jonathan Gruber describes a "central tension" in online health exchanges: more choices and more competition versus standardization that makes choices between plans abundantly clear:

The health-insurance markets of the (very near) future, MIT News: An online health-insurance exchange is coming to your state. How effective will it be?

That is an increasingly important question in the United States. In June 2012, the Supreme Court upheld the legality of the country’s Affordable Care Act, passed by Congress and signed into law by President Barack Obama in 2010. The program mandates private-sector health insurance for all citizens, and provides subsidies for those who otherwise could not afford it. Insurance-plan choices will be available through exchanges, or marketplaces; most people will be able to study plans and sign up for one online. As of December, nearly 20 states have elected to run exchanges themselves; the federal government will run the exchanges in other states.

And therein lies a key issue: Creating a consumer-friendly exchange is no easy task. It is hard enough to know what kinds of foods we should eat, which cars to drive, or which apps to use. Selecting an insurance plan is a far more complex decision.

“Health insurance is a confusing and difficult choice,” says Jonathan Gruber, a professor of economics at MIT who specializes in health-care issues. “It’s important that people make decisions in an organized and effective market. In that way they can make the best choices, and we can ensure the best level of competition among insurers.” ...

Moreover, as Gruber readily acknowledges, state-run insurance exchanges must pull off a difficult balancing act. The point of markets is to provide competition, but academic research shows that when people are given too many choices, they struggle to select logical options for themselves.

“The tension that exchanges face,” Gruber says, “is [having] enough standardization to make choice and competition work effectively, but not so much standardization that people can’t find the plans that best fit their tastes. That’s absolutely a central tension.” To handle this challenge, policymakers and academic researchers will almost certainly have to collaborate in productive ways.

Indeed, plenty of research suggests that America’s existing health-care offerings are already too complex. ...[more]...

Thursday, December 27, 2012

'Disease Burden Links Ecology to Economic Growth'

Many development economists argue that "the foundation of economic growth is in political and economic institutions." This research argues that "vector-borne and parasitic diseases" are just as important as "crime or government corruption" in explaining the global distribution of income. This is not my area, so I won't comment on the quality of this research, but hoping development economists will chime and explain the degree to which these results should be noted or ignored:

Disease burden links ecology to economic growth, EurekAlert: A new study, published December 27 in the open access journal PLOS Biology, finds that vector-borne and parasitic diseases have substantial effects on economic development across the globe, and are major drivers of differences in income between tropical and temperate countries. The burden of these diseases is, in turn, determined by underlying ecological factors: it is predicted to rise as biodiversity falls. This has significant implications for the economics of health care policy in developing countries, and advances our understanding of how ecological conditions can affect economic growth.
According to conventional economic wisdom, the foundation of economic growth is in political and economic institutions. "This is largely Cold War Economics about how to allocate property rights—with the government or with the private sector," says Dr Matthew Bonds, an economist at Harvard Medical School, and the lead author of the new study. However, Dr Bonds and colleagues were interested instead in biological processes that transcend such institutions, and which might form a more fundamental economic foundation.
The team was intrigued by the fact that tropical countries are generally comprised of poor agrarian populations while countries in temperate regions are wealthier and more industrialized. This distribution of income is inversely related to the burden of disease, which peaks at the equator and falls along a latitudinal gradient. Although it is common to conclude that economics drives the pattern of disease, the authors point out that most of the diseases that afflict the poor spend much of their life-cycle outside the human host. Many cannot even survive outside the tropics. Their distribution is largely determined by ecological factors, such as temperature, rainfall, and soil quality.
Because of the high correlations between poverty and disease, determining the effects of one on the other was the central challenge of their statistical analysis. Most previous attempts to address this topic ignored disease ecology, argue Bonds and colleagues. The team assembled a large data set for all of the world's nations on economics, parasitic and infectious vector-borne diseases, biodiversity (mammals, birds and plants) and other factors. Knowing that diseases are partly determined by ecology, they used a powerful set of statistical methods, new to macroecology, that allowed variables that may have underlying relationships with each other to be teased apart.
The results of the analysis suggest that infectious disease has as powerful an effect on a nation's economic health as governance, say the authors. "The main asset of the poor is their own labor," says Dr Bonds. "Infectious diseases, which are regulated by the environment, systematically steal human resources. Economically speaking, the effect is similar to that of crime or government corruption on undermining economic growth."
This result has important significance for international aid organizations, as it suggests that money spent on combating disease would also stimulate economic growth. ... The research sets the stage for a number of future analyses that need to lay bare the relationship between health care funding and economic development.

Wednesday, November 21, 2012

'Drug Company Money is Undermining Science'

Charles Seife:

How Drug Company Money is Undermining Science, by Charles Seife, Scientific American: ...In the past few years the pharmaceutical industry has come up with many ways to funnel large sums of money—enough sometimes to put a child through college—into the pockets of independent medical researchers who are doing work that bears, directly or indirectly, on the drugs these firms are making and marketing. The problem is not just with the drug companies and the researchers but with the whole system—the granting institutions, the research labs, the journals, the professional societies, and so forth. No one is providing the checks and balances necessary to avoid conflicts. Instead organizations seem to shift responsibility from one to the other, leaving gaps in enforcement that researchers and drug companies navigate with ease, and then shroud their deliberations in secrecy.
“There isn't a single sector of academic medicine, academic research or medical education in which industry relationships are not a ubiquitous factor,” says sociologist Eric Campbell, a professor of medicine at Harvard Medical School. Those relationships are not all bad. After all, without the help of the pharmaceutical industry, medical researchers would not be able to turn their ideas into new drugs. Yet at the same time, Campbell argues, some of these liaisons co-opt scientists into helping sell pharmaceuticals rather than generating new knowledge.
The entanglements between researchers and pharmaceutical companies take many forms. There are speakers bureaus: a drugmaker gives a researcher money to travel—often first class—to gigs around the country, where the researcher sometimes gives a company-written speech and presents company-drafted slides. There is ghostwriting: a pharmaceutical manufacturer has an article drafted and pays a scientist (the “guest author”) an honorarium to put his or her name on it and submit it to a peer-reviewed journal. And then there is consulting: a company hires a researcher to render advice. ...
It is not just an academic problem. Drugs are approved or rejected based on supposedly independent research. When a pill does not work as advertised and is withdrawn from the market or relabeled as dangerous, there is often a trail of biased research and cash to scientists. ...
The scientific community's answer to the conflict-of-interest problem is transparency. Journals, grant-making institutions and professional organizations press researchers to openly declare ... when they have any entanglements that might compromise their objectivity. ... It is an honor system. Researchers often fail to report conflicts of interest—sometimes because they do not even realize that they present a problem. ...
In theory, there is a backup system. ... When a scientist fails to report such a conflict, the university or hospital he or she works for is supposed to spot it and report it. And when a university or hospital is not doing its job catching conflicted research, then the government agency that funds most of that research—the National Institutes of Health—is supposed to step in. Unfortunately, that backup system is badly broken. ...

Friday, November 16, 2012

Paul Krugman: Life, Death and Deficits

 Raising the eligibility age for Social Security and Medicare is *not* the answer:

Life, Death and Deficits, by Paul Krugman, Commentary, NY Times: America’s political landscape is infested with many zombie ideas... And right now the most dangerous zombie is probably the claim that rising life expectancy justifies a rise in both the Social Security retirement age and the age of eligibility for Medicare... — and we shouldn’t let it eat our brains. ...
Now, life expectancy at age 65 has risen... But the rise has been very uneven..., any further rise in the retirement age would be a harsh blow to Americans in the bottom half of the income distribution, who aren’t living much longer, and who, in many cases, have jobs requiring physical effort that’s difficult even for healthy seniors. And these are precisely the people who depend most on Social Security. ...
While the United States does have a long-run budget problem, Social Security is not a major factor... Medicare, on the other hand, is a big budget problem. But raising the eligibility age, which means forcing seniors to seek private insurance, is no way to deal with that problem. ...
What would happen if we raised the Medicare eligibility age? The federal government would save only a small amount of money, because younger seniors are relatively healthy... Meanwhile, however, those seniors would face sharply higher out-of-pocket costs. How could this trade-off be considered good policy?
The bottom line is that raising the age of eligibility for either Social Security benefits or Medicare would be destructive, making Americans’ lives worse without contributing in any significant way to deficit reduction. Democrats ... who even consider either alternative need to ask themselves what on earth they think they’re doing.
But what, ask the deficit scolds, do people like me propose doing about rising spending? The answer is to do what every other advanced country does, and make a serious effort to rein in health care costs. Give Medicare the ability to bargain over drug prices. Let the Independent Payment Advisory Board, created as part of Obamacare to help Medicare control costs, do its job instead of crying “death panels.” (And isn’t it odd that the same people who demagogue attempts to help Medicare save money are eager to throw millions of people out of the program altogether?) ...
What we know for sure is that there is no good case for denying older Americans access to the programs they count on. This should be a red line in any budget negotiations, and we can only hope that Mr. Obama doesn’t betray his supporters by crossing it.

Saturday, November 10, 2012

'It’s All About Health Care'

No matter how many times this point is made, it seems to get lost in budget discussions. Our budget problem is about health care costs, and it's a problem the private sector shares (so privatizing health care doesn't solve the problem unless you believe, contrary to the evidence, that this would reduce cost growth):

The single best graph on what’s driving our deficits, by Ezra Klein: From the Congressional Budget Office’s hot new white paper, “Options for Deficit Reduction“:

Cbo

That’s all of the federal government’s spending in three graphs. The top graph is health care, including Medicare, Medicaid and the Affordable Care Act. The middle graph is Social Security. And then there’s literally everything else: Defense, education, infrastructure, food safety, R&D, farm subsidies, the FBI, etc.
What these three charts tell you is simple: It’s all about health care. Spending on Social Security is expected to rise, but not particularly quickly. Spending on everything else is actually falling. It’s health care that contains most all of our future deficit problems. And the situation is even worse than it looks on this graph: Private health spending is racing upwards even faster than public health spending ...

Monday, October 29, 2012

Paul Krugman: Medicaid on the Ballot

Medicaid faces large cuts if Romney is elected:

Medicaid on the Ballot, by Paul Krugman, Commentary, NY Times: There’s a lot we don’t know about what Mitt Romney would do if he won...; his economic “plan” is an empty shell.
But one thing is clear: If he wins, Medicaid ... will face savage cuts. Estimates suggest that a Romney victory would deny health insurance to about 45 million people who would have coverage if he lost, with two-thirds of that difference due to the assault on Medicaid.
So this election is, to an important degree, really about Medicaid. And this, in turn, means that you need to know something more about the program. ...
Medicaid is generally viewed as health care for the nonelderly poor... For those who get coverage through the program, Medicaid is a much-needed form of financial aid. It is also, quite literally, a lifesaver. Mr. Romney has said that a lack of health insurance doesn’t kill people in America; oh yes, it does, and states that expand Medicaid coverage show striking drops in mortality.
So Medicaid does a vast amount of good. But at what cost? There’s a widespread perception, gleefully fed by right-wing politicians and propagandists, that Medicaid has “runaway” costs. But the truth is just the opposite. ... Medicaid is significantly better at controlling costs than the rest of our health care system. ...
Is Medicaid perfect? Of course not. Most notably, the hard bargain it drives with health providers means that quite a few doctors are reluctant to see Medicaid patients. Yet given the problems facing American health care — sharply rising costs and declining private-sector coverage — Medicaid has to be regarded as a highly successful program. It provides good if not great coverage to tens of millions of people who would otherwise be left out in the cold, and as I said, it does much right to keep costs down.
By any reasonable standard, this is a program that should be expanded, not slashed — and a major expansion of Medicaid is part of the Affordable Care Act.
Why, then, are Republicans so determined to do the reverse, and kill this success story? You know the answers. Partly it’s their general hostility to anything that helps the 47 percent — those Americans whom they consider moochers who need to be taught self-reliance. Partly it’s the fact that Medicaid’s success is a reproach to their antigovernment ideology.
The question — and it’s a question the American people will answer very soon — is whether they’ll get to indulge these prejudices at the expense of tens of millions of their fellow citizens.

Tuesday, October 23, 2012

'The Health Mandate Romney Still Supports'

Eliminate boredom at meetings blogging -- quick one -- Bruce Bartlett on Mitt Romney's (silly) claim that the individual mandate for health insurance is unnecessary because people can get the care they need at emergency rooms:

The Health Mandate Romney Still Supports, by Bruce Bartlett, Commentary, NY Times: Republicans ... are adamantly opposed to government paying for health care or a mandate requiring people to buy health insurance. At the same time, they recognize that they cannot say ... that if a dying person shows up at an emergency room without insurance, that person will be left to die in the street. Thus they support a little-known mandate requiring hospitals to treat the uninsured, the Emergency Medical Treatment and Active Labor Act.

Often referred to as Emtala, the bill ... was signed into law by Ronald Reagan... It was enacted because, previously, people had in fact been left to die in the street... Since then, Republicans have routinely cited Emtala as a key reason that the United States already has de facto national health insurance...

In fact, the Emergency Medical Treatment and Active Labor Act isn’t even remotely a substitute for health insurance... It does not demand that all hospitals care for whoever walks in, only those who require urgent care to avoid serious injury or life-threatening consequences. Only hospitals that both participate in Medicare and have emergency rooms are covered by the law...

A new report ... found that hospitals continue to engage in a practice known as “patient dumping” – turning away uninsured patients from emergency rooms despite the law. One reason they are able to do so is because in 2003 the George W. Bush administration eased the rules regarding Emtala. ...

The ... mandate on hospitals ... is a very inadequate and inefficient substitute for health insurance – something Mr. Romney used to acknowledge – and every bit as much a violation of Republican principles, which oppose unfunded mandates, as the individual mandate that they abhor.

Monday, October 15, 2012

Paul Krugman: Death By Ideology

Mitt Romney's comments about health care "clearly demonstrate that Mr. Romney has no idea what life (and death) are like for those less fortunate than himself":

Death By Ideology, by Paul Krugman, Commentary, NY Times: Mitt Romney doesn’t see dead people. But that’s only because he doesn’t want to see them; if he did, he’d have to acknowledge the ugly reality of what will happen if he and Paul Ryan get their way on health care.
Last week,... Mr. Romney declared that nobody in America dies because he or she is uninsured: “We don’t have people that become ill, who die in their apartment because they don’t have insurance.” This followed on an earlier remark by Mr. Romney — echoing an infamous statement by none other than George W. Bush — in which he insisted that emergency rooms provide essential health care to the uninsured.
These are remarkable statements. ... Even the idea that everyone gets urgent care when needed from emergency rooms is false. Yes, hospitals are required ... to treat people in dire need, whether or not they can pay. But ... you will be billed, and ... fear of huge bills can deter the uninsured from visiting the emergency room even when they should. And sometimes they die as a result.
More important, going to the emergency room ... is no substitute for regular care, especially if you have chronic health problems. When such problems are left untreated — as they often are among uninsured Americans — a trip to the emergency room can all too easily come too late to save a life.
So the reality, to which Mr. Romney is somehow blind, is that ... lack of insurance is responsible for thousands, and probably tens of thousands, of excess deaths... But that’s not a fact Mr. Romney wants to admit, because he and his running mate want to repeal Obamacare and slash funding for Medicaid — actions that would take insurance away from some 45 million nonelderly Americans, causing thousands of people to suffer premature death. And their longer-term plans to convert Medicare into Vouchercare would deprive many seniors of adequate coverage,... leading to still more unnecessary mortality. ...
So let’s be brutally honest here. ... Mr. Romney and Mr. Ryan are proposing trillions of dollars in tax cuts for the wealthy. So a literal description of their plan is that they want to expose many Americans to financial insecurity, and let some of them die, so that a handful of already wealthy people can have a higher after-tax income.
It’s not a pretty picture — and you can see why Mr. Romney chooses not to see it.

Friday, October 12, 2012

'Romney Sticks to Ridiculous Emergency-Room Argument'

In case you missed Romney's 'they can always go to emergency rooms argument,' here's Steve Benen:

Romney sticks to ridiculous emergency-room argument, by Steve Benen: Just three weeks ago, CBS's Scott Pelley asked Mitt Romney, "Does the government have a responsibility to provide health care to the 50 million Americans who don't have it today?" The Republican didn't answer the question directly, but instead suggested there's no cause for alarm -- the uninsured can rely on emergency rooms.

The exchange was widely panned for being both callous and ignorant, and yet, as Rebecca Leber noted, Romney apparently can't help himself. ...

Sigh. It's disconcerting to see Romney stick to such a ridiculous position, but my greater fear is that the Republican candidate actually believes what he's saying. ...[W]e know exactly why he keeps talking like this: under his approach, the number of Americans without health insurance will soar. ...

Romney's argument isn't a responsible approach to American health care in the 21st century; Romney's argument is ridiculous.

Wednesday, October 03, 2012

The Effects of Medicaid Eligibility

This is from the NBER:
Saving Teens: Using a Policy Discontinuity to Estimate the Effects of Medicaid Eligibility, by Bruce D. Meyer, Laura R. Wherry, NBER Working Paper No. 18309, Issued in August 2012: [Open Link to Paper]: This paper uses a policy discontinuity to identify the immediate and long-term effects of public health insurance coverage during childhood. Our identification strategy exploits a unique feature of several early Medicaid expansions that extended eligibility only to children born after September 30, 1983. This feature resulted in a large discontinuity in the lifetime years of Medicaid eligibility of children at this birthdate cutoff. Those with family incomes at or just below the poverty line had close to five more years of eligibility if they were born just after the cutoff than if they were born just before. We use this discontinuity in eligibility to measure the impact of public health insurance on mortality by following cohorts of children born on either side of this cutoff from childhood through early adulthood. We examine changes in rates of mortality by the underlying causes of death, distinguishing between deaths due to internal and external causes. We also examine outcomes separately for black and white children. Our analysis shows that black children were more likely to be affected by the Medicaid expansions and gained twice the amount of eligibility as white children. We find a substantial effect of public eligibility during childhood on the later life mortality of black children at ages 15-18. The estimates indicate a 13-18 percent decrease in the internal mortality rate of black teens born after September 30, 1983. We find no evidence of an improvement in the mortality of white children under the expansions.

I'll let people connect their own dots, if they think it's appropriate, between who is helped and who is not and the current debate over Medicaid funding.

Monday, October 01, 2012

Paul Krugman: The Real Referendum

If Obama wins, will he betray the "clear mandate for preserving and extending" the social insurance system that voters will have given to him?:

The Real Referendum, by Paul Krugman, Commentary, NY Times: Republicans came into this campaign believing that it would be a referendum on President Obama, and that still-high unemployment would hand them victory on a silver platter. But given the usual caveats — a month can be a long time in politics... — it doesn’t seem to be turning out that way.
Yet there is a sense in which the election is indeed a referendum... Voters are, in effect, being asked to deliver a verdict on the legacy of the New Deal and the Great Society, on Social Security, Medicare and, yes, Obamacare...
If the polls are any indication, the result of that referendum will be a clear reassertion of support for the safety net, and a clear rejection of politicians who want to return us to the Gilded Age. But here’s the question: Will that election result be honored?
I ask that question because we already know what Mr. Obama will face if re-elected: a clamor from Beltway insiders demanding that he immediately return to his failed political strategy of 2011, in which he made a Grand Bargain over the budget deficit his overriding priority. Now is the time, he’ll be told, to fix America’s entitlement problem once and for all. There will be calls ... for him to officially endorse Simpson-Bowles...
And Mr. Obama should just say no,... the fact is that Simpson-Bowles is a really bad plan, one that would undermine some key pieces of our safety net. And if a re-elected president were to endorse it, he would be betraying the trust of the voters who returned him to office. ...
Now, there’s no mystery about why Simpson-Bowles looks the way it does. It was put together in a political environment in which progressives, and even supporters of the safety net as we know it, were very much on the defensive — an environment in which conservatives were presumed to be in the ascendant, and in which bipartisanship was effectively defined as the effort to broker deals between the center-right and the hard right.
Barring an upset, however, that environment will come to an end on Nov. 6. This election is, as I said, shaping up as a referendum on our social insurance system, and it looks as if Mr. Obama will emerge with a clear mandate for preserving and extending that system. It would be a terrible mistake, both politically and for the nation’s future, for him to let himself be talked into snatching defeat from the jaws of victory.

Tuesday, September 18, 2012

Competition Will Not Reduce The Price Of Medicare

It wouldn't hurt to emphasize this point once again. Competition "won’t give us cheap healthcare":

Why Competition Will Not Reduce The Price Of Medicare, Cheap Talk: Mitt Romney and Paul Ryan have proposed a plan to allow private firms to compete with Medicare to provide healthcare to retirees. Beginning in 2023, all retirees would get a payment from the federal government to choose either Medicare or a private plan. The contribution would be set at the second lowest bid made by any approved plan.
Competition has brought us cheap high definition TVs, personal computers and other electronic goods but it won’t give us cheap healthcare. The healthcare market is complex because some individuals are more likely to require healthcare than others. The first point is that as firms target their plans to the healthy, competition is more likely to increase costs than lower them. David Cutler and Peter Orzag have made this argument. But there is a second point: the same factors that lead to higher healthcare costs also work against competition between Medicare and private plans. Unlike producers of HDTVs, private plans will not cut prices to attract more consumers so competition will not reduce the price of Medicare. A simple example exposes the logic of these two arguments. ...[gives example]...
But there is an additional effect. Traditional competitive analysis would predict that one private plan or another will undercut the other plans to get more sales and make more profits. This is the process that gives us cheap HDTVs. The hope is that similar price competition should reduce the costs of healthcare. Unfortunately, competition will not work in this way in the healthcare market because of adverse selection. ...[continues example]...
So, adverse selection prevents the kind of competition that lowers prices. The invisible hand of the market cannot reduce costs of provision by replacing the visible hand of the government.

Tuesday, September 11, 2012

'Is Medicare Really Going Bankrupt? Definitely Not'

Trudy Lieberman of the Columbia Journalism Review catches CNN getting something right:

Medicare ‘bankruptcy’: CNN gets it right, by Trudy Lieberman: Hooray for CNN.com, for fact checking the often-heard claim of Medicare’s “impending” bankruptcy. CNN’s contribution sets a high bar...
The “bankruptcy” language comes up a lot. ... But is Medicare really going bankrupt? Definitely not, says CNN. The network is correct, and the point is crucial.
How did CNN pull away from the fact-checking pack on this one? ... First, CNN reported, as CJR has urged news outlets to do, that only one part of Medicare is in potential trouble—the Hospital Trust Fund, which is financed by payroll taxes. The other parts of Medicare, including Part B, which finances doctor visits, lab tests, and outpatient services, “are adequately financed for now,” Medicare trustees have said. ...
CNN pushed further and asked a logical question that most reporters writing about Medicare have missed. When the magic date for “bankruptcy” arrives—2024 according to the Dems, or 2016 if the ACA disappears in a Romney presidency—would Medicare really disappear? Jonathan Oberlander, a health policy expert at the University of North Carolina, told CNN that ... “Medicare is not going bankrupt. Medicare would still have most of the necessary funds to pay those expenses and other parts of the program would be unaffected. Medicare won’t go bankrupt in the literal sense in 2016 or 2024 or 2064—or ever.” The Centers for Medicare and Medicaid Services, which runs the Medicare program, said this year that even in 2024 the Medicare hospital trust fund could still pay 87 percent of its estimated expenditures, and noted that, “in practice, Congress has never allowed a Medicare trust fund to exhaust its assets.” ...
That’s not to say that Medicare’s cost explosion is not a problem. How to control cost—not just for Medicare but for al the rest of the healthcare system, too—is a central issue that the press needs to clarify. ...

Sunday, September 09, 2012

Is Romney 'Preparing for a Major Fold' on Health Care?

Brad DeLong:

Why Oh Why Did the Republicans Nominate This Clown?, by Brad DeLong: ObamaCare allows parents to keep their young-adult children on their insurance, requires insurers to offer guaranteed issue and community rates, and imposes an individual mandate to purchase insurance on individuals.

Now comes Mitt Romney:

Romney says he won't repeal all of Obamacare: Mitt Romney says his pledge to repeal President Barack Obama's health law doesn't mean that young adults and those with medical conditions would no longer be guaranteed health care.

So there we have it: Romney will keep the parts of ObamaCare that are young-adult coverage, and guaranteed issue and community rates.

It continues:

The Republican presidential nominee says he'll replace the law with his own plan. He tells NBC's "Meet the Press" that the plan he worked to pass while governor of Massachusetts…

So there we have it: Romney will keep the parts of ObamaCare that imposes on individual mandate to purchase insurance.

So what's left?

Romney says he doesn't plan to repeal of all of Obama's signature health care plan. He says there are a number of initiatives he likes in the Affordable Care Act that he would keep in place if elected president…

Like: the whole thing. Duh.

There is something very wrong with anybody working for, contributing to, or arguing for Ryan-Romney right now.

Tyler Cowen pats himself on the back:

I would say he is preparing for a major fold on the issue. I’ve been predicting a Romney administration would block grant Medicaid, undo some or all of the Medicare savings in ACA, but essentially keep the mandate under a different label and then claim to have “repealed and replaced.” The story is here.
I won't complain about "a major fold" on healthcare, but it does bring up a question. Does Romney stand for anything? He seems to know how to set his principles aside and submit to the highest bidder -- something his touted business experience taught him I suppose. But with all of the flip-flops, Etch-a-Sketch moments, his refusal to take a stand on budget cuts, his dishonest campaigning, etc., etc., is there any principle that Romney won't conveniently overlook if it looks like there's a few votes to be gained?

Friday, August 31, 2012

Paul Krugman: The Medicare Killers

Paul Ryan’s 'big lie' about Medicare:

The Medicare Killers, by Paul Krugman, Commentary, NY Times: Paul Ryan’s speech Wednesday night may have accomplished one good thing: It finally may have dispelled the myth that he is a Serious, Honest Conservative. Indeed, Mr. Ryan’s brazen dishonesty left even his critics breathless. ...
But Mr. Ryan’s big lie — and, yes, it deserves that designation — was his claim that “a Romney-Ryan administration will protect and strengthen Medicare.” Actually, it would kill the program. ...
The Republican Party is now firmly committed to replacing Medicare with what we might call Vouchercare. The government ... would give you a voucher that could be applied to the purchase of private insurance..., the vouchers almost certainly would be inadequate...
Why would anyone think that this was a good idea..., wouldn’t private insurers reduce costs through the magic of the marketplace? No. All, and I mean all, the evidence says that public systems like Medicare and Medicaid ... are better than the private sector at controlling costs. ...
So Vouchercare would mean higher costs and lower benefits for seniors. Over time, the Republican plan wouldn’t just end Medicare as we know it, it would kill the thing Medicare is supposed to provide: universal access to essential care. Seniors who couldn’t afford to top up their vouchers with a lot of additional money would just be out of luck.
Still, the G.O.P. promises to maintain Medicare as we know it for those currently over 55. Should everyone born before 1957 feel safe? Again, no.
For one thing, repeal of Obamacare would cause older Americans to lose a number of significant benefits..., including the way it closes the “doughnut hole” in drug coverage and the way it protects early retirees.
Beyond that, the promise of unchanged benefits for Americans of a certain age just isn’t credible. Think about the political dynamics that would arise once someone born in 1956 still received full Medicare while someone born in 1959 couldn’t afford decent coverage. ... For sure, it would unleash political warfare between the cohorts — and the odds are high that older cohorts would soon find their alleged guarantees snatched away.
The question now is whether voters will understand what’s really going on (which depends to a large extent on whether the news media do their jobs). Mr. Ryan and his party are betting that they can bluster their way through this, pretending that they are the real defenders of Medicare even as they work to kill it. Will they get away with it?

Friday, August 24, 2012

'Evidence vs. Ideology' and 'Romney’s Lying Machine'

Laura D’Andrea Tyson:

Evidence vs. Ideology in the Medicare Debate, by Laura D’Andrea Tyson, Commentary, NY Times: When formulating public policy, evidence should be accorded more weight than ideology, and facts should matter... The ... Romney campaign has been deliberately misrepresenting President Obama’s Medicare record.
Mitt Romney characterizes the $716 billion of Medicare savings over the next 10 years, contained in the Affordable Care Act, as President Obama’s “raid” on the Medicare program to pay for his health care program. This fear-mongering is simply untrue. These savings result from reforms to slow the growth of Medicare spending per enrollee – there are no cuts in Medicare benefits. ...
Both Governor Romney and Representative Paul D. Ryan have promised to repeal the Affordable Care Act and with it the reforms behind the $716 billion in Medicare savings (although Mr. Ryan duplicitously counts the savings from these reforms in his deficit-reduction plan). Medicare beneficiaries would ... lose the benefits..., and they would be forced to pay higher premiums and co-pays as a result of faster growth in Medicare costs.
President Obama’s health care plan is not a raid on Medicare; it is an investment in a stronger system. If the Affordable Care Act had not met this standard, the AARP would not have endorsed it. ...
Now Mr. Ryan has espoused – and Governor Romney has embraced — a proposal to transform Medicare into a premium support system. ... There is no evidence that such a system would control Medicare spending more effectively than the current Medicare program strengthened by Affordable Care Act reforms. Indeed,...the C.B.O. has concluded that ... such plans would drive up total health-care spending per Medicare beneficiary...
A voucher system would do little to control the growth of health care costs, but it would shift their burden onto Medicare beneficiaries in the form of higher premiums and reduced care. Cost-shifting should not be confused with cost containment. ...
A “serious” deficit hawk committed to saving and strengthening Medicare, not one whose primary goals are repealing health-care reform and cutting taxes for the wealthy, would base his Medicare plan on the evidence. ...

Robert Reich is astounded at the Romney-Ryan campaign:

Romney’s Lying Machine, by Robert Reich: I’ve been struck by the baldness of Romney’s repetitive lies about Obama — that Obama ended the work requirement under welfare, for example, or that Obama’s Affordable Care Act cuts $716 billion from Medicare benefits. ...
Every campaign is guilty of exaggerations, embellishments, distortions, and half-truths. But this is another thing altogether. I’ve been directly involved in seven presidential campaigns, and I don’t recall a presidential candidate lying with such audacity, over and over again. Why does he do it, and how can he get away with it?
The obvious answer is such lies are effective. Polls show voters are starting to believe them... Romney’s lying machine is extraordinarily well financed. ... Romney’s lying machine is working.
But what does all this tell us about the man who is running this lying machine? (Or if Romney’s not running it, what does it tell us about a man who would select the people who are?)
We knew he was a cypher — that he’ll say and do whatever is expedient, change positions like a chameleon, eschew any core principles.
Yet resorting to outright lies — and organizing a presidential campaign around a series of lies — reveals a whole new level of cynicism, a profound disdain for what remains of civility in public life, and a disrespect of the democratic process.
The question is whether someone who is willing to resort to such calculated lies, and build a campaign machine around them, can be worthy of the public’s trust with the most powerful office in the world.

The press is completely dropping the ball in its duty to inform voters (surprise!). If stories consistently opened up with something along the lines of "The Romney campaign continued to make lies and misleading inferences the centerpiece of its campaign today...," this would stop. (It would also be worth noting, I think, that making lies about the other side the most prominent feature of a campaign is a pretty good indication that the candidate has no new ideas of his own to present. But simply pointing out the lies -- and the massive number of flip-flops of convenience -- would go a long way toward fulfilling the duty of the press to inform voters rather than mislead them by presenting false claims as legitimate debate.)

Wednesday, August 22, 2012

'Patients Would Pay More if Romney Restores Medicare Savings'

Mitt Romney’s promise to restore Obama's Medicare savings is “both puzzling and bogus":

Patients Would Pay More if Romney Restores Medicare Savings, Analysts Say, by Jackie Calmes, NY Times: Mitt Romney’s promise to restore $716 billion that he says President Obama “robbed” from Medicare has some health care experts puzzled, and not just because his running mate, Representative Paul D. Ryan, included the same savings in his House budgets.
The 2010 health care law cut Medicare reimbursements to hospitals and insurers, not benefits for older Americans, by that amount over the coming decade. But repealing the savings, policy analysts say, would hasten the insolvency of Medicare by eight years — to 2016, the final year of the next presidential term, from 2024.
While Republicans have raised legitimate questions about the long-term feasibility of the reimbursement cuts, analysts say, to restore them in the short term would immediately add hundreds of dollars a year to out-of-pocket Medicare expenses for beneficiaries. That would violate Mr. Romney’s vow that neither current beneficiaries nor Americans within 10 years of eligibility would be affected by his proposal to shift Medicare to a voucherlike system in which recipients are given a lump sum to buy coverage from competing insurers.
For those reasons, Henry J. Aaron, an economist and a longtime health policy analyst at the Brookings Institution and the Institute of Medicine, called Mr. Romney’s vow to repeal the savings “both puzzling and bogus at the same time.”
Marilyn Moon, vice president and director of the health program at the American Institutes for Research, calculated that restoring the $716 billion in Medicare savings would increase premiums and co-payments for beneficiaries by $342 a year on average over the next decade; in 2022, the average increase would be $577. ...

Tuesday, August 14, 2012

Whose Plan Destroys Medicare?

Robert Reich says to spread the word about who really wants to gut Medicare:

Whose Plan Destroys Medicare — Obama’s or Romney-Ryan's?, by Robert Reich: Stumping in Florida today, Mitt Romney charged President Obama’s Affordable Care Act will “cut more than $700 billion” out of Medicare.
What Romney didn’t say was that his running-mate’s budget — approved by House Republicans and by Romney himself — would cut Medicare by the same amount. The big difference, though, is the Affordable Care Act achieves these savings by reducing Medicare payments to drug companies, hospitals, and other providers rather than cutting payments to Medicare beneficiaries.
The Romney-Ryan plan, by contrast, achieves its savings by turning Medicare into a voucher whose value doesn’t keep up with expected increases in healthcare costs — thereby shifting the burden onto Medicare beneficiaries, who will have to pay an average of $6,500 a year more for their Medicare insurance, according an analysis of the Republican plan by the non-partisan Congressional Budget Office.
Moreover, the Affordable Care Act uses its Medicare savings to help children and lower-income Americans afford health care, and to help seniors pay for prescription drugs by filling the so-called “donut hole” in Medicare Part D coverage.
The Romney-Ryan plan uses the savings to finance even bigger tax cuts for the very wealthy.
Spread the word. Don’t allow the GOP to get away with this demagoguery.

Yes, don't let Republicans get away with this. [See also: The Republican ticket’s big Medicare myth, by Ezra Klein.]

Saturday, August 04, 2012

Socialized Medicine in the US

Uwe Reinhardt has a dare for "presidential candidates professing a distaste for socialized medicine":

Where ‘Socialized Medicine’ Has a U.S. Foothold, by Uwe E. Reinhardt: Last Friday’s exuberant celebration of Britain’s National Health Service during the opening ceremony for the 2012 Olympics ... elicited ... stern rebukes from the commentariat in the United States, most vehemently by Rush Limbaugh. Bashing the N.H.S. has become a favorite ritual during any debate on health care reform on this side of the Atlantic. ...
Remarkably, Americans of all political stripes have long reserved for our veterans the purest form of socialized medicine, the vast health system operated by the U.S. Department of Veterans Affairs... If socialized medicine is as bad as so many on this side of the Atlantic claim, why have both political parties ruling this land deemed socialized medicine the best health system for military veterans? Or do they just not care about them?” ...
Occasionally one does come across an American politician who mutters something about privatizing the V.A. health system. I doubt this idea would have much political traction... In fact, I would dare presidential candidates professing a distaste for socialized medicine to call openly for abolition of the V.A. health system in favor of a purely privatized system – e.g., a defined contribution system such as that advocated for Medicare by Representative Paul D. Ryan, Republican of Wisconsin...
So far I have not received a satisfactory answer from detractors of “socialized medicine” to my question of why we have the V.A. health system when socialized medicine putatively is so evil. Perhaps some commentators ... will enlighten me.
Before responding, however, readers might consider these readings...: a book by Phillip Longman, “The Best Care Anywhere: Why V.A. Health Care Is Better Than Yours”; an article on V.A. health care in the American Medical Association’s amednews.com, and, finally, from the Rand Corporation’s nationally recognized team of experts on the quality of health care in the United States this eye-opening report.