True healthcare reform = curbing excessive profits

            Over the summer, we saw the first half of the circus that healthcare reform has become: Tea Partiers and Town Hallers screaming at members of Congress not to kill grandma or socialize their Medicare.  Now we’re in the middle of the second act: trying to move the legislation through the Senate.  With all of the horse trading, showboating, and lack of good-faith negotiations on the part of some individuals, this whole issue has become more complicated than it deserves to be.

            For example, a plan to offer a Medicare buy-in for seniors 55 and older was shot down after lacking the votes.  At the same time, the chance for a public option has gone down the drain, thanks to a handful of moderates.  Has anyone ever considered that a public option (not to mention a full-blown single-payer system) would make any discussion of Medicare and Medicaid moot?  If people were given the choice to buy an insurance plan offered by the government, we could eliminate those two programs altogether.  Low-income people would be subsidized under the government plan until they are able to gain insurance through their employer (assuming that they would want to switch plans), and elderly people could enroll in a subsidized plan when they retire; there would be no onerous eligibility requirements and everyone would be allowed to purchase coverage under it.

            Another frustrating impasse: Senator Byron Dorgan’s (D-N.D.) amendment to allow Americans to buy imported medications at lower prices than their American-made counterparts.  Obviously, there are concerns about the safety of drugs that are not produced in this country, but given the widespread salmonella outbreak in peanut products earlier this year, one has to wonder whether the FDA could effectively protect us even if it were given the resources to.  Yet, the amendment is unlikely to pass because of lobbying by the pharmaceutical industry.  They agreed to cut the cost of prescription medications for seniors in order to save $80 billion over ten years, but heaven forbid they be expected to lower their prices for everyone—to the tune of several hundred dollars for some drugs—when competition is introduced into the market.

Members of the satirical group "Billionaires for Wealthcare"

            I am sympathetic to drug manufacturers to a certain point.  That point is when the focus turns from researching new cures to making obscene profits off of Americans’ health.  In 2002, the top ten drug makers in the U.S. spent 14 percent of their revenue on research and development, while spending 31 percent on marketing.  What does marketing entail?  Trying to persuade doctors and patients to choose one drug over other similar medications on the market (“me-too” drugs), for starters.  And, of course, billions are spent lobbying members of Congress to ease the burdens of regulation and competition. 

          The underlying problem with drug and insurance companies is that these enterprises have to reconcile the business necessity of making profit with the social obligation to keep Americans healthy.  But really, is there any doubt which side of the operation takes precedence?  President Obama has had the same problem with banks, who have kept a tight lid on credit in order to maintain high profit margins.  He is trying to persuade bankers to moderate their extravagant pay and remind them of an obligation to help the taxpayers who bailed them out.  Perhaps the president sees corporate America as a community in need of an organizer, but really it is a collection of bullies in need of discipline. 

          America is the only industrialized country that does not limit drug prices in some way.  I doubt that there is political will to enact price controls, which is a shame, since I would prefer to go many steps further and nationalize the drug and insurance industries.  People who scream about “government takeovers” say that this is bad for business, but doesn’t that bring up the possibility that such a move is good for consumers?  Just consider, the salary of Arden Bement, Jr., the director of the National Science Fondation, was $172,000 in 2008.  The salary of David Brennan, AstraZeneca CEO, was $4.3 million in 2007.  Does Brennan, who started his career as a sales representative—i.e. marketer—for a drug company, add any more value to the corpus of scientific knowledge than Dr. Bement—a professor of nuclear engineering? Probably not, but he sure knows how to turn a profit for his company.

          Obviously, there is a place for the profit motive in stimulating innovation.  But I wish that Congress would take a candid look at what measures need to be implemented that would truly restrain the healthcare industry from denying affordable treatment to Americans without compromising their ability to remain competitive in the field of research.

Healthcare passes—at the expense of women

            Healthcare reform is inching along and if the close vote in the House is any indication of the deep split between liberals, moderates, and conservatives, then the Senate—with a higher concentration of the latter two groups—will have to dilute the bill even more to surmount a filibuster.  Still, the House’s bill is not a resounding victory.  It takes two steps forward and one step backward—in that for all of the great features that will expand health coverage and crack down on insurance companies, this comes at the expense of women’s reproductive rights.

            While abortion coverage (along with illegal immigrant coverage) was always a contentious point of reform, the settlement over the weekend on the Stupak Amendment is not only against women’s rights, but is against working-class women’s rights.  The language of the amendment denies federal funding for abortion services (an already-established provision of the law), but also denies women who are receiving subsidies from the government to purchase public or private insurance in the new Exchange from getting an abortion even if they pay out-of-pocket into their monthly premiums.  A far more sensible amendment was offered by Rep. Lois Capps (D-Calif.) in which federal funds and private funds would be segregated in premium payments, and only the non-subsidized money would be used for the operation.  However, detractors called it an accounting gimmick that could not be enforced.

            The glaring irony is that small-government conservatives of both parties voted in favor of this amendment, even though it expands the reach of federal prerogative right into a woman’s physician’s office.  What’s more, the vast majority of those voting for the amendment would not have voted for the final bill even if the language was not approved.  But alas, the art of politics requires that a tiny fraction of lawmakers be appeased for the country as a whole to progress.

            While the language makes an exception for women whose life is endangered, or who have been the victims of rape and incest, that is little consolation.  A pregnancy is more than a medical condition.  It is an obligation to the woman, the child’s father, and the families of both parents.  But the weight of obligation is sometimes too much for women to bear.  The child might be unwanted or the woman might be physically, mentally, or financially unprepared to bear such a burden.  No one wants any abortion to happen, but when a woman needs more time before  entering into motherhood or when she must weigh the costs of rearing a child to whom she cannot dedicate herself or her material resources, it is unfair for a group of (primarily) men to stipulate that a woman must be dying or traumatized for her to have any choice in the matter.

            It makes little sense to me that this bill will bring opportunity for treatment to millions of working-class and young women—both of whom are most subject to false information and interest group tug-of-wars on the family planning front—so that if they accidentally get injured, they will be fine—but if they accidentally get pregnant, they are out of luck.  Would it not be more practical to simply regulate abortion providers to ensure that women who seek the procedure are not put in jeopardy by back-alley, unlicensed abortionists?  The last time I checked, the Constitution charged our government with promoting the “general welfare” of all its citizens, not simply the welfare of those who are wealthy and already have access to employer-based private coverage and who have an unbiased accounting of their options regarding reproductive rights.

            While the bill should not be sunk on the basis of this one anti-woman provision, it just goes to show that sex discrimination is still acceptable by the majority of elected representatives, even if it takes away a long-established legal right.

Protecting unions’ healthcare rights

            Yesterday, Washington Post columnist Harold Meyerson pointed out a widely-overlooked aspect of healthcare reform that ought to be addressed before the final bill is deliberated upon.  Throughout the deliberations on how to pay for increasing coverage, two options have solidified.  The House’s plan is to tax wealthy households and individuals, which will cover about half the cost of the bill.  The Senate, on the other hand, will tax “Cadillac” plans that exceed roughly $21,000, encouraging folks to buy less expensive plans, consume fewer costly treatments, and thus reduce expenditures.

            Liberals are wary of the Senate’s plan because union members have, over the years, settled for lower wages in exchange for generous healthcare benefits, and any tax will ensnare middle-class families who happen to have well-earned, expansive health coverage.  However, it has been pointed out that many union contracts will have to be renegotiated in the coming years and employers can simply reduce the level of healthcare coverage while boosting wages in an attempt to shift the balance between income and non-taxable health benefits.  This will ensure that these workers will not cost the healthcare system as much in treatment and if they need to seek medical help above and beyond what their coverage entails, their extra wages can be used to cover that treatment.

            But Meyerson cautions us not to fall into a rhetorical fallacy: just because two ideas appear to be connected does not mean that there is necessarily a logical link between them.  In this case, we are dealing with the assertion that employers have a “pool” of money for each employee, into which are divided wages and healthcare benefits (in addition to Social Security taxes, pensions, etc.).  If one part of the pool—healthcare—shrinks, the other part—wages—will get larger, and the overall size of the pool will remain unchanged, as long as revenues and expenditures remain constant.

            Yet, this is not an ironclad deduction.  Unions have been successively weakened in America, and many people disdain unions as only serving the purpose of protecting incompetent workers from being fired.  This public condemnation—combined with the fact that in 2008, “top executives at 386 Fortune 500 companies averaged $10.8 million in total compensation, more than 364 times the amount paid to the average American worker”—demonstrates the relatively impotent bargaining position of the average employee.

            Employers could very well shrink the pool—paying less for healthcare, refusing to increase wages, and then pocketing the rest.  Congress ought to write a provision into the bill requiring employers to match dollar-for-dollar any decrease in existing health benefits with an increase in wages.  If that cannot be done without a compelling reason, union leaders should have the right to appeal to the Labor Department for an inquiry and/or punishment.  Among the administration’s many endeavors to reinvigorate the middle class and curtail the rampant greed of corporate culture, ensuring that unions receive proper respect at the bargaining table will prevent the further widening of the wealth gap that is a byproduct of the American myth that what is good for wealthy businessmen is good for the country overall.

Let’s opt out of the “opt-out” idea

            Senate Majority Leader Harry Reid’s (D-Nev.) announcement that the healthcare bill for his chamber will include a government-run option is a double-edged sword.  On the one hand, it is a relief to liberals who consider the public option to be the next-best (and only) alternative to a single-payer system but at the same time it puts moderates of both parties (well, Democratic moderates plus Sens. Collins and Snowe) in an enormous position of power.  Every senator who could potentially vote for this bill is needed and must be accommodated in the search for sixty votes.  It’s an undemocratic system that gives disproportionate advantage to rural states, but that is the way our Constitution works, for better or worse.

            The small state senators have a legitimate point with a public plan which is linked to Medicare, in that doctors already receive lower per-patient reimbursement by the government than by private insurers in their states or by Medicare payments to other states.  In part, this is due to the different costs of living throughout the country, but also it is attributable to formulas which have historically penalized efficient, rural providers such that they cannot afford to take on a good number of Medicare patients and still meet operating costs.  So, from their perspective, private insurers would better compensate doctors.

            Still, the formula can be altered.  What’s more, the people who do not have insurance currently are treated either at neighborhood clinics or in emergency rooms, so all that this legislation is doing is shifting the costs around.  The goal of healthcare reform is to bring down the cost of providing care overall, so the combination of new customers, reduced premiums, lower drug prices, and patient-centered care will, in theory, increase the number of patients that doctors see while decreasing the amount of billable-hours treatment people receive for their illness.

            I am concerned about this new “opt-out” aspect of the public option.  If states are allowed to forgo participation, how will the people currently uninsured find an affordable plan, especially if there is a mandate on individuals to purchase insurance?  Plus, the greater the number of people that participates in the public option, the more the costs of treatment will be spread between healthy and ill people, lowering premiums not just for people in the government plan, but for its competitors.  If half of the states choose not to make the public option available, what will that do to cost estimates which base premium prices on a certain level of participation?

            Lastly, there is a civil rights question here: if states are presented with a means of insuring those who are sick but choose not to make that path available to citizens, is the state liable for every ensuing preventable death?  Will public plan-based insurance be valid if a person seeks medical treatment in a state that has opted out?  And if states opt out, should they have to find another way to ensure that at least 95 percent of their legal residents have insurance or face some penalty, such as being denied funding for highways?

            The top map in this graphic is from Gallup, and I colored in the bottom section with the electoral results from last year’s election.

There seems to be a slight correlation between the percentage of insured adults per capita and the political leanings of the state.  Of course, this map does not indicate which party is in charge of the state legislature or the governor’s mansion.  For instance, even though Virginia voted Democratic in 2008, we will very likely have a Republican governor and legislature when the healthcare bill takes effect.  So, we can say that generally, state governments controlled by Republicans (who will be most likely to opt out) tend to have higher rates of uninsured adults.

            What it comes down to is this: I am worried that the ability to opt-out of the public option will fail to help people in states that most need an alternative method of procuring affordable insurance.  The senators from states such as Arkansas, Nebraska, and Louisiana should look at the 19 to 27 percent of constituents who lack insurance and explain why they were loathe to support a plan that will ensure their wellbeing.

From Obama, emotion and understanding

            With tonight’s speech to Congress, the president told legislators that the ball is in their court now.  He answered the calls to draw lines in the sand and show some leadership on his signature issue.  And just as he explained his hopes and expectations to nervous and excited schoolchildren back from summer vacation yesterday, he tried to calm the nerves of jittery members of Congress and refocus their attention.

         As usual, Obama tried to negotiate positions that would satisfy all constituencies: he laid down his support for a public option to appease liberals.  He pointed to a need for malpractice reform to get Republicans on his side.  He repeated his insistence on a deficit-neutral bill to bring fiscal conservatives of both parties to their feet.  And importantly, he talked about the human side of healthcare—the suffering that goes on each moment of every day—to remind people everywhere why he is staking his presidency on this issue.

            Unfortunately, the media will probably seize on the congressman who yelled “You lie” during the speech, or the fact that Minority Whip Eric Cantor was busy texting or that Republicans were waving their own proposals for a reform bill.  What I hope doesn’t get lost is the obvious emotion that Obama felt when singling out all of the Republicans who had worked with Ted Kennedy to provide health insurance to children, among other things.  Kennedy did not pursue the cause of expanding healthcare because he was a large-hearted liberal, but because his family had been through medical trauma many times.  Ted Kennedy simply could not comprehend why someone should be denied care or receive inferior care simply because of insufficient wealth or because of perverse corporate incentives to limit treatment.

            I would hope that Republicans and skeptical Americans would realize that Obama would surely never sincerely intend to approve a bill that dictates immigration or abortion policy.  Nor should liberals interpret his belief on the necessity of a public option will be a centerpiece of healthcare reform.  This president has repeatedly shown himself to be open to multiple ideas from both parties as long as they fall under his general conception of injecting competition into the marketplace to decrease costs to consumers, increase choice between plans, and provide near-universal coverage instead of the 85 percent that is the status quo.

            I can’t help but wonder if people in other industrialized nations overseas are looking curiously at what’s happening in this country.  I suppose they are asking, what is it about Americans that they can’t decide on a way to ensure that everyone gets the care they need from the doctors they want?  As the president said, we’re the only wealthy nation where people are left to die out of a desire to serve corporate welfare and a lack of collective determinism to take responsibility for the least-well off in society.

            Of course, all of the healthcare sob stories and reasoned explanations of the plan’s framework won’t mean a thing unless reasonable men and women in both houses can agree on the details.  As it stands, Democrats have 59 senators, but they may not have 59 votes.  Some conservative and vulnerable Democrats—who may or may not happen to have taken large campaign contributions from the healthcare industries—are concerned about the size and scope of reform efforts.  The number of Republicans who are willing to cross the aisle can probably be counted on one hand.

            Or, make that one finger: Olympia Snowe of Maine, the only Finance Committee member not to sign a letter to the president vowing never to vote for a public option.  Unfortunately, today she has asked the president to drop this feature—not because of a personal objection, but on the realistic grounds that “all Senate Republicans as well as some Democrats do not support” it. 

         However, that does not change the fact that Snowe is the only Republican who is still providing constructive input—such as suggesting a “trigger” mechanism in lieu of an immediate public plan.  If that’s what it takes, I’m sure the president would give his blessing.  The fact is that the bill cannot be passed without her.

         Obama did a good job tonight of combating lies and explaining the truth behind this bill.  Let’s hope that some good will was generated on both sides of the aisle toward action on this issue.