http://thehill.com/homenews/senate/59331-menendez-forces-immigration-debate-into-healthcare-fight
Friday, September 18, 2009
Thursday, September 17, 2009
Wednesday, September 16, 2009
Tuesday, September 15, 2009
Obama-The Carnival Huckster
For every problem, there's a cure, and President Obama will tell you what that cure is before he knows the problem. His cure, the nationalization of the health insurance industry. So what's the problem? For one, the majority of Americans do not want his cure and he will not accept that the nation will not roll over and play dead over his "plan". Why? He doesn't have a plan, he has identified the problem, as he and his liberal friends see it, not as the American public sees it. He delegated the job of designing a solution without any guidance, to that much reviled American institution called Congress. No fewer than 5 committees from the House and at least one important Senate committee, with little to no input from the Republicans.
Without leaving Obama's fingerprints on it, Obama's White House negotiated the limitation of damages the major health industry players will incur provided they hop on board the Obama express and promote his "plan". In spite campaigning on a platform to limit the level of involvement of the Washington lobbyists, the backroom arm twisting was facilitated by the very lobbyists he promised to remove from influencing legislation. To show he was going to be tough on removing costs from health care system, he turned his attention on the health insurance industry and on the waste and fraud in the Medicare and Medicaid programs. He wants you to believe that success in these two areas will pay for the new entitlement, subsidized health insurance on a sliding scale for those who claim hardship or can not afford to pay for health care insurance.
Does he think he makes sense? Now, I want to tell you, he does, because he says so. Since the advent of Medicare and Medicaid, every breathing and thinking person in America knows that there is waste and inefficiency. After all, it is a government program, the same government that brought you $1000 toilet seats and several hundred dollar screw drivers. The Amercian people know that their government is not efficient in the handling of taxpayers funds. It knows that Congress is irresponsible with managing the people's money. Every President pledges to remove waste from the government, after all it is there for the picking. Why, with all the Harvard educated geniuses that find their way into government service, have they not wrung out the savings? You know the answer. But, President Obama says he will do it, that it is a new day and we have to look forward. "Yes we can" is his motto. Do you dare to contradict the President? You bet your sweet ass you should because it is all bullshit. If it was there to the degree Obama and his minions believe, it would have been taken and corrected well before now. Nothing in his plan indicates a path to the savings, other than stripping out $500 billion from Medicare under the guise of eliminating waste. Wonder what waste he is talking about, the waste of money by paying for end of life care? How about the "unwarranted subsidies" to insurance companies who offer better coverage to seniors who opt to go to a Medicare Advantage provider, an insurance company that is paid by the government a flat rate to assume 100% of the cost of Medicare patients. The same people who have attracted a growing number of seniors to a government sponsored alternative to traditional Medicare. A plan with growing popularity amongst seniors for its superior comprehensive benefits. Is this the type of waste reduction you can believe in?
When Obama says that seniors should not listen to the scare tactics of the opposition, Should you listen? Damned right you should listen! You need to be aware of the verbal tricks and verbal slight of hand that comes from the rhetoric of the President. You need to challenge his promises. When Obama says that "nothing in our plan requires you to change what you have" you need to be aware of the grand experiment of Congress in the past when the rate to be reimbursed by the government to the Medicare Advantage providers was cut to a level that caused the providers to pull out of the program, leaving the seniors who had opted out of the traditional Medicare up a creek. The reimbursement was reduced to a level that the business was unprofitable and nobody in the industry was going to lose money just to keep the enrollment numbers up. Congress, in subsequent session, reversed the cuts and attracted the insurers back to the program.
Will it happen again? It very well could if the cuts make the program unprofitable! Will Obama and the liberal Congress care, only if the seniors remain silent. Can you afford to be quiet? No, Congress changed the reimbursement and the enrollment was reinstated because the seniors and their lobbyists AARP caused an uproar. Congressmen may be many things, but when it comes to re-election they are not stupid. Obama on the campaign trail said he favored a single payor system. If he does, he may not care that seniors who opted out of Medicare in favor of the Medicare Advantage plans will have to change back to Medicare. He may not understand that your current physician may not take you under Medicare's poor reimbursement or that you will have to change pharmacy providers because the Medicare Advantage pharmacy benefits are managed by someone else. Now, that is change we can believe in!
Now, we know what Obama has said should bethe direction of the solution. His disdain for the health insurance industry is clear, they are the villains, the cause of the high costs of the health care and the leaders of the inflationary acceleration over the last decades. They caused the medical care inflation index to be two to three times the consumer inflation index. They are the greedy ones who kick insureds off the list at the time of most need, the ones who rate based on age and sex, that charge varying rates based on sex and age, and health experience of the individual or the community. Horrors! How could they do that?
Insurance is an underwriting game, a game that takes into consideration variables that attempt to quantify the risk so that a premium can be charged on some rational basis that relates to their expected medical loss ratio, the ratio of payout to premium, or simply, the expected costs of reimbursing providers for providing care. That the costs reflect experience and other actuarial algorithms related to risk and timing of incurred claims versus incurred and unreported claims does not make the setting of price irrational, arbitrary, or capricious as you would interpret from the remarks by Obama. That each state has an insurance commission and are members of the National Association of Insurance Commissioner (NAIC) is not recognized by Obama. Each state abides by the standards established by the rules of the state and the NAIC in formulating regulations that govern all manner of insurance. It should not be interpreted as a loose system that needs the assistance of the Federal Government. It is highly regulated and Obama would upset the delicate system of insurance regulation based on State insurance underwriting standards and would abandon sound actuarial standards of risk management in what he has proposed.
Worse, Obama would nationalize health insurance, applying price controls on many of the elements essential to understanding the risk as an insurance provider, eliminating, in fact outlawing age and sex cohorts, experience-rating standards, prohibit pre-existing conditions as a risk factor, arbitrarily cap out of pocket expenses, remove life time caps. The Federal Government would set the rules and regulate the industry. Then, he would force the insurance providers to compete against a government subsidized not-for-profit option that he claims will have lower administrative costs, lower executive compensation, and more efficiency than the companies that provide coverage now, including the many fine Blue Cross and Blue Shield plans that are currently not-for-profit and cover many of the citizens who could not access group coverage without the BC/BS plans?
Obama says he wants competition to keep the insurance companies honest. This is ok if the competition was on a level playing field with like competition, but with the government establishing an agency-like health care entity with an implied government guarantee, doesn't sound a great deal like Fannie Mae and Freddie Mac, with all the benefits of Congressional tampering and politics as usual tramping on private enterprise. We all know how well Fannie Me and Freddie Mac worked out. Can we risk our health system to such antics?
How many companies will survive this competition? Who knows, but if history is any example, many will just cease to exist or merge creating even bigger behemoths and less competition. It means that the estimated number of 5% of the population is seriously understated. As Obama said, there is nothing in his plan that will require you to change your insurer if you are happy with the insurer. He also says, there is nothing that will require businesses to change the coverage for the employees. What he does not say is what happens if the employer, who makes an economic decision and who finds his costs have increased because of the new limits on underwriting such as out of pocket caps and pricing controls, mandated coverage, and other limits placed on his plan. If the cost is higher than the penalty to pay for not providing health insurance coverage, he may make an economic decision. Either drop and pay the penalty or raise his costs without any offset. Which way do you think he will go?What happens if some insurers simply change their business model, refusing to lose money on each subscriber? You lose, and the taxpayer loses.
Now, most large businesses no longer purchase "indemnity" plans, rather, they have switched years ago to what is called "ASO" plans, health coverage where the larger employers self-insure, contracting with insurance companies who bring a network of providers, negotiated prices, information systems for claims processing, consultation on plan design, etc, but not insurance. This is true of the large employers, but encompasses employers as small as 500 employees. The insurance companies charge a few per subscriber, but take no risk. The employer takes the risk and funds the medical expenses, accruing unknown medical expenses. Under Obama's plan, how will they know what their risk is and will they be able to charge the employees and the dependents enough of a contribution, together with the employers portion, so that the health care costs do not become a surprise? With much uncertainty in the calculation, employers will be motivated to find the cheapest care.
What about the people who have been responsible and purchased individual policies, joined community HMOs, bought indemnity plans who now see their cost go up with the uncertainity of underwriting? Will they keep their own coverage or will they capitulate and drop coverage and buy the cheaper plan? undoubtedly, there will be many who change plans to the government plan and probably will have to change doctors because their doctor will not accept the reduced reimbursement the government plan will pay.
That is why it is disingenuous of the President to sell his plan as if there will be minimum disruption to the existing system. This is why it it not credible for the President to stand there and lie to the American public and misrepresent the damge his plan will have to the safety and security of our healthinsurance we currently have. A health system that is working for 85% of the people, the people who favorably rate their existing coverage. Be honest, Mr. Presidnet, tell the people you really want a single payor system. Quite trying to sell them an elixir when you know it is just snake oil! Any other words, no matter how eloquently delivered, are just words, just words, you know!
We know the health system can be improved, can be held more accountable for outcomes, and should provide health care to American citizens who can not afford health insurance with out some help, either with tax credits or vouchers do to incomes to large to qualify for Medicaid, but not enough to pay for Health coverage. We should mandate enrollment of all eligible children in CHIP and SCHIP programs as a condition for the continuation of welfare payments or food stamps. We can change eligibility for Medicaid to provide health insurance to the most needy. We do not need to upset the entire system working for 85% of the people for the 10 to 12 million who need a hand in affording health care. We do not need some grand experiment with a public option, we already have public options, and they are not very efficient nor cost effective, because they are government programs. We do not need another entitlement that will be bankrupt in 40 years. We need some common sense solutions that we can all get behind. We need a bipartisan consensus, not a partisan plus 1 or 2 solution.
Wednesday, September 9, 2009
Lumpen Bureaucratiat
The American people will not accept the status quo when it comes to health care, we are reminded by Tom Daschel. Nancy Pelosi, Harry Reid, Barney Frank, Steny Hoyer toe the progressive line, insisting that the American people are demanding changes in the health care system. They want "universal coverage" for the greater good, a progressive ideology that justifies the redistribution of wealth and support changes for the many to benefit the few.Candidate Obama promised to address the number one issue on the mind of the American public (they believe), the reform of health care, careful to avoid any link to the inevitable tax increase on the middle class that will be needed to pay for the reform, while hiding any semblance of a plan, in laying out grand principals: coverage for all with low cost high quality health care coverage. When pressed, he promised to rid Medicare of waste and abuse, soak the rich with a tax increase, and punish the health insurance industry by prohibiting sound underwriting principles. In short, increase the costs for the health insurance industry and redistribute the wealth to accommodate the reform of the largest component of the GDP, after defense, the health care industry. All to accommodate 5 million people who can not afford health insurance and to subsidize the health insurance for 10-12 million who make enough but chose not to buy insurance. To risk the health insurance of 90% of the population, 85% happy with their coverage.
President Obama, after countless speeches on health care reform, continues to lay out the same broad principles, quality health care for all at low cost. President Obama has left the writing of the legislation to the progressive wing of his party. Fearing a liberal backlash, he continues a pattern of ducking difficult issues needed for true reform so he leaves no fingerprints on a bill that may bankrupt America. A pattern of avoidance that can be seen in his Illnois Senate voting record, where he voted present more times than any other state legislator.
We are told health reform is good for business, for the people, and for the country. We are asked to suspend disbelief to support a reform that promises something for nothing. We can deliver high quality, low cost care to everyone and pay for it without raising taxes on the middle class (we are warned to be prudent consumers, that if it is too good to be true, it probably isn't). But if the President says it is true, we are to expected to be true believers.
We are also told that what is being considered by Congress is hog-wash. The Congressional scorekeepers have scored the bill passed by the House and have concluded the promise of savings is just that, a promise. It will never happen. Indeed, if passed into law, over the next 10 years the deficit will increase by 9 thousand Billion dollars (that's 9 trillion dollars, folks). This from a body that, according to a recent Rasmussen poll, 57% of the voters would throw out of office in mass based on their job performance. Now that is confidence in the Bureaucratiae. House polls in the 30% range of approval for the job they are doing, is paralleled by the ratings of Pelosi and Reid Even the President's rating has dipped below the 50% level, with more people expressing disapproval than voicing approval ratings for the handling of the domestic agenda. He still maintains a high level of support, in spite of the public's skepticism of his handling of the economy and the domestic agenda.
History is filled with inspired leaders, tapping the roots of discontent found in the masses, to overturn existing leaders, take control of nations, and impose their will on the people who made possible their revolutions. It is filled with the ruins of empires, masses subjected to progressive ideology, massive wealth distribution, chronic poverty, low productivity, and anemic economic growth. We have witnesses mis-steps in foreign policy lead by diplomacy by appeasement, the fall of prime ministers, the horrors of war in the name of ideologies.
One thing in common with the leaders of the 20th century who plunged the world into world war and isolated nations in a cold war lasting the better part of 40 years and Obama is that these leaders gained their positions by emphasizing progressive ideologies against the back drop of populist unrest. Promising a cure to all evils by the redistribution of wealth, demonizing business and their leaders, laying waste to years of progress by blaming the engines of growth for the disparity of income, and promising a new day. Isolation, trade barriers, appeasement with the enemies, were the norm, but underneath diplomacy was the bodyguard of lies. The most virulent of the populist revolutionaries made purges of the intellectuals, creating a more progressive intelligentsia. The masses, no better after the revolution, became the silent majority ruled by leaders who no longer needed to seriously respond to the will of the people, the progressives were in charge and they knew what is best.
The progressives had become the tyrants, the despots, the dictators. The people outside of the progressive elites were the tools to be exploited, to be ignored. The will of the leaders substituted for the will of the people.
Today, our leaders run the risk of marginalizing the vast majority of the population. the American people have voiced great concern about their priorities. Yes, they would like health care improvements. They would like to see the rate of inflation of the health care in line with the general rate of inflation. Since Medicare and Medicaid was passed, the medical care cost index has been above the rate of consumer costs in general. With the Government running over 50% of the health care system, cost increases have consistently been more than twice the rate of growth of the general consumer costs. Health insurance premiums have been consistent with the governmental inflation rates. There are a lot of reasons for the high rate of inflation, but the least important reason is general price increases, the more specific culprits are increased medical loss ratios (the medical costs incurred by the insurance companies exceed the underwriting standards meaning more use per thousand population, increases in input costs of labor and capital incurred by providers, increased medical technology costs for better diagnostic equipment, drugs, and procedures, and increased waste in the systems do to lack of controls), population dynamics, and the structure of the delivery system.
The American people have also strongly voiced their priorities. They told their elected representatives at town hall meeting after town hall meeting in August that Washington should be focusing on the Economy and jobs creation, the Budget deficit, and the country's mounting debt problem. Carbon credit programs, environmental programs, health reform, and the numerous tax increases to pay for all the progressive reforms should be put on the back burner until the country has returned to economic health, jobs have been created, and the deficits reduced. A plan needs to be in place to shore up the strength of the dollar, build financial credibility for our financial institutions, and create the environment that stimulates business formation and job creation.
Only the progressives believe that their "green" programs and their income re-distribution schemes are stimulative. They convinced enough hapless moderates to vote for a non-stimulating stimulus program. They believe, truly, that by providing a government option to the private insurance companies that the country will be able to reduce the cost of health insurance for the vast middle class and reduce the deficit. With competiton from a government option, the consumer will make rational choices and look for value for money. It will force the insurance companies to change their business model, give up underwriting standards, and meet the price the government program, supported by the healthy tax revenues from the new tax increases imposed on a shifting sand definition of middle class taxpayers.
Can we believe what they say? Remember, Congress doe not have a great track record on estimating future costs of their landmark programs. In fact, with all their experts and the geniuses in Congress at the time of Lydon Johnson's Great Entitlements explosion and the passage of Medicare and Medicaid, the trajectory of costs forecast for these two grand entitlements was hopelessly underestimated leaving the shortfall to be made up by the now taxpayers in the form of higher and higher payroll related medicare taxes and still facing the prospect of insufficient capital to cover the costs of the entitlement. With budge gimmickry practiced by both parties over the past two decades, Congress wanted to avoid the difficult decisions of yesterday for a future generation. We have now run out of generational time to pass the buck.
Remember the budget overruns with Medicaid. When originally adopted, the cost trajectory for future program costs were woefully underestimated. Congress stepped in and did what they do best, they passed the buck and changed formulas for cost sharing and sent the bill to the states, keeping the majority of the overruns off the Federal books.
In fact, we can not believe what Obama promises, there is just no evidence that Obama, Congress or the administration can deliver the forecasted expenditures, without voodoo accounting used by Congress to ignore outer years and time the changes to meet "targeted" budget goals, goals that bear no relationship to the real run rates that can be expected, run rates that Corporate America must rely on to get a true picture of financial resources need rather than budget gimmicks to obscure the facts and give a true transparency that we were all promised.
Take back your country. Let your senators and representatives know where you stand on the health care issue. Let Obama know that you expected to be heard. Let your friends and neighbors know that sweet talk and shallow promises by an emptied- suited President imposing his will on the American public will not fly. Spin, innuendo and incomplete facts and facts out of context just will not make health reform anything but a fiasco. When Obama talks of shared sacrifice, he wants you to sacrifice so he can share the benefits with those less fortunate, even at the expense of the 90% of the insured poulation and at the expense of those over 65 who depend on security and stability to make it through the days, weeks and months. Real reform will require everyone to sacrifice. Unfortunately, Obama's plan does not address real reform, it does not give a path that is credible on changing how we cover our entitlements, how costs will be reduced, and how reform can be achieved when he has cut deals that minimize the cost reductions from the largest elements of the health care system, the physicians, hospitals, and the insurance industry, the very industry he wants to destroy.
It is not hard to understand why there are skeptics. It is even harder to understand why Washington does not get it.
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