Tag Archives: Health Reform

Health Alerts

Health Care and Taxes

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The worst idea candidate Barack Obama had during the presidential campaign was his pledge to finance health reform with taxes on capital.  To be fair, he didn't word it that way.  Instead, he promised to pay for universal health care in part by rescinding George Bush's "tax cuts for the rich." 

Bush didn't cut taxes for the rich, however.  He lowered the tax rate on capital gains income and substantially lowered the tax rate on dividend income for all taxpayers, many of whom have high incomes.  Bush also lowered the top rate on wage income; but for high-income earners this is also frequently income from capital (pass-through profits to owners of small businesses, for example).

Obama is now proving that he keeps his word and then some.   Overall, his new budget includes a slew of new taxes on businesses and investors totaling almost $1 trillion over the next 10 years (and that doesn't even count the $646 billion "cap and trade" tax).  He proposes to "bank" a portion of this for health care to be matched by difficult-to-make health care spending cuts and by health care "savings" that virtually all independent analysts agree are unlikely to materialize.  The only thing certain so far is the taxes.

What's wrong with paying for health reform by taxing investment income?  It is always bad to tax capital to pay for consumption.  Capital is the seed corn that grows businesses, creates jobs and generates the income that makes consumption possible. Taxing capital to pay for health care consumption is especially bad, considering that health care spending at the margin is already very wasteful.

httpv://www.youtube.com/watch?v=QCG3kJtQBKo

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Physicians

More on Health IT

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Here is in-depth analysis by the law firm McDermott, Will & Emery (MWE) of the Health Information Technology section of the new stimulus package. The lesson – if you would like to participate in the Brave New World of federally-prescribed Health IT, the first thing to do is hire a lawyer.

The provisions of the bill are nearly incomprehensible. And the time frames are completely unrealistic. Standards are supposed to be set by December 31, 2009 – that's ten months from now, folks. And "each person in the United States" is supposed to be using an Electronic Health Record (EHR) by 2014. There are committees galore and grants to the states and "qualified not-for-profit entities." There is money available to providers to "purchase certified EHR technology," and "incentives" under Medicare and Medicaid to become a "meaningful EHR user." For physicians, the incentive is a bonus of up to $18,000 for 2011 and 2012, and decreasing after that.

Health Alerts

Reforms that Don’t Work

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Right before Christmas the Congressional Budget Office (CBO) lowered the boom on a set of health reform ideas by confirming what everyone should already have known anyway: You can't change the practice of medicine with demand-side reforms.

This is devastating. At least it's devastating if you're a member of the Obama health team. During the election, Obama's health advisors said they could save the average American household $2,500 a year through such reforms as coordinated care, preventive care, evidenced-based care, pay-for-performance care, electronic medical records and a slew of similar ideas. The CBO response? These reforms will save about 1% of what the Obama team projects, and maybe nothing at all [here and here]. They may even increase costs!

Before you lament the fact that the CBO waited until after the election to tell us this bad news, know that John McCain endorsed the same reforms – as did almost every presidential candidate (without the ridiculous claims about monetary savings). They also have been endorsed by what I call the "new consensus" folks: left and right, business and academic, government and nongovernment, public and private sectors – including employer groups and third-party payers of all sorts. (I'll withhold the names out of respect for the families.)

httpv://www.youtube.com/watch?v=J26UlYXPi7o

"Everybody Knows"

It's cynical, depressing and sometimes factually
incorrect. Still, it seems to fit. Next
week, I'll pair something
cheerier with "Health Care Markets that Work."

Continue reading Reforms that Don’t Work →

New Health Care Law

Will US Health Reform be Bad for Canada?

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An article in the (Canadian) National Post worries that Obama’s health proposal will lure doctors from Canada.  After Massachusetts passed its universal mandate, it found that it didn’t have enough physicians to meet the demand. Higher pay in the United States might entice Canadian physicians to travel South in search of better compensation or working conditions.  The United States already relies on foreign-trained physicians for one-quarter of its residency slots.

Hat tip to the Wall Street Journal blog.

Interesting Links

Hits & Misses – 2008/12/30

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"We hate insurance companies." "Health care is a right." "Insurance should cover everything." You guessed it. This is a Daschle health reform party. Amazing how a little eggnog sparks creative thought.

Ten bad things that can happen to you in a hospital. These are technology mishaps.

What makes a conventional flu very, very deadly? Three genes. In 1918, they killed 50 million people.

The bad economy isn't hurting Botox. "Nearly three out of four plastic surgeons….reported that demand has increased or held steady for minimally invasive procedures."

"Very few rehabilitation programs have the evidence to show that they are effective." Yet Congress and state governments require insurers to pay for them anyway.

Health Alerts

Consensus

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Big business has a plan. The health insurance companies have a plan. Tom Daschle has a plan. Max Baucus has a plan. Teddy Kennedy is about to have a plan. And the chattering class is exuberant over the idea that a consensus is emerging on health reform. With respect to the twin problems of cost and quality, just about everyone seems to hold these positions:

 Consensus Point No. 1: I AM NOT AT FAULT.
 Consensus Point No. 2: Somebody else is at fault; and, not to put too hard an edge on it and you may have to read between the lines to see this, but a reasonable inference is that DOCTORS ARE AT FAULT.
 Consensus Point No. 3: Again, not to put too hard an edge on it and you may have to read between the lines even more diligently, but once you do you will surely conclude that we must FORCE DOCTORS TO CHANGE THE WAY THEY PRACTICE MEDICINE.

Seeing all this agreement makes me so giddy I want to immediately go rewatch "Twelve Angry Men" for the umpteenth time.

httpv://www.youtube.com/watch?v=InJpuXMTDC4
"Glory Days"

Continue reading Consensus →

Health Alerts

Memories

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At the National Journal Health Blog, Marilyn Serafini asked, "How much does health reform really cost, what elements are worth it, and what are the best and worst options for paying for it?" She invites bloggers to compare the current situation with the passage of Medicare and Medicaid in 1965. [link] Here is part of my response:

Here are five lessons from the Medicare and Medicaid experience:

  1. The cost of Medicare and Medicaid was way beyond what anyone predicted. The reason: failure to realize that when any good or service becomes free, people will consume more of it.
  2. Once started, these programs are extremely hard to curtail. If we ended Medicare today – collecting no more taxes and allowing no more accrual of benefits – we would still owe $33 trillion in benefits already earned! (Results of new NCPA study.)
  3. Looking indefinitely into the future, the Trustees have calculated there is an unfunded liability (promises made over and above expected premiums and dedicated taxes) of $85 trillion – almost six times the size of the entire economy.
  4. According to Amy Finkelstein, although Medicare was financially important to the elderly, it created no discernable health benefits in terms of reduced mortality. [link]
  5. Despite no measurable health benefits, the explosion of spending on these two programs forced up prices for everyone else. In fact, HHS' own internal estimates suggest that every $1 of additional spending buys 57¢ of higher prices.

httpv://www.youtube.com/watch?v=1MWN_duZfIs

"Memories Are Made of This"

New Health Care Law

What People Think

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Harvard's Robert Blendon continues his superlative work in measuring public opinion around health care issues in a new study of the attitudes of Massachusetts residents about that state's health reforms. [link]

One of the findings is how opinion changes once people are made aware of the costs and consequences of a reform proposal. Mr. Blendon tested attitudes towards various reform ideas in 2003. He found that 82% of respondents favored "expanding existing state programs," but when told that "these programs would require raising taxes to pay for the cost" support dropped to 55%.

Continue reading What People Think →