Wickersham's Conscience

So it’s in the hands of the U.S. Supreme Court now. We heard the arguments, heard the querulous questions of the Justices (all those old voices), and listened to the hordes of tea-leaf readers. WC, while he has little confidence in the U.S. Supreme Court, has no idea how it is going to turn out.

But between now and a decision late this summer or early next fall – at the earliest – WC will leave you with this quote, from David Frum, over at The Daily Beast. If ACA is held unconstitutional, what next?

In that case, Republicans will need a Plan B. Unfortunately, they wasted the past three years that might have developed one. If the Supreme Court doesn’t rescue them from themselves, they’ll be heading into this election season arguing, in effect,Our plan is to take away the government-mandated insurance of millions of people under age 65, and replace it with nothing. And we’re doing this so as to better protect the government-mandated insurance of people over 65—until we begin to phase out that insurance, too, for everybody now under 55.

In the meantime, we are all in stasis, a stasis we can ill-afford, waiting for the Court’s decision. Well, everyone but the health insurance industry, who doubtless will continue to raise premiums.

The fate of the Affordable Care Act will be handed to the very conservative U.S. Supreme Court this week. There will be three days of oral argument, and then the SCOTUS will take the various challenges to the law under advisement.

This isn’t a surprise. It was a given from the day the bill was signed into law. But there have been a couple of developments since enactment that bear on the SCOTUS’s decision and the climate in which that decision is going to be made.

Historically, citizens have gotten their health care through their employers. But the evidence is overwhelming that employers have been ending health care coverage.

Employer-provided Health Care - Source: Center for Studying Health System Change (HSC)

In just three years, the percentage of employers providing health care coverage declined from 63.6% to 53.5%, a decline of 10%. As the graph shows, most of those folks are now uninsured, or are unemployed or marginally employed and eligible for Medicaid. In all of those case, it’s the U.S. paying for their health care coverage, and not the citizens themselves.

If the key provisions of health care reform are struck down by the SCOTUS, the misery is only going to increase. Because delayed health care means more expensive health care, the costs of health care to the nation, already increasing too rapidly, will accelerate.

While WC hasn’t found data to support this, WC suspects that among employers still providing health care, the quality of coverage is contracting (higher deductibles, bigger co-pays, more exclusions) at the same time as premiums increase at multiples of inflation. For WC’s small company, 20% annual premium increases are the  norm. If the SCOTuS kills Affordable Care, we can expect those trends to accelerate, as well.

Those citizens who wax hysterical about the intrusion on freedom, or shriek about mandated coverage: think beyond your own pocketbook for a moment, and consider the economic health of the nation as a whole. This simply cannot go on. It will bankrupt our economy. And if you cannot think beyond your own pocketbook, ask yourself what you will do when your employer pulls the pin on your health coverage, because absent a mandate, it is gong to happen.

To have a brief discussion on politics and evolution.

The Obama administration is drawing a lot of fire for its recent regulation requiring all employers provide health insurance plans that provide free contraceptives. The political reality is that most Americans – and most Catholics – support the idea.

Approval of Free Birth Control by Belief Groups - Graphic by Sarah Kliff

But let’s set the politics aside and examine the biology of the issue. You know, the science?

Any species that engages in conduct that is contrary to the species long term survival is dooming itself. The peacock’s tail: It may be very appealing to peahens, but it’s a serious handicap when you are trying to escape a predator.

Start with the premise that there are a couple billion too many people on the planet. If you disagree with that premise, you are irrational and should skip ahead to the next blog post. Now, if your species is able to develop a tool that allows you to voluntarily control that population, it beyond stupid not to use that technology. It is contrary to the species’ survival; it’s against our collective self-interest.

As the chart shows, Catholics are smarter than their Catholic leadership. They ignore Catholic dogma. Especially American Catholics ignore the prohibition on contraception. Overwhelmingly. Really since contraception became widely available. All those tirades from the pulpit and still something like 85% of American Catholics have used forms of birth control unapproved by the Church.

No, it’s the White Evangelicals who object to birth control, demonstrating that they are not as smart as their leaders, and insist on following contra-survival strategies. They insist upon procreating in the name of their god and exploding the population bomb that imperils the planet. Thats bad enough, But as the Republican’s strategy shows, they insist, in the name Christianism, in imposing their values and their world view on their fellow Americans. Clowns like presidential wannabe Rick Santorum want us to procreate until the poor, exhausted environment collapses under the weight of humanity.

Is this part of the denial of evolution? The rejection of science? For humanity as a whole, it’s a burgeoning evolutionary crisis. Hello?

We’ll now return to your regularly scheduled nature photography.

Serious props to Morgen Richmond, who unearthed this clip of Newt Gingrich endorsing the key components of the health care plan he now reviles.

Once again, you can see the litmus test for Newt’s positions is how they benefit Newt. What’s changed since 2009? Nothing. Except Newt is running for an office that requires him to be opposed to a health care mandate…

Presidential Wannabe Mitt Romney famously said, “I like being able to fire people.” And it is perfectly clear that the quote was taken out of context:

I want individuals to have their own insurance. That means the insurance company will have an incentive to keep people healthy. It also means if you don’t like what they do, you can fire them. I like being able to fire people who provide services to me. If someone doesn’t give me the good service I need, I’m going to go get somebody else to provide that service to me.

But if the media would look a little more closely at Romney’s comment, they’d see an unholy mix of lies, deception and half-truths in the full quote. As well as a glimpse to Romney’s mind-set at this point in the campaign. WC will undertake his own examination.

1. Romney seems to be implying that the Affordable Care Act prevents people from firing their insurer. That’s simply untrue. Romney, of all people, knows it is untrue because the Affordable Care Act is based on the Massachusetts health care plan, which was supported and signed into law by Romney. There are lots of reasons why a prudent patient might not want to fire their insurer; some of them are discussed below. But Romney is intentionally misleading voters, and he knows he is.
   

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2. Romney seems to also be implying that individuals don’t get their own insurance under the Affordable Care Act. For better or worse, a sole-provder system was never seriously considered. The Affordable Care Act specifically preserves the right of an individual to shop for insurance. Again, this is the Massachusetts plan, the plan Romney sponsored; the plan Romney signed into law. He absolutely knows the Affordable Care Act doesn’t impair patient choice. He’s lying again.
   

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3. Romney implies that the insurance market has no restrictions on entry; that is, that a patient can change insurers without running into financial or other barriers. That might be true if your income if $26 million a year. But if you have a pre-existing condition, you don’t date fire your insurer, because, until the Affordable Care Act, you wouldn’t be able to find another insurer to provide you with coverage. Let’s suppose you’ve been diagnosed with cancer and the insurer you have is screwing you around. Can you “fire” your insurer and “get somebody else to provide that service to me”? Not a chance. No insurer is going to touch you with a barge pole. Sure, if you offer them enough money they might condescend to insure you. But most of us don’t have that kind of money. Romney knows all this. But it serves his purpose to pretend it doesn’t exist; it serves his purposes to lie.
   

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4. Many of us – about 45% – as far as WC can tell – get our health insurance through our employer. We have little or no choice in who our employer  selects as our insurer. The only way we employees can “fire our insurer” is by quitting our jobs. Of course, Mitt Romney is famously unemployed, and the poor boy has to make do with annual installment payments of $26 million from Bain Capital. Mitt knows  employers select insurers, not employees. It’s deeply disingenuous, at best, for him to imply otherwise.
   

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5. Romney seems to believe that all insurance markets have as many health insurers as, say, Massachusetts. There are states with smaller populations where there are only a very few insurers. Like Alaska, where Premera/Blue Cross completely dominates the market. You can’t fire Blue Cross, because there is no one else. Sure, you can “fire” Blue Cross, but that’s a false choice because effectively there is no one else. And the Republicans’ claims that state regulators impose barriers to market entry is again, untrue. If there was money to be made, the insurers would be here. And if the Republicans are claiming that the health insurance industry needs less regulation and not more, they are dangerously delusional. And have never had to deal with an Explanation of Benefits, or, as WC prefers, a Nonexplanation of Nonpayment of No Benefits.

So when you really examine that statement giving rise to the quasi-gaffe, it turns out to be more troubling that the quasi-gaffe itself. There’s a conscious , intentional pattern of deception.

And WC won’t even go down the path of quotes taken out of context, or mention an infamous instance of Romney taking President Obama’s words out of context.

And if they’ll lie to you now, how can you trust them if they get elected?

Despite the wretched outcome of his wishes for 2010 and wishes for 2011, WC will once again set out his wishes for 2012. While it is tempting to moderate those wishes, WC is not inclined to lower his expectations in the hope of greater success. So here they are: WC’s wishes for 2012:

1. Overpopulation. Among the crises facing the planet is human overpopulation. During 2011, we rolled the odometer over to an estimated  7 billion. To a deplorable extent, especially in the Western world, the rate of population growth is a function of religious teachings. The Catholic church’s and the Latter Day Saints’ crazed obsession with large families would be two examples. When religious dogma have counter-survival effects, it’s past time to change them. WC calls on those latter day saints and infallible pontiffs to have a revelation: that further growth of human populations is terrible, and must be controlled, that more than two chldren is a sin by whatever definitions they use.
2. A second great crisis facing humanity is anthropocentric climate change. The way things are going, to paraphrase Pratchett and Gaiman, we are going to scourge all intelligent life from the planet, leaving nothing but dust, cockroaches and fundamentalists. The time for denying man-caused climate change is past. Can we at least shift the debate about how to deal with it? And can all the global warming-denying politicians who have sold their small, dark, crabbed souls to the fossil fuels industry have a look in the mirror and ask themselves, “Do I care about my gtandchildren?” There will come a day when fossil fuel lobbyists and the politicians they have purchased will be held in the same contempt as Congressmen who defended slavery, or claimed tobacco was harmless. Why not now?
3. The health care crisis facing facing America threatens to sink the economy of our country. The Affordable Care Act remains the only half-way comprehensive solution presented. The need for health care is not going to magically vanish if Medicare and Medicaid are repealed. Passing a reduced amount of money out as vouchers isn’t going to reduce spending or lower costs. It is absolutely clear that traditional capitalist solutions are an abject failure in controlling costs. We’ve been trying it for the last 50 years and it has gotten us where we are. The neocons have to come up with  specific, functional proposals to fix a real crisis, or shut up. Not more of the same. Real solutions.
4. Despite the Republican presidential wannabes’ lies, distortions and self-deception, President Barack Obama as a national leader is vastly superior to Mitt Romney and all the Not-Mitts. Despite the protracted and concerted efforts of the Republicans to blow up the economy rather than allow him to effect reasonable repairs, the economy has improved. He has done more to slap down Islamofacsist terrorism than his predecessor managed with two land wars in Asia, up to and including the assassination of bin Laden and the liberation of Libya. He has gotten us out of George W. Bush’s disastrous, ill-conceived and unnecessary war in Iraq. He has stopped and repudiated the use of torture as an instrument of national policy. He has enacted the first real health care reform in the United States since Medicare. He has saved the plutocrats from their own greed and folly. And he has done all this is the face of an unscrupulous U.S. House that would tear the country to shreds if it had its way. Re-elect him. And while we are at it, pitch the Teabaggers out of the U.S House.

So there you have it: four modest, sensible and practical wishes. WC cautions against holding your breath while waiting to see if they come true.

Happy New Year, everyone.

During the health care debate, and even now, you hear tales of how terrible the Canadian single provider health care system is. How Canadians can’t get treatment and come to the U.S. so they can get the care they need. We’ve all heard the anecdotes.

And that’s what those stories turn out to be: anecdotes. Using three different methodologies, a publication in a peer-reviewed journal, Health Affairs, looked at how many Canadians actually do come to the U.S. for treatment.

Canadians' Health Care in the U.S.

The answer, despite all the stories, is a vanishingly small percentage. And the numbers in this chart include Canadians who required medical treatment while visiting in the U.S.

All of which is why WC puts little credence in anecdotal evidence and more in science. If you hadn’t guessed.

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In Andrew Sullivan’s apt phrase, “The fish rotted from the head down. Last night, we got a whiff of the smell.” As a matter of raw statistics, at least 13 out of every 100 Teabaggers cheering the death of the hypothetical young man who didn’t have health insurance do not themselves have health insurance. And the 13% rate was in 2008; subsequent unemployment increases will surely have raised that number. The Teabagger crowd lacks the introspection of a rabid skunk or is deluding themselves that they are immune to all disease and accident. It makes WC embarrassed to be an American.

But going beyond the Libertarian clap-trap, the Emergency Medical Treatment and Active Labor Act (EMTALA) was adopted in 1986 to address the problem of “patient dumping.” Simply put, any hospital accepting federal funds (excluding VA, IHS and Shriners’ Children’s Hospitals) are not permitted to turn away emergency patients, regardless of their ability or inability to pay. The hypothetical posed to Dr. Paul can’t happen.

Of course, that emergency room care comes at a price. And since the patient cannot pay, we all get to pay. Hospitals – even nonprofit hospitals – have to make money, so the cost of treating EMTALA patients gets passed along to those of us who do have health care coverage, in the form of higher rates. TANSTAAFL and all that. A great many emergency rooms visits are the result of a failure to obtain basic or preventative care. So in addition to increasing everyone else’s health care expenses by being uninsured, those ER patients often have avoidable emergency conditions.

In a very real sense, the Patient Protection and Affordable Care Act – the much-derided “Obamacare” – is simply a recognition of the insanity of current practices. Instead of dealing with health care at the ER door, instead of waiting until it is a crisis and treatment is more expensive, deal with it earlier.

And those cheering Teabaggers: It’s easy to talk the talk; let’s see the Teabaggers walk to the walk. WC suggests that if the Teabaggers really want a health emergency to mean death for the uninsured, then seek repeal of EMTALA. By all means, let’s go back to the ambulances driving from hospital to hospital, looking for someone to help a critically ill victim. Pile ‘em up outside the ER door to live or die. That’s civilized. You betcha.

The Teabaggers are likely to return to their attacks on the Affordable Care Act when they “return to work” after the summer recess. As a help to readers, WC offers the following handy history of health care laws containing an individual health mandate. What’s interesting about the history of health care mandates is that it primarily a Republican idea. (WC has had to tweak the table to get it to look even halfway decent on WordPress. Sorry for the cramped appearance.)

Federal Health Care Bills Containing an Individual Health Insurance Mandate, 1993-2009 Date Bill Sponsor(s) CRS* Description of Individual Mandate 1. Nov. 20, 1993 (date introduced) Consumer Choice Health Security Act (SB 1743) (624 KB)  Sponsored by Senator Don Nickles (R-OK) & 24 Republican cosponsors “Subtitle C: Employer Provisions - Requires employers to: (1) withhold health insurance premiums from employee wages and remit such premiums to the employee’s chosen insurer; and (2) notify employees of their right to claim an advance refundable tax credit for such premiums.” 2. Nov. 23, 1993 (date introduced) Health Equity and Access Reform Today Act (SB 1770) (1.6 MB)  Sponsored by Senator John H. Chafee (R-RI) & 20 cosponsors (2-D, 18-R) “Subtitle F: Universal Coverage - Requires each citizen or lawful permanent resident to be covered under a qualified health plan or equivalent health care program by January 1, 2005. Provides an exception for any individual who is opposed for religious reasons to health plan coverage, including those who rely on healing using spiritual means through prayer alone.” 3. Jan. 18, 2007 (date introduced) Healthy Americans Act (SB 334) (427 KB)  Sponsored by Senator Ron Wyden (D-OR) & 17 cosponsors (7-D, 1-I, 9-R) “Healthy Americans Act - Requires each adult individual to have the opportunity to purchase a Healthy Americans Private Insurance Plan (HAPI). Makes individuals who are not enrolled in another specified health plan and who are not opposed to coverage for religious reasons responsible for enrolling themselves and their dependent children in a HAPI plan offered through their state of residence. Sets forth penalties for failure to enroll.” 4. Feb. 5, 2009 (date introduced) Healthy Americans Act (SB 391) (394 KB)  Sponsored by Senator Ron Wyden (D-OR) & 14 cosponsors (8-D, 1-I, 5-R) “Healthy Americans Act - Requires each adult individual to have the opportunity to purchase a Healthy Americans Private Insurance Plan (HAPI), which is: (1) a plan offered by a state; or (2) an employer-sponsored health coverage plan. Makes individuals who are not enrolled in another specified health plan and who are not opposed to coverage for religious reasons responsible for enrolling themselves and their dependent children in a HAPI plan offered through their state of residence. Sets forth penalties for failure to enroll.” 5. Dec. 24, 2009 (date passed) Patient Protection and Affordable Care Act (HR 3590) (2.2 MB)  No sponsors. Bill re-written by Senate Democrats. No Republican Senator voted for the bill. Read more. “Subtitle F: Shared Responsibility for Health Care – Part I: Individual Responsibility - (Sec. 1501, as modified by section 10106) Requires individuals to maintain minimal essential health care coverage beginning in 2014. Imposes a penalty for failure to maintain such coverage beginning in 2014, except for certain low-income individuals who cannot afford coverage, members of Indian tribes, and individuals who suffer hardship. Exempts from the coverage requirement individuals who object to health care coverage on religious grounds, individuals not lawfully present in the United States, and individuals who are incarcerated.” * CRS is the Congressional Research Service.

In fact, so far as WC can discover, the whole idea of an individual health care mandate originated with The Heritage Foundation, a very conservative think tank in Washington, D.C., in 1989. So it turns out that it’s not the idea of a crazed liberal crowd of Democrats. See Assuring Affordable Health Care for All Americans (1.6 MB) , by Stuart M. Butler.

Of course, Republicans can’t be bothered by history, and where it inconveniences them, they ignore it. But still.

As most readers know, the Affordable Care Act is under sustained legal attack in at least four federal court districts. To this point, the decisions had all been by U.S . District Judges; interesting, but not authoritative.

Today, the first court of appeals decision was announced. While everyone thinks that ultimately the U.S. Supreme Court will decide the constitutionality of health care reform, unless and until the high court does, the federal court of appeals decisions are very important. And not just because the U.S. Supreme Court has to take those intermediate court decisions into account.

The Sixth Circuit out of the midwest ruled the Affordable Health Care Act constitutional today. A three judge panel – two Republican appointees and one Democrat appointee – found unanimously that the Commerce Clause empowered Congress to take the actions that it did. The 64-page opinion is straight up; there’s no legal games being played. The law is held up against precedent and found to be constitutional. It will be interesting to see how the opinions that are expected soon from panels in the Fourth Circuit in Richmond, Va., and the Eleventh Circuit in Atlanta are affected by their Sixth Circuit cousins.

But the first round goes to the rule of law.

The full quote is,

What’s in a name? That which we call a rose
By any other name would smell as sweet.

William Shakespeare, “Romeo and Juliet,” Act II, Scene 2

And WC’s point is that US House Speaker Leader John Boehner’s proposal for means-testing for Medicare is the same tax on the wealthy that already makes Republicans wax hysterical.

Progressives want to increase the tax rates on the wealthiest 10% of Americans to close the fiscal gap created by the Bush-era tax cuts. The purpose of the those tax-cuts was the repeatedly disproven idea that you can grow the economy by decreasing taxes. That didn’t work so well, as evidenced by the worst recession in decades, but that’s not stopped the Republicans from vowing to give the rich even bigger tax cuts.

Speaker Boehner suggested closing some of the Medicare funding gap by creating a means test for Medicare coverage. If, say, you made more than $100,000 a year, you’d pay an extra $10 a month for Medicare coverage for each $10,000 in additional income.

But if you have the intellectual skills of a retarded goldfish, you can see that’s just a tax increase on the wealthy. You’re making the wealthy pay more, but calling it a “Medicare premium increase” and not a “tax” apparently makes it politically palatable to the Neocons. A rose my any other name.

As a form of disguised tax increase, means-testing for Medicare may be more likely to cause economic distortions than a simple tax increase. It’s a selective tax increase, instead of a broad-based one. Seniors will base their retirement decisions on Medicare premiums; that will have hard to predict results.

But if calling a rose something else will get it in the bouquet, then WC has no objection. Medicare means-testing, while not ideal, is far preferable to Ryan’s proposal to kill it.

WC has examined the U.S.’s health care crisis in a series of recent posts. Like a quack physician faced with something he doesn’t understand, Republicans insist on treating the wrong symptoms while ignoring the causes of the problem.

The most egregious example of ignoring real solutions is Canada’s successful solution. The Incidental Economist has a very thorough analysis of the excuses and distortions offered to condemn Canadian health care, and demonstrates the Republican claims don’t hold up to examination. WC strongly recommends Allan Carroll’s excellent post. Paul Krugman has similar, if less detailed, comments. Canada now offers a health care system that, by any number of measures, gets much better results for about half the cost. Unlike ours, it works pretty well. Also unlike ours, it doesn’t prey upon the poor.

WC suspects the lies and distortions Republican offer as grounds for avoiding Canada’s single-payer system are traceable to those who would be hurt the most by a conversion: the U.S. health insurance industry. But since 1966, Canada’s system has provided quality care to all, at greatly lower cost. The only reason we don’t have a similar system in the U.S. is a highly successful,very well funded lobbying campaign by the big winners in the current, gravely dysfunctional system. And a political party in the United States that for its own, crassly political reasons refuses to face the real issues.

WC is undertaking an intermittent series on Medicare, and specifically on claims about Medicare that are simply untrue. WC earlier examined the claim that increasing the co-payment obligation – making seniors pay more – will save money, and the claim that privatization will save money. Now WC will examine the claim that making patients have “skin in the game” will save Medicare money.

“Skin in the game” is the inelegant Republican phrase for sharing of medical expenses, the cost of Medicare, between the government and the patient. It’s inappropriately lifted from Warren Buffet, who approves of highly aid executives investing their own money in the companies they are running. The metaphor isn’t a good fit for the Medicare situation. The idea there is that if the patient is paying a chunk of the medical bills in the form of co-payment and deductibles, the patient is less likely to run to the doctor and spend Medicare money over silly little things.

The most famous research on patient cost-sharing is the RAND Health Insurance Experiment, which was conducted with 2,750 families from 1971 to 1982. Each family was randomly assigned to one of five formulas determining how much of their medical expenses they would pay themselves.

The RAND results showed that the introduction of cost-sharing can reduce medical spending without causing harm to health. That’s the holy grail of health policy. The biggest reductions in the RAND study, though, came in moving from zero expense for families to at least some cost-sharing. As we already have some cost-sharing in our current system (co-pays and deductibles), that finding doesn’t suggest a new path to savings. And, unfortunately, the results from raising cost-sharing above current levels were generally more modest. In fact, economic incentives by themselves do not improve appropriateness of care or lead to clinically sensible reductions in service use. That presents the risk that patients faced with higher costs will avoid or defer necessary medical care, delaying inexpensive problems until they are expensive crises. Set aside quality of life issues; the studies show that higher co-payments makes overall health care more expensive.

Nor does “skin in the game” make patients take better care of themselves, by avoiding risk factors for chronic health oconditions. The RAND experiment examined whether shouldering more of their own health care costs leads people to take better care of themselves. It did not. Risky behaviors were not affected — rates of smoking and obesity, for instance, did not change.

But the fundamental problem of increasing co-payment obligations is that it doesn’t address the real problem facing Medicare and Medicaid: treatment costs are increasing much faster than basic inflation. Co-payment does nothing to address that fundamental problem.

So “skin in the game” is another mythical cost containment device after it moves above 10-25%, which is where it is under present law. At higher levels, the higher patient out of pocket costs cause patients, and especially the poor, to avoid or defer necessary and appropriate care, resulting in higher total expenses in the long run. And all the while the real problem of containing the increases in costs of treatment, inflation in the costs of the same procedure, goes unchecked.

WC is undertaking an intermittent series on Medicare, and specifically on claims about Medicare that are simply untrue. WC earlier examined the claim that increasing the co-payment obligation – making seniors pay more – will save money. Now WC will examine the claim that the privatization fairy will save Medicare money.

WC has borrowed the phrase “privatization fairy” from Paul Krugman, who often references the “confidence fairy.” It’s an easy way of referring to the claim that there is a magic force that will solve a problem, in the complete absence of evidence that the magic force exists or will solve the problem. Krugman uses it to scoff at the idea that investor confidence will save a country’s economy. WC uses it to scoff at the idea that privatization of a government program is always the solution.

Rep. Paul Ryan thinks that privatization will “save” Medicare by saving buckets of money. The neutral Congressional Budget Office has already written him a detailed analysis telling him it isn’t so. But that’s simply an inconvenient truth, and no obstacle to belief in the privatization fairy.

The reasons privatization won’t save the government money are easy to understand: economies of purchsing power and the need for a private operator to make a healthy profit. Consider the following chart:

Medicare Spending

Not only would Ryan’s proposal double the cost to the average senior; it would also increase the total cost of health care in comparison to what the current Medicare program is spending.

The first cause of the increase is the loss of the mass purchasing power of the federal government. The Medicate system is the country’s largest single purchaser of health care. When it purchases something, there is intense competition for the business, and real savings from economies of scale. Privatization would significantly reduce those savings.

The second cause of the increase in total cost is that for profit health care operators want, well, a profit. As the CBO Study makes clear, profit and increased administrative costs crease a much higher administrative marginal cost than does Medicare.

In the words of Bloomberg’s Peter Orszag,

Health-care costs would not be reduced on the backs of seniors; they would be raised on the backs of seniors.

As the CBO study makes clear, Ryan’s plans for Medicare have exactly the opposite effect of what is needed. At a time when we need to find a way to contain health costs, Ryan’s plan will actually increase health costs. Bad enough the costs would be shifted to folks with no means of paying. But to knowingly increase those costs, too? Madness and folly.

There may be places where the privatization fairy can magically save money; this isn’t one of them.

As a public service – and not because WC is approaching Medicare eligibility – WC is beginning an intermittent series on the mythology surrounding Medicare. One such myth lies at the heart of the Paul Ryan plan to dramatically increase the co-payment seniors would have to make. Yes, WC recognizes that Ryan has called it “Medicare privatization,” but it’s really about increasing the portion of a senior’s medical bill that the senior has to pay. WC will show in a future post that privatization will increase costs, not decrease them. But back to co-payment.

Consider the following chart, prepared by the strictly neutral Congressional Budget Office:

Concentration of Medicare Expenses

If you study the graphic for a moment, you’ll see that at that date, anyway, 5% – just five percent – of Medicare beneficiaries consumed 43% – nearly half – of total Medicare expenses. 25% – just one quarter – of all beneficiaries consumed an amazing 85% of total Medicare expenses.

On April 15, the U.S. House made the mistake of treating the symptoms of the problem, not the disease. We’ll have to hope that doesn’t kill the patient, because that’s all of us who don’t have Congress’s health insurance plan.

The symptom is that Medicare costs are rapidly increasing, far faster than inflation, aggravating the deficit. The Republican majority in the U.S. House “treated” that problem by ending Medicare. They voted to offer instead a voucher program which will subsidize only a fraction of the cost of health care. In an amazingly cynical political move, the Republicans delayed the termination as to anyone who is 55 years old or older. They assume the middle-aged and older are as cynical as the Republicans are, and don’t care about the impact on their children. So the “treatment” will not only poison the patient in the long run, but won’t be started for ten years or more.

The “treatment” does little or nothing to control soaring health costs, which are the real problem. The Republicans are not treating the disease. Of course, there is a plan in place to control health care costs, passed by the last Congress. It’s the health care reform act. But the Republicans are inalterably opposed to it, and are even seeking to defund and repeal it.

So the disease – spiraling health care costs – will continue. The treatment – termination of Medicare by a thousand cuts – will aggravate the disease, because the vouchers will pay only a fraction of the cost of health insurance. The uninsured and underinsured will delay treatment until it is an emergency. The few who have insurance will subsidize the late, unnecessarily expensive treatments. And health costs will continue to spiral up.

Of course, in another sense the “treatment” is really just a cynical excuse by the House Republicans to cut taxes further, making the rich richer. The “trickle down” theory – that giving the rich more money will make everyone richer – has long since been established as a fantasy. This is really about the Republicans paying back the richest 1% of Americans whose very generous campaign contributions got them re-elected.

And the Republicans have the unmitigated nerve to claim this is a good idea.

Alaska’s Shame achieved a smattering of notoriety for characterizing a part of the health care reform package as “Obama’s Death Panels.” They weren’t, but that’s an old story and speaks more to her glibness and willingness to lie and distort than anything else. Well, anything but the public’s gullibility in falling for the lies, perhaps. PolitiFact.com, the fact-checking website of the St. Petersburg Times, chose it as the “Lie of the Year” for 2009.

But it’s time for WC to write about the real death panels, because they do exist, they are a very serious problem, and the health care industry’s lobbyists are working diligently to persuade Congress to ignore them.

WC speaks, of course, of the health insurance industry’s twin policies of denying coverage to health insurance applicants who had one of 425 ailments. If you had or have one of those ailments, you were permanently barred from getting health insurance. Blacklisted. Death panels, indeed. In response, health care reform forbade health insurers from denying anyone coverage. That’s one of the key provisions of the health care reform law. And that’s part of what our Tea Bagger friends want to repeal. And yet The Quitter claims to be opposed to “death panels.”

The second policy is more insidious: if your doctor wants you to have an expensive health care procedure, it has to have approval from a panel of your health insurer’s medical directors. Without the approval, the health insurer won’t pay. Without payment, the hospital won’t give you the treatment. Without the treatment, you die. The panel of medical directors is supervised by regional business manager. It’s all about profit, you see, all about dividends to shareholders. It’s about death panels, because health insurers have to make a profit. This story comes from Wendell Potter, a former CIGNA insurance executive:

You don’t have to take my word for it. Just ask Hilda and Grigor Sarkisyan, who very possibly would be helping their daughter, Nataline, plan her 21st birthday about now, had a corporate medical director not refused to pay for a liver transplant Nataline’s doctors believed would save her life.

Nataline was diagnosed with leukemia at 14. Initial treatments were successful and the disease went into remission. It came back a couple of years later, though, and the sort of treatments she’d had previously were not working. She had to have a bone marrow transplant, which weakened her liver. In mid-December 2007, her doctors at UCLA Medical Center said she needed a liver transplant. They asked for prior approval from her insurer, CIGNA, to pay for it. Nataline’s doctors said they believed she had at least a 65 percent chance of living five years or longer if she had the procedure.

A CIGNA medical director 2,500 miles away in Pittsburgh disagreed. To the astonishment of Nataline’s doctors, he ruled the transplant “experimental.” Insurers almost never pay for procedures they consider experimental, so this corporate medical director’s decision meant that the Sarkisyans would have to pay for the transplant and all related care out of their own pockets. Not being wealthy enough to do that, Nataline’s parents launched a campaign to rally public support and media interest in the case. It worked. CIGNA eventually agreed to cover the transplant. Unfortunately, so much time had passed since the original request had been made that Nataline’s other organs began to shut down. She died a few hours after the family got the news that CIGNA had changed its mind.

You see, now that’s a real death panel. Not a wannabe politician’s fantasy that Medicare-subsidized conversations about your rights in a final illness is somehow a “death panel.”

In Caribou Barbie’s arrogant ignorance, her invincible stupidity, she has helped continue the real death panels while defeating the illusory ones. She has put your well-being, your spouse’s and your children’s in the hands of bean counters, whose bonus is only increased if they deny you payment for the treatments you need. Oh, and also prolonging the needless, hideously expensive final illnesses of those who need to know their rights. The Quitter’s opposition to the health care reform law threatens assure that there will be lots more Natalines.

WC wonders whether, if she understood, she would be so proud of herself?