I’ve been generally critical of the Baucus Bill, primarily because of the reduced subsidies, which I see as an increased tax on the currently uninsured middle class. But luckily Ezra Klein has been providing detailed coverage of what’s good about it – notably, the proposed reforms to the health care delivery system. See his interview with Peter Orszag and his post about Chris Jennings and most of his other posts from yesterday. On my reading, the Baucus Bill will kick off a number of initiatives that will test different ways of reducing costs or improving quality, such as ways of linking payments to outcomes.
I think this is promising because, as I’ve said before, even though we have a general idea of what the problem is – economic incentives that are cut loose from outcomes – we’re not sure how to solve it. As a result, any master plan to reduce costs without sacrificing quality is easy to attack, and given the political dynamics people will be eager to attack it. The answer is that, in the medium term, we have to figure out what does work, and the way to do that is to try lots of different things. This is exactly what a smart business would do, so it’s good to see the government doing it.
By James Kwak
The Baseline Scenario 
The answer is that, in the medium term, we have to figure out what does work, and the way to do that is to try lots of different things.
I think we have figured out what doesn’t work, and that’s trying to tinker with the existing system but leaving it basically intact.
“Regulation”? Nope. “Triggers”? We know that’s always a poison pill. Counting on private insurers not to always act in as predatory and criminal a fashion as possible? I think everybody knows the answer to that.
It’ll be a war of attrition that the people will always lose for so long as this enemy exists. That applies to the insurance racket, and to every other racket.
“reduced subsidies, which I see as an increased tax on the currently uninsured middle class”
Getting less than you’d like of a subsidy that you never got before is a tax? I guess you don’t like Merriam-Webster either.
“we’re not sure how to solve it”?
Well, let’s consider looking at the data:
The common factor is either the abolition or castration of private health insurance. France, for example, is single payer and has half our costs and better outcomes (two years longer life expectancy). The UK, with it’s nationalized health insurance (“socialized medicine”) does even better on cost.
It’s disappointing to see the general media indifference to solutions that actually work — as opposed to solutions that can be spoken of in the discourse of Versailles — reproduced here at Baseline Scenario, even in a single post.
The tax is this individual mandate, which in the absence of a strong public plan would be as vile and tyrannical a loot conveyance to the insurance thugs as can be imagined.
The “subsidy” would be the utterly inadequate crumbs they’d throw to some of those who can’t afford this stick-up.
Ergo, reducing the subsidy raises the tax.
You can’t be gullible enough to believe any of this?
They’ve been so great solving the deficit problem, the financial regulation problem, the unemployment problem, the problems in education, I just can’t wait for them to solve our health care problem. They really know how to set incentives to produce better results, don’t they?
We’re talking about the US Congress. I find it incredible that anyone thinks solutions will come from central control. It’s great to sit back and make abstract arguments about linking payments to outcomes. Here’s how that works. The [insert industry here] lobby romances our (mis)representatives and the industry supplies payments to representatives’ campaigns. The representatives engineer legislative products to create great outcomes for industry.
I’ve heard there are already 500 proposed amendments to Baucus. This sausage is not going to taste good.
I am dismayed, but not surprised, that U.S. corporations ,with large numbers of U.S. employees , have not lobbied FOR socialized medicine to stay competitive in world markets. The continuation of private health insurance only means the demise of U.S. companies ( ie. Chrysler and General Motors) will re-occur much faster with their burden of added costs (versus their non-U.S. competitors) from private coverage of their employees. .
Then there’s what’s bad about it. Those 25,000 preventable deaths a year estimated by Physicians for a National Health Program stick in my gullet.
And that estimate did not factor in the likelihood that insurance costs would continue to grow out of all proportion to personal income, causing the numbers of uninsured and preventable deaths to grow again.
Just get ready folks. Get ready. Because whether it ends up a good piece of legislation, or a bad piece of legislation, the Republicans have the same answer to everything: “No!”. And the Republicans have no new ideas, just regurgitated versions of “trickle down” economics.
So near the same time this bill is passed all the Republicans will be whining about “Reconciliation!! Reconciliation!! Reconciliation!! Wah! Wah! Wah!” like old white babies crying in their Metamucil drink. They’ll talk about reconciliation as if it’s some crime, when the Republicans used the same tactic to pass laws for oil drilling in Alaska’s Arctic National Wildlife Refuge.
I agree that the individual mandate is the tax, but that was not what was said. I cannot tell from the text whether James likes the mandate.
On the Merriam-Webster reference, I just couldn’t help myself after seeing Stephanopoulos interview Obama.
“We have a general idea of what the problem is – economic incentives that are cut loose from outcomes”
The “incentives” argument above discounts the obvious: In the current system, there is a intractable conflict of interest between health care insurers and their customers. Health care claims – unlike auto and home insurance claims – have no ceiling; there is no “book value” on a human life. To make matters worse, each dollar of claim paid out by an insurer is one less dollar of corporate profit. Therefore, insurers have an huge incentive to deny claims.
“This is exactly what a smart business would do, so it’s good to see the government doing it.”
it behooves you to review plato’s republic, and the distinction explained therein between the incentives appropriate to businesses, and those appropriate to professions … the key reason why health care costs continue to grow so rapidly, is that the paradigm of health care has shifted from profession to profit. increasingly profit-focused policies will only reinforce that shift.
The answer is that, in the medium term, we have to figure out what does work, and the way to do that is to try lots of different things. This is exactly what a smart business would do, so it’s good to see the government doing it. Or, you could look around at other countries’ solutions. A lot has already been tried, though not on Americans.
Here, Here, ladies and gentlemen. The business-oriented sites and blogs like this one, provide more intelligent progrssive insight and commentary than any of the (less intelligent, at times, so it seems to me) progressive political/academic-oriented sites. Keep up the good work. I have nothing to add to your analysis.
What’s all-too-characteristic is that the Rep rationale according to which drilling ANWAR would have had anything to do with making it a “budgetary” matter was bogus on its face, but they never for a second worried about offending the “Senate parliamentarian”.
On the other hand everything about this health care legislation is as budgetary as it gets.
So take one guess on whether or not the Dems are supplicating before him.
With all respect, we already have various in-play co-ops and the Massachusetts plan to show us “a number of initiatives that will test different ways of reducing costs or improving quality…” Massachusetts is already making changes due to problems that have arisen, and we have the experiences of many unhappy consumers to tell us what isn’t working. The Baucus bill is a big fat Christmas present to the already fat insurance industry that utilizes none of the 3+ years of lessons from MA or the co-ops or the old Blue Cross/Blue Shield years, but rather is written as if they never existed. Why are they still gabbling, for instance, about malpractice tort reform, when the experience of states like California has shown us that it has no effect on insurance rates? Why? Because no rich ox shall be gored, and that’s what Baucus ensures.
They won’t be uninsured; it’s just that their insurance will provide no coverage of anything. Big difference.
It’s not as if we don’t have 2500 years of medical history, and at least 100 years of international comparisons to draw on.
We know that medicine works when you give doctors more autonomy. Things were going reasonably well until insurance companies and HMOs mucked them up starting in the late 80s. Take the thorn out of the side of medicine, and things will go back to normal.
One of the lessons learned from the late and unlamented Bush presidency is that it isn’t necessary for facts to influence policy. The left has adopted that attitude on healthcare.
1. The US spends alot but it does not lag the rest of the developed world in life expectancy because of anything to do with the inefficiency of the US healthcare system. Low US life expectancy is primarily due to high numbers of smokers in past years.See the NYT articles on this this past week.
2. The Mass. system is working well and is a vast improvement over what existed prior. 97% of the residents have health insurance. The cost problems are being worked and will be resolved. Recent criticism of the plan is that it is not providing enough care to illegal immigrants, the mentally ill and substance abusers, because ER subsidies to safety net hospitsl for free care are being cut.