Dissecting DeParle's Propaganda Letter on Health Reform

A letter from Nancy-Ann DeParle, Director of the White House Office of Health Reform, arrived in my in-box today. I've watched the health care reform debate (so called, even though the debate has had next to nothing to do with health "care" and everything to do with health "coverage") go on for the better part of a year and have largely kept my thoughts to myself. But as my childhood hero Popeye liked to say, "I've had all I can stands, and I can't stands no more!" Or to rephrase: "I'm mad as hell, and I'm not going to take this anymore."

So here is a reprint of Ms. DeParle's letter, interlineated with my responses.

Good morning,

It was, until now.

Democrats and Republicans agree -- the health care status quo isn't working for the American people.

Some would argue that Democrats and Republicans are not working for the American people either. But we're off on a tangent already, aren't we?

Health insurance is growing more and more expensive by the day. Too many of us can't afford it -- not middle class families, not businesses, not the Federal Government.

Well, let's slow down a minute there. Health insurance premiums are typically adjusted annually, so to say they're growing more expensive "by the day" is kind of a misstatement. I'll give you some leeway here to speak figuratively for the purpose of lending a sense of urgency to your message. But I'll have to think about whether that sense of urgency is justified, or whether it's intended to create a false sense or emergency so that people will be more comfortable with acting unwisely. After all, who is more vilified in pop movies: the person who makes a bad decision during an emergency or the person who can't make any decision at all?

Onward then: "Too many of us can't afford health insurance," you say. And my question in response is, who says how much is "too many?" Figures issued recently by the United Hospital Fund suggest that 41% of New York's uninsured are actually eligible for public coverage, but aren't enrolled. So it's not that they can't get health insurance, it's that they don't get health insurance. Perhaps they want other things instead. Are American citizens not permitted to forego health insurance? I venture to say here that you firmly believe no person who could get health insurance would forego it. And I say you are arrogantly supplanting your value system on someone else who may or may not hold to your point of view.

Also, I see here another propaganda technique you've deployed: "too many of *us*," you say. Really, you --- the Director of the White House Office of Health Reform --- can't afford health insurance? Please. I suppose you need more leeway to write figuratively here again. You don't really mean "us" because you yourself are not included in the group, so you must mean "you" or "them" but you write "us" to create a false sense of similarity. As if you were in "our" group. As if you were "just like us." I say go to hell.

And another thing, didn't this debate start out as health *care* reform? Your boss, the President, once said "By a wide margin, the biggest threat to our nation's balance sheet is the skyrocketing cost of health CARE." Now, reasonable minds might disagree with that statement, but it's what he said so I'll take it as a given that he actually believes it. So, Ms. Director of Health Reform, when are we going to start talking about the skyrocketing *costs* of health care? You know, how much it costs to go to the doctor, or have your tonsils out, or get an MRI? After all, I'm pretty sure the costs of health care are, in fact, "growing more and more expensive by the day."

Insurance companies have too much control over health care decisions that should be left between a patient and their doctor.

Still on insurance, eh? So the strategy has become to pick the least sympathetic character in the health reform arena and pick on them? It would appear that way.

Out of curiousity, I have to ask - - when Medicare Advantage managed care plans conduct utilization review on behalf of the U.S. government are they exercising too much control over health care decisions that should be left betwen a patient and their doctor? When Medicaid managed care plans conduct utilization review on behalf of state governments are they exercising too much control over health care decisions that should be left between a patient and their doctor? Where is the federal plan to disengage from managed care, thereby restoring health care decisions to their "proper" place - - between the patient and the doctor? There aren't any? Well it *used to* be that way - - it was called Medicare fee-for-service and in the private sector was called a traditional "indemnity plan" and those models broke the banks of the government and employers, respectively, who paid for them and now both models are both virtually nonexistent. Is that what we're going back to?

They [health insurers] freely ration care based on who's sick and who's healthy; who can pay and who can't.

Oh, the dreaded "R" word - - rationing. Nice turnabout here, using the word that Republicans first threw at the Democrat's plan. I actually spent a long time trying to figure out what you are trying to get at in that sentence and I can't even venture a guess. Health insurers collect dollars ("premium") and then pay out expenses ("loss"); since the number of premium dollars is finite (i.e. limited) then in a way health insurers do "ration" payment. And I suppose that have to ration it based on who's sick and who's healthy, after all you want sick people to be able to get care and should worry less about health people. And I suppose they ration based on who can and who can't pay the premium; you can't pay out in loss dollars that you never received in premium. But maybe I'm misunderstanding your point, which really was just to throw out the word "ration" in the same sentence as "health insurers" and hope it sticks.

By the way, when do we start talking about what your boss called "the biggest threat to our nation's balance sheet - - skyrocketing costs of health care?" Not yet, it would seem.

On both sides of the aisle, we all agree that if we do nothing, the problem will just get worse. Now, after a long and wrenching debate, it's time to make a decision. Yesterday, President Obama called on the United States Congress to cast a final up or down vote on health insurance reform in the coming weeks and pledged to fight for it every day until that happens.

Well damn, let's boil some water so we can get on with delivering this baby, shall we? Let's not stop to ask - - *why* will the problem get worse if we do nothing? The White House message is the classic message of those who use their position for the purpose of abuse: YOU ARE IN TROUBLE AND YOU ARE POWERLESS, AND I'M THE ONLY ONE WHO CAN HELP YOU. Really, Ms. DeParle, do you think I haven't read "The Gingerbread Man"? But now the urgency begins to make more sense, doesn't it? Yes or no! Now! It's urgent! Decide! Don't think, ACT!

No, thanks. Health care transactions are 16% of all economic activity that occurs in our country, and is projected only to grow and grow. When you open the want ads, the first three pages are health care positions, and then there's half a page of tech jobs, and then a few service jobs. (I'm sure Ms. DeParle doesn't open the want ads, though, even though she's one of "us".) I don't want to monkey with that much of our economy in one chunk unless I'm certain that I've got the right answer. Are you certain, Ms. DeParle, that the President's proposal is the correct course? If so, you must be the smartest person in the universe.

To believe that there is a sense of urgency about health insurance reform (let's just call it that from now on, since it's clear we're not going to talk about costs) when so much is at stake is to buy into the Democrat theory that something - - anything - - is better than nothing. Yes, the current health model is a disaster in progress, but it's a long slow trainwreck of a disaster. There is time to make the correct decisions, be assured.

The President's final plan for health insurance reform puts control of health care where it belongs -- in the hands of American families and small businesses, not health insurance companies or government.

My goodness, but this line almost made me fall out of my chair. How on Earth does the current proposal even begin to accomplish this? What exactly is "control of health care" anyway? Are we not going to have health plans anymore to tell us what's covered and what's not? Actually, we'll have MORE people enrolled in such models.

This is a propaganda technique borrowed straight from George Orwell: call it whatever it's not. Make the censorship bureau a "Ministry of Truth." Hitler put "Work Makes One Free" over the gates to his concentration camps. This line about "putting control in the hands of American families" is the line that got me. It is the line that tells me the President is selling the American people a crock of shit, with a label on it that says "Honey." The current reform proposals will concentrate power in the federal government, will undermine the autonomy of the states, and will restrict the liberty of the citizens that make up the "American families" referenced here. And not just for today, but for generations at least. Honey indeed. How sweet.

So let's turn back for a second to my earlier question - - why should we believe that we are powerless to solve the problem on our own? Why hasn't the market solved the current crisis?

I venture an answer here: it can't. And it can't because the third party payor system has essentially been cemented into place by a complex series of laws and regulations, coupled with intertia and a generous dollop of fear. You can only escape it by not buying insurance at all, and the Democrats would even take that option away.

It's somewhere between difficult and impossible for payors to develop new reimbursement models that would damp off the incredible upward price pressure that a third party payor fee-for-service system creates. The fundamental mechanics of human decision-making make it easier to spend other people's money; this isn't just a mental state, it's the result of the physiological process of making a decision. A third party payor model *inherently* encourages overutilization by patients and overtreatment by providers. It inherently sets up the patient to be disastisfied with the level of coverage and inherently sets up providers to be disatisfied with the level of reimbursement. In both cases, it's always other people's money so it's too easy to want more.

The current proposals do nothing to return health care transactions to the two people who are actually involved in the transaction: the patient and the provider. In fact, the current proposals merely expand the current model and make it far less likely that we will ever get to the point where patients and providers alone truly make health care decisions together.

Remember - - and these aren't my words - - the biggest threat to our nation's balance sheet is the skyrocketing cost of health care. The current proposals do nothing to reduce health care costs. As soon as the Obama administration perceived that health plans could become the scapegoat of all that's wrong in the current health care crisis, "health care costs" fell right out of the dialog. Instead, it became all about "coverage."

"Greedy insurance executives" and "excessive insurer profits" at their worst take up a few pennies out of the health insurance dollar. "Health care costs," in contrast, are 75%-80% and as high as 90% of the health insurance dollar. Which might be more effective to focus on in making some meaningful progress in health reform? Imagine a salesman that walked up to your house, looked at your missing front door, and said, "You know, if you bought some new windows you could really snug up this place." If you buy the Obama proposal you are paying for new windows while ignoring your missing front door.

His proposal takes the best Republican and Democratic ideas and changes three main things about the current health care system:

• It ends the worst insurance company practices and outlaws discrimination against Americans with pre-existing conditions.


• It reduces costs for people with insurance and makes coverage more affordable for people without it today.


• It sets up a new competitive insurance marketplace where small business owners and families can shop for the insurance plan that works best for them, giving them the same buying power and insurance choices as all members of Congress.

Ms. DeParle: did you notice that New York required guaranteed issue, guaranteed renewable policies fifteen years ago? Did you further notice that government plans are available for families making multiples of the federal poverty limit? And did you further notice that New York's uninsured problem, while slightly less than the national average, persists?

Or perhaps you regard the problems you intend to address with your reforms as having been solved in New York, in which case, where is New York's exemption from the price tag for this so-called "reform"?

Health insurance exchanges, your third bullet point, could be neat. But having a fancy mart in which to look at policies you can't afford anyway isn't altogether helpful. At least not in my book.

I skipped over your second bullet point which is just flat out not true. Not even the budget director that your boss appointed thinks so.

The single greatest weapon that could be deployed against skyrocketing health care costs (in Obama's words, the "biggest threat to our nation's balance sheet") is the measured consideration of the American health care patient. But that's exactly who is carved out of all of the decisions under the present system. And that's exactly who is carved out of the more burdensome variation of the present system that Mr. Obama proposes.

What kinds of policies are actually available in the marketplace? State regulators will tell you. How much will they cost? State regulators will tell you, and if not them then federal regulators. Which policies will be offered to you? Your employer will tell you. Which doctor can you go to? The health plan will tell you. What services can you get? The health plan will tell you. How much does it cost? The health plan and your physician decide, and then keep the price secret from you. Can you opt out of this morass and just pay for the care you want? No, sir, no. That freedom is not yours.

Imagine a going to a place where you can review available options, weigh prices, ask questions, and decide not to buy if it's not what you need. You can do that if you want to buy a big-screen TV, but not if you want to make very important life-impacting decisions about your health care. I can find out more information about the service quality provided by a person selling antiques on eBay than I can about my family physician, or the surgeon that wants to cut open my back. I can see how many transactions that antique-seller has completed, his or her satisfaction rating, average time to ship, and I know what the price is going to be ahead of time. Not so in health care. In some cases no one knows these things; in other cases the numbers are known but they are confidential. But go ahead, ask that surgeon how many cases he's done and what his error rate is and how many complaints he's had, and see what kind of frosty response you get. Are antiques really more important than back surgeries?

The free market brought us eBay user ratings, Amazon book reviews, and built-to-order computers by Dell. In New York, you can't buy the coverage you want, you can only buy the coverage the State Insurance Department wants to allow payors to sell you, and the State Legislature has mandated that all policies must cover things like prostate cancer screening even if you are female and Pap smears even if you are male. By the way, the American Cancer Society just released a policy urging doctors to stop performing digital rectal exams as a cancer screening tool because they don't work. Think those New York docs are going to stop doing them? Nope, because when they do them they get paid - - the policy has to cover it. And because it's a law, insurers can't take it out of the policy even when the procedure has been discredited. That's what laws do - - they cement things in place.

And so in my libertarian mind I believe that laws should be reserved for areas that one does not perceive as having to change in any forseeable future.

Our health care delivery system? You bet I want it to change. I want it to change faster than any Congress can pass laws. I want my family physician to retool his practice so that it pays attention to me, not my insurer. I want going to the medical doctor to be more like going to my dentist, who relies primarily on direct payments, whose waiting room is empty, who uses hi-tech radiological images so I don't have to wait for x-rays, whose staff is friendly. Or like the plastic surgeon I went to once for a scar excision, whose website told me everything I need to know in advance, who saw me on time, who spent an unrushed half hour with me, who gave me free coffee for the 12 minutes I sat in the waiting room watching HD TV, and who quoted me a price on the first visit. All because they know that they need to deliver service that justifies the price they are asking me to pay. My family physician? Not so much - - I have no idea what it costs to visit him. In his mind and in my mind it's "free" (and no degree of Democratic propaganda can change that physiological truth) and so if the service is poor there's not much to complain about.

Incidentally, the price for the surgery dropped my jaw, in a favorable way. Does that ever happen when you are on the "medical" side?

We've debated the issue of health insurance reform thoroughly, not just over the past year, but over decades.

And so the "urgency" of health reform is here proved to be utterly manufactured. To paraphrase: "the debate . . . which has gone on for decades . . . MUST END RIGHT NOW!!" Must it really? Kathleen Sebelius' digging in to health insurer rate increases in a state in which she has no jurisdiction and can literally do nothing about it amounts to a desperate grab for traction in an otherwise untractionable position. It is intended merely to provide a backdrop for Ms. DeParle's dramatic intonation that "health insurance costs are going up every day."

It's time to make a decision about how to finally reform health care so that it works for America's families and businesses -- not just for insurance companies.

Whip away, Ms. DeParle, whip away. I have to look askance at anyone that believes there is a moral highground in the health reform debate or that - - conversely - - points to any one party as The Problem.

Let's get it done.

Let's get it done indeed.

In the current health care market, Medicare is about a third of spending and the remainder of the market tracks Medicare. Do we really want the price for services in a sector that will soon make up 20% of all economic activity in the United State to be determined by the government? There are examples of societies that have tried on centralized price control. You can find them in the history books.

Let's not forget what effect this will have on costs. Just a few days ago Congress decided to hold off on a price cut for Medicare services. Do we need prices of medical services to come down? Yes, we do. Do prices under Congressional control ever come down? No, they do not.

Free markets are not perfect. But they are the best model anyone's yet come up with. And they do not guarantee that things will always stay the same. In fact, what you observe in the market place today is the free market coming to bear on the inefficient third party payor model. It is the agonal lurching of a system that should die and should be allowed to die. It has priced itself out of viability.

So let's see some "reform" proposals that actually give life to health care in the United States! Let's see some proposals that look towards the future, not ones that take a broken system and put it on life support and then sign a contract binding five future generations to the expensive prospect of keeping it alive. Just so a president can say he got something done.

Yes this is a crisis, friends, but not the one that it seems. This is a crisis far greater than whether grandma gets her CT scan. This is a question of whether the federal government GETS OUT OF THE WAY and lets the innovation of 280 million minds find out what health care is going to look like tomorrow. It is arrogance beyond measure to think that a few hundred people sitting in Washington can figure out the "one best way." America has never worked that way.

Find me an example where true market innovations have sprung lively from the enactment of federal statutes, and I'll be happy to change my mind. Microsoft wasn't legislated. Google wasn't legislated. Dell wasn't legislated. Apple wasn't legislated. eBay wasn't legislated. Twitter wasn't legislated. Amazon wasn't legislated. Nor did they operate in an environment where their product designs were regulated, their marketing plans preapproved by regulators, their pricing regulated, and their internal processes and procedures regulated, their relationships with vendors regulated, their ownership and governance structures regulated. They were given room to dream, and what they dreamed has brought untold value to Americans. When providers dream of different reimbursement models, lawyers tell them, "the law won't let you do it that way." When payors dream of innovative policies that better meet consumer demands, lawyers tell them, "the law won't let you do it that way." When patients dream of different ways of interacting with medical service providers, they find that no one is paying attention to them.

The government is not "causing" the current health care crisis - - it is the natural and predictable course of the existing model. But the laws and regulations that were intended to bring that system to heel have now ironically become its perpetuator - - by prohibiting the natural development of models that would take its place.

And so what to do?

"Climb on to my back, Gingerbread man, and I'll take you to the other side of the river."

"Thank you just the same," I say.

We have a choice - - the option of getting off the fox's back. If we let the fox carry us to deeper water, we'll have no other choice but to jump in to the maw. That is the real urgency with which the health insurance reform question should be viewed.

Let's take Scott Brown's advice and go back to the drawing board. Let's not go to the stakeholders like the American Association of Health Insurance Plans or the American Medical Association or the American Hospital Association or union groups or the AARP and ask them how we can improve things for THEM. Let's instead ask those players a simple question, "what is preventing you from responding to patient demands?" When the answer is laws or regulations, roll them back. When the answer is inertia, provide incentive. When the answer is momentum, provide a brake. The proposal for health care reform should create an open space for the inevitable innovation that will follow when given the chance. The current proposal is not so much open space as it is a careful script of How Things Will Be For The Next Fifty Years, and it will have to be that way, and it will have to proceed that way, until the bank is broken and our grandkids move to China because there's nothing left of the US economy.

So know this: my evaluation of health reform proposals moves from these principles: free markets; room for innovation; primacy of the patient. These things are utterly lacking from today's model. Anything that moves towards those principles, I like. Anything that moves away from them or that attempts to cement today's model in place, I dislike. And any representative of mine that votes for it will get a resounding NO from me the next time I see their name in a voting booth, and forever after that until they are gone.

It is time indeed to end the national health insurance debate. It is time to begin the debate that never happened, which is the national health care debate. And it is time to make room for a new system that will give patients the same benefits of technologies and knowledges that are ubiquitous in our society but that have failed to penetrate the health care sector because of its arcane reimbursement models.

It is time indeed.

Thank you for bearing through this diatribe til the end. Please share freely.