Saturday, September 17, 2011

Which is cheaper - public health care or private health care? Here's some facts.

What are the facts about the costs of publicly paid health care and privately paid health care? Consider these facts with links to the backup data:

All of that is consistent with the hypothesis that public health financing programs can control costs at least as well, if not better, than private ones. In addition to that and as Yglesias wrote, there are the decades of statements by health industry leaders and proponents of private health care that suggest they all know this to be true. You can’t argue low public payments stifle innovation if public payments aren’t below those of the private sector. You can’t argue that low public payments lead to cost shifting if public payments aren’t lower than private ones.

This comes from Ezra Klein's Wonkblog.

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Wednesday, August 31, 2011

Obama to win in 2012

Allan Lichtman, professor at the American University, has a thirteen element formula which has successfully predicted which party would win the Presidency each election since 1984. US News has published his prediction for 2012. Obama will win, he says. Combine this with Steve Benen's report this morning that Obama is going to propose a big jobs initiative force the Republicans to continue to expose their anti-middle class agenda the 2012 election already seems rather easily predicted.

Here are the thirteen elements with Lichtman's scoring:
  • Party mandate: After the midterm elections, the incumbent party holds more seats in the U.S. House of Representatives than it did after the previous midterm elections. Says Lichtman, “Even back in January 2010 when I first released my predictions, I was already counting on a significant loss.” Obama loses this key.
  • Contest: There is no serious contest for the incumbent party nomination. Says Lichtman on Obama’s unchallenged status, “I never thought there would be any serious contest against Barack Obama in the Democratic primary.” Obama wins this key.
  • Incumbency: The incumbent party candidate is the sitting president. Easy win here for Obama.
  • Third Party: There is no significant third party challenge. Obama wins this point.
  • Short term economy: The economy is not in recession during the election campaign. Here Lichtman declares an “undecided.”
  • Long-term economy: Real per capita economic growth during the term equals or exceeds mean growth during the previous two terms. Says Lichtman, “I discounted long term economy against Obama. Clearly we are in a recession.” Obama loses this key. [Read: Seven Ways Obama Can Gain Credibility on Jobs.]
  • Policy change: The incumbent administration effects major changes in national policy. “There have been major policy changes in this administration. We’ve seen the biggest stimulus in history and an complete overhaul of the healthcare system so I gave him policy change,” says the scholar. Another win for Obama.
  • Social unrest: There is no sustained social unrest during the term. Says Lichtman, “There wasn’t any social unrest when I made my predictions for 2012 and there still isn’t.” Obama wins a fifth key here.
  • Scandal: The incumbent administration is untainted by major scandal. “This administration has been squeaky clean. There’s nothing on scandal,” says Lichtman. Another Obama win.
  • Foreign/military failure: The incumbent administration suffers no major failure in foreign or military affairs. Says Lichtman, “We haven’t seen any major failure that resembles something like the Bay of Pigs and don’t foresee anything.” Obama wins again.
  • Foreign/military success: The incumbent administration achieves a major success in foreign or military affairs. “Since Osama bin Laden was found and killed, I think Obama has achieved military success.” Obama wins his eighth key.
  • Incumbent charisma: The incumbent party candidate is charismatic or a national hero. Explains Lichtman, “I did not give President Obama the incumbent charisma key. I counted it against him. He’s really led from behind. He didn’t really take the lead in the healthcare debate, he didn’t use his speaking ability to move the American people during the recession. He’s lost his ability to connect since the 2008 election.” Obama loses this key. [See political cartoons about President Obama.]
  • Challenger charisma: The challenging party candidate is not charismatic or a national hero. Says Lichtman, “We haven’t seen any candidate in the GOP who meets this criteria and probably won’t.” Obama wins, bringing his total to nine keys, three more than needed to win reelection.
It's quite a way in advance of the election, of course, but the Republicans' only power is their conservative and socially conservative base who will not permit their politicians to even try to run on policies which might defeat Obama. While no election can really be predicted this far in advance, something really significant would have to change to make this prediction wrong.

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Tuesday, August 30, 2011

Several excellent health care articles

Here are some excellent health care insurance articles from Ezra Klein.

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Thursday, July 14, 2011

Chained CPI explained by Kevin Drum

The Chained CPI is a really bad deal for Social Security beneficiaries. Here's Kevin Drum's explanation.:
Economists on both left and right mostly agree that the current standard measure of inflation, CPI-W, slightly overstates the actual growth in the cost of living. The reason is something called "upper level substitution bias," which means that instead of always buying a standard basket of goods and services, people change their buying habits over time as prices change. When the price of hamburger goes up, they eat more chicken. When the price of chicken goes up, they switch back to hamburger.

A version of CPI that takes this into account is called chained CPI, and overall it's considered a more accurate reflection of actual inflation.
But that is actual inflation for everyone. Older people on fixed incomes are effected quite differently from most people being effected by inflation.
Initial Social Security benefits upon retirement are calculated based on wage levels, so they'd be unaffected by a switch to chained CPI. But annual COLA increases would be affected, and they'd be lower than they are now. Michael Hiltzik suggests two reasons this is unfair. First:

It's not at all certain that elderly persons on fixed incomes can make the sort of lifestyle changes contemplated by the chained CPI....That's because a larger portion of seniors' spending is concentrated in medical goods and services, which aren't as amenable to substitution as, say, oranges for apples.

....Indeed, the BLS has recognized that elderly consumers are a special case by developing an experimental CPI, known as the CPI-E, just for those 62 and older. Among other differences, the index overweights medical care as a factor in seniors' spending....The CPI-E rose nearly 7% faster than the standard CPI from 1998 through 2009, according to government estimates. It also tells you why, from the standpoint of seniors' real cost of living, the chained CPI is a rip-off.

No measure of CPI is perfect for everyone: if the price of gasoline is skyrocketing and you have a long commute, then your personal cost of living will rise faster than official inflation figures. Likewise, because healthcare costs are rising faster than most other goods, people with a lot of medical problems face higher inflation than those who are healthier. From a statistical point of view, then, the best you can do is choose a measure of CPI that's most accurate in general.

Still, the CPI-E issue is a serious objection: it applies to a very large group, and it applies to a large group that typically has modest incomes. Ideally, it would be handled by broadening the scope of Medicare, not by deliberately using an innacurate measure of general inflation, but broadening the scope of Medicare is hardly on the table right now. Given that reality, the net result of this change would be to cut Social Security benefits by calculating inflation less accurately for seniors.
The chained CPI is not representative of the income and expenses of people on Social Security. Essentially it is a cut in benefits to people generally who have no way of adjusting for the cut. It is also not needed since Social Security is not in any near term threat of financial shortage. The chained CPI is a solution looking for a problem to solve and it hasn't found it.

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Friday, April 15, 2011

Ryan's Medicare proposal is dead already. Good riddance.

Does anyone really think that Paul Ryan's Vouchers-for-Medicare plan can work? Ask the insurance industry which companies want to offer health insurance to the over age 65 demographic. This is from Benjy Sarlin at Talking Points Memo.
Unlike the Affordable Care Act, which mandated that millions of young and healthy Americans purchase insurance with government subsidies, the Paul Ryan plan would instead bring the oldest, sickest, and least profitable demographic to the table. And with the CBO projecting that the average senior would be on the hook for over two-thirds of their health care costs within just 10 years of the plan's adoption -- a proportion that is projected to worsen in the long run --- the government subsidies backing them up may not bring in enough profitable customers to make things worthwhile.

"If reimbursement rates are too low to provide basic benefits, they'll tell the government, 'You do it,'" one insurance lobbyist told TPM. "I don't think they can require they lose money, they'd just pull out."

Dan Boston, a veteran lobbyist for health care providers and co-owner of Health Policy Source, said in an interview with TPM that he was taking a "wait and see" approach on the GOP budget before judging its value. (The American Hospital Association opposes the plan). But he cautioned that a major concern would be whether hospitals and private insurers would be left on the hook for low-income seniors eligible for both Medicare and Medicaid, who could run up significant costs with little hope of ever paying them off.

"I think everyone is going to be looking at the viability of the funding," he said.
Any so-called insurance company that tried to offer policies to the Medicare demographic would not last two years.

Ryan's plan is a perfect example of the crap that Republicans and much of the MSM call thoughtful and innovative. Ann Rand would have loved this stuff.

[Cross-posted at Whiskey, Tango, Foxtrot - over.]

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Friday, April 08, 2011

Healthcare. Does America get promises of magic or real down-to-earth efforts to improve health care and lower costs?

Ezra Klein has an important posting on Ryan's health care proposals. The point he makes is that while the media has fallen in love with Ryan's vision of a new health care policy that, if implemented, would shift the increase in health care costs away from the government and onto the sick, the Democrats have an actual plan that includes many elements designed to actually lower health care costs. In short the Affordable Care Act actually includes many rational elements which will lower health care costs, Ryan offers the magic of the invisible hand and a snake-oil salesman's promise that if the insurance payments are changed, providers will change what they charge to get and keep patients well.
At the heart of Ryan’s budget are policies tying the federal government’s contribution to Medicare and Medicaid to the rate of inflation — which is far, far slower than costs in the health-care sector typically grow. He achieves those caps through cost shifting. For Medicaid, the states have to figure out how to save the money, and for Medicare, seniors will now be purchasing their own insurance plans and, in their new role as consumers, have to figure out how to save the money. It won’t work, and because it won’t work, Ryan’s savings will not materialize.

Even Ryan’s fans agree you can’t hold health-care costs down to inflation. But even if you grant that Ryan’s target is too low, his vision for reforming Medicare would like miss a more reasonabke [sic] target, too. Consider the program Ryan names as a model. He said his budget converts Medicare into “the same kind of health-care program that members of Congress enjoy.” The system he’s referring to is the Federal Employee’s Health Benefits Program, and cost growth there has not only massively outpaced inflation in recent years, but actually outpaced Medicare, too. Ryan’s numbers are so fantastic that Alice Rivlin, who originally had her name on this proposal, now opposes it.

Democrats don’t just have a proposal that offers a more plausible vision of cost control than Ryan does. They have an honest-to-goodness law. The Affordable Care Act sets more achievable targets, and offers a host of more plausible ways to reach them, than anything in Ryan’s budget. “If this is a competition betweenRyan and the Affordable Care Act on realistic approaches to curbing the growth of spending,” says Robert Reischauer, who ran the Congressional Budget Office from 1989 to 1995 and now directs the Urban Institute, “the Affordable Care Act gets five points and Ryan gets zero.”
So from Ryan we get promises of magic, smoke and mirrors that will lower health care costs if we just keep the government from paying for them. His magical vision is to shift all cost increases off to the patient. The magic does nothing to actually lower health care costs.

In constrast the Democrats have the already enacted and partially implemented Affordable Care Act which does the following
The Affordable Care Act’s central hope is that Medicare can lead the health-care system to pay for value, cut down on overtreatment, and cut out treatments that simply don’t work. The law develops Accountable Care Organizations, in which Medicare pays one provider to coordinate all of your care successfully, rather than paying many doctors and providers to add to your care no matter the cost or outcome, as is the current practice. It also begins experimenting with bundled payments, in which Medicare pays one lump-sum for all care related to the successful treatment of a condition rather than paying for every piece of care separately. To help these reforms succeed, and to help all doctors make more cost-effective treatment decisions, the law accelerates research on which drugs and treatments are most effective, and creates and funds the Patient-Centered Outcomes Research Institute to disseminate the data.

If those initiatives work, they head over to the Independent Payment Advisory Board (IPAB), which can implement cost-controlling reforms across Medicare without congressional approval — an effort to make continuous reform the default for Medicare, even if Congress is gridlocked or focused on other matters. And if they don’t work, then it’s up to the Center for Medicare and Medicaid Innovation, a funded body that will be continually testing payment and practice reforms, to keep searching and experimenting, and when it hits on successful ideas, handing them to the IPAB to implement throughout the system.

The law also goes after bad and wasted care: It cuts payments to hospitals with high rates of re-admission, as that tends to signal care isn’t being delivered well, or isn’t being follow up on effectively. It cuts payments to hospitals for care related to infections caught in the hospitals. It develops new plans to help Medicare base its purchasing decisions on value, and new programs to help Medicaid move patients with chronic illnesses into systems that rely on the sort of maintenance-based care that’s been shown to successfully lower costs and improve outcomes.

I could go on, but instead, I’ll just link to the Kaiser Family Foundation’s excellent primer (pdf) on everything the law does. The bottom line is this: The Affordable Care Act is actually doing the hard work of reforming the health-care system that’s needed to make cost control possible. Ryan’s budget just makes seniors pay more for their Medicare and choose their own plans — worthy ideas, you can argue, but ideas that have been tried many times before, and that have never cut costs in the way Ryan’s budget suggests they will.
So what will America get from the government in order to control runaway health care costs? Ryan's promises of magic, smoke and mirrors with no system of accountability for the effectiveness of health care services? Or the Affordable Care Act the Democrats have, at great cost, already crafted and begun to implement which takes a solid, working approach to actually improving the effectiveness and efficiency of the health care procedures themselves?

I'll take the output of the practical mechanic over the wild promises of the flashy "magician" any day. So will any intelligent grown up.

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Tuesday, April 05, 2011

"Fix" Medicare? Nah, Ryan just wants it abolished.

Medical costs are climbing sustainably. No question. But America pays more than twice as much per person for health care as any other industrial nation while NOT getting as good results for what is bought as those other nations get! So what is the Republican solution as presented today by Rep. Ryan? Abolish Medicare.

Here's an excellent description of what was offered written by Josh Marshall,.
What the Republicans are proposing are not cuts. Some level of cuts and/or cost containment in Medicare are necessary because medical inflation is growing so quickly. But these aren't cuts. They're using a temporary budget crisis and the need to slow the rate of Medicare costs over long run simply to abolish the program. That's a bait and switch. It's the medical side equivalent of the "private accounts" bamboozle that President Bush used in 2005 to try to phase out Social Security.

Medicare is a federally-backed health insurance program for seniors. Why seniors? Because seniors as a group are just too sick for the private health care insurance sector to adequately provide coverage for. To rein in costs you can reduce benefits that the program provides or place more cost containment measures in place. Real pain is involved in both. But that's a legitimate area for debate. Medicare is a long term budget problem, unlike Social Security which isn't.

Or you can decide just to abolish the program altogether. Just eliminate Medicare in its entirety. This is what Rep. Ryan (R-WI) calls "fixing" Medicare, i.e., getting rid of it. Getting rid of it means abolishing the program and pushing seniors back into the private health insurance system and providing a subsidy to help pay the costs of your average 75 year old's health care. If costs go up? Well, start saving now.
This piece of Republican bamboozlement is going to get a lot of media blather in the next few weeks - even as the tea baggers shut down the federal government. But what it should get is total rejection. There is simply nothing here except a conservative primal scream shouting "We hate government except for Wars!! Government exists to Kill - kill - Kill and nothing else!!"

What no one today remembers is that when Medicare was passed in 1965 there was no insurance for anyone after age 65. If you had insurance and turned age 65 that health insurance was cancelled and there was no company in the market which would sell you a policy. People over age 65 were simply uninsurable.

This is the nature of the market that Paul Ryan wants to throw medicare beneficiaries back into.

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