19.7.17

THEY'RE WRANGLING OVER INSUFFICENT ALTERNATIVES.

Our President is apparently OK with letting Obamacare fail, and mocking the Democrats for now mourning the suffering that is coming in the wake of the exchanges collapsing.

The problem, as I see it, is that it doesn't matter what the national government does as long as its emphasis is on insurance, and trial lawyering, and everything else that keeps the third-party payments around, and the trade-tested betterments in abeyance.  As Jesse Watters quipped yesterday evening, "Coverage."  Here's National Journal's Josh Kraushaar: "Once Republicans got trapped into playing the opposition’s game—that the quantity of coverage is more important than the quality of coverage—they were already playing a losing hand."  His essay is more about the effects of a Trump presidency on conservatism.  With as many black swans in the air as there currently are, that's too messy to contemplate. Reason's Shikha Dalmia is also on to the deflection.  "The first problem with this analysis—apart from its chutzpah—is that it assumes that all insurance saves lives, even a substandard plan like Medicaid, which accounts for the vast majority of the people covered by ObamaCare. That is emphatically not the case."

Trade-tested betterments in health care, on the other hand, are more straightforward.  Herewith one opening proposal from W. A. Root.  First, though, we have to get Official Washington thinking about something other than coverage and liability, and the rent-seekers, including the physicians and surgeons probably benefit more by the conversation remaining focussed on coverage and liability.  That despite the Medicaid and Medicare reimbursement rates reducing the return on human capital to studying medicine.

It's a failure of elite imagination to Jason Willick and W. R. Mead to keep on slicing and dicing the same rents.
The debate we are having is therefore about how best to distribute what is assumed to be a constant amount of suffering—about who should be screwed over the most as the system as a whole continues to stagnate and underperform. Obamacare imposed higher costs on the young and raised taxes on the rich while adding millions to the Medicaid rolls—a second-rate government insurance system that may or may not improve health outcomes. The GOP would lower insurance costs for the young, raise them for the rich, and shrink the Medicaid rolls reduce the deficit and deliver a big tax cut, mostly to high-earners.

In other words, the parties are locked into a more-or-less zero-sum fight over resources that leaves the underlying deformity of our system unaddressed: Healthcare costs too much, whether it is paid for by government or private insurance. Our existing healthcare system is on a trajectory to bankrupt the country no matter how we distribute the costs.
It's the coverage, stupid. But read on, and do you find anything at all about trade-tested betterments?  Commercial freedom for practitioners?
What if instead of simply rolling back Obamacare’s taxes and transfers, Congress passed a smorgasbord of experimental measures aimed at bringing prices under control in the long run? There are a number of ways we can reduce cost by increasing the supply of care. For example, we could tweak our immigration system so that more well-qualified doctors come to work in the United States (the U.S. has fewer doctors per capita than many other advanced countries) and certify more medical education programs. We could encourage a more efficient distribution of doctors by offering medical school loan forgiveness for doctors who work in places with a care shortage.
Not quite.  But perhaps we haven't suffered enough.
The crud that has been accumulating in the system can’t be addressed all at once. Reform should be repositioned as a series of incremental steps in the direction of lower-cost care care plus a temporary compromise over Medicaid and subsidies to tide us over until the good times arrive.

This is a more challenging and by necessity more experimental project, and it will never be fully complete. But it has the potential to start breaking us out of the despairing confines of right-left Obamacare debates, which suggest a society that has lost the confidence and imagination to reform its institutions to address its gravest challenges.
But from that perspective, perhaps "Let Obamacare collapse" is precisely the push the political class needs. The usual "do something" partisan approach isn't working. "If Republicans don’t start getting some wins, Americans have every right to ask, 'What good is it with you folks in the majority?'"

For openers, if you think health care is expensive now, wait until you see how much it costs when it's "free."
With monopoly buying power, the government could tighten up on health-care spending by dictating prices for services and drugs. But the government already has a lot of leverage. A big reason it does not clamp down now on health-care spending is that it is hard to do so politically.

Republicans have tarred the Affordable Care Act’s Medicare cuts as attacks on the cherished entitlement program. Doctors and hospitals have effectively resisted efforts to scale back the reimbursements they get from federal health programs. Small-town America does not want to give up expensive medical facilities that serve relatively few people in rural areas. A tax on medical device makers has been under bipartisan attack ever since it passed, as has the “Cadillac tax” on expensive health-insurance plans. When experts find that a treatment is too costly relative to the health benefits it provides, patients accustomed to receiving that treatment and medical organizations with a stake in the status quo rise up to demand it continue to be paid for.
Again, no discussion of trade-tested betterments. Surprised?
To realize the single-payer dream of coverage for all and big savings, medical industry players, including doctors, would likely have to get paid less and patients would have to accept different standards of access and comfort. There is little evidence most Americans are willing to accept such tradeoffs.

The goal still must be universal coverage and cost restraint. But no matter whether the government or some combination of parties is paying, that restraint will come slowly, with cuts to the rate of increase in medical costs that make the system more affordable over time. There are many options short of a disruptive takeover: the government can change how care is delivered, determine which treatments should be covered, control quality at hospitals, drive down drug costs and discourage high-cost health-care plans even while making the Obamacare system better at filling coverage gaps.
Maybe the best thing the national government could do is go away. You won't get that advice from the Gray Lady, but commentator C. F. Chapin starts at the right place. "The problem with American health care is not the care. It’s the insurance."Continuing. Before the Great Society, there was more room for trade-tested betterments.
Individuals and families paid a monthly fee, not to an insurance company but directly to the physician group. This system held down costs. Physicians typically earned a base salary plus a percentage of the group’s quarterly profits, so they lacked incentive to either ration care, which would lose them paying patients, or provide unnecessary care.

This contrasts with current examples of such financing arrangements. Where physicians earn a preset salary — for example, in Kaiser Permanente plans or in the British National Health Service — patients frequently complain about rationed or delayed care. When physicians are paid on a fee-for-service basis, for every service or procedure they provide — as they are under the insurance company model — then care is oversupplied. In these systems, costs escalate quickly.

With Medicare, the demand for health services increased and medical costs became a national crisis. To constrain rising prices, insurers gradually introduced cost containment procedures and incrementally claimed supervisory authority over doctors. Soon they were reviewing their medical work, standardizing treatment blueprints tied to reimbursements and shaping the practice of medicine.

It’s easy to see the challenge of real reform: To actually bring down costs, legislators must roll back regulations to allow market innovation outside the insurance company model.
Faster, please.

Perhaps "Let Obamacare collapse" will give consumers a new birth of freedom.
What consumers need is the ability to shop for policies they can afford. Why not let young people, for example, buy inexpensive policies with high deductibles so that they are covered in case in case of accidents but pay out of pocket for routine care? And why should the 21st century health insurance system be broken up into 50 separate economies when efficiencies and convenience could be had by offering insurance options on a nationwide scale?
Precisely. But that lets defenders of the (failing?) status quo invoke Charles Dickens, or Hunger Games. Trade-tested betterments? Too risky.
Republicans need to be honest with themselves and the public: If they want medicine to be truly free-market, then they have to be willing to let the next man or woman they find lying unconscious in the street remain there and die. In a truly free market, we cannot treat someone — and charge someone — without their consent and against their will. If we believe, however, that those lying there in their most vulnerable moments deserve a shot, then we need to push forward with the idea that health care, at its core, must be designed around a caring system that serves all people fairly.
There's that design conceit again. I know that if I encounter a person starving in the street, there is likely a vendor nearby from which I can purchase nourishing food. It's probably not going to be a seven-course meal at Maxim's, but it will be enough to get the person on his feet. If I want to provide that person with interview-grade clothing, ditto. A place to wash up, a bit harder, but still feasible.

Yes, storefront health is not the same thing as storefront fruit juice and a sandwich, but still, it's the absence of any such options that's more germane.  John "Grumpy Economist" Cochrane, who has been thinking way more systematically about the institutions of the health industry, elaborates.
[The Times commentator's] point is entirely the cost of treatment, for that extremely narrow group, people with assets who somehow don't have insurance.)  As a doctor, he does not see that economic counterfactual, or how cheap unregulated catastrophic coverage would be.  And emergency room physicians dealing with comatose patients are not exactly an unbiased sample of the health care system. Even if such patients need to have government support, just why does a routine dermatologist visit need to be subject to the tender mercies of the Federal Government?
And we don't have the kind of price discovery of the simple procedures that might help a charitable citizen help someone in distress, the way it's possible to buy a hungry person a meal.
While the science of medicine has undoubtedly advanced by leaps and bounds, the ability to actually see a doctor for a price the average person can afford has, if anything, moved backwards.

The difference is all down to competition. While anybody with a grill can work on building a better burger, opening a school or practicing medicine requires years of navigating red tape, licensing requirements, and thousands of dollars in fees. And even if you succeed, the government’s stranglehold on both these industries leaves little room for true experimentation.

So the next time you chow down on a tasty burger, remember that the only reason it tastes so good is because people were free to innovate, and then imagine how much better the rest of life could be if the same were true for other industries.
I could add: or get a tummy tuck or your nearsightedness refocused by a laser.

With the state exchanges coming unglued even without any pushes from Our President, to borrow a phrase, what does the public have to lose?  Oh, the Democrats will be unhappy, but Rick Moran suggests the Democrats brought it on themselves.
Democrats have not offered a comprehensive plan to fix Obamacare, so it's reasonable to assume they don't care about the dead people that will be piling up at their door as a result of  people dropping off their plans because they're too expensive. They didn't care when 5 million people lost their coverage when Obamacare was implemented. Why should they care now?
It's easier to care in the abstract. Those fifteen million people who opted to pay the tax penalty rather than buy useless health insurance are more useful as a talking point, fifteen million people who will lose the (theoretical) coverage they had (the opportunity to buy, no thanks) under Obamacare.

Perhaps it has to get worse first.
Any bill in congress that affects to reform the gross financial malfeasance in healthcare ought to start with the absolute requirement to publicly post the cost of everything that doctors and hospitals do, and enable the “service providers” to get paid only those publicly posted costs — obviating the lucrative rain-dance for dividing up the ransoms paid by hostage-patients who come to the “providers,” after all, in extremis. Notice that this crucial feature of the crisis is missing not only from the political debate but also from the supposedly public-interest-minded pages of The New York Times and other organs of the news media. Perhaps this facet of the problem never entered the editors’ minds — in which case you really have to ask: how dumb are they?

(The funniest claim about ObamaCare in today’s New York Times is the statement that 20 million citizens got access to health care under the so-called Affordable Care Act. Really? You mean they got health insurance policies with $8000-deductables, when they don’t even have $500 in savings to pay for car repairs? What planet do The New York Times editorial writers live on?)

The corollary questions about deconstructing the insurance armature of the health care racket, and assigning its “duties” to a “single-payer” government agency is, of course, a higher level of debate. I’m not saying it would work, even if it was modeled on one of the systems currently working elsewhere, say in France. But Americans have acquired an allergy to even thinking about that, or at least they’ve been conditioned to imagine they’re allergic by self-interested politicians. So, the current product of debate in the US Senate is just a scheme for pretending to reapportion the colossal flow of grift among the grifters.
It's Kunstler.  It's crash.

He's right, though. Rent-seekers gotta seek rents.

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