Thursday, October 29, 2009

Beyond the Shouts: A Discussion of Health Reform in America

Everyone - from Congress to drug and insurance companies to providers and patients - has an opinion on health care reform. On September 28, 2009 St. Mary's College of Maryland brought together a panel of policy experts to offer their take on the heated debate and answer community questions about this complicated issue.

Participants in the panel included health care financing expert Greg Scandlen, pediatrician Margaret Flowers, and Karen Davenport, director of the Center for American Progress. Todd Eberly, Assistant Professor of Political Science and Coordinator of Public Policy Studies served as moderator.

Watch the forum here (please note that the volume is quite low):

Tuesday, October 27, 2009

Preview of the Virginia and New Jersey Elections

I have a preview of the high profile races in New Jersey and Virgina over at the PoliProf Blog. Back in early September I urged you to watch the off year elections in VA and NJ very closely, arguing that two GOP victories would indicate a high level of GOP intensity, Independent willingness to vote GOP, and, most deadly, Democratic apathy. Today marks the one week countdown to Election Day 2009 and I think that it is a good time to revisit the states.

Monday, October 26, 2009

The Need for Real Health Care Reform

A few weeks ago on the PoliProf Blog I cited a study by the McKinsey Global Institute (MGI) which found that the U.S. spends about 31% more per year on health care than would be expected based or our wealth, cost of living, and health. In a $2.5 trillion health care economy that translates into $775 billion in excess spending. Why do we over spend? We have higher administrative costs owing to the fragmentation in our system, but mostly the problem is the manner in which we pay for services. Since every patient and procedure is a source of revenue providers over-provide. Because our insurance frequently has no limit on the utilization of services, we over-consume. My argument then was that only system-wide reform could realize the substantial savings implied by the study.

The findings from the MGI study have just been confirmed by a new study conducted by Thomson Reuters. That study found that the American health care system wastes an estimated $700 billion a year, roughly one-third of the nation's healthcare bill. Among the key findings:
  • Unnecessary care such as the overuse of antibiotics and lab tests to protect against malpractice exposure makes up 37 percent of healthcare waste or $200 to $300 billion a year.
  • Fraud makes up 22 percent of healthcare waste, or up to $200 billion a year in fraudulent Medicare claims, kickbacks for referrals for unnecessary services and other scams.
  • Administrative inefficiency and redundant paperwork account for 18 percent of healthcare waste.
According to a Reuters news account of the study "All this could help explain why Americans spend more per capita and the highest percentage of GDP on healthcare than any other OECD country, yet has an unhealthier population with more diabetes, obesity and heart disease and higher rates of neonatal deaths than other developed nations."

The Reuters story concludes with this "Democratic Senator Charles Schumer said on Sunday that Senate Democratic leaders are close to securing enough votes to pass legislation to start reform of the country's $2.5 trillion healthcare system."

The implication from that final line about Schumer and Democratic leaders being close to a deal on reform is that the reform may actually address the problems highlighted in the Thomson Reuters study - unfortunately, that is simply not the case. The current reform proposals being considered in the House and the Senate will not solve the systemic problems in the American health care system - in fact they will likely make the problems worse. The current reform proposals maintain our fragmented system and will even add to the fragmentation. The expansion of Medicaid and the creation of a public insurance option will only add to the plethora of insurance providers with which doctors and hospitals must contend. The reforms will do nothing to address the care-linkage deficiencies that result in the poor management of patients with chronic conditions (asthma, diabetes, heart disease) who consume 70% of our health care dollars. The reforms will not change the fact that our fee for service system makes every patient and every procedure a source of revenue - and therefore encourages overuse. The reforms will not alter our malpractice policies and the defensive medicine that results. Rather the proposed reforms will extend coverage to about 30 million Americans (a good thing), but it will accomplish this by dropping them into an inefficient, expensive, and broken system - the simple result will be even greater costs (a very bad thing).

In his recent book The Healing of America, T.R. Reid writes "Any proposal for reform that continues to rely on our fragmented structure of overlapping and often conflicting payment systems... will not reduce the cost or the complexity of American health care. Any proposal that sticks with our current dependence on for profit health insurers... will not be sustainable." Unfortunately our elected leaders have spent the past few months hammering out deals that will do those very things. While our press and our politics have been obsessed with whether or not reform would have a public health insurance option the real question should have been "will these reforms actually improve the American health care system?" Perhaps no one wanted to ask the question because the answer is so clearly "No."

President Obama has said repeatedly that he would like to be the last president to take on the challenge of health care reform... if he signs into law any reforms similar to the legislation being debated in the House and Senate he will fall well short of that goal.

Wednesday, October 21, 2009

Mo' voting, mo' problems?

The news yesterday that Afghan President Hamid Karzai has accepted the findings of the Electoral Complaint Commission (ECC) and hold a run-off election between himself and Dr. Abdullah Abdullah on November 7 was greeted positively in many corners. By all accounts, Karzai received the “Johnson treatment” from a host of Western politicians, including John Kerry, Hillary Clinton, and Gordon Brown. So, a run-off is good for Afghanistan, and by extension the United States and its allies, right?

There appear to be four possible outcomes to this decision. The best-case scenario for the United States is Karzai winning the run-off in a clean election that increases his legitimacy and allows the U.S. to continue to prosecute the war in Afghanistan with an ally or at least known commodity. The second best outcome is Abdullah winning a clean election, which would give him legitimacy, but offers a more uncertain outlook for U.S.-Afghan cooperation in fighting insurgents. Those are the two good outcomes, now we get the two far less desirable results. First, Karzai could win another election marred by fraud, leaving him in power as a weak, illegitimate leader at a time the U.S. needs a strong partner to assist in its strategy change under General McChrystal. Finally, in the worst-case scenario, Abdullah wins a tainted election and the U.S. stands at square minus-one. You could debate my rank ordering here, perhaps arguing that Abdullah is not a bad option for the U.S., but clearly the bright line exists between a free and fair election and one that is tainted.

The key probability for U.S. policymakers is the likelihood that the Afghans’ second try at an election will come off better than the first. There are a number of reasons to doubt this will be the case. First, the Afghans will have to scramble to prepare the country to vote in just over two weeks, and hope that the weather cooperates. Of course, considering turnout in round one was merely 30%, wintry conditions are only likely to keep more voters away from the polls. So, the first problem facing the second election is that low voter turnout might sabotage even a free and fair outcome.

The second problem is that telling Karzai, “This time, don’t cheat!” may not have much of an impact. Despite losing one million votes, Karzai still held a commanding lead over Abdullah. This raises the question, if Karzai believed he could win fairly, why would he organize fraud on such a massive scale? The answer is that, like many things in Afghanistan, Karzai may not have complete control, even over his own supporters who stuffed ballot boxes because they believed it would help their candidate. Fraud committed out of loyalty or to curry favor is likely to turn up in the second round, even if Karzai does not orchestrate it. Of course, it may be that all the fraud committed in the first round was sanctioned and organized by Karzai, but if that is the case, we might consider whether he is a good ally.

The final problem involves the images from the press conference yesterday where Karzai announced the run-off election. Succumbing to outside pressure is unlikely to increase Karzai’s bona fides as a nationalist. Even if he wins the election, Karzai may feel the need to exert his independence after this experience or he may be viewed by an increasingly large swath of the population as little more a Western puppet.

The take away point from all of this is that the outcome of a second election is highly uncertain and may be just as bad, or worse, than where we stand today. We are now far beyond Colin Powell’s “Pottery Barn Theory of International Relations” that we now have to “buy” Afghanistan because we broke it. Instead, the situation the U.S. finds itself in is more akin to working at the corporate offices and dealing with a difficult local manager. You have a certain vision for how things should be handled, but the manager has his own interests that may occasionally clash with yours or bring embarrassment on the company (country). Yes, this is the “David Wallace Theory of International Relations,” and it is much trickier than repairing overpriced dinnerware.

Tuesday, October 20, 2009

Deciphering Public Opinion on Health Care Reform

As Harry Reid (D-NV), Chris Dodd (D-CT), Max Baucus (D-MT), Rahm Emanuel, and Olympia Snowe (R-ME) continue to hammer out the Health Reform compromise between the Senate's HELP and Finance Committees there is a picture emerging with regard to public opinion toward health reform – and at first glance it makes little sense. The most recent data from Pollster.Com (see chart below) show that public support has begun to drop (after a mini-rally last week) and opposition is on the rise. A recent ABC News survey found that 48% opposed “the proposed changes to the health care system being developed by Congress and the Obama administration,” while 45% supported such changes. A Fox News survey found that 54% opposed “the health care reform legislation being considered right now,” and only 34% supported it. According to Rasmussen Reports 54% opposed “the health care reform plan proposed by President Obama and the congressional Democrats,” and 42% supported.

Taken together these polls suggest considerable opposition – but beyond these topline questions the picture becomes murkier. When ABC News asked “Would you support or oppose having the government create a new health insurance plan to compete with private health insurance plans” an overwhelming 57% indicated support – odd given that such a proposal is being considered as part of the changes being developed by Congress – the same changes that only 42% of respondents supported. When Fox News asked whether respondents would prefer “the current health care system or the health care plan proposed by the Democrats in Congress” the current system was favored by a 51% to 34% margin. The Rasmussen survey found that a majority of respondents believed that health care costs would increase and quality decrease if the current reforms were enacted.

So what can we make of this? There appears to be clear opposition to the health reform plans in general, support for maintaining the current system, a lack of faith in the ability of the proposed reforms to control costs or maintain quality, but also clear support for the creation of a public option. I see two possible explanations – one being that many Americans don’t know what the “public option” is and therefore their response to questions regarding support or opposition must be taken with a grain of salt. A recent post by Mark Blumenthal at Pollster.Com gives credence to the theory that the public does not understand the term. As he points out, a recent PEW study found that 56% of the public correctly linked the term “public option” to health, meaning that 44% of the populace does not recognize the term. He also points to a randomized internet survey where only 37% of the adult population could correctly identify the public option when presented with three choices (by random chance you would get 33%). So perhaps the public simply does not get it. There is one other possibility that gives the public a bit more credit. When Fox News asked respondents whether they supported reforming “the entire health care system” or reforms to provide “health insurance to those who don't have it,” covering the uninsured was preferred by a 50% to 27% margin. With that answer, current public opinion makes much more sense.

The current proposals in Congress would represent system-wide changes, though largely incremental in nature, they are more akin to the “Comprehensive Incrementalism” defined by the Washington Post's Ezra Klein. It would appear that most Americans are opposed to the proposed comprehensive incrementalism, but support efforts to cover the uninsured – such as a public, or government-sponsored health insurance option. So when ABC News asked whether respondents would support “a plan that includes some form of government sponsored health insurance for people who can't get affordable private insurance, but is approved without support from Republicans in Congress; or a plan that is approved with support from Republicans in Congress, but does not include any form of government-sponsored health insurance for people who can't get affordable private insurance?” it should not be surprising that “government sponsored health insurance for people who can't get affordable private insurance” was preferred over bipartisanship by a 51% to 37% margin. This is roughly the margin that preferred covering the uninsured over system-wide reform in the Fox poll. By no means does it suggest that the public would prefer Democrats to “go it alone” on overall health care reform, nor does it suggest public support for current proposals would be higher if those proposals contained a public option. It does tell us that Democrats are correct when they say that the public supports a public option, and Republicans are correct when they say that the public opposes the health reform proposals currently being considered in Congress.

Friday, October 16, 2009

Let it Snowe, Let it Snowe, Let it Snowe...

On Tuesday, Olympia Snowe (R-ME) became the only Republican member of the Senate Finance Committee to vote in favor of the so-called “Baucus Bill” for health reform. Though threatened with repercussions by Republican leadership Snowe simply stated that “when history calls, history calls.” Snowe also prefaced her vote by saying that her vote today did not forecast what her vote would be when final legislation came to the floor of the Senate. With that one vote, Snowe has catapulted herself in to the final negotiations over health reform legislation. In fact, Ezra Klein reports today that Snowe now has a seat at the table along with Senate HELP chairman Chris Dodd (D-CT), Finance chairman Max Baucus (D-MT), and White House representatives Rahm Emanuel and Nancy-Ann Min Deparle. This has incensed liberal Democrats in the House and Senate. They are angry that in an effort to create the veneer of bipartisanship one GOP senator has been granted tremendous influence on the final product. Make no mistake, Snowe’s involvement will influence the final product, it will likely ensure that the Senate bill contains no strong public option (if anything), and it will likely mean that the weakened individual mandates (see prior post) will remain. One thing is certain, with that one "Yes" vote, Snowe demonstrated that she is a very shrewd politician.

Monday, October 12, 2009

Shooting from the AHIP... or 1993 All Over Again?

Last week on the PoliProf Blog I warned that the decison by the Senate Finance committee to water down the individual mandates in the health reform legislation risked raising the ire of the insurance industry. Consider their ire raised... After initially signaling support for reform efforts the industry's chief lobbyist issued a report today that projects that the legislation, as currently proposed, would add $1,700 a year to the cost of family coverage in 2013. When asked, Karen Ignagni, president of America's Health Insurance Plans (AHIP), would not rule out attack ads on TV featuring the study.

In 1993, AHIP was responsible for the highly effective Harry and Louise ads which featured a middle-aged, middle-class couple, expressing deep concern over the bureaucratic nature of Clinton's proposed reform. One can only assume that AHIP is dangling a similar threat now to extract as many concessions as possible at this make or break point. Democrats and the White House have reacted harshly to this apparent broadside from AHIP, but they had to know that it was coming after weakening the individual mandate. As it stands now, insurers will be required to cover high risk folks with pre-existing conditions, but will not get to bring all of those young, healthy folks into the risk pool because the mandates have been so weakened – suddenly reform looks like a bad deal for the insurance industry - and they are expressing their displeasure. Given the power of the insurance industry, Democrats should be worried.

Friday, October 9, 2009

All Eyes on the Prize

The quite surprising news out of Oslo today that President Obama will receive the Nobel Peace prize is likely to raise eyebrows even among the President’s supporters. The debate in the United States will likely provide a rehash of last year’s election campaign, with the President’s critics arguing that his thin resume does not justify the honor. However, the real question surrounding the award is whether Obama is a Willy Brandt or a Woodrow Wilson, two prominent leaders who received the award at different stages of their political careers. The Nobel committee clearly hopes that Obama’s award signals the potential of things to come, just as Brandt’s Ostpolitik had not yet born fruit when he received the prize in 1971. For Wilson, the Nobel award is the tale of promise unfulfilled, as his efforts to build an enduring peace following World War I failed when the Senate failed to ratify the Versailles Treaty and thereby beginning the slow death of the League of Nations. The general problem with the Peace prize is that unlike the Literature prize, winning the award does not appear to help your career. Since the award is normally given for past service – hence Jimmy Carter’s win in 2002 – it does not lend itself to furthering one’s goals. The exception to this might be when the award is given to lesser known human rights or environmental campaigners such as Jodi Williams or Wangari Maathai, who can parley the award into greater recognition for their causes. The larger point is that despite the prestige of winning the Nobel, Obama will be hard pressed to use it to support his foreign policy goals. The large number of Democratic winners over the past decade (3) is likely to lead Republicans to view the award as a left-wing coronation rather than a distinguished prize. On the other hand, the award will raise Obama’s esteem in the international community where he already enjoys broad popular support. However, the award occurs in the same week as the release of a report by an American Political Science Association task force investigating anti-Americanism. The report argues that while Obama does enjoy widespread popularity around the world and is partially responsible for the improved views of the U.S., there remains widespread discontent with many U.S. foreign policies. The awarding of the Peace prize could contribute to the opposite effect of what occurred during the Bush presidency, with Obama enjoying more positive ratings than the country as a whole. In the end, as with Woodrow Wilson, the question remains as to whether the goals that Obama has set for U.S. foreign policy will be matched by results.

Thursday, October 8, 2009

Health Reform's Comprehensive Incrementalism

Ezra Klein offers a pretty fair assessment of the Senate Finance Committee's health reform legislation post Congressional Budget Office analysis "this bill will change the insurance situation for 37 million legal residents, 29 million of whom would otherwise be uninsured. That's a big step in the right direction. But most people will never notice it."
Klein coins a great new term "comprehensive incrementalism" and correctly notes that the bill would produce some good change, but is by no means represents system-wide reform. So even if it becomes law, Barack Obama will not be the last president to take on health reform.
There is a larger political point though, according to the CBO the Senate Finance bill would cover 94% of the population and with cost offsets and new revenue would reduce the deficit - the bill is paid for. So Republicans have a choice to make; will they simply be the party of "No" or will they follow the advice of former Majority Leader and presidential candidate Bob Dole and support the reform effort? The bill offers the promise of expanding coverage while maintaining the basic structure of our current system (unfortunately), so what is there for the GOP to oppose?

Wednesday, October 7, 2009

Lessons in disastrous analogies

There has been some buzz this week over Gordon M. Goldstein's Lessons in Disaster, which documents key decision-making moments during the Vietnam War from McGeorge Bundy’s perspective. According to George Stephanopolous, the book has become a must-read for Obama administration officials. Of course, since this is a book about Vietnam, you can guess that the message administration officials are going to take away is unlikely to be that escalation is the answer to American problems in Afghanistan. Putting the debate about the correct path forward in Afghanistan aside for the moment, the selection of Goldstein’s book raises a larger question about how policymakers form their opinions on international issues. While Goldstein’s book is undoubtedly a fine history of the difficult decisions surrounding the Vietnam War, merely raising the specter of Vietnam means that the lessons likely to be set out before the spine is cracked. It seems unlikely that Vietnam will ever be invoked by a politician as a successful case of U.S. military operations.

The greater problem is how history is being used here. Obama is certainly not the first President to employ this tactic. George W. Bush read Hugh Thomas' The Spanish Civil War, which leads to the argument that if fascism were stopped in Spain, further horrors could have been avoided. If we simply treat history as a grab bag, from which we draw examples to affirm our pre-existing beliefs, the true value of history is lost. While on health care Obama assigned an article with social-scientific underpinnings (Atul Gawande’s “The Cost Conundrum”), on foreign policy issues there seem to be only a small number of examples from which we can draw lessons (Munich, Yalta, the Cuban Missile Crisis and Vietnam) and these tend to be very poor approximations to most modern problems faced by the United States. As Yuen Foong Khong has pointed out, such analogies tend to generate more heat than light: we read into them the message that we want to see.

Admittedly, finding good data on success against insurgencies is difficult, although the Enterline and Magagnoli dataset mentioned in an earlier post is a good start. Perhaps the fact that Presidents repeatedly select histories for guidance on foreign policy is more a comment on the shortcomings of international relations scholarship: unreadable prose, limited policy applicability, and a focus on theoretical debates. Still, I’ll dream of the day that I see the White House book club is reading an IR scholar’s book. Then I can criticize them for reading the wrong scholar…

Tuesday, October 6, 2009

The Economic Case for Single-Payer Health Care Reform

I make the case for single-payer health reform over at the PoliProf Blog:
"The only way that we can bring health care spending under control, and therefore be able to provide coverage to everyone, is if we move beyond our aversion to government intervention. Only government can effectively allocate our health care resources in a manner the responds to need rather than wealth. Only government can establish an annual health care budget and ensure that facilities and providers abide by the annual limits. Only government can effect our transition from a system driven by the perverse incentive to deliver care as a means to generate revenue to a system based on the proper management of care in order to conserve resources. The logical approach would be to restructure Medicare and make it universal. And it must be universal. The only way to get the public on board, and to accept the change, is to have us all in the same system, all guaranteed the same level of care, all sharing the same resources. This is what other nations do, and what we must do."

Friday, October 2, 2009

There's a Public Option and Then There's a Public Option...

The Senate Finance Committee defeated two efforts to add a public option to Baucus authored health reform bill, but proponents have note ceded defeat. In fact, many are being heartened by recent statements from Harry Reid that “We are going to have a public option before this bill goes to the president's desk.”

What does this mean? Will Reid ensure that the public option is retained when the Senate Finance and Senate Health, Education, Labor, and Pension committee bills are merged? Does it mean that he will ensure that the public option survives the House/Senate conference process? Does it mean that he plans to use reconciliation to pass the bill and has sufficiently prepared for all of the challenges that would present?

Or does it mean that Reid is choosing his words wisely? Moments after his initial comments were made public his office offered a follow-up: “Sen. Reid believes that health insurance reform must include a mechanism to keep insurers honest, create competition and keep costs down… the public option is the best way to do that… we don't know exactly what that option will look like.”

I’d suggest that it won’t look like a federal public option, rather it is more likely to come in the form of the amendment drafted by Tom Carper (D-DE). Carper’s amendment would:

give states the authority to increase competition in health insurance markets by implementing one of the following mechanisms listed below. This would allow a state to offer a state public option; however, both the executive and state legislature would have to agree.
The state would have the option of implementing one of the following mechanisms:
1. Participate as grantees in the CO-OP program and apply for seed funding.
2. Open up that state’s employee benefits plan.
3. Create a state administered health insurance plan with the option of banding together with other states to create a regional insurance compact.

So states could participate in the co-ops created in the Baucus bill as a substitue for a national public option, open the state's insurance plans, or create a state based public option... This is hardly a significant change and arguably "allows" states to do things that they can already do.  So I would advise tempering any excitement over Reid’s comments.