Thursday, November 05, 2009

Top Dems: Obama Won't Get Health Care Bill in 2009

Senior Congressional Democrats told ABC News today it is highly unlikely that a health care reform bill will be completed this year, just a week after President Barack Obama declared he was "absolutely confident" he'll be able to sign one by then.

"Getting this done by the by the end of the year is a no-go," a senior Democratic leadership aide told ABC News. Two other key Congressional Democrats also told ABC News the same thing.

This may come as an unwelcome surprise for the White House, where officials from the president on down have repeatedly said the health care bill would be signed into law by the end of the year. "I am absolutely confident that we are going to get health care done by the end of this year, and Nancy Pelosi is just as confident," Obama said Oct. 27 at a fundraiser for the Democratic Congressional Campaign Committee.

Speaker of the House Nancy Pelosi may still be confident -- and her spokesman Brendan Daly said today, "We are going to get our part done" -- but the reason for the delay can be found in the Senate. Senate Majority Leader Harry Reid has yet to release the bill he eventually plans to bring to the Senate floor. Reid is still waiting for the Congressional Budget Office to come up with an estimated cost of several possible variations of his bill before deciding which one to introduce in the Senate. That cost estimate, Democrats tell ABC News, is not expected until next week.

Asked directly by ABC News, "Will you pass health care reform this year?" Reid pointedly did not answer "yes." Instead, he replied, "We are not going to be bound by any timetables," adding, "We are going to do this as quickly as we can." The delay is causing some frustration among Reid's fellow Democrats, but Reid said of his colleagues, "They want us to do this the right way, not the fast way."


Great Moments in Socialized Medicine

"X Factor judge Simon Cowell showed his more generous side [yesterday] when he gave £100,000 [about $160,000] to help save the life of a cancer-stricken youngster," reports London's Daily Mail:
The pop Svengali donated the money for 18-month-old Sophie Atay--from Birtley, Gateshead--to fly to the US for pioneering treatment at the Memorial Sloan Kettering Hospital in New York.

He acted after learning the youngster's family launched a last-ditch appeal for £500,000 to pay for the treatment last week after they were told Sophie was suffering from a rare form of neuroblastoma and needed treatment within days.

Alexandra Burke, last year's X Factor winner, broke the news to Sophie's mum Karine, 33, on the telephone today that Simon had now dipped into his own pocket to top up the total to the necessary amount.

Wait, we're confused! Why does a little English girl have to come all the way to the U.S. to get medical care, and why does this Cowell fellow have to pay for it? We thought Britain had free medical care!

But wait, another Daily Mail story reports on what happens to older people who get cancer in Britain:
Alarming research is showing that elderly cancer patients are missing out on the breakthroughs in chemotherapy and surgery that have dramatically improved the outcome of younger patients.

In fact, up to 15,000 elderly people with cancer in the UK are dying prematurely every year when compared to the rest of Europe and the U.S., according to a report published by the North West Cancer Intelligence Service (NWCIS) which compiles cancer statistics. . . .

A major concern is that the NHS Cancer Plan, introduced in 2000 to improve cancer survival in the UK, has a cut-off point at 70. This results in hospitals having less interest in the elderly. "Yet half of all those diagnosed with cancer are over 70," says Dr Tony Moran, NWCIS research director. "It's an area that has been grossly neglected. . . ."


The Health Care Disaster in Canada

After more than a decade of public health care with mandatory coverage, so many Canadian doctors have left the practice and so many young people have entered other fields that Canada ranks 26th of 28 developed nations in its ratio of physicians to population. Once, Canada ranked among the leaders in the number of physicians -- but that was before government health care drove doctors out of the practice in droves.

The fundamental fact is that we cannot cover 36 million new patients without more doctors and nurses, much less with the declining census of medical professionals the Canadian experience points to.

A recent survey of doctors by the Pew Institute found that 45 percent of all practicing doctors would consider retiring or closing their practices if the Barack Obama health care bill passes. This scarcity of medical personnel heightens the likelihood of draconian rationing, lengthy waiting lists and lower quality medical care for all of us, particularly for the elderly.

This physician shortage leads to massive and never-ending waiting lists. In 1993, for example, there was an average wait of 9.3 weeks from the time a patient got a referral from a general practitioner to the time he could see a specialist in Canada. By 1997, the wait was up to 11.7 weeks. Now it's 17.3 weeks -- over four months just to see a specialist!

In Canada, unions control the entire health care process. In Manitoba, for example, there is an eight-month wait for colonoscopies, yet the unions do not permit weekend or evening procedures, thereby extending the waiting lists. The unions are doing to health care in Canada what they have done to education in America -- stifling creativity, reinforcing bureaucracy and extending waiting times.

Because of these long waits for colonoscopies, there is now a 25 percent higher incidence of colon cancer in Canada than in the United States. And, because the leading drugs that we routinely use to treat the malady in the U.S. are banned in Canada because of their high cost, 41 percent of Canadians who get the cancer die of it, compared with only 32 percent in the United States. Overall, the cancer death rate in Canada runs 16 percent higher than in the United States. Cancer does not wait for waiting lists to clear.

The potential of health care changes to shrink the doctor population, exacerbating scarcity and extending waits, is even worse now that it is apparent that we have overestimated the number of doctors in the U.S. Where we once thought there were 840,000 doctors, the total is now estimated to be only 760,000.

The proposed $400 billion cut in Medicare raises the probability that more and more of those doctors who do practice will refuse to accept Medicare patients, aggravating the doctor shortage among the elderly, the population that needs them the most.

As Obama's program moves through Congress, despite the fierce opposition of a majority of American voters in virtually all the polls, it becomes clear that those moderates who vote for it will face harsh retribution at the polls from their outraged constituents. A kind of suicide-pact mentality is gripping the Democratic majorities in Congress, akin to that which came over it when Congress passed President Clinton's tax package in 1993.

This disregard for the will of the marginal voter may make sense for those who come from safe districts -- it makes none for those who come from swing districts. For them, suicidal conduct leads to political demise.


The Worst Bill Ever

Epic new spending and taxes, pricier insurance, rationed care, dishonest accounting: The Pelosi health bill has it all.

Speaker Nancy Pelosi has reportedly told fellow Democrats that she's prepared to lose seats in 2010 if that's what it takes to pass ObamaCare, and little wonder. The health bill she unwrapped last Thursday, which President Obama hailed as a "critical milestone," may well be the worst piece of post-New Deal legislation ever introduced.

In a rational political world, this 1,990-page runaway train would have been derailed months ago. With spending and debt already at record peacetime levels, the bill creates a new and probably unrepealable middle-class entitlement that is designed to expand over time. Taxes will need to rise precipitously, even as ObamaCare so dramatically expands government control of health care that eventually all medicine will be rationed via politics.

Yet at this point, Democrats have dumped any pretense of genuine bipartisan "reform" and moved into the realm of pure power politics as they race against the unpopularity of their own agenda. The goal is to ram through whatever income-redistribution scheme they can claim to be "universal coverage." The result will be destructive on every level—for the health-care system, for the country's fiscal condition, and ultimately for American freedom and prosperity.

•The spending surge. The Congressional Budget Office figures the House program will cost $1.055 trillion over a decade, which while far above the $829 billion net cost that Mrs. Pelosi fed to credulous reporters is still a low-ball estimate. Most of the money goes into government-run "exchanges" where people earning between 150% and 400% of the poverty level—that is, up to about $96,000 for a family of four in 2016—could buy coverage at heavily subsidized rates, tied to income. The government would pay for 93% of insurance costs for a family making $42,000, 72% for another making $78,000, and so forth.

At least at first, these benefits would be offered only to those whose employers don't provide insurance or work for small businesses with 100 or fewer workers. The taxpayer costs would be far higher if not for this "firewall"—which is sure to cave in when people see the deal their neighbors are getting on "free" health care. Mrs. Pelosi knows this, like everyone else in Washington.

Even so, the House disguises hundreds of billions of dollars in additional costs with budget gimmicks. It "pays for" about six years of program with a decade of revenue, with the heaviest costs concentrated in the second five years. The House also pretends Medicare payments to doctors will be cut by 21.5% next year and deeper after that, "saving" about $250 billion. ObamaCare will be lucky to cost under $2 trillion over 10 years; it will grow more after that.

• Expanding Medicaid, gutting private Medicare. All this is particularly reckless given the unfunded liabilities of Medicare—now north of $37 trillion over 75 years. Mrs. Pelosi wants to steal $426 billion from future Medicare spending to "pay for" universal coverage. While Medicare's price controls on doctors and hospitals are certain to be tightened, the only cut that is a sure thing in practice is gutting Medicare Advantage to the tune of $170 billion. Democrats loathe this program because it gives one of out five seniors private insurance options.

As for Medicaid, the House will expand eligibility to everyone below 150% of the poverty level, meaning that some 15 million new people will be added to the rolls as private insurance gets crowded out at a cost of $425 billion. A decade from now more than a quarter of the population will be on a program originally intended for poor women, children and the disabled.

Even though the House will assume 91% of the "matching rate" for this joint state-federal program—up from today's 57%—governors would still be forced to take on $34 billion in new burdens when budgets from Albany to Sacramento are in fiscal collapse. Washington's budget will collapse too, if anything like the House bill passes.

• European levels of taxation. All told, the House favors $572 billion in new taxes, mostly by imposing a 5.4-percentage-point "surcharge" on joint filers earning over $1 million, $500,000 for singles. This tax will raise the top marginal rate to 45% in 2011 from 39.6% when the Bush tax cuts expire—not counting state income taxes and the phase-out of certain deductions and exemptions. The burden will mostly fall on the small businesses that have organized as Subchapter S or limited liability corporations, since the truly wealthy won't have any difficulty sheltering their incomes.

This surtax could hit ever more earners because, like the alternative minimum tax, it isn't indexed for inflation. Yet it still won't be nearly enough. Even if Congress had confiscated 100% of the taxable income of people earning over $500,000 in the boom year of 2006, it would have only raised $1.3 trillion. When Democrats end up soaking the middle class, perhaps via the European-style value-added tax that Mrs. Pelosi has endorsed, they'll claim the deficits that they created made them do it.

Under another new tax, businesses would have to surrender 8% of their payroll to government if they don't offer insurance or pay at least 72.5% of their workers' premiums, which eat into wages. Such "play or pay" taxes always become "pay or pay" and will rise over time, with severe consequences for hiring, job creation and ultimately growth. While the U.S. already has one of the highest corporate income tax rates in the world, Democrats are on the way to creating a high structural unemployment rate, much as Europe has done by expanding its welfare states.

Meanwhile, a tax equal to 2.5% of adjusted gross income will also be imposed on some 18 million people who CBO expects still won't buy insurance in 2019. Democrats could make this penalty even higher, but that is politically unacceptable, or they could make the subsidies even higher, but that would expose the (already ludicrous) illusion that ObamaCare will reduce the deficit.

• The insurance takeover. A new "health choices commissioner" will decide what counts as "essential benefits," which all insurers will have to offer as first-dollar coverage. Private insurers will also be told how much they are allowed to charge even as they will have to offer coverage at virtually the same price to anyone who applies, regardless of health status or medical history.

The cost of insurance, naturally, will skyrocket. The insurer WellPoint estimates based on its own market data that some premiums in the individual market will triple under these new burdens. The same is likely to prove true for the employer-sponsored plans that provide private coverage to about 177 million people today. Over time, the new mandates will apply to all contracts, including for the large businesses currently given a safe harbor from bureaucratic tampering under a 1974 law called Erisa.

The political incentive will always be for government to expand benefits and reduce cost-sharing, trampling any chance of giving individuals financial incentives to economize on care. Essentially, all insurers will become government contractors, in the business of fulfilling political demands: There will be no such thing as "private" health insurance.

All of this is intentional, even if it isn't explicitly acknowledged. The overriding liberal ambition is to finish the work began decades ago as the Great Society of converting health care into a government responsibility. Mr. Obama's own Medicare actuaries estimate that the federal share of U.S. health dollars will quickly climb beyond 60% from 46% today. One reason Mrs. Pelosi has fought so ferociously against her own Blue Dog colleagues to include at least a scaled-back "public option" entitlement program is so that the architecture is in place for future Congresses to expand this share even further.

As Congress's balance sheet drowns in trillions of dollars in new obligations, the political system will have no choice but to start making cost-minded decisions about which treatments patients are allowed to receive. Democrats can't regulate their way out of the reality that we live in a world of finite resources and infinite wants. Once health care is nationalized, or mostly nationalized, medical rationing is inevitable—especially for the innovative high-cost technologies and drugs that are the future of medicine.

Mr. Obama rode into office on a wave of "change," but we doubt most voters realized that the change Democrats had in mind was making health care even more expensive and rigid than the status quo. Critics will say we are exaggerating, but we believe it is no stretch to say that Mrs. Pelosi's handiwork ranks with the Smoot-Hawley tariff and FDR's National Industrial Recovery Act as among the worst bills Congress has ever seriously contemplated.


The "Costs" of Medical Care

Although it is cheaper to buy a pint of milk than to buy a quart of milk, nobody considers that to be lowering the price of milk. Although it is cheaper to buy a lower quality of all sorts of goods than to buy a higher quality, nobody thinks of that as lowering the price of either lower or higher quality goods.

Yet, when it comes to medical care, there seems to be remarkably little attention paid to questions of both quantity and quality, in the rush to "bring down the cost of medical care." There is no question that you can reduce the payments for medical care by having either a lower quantity or a lower quality of medical care. That has already been done in countries with government-run medical systems.

In the United States, the government has already reduced payments for patients on Medicare and Medicaid, with the result that some doctors no longer accept new patients with Medicare or Medicaid. That has not reduced the cost of medical care. It has reduced the availability of medical care, just as buying a pint of milk reduces the payment below what a quart of milk would cost.

Letting old people die instead of saving their lives will undoubtedly reduce medical payments considerably. But old people have that option already-- and seldom choose to exercise it, despite clever people who talk about a "duty to die."

A government-run system will take that decision out of the hands of the elderly or their families, and thereby "bring down the cost of medical care." A stranger's death is much easier to take, especially if you are a bureaucrat making that decision in Washington.

At one time, in desperately poor societies, living on the edge of starvation, old people might be abandoned to their fate or even go off on their own to face death alone. But, in a society where huge flat-screen TVs are common, along with a thousand gadgets for amusement and entertainment, and where even most people living below the official poverty line own a car or truck, to talk about a "duty to die" so that younger people can live it up is obscene.

You can even save money by cutting down on medications to relieve pain, as is already being done in Britain's government-run medical system. You can save money by not having as many high-tech medical devices like CAT scans or MRIs, and not using the latest medications. Countries with government-run medical systems have less of all these things than the United States has.

But reducing these things is not "bringing down the cost of medical care." It is simply refusing to pay those costs-- and taking the consequences.

For those who live by talking points, one of their biggest talking points is that Americans do not get any longer life span than people in other Western nations by all the additional money we spend on medical care.

Like so many clever things that are said, this argument depends on confusing very different things-- namely, "health care" and "medical care." Medical care is a limited part of health care. What we do and don't do in the way we live our lives affects our health and our longevity, in many cases more so than what doctors can do to provide medical care.

Americans have higher rates of obesity, homicide and narcotics addiction than people in many other Western nations. There are severe limits on what doctors and medical care can do about that.

If we are serious about medical care-- and we should be serious, since it is a matter of life and death-- then we should have no time for clever statements that confuse instead of clarifying.

If we want to compare the effects of medical care, as such, in the United States with that in other countries with government-run medical systems, then we need to compare things where medical care is what matters most, such as survival rates of people with cancer.

The United States has one of the highest rates of cancer survival in the world-- and for some cancers, the number one rate of survival.

We also lead the world in creating new life-saving pharmaceutical drugs. But all of this can change-- for the worse-- if we listen to clever people who think they should be running our lives.


Funding Health Care on the Backs of the Young

As I was talking recently with the founder of a large American corporation, the conversation turned (inevitably) to health care reform. His employees in their 20s, on average, cost the company about $1,500 a year in health bills. Those in their 50s cost at least 10 times more. The effect of proposed health care reform -- which limits the ability of insurers to charge higher premiums for older adults -- would be, he said, a large shift of America's health care burden to the younger generation.

This is not an unintended consequence of reform; it is the whole purpose. It is not a side effect; it is the main funding mechanism. Precisely because younger people have lower health costs, reformers want to draft them into the broader health insurance system so their premiums can subsidize the health expenses of older, sicker health care consumers. Thus, in every version of health care reform, the young are required to purchase coverage, on penalty of an "excise tax."

This mandate explains the political coalition behind health care reform. Insurance companies are willing to accept tighter government regulation on matters such as the coverage of pre-existing conditions -- but only if they are given guaranteed access to millions of younger, healthier premium payers. Congress gets additional resources from the young to expand insurance coverage, with less need to raise taxes overtly. Advocates for the elderly welcome an intergenerational subsidy that reduces premiums for older Americans.

Amazingly -- out of idealism, ignorance or both -- people in their 20s remain the strongest supporters of health care reform. They are also the most likely group to wake up the day after passage of Obamacare with a health reform hangover -- forced to buy coverage at higher premiums to reduce the cost of someone else's health insurance.

Legislators, perhaps fearing that future anger, seek to soften the blow in a couple of ways. The Senate Finance Committee bill would allow insurance companies to charge older adults a maximum of four times more than young people -- reducing premium increases for the young by making the elderly carry more of their own weight. The House bill would set the maximum premium difference between old and young at two to one. This provision, supported by AARP, is likely to increase premiums for the young dramatically.

Both the House and Senate bills also provide subsidies for those with low incomes to make health insurance more affordable. Many of the young would qualify. Many would not. Offsetting the whole cost to the young through subsidies would make health reform fiscally unsustainable -- requiring new taxes on other groups.

There are arguments for mandating the purchase of higher-priced insurance by the young. It would, on the bright side, leave less disposable income for nose rings and tattoos. And perhaps the ownership of health insurance, in an ideal world, should be a social expectation, like the ownership of auto insurance.

But this burden on the young comes in a series. The most consequential element of the New Deal -- Social Security -- has been a large transfer of resources from young to old. The same is true of the Great Society's Medicare program, which has channeled massive spending toward health care for the elderly. Two-thirds of Medicaid spending goes to nursing homes. In 1965, there were four workers paying for the benefits of each retiree. Soon, there will only be two.

In our history, public programs helping the young -- say, the Civilian Conservation Corps or the GI Bill -- tend to be discretionary and temporary. Entitlements benefiting the elderly are eternal. And health insurance reform adds to the list.

America's 60-year, cross-generational transfer of wealth counts moral achievements. In the 1960s, 30 percent of the elderly lived in poverty. In 2008, that figure was less than 10 percent. And the compassionate treatment of the elderly serves our future interests. The young grow old, with a little luck and patience.

But limited resources require the interests of young and old to somehow be balanced. And a society that consistently shifts burdens from old to young at some point becomes selfish. We are proud to sacrifice for the sake of our parents and grandparents. We are less proud of imposing burdens on our children and grandchildren that diminish their opportunity.

This is the inescapable shame of overwhelming budget deficits. But it applies to health care as well. A nation that views the young as ripe for burdens instead of benefits has itself become old.


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