I was debating whether I should do one final piece to show that the health care bill about to be signed into law lacks serious cost control. Fortunately, Ezra Klein, who is a big supporter of the bill, accidentally did my job for me.
In his piece “The five most promising cost controls in the health-care bill,” Klein tries to make the case that the bill does contain a lot of serious cost control. The problem is, three of his five ideas just don’t hold up. His five promising cost controls are:
(1) Create a competitive insurance market:
The idea of lousily regulated health insurance exchanges is not new. The Federal Employee Health Benefit plan (FEHB) has been a health insurance exchange for several decades now. With roughly 8 million users, it is bigger than any state exchange will be. Yet, the evidence is that health care costs on the FEHB grow at at effectively the same rate as the rest of the employer market. Even Klein himself has admitted this. Exchanges will probably smooth out the fluctuations and imbalances in the individual market and should reduce some amount of administrative overhead in a small part of the health insurance market, but the evidence they will systematically bring down cost is sorely lacking.
(2) The Medicare Commission:
Despite the huge carve-outs to protect most of the more costly aspects of the Medicare program from changes by the commission, this idea could potentially to do some cost control.
(3) A tax on “Cadillac plans”:
The first problem is that this tax does not kick in for eight years (2018). Given its unpopularity and poor design, it is hard to imagine it survives as is. Also, the claims that taxing benefits will really control costs seem dubious at best. I agree with the assessment of the Center for Medicare and Medicaid Services, which concluded the excise tax’s ability to bring down National Health Expenditures would be very minimal.
(4) Medicare “bundling” programs:
This is a good idea. Paying for quality and not quantity is a smart move. Ideally, this will help bring down cost.
(5) Changing the politics of reform:
Now this is just silly. Changing the politics of reform is not “in the bill.”
Klein is basically arguing that the bill’s promised affordability subsidies and individual mandate are unsustainable because the bill lacks sufficient cost control (which is true). But, he argues, now that the government has made promises it can’t keep, it will eventual need to deal with real cost control, or cut services.
I do hope the solution is real cost control reform, but I fear Republicans will kill the program with a thousand cuts. Only a small group of Americans will use the exchanges and qualify for tax credits. I can easily picture a scenario where Republicans slowly reduce tax credits, scale back insurance actuarial values, add co-pays for preventive services, reduce what must be covered in the minimum package, etc., instead of taking on the insurance companies, drug makers, and providers to actually bring down costs.
So, the bill does really lack serious cost control.
In Klein’s attempt to defend the bill, he points to five cost controls. Only two seem to show some promise. Two others are dubious, with little evidence to back up the belief that they will bring down prices and one “cost control” is not even in the bill at all, just a vague hope for a better tomorrow. If this is really the best defense of the cost controls you can get from a strong supporter of the bill, my case about how the bill really lacks true cost control reform has basically already been made.
Now that the bill has passed, I would hope people can focus on its many failings more openly. Almost all the real cost controls were dealt away by President Obama to big health industry lobbies last spring. As a country, we will actually need to deal with health care cost control if we hope to stay competitive in the international marketplace. Pretending that this bill will accomplish way more than it really will is not a good path to much needed further action.




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I want what Ezra’s smokin’
You have to be in the DC in-crowd. They pump it through the air there once you get access and everyone there gets to inhale deep, but it isn’t available outside the beltway.
The two you think can work, only have to do with Medicare spending, so their effectiveness is obviously limited. I think you’ll see MA make some moves toward cost controls, like global payments, and then you’ll see the feds follow that lead. But I still think that is just nibbling at the edges. One of the problems here, is that while our piecemeal system and third party payers are pushing prices up, they are not necessarily even the driving force of pushing prices up. Advances in technology are really what’s driving health care inflation. Because that is not something we can control, I think every penny counts and we essentially will have two choices, either price setting in a non-profit private system(though remember already the feds pay almost half of all medical bills), or, same price setting in a single payer system, which would clearly save more money. I think “competition” in insurance markets is more a talking point than a realistic policy objective. Any market you need a third party payer in is inherently not competitive. It’s true, that a public plan would force some downward pressure on the price of private insurance(although that would be limited to how many unfair advantages the private insurers get, like subsidies)but it would not create a truly competitive market. Further, if you look inside the MA Exchange, you’ll find all of the plans offered by the different providers at each of the various benefits levels are roughly the same price. Insurers basically collude. They slice and dice the market, including by their provider network, and so there is little if any actual competition. Long term I think because of advances in technology we are going to continue to see health care prices rise, and ultimately, the price is going to be too much for the market to bear, and the feds will have to take on the majority of health care costs.
No you don’t.
Yeah, I guess you’re right – at least if it makes me believe the things he seems to believe.
I was just thinking about the hallucinogenic potential.
This will happen when pigs fly. Ezra’s just making sure that they all have lipstick on.
Cutting the cost of health care was merely a smoke screen to siphon off the public’s money to private corporations.
Ezra, yet another “expert”…..speaking of, say it isn’t so Rush!!! You f’ing promised!! LIAR!!
http://mediamatters.org/mmtv/201003220055
How lame do you have to be to be contradicted by your own analysis? One of the many reasons I no longer take Ezra Klein seriously.
I always counted this as yet another illusory benefit of the health care bill.
And devilishly clever to figure out a way of kicking the can down the road so the low info voter doesn’t catch on until after an election or two.
I have scars older than Ezra Klein. Why would anyone take him seriously? What pray tell has he ever done to deserve anyone listening to him?
Heh. There was a mikefromsomewhere on yesterday, and I asked him how it would cut costs. He replied: so what’s your solution? I replied: nice, but transparent, way to avoid answering my q. I’m still waiting for his repsonse.
Limpy caught lying? Say it ain’t so! I’m sure he will just bloviate loudly until he figures out some sort of spin.
That’s sort of the definition of American politics, isn’t it?
“hehehehe…I didn’t say I was moving there, I said I would go there for my healthcare…hehehehehe” Rush Limpballs.
He does already travel overseas for his sexual heathcare.
Ezra Klein and Ed Shultz are smoking the same stuff.
Ed is a great Insurance Company Cheer Leader!
The last person the middle class need on their side is old ED
I think I now figured out why there were so many concessions, and why progressives folded. Age. The age of alot of these progressives is too young. They don’t remember previous healthcare fights except what they’ve read or been told. Take Ezra Klein. Clinton was attempting healthcare in the 90′s. Klein was just a small child! Perhaps it’s lack of experiences? Lack of factual knowledge? Studying things isn’t the same as doing things. Maybe I’m sounding too harsh, but listening to some of these people in the media, my children are older! No way you can have any sort of connections or power in DC like a lifelong politician when you are that young, and that is where you lose. Just a thought. Tell me I’m wrong.
.
I wonder if that’s true. In Germany, The Nederlands, Japan and others have no public option but still cover everyone and pay a lot less then we do.
What I haven’t seen in this debate is an good analysis of those systems. We have heard a lot about Canada single payer system and the U.K. socialized system.
Exactly. If this legislation is so great for the American people why should they have to wait 4 to 8 years for the provisions to go into effect? By the time people realize what a piece of garbage they were sold the perpetrators will be long gone down the road. It’s really laughable how stupid the American public has become. Of course their ignorance serves the fat cats and aristocrats well. As pointed out before, Americans by and large make the perfect serfs.
“But, he argues, now that the government has made promises it can’t keep, it will eventual need to deal with real cost control, or cut services.’; all one has to do is look around the world and at our national finances to know that is will be ‘cut services’.
Who the hell is Ezra Klein(besides the obvious) and why does he rate such visibility?
“Progressives” in the media do not seem to have a problem with people being forced to put their money into a private for profit corporation.
reducing the cost by increasing the cost of benefits?
this doesn’t seem to make any sense. none.
The post vote passing “wrap up” reminded me of the Academy Awards.
“I just want to thank ……. without …. this would have never happened.”
and oh, if there’s anyone I’ve forgotten” etc.
Most amazing to me, is that they won’t negotiate drug prices like every other country in the world. every country in the world does that.
They want to run it like a business.
let walmart negotiate the price of drugs.
This is such an obvious way to save money. And such an obvious payoff.
ezra klein, markos moulitsas, paul begala et all…
= manufacturing consent
especially when they constantly appear on the same programs spouting ‘wisdom’ in 3 minute segments
OK, I’ll play.
I think the reason is the belief that any of them are “progressives” is a naive hope, a child’s fantasy.
Of course, I’d then have to believe my problems have something to do with me – in this case, my unwillingness to verify claims when I don’t want to get an answer I might not like, my preference to believe my hopes in the face of evidence to the contrary, and my failure to get off my ass and do enough about it that it all changes.
So asking why “progressives” folded, sincere as the question is, misses the point.
The real question is why did I fail.
belly laugh :)
Yeah, but Chomsky never said anything about so much out-and-out fellating….
I in no way implied that I knew/know more. Hope you didn’t take it that way. What I was implying was the talking head supposed leaders in the media. Besides Ezra being like 6 years old last healthcare go around, it’s hard to see why a grandma or grandpa would take him seriously because of his age. Did you happen to read the piece by matthew yglesias where he gives Obama the massive written blowjob? Beyond disgusting.
I think between being lied to, stabbed, and a touch naive (SP?) probably put the nail in the coffin. Like I said, just thinking about it after reading Ezra’s wisdom.
Btw, did you happen to read matthew yglesias’ written Obama
blowjobslight praise? Oh he’s the greatest bestest Prez in the history of Prez!! That my friend, is um…….sad.Edit……..posted this in reply above, but now it glitched…..weird.
I didn’t take it that way, sorry if it sounded like I did.
I was trying to point out that asking even earnest questions such as yours is still avoiding the fundamental truth (to torque Shakespeare to my own ends):
“The fault lies not in our ‘progressives’ but in ourselves.”
This sounds like voodo economics. When you spoon feed a monopolistic industry 100% penetration in a market with guaranteed government subsidies and no substantive regulations, it’s a mortal lock prices are not going down.
No, that’s not true. Germany has a public program you can opt out of depending on if you make a high enough income. Most don’t. Also, in Germany every one is lumped into one of a few public plans by occupation. None of those systems are competitive. The Swiss system bundles their insurance, but it’s not a competitive market. It’s like picking your public utility. It’s a myth that there are competitive health insurance markets.
Ezra is just intellectually lazy most of the time. Where’s the anti-trust exemption removal? Where’s the drug reimportation? Where’s the negotiated drug prices? ALL of those are 100% certain to bring down healthcare costs, and NONE of them are in the bills.
Moreover, Ezra just did a puff-piece “interview” with the head of the Kaiser Foundation, as if that foundation – funded by and run by the Kaiser insurance/provider mega-comglomerate – was an unbiased source of facts about healthcare. What he should have been asking was, “how much did your foundation pay to place those “news articles” in the Philadelphia Inquirer and elsewhere, in the run-up to the HCR debate?” That “foundation” is doing exactly what WaPo was roasted for in the context of the deficit debate – placing opinion pieces in newspapers, disguised as journalism. The Inquirer would not tell me how much the Kaiser Foundation paid, but did not deny that they paid.
I think any attention paid to Ezra – even if critical – just feeds his need to feel important at any cost.
Yglesias was always pretty sad.
I dunno that much could be worse than this lead paragraph from the AP last night, though:
I left out the part about “the sweet, sweet drops of his nourishing man-nectar were like a gift from God that healed the sick and saved us all.”
But maybe the little orange prick will say that on MSNBC tonight.
P.S. I was writing long before Obama was even nominated that his fundamental M.O. is seduction.
(This is generally true of all D presidential candidates over the past half century).
But the liberating moment for the naive is when they stop blaming only the seducer and they start asking themselves where and how and why they allowed themselves to be, where they wanted to be, where they asked to be seduced.
When one can move beyond the pain and the grief of the loss of innocence, one can start to see that another synonym for “seduced” is “enlightened.”
I can still remember the girls going nuts over McGovern.
According to this link Japan has Single Payer
http://www.dailykos.com/storyonly/2009/8/25/772005/-Born-Under-Single-PayerA-Snarky-Photo-Diary-Updated
Damn, I like your style!!
Of course not.
It fattens their portfolio and they’ll never have to worry about health care. (and I don’t begrudge them this, but not all of us are so lucky.)
Insurance and pharma stocks have been going through the roof since this snow job began.
The government figures we can pay 7-8% of our income for insurance. I don’t know how they worked that out, but they did. With an annual household income of $50K, that’s $4K the feds say you can pay, with subsidies paying the rest of the premiums. $4K divided by 12 months = $333.33/mo. That’s over $333.33/mo. you MUST pay for insurance, whether you want it or not, or else pay the annual fine of $2,085.
I don’t think this is going to be very popular.
That actually reinforces the point, and is much of why the D’s lost that election so badly (and in ’84 with Mondale, too) – running an old, sexless guy when the demand is to be seduced is a great way to fail.
The hugely successful D’s – Kennedy, Clinton, Obama, even to a lesser extent the young Carter – all got the base all hot and squishy.
It’s a result of the underlying nature and role of the two sides. In our national dysfunctional family the R’s hold the role of father – which means presenting the image of older, powerful male who will protect. It’s the fight-or-flight side of the limbic system. The D’s play the role of mother – concerned with the feeding and f*cking side. Thus the D emphasis on care (sort of) for the national body, things like social programs and health. And the other part of that limbic system axis, at least if it’s to have any resonance with the public, is all that energy for f*cking.
This is all unconscious at the collective level, of course.
And the way out is for us to wake up and stop being run by the animal instincts of our national limbic system.
That’s a very nice thing to say, and I appreciate it a lot. Thank you!
Then there was Dukakis in the tank. Kerry windsurfing with that orange tan from a can. What does this say about the typical Democratic voter? Scary. We need George Clooney, then you can bullshit all you want and MoveOn, Kos and the rest will be slamming anyone who points out your bullshit. So we get a lying scumbag with cute hair.
Is Ezra Klein Jonathan Gruber’s replacement? (Thank you, Marcy Wheeler.)
His assistant, maybe?
I get a strong sense that Ezra Klein is an Obama operative a la Jonathan Gruber and Armstrong Williams before him in the last administration.
To clarify (first part of that comment @41 was deleted accidentally), in six years, the fine for a family w/ no insurance will be $2,085 or 2.5 percent of income, whichever is greater. For an individual, $695.
For a family of four with annual household income of $50K, that’s one helluva hit. $333.33/mo. for junk insurance or an annual fine of $2,085.
Yup.
Though, to relate this to my responses to candianbeaver (ahem!), the reason the national family’s so dysfunctional is it’s life’s way of telling the kids (that’s us) that it’s past the time of choosing which parent might save us.
It’s time for us to realize we can, and we must, leave the safety of home and make our own way in the world.
Actually, I was wondering today if George Clooney might not be our answer. I mean, shit, if Ronnie Raygun can run as an actor turned political front man and get elected, if Ahnold can get elected in CA, maybe Clooney would be our best bet. (Imagine the situation in a 2012 run against Obama, and Obama is the one with the charisma shortage problem. Ha!)
I left out the part about “the sweet, sweet drops of his nourishing man-nectar were like a gift from God that healed the sick and saved us all.”
Link, please.
“Village Grass?”
Worked with a German woman who hates the German health care system: too expensive and treats patients like dirt, was what she said. A lot of stuff can look good…………until you have to actually get in and use it. The Canadians I’ve read like their system and that’s an endorsement.
I think the subsidized policies are going to be low end policies and only cover 70% of health care costs. So the real costs will be much higher if someone in the family actually needs health care. I’m not certain of this, but I know the current bill lowers the amount of over-all subsidies by a considerable amount compared to the original House bill.
Anyone else notice the timeline rollout of the various pieces of the bill? I gather the part that allows children to stay on their parents insurance thru 26, or is it till 26?, goes into effect shortly. The crappy stuff seems all to be scheduled after 2012, like 2014 or 2016. What’s up with this? Am I being too suspicious? It just looks like a have-a-piece-of-candy-while-you’re-waiting sucker play.
So, my question is if Klein knew they were lying, making promises they could not keep, why did he support them?
You know, I have to add this. Marcos can be funny and I used to enjoy reading his stuff even when I didn’t agree, but what has happened to him? There’s a piece up on the front page about the Republicans moving on SS and Medicare. Yeah, well, so who initiated a Deficit Commission and appointed Bowles and Simpson as co-chairs? Take a good look at Obama’s other appointments. With friends like the Democrats in office, who needs enemies like the Republicans? Odd, to say the least.
Has DKos been co-opted? Sunstein’s suggested subversion tactic isn’t an original idea.
I am so glad you folks can find what is right in the bill. And, of course, I appreciate your explanations as to why Republicans, since they are the same as Democrats, are so whole-heartedly supporting this bill. Good to see the consensus on bipartisanship on FDL.
With all the incessant and substance-less cheerleading from the democratic party loyalist blogosphere and the excuse-making and hyper-rationalizing denial going on in what I THOUGHT was the progressive end of the blogosphere, I truly feel like I have been abducted by aliens and dropped square in the middle of Stepford.
It’s not known as the Great Orange Satan for nothing.
Ditto.
This is about the only place that deals in reality.
Or, to use Moulitsas’ projective slur against Kucinich to characterize things more accurately:
“the Little Orange Prick.”
From the start, a single payer system was taken off the table (remember the single payer advocates bodily removed) and at the very least, a responsible, educated discussion about health care systems around the world never occurred. This was when I began to suspect that a “deal” had already been made. Then, when I read the AHIP proposal from December 2008, I knew the insurance companies were writing the bill.
http://www.americanhealthsolution.org/assets/Uploads/ahipreformpolicyproposal.pdf
Another possibility is to point out the truth that Democrats are not our “mother” or “caring”.
Markos, who can be funny, isn’t at all funny when he drops into ad hominem. Dead giveaway of an argument without substance.
Simply, Republicans are not supporting this bill because they want power and control back by any means. Therefore, they won’t support any proposal by Democrats. They can afford to “just say no” and not hurt the insurance companies or Big Pharma because it would have maintained the status quo. If voting no actually “hurt” the corporate bottom line, they would not have voted no. Either way, without a robust public option, lack of cost controls, etc., the insurance companies have been big winners with the resulting “reform”.
The fix was in from the start. But Obama had a track record in the Illinois senate that presaged this kind of wheeling and dealing.
‘bundling payments’ and ‘pay for performance’ are two different things. nor do i expect either to do much for controlling costs.
bundling payments. medicare already does this to a great extent on their payments to hospitals [prospective payment system, aka diagnosis-related groups]. it does save administrative costs for the hospital to be able to send 1 bill for ‘heart transplant, surgery and related hospital care’ for instance, rather than billing for all the pieces separately. the new proposals for bundling call for paying both the hospital and related outpatient costs for an ‘episode of treatment’ into one bundle. but this leaves the hospital and the various physicans, labs, clinics, etc [who may or may not be owned, operated, or employed by the hospital] to duke it out among themselves over who gets how much. good luck on that.
one of the driving forces behind the bundling of payments is the [imnsho misbegotten] desire to re-create, using ‘market forces’, the success of the vha and the original design of health maintenance organizations [not what passes for hmos these days]. these entities [called accountable care organizations in their new incarnation] will be more efficient, especially if they’re large. this could work that way, but one of the problems that the neoliberals [and this is a very neoliberal approach] ignore is that very large provider groups can negotiate nice fat payments for themselves from insurers [see partners health care, boston], yes, large provider organizations can save with their economies of scale, or they can extort higher payments instead [or they can do both!]
yeah, that’ll control spending.
pay for performance. this is, in part, another nudge toward creating huge acos, because only the large provider groups are going to have the manpower to make tracking all the performance measures worth the extra cost for the tiny payout. the medicare pilot program paid out up to a maximum of 2% more over a group’s standard fees, but the extra pay was often more like 0.5-1%. if a small practice is bringing $500,000/year, they could theoretically get another $10,000 but if it’s more likely to only be $2500, what’s the point? a large group, making several million per year, could easily afford to hire another clerk to keep up with the required paperwork and still make tidy sum. but then this brings us back to the large-provider advantage when negotiating payment rates with insurers.
but hey, it’s worth it if it raises the quality of care, right?
except that a lot of p4p measures are process measures, not outcome measures. very easy to check off little boxes for yes, gave flu shot; yes, prescribed beta blockers for heart attack; yes, counseled patient to eat less and give up smoking… much harder to measure, in the timeframe needed to make p4p work, whether these saved any lives, or made people healthier.
the infection control checklist that you read about sometimes was an excellent example of where simple and easy process measures are easy to check off AND did a measureable amount of good in a short time. but keep in mind that something like 50% of ‘best practices’ recommendations get revised or outright scrapped within 5 years of their implementation, for a lot of reasons, not the least of which is that good comparative effectiveness research is generally expensive and time-consuming to do.
lastly, p4p is also based, in part, on the idea that’s been propagated by the dartmouth atlas group, that we get too MUCH care [like 30% too much]. international comparisons are tricky to do, but the evidence is that no we don’t really get too much CARE, we just spend too much on each unit of care that we do get. uwe reinhardt’s ‘it’s the prices, stupid’ is a good place to start. meanwhile, large group practices like mayo clinic and cleveland clinic maintain that their excellent results are because they provide ‘more efficient’ care [read: less care, because too much care is bad for us] and therefore they lose money and should be paid more for delivering us this lesser amount of care.
lastly, going back to the bundling of payments…
it’s popular to demonize fee for service payment systems, and this is one of the drivers behind bundling payments, but it’s worth noting that japan, france, canada, and a lot of other countries have ffs [and more of it than we do in some cases] and they keep overall costs down not by discouraging ffs and the [purported] overuse of care, but by imposing strict govt controls on the price of each unit of care. sure, some hypochondriacs and some over-protective parents are going to go to the doctor ‘too often’ but that’s cheaper than diabetics and people with high blood pressure or other chronic diseases cutting back on their ‘overuse’ of care.
as for hospitals being incentivized to do more unnecessary costly procedures because of ffs, this is a problem to some extent, but a saner payment system [hr676!] that includes global budgeting for hospitals and getting rid of for-profit hospitals entirely would go a long way toward reining in spending [this is basically what canada did]. setting doctors, hospitals, and insurance companies at each others throats, which is what we have now and what this bill is proposing to do in new and exciting ways, is not going to control spending. nor is it likely to turn out well for patients, but nobody really cares about them [despite whatever rhetoric to the contrary that pops up on occasion].
hipparchia:
Did you read David Goldhill’s article in the September 2009 issue of Atlantic Magazine? Some really interesting ideas and I’d like to read your opinions.
http://www.theatlantic.com/magazine/archive/2009/09/how-american-health-care-killed-my-father/7617/
I’m sure there are holes in this argument, but there are craters in the medical-industrial complex now and people fall into them all the time. Goldhill’s premise that the industry we have doesn’t serve its purported purpose because incentives are misconstructed is sound, I think. He also thinks the bill just passed is useless for any of its stated purposes, and likely to make things worse. (Oh, boy)
By design, #1-#5 are all UNproven cost control strategies. The proven strategies were left out of the plan.
I disagree that the Medicare commission will yield big savings. It’s a political minefield, as Britain has seen with their NICE program.
Bundling will yield some savings. In fact it’s already proven to work in Medicare. But it is only applicable to common clinical scenarios, while some of the most expensive care is for unusual conditions. In any case we should move forward with this instead of doing more pilot projects.
i remember that article. my apologies, but i can’t bring myself to read it beyond the first page nowadays.
he’s right about some of the symptoms, but wrong about the cure. he thinks market forces and transparency and competition and all those other neoliberal fetishes are the cure.
for-profit hospitals are a scourge, not only in themselves, but because the introduction of for-profits into the hospital ‘market’ has caused many a non-profit to take on all the abominable practices of for-profits. the severe understaffing in nursing and cleaning and laundry and related personnel is criminal, and ‘transparency in pricing’ or other ‘incentives’ will not stop their predation on sick people. they need to be incentivized right out of existence.
also, on hospital-acquired infections, there’s some evidence that we need to stop feeding antibiotics to livestock if we ever hope to combat the superbugs. not that we’re going to see anybody in this administration willing to take on big agriculture, and they’ve already proven they aren’t going to take on big pharma.