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As we no doubt all know, yesterday President Obama and several lawmakers spent more than seven hours talking past each other at the Blair House. Probably the most dramatic thing to come out of the meeting was the (renewed) Democratic threat to use Budget Reconciliation to push a HCR bill past a threatened filibuster. This isn't the first time this idea has been bandied about, but the threat carries more weight now that Democrats only hold 59 seats in the Senate. Republicans countered, predictably for the opposition party, that such a move is unprecedented and not appropriate for such sweeping social reform. Former Senate Majority Leader Bill Frist argued such last night on WSJ online.
Senators of both parties have assiduously avoided using budget reconciliation as a mechanism to pass expansive social legislation that lacks bipartisan support. In 1993, Democratic leaders—including the dean of Senate procedure and an author of the original Budget Act, Robert C. Byrd— appropriately prevailed on the Clinton administration not to use reconciliation to adopt its health-care agenda. It was used to pass welfare reform in 1996, an entitlement program, but the changes had substantial bipartisan support.
Since 1980, Budget Reconciliation has been used (and not vetoed) 19 times. (link is .pdf) Fourteen of those times, or 74% of the time, it was a Republican congress that has done so. The largest uses, in terms of net effect on the deficit, were:
In today's dollars, those are roughly equivalent to $670b, $738b and $398b respectively.
I'm not entirely decided on the Budget Reconciliation idea. I think Frist does have a point that HCR reform is more expansive than Bush's two rounds of tax cuts, Clinton's welfare reform and tax increases/spending cuts, and Reagan's tax and welfare/spending cuts. On the other hand, the Republican's complete refusal to participate in the process leaves the Democrats without many alternatives. Both McCain and Boehner have said they want to scrap the bill and start over from scratch. This could be shrewd political strategy. Another 9+ months of debate will probably help the Republicans this fall.
Yesterday, as the meeting was going on, I heard a congressman (Democrat I think - I wish I had caught his name) on the radio talking about the 3 legs of the Health Care Reform stool. The first was coverage for preexisting conditions. There seems to be broad bipartisan support for this idea. The congressman's point was that mandating that insurance companies cover preexisting conditions necessarily requires mandating universal coverage, which in turn necessitates government subsidies (the second and third legs of his stool). I wonder what the Conservative or Libertarian response to this is? Do they not want coverage for preexisting conditions? Or are they willing to mandate universal coverage? And if so, are they willing to subsidize insurance for the poor? Or are there other solutions to these two problems? These seem like deal breakers to me, which lends credence to the thought that Health Care Reform (that includes coverage for preexisting conditions) will not be possible without resorting to Budget Reconciliation.
3 Legs of the Stool: Are They Intertwined legs?
Nice post.
(1) If budget reconciliation leads to reduced deficit and reduced federal power, reconcile away. Uh, oh! I notice I didn't bother to ask whether or not this was a GOP or Democrat idea. But that's probably because I don't much care.
(2) Question: can the "3 legs" be addressed in separate legislations, sans crap? E.G., why can't "bipartisan support" for the pre-existing conditions laws be harnessed into passing a law focused on that point?
[NOTE: I actually know that the answer to that question is, "because that would be sensible and therefore above the pay grade of the federal government" so don't bother providing that answer. I am just trying to think outside the beltway for a moment here.]
(3) banning health insurance denial of pre-existing conditions mandates more law on universal heathcare? Really? I think that might be a false what-chum-you-call-it. I refute that assertion.
(4) Only by striving for mandatory universal health care coverage will the government (like "no child left behind") fail.
This is not the nation of universal success. It is the nation of universal opportunity. That's a crucial difference. Provide all citizens a rational opportunity to have health insurance. Let's start there.
****
"There's a reason we don't quote Hitler when we discuss highway spending. It just puts too much noise into your signal." Joel, 2010
RE 3 Legs of the Stool
These questions/points are two sides of the same coin. To answer the first one, no, you can't simply mandate coverage of preexisting conditions by itself. The system would collapse if that was all you did. You have to include some provision to deal with the fact that people would not buy insurance until they got sick.
Here is the logic, as I understand it. Imagine that insurance companies couldn't deny you coverage of preexisting conditions. In such a world, there would be no incentive for an individual to buy medical insurance until he needed it. There would be even less incentive than there currently is for younger/healthier people to buy any insurance at all. The market pressure (of consumers leaving the marketplace until they are sick) would cause premiums to increase. In the extreme case (where no one bought insurance until they got sick), your premium would actually equal the cost of your health care, at which point it ceases to be insurance. The idea of insurance to not only to spread risk over a group of people, but also across time. One obvious way to correct for this is to mandate that everyone buy some level of insurance (like we do for cars).
Nifty Follow Through
"In such a world, there would be no incentive for an individual to buy medical insurance until he needed it. There would be even less incentive than there currently is for younger/healthier people to buy any insurance at all. "
stop. take a breath.
But... if insurance given to people with no or few pre-existing conditions was much lower than insurance issued to people who *waited* to get sick, doesn't that incentivize people to buy insurance while it is cheap?
RE Nifty Follow Through
So a guy walks into an insurance office to buy insurance. He has cancer. What premium are you going to charge him? Stop. I'll answer for you. You will charge him exactly what it costs to treat him, which of course he can't afford.
RE: Blair House Meeting
In all this talk about using "reconciliation" to pass ObamaCare — still no sure bet — I'm struck by a couple of things. One, the fact that various polls show overwhelming opposition among the American people for passing ObamaCare. A CNN poll finds that only 25 percent believe Democrats in Congress should pass what it has come up with, 48 percent say it's time to start all over again, and another 25 percent say it's time to cut bait entirely and move on to other issues. (That's probably the worst of the polls at the moment from Obama's perspective, but others show similar sentiment among the public.) Yet Obama said at the end of his 7-hour summit that he's gonna give it a few weeks, then urge the Dems to find a way to pass a bill CNN's poll says just 25 percent of Americans want to see made law. Just one word: Wow.
Anyway, I'm reminded about Bush's first year in office upon reelection. I was covering the White House at the time, and remember his first post-election press conference in the Eisenhower Excutive Office Building in January 2005. Bush declared his re-election, like it does for all presidents, gave him political capital. "And I intend to spend it," he said, by moving forward with his campaign pledge to enact Social Security reform. I don't remember how the polls reflected his plans to partially privatize Social Security for younger workers, while keeping the status quo in place for the retired and those close to retirement. But it could not have been worse than ObamaCare is polling now in some quarters — though it may have matched it and I'd wager it was probably polling at least a little better.
So I've wondered this week what the political and media class would have been saying back then if Bush used his much smaller Congressional majority in 2004 to jam Social Security reform through via reconciliation. Using that parliamentary maneuver — distorting it, really — to get his way would have elicited the same kinds of howls from Democrats that we're hearing now from Republicans. But I don't recall it even being contemplated by the then-in-power GOP. Not a whiff — even from a president who was just as certain his Social Security reform ideas were as necessary to ensure America's long-term fiscal health as Obama is of his health care plan.
So perhaps Republicans in this case have a strong point when they insist reconciliation should not be used to muscle through sweeping changes to social programs. They didn't try it when they had a chance under very similar circumstances. And even if one wants to look at that dynamic cynically, one could say the GOP failed to pull the reconciliation trigger not out of principle, but out of a sheer survival instinct. Such a move would have been politically risky, if not political suicide, because of the outrage over how the Republicans were openly defying public opinion.
So despite Obama's implication that he will push for the use of reconciliation to pass such an unpopular bill, I have my doubts his fellow Democrats will be accommodating. While Obama famously declared that he'd rather be "an effective" one-term president than an average two-termer, I have a feeling most Congressional Democrats — who face voters in an alarmingly short eight months — would rather they keep getting re-elected than do the president's bidding.
There is zero upside to walking the plank Obama has set before them. Better to simply make the best of a bad situation and try to convince voters that ObamaCare would have been really awesome if Republicans didn't muck it up by ... well ... helping to defeat a bill they hated anyway. I can't wait to see how that turns out.
Oh, and a quick side note about this comment:
It's more accurate to say that the Democrats didn't allow Republican participation in the committee process — when it matters. Besides, I thought I heard from the summit yesterday that there were a few Republican ideas in the bill. From the president's own lips. So which is it? Kinda hard to argue both points.
I've said it before and I'll say it again: Obama and the Democrats have blown the greatest set of favorable political conditions in at least half a century. Just one year ago — one year! — Republican politicians were saying that Obama had a mandate, and it was time to get on board with some of his ideas. Offer some suggestions of their own, certainly. But they thought voters would dig the dagger in deeper in 2010 if they didn't show a willingness to cooperate with this enormously popular new president.
Congressional Democrats reacted by walking through the political battlefield and shooting the wounded. Obama reacted by saying "I won," and embarking on an agenda well to the left of what he expressed during the campaign — or at least way to the left of what the press and voters were convinced he campaigned on. Every new president, and a heartened Congressional majority, acts as if they have a mandate larger than the one they actually have. It's only natural. But most presidents are smart enough to eventually walk back and reassess when they realize their error. Not Obama, and not this Congress.
I've been watching and covering politics for a long time. I've never seen anything like this self-inflicted political disaster.
What's Wrong With Obama: There's Always the Spectre
... *not* Arlen...no...
-- there's this, in the back of the minds of (how many?) many of Obama's colleagues in the senate:
"This guy -- this ex-junior senator from Illinois, this 2-year-man -- thinks he knows more about the system than I do?"
My brother predicted that sort of silent sentiment would work against Mr. Obama if he were elected -- Clinton would have suffered from it, to a more limited extent; McCain not at all. I think what we are watching is symptomatic of my brother perhaps being right about the behind-the-scenes machinations of the senate.
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"There's a reason we don't quote Hitler when we discuss highway spending. It just puts too much noise into your signal." Joel, 2010
Republican ideas and Public perception
Indeed, a lot of Republican's ideas have been included in the bill. The Democrats have made a lot of concessions (the most obvious example is the Public Option). And yet, the Republicans still refuse to support the bill. That's what I was getting at (and I'll admit my phrasing was less than perfect). Democrats have compromised, but Republicans appear to not want to pass any bill, no matter how many ideas of theirs are included.
I'm not sure I'm convinced that his actual Health Care plan is that further to the left than he lead on. I think conservatives (especially Palin and her Death Panels) have done a lot to distort the public's perception of what HCR actually is.
RE: Republican ideas and Public perception
Let me say for the record something you probably already know: I'm glad the Republicans have refused to support the bill. And if they got most of their suggestions into the bill, I'd still want them to oppose it because I don't want just about any of the stuff the Democrats have put in the bill to become law.
My biggest fear at the beginning of the Obama administration was that the Democrats would be smart about this, craft a bill juuuuuust palatable enough for the likes of Snowe and Collins and perhaps a few other Senate Republicans to sign on, and that would become the first steps toward Euro-style government-run health care in this country. Such a strategy would also have kept conservatives busy "eating their own," by trying to keep "RINOs" in line, rather than focusing on their opposition to Democrats.
So, thank goodness Democratic leaders in Congress and Obama didn't go that route. Instead, the Dems figured that they didn't need a single Republican vote, so why bother giving them or any of their ideas a serious airing? After all, they'd have a filibuster-proof 60 votes in the Senate once Al Franken took his seat (that was on July 7) and they could get everything they wanted this year without any compromises. It was a high-risk strategy, but if it worked, they'd probably solidify their majority in Congress for a generation. Republicans would become as irrelevant as they were in the era of FDR.
But something funny happened. The public began to pay close attention to the Democrats' plans, and they didn't like what they saw. They began to wonder: Can we really afford all this? Will it really solve the problems we have in the health care system? And how can this really be good for the country if Harry Reid has to bribe members of his own party with hundreds of millions of taxpayer money to get on board? And, hey! Why do unions get special deals? Why are seniors in Florida treated different than seniors in Arizona?
It seems to me that Obama and the Democrats' reaction to these concerns — reflected in the fact that support for ObamaCare had sunk below 50 percent by fall — was that the public was wrong, not them. That the people were misled by the industry, despite the fact that Obama had already cut special deals to get the health care industry on board. That the people were misled by the media, despite lots of positive coverage, including a prime-time infomercial on ABC. That the people were misled by talk radio hosts and Fox News, which is why the White House attacked the former and attempted to marginalize the latter. They still appear to believe this.
But maybe the people had it right all along, which is why Democrats have never been able to get their caucus in line, and will be unlikely (I predict) to ever get it in line for this bill — reconciliation or no.
Libertarian responses
Okay, just for fun, I'll give a couple of libertarian responses:
So what should the federal government do instead, if anything?
Okay, let me have it.
RE Libertarian responses
That's a convenient out. I guess that is the "true" Libertarian answer, but it's hardly pragmatic.
Isn't it kind of hard to get rid of state-by-state monopolies if you don't let the Federal government get involved?
This is a talking point that is brought up a lot, and while I don't disagree with it, from what I remember it will make a very insignificant dent in the cost of healthcare. I think I remember hearing two estimates on the effect. The Democrat estimate was 0.5% and the Republican 1%. Or maybe it was 0.25% and 0.5%. So while this is probably a good idea, it's a very small piece of the puzzle. (Can anyone confirm or deny my numbers?)
Well like I said before, you can't do this without getting the Feds involved. To which the response is, don't regulate it at all. But we all know that is simply not going to happen, and I think even you and Deregulator would be hard pressed to come up with a good argument why the insurance industry shouldn't be regulated at all (imagine if people like AIG were running your health insurance).
An anecdote about killing the lawyers
When we moved to North Carolina last year, my wife (an RN) took a temp job with a company that handles clinical trials for a major pharmaceutical company. Her job was to take calls from patients experiencing "adverse consequences" (anything from minor problems to circumstances that wound up being referred to 911).
Whenever a patient called, she had to file a report for every symptom listed, even if it was completely unrelated to the drug (which treats a neurological disorder). If the patient reported a hangnail, my wife had to report it. She said that the call center she worked in could have done a better job with half the employees and would have been much more efficient if the employees could have ignored symptoms that had no connection to the medication.
But the place was overstaffed and the employees constantly filled out completely frivolous reports. Why? Her employers never said, but it was obvious (to her, anyway): The testing company was protecting itself from lawsuits completely unrelated to the safety of effectiveness of the medication.
Multiply her experience at hundreds or thousand of other facilities, and you have an idea of the unnecessary costs imposed by frivolous litigation.
If we simply adopted the English system (loser pays the costs of lawsuits), we could take a big slice out of medical costs.
Easy Lob
Talk about lobbing an easy one over the plate. One could very easily argue that, in a system where the loser pays the cost of a lawsuit, many worthwhile and well-founded cases would never make it to court for fear that even the best case could be lost against highly-paid teams of corporate lawyers on retainer. Keep in mind that a serious problem is any lawsuit, frivolous or otherwise, costs a corporation very little, while even a quick easy lawsuit can bankrupt an individual.
This isn't medical at all, but consider the case of Robert Kearns, the guy who invented the intermittent windshield wiper system. He had an ironclad case against Detroit's automakers and ended up wasting 20 years of his life and $10 million in legal fees proving it.
Any tort system is going to have its costs.
Smacking the "easy lob"
Including a righteous cost to the corporations. Chris, you might have picked a better example than Robert Kearns to press your case. From the Wikipedia entry you cited:
So, by my math — and it isn't very good, but I think I got this one! — Kearns came out $30 million dollars ahead. Not too shabby considering he represented himself against Chrysler and didn't have to share the winnings with an attorney. Why did you leave that part out of your story? Did they leave it out of the movie, too?
He Won...Eventually
Kearns did indeed win. Eventually. It took him from 1978 all the way to 1995, nearly twenty years, from his first suit until he was finally fully vindicated. It cost him $10 million and an effort most would call superhuman. And then he died.
And we're counting only from the day he actually filed suit. He'd been pursuing the auto companies longer than that. I read an interview with him in the 1990s where he said something along the lines of "Do you think I wanted to spend twenty years of my life on a capacitor and a couple of resistors?" But Kearns was extraordinarily persistent.
How much did the case cost Ford and Chrysler? How much is $40 million over twenty years to those companies? Even adding in their own legal fees, this didn't even qualify as chump change.
So, great, he won. It only cost him half his life.
Is this the kind of system we want? No, of course not. But it's what we have.
There are bound to be costs either way. So today we have the costs of frivolous lawsuits. Implement a punishment system -- because apparently people seeking legal redress against large corporations aren't being punished enough -- and we'll have the costs of valid lawsuits never being filed.
The fact is, even with the threat of frivolous lawsuits, many companies disregard the health, safety and rights of individuals. Now imagine you make the hurdle for suing them even higher: Back down in the face of their legion of lawyers and you owe them court costs, too!
All I'm saying is, this isn't as obvious as you might think. Tort reform is not magic -- it won't make all our problems go away and won't necessarily make healthcare cheaper or better.
Atul Gawande wrote a great article for the New Yorker on what it would really take to lower health care costs. Surprise! It's not about who pays! It's about what's being paid for!
Fine, crywalt
You still used a crappy example, and it took me to point out that Kearns won $30 million, a pretty key detail you did not find relevant to address until now. That fact paints a different picture than you did, but I'm happy to talk about this issue with that fact presented.
I admire Kearns' persistence. And I don't mean to be a dick towards you. But it is entirely irrelevant that a corporation like Chrysler (which despite all its power is now all-but defunct) had more resources than Kearns. Hell, the coffee shop down the street from me has more resources to fight a legal battle than I do if I slip on their sidewalk. So what?
What matters is who is right and who is wrong. Despite what one might have learned from your original and abridged citation of Kearns' case, right won out. I'm not defending how long it took, and I'm glad Kearns won. He obviously deserved to win. But tort law even looser than we have now wouldn't have changed what transpired.
The machinations of the civil legal system, including the appeals process, grinds at its own slow pace. Do you really think that pace would be quickened if it was even easier to sue? Do you think a well-heeled aggrieved corporation suing another corporation has better luck or speed with its suits? That happens a lot more than a Robert Kearns suing "Big Industry." And I'd argue that the current loose standards for suing corporations, no matter the plaintiff, incentivizes the kinds of frivolous lawsuits that helped tie up the courts so horribly that it took Kearns' righteous suit 20 years to get the proper resolution.
And I haven't looked at lots of studies. But I've heard enough good doctors talk about the insanely high rates they pay for malpractice insurance to believe it when they say it's a serious cost-driver. And I don't think — and neither does Rick, I'd wager — that malpractice tort reform is a "magic" solution. Unlike Obama, I don't believe any legislation would be a "magic" solution that would "solve" all the problems with our health system. But malpractice reform it's a good, reasonable, start — and cost-free (to taxpayers) to boot. Add that into the resulting decline in expensive "defensive medicine" that the current sue-happy malpractice regime requires, and we're really getting somewhere.
Too Much
You're reading way too much into my abridged version of the Kearns case. I didn't intentionally leave anything out to make a point, I simply figured anyone could go read the whole thing at Wikipedia. That's why god gave us links. It's not as if I expected to elide the happy ending and no one would notice. I think Kearns' victory is at best bittersweet if not entirely Pyrrhic.
And it may not have been the best example but it's one I could think of off the top of my head. Meanwhile no one's come up with a good counterexample from England, where (apparently) losers pay court costs.
Doctors certainly pay a lot in malpractice insurance, and I've heard (anecdotally) it's even driven some of them out of business. But is it a serious driver of healthcare costs? Nothing I've read on the subject indicates this is so.
Read and enjoy
http://www.pointoflaw.com/loserpays/overview.php
The short version
The U.S. is the only Western democracy that doesn't have some version of loser pays in cases filed in federal court. (A few states use it for some litigation.) And this is one of those instances where American Exceptionalism ain't so exceptional.
URL Problems
You realize that site you linked to is called Pointo Flaw.
I'm not against the idea of...what's the site call it?...the indemnity principle. I'm just saying it's not a cure-all. Or even a cure-most. First, because there would be an improvement in lawsuit quality, I guess you'd call it, but there would also be a reduction in "good" lawsuits, too. But mostly because healthcare simply isn't expensive due to frivolous lawsuits. It would be nice, perhaps, but it wouldn't put the slightest dent in the real problem.
I'm not saying it's a cure-all either
But tort reform would reduce medical costs without reducing quality of care. It would slow the redistribution of income to the plaintiff's bar.
You got a panacea up your sleeve?
Maybe
You wrote, "If we simply adopted the English system (loser pays the costs of lawsuits), we could take a big slice out of medical costs." I argue doing so would take out a small slice at best, and would have its own hidden costs as well. We seem to have argued to the point where you admit it wouldn't help a lot but a little and are now asking me for my panacea. Well, I never claimed to have one. I merely noted that your solution is, in fact, under the best possible conditions, one tiny small part of a possible solution.
Also, you note "The U.S. is the only Western democracy that doesn't have some version of loser pays in cases filed in federal court"; following that argument, we could also note that the U.S. is the only Western democracy that doesn't have universal healthcare. Why isn't that the solution?
Read the entire post
Where I said:
Perhaps I was being too clever. I rarely believe Americans should rush, lemming-like, to emulate other nations. Especially if what we're doing respects liberty and individual rights more than everyone else.
Too Clever By Half
You were being too clever, or maybe not clever enough. At least one aspect of your argument was argument by authority -- "Every other civilized nation does it!" (Who pays for lawsuits in Papua New Guinea?) -- but that's a specious argument. And you know it is.
It wasn't your whole argument, at least, which is good.
Malpractice Insurance ~ Red Herring
This whole discussion of medical malpractice insurance and tort reform, while enlightening, is mostly a red herring. The simple fact of the matter is that malpractice insurance is not a significant driver of health care costs. I threw out a figure earlier, which no one confirmed or denied. So I did the search and found this article at factcheck.org who did the research on some of the claims made at the Blair House meeting.
The ironic part of this minor part of the health care reform debate is that doctors and hospitals themselves share part of the blame for malpractice rates (that is, rate of incidents, not insurance). From the article RobbL linked to:
There is a proven, simple, and best of all cheap way to drastically reduce hospital infections, but a lot of doctors are above doing it and hospitals don't want to piss them off by forcing them too. Just blame the lawyers.
Now don't get me wrong, I'm not saying we shouldn't take a serious look at tort reform. At first glance the "loser-pays" system doesn't sound right, but then again, if it has enjoyed long-term and widespread use in Europe, then maybe there is something to it. (But like crywalt said, the same goes for universal health care, so what about that? eh? EH?) At the end of the day though, what ever we do or don't do about malpractice insurance is only one very small piece of the whole puzzle.