At the debut of his own health care reform plan in June, Bob Dole recalled some words of encouragement from Ronald Reagan: Get me one hundred percent, but if you can’t, get me at least seventy. Unfortunately, Obama and Democratic leaders are willing to sacrifice bipartisanship and settle for less—the bare minimum—to pass their sweeping alterations while they still have the momentum. In this fashion, the Kennedy bill completed the first leg of its journey Wednesday morning with an anticlimactic 13-10 vote along party lines, but the bill thankfully still faces a sheer cliff face to reach the president’s desk. There are a number of alternative routes the bill can take to the top, all with a heavy demand for time and meticulous maneuvering, but what is the likelihood it will reach the summit, especially under the strain of an Obama October 15 deadline (click here for countdown)? In times of uncertainty we can always count on the intuition of Vegas to pull through. With a derivative to trade for anything these days, the likelihood of the passage of a government run health insurance plan by the end of the year is priced on Intrade. Right now it is trading around 35%. This is the rare instance these days where we would like to see anything trade lower.
Despite the Senate HELP committee’s head start on Senator Max Baucus and his Finance committee, the absence of the language of the most controversial sections of the bill—the public option, employer mandates, follow-on biologics—led to John McCain’s accurate assessment that their “hours [had] been a waste of time.” As anticipated, the bill included a public option and employers mandates to provide coverage. However, in their post-vote press conference Wednesday morning, HELP Republicans were quick to remind the public not to be fooled by any attempt to label the work as “bipartisan” (see first paragraph). Although the GOP did offer hundreds of amendments, and the Democrats will reference their acceptance of a number of them, those accepted were predominantly technical amendments to language, rather than function. If anything, the sheer number of proposed amendments should be a sign of dissatisfaction, and the rejection of these should be a call for closer examination by all Americans.
Senator Baucus and his Finance committee have wisely recognized that in the face of a ballooning deficit, the fate of the bill once it reaches the floor is dependent on cost. While the Democrats on the HELP committee tended to put their dreams to make history ahead of the realistic costs associated with doing so, Baucus has attempted to address this issue and manage the cost in the hope to garner more, meaning some, bipartisan support. It’s rather strange that he is facing criticism for taking the time to get it right—measure twice, cut once—but this is typical of many Americans who want everything immediately and cheaply, two things that are tough to come by with such influential legislation. They are now in talks to develop financing with increased tax revenues that won’t turn moderate Democrats away, in hopes to begin the mark-up in the final week of July. The options include Baucus’s aim to tax employee health benefits and Chuck Grassley’s to eliminate the non-profit tax exemption of hospitals that are in reality for-profit and without charity work. There is, of course, a surcharge on the table to further tax income of the “wealthy,” as well as a laughable idea of a sin tax on soda and alcohol.
The House side is just as scary—a simple breakdown of their plan here. Revealed earlier this week, the bill creates a government-run public option, attempts to force individuals to buy and businesses to offer insurance, and expands Medicaid. The $1.5 trillion package includes surtaxes of various levels on the wealthy, as well as a tax as high as 8 percent on employers with payrolls greater than a mere $400,000 that don’t provide benefits. The bill also taxes Americans who choose not to carry health insurance.
So which parent will this child take after? At least on the Senate side it is beginning to look like the final version will more closely resemble the work of the Finance Committee, especially if you take a look at K Street activity, which is skewed towards Finance. Based on the nature of much of the reform and the committees’ respective titles, Finance has lead jurisdiction on many of the more controversial areas. Roll Call points out that lobbyists concerned with Medicare and Medicaid funding are targeting finance, with those focused on wellness programs and preventative measures turning their attention to the HELP committee. The committee with more lobbyist support and approval will likely have a greater weight in the final matter. Given that the HELP committee certainly represents the more liberal approach of the two, we will hopefully see a more middle-of-the-road final product on the finance side.
Looking ahead, it is incredibly frightening to imagine a behemoth of a public option with enough mass to create its own market forces to significantly reshape the current landscape of supply and demand in our insurance market. With their own recent analogous experience, the Democrats should just look at the financial markets that they have come to understand so well—during the last decades of the last century when major financial institutions amassed more and more momentum from their accumulation of unheard of amounts of capital, the movements of the market began to rely on and were driven by the trades and movement of these larger-than-life firms. More frightening than the monopolistic public option, however, is the intertwined idea of comparative effectiveness research. Regardless of whether the final bill that emerges from Congress incorporates the defined practices of utilizing the labeled approach of comparative effectiveness, the general aims of it are unavoidable in a government plan run by bureaucrats withdrawn behind impenetrable walls that filter out the human aspect of the business. This should frighten anyone considering partaking. The government has already broadened its reach with investments in previously untouched portions the economy, and with the frontline goal of curtailing “excessive” health spending in the face of a ballooning deficit, its newest investment vehicle will be the health and lives of its citizens. Just as there is for every recipient of government funds, an agency or committee will be charged with the task of evaluating your life as an investment, and their idea of excessive cost may not quite coincide with your own.
We needn’t look far to find an example of this nightmare in practice (the WSJ provides some great incite in the editorial “Of NICE and Men” from July 7). While we worked so hard to distance ourselves from the British a short while ago, Obama, et al. are looking to take a page from their book. Yes, the Brits may spend half as much per capita as we do on health care, but it isn’t by some sort of genius lost through geographical natural selection. The National Institute for Health and Clinical Excellence (NICE), established in the late 90s to promote “best practices” for the National Health System, is in actuality a rationing board that bans costly, although effective, drugs, and denies imperative diagnostics and treatments on the basis of cost. How much is too much? They utilize another euphemistic acronym, quality adjusted life year (QALY), to cap expenditures at $22,000 per an additional six months of life. If a cost-benefit analysis returns an insufficient benefit per dollar, that potential benefit will simply be denied. When Katie Brickell requested on several occasions a seemingly standard Pap smear test, she was denied under the guideline that she was under 25 years of age and therefore not at significant risk—she is now dying from cervical cancer that could have been treated if discovered during an earlier stage. But NICE rules that screening women below 25 is too costly. And even when David Swain offered to pay the monthly £2,000 cost of a cancer drug to extend his life, he was prevented from doing so because it was ruled too expensive. Through their own experience, the British have determined that rationing care in this fashion is the only way to truly reign in costs. If Democrats weren’t blinded by their own desperate optimism, they would be able to recognize this. In considering their idea of reform, ask yourself, will your Return on Investment always be favorable?
