Wednesday, March 06, 2013

The Yin And Yang*

You probably won't hear it on the Tonight Show with Jay Leno. Or on Letterman, Fallon, Kimmel, O'Brien, or any of the other overpaid entertainers posing as comedians on late night television.

Now that I've alienated approximately half of my readership, I'll move on to approximately half of the the rest... the half that still believes.

The New York Times last June ran a story offering historians, who make far better comedians than late-night talk show hosts, a chance to wallow in absurdity.   Mark Landler wrote

For Barack Obama, who staked his presidency on a once-in-a-generation reshaping of the social welfare system, the Supreme Court’s health care ruling is not just political vindication. It is a personal reprieve, leaving intact his hopes of joining the ranks of Franklin D. Roosevelt, Lyndon B. Johnson and Ronald Reagan as presidents who fundamentally altered the course of the country.

For all its weight, however, the judgment does little to settle the bitter debate, spanning decades, over the proper role of government in American life. That debate rages on, with the next acid test only four months away — an election that will give voters the chance to render their verdict on Mr. Obama’s ambitious legacy.

What the Supreme Court’s decision does do is preserve Mr. Obama’s status as the president who did more to expand the nation’s safety net than any since Johnson. It preserves a bill intended to push back against rapidly rising income inequality. And for a self-consciously historic figure, it allows Mr. Obama to argue that he has delivered on the most cherished goal of his 2008 campaign: “Change we can believe in.”

“Historians will compare this to F.D.R.’s Social Security and Lyndon Johnson’s Medicare,” said the historian Robert Dallek, who has written about both presidents. “This is another step in humanizing the American industrial system.”

In political terms, said Douglas G. Brinkley, a professor of history at Rice University, “It’s the cornerstone of what could turn out to be one of the most extraordinary two-term presidencies in American history.”

Joining Dallek and Brinkley in Obama-worship was staff writer Landler, who believes Obama is "the president who did more to expand the nation's safety net than any since Johnson" and "has constructed his political career on the notion that Americans are ready for something different after three decades of rising inequality and slow-growing incomes for the middle class."

Eight months later, with the President practically begging the anti-government party to cut Social Security benefits, president and executive director Neera Tanden of the Center for American Progress told the Hardball audience Monday

Well, look, I think that there are solutions in the Affordable Care Act and that they should be strengthened.

And one of the challenges is we don`t have enough competition. There`s not competitive bidding. So, one of the things is that people can charge exorbitant prices and there`s no competition to get a lower price. It`s something that this really amazing article points out, and I think that is -- there are a number of steps.

It doesn`t matter who is paying for things and how they`re paid for. Some of the ideas around bundling and insuring that we`re paying for episodes of care will help illustrate why -- it will help actually create incentives to lower the cost of every individual item, every particular service.

So there are steps within the Affordable Care Act that get at why prices are so high. We should take additional steps, and they`re not sufficient. We should do more.

While running an excellent blog, the Center for American Progress functions as a stalwart defender of the Obama White House.  Because she was on the program with Time's Steven Brill, Tanden wisely conceded "we should do more" to lower health care prices.  Still, she was exposed and Brill, politely and quietly, took his shot, explaining

Well, I think the fair thing -- with all due respect to Neera and her work, the fair thing is to say that they tried.

But the reason Obamacare passed was it didn`t do anything to cut into the profits of the drug companies, of the hospitals, the exorbitant profits that your local non-profit hospital makes even though we think it`s a nonprofit.

The Affordable Care Act did nothing to cut the profits of everybody involved. In fact, if anything, it`s going to add to the profits because it`s going to put more people into health care which is a good thing.

They`re going to have insurance, but the taxpayers are going to subsidize that.

Brill stopped just short of humiliating Tanden in his synopsis of the impact of the Affordable Care Act on the cost of health care.   At the conclusion of his Time article, Bitter Pill: Why Medical Bills are Killing Us, Brill offered suggestions for improvement while providing an objective summary of the advantages and disadvantages of the PPACA. He noted that the architects of the legislation

know what the core problem is — lopsided pricing and outsize profits in a market that doesn’t work. Yet there is little in Obamacare that addresses that core issue or jeopardizes the paydays of those thriving in that marketplace. In fact, by bringing so many new customers into that market by mandating that they get health insurance and then providing taxpayer support to pay their insurance premiums, Obamacare enriches them. That, of course, is why the bill was able to get through Congress.

Obamacare does some good work around the edges of the core problem. It restricts abusive hospital-bill collecting. It forces insurers to provide explanations of their policies in plain English. It requires a more rigorous appeal process conducted by independent entities when insurance coverage is denied. These are all positive changes, as is putting the insurance umbrella over tens of millions more Americans — a historic breakthrough. But none of it is a path to bending the health care cost curve. Indeed, while Obamacare’s promotion of statewide insurance exchanges may help distribute health-insurance policies to individuals now frozen out of the market, those exchanges could raise costs, not lower them. With hospitals consolidating by buying doctors’ practices and competing hospitals, their leverage over insurance companies is increasing. That’s a trend that will only be accelerated if there are more insurance companies with less market share competing in a new exchange market trying to negotiate with a dominant hospital and its doctors. Similarly, higher insurance premiums — much of them paid by taxpayers through Obamacare’s subsidies for those who can’t afford insurance but now must buy it — will certainly be the result of three of Obamacare’s best provisions: the prohibitions on exclusions for pre-existing conditions, the restrictions on co-pays for preventive care and the end of annual or lifetime payout caps.

Put simply, with Obamacare we’ve changed the rules related to who pays for what, but we haven’t done much to change the prices we pay.

*not necessarily applicable to the post, but I always wanted to write "yin and yang"

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