Archive for the ‘medicare’ category

Is The Free Market The Answer?

March 20, 2017

The “repeal and replace” gang have been telling Americans for a long time that healthcare needs to be about choice, that the high cost of healthcare is because the free market is not working, and things will get better when Government no longer comes between the patient and the doctor.

Admittedly, supporters of Obamacare have been handicapped because healthcare spending is still high and rising annually. How can one speak against what Republicans are saying when what Republicans are criticizing is not working well either?

Whoa. Let’s slow this down and review some inconvenient facts.

The Affordable Care Act (Obamacare) is about insuring more Americans, not directly dealing with how much healthcare costs. So right away if voters don’t want to pay (via subsidies and expanded Medicaid) for more insured, than it is entirely unnecessary to put forth misinformation about more choice and better healthcare, just admit that as an American one feels no need for universal healthcare coverage. Full stop.

Now if one wishes to invest energy and tinker with the Affordable Care Act, let’s consider a few popular Republican myths.

  • Get the Government out from between you and the doctor. Is the implication that I should accept (for profit) insurance companies making better decisions on what treatments are covered or what drugs are acceptable? At the very best of possibilities, how are these two options different? And, with insurance companies public corporations with a requirement to make a profit, how can insurance companies not be more costly?
  • Competition is the answer to lowering healthcare costs. The suggestion is that with more policies available (selling insurance across State lines) natural free market principles will drive down costs. Insurance prices are related to real healthcare costs which are generated by hospitals, doctors, and drug companies, not insurance companies. Insurance companies simply hitch a ride on basic costs.  Insurance premiums assumes usage and underlying costs PLUS insurance company profit. If insurance companies guess wrong, they just raise the price of their policies.
  • Patient centered Healthcare puts the individual in charge. This “wordsmith” slogan “Patient Centered” has no connection with underlying costs. “Patient Centered” is about providing the patient with information about their health status and suggested medical treatments and services tailored to improve health outcomes. Is this not what we have today?
  • American Healthcare is the best in the world. This myth is put forth whenever there is a suggestion that other countries have better healthcare delivery systems and surprisingly achieve that superiority at substantially lower costs. There is little to be gained from disputing how good the Mayo Clinic, the Cleveland Clinic, or Johns Hopkins might be, or for that matter many other large teaching hospitals across the country. Most Americans, however, only read about these institutions and do not receive medical treatments from them. Life expectancies, percent of residents receiving basic healthcare, and treatments for serious illnesses rank American healthcare well down the list of modern, developed countries.

The number one problem with America’s healthcare delivery system is cost. Americans spend twice as much as most other modern countries (with healthcare outcomes equal to or superior to America’s). The number two problem is that America’s healthcare delivery system does not include all Americans since cost puts it out of range for poorer, sicker, and older Americans.

These are not myths, these are facts. So all the smoke and fiery words about repeal and replace the Affordable Care Act miss the primary targets as did Obamacare.

Given all this, is the free market even remotely likely to improve a fundamentally flawed healthcare delivery system?

The Healthcare Maze

March 16, 2017

The Affordable Care Act “repeal and replace” discussion, has displaying the worst in our two main political parties, and just as importantly, has also pointed to a deaf spot in both the parties’ hearing. I wonder whether there will be a waking up or whether ideological beliefs will continue to drown out the roar of the crowd.

Republicans say many things but basically it is a combination of “healthcare is about choice”, “healthcare is about being patient centered”, or “healthcare cannot be about more entitlements”. Democrats say that the Republican plan will cover fewer people and cost those covered more. Democrats object to the Republican plans but offer no alternatives other than status quo. Why?

Most of those covered by the Affordable Care Act have gotten healthcare insurance for the first time in their lives. The 20 million or so Obamacare people include individual mandate enrollees, pre-existing condition refugees, and the poor who now quality for expanded Medicaid. Think about that, 20 million out of 340 million Americans can’t be the source of all this Congressional hassle. Hmmm.

Could it be that the national cry to “repeal” Obamacare and the objection to the American Health Care Act (the replace part) is because neither address effectively the current high cost of healthcare?

The US spends twice as much each year on healthcare per capita than any other country in the world.

Why are politicians more concerned with cutting Medicaid rolls than asking why healthcare costs so much? Why would anyone call a healthcare delivery system “patient centered” when most Americans find the premiums unsatisfactorily high? Why would anyone be satisfied with a national healthcare system which costs more than equally effective systems in other countries and still not cover all Americans?

The Healthcare Maze and the current debate is totally irrational without a full debate about what makes up yearly healthcare spending and why it is so much higher than two dozen other modern countries around the world.

Where Is The Center In Troubled Times?

January 18, 2017

When George W Bush was elected in 2000, Bush campaigned as a “compassionate conservative”. What could be better, a mix of pragmatism and concern for others? The wealthy smiled as the Bush Administration made a case for two tax cuts. The evangelical community smiled when government policy turned upon science severely limiting stem cell research and linking foreign aid to impoverished countries’ family planning methods.

And the gates were opened for the neoconservative movement, blindly supporting Israel and simultaneously destabilizing the Arab world. Along came the Patriot Act, secret subpoenas, and Justice Department sanctioned torture.  Hmmm. That America’s part of the world tilted strongly to the right and away from the center would be an understatement.

Barack Obama brought into power countervailing tendencies. Science was again respected as evidenced by renewed concerns about global warming, use of data in forming public policy, and research into solar and wind technology. The Obama Administration pointedly worked to end the Iraq and Afghanistan wars and to close the dark spot on America’s image, the Guantanamo Detention Facility. And, most remarkably, the Obama Administration attempted to bring US healthcare into the realm of other world class, modern industrial countries by passing the Affordable Care Act.

The Republican Party, lead by the Tea Party/Freedom Coalition howled in horror about the reckless race to the left. It was not, however, clear that President Obama was guiding America towards the “center” until Bernie Sanders’s campaign revealed much more progressive goals. For many conservatives, however, President Obama’s policies represented socialism, if not outright communism.  To highlight this, the Republican Party’s complete rejection of Merritt Garland’s Supreme Court nomination underscores GOP rejection of centrist governance.

As the Trump Administration readies itself to take office, the Republican controlled Congress appears like the cat ready to eat the canary. The Republican Congress can’t wait to take the country back and “back” will be well to the right of center.

The unknown, strangely is President-elect Trump. Will he focus upon the ideological right or what ever is needed to stimulate economic growth? Will President Trump trade support for right wing ideas in return for support of his growth initiatives? Or, even worse as some conservatives worry, would a President Trump simply be a Democrat in Republican clothing?

“Regaining The Center” may appear a desirable goal, especially in comparison to the conservative hinterlands Republicans boast as the fruits of taking America back. The GOP possesses enough votes in Congress that Republican initiatives can carry the day. “Regaining the Center” may serve the reader well by putting GOP policies in context as a public reminder that Republicans seek benefits for their wealthiest members, at the expense of the average person.  If there are benefits, these pluses flow incidental to their main purpose.

For now, the GOP and the Trump Administration can do pretty much what they wish. In two years and again in four, voters get to assess Republican stewardship.  As with George W Bush’s Administration whose results were mixed but on the big issues, failures, “Regaining the Center” may sound prophetic.  The center may soon appear much less unsettling for independents to shift left of the Trump Administration without doing a full Bernie Sanders.


Ready, Set, Fire, Aim

January 16, 2017

With only a few days left before President-elect Trump becomes President Trump, the feeling is like the calm before the storm. On Friday, January 20th, 2017, the Republican Party gets a full house and a friendly President to boot. The GOP wish is to undo the last 8 years and make the future like the past, the distant past. The public has been advised “to fasten their seat belts” and watch our elected leaders make things happen beginning on the very first day.


We can remove some mystery about any consequences from GOP actions. There will be massive reductions in taxes paid by the top 1%. Even the irresponsible repeal of Obamacare is at its core a tax cut for the wealthy.

Corporate tax rate reduction unless accompanied with elimination of business tax deductions, exemptions, and loopholes will accrue more money for the wealthy. And eliminating the myriad of regulations which we are told are hamstringing our economy, will put even more money in the wealthiest’s pockets.

So for at least some Americans, January 20th should be a red letter day.

Every action has a reaction too. Repeal of Obamacare will immediately beg the question what happens to those insured by the Affordable Care Act? The GOP will attempt to keep enough of current Obamacare recipients covered that they can look the camera in the eye and say, “see we replace Obamacare with patient centered, not Washington centered healthcare”.

But two facts will emerge. (1) The GOP will have to find money to cover whatever parts of the ACA it puts forward as “patient centered care” and will most likely hide their healthcare subsidies. With no new taxes, the healthcare costs will go straight to the national debt.  The GOP will adamantly deny this with a look of sincerity.

And, (2) The number of people covered will shrink as will the quality of their coverage.  The “free” market will offer reduced coverage to those unable to pay the going price for standard coverage. Those impacted the most will be the most vulnerable and, not surprisingly, those least able to garner public sympathy.

This is a pretty sad commentary on the Grand Old Party.

But there’s more.    IMO, Trump will support juicing the economy with tax cuts and government spending so that his prediction of greater economic growth can materialize. Trump, however, will run into opposition from fiscal conservatives who want to see the debt decreased, not increased. Trump, the deal maker, will step forward offering to trade his support for much of the GOP agenda, despite his own preferences, in return for support of new spending.  You scratch my back, I will scratch yours. Hmmm.

With “Ready, Set, Fire, Aim”, Republicans will run unnecessary risks. Unintended consequences and collateral damage are almost assured with current GOP plans. As the first 100 days domestic casualties begin to mount up, voters view of President Trump will become tarnished.  At that point, President Trump will make sure everyone knows he favored this or that, and instead those in Congress, much over rated, all talk and no action did not follow his advise and are to blame. Hmmm.

Most of the Republican game plan will hurt small groups… initially. For example, the 20 million ACA subscribers pale in comparison to the greater 340 million US population. Increasing the Federal Debt won’t impact anyone at first. The subsequent risk, however, is the building pressure to reduce other Government spending… like Medicare, Medicaid, Social Security, and a myriad of social safety network programs. And as these messy regulations are revoked, freeing up America’s great capitalist engine and creating jobs on every corner, conditions for another financial meltdown, run away inflation, and renewed disillusionment with Washington will gratuitously appear.

President Trump has an initial White House lease for 1461 days. It would be a shame for the Trump Administration to let hubris in the first 100 days help destroy the next 1361.

Fitness To Govern

January 5, 2017

The opening days of the 115th Congress is only days old and there are hints (ones you can’t miss) that governing will be a difficult task for the Republican Party. Choosing as their first issue, the gutting of the independent watchdog Office of Congressional Ethics, the GOP signaled that the 115th would be about minding the Congress members’ needs, not that of the American people. Following public outcry and a quick admonishment from President-elect Trump, the rules change was quickly withdrawn. So much for commitment to purpose.

Next on the list was the repeal of Obamacare, making the difference between America’s second class healthcare delivery system even greater compared to other modern industrial countries. Lacking the votes to pass “repeal and replace” legislation, Republicans appear content to simply “repeal” and hope that they can agree on a “replace” later. For those 20 million insured by the Affordable Care Act, this is worrisome, although not unexpected.

For supporters of “repeal”, one can only ask “what are you thinking”?

The New York Times today suggest many of repeal supporters trust Republicans will keep provisions such as “pre-existing conditions”, probably no life time spending limits, and keeping children eligible for their parents insurance until age 26 in the replace package. These supporters also expect healthcare insurance costs to tumble… and the sun to shine every day.

Analyzing this healthcare mess must begin with the assumption that universal healthcare, single payer delivery is not in the GOP DNA. Consequently Americans are left with a for profit healthcare insurance industry looking after a for profit healthcare (doctors, hospitals, drug/medical equipment) delivery system. Apparently Americans trust their insurance company (that brought users pre-existing condition exclusions, life time payment limits, and arbitrary definitions of who qualifies to belong to a family) more than the government (that brings many Americans Medicare single payer insurance).

Wide open eyes can see that there is no replace plan which can insure the same number of Americans without generating the same offsetting revenue as Obamacare. Republicans must “replace” with less coverage or insure less Americans. The for profit big insurance companies’ profit margins will dictate annual price increases. Higher premiums costs will soon follow.

So one is left with the conclusion that Republicans do not worry about insuring all Americans. As a corollary, Republicans may think requiring Americans to scramble for insurance in some way may makes them better people (like pulling oneself up by the bootstraps). Hmmm.

There are indications that President-elect Trump has a different view on health insurance and will attempt to reign in the leaderless Republican Congress. While Trump has said he wants to repeal and replace Obamacare, he too has not stated what the replace will look like. Hmmm.

The repeal of the Affordable Care Act may also trigger unintended consequences too. Obamacare calls for all business with 50 employees or more to provide health insurance. It may not take long for the free market to figure they no longer need to provide health insurance since employees may be able to obtain tax credits and cheap (mainly covering catastrophic events) insurance policies.

With some employers not providing insurance, voters will take more than a dim view of the GOP, as they should.

Wouldn’t it be a hoot if it turns out President-elect Trump is more fit to govern that the GOP controlled Congress?

Growth As In “America Great Again”

December 9, 2016

President-elect Donald Trump has told anyone who would listen he is a wildly successful business man and he will apply the principles which has propelled his wealth accumulation to problems and opportunities facing America. And, voila, America will be great again. Hmmm.

Trump the candidate often pointed to US “GDP” growth (around 2% per year) under President Obama as “pathetic”. Trump and his surrogates boasted that they would return growth to 4-6% range, if not higher. Is this a likely outcome one should reasonably expect?

Economic theory around growth gets complicated very quickly. One financial pundit recently boiled GDP growth down to two simple factors, population growth and productivity growth. This person predicted that the base case was likely to be 1% total GDP growth given a 1/2% population increase and a 1/2% productivity increase.

If this person was close to accurate, then for the US GDP growth to be higher, there would have to be a lot more workers added or some large stimulus to increase the output per existing worker, or both. At the present time no one is predicting new productivity tools similar to the impact computers and automation have had and no one is seeing the number of hours worked increase. So where would that 4-6% GDP growth come from?

The Trump economic brain trust claims that with less regulations and lower taxes, America businesses will invest more and as a result produce more goods and services. Hmmm.

And don’t forget the bi-partisan support for infrastructure repair and maintenance. This often characterized as a multi-trillion dollar, absolutely necessary, investment that only the government can finance. To be sure, infrastructure means more jobs and should be additive to GDP growth. But….

The combined lower taxes and the increased government infrastructure spending will drive federal deficits and increase the national debt dramatically. Sooner or later this increased debt will need to be paid back. And when paid back the reverse impact upon the economy (slowing productivity) should be expected.

Again the Trump team has the answer, the economy will be percolating so strongly with less regulations, lower taxes, and a stronger infrastructure that tax revenues will be sufficient to pay down the increased debt. Hmmm.

Looking around the world and judging the GDP growth of other countries puts President Obama’s 2% in a fairly good light. The Trump Administration’s 4-6% goal would put the US in a class by itself with a growth rate like China but growing without the predatory export segment. Hmmm.

Oh, and lastly, I wonder where the population growth rate comes out in Trump’s team’s mind? Making it harder for seasonal workers or undocumented workers living here now should run counter to GDP growth.

The most likely outcome will be a slight positive boost to GDP growth, say maybe to 2.5%.  Growth in excess of 3% will come with the prospect of a subsequent contraction back to 0.5% or so.  If GDP growth exceeds 4%, then a recession should be expected as the longer term reward.  (The silent hand won’t be so silent.)

With all this chatter about GDP growth, I wonder whether anyone will notice the “really big” tax reduction the wealthy received, the millions who will lose healthcare coverage, or that the new jobs “America Great Again” are mostly low pay and minimal or no benefits?

Medi-scare Or What

December 2, 2016

House Speaker Paul Ryan has accused Democrats of conducting scare tactics around his proposed changes to Medicare. Ryan points to the projected exhaustion of the Medicare Trust Fund and its ultimate “bankruptcy” as reason to act. Ryan claims his plan is benign and will save healthcare for current and future Medicare subscribers. Hmmm.

Roughly speaking, Ryan has proposed adding to Medicare the option of “good” (?) private health care insurance. For Americans currently on Medicare, they could stay put with the current plan. Presumably some group of Americans, for example those under 50 would ultimately only have the “good” private insurance option. Medicare would die out as its subscribers died out.

Ryan’s plan carries some serious risks. The financial underpinnings of current Medicare can be fixed in a straight forward manner by raising or broadening the Medicare withholding tax, AND, putting in place sensible cost controls (US healthcare costs are twice the amount any other country spends).

The notion that the Medicare funding issue could be solved with “free market” principles is laughable when one looks around the world or considers the rising costs of healthcare insurance which most working Americans have .

All other major industrial countries utilize some form of a single payer healthcare system. At least two dozen of these countries have better health outcomes than the US. And, oh by the way, none of these countries spend as much per capita as does the US.

Medicare, however, is in a difficult spot. Each year, Medicare withholding tax revenues are less than what the efficient Medicare single payer system has to spend. The idea of giving each American the option of staying where they are or joining some new “good” private health insurance plan suggests first, that Medicare does not deliver “good” healthcare and second, that Americans are naive enough to believe there is another free lunch just waiting to be tasted.

There should be no doubt that Medicare subscribers could be shifted to other types of insurance and the balance between tax revenues and outflows could be made even. Less coverage or higher co-pays and deductibles from a “good” plan would shift the current deficit to Medicare users.

But there is no reason to believe the proposed “good” private healthcare insurance would provide the same coverage as currently available with Medicare somehow at a lower cost. (Ryan and company argue that “competition” will drive down the insurance costs. Hmmm.)

Medicare provides health insurance for the most vulnerable and ultimately the sickest Americans. Some of this cohort is wealthy and can afford to pay extra. Others are on a fixed income and are dependent upon what Medicare provides. Scare tactics are tempting but shear facts and comparisons with other nations should convince reasonable people that healthcare does not belong in the private sector.