Charlie Rose recently (i.e., Dec 15th) had an interesting interview with Ezra Klein, who reports and blogs on health care issues from the Washington Post.
The interesting part was mainly his commentary on our government, though his health care reform analysis was interesting too.
To summarize, he thinks that the HCR will pass soon, but that additional important health care reforms may be nearly impossible to pass with the way our government currently operates.
(To watch the full interview, go to www.CharlieRose.com and enter "Ezra Klein" in the "search videos" text box.)
According to Ezra Klein, the HCR will pass, because it's clear that there's enormous willingness to compromise, given how fast the Senate reacted to Lieberman's requirements (i.e., no public option, no medicare buy-in).
What's driving this willingness to compromise is that at the bare minimum, this bill will insure 35 million currently uninsured Americans, which will resolve an important issue. Also, the political calculus is that re-election will be more challenging if the Democrats are perceived to have failed on HCR.
Klein thinks that if the Senate passes the bill, the House may not even take it to conference. They may just vote on whatever bill the Senate passes, and then take it directly to the President. In this way, the HCR could pass before the State of the Union speech in late January. Otherwise, if it goes to conference, then changes may be made that could disrupt the delicate compromise and then there could be more debate and delaying tactics, while the mid-term elections draw closer.
Ezra Klein: The compromise in the Senate is so delicate and there is such an undeniable willingness on the part of Senators like Lieberman, Nelson, and Snow and others, to filibuster, that the House simply can't do what it would like to do and change this bill substantially. That it's too fragile. And if that is the case - you know, the House is much more afraid of the upcoming election than the Senate, because they're all facing the voters and they know they need to get this done. So, they may opt to simply do this quickly, get it done this year or very early next year, and get it to the President, so come the State of the Union, Democrats have a major accomplishment - and this is important to them - can pivot hard to jobs and the economy, and for that matter, the deficit. But if they let it drag out, if Congress begins to drag on, then they're sitting there with this giant bill, bad press coverage for a lot longer, and they're message gets stepped on.
But the one issue that would kill HCR is if the subsidies are not large enough to address the affordability of the health-care-insurance mandate. For a really good and personal diary on this issue, see the following diary from just two days ago:
Survived Bush: CANNOT AFFORD THIS BILL
Klein says affordability is the issue that could kill the bill.
Charlie Rose: Where would those Democrats who are willing to bite the bullet on public option, are there certain issues that they will say "no, I'm not going there for the sake of compromise and for the sake of health care reform in 2009 or 2010"?
Ezra Klein: Affordability. What you have with health care reform is three legs of a stool that interact very quickly. One is subsidies - the 900 billion dollars, the money we give to people below a certain level of income to help them buy the plan. The other is the individual mandate. And this is very important. The individual mandate says that pretty much everybody, except for people who really can't afford it - (it has to do with the percentage of income) - they have to buy in and if they don't, then they face a penalty. Now, if the subsidies aren't enough and the insurance regulations aren't enough to make coverage affordable for people, you can't have the mandate, because it's penalizing people for something they can't do. Subsidies are probably too low as it is. I think President Obama's level of 900 billion was actually too low for this bill. If that dropped, then you would see people fleeing the bill, not just because they think the bill is becoming bad, but because it's becoming a political liability. The individual mandate, if it ends up applying to a bill that is not affordable, it's going to be extremely unpopular.
Charlie Rose, then asks what the cost will be.
Charlie Rose: When you look at the cost of this, where do you think the real number is?
Ezra Klein: ... The price tag may be 900 billion dollars, but just as some investments end up returning money over time, I believe this one will too. What we have from the Congressional Budget Office - which is the best estimates we can go on - is that this bill will save money. And the reason it saves money is that it raises more revenue and it achieves more savings in Medicare and Medicaid and other elements of the health care system than it costs. Now some people are skeptical that will manifest and we could see some changes on the margins, but fundamentally the basic arithmetic of the bill is pretty sound and generally Congress does follow through on what it says it's going to do. A couple of people looked into this and tracked old Medicare savings efforts and mainly they worked. And so, we should see a slight reduction in the deficit the first ten years and a slightly larger one in the seconds ten years. Health care [reform] is not going to be a huge cost control device - at least at this point, as it is currently written - but it will not cost tax payers anything more in terms of borrowing.
Regarding the long-term challenges with Medicare costs, Klein says that there is a provision in the legislation for a "Medicare Commission", which both Senator Jay Rockefeller and the President supports. The Medicare Commission would be used to fast-track reforms that would lower costs. Klein says this could have a big affect, though it's impossible to estimate how big an affect that would be. But beyond discussing what this legislation would do, Klein says that we should also keep reminding ourselves that Medicare is on an unsustainable path, such that not only will Medicare go bankrupt but will also bankrupt the government.
Ezra Klein: So, at some point, we will need to save money in Medicare and we're not saving as much money as we will eventually need to do, but maybe we're making a start in putting in place some procedures that will help us do so in the future.
Klein says that Medicare works in providing care, but is not efficient, because our overall health care system is not efficient.
Charlie Rose: Do most people, whatever the numbers say, believe that Medicare works?
Ezra Klein: I believe the most people who are on it, believe that Medicare works. Does Medicare work in sort of an abstract policy-wonk way, yes and no. It's extremely efficient at providing insurance to seniors and it gives them generally speaking a very good experience. It, like the private market, is not a very efficient health care system, in particular the way it pays doctors. We pay doctors the way we pay salesman at Best Buy. We say if you sell us more stuff, we give you more money. That's good for a salesman at Best Buy, but maybe we don't want doctors to have the incentive to do more treatment, more surgery. So, that is one of the places people would like to see that changed. ... This bill tries everything everybody can think of to save money in Medicare. There are - most of the bill, when you hear 2074 pages - most of it are these pilot programs in Medicare. And they're pilot programs about changing the payment structure, about bringing more evidence to bear, about penalizing hospitals that have high post-op infection rates. They're honestly putting in a small version of anything anybody has thought of here. So, they are trying. The question is whether these programs works and how well they get moved up to scale is an open one for now. But there's simply no doubt that this bill, as insufficient as it may be, is the single largest cost-control effort we have ever made in the health care system. Nothing we have done is even close.
Klein describes the significance of the HCR bill, if it pass. He says that it would be a big step forward, but would not be sufficient to deal with the cost issue. The next step will need to be cost control and will politically be much more challenging than this step.
Ezra Klein: We say two things. This will simultaneously be the largest step forward in social policy since the Great Society and a sharp reminder of how little our system can do about problems we all admit that we have. ... This bill is both quite an achievement and a recognition of our limits and at some point, we are not going to be able to content ourselves with having picked the low-hanging fruit. We're going to have to sit down and make hard decisions and hard choices on cost, and there won't be the spur and the shiny goal of covering the uninsured. They're will be a lot less, and we're still going to have to do it. This bill is a good first step. It will make the next one easier, but the next one is actually going to be the harder one. And I don't think anybody looking at this process should be very confident that we will be able to take it.
Charlie Rose: What's the next step?
Ezra Klein: In a very hard way, cost control. Not just starting with procedures and the pilot programs. But telling doctors, hospitals, device manufacturers, and pharma, that you're going to make less money next year than you made this year or you are going to make a lot less money in ten years than you expect to be making now. And that's going to be very hard.
Klein says our "first problem" is fixing our government, particularly Congress, because until we fix our government, we really cannot make much progress on solving many of the nation's problems.
Charlie Rose: Tom Friedman makes the argument in conversations that we are finding out and I think this is exactly what you just said in another way, we're finding out that the political system we have does not produce the best option, the most attractive means of dealing with public problems. Can you go to that point or are you somewhere less than that?
Ezra Klein: Absolutely. I would indeed go further. ... Imagine an alcoholic. That alcoholic could be losing his family, he could be deep in debt, he could have cirrhosis of the liver and you might look at him and say that his worst problem is not that he has 3 or 4 drinks before he goes to bed at night. But it is the first problem. It's the one you're going to have to solve before you can solve all the others. And I've come to believe in this process that our first problem is at this point Congress, our government. I do not believe we can solve our problems. I do not believe that we have the capacity to solve cap & trade and in the future to solve health care reform, the entitlement crisis, to reform the tax code. The filibuster has become the central governing reality in this country. It was not that way 40 years ago. I found in some historical research that somebody sent to me, a memo sent to Lyndon Johnson about passing Medicare with 55 votes. You would never send that memo today. You don't pass things that way. At the same time, we've become much more polarized. It's harder for the parties to work together. We have a system, in which on the one hand, we have made the rules such that we need more consensus, and on the other, we are able to achieve less of it. And if you want to see where that ends up, look over at California, where I come from, where we saw governmental dysfunction for many years and we assumed when it came down to it, they would be able to act. And then when an emergency happened, they couldn't act. All the things we knew were wrong with the government got worse, not better. The minority party had both an incentive and the ability to see the majority fail. And you can't work a system like that. The minority can want the majority to fail or they can be able to make the majority fail, but not both.
Klein says one of the main problems with our system is that we focus too much on the Presidency as the vehicle with which to fix our problems. Instead of focusing (as much as we have been) on getting better Presidents, we should shift some of this focus onto getting better Congressional members.
Charlie Rose: And the President himself, can you argue they did the best under the circumstances? And any quarreling with how they approached this is simply nibbling at the edges.
Ezra Klein: I basically agree with that and I would just say that I think one of the serious problems our system has - and this is the fault of many of us in the media - is how much we overemphasize the President. The President does not have the power that Congress has. He cannot write legislation. He cannot vote on it. And he cannot pass it. Even if he vetoes it, it can be overturned. We think of politics in terms of the President. We imagine he sets the agenda for Congress. When Congress isn't doing well, we in the Press, we say the President's strategy has been poor this year. But we should not need the President to approach Congress with perfect tactical brilliance, in order to get our legislative body to legislate. That isn't a sustainable way to run this country. And so I do think you end up in a situation there where... You know, I do think the Obama administration has been quite wise in the way they've handled this, but broadly speaking, I think a big part of the problem is that they don't have the power that many would like them to have. And if they don't have that power and we are waiting for them to exercise it, you do end up in a bit of a space between the perception about how politics works and how to change it and reality. I think the American people tend to think the lever they should pull to make the country better is the Presidency's lever, and I think that much more of the attention needs to focus on Congress."
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Summary of Ezra Klein's Points
- HCR will likely pass by early next year, maybe before the State of the Union address. However, it could be killed if the insurance subsidies are lowered for low-income households.
- HCR will save our country money, at least according to the analysis made by the Congressional Budget Office.
- HCR will result in 35 million uninsured Americans getting health care insurance, which in turn will "save thousands of lives, keep people from medical bankruptcy, keep people from becoming infirm or in chronic pain, it will do an enormous amount of good".
- HCR will not fix the long-term budget issues with Medicare and the overall high cost of health care. In order to fix these problems, we will have to find a way to make our overall health care system more efficient. This will be politically challenging, because making the system more efficient will mean that doctors, hospitals, device manufacturers, pharma, etc, will make less money.
- We cannot fix the cost issue with our health care system until we fix the "first problem", which is our government, specifically Congress. The problem is that we cannot tackle challenging public issues, given the fact that the filibuster has become such a powerful tool and that minority parties have a willingness to use the filibuster just for the political gains that accrue from making the majority party fail.
- One way we can begin to fix the "first problem" with our government is for us to shift some of our intense focus away from the office of the Presidency to the many seats in Congress. We need to elect a better Congress.
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My Comments
I agree with much of what Ezra Klein says. But I'm skeptical about blaming the filibuster as a critical cause of our government's inaction on looming public issues.
I remember a few years ago, when the tables were turned and the Republicans had control, I was listening to talk radio and somebody called up Bob Brinker's radio show and was blaming the Democrats for the poor performance of Congress, by saying that the problem was that the Democrats were using the filibuster and the Republicans didn't have the 60 votes to make a filibuster-proof majority. Bob Brinker replied that it was absurd to blame the Democrats when the Republicans controlled the House, the Senate, and the Presidency. I laughed in agreement. And though I don't laugh now, I still don't think that's the essential problem.
I think the problem is still the moneyed interests. I mean, why as Klein says, is it so politically difficult to pass legislation that will reduce health care costs in such a way that the medical industry makes less money? Yet, it was pretty easy to pass a 700 billion dollar bailout for the largest financial companies.
Yet, I agree with Klein that our "first problem" is our government and I agree that we need to focus more on Congress than the Presidency.
Also, I agree with Klein that fixing the long-term costs with health care will likely mean less money for the medical industry. We need to somehow fix the incentive system, so that the medical industry doesn't make more money by just prescribing more patented, complex, and expensive products and services regardless of whether it actually makes people healthier.
There was a really good podcast of "This American Life" which focused on health care costs in this country. (To listen to the podcast, click the following link for the episode #391 titled "More is Less".)
17 minutes into the episode:
"One of the many doctors I talked to in Maine, was an eye specialist named Frank Reid and he told me this story: 'My old partner that I joined here in 1971 was asked by a friend of his, 'At what level of vision do you do a cataract operation' and he said 'well, if there's one ophthalmologist in town, it's 20/200.' 20/200 is pretty bad vision. 'If there are two ophthalmologists in town, it's 20/80.' Not so bad vision. 'If there are three ophthalmologists in town, it's 20/40.' Pretty good vision. ... In other words, the criteria easily shifts. ... The number of doctors in an area can influence the amount of medical services consumed. The more doctors, the more procedures, the more appointments, the more money spent."
"You could definitely see this in the 1970s. To drive down costs in medicine, the Federal Government created a program to send more people to go to medical school. The theory was that when there were more doctors, doctors would be forced to drop their prices to compete for patients - basic economics. But that's not what happened. The doctors just adjusted their criteria for doing stuff and had the patients they had, come in more often. Because in health care, supply drives demand. So, when the supply of doctors and clinics increases, the demand for medical services goes up."
"... You see the majority of doctors in this country are not paid on salary, but are paid for each thing they do, a la carte. ... If you pay people more, the more things they do, they're going to do more things. ... One of the most popular operations among back doctors these days is this complicated procedure called an "instrumented fusion". ... In the old days, the doctor used a much simpler and safer operation, but the new more complicated one costs more. Surgeons could charge more, because they were doing these complicated procedures. ... So, you had a whole new high-tech procedure that was enormously attractive to spine surgeons and it literally took off in this country. And at the same time, they had no research to support what they were doing. In fact, the one high quality study that did exist showed ... that the old-fashioned non-instrumented fusion was as successful as the instrumented fusion, which was a real blow."
"A group of healthcare researchers at Dartmouth College ... estimated that about 1/3rd of medical care is unnecessary in this country."