Employer Coverage Dumping - A Prediction Coming True

In May of 2010 I wrote this about the impact of the then-new health reform law on employer-sponsored coverage:

More employers, already at or near the break point of providing health insurance coverage as an employment benefit, will elect not to

Today, there's this from Avik Roy at Forbes:

there’s a new study that suggests that employer dumping under Obamacare could be significant, leading to an explosion of the law’s costs and thereby the federal debt. A working paper by economists Richard Burkhauser and Sean Lyons of Cornell and Kosali Simon of Indiana, published by the National Bureau for Economic Research, examined various reasonable assumptions regarding the behavior of employers under the law.

Burkhauser and colleagues found that, in a worst-case scenario, the number of people covered by Obamacare’s subsidized exchanges could be more than double the estimates of the Congressional Budget Office and the Joint Committee on Taxation. “In the most dynamic case (broad affordability and maximum change in premiums)…Exchange coverage increases from 10.23…to 22.89 percent” of the privately-insured workforce. This would lead to worst-case of $48 billion a year in additional federal spending, according to a version of the study published by the Employment Policies Institute.

Well, hey. When your budget is $1.3 trillion in the hole, what's another measly $48 billion on top? Read the rest of Avik's post at Forbes here.

How To Cut Health Care Costs By 64%: Let The Patient Ask

For some months now I have been suggesting on this blog (and everywhere else I can) that the best mechanism for exerting downward pressure on health care costs (meaning, the price of care) is to have the ultimate consumer (meaning, the patient) pay for the services.

Republicans and Democrats alike seem to be bent on ignoring such a tactic in favor of other approaches that cater to their pet constituencies.

In today's Kaiser Health News columnist Lisa Zamosky relates a real-life example of what happens when you force health care providers to justify their prices in the harsh light of day. The story involves a patient who has a high-deductible health plan, requiring her to pay on her own for the first $5,000 of care she gets in any year. When the patient went for an annual checkup and was handed a $350 bill (which she described as "ridiculous"), she asked for a discount. Removing a few routine tests from the bill brought it down to $125, which the patient then paid.

That's a discount of 64%.

Detractors from the market approach would likely suggest that a 64% discount is not a result that could be achieved on a large scale. The primary care industry would evaporate if it were forced to take a pay cut of approximately 2/3 of their income.

Which is true to this extent: the primary care industry as we currently know it would evaporate. In its place, I have no doubt at all, some enterprising individuals would figure out how to package primary care services in a way that deliver value to the patient and still allow physicians and nurses to eat. I don't think for a moment that the system will look anything like what we currently have. But why should it? The current system is both overpriced and inefficient; why should we continue to prop it up?

Health care reform proponents squawk about "access" and how free market solutions will fail to provide universal access to care. I wonder at that. It did not require massive government spending programs to make cellphone ubiquitous; it did not require impinging on personal liberties to put televisions in every home; it did not require nationalizing an industry to make personal computers affordable.

Imagine a sprawling government system whose purpose was to extend the life of the recording industry at a given point in time, say, the year 2000. We would be stuck with regulations forcing us to buy overpriced CDs and CD players, perhaps even cassette tapes, in order to keep the music stores open, while foreclosing the development of the iPod and other forms of music content delivery yet to be thought of. Why would we agree to such a thing? Why did we agree to such a thing?--because that's exactly what we have now.

Reform advocates posed this question may cough nervously and suggest that health care is different. But they can't quite say how.

I saw pshaw.

By the millions, Americans have concluded that the current third party payor system does not deliver the care they need at the price they can pay. The reformer's response: buy it anyway.

That's the definition of a command market.

Why would we agree to such a thing. Why did we?

Health Reform: Banking on Telekinetics - Part I

Now that the shock of having actually passed a health reform bill (if you want to call it "passing," it was really just "deemed passed") is wearing off, conversations seem to be turning more towards costs. The problem of uncontrolled costs persists, and threatens to break the bank if not the very back of the United States.

Happily, some very smart people are sporting their opinions about costs. One of them is David Cutler, the Otto Eckstein Professor of Applied Economics at Harvard University, who spoke recently at a symposium organized by the prominent journal "Health Affairs."

Cutler's take is this: health reform will bend the cost curve, "because it has to." So there. Take that, all you doubters and haters.

"Health reform will only be successful," he says in his symposium remarks, "if it can successfully bend the cost curve."

"If it can," he continues, "then we will be able to afford the commitments we've made under the legislation as well as the committments that were already in place through Medicare and Medicaid. And if we cannot bend the cost curve, then not only will the new commitments we made fail, but the older commitments to Medicare and Medicaid and a variety of other programs will fail as well. And we know that from look - - any cursory look at the federal budget will tell you that. So the success or failure of health care, and health reform, will be determined to a great extent by what this legislation does about cost issues." (Emphasis is mine.)

Agreed.

But if you were wishing Cutler would then proceed to explain why he thinks health reform will actually bend the curve, well, keep on wishing. Instead of talking specifics, Cutler jumps ahead to explain how you will know if health reform is in fact bending the curve: "I think the right way to view this now is not as a kind of, he-said . . . she-said or, or this-team-said . .. that-team-said in the sense of what is likely to happen," he said, "but what I want to do is leave you with the sense of 'how will you know when reform is actually working.'"

He then looks to industries outside of health care, and points out what makes those industries successful. If you see those things happening inside of health care, the theory goes, it means (one supposes) that health care is also becoming a successful industry - - one with "high value, low production costs."

Point one: Information Technology.
"Very successful industries use information technology a lot," Dr. Cutler says, "so they know what they're doing, who's doing it, why they're doing it, who's the right person to do it, how long it's taking, how much it costs . . . everything about the nature of production. Of course in health care the most interesting thing is that we know essentially none of that. And when we do observe it, we observe that it's bad."

Now one hopes it doesn't take a doctoral degree from Harvard to understand that IT can be a useful tool to manage production. Which leads one to wonder, why hasn't the production side of the health care industry already adopted IT solutions to reduce production costs? Especially technologies that have been around for a while and are proven value-adds?

One reason might be because they have no incentive to do so. In other industries, production costs translate directly into retail costs, and retail costs need to be justified in the harsh light of day both against consumer expectations (I'm paying $100 for THAT?) as well as against competitor prices (But I can get it at Joe's for $80!)

Unfortunately, neither of those two factors appear in the health care industry. Either the consumer/patient remains blissfully unaware of the actual retail price of the good or service they are obtaining, or the price is obfuscated by byzantine policies, procedures, and billing practices. "The system" usually shows you nothing, and when it does show you something what you see is a Gordian knot. To top it off, if there is a third party payor involved (private insurance, Medicare, etc.) there is no need for either the hospital or the patient to rationalize the price, because it's someone else's money being spent.

In that basic environment, "cost-cutting" means only reducing your revenue and "productivity gains" means only staff-cutting. Neither of those things would make a hospital CEO very popular, especially the latter, especially in smaller communities where the hospital is likely one of the very few stable employers left in the area.

Take, for example, bar codes. Reading, for example, McKesson's summary of the "glacial" progression of bar code technology in the health care industry (see Appendix B of the target document) is downright depressing. Following adoption of the "uniform product code" in 1972, US grocers began adopting point-of-sale bar code systems "en masse." Throught the 80s, other industries "began leveraging bar codes for unprecedented efficiency gains." Not so health care. Come 2003, there is still more foot-dragging than progress despite proven benefits of bar-coding in terms of efficiency and patient safety.

So what is changing about that basic environment to provide an incentive for health care producers to adopt IT solutions? Nothing, so far as I can tell. And as any IT consultant can tell you, American businesses are full of IT products that were purchased and never implemented, or implemented and later abandoned. If there's no good reason to use the product, it won't be used.

Under Dr. Cutler's theory, if we look at the health industry and we see that it has finally gone mainstream on bar-coding, does that mean health-reform is working? Well, if your employer told you he was getting your computer up-to-par by mid-80s standards, would you be pleased about that? TRS-80, anyone? I didn't think so.

Once the incentive money to buy electronic health records, for example, runs out, nothing about the health care industry's basic environment will draw its major players either to spend the money to upgrade the current technology, or to adopt the NEXT technology - - the technologies that other industries are developing and adopting NOW to boost their productivity and cut costs. The result: a health care industry that is perpetually 20 years behind the times and experiences technology adoption if and only when massive government spending and perhaps a mandate or two is involved.

How successful do YOU think such an industry will be at controlling health care costs?

The Law of Unintended Consequences

In a famous scene in the movie "Top Gun," the salty naval commander Stinger admonishes Maverick (Tom Cruise's character) that "your ego is writing checks your body can't cash."

One might well give the same admonition to Congress, poised this week to extend unemployment benefits yet again ($47 billion), assuage bellyaching physicians with increased Medicare reimbursement ($64.9 billion), and increase Medicaid payments to the States ($24 billion), along with a handful of other initiatives both noble and nefarious to the total tune of $190 billion.

Uhm.

That besides, at the official health reform blog (HealthReform.gov), Stephanie Cutter, Assistant to the President for Special Projects, put up a post May 19 titled "Yes, You Can Keep Your Health Plan." In it, she says, "while the Act makes many changes to the individual market, it specifically allows those who want to keep their current insurance to do so. Most of the Act's protections apply only to new policies, allowing people to stick with their current plan if they prefer."

Of course, this statement is premised on the assumption that the individual's "current plan" will remain available, a condition that is - - at present - - beyond the administration's control. For those Americans whose health insurance is provided as a fringe benefit to employment, the continued availability of the "current plan" is the decision of the employer. Not the individual, and certainly not the Obama administration.

Employers understand this, and have for some time. Long before the reform bill passed, employers were considering whether continuing the paradigm of employer-based coverage still made economic sense:

The primary source of instability in the employer-sponsored insurance market is the decrease in employers offering health insurance coverage to workers and their families. Between 2000 and 2008, the percentage of firms offering health insurance coverage to their employees declined from 69 to 63; for firms employing less than 10 workers, the decline was even greater – from 57 to 49 percent.

The administration understands this too, because the above quote comes (also) from the HealthReform.gov website.

Consider the following factors in play:

• The reform bill did nothing to address the cost of care, which will continue to go up


• Premiums, which reflect the cost of care, will also continue to go up


• A surplus of employable individuals mean that businesses need not offer enhanced benefits to attract workers


• More employers, already at or near the break point of providing health insurance coverage as an employment benefit, will elect not to


• When employers drop health insurance as a benefit, the Obama administration's promise of being able to keep your "current plan" will be worthless.

Not that that would be a bad thing, necessarily. There are lots of reasons why employer-sponsored health insurance is a poor model on which to structure health care delivery.

But remember, of course, that we now have an individual mandate to purchase insurance. Individuals will be forced to continue supporting a third-party-payor model that overpays providers for poor quality care - - propping up what will be then be 1/5 of our entire national output while servicing a debt that exceeds 90% of GDP. That is what living in America will mean: being forced to support an otherwise unsupportable industry using money our grandkids will work their entire lives to pay off. That's not a future I want, and it's not a future I want for my children.

The "health care crisis" can be traced back directly to government intervention. The employer-based, third-party payor system thrived in the 50s and 60s because Congress and state governments thought it was a great idea and enacted laws that favored that model over others. Managed care thrived and became mainstream in the 70s and 80s because Congress and state governments thought they were awesome and enacted laws that favored that model over others.

The unintended consequences of all that government intervention is a system that has priced itself out of viability and yet delivers low quality care. Free markets frown on such results, and thus both individuals and business had begun to turn away from that model. But rather than return to free market principles, the recent reform bill corrals all of those that would flee and throws them right back into the third party-payor, managed care system by way of the individual purchase mandate.

That is not legislating to the benefit of the American people; it is legislating to the benefit of an outdated idea that should have died a long time ago. That is not legislating to the principles of a free market; it is legislating to the principles of a command market. That is not liberty; it is involuntary servitude to the third- party payor model of health care reimbursement. And involuntary servitude is the unintended - - but very real - - consequence of Obama's health care reform.

Braly's Obama Letter is a Bad Move

WellPoint CEO Angela Braly has told President Barack Obama by way of a letter that attacks on health insurers "must end."

I feel fairly comfortable in saying that Obama's attacks on health insurers will not end, Braly's letter notwithstanding, anytime soon. And here's why:

Support for Obama's health reform is weak. More American's opposed the health reform bill than supported it, and of those that were undecided at the time the bill passed, more have decided against it than in favor of it. Generally speaking, social programs do not begin with much popular support as they go against a very long tradition in the United States of self-determination and personal responsbility.

Backlash against health reform is strong. Tea partiers, 9/12 movements, and traditionally conservative organizations are using health reform as a rallying cry. Twenty states have launched legal challenges to the reform bill and more yet may be coming. Incumbent Senator Bob Bennett of Utah was recently decapitated (figuratively speaking) by his own Republican party due in no small part to his support of the Wall Street bailout and support of bipartisan health reform efforts.

In light of these two factors, Obama needs to work continually to gin up support for the health reform initiative and protect his party. If he doesn't, his party and centrist Republicans are facing certain slaughter in the November elections. That is why Secretary of Health and Human Services Kathleen Sebelius has become the most vocal Obama cheerleader, "trumpeting" health reform's immediate impact even as she cajoles insurers into acting early on select implementation issues.

Health insurers were the whipping boy of the Obama administration. Anthem's (a WellPoint subsidiary) ill-timed rate increase in California breathed life into what was a very nearly dead effort to pass a reform bill.

The AMA grudigngly supported Obama's reform in exchange for the "Doc fix," a change to Medicare reimbursement that the Congressional Budget Office recently re-estimated will cost $276 billion over the next 10 years - - an increase, by the way, of 33% over CBO's previous estimate and a giveaway of more than twice the entire estimated "savings" of the health reform bill itself.

Hospitals are community anchors and are untouchable despite growing skepticism over their financial practices. In rural communities, hospitals are often the only sizable employer other than government and school districts.

Patients, of course, are ultimately voters and so they must be made out as innocent if not unwitting victims.

And that leaves insurers. And hey, it worked in March because the health reform bill indeed became a reality.

So it is a fair bet that Obama will go back to the "health insurers are evil" well many, many times between now and November.

Braly now says the country has a history of coming together after tough debates, and "health reform should be no different." This conciliatory statement underestimates the robustness of the backlash against reform, and will ultimately serve only to hearten the administration in its effort to gain support for its agenda - - from anywhere they can get it.

WellPoint would have been better served by throwing an elbow. Eighty-five to ninety percent of the increasing cost of insurance is due to the increasing cost of care. Health care payors are largely hamstrung by restrictive state and federal laws from pursuing efforts to reduce the cost of care, and the administration has done nothing but protect physicians and drug manufacturers from downward price pressure. WellPoint would have been better off asking why Obama is working so hard on only 12% of the problem while ignoring the other 88%.

Why Bother With Smoke and Mirrors?

When the Congressional Budget Office released its savings estimates on the health reform package, Democrats danced in the aisles. There, finally, was proof that they were not just irresponsible spenders. The comprehensive package was pegged by the CBO as reducing the deficit over the the next 20 years.

Take note, however, where these savings come from. The total deficit reduction of the bill was estimated at $138 billion over 10 years. Of that, about $20 billion was related to changes in how educational loans are written and administered. The health reform provisions accounted for about $118 billion over 10 years.

A review of the line-by-line analysis points out a few overall weaknesses in the plan. For one, most of the provisions are either budget neutral or add to spending. Only a few lines contribute to a reduction, and of those few lines only a few are large numbers. This concentrates the "savings" in a few very specific areas while spreading the "spending" out across dozens of provisions. What that means is that if only one of the "savings" lines fails to come out as predicted, it could throw off the whole calculation.

For example, COB predicts a deficit decrease of $132 billion from decreases in "Medicare Advantage Payments." If only this one line fails of its purpose, then all of the alleged savings to be accomplished under this reform bill are obliterated.

Another line predicts $156.6 billion in savings from "Revision of Certain Market Basket Updates and Incorporation of services Productivity Improvements into Market Basket Updates that do not Already Incorporate Such Improvements." Is that not clear? The lawfirm Arent Fox provides some elucidation: "[This section] incorporates a productivity adjustment into the market basket update for inpatient hospitals, home health providers, hospice providers, inpatient psychiatric facilities, long-term care hospitals, and inpatients rehabilitation facilities. The beginning of the productivity adjustment varies, depending on provider type. The provision provides additional market basket reductions for certain providers, and incorporates a productivity adjustment into payment updates for Part B providers who do not already have such an adjustment." So $156 billion in the "savings" rests upon reducing the amount paid to Medicare providers using some kind of complex formula.

Now if that sounds a little familiar, it should. In 1997 Congress hatched a scheme to reduce the amount paid to Medicare physicians using some kind of complex formula. But when the formula kicked in, the AMA screamed bloody murder, and . . . yep, you guessed it, the cut didn't happen because Congress acted to put it off. Didn't happen in '98, '99, '00, '01, '02, '03, '04, '05, '06, '07, '08, '09, and if the Democrat leadership has their way, it won't happen in 2010 either. What's the price tag for the "doc fix" legislation? For the short term proposals, it's either $9 billion or $18 billion depending on whom you ask and which version is being discussed. Either way, it's far less than the $156 billion that the "productivity adjustment" is supposed to squeeze out of Medicare to pay for health reform.

So if Congress doesn't have the stomach to reduce Medicare spending by 18 billion, how likely to you think it is that the $156 billion cut is ever going to materialize?

In my opinion, not a bit likely at all.

Now if you factor out just that one line, the net savings of the health reform bill are gone and the whole thing is in the red by $38 billion. And that's assuming the expense side isn't underestimated by 40% like Medicare Part D was. By the way, the long-term "fix" for the Medicare physician payment "problem" is estimated at over $200 billion - - or, 1.8 times the total estimated health care savings under the reform bill.

When Congress was considering the North Atlantic Free Trade Agreement (NAFTA) in 1992, Presidential candidate Ross Perot used the phrase "a giant sucking sound" to describe the noise made by US jobs heading south for Mexico should NAFTA go into effect. (Which it did, and which they did.)

If you listen carefully right now, you will hear a "giant flushing sound" and that is the sound of the US economy going down the drain under the crushing weight of the total health care spend. The stimulus bill might give us a temporary bump, but most agree that over a long term arc the amount of resources we direct to paying for simple health care is astounding and unsustainable.

Although touted as a deficit reducer, health reform is a big fat spending bill whose net savings are based on a few huge cuts which Congress knows damn good and well are never going to happen.

Republicans Don't Get It Either

The reason we don't have a genuine health reform proposal on the table is because Republicans don't get it either. It's like watching two monkeys trying to figure out how to turn a nut, and one picks up a hammer, and the other picks up a screwdriver, and they both go at it while the wrench lays there unused.

Today's Albany Times-Union provides a nice example. On page A3, Republican Congressional candidate Chris Gibson is quoted touting his party's reform ideas:

"I believe that [the recent health reform package] was a step in the wrong direction," Gibson said, explaining he would support legislation to reduce health costs by capping medical malpractice awards, allowing people to buy insurance across state lines and more closely scrutinizing fraud."

Now as luck would have it, in the same edition on page A1, the paper reports on a recent record-busting medical malpractice award: $5.2 million. What happened? An arrogant obstetrician refused three requests by another attending doctor to look at a post-surgery patient suspected of internal bleeding. Eventually he went back in, but it was too late. The patient was 32. She left a police officer husband and two kids behind.

If Dick Cheney had his way, that family would have been left with $250,000. Personally, I think $5.2 million's not enough. I'd like to see the physician indentured to the family for the rest of his life - - which, incidentally, would not be spent working as a physician. That chapter would be closed.

It's easy to talk about caps when there's no face in the story.

Coincidentally, or perhaps not, yet another story in the same edition describes the ongoing rise in Caesarean-section rates. Research into this phenomenon suggests that the increase is largely for the convenience of the attending physicians. C-sections are twice as expensive as normal deliveries, and are three times deadlier to the mom.

In a third party payor system, the decision to have a C-section gets split up among a bunch of different players. The health plan recognizes the problem and tries systematically to reduce the number of C-sections. It's first suggestion is to pay physicians more for not performing C-sections; health plan lawyers ixnay that suggestion because it violates federal law. (Never mind that C-sections are risky and unnecessary - - you can't pay physicians to not perform a service.)

The health plan's next suggestion is to devise a quality standard and pay physicians more for meeting the standard - - a national benchmark, say. The physician then publicly decries the health plan's "cookbook medicine" plan and tells the health plan to stop telling him/her how to practice medicine.

Where's the patient in all this? Well, all she knows is that her physician wants to do something and the health plan is saying no. Because that's all health plans do: deny, deny, deny.

I suggest that if the patient were responsible for the costs of the medical care, a number of factors would come in to play. The patient would see the real cost of the decision to have a C-section. Given the tremendous impact, the patient would likely question the value of the C-section. Once informed of the additional risks and the additional costs, the patient would probably say C-section only if absolutely positively unavoidably necessary. Which is as it should be. And all of this would happen in a conversation between the patient and the physician, where neither one can vilify a third party for being unreasonable. Which, again, is as it should be. C-section rates would drop, all on their own, and lots of unnecessary care would be removed from the system. The overall spend would go down.

That is where health reform needs to go. Anything else is just a hammer on a nut, or a bad screw job, depending on your party preferences.

Pick up the wrench.

It's Still About Costs

Witness Massachusetts, the poster child of Democrat health reform efforts:

State regulators said yesterday that they will probably change the complex formula they use to determine how many Massachusetts residents face a tax penalty for not having health insurance, because spiraling costs are making coverage unaffordable for too many people.

I persist in believing that health care costs will continue to rise unabated unless and until individual Americans pay a majority of their medical expenses out of pocket. Until then, patients and providers alike will be spending "other people's money."

Also of interest was this nice summation from the traditionally left-leaning Washington Post, which appeared in today's Albany Times-Union:

But the long-term threat is no joke, as Obama has acknowledged many times. If he does not pivot, the country will be in serious trouble.

Why? According to a Congressional Budget Office analysis published last week, Obama's budget plan has the government spending one-quarter of the national economy (25.2 percent of gross domestic product) 10 years from now, while collecting revenue that's less than one-fifth (19.6 percent).

Such a gap isn't sustainable for any country. The United States would have to borrow so much money that in interest alone the government would be spending 4.1 percent of GDP -- compared with 1.4 percent this year.

So we should be happy about health care reform because it trims the deficit, right? Not so fast.

The President touts health reform in part because it will reduce the deficit -- according to the CBO, by $143 billion in the next 10 years.

That sounds pretty good, until you consider that Obama would need the equivalent of 70 additional health bills to undo the $9.8 trillion that his budgets will add to the deficit during the next 10 years, according to the CBO.

(Actually, it would take something like 220 health care bills of deficit reduction. The savings from health care are more like $44 billion, once you subtract $70 billion in premiums that people will pay for long-term insurance and $29 billion they will pay into the Social Security trust fund, all of which will have to be paid out later. Either way, it's pretty scary.)

I never bought that health reform was necessary before fiscal reform can take place. Health reform was a golden opportunity for fiscal reform, and Obama blew it by cutting special interest deals with big pharma and the AMA.

That's not change I can live with.

Why Aren't We Talking About The Cost of Care?

Yet another missive from the persistent Nancy Ann Min DeParle, Director of the White House Office of Health Reform:

Good afternoon,

Hi, Ms. DeParle. I was just spending the afternoon counting the number of millions of dollars in your back account that came from businesses in the health care industry - - the industry you are now seeking to reform. I got up to $5.8 million dollars and that's only in the last three years before you were appointed to the WHOHR. You must spend a lot of time thinking about that money - - it's so much I can hardly get my brain around it myself. But that's just me, because I've never seen a million dollars, not in all my years of working put together.

Anyway, you probably wanted to talk about reforming the health insurance industry. I think you might have made the least money from health insurers in those last three years before your appointment. Maybe that's why they're your current whipping boy. But who can say?

If you’re an American under the age of 65, there's roughly a 50/50 chance that you will find yourself without coverage at some point in the next decade.1

Simply put, losing insurance can happen to anyone.

Yes, and now that you mention it we have this thing called COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act, and which has been around for quite some time now. COBRA gives anyone who loses their group insurance the right to continue paying for it on their own at nearly the same rate for up to 18 months. Recent federal legislation extended that timeframe to 36 months. States also have laws (usually referred to as "mini-COBRA" laws) that provide similar extension rights and in some cases more lenient extension rights.

So is the issue here the *opportunity* to continue paying for insurance, or the *ability* to continue paying for insurance? Those are two very different things.

At yesterday's health reform event, President Obama told the story of Natoma, a self-employed woman in Ohio who found herself in the position of losing her health insurance after yet another rate hike from her insurance company:

OK. So you mean the *ability* to pay for insurance. So what we are really talking about here is the affordability of insurance premiums in general, not necessarily the loss of coverage due to a specific event.

"She realized that if she paid those health insurance premiums that had been jacked up by 40 percent … she couldn't make ends meet. So January was her last month of being insured.

Say now, the Obama plan would have relieved Natoma of the difficulty of her decision by making it for her: she would not have had the option of foregoing insurance because of the individual mandate. So, whether the reason was that she couldn't make ends meet, or that she just wanted to spend her money on something else, she would not have had the option either way.

You might respond by saying that your reform efforts will lower premiums. Every experience however is to the contrary.

And while I'm thinking about it, if Natoma really couldn't make ends meet, how come she didn't qualify for Medicaid? Details, details.

Like so many responsible Americans -- folks who work hard every day, who try to do the right thing -- she was forced to hang her fortunes on chance... And on Saturday, Natoma was diagnosed with leukemia…

Well of course she was, otherwise why would Obama be talking about her in a speech? But is Natoma's story everyone's story? Here's something from the source you cite on the uninsured: "45 percent of Americans in households making between $50,000 and $100,000 went without health insurance at some point between 1997 and 2006." (see page 2) Do you suppose those moderately well-off households were "forced to hang their fortunes on chance" or do you suppose that they just decided of their own free will to do so?

Should we have the freedom to make bad choices? Perhaps you don't think so, but I do.

Here's something else: "57 percent of Americans under 30 went without insurance between 1997 and 2006." (also on page 2) One might suppose that young and healthy individuals without a lot of disposable income might want to spend their money on other more important things, like repaying educational debt, or building up some good credit history, or maybe putting away early for retirement. Shouldn't they be able to? Your plan for an individual mandate would saddle youths just out of school with an expensive mandate to purchase a product that they will make very little use of. Not good news for young kids, considering that they will also have the highest Social Security Tax imposition ever to deal with, a national debt to be serviced that will amount to 90% of GDP, and a likely doubling of the state and federal outlays for Medicaid. Where exactly is all that money supposed to come from?

"Part of what makes this issue difficult is most of us do have health insurance, we still do.... But what we have to understand is that what's happened to Natoma, there but for the grace of God go any one of us."

Yep, Ms. DeParle, unfortunate things happen to people sometimes, and they don't always have millions in the bank like you to fall back on. Like the young kids that will be forced to buy health insurance when they don't need it and don't want it. That's a rather unfortunate thing, and they won't have yet made their millions.

For Natoma and the millions of other Americans forced to face the burden of medical bills they can't pay while at their most vulnerable -- the time is now for health insurance reform. Watch the video of Natoma's story and learn what more you can do to help spread the word about the need for reform.

Medical bills they can't pay? Now wait a minute, we started out talking about the affordability of *insurance,* and now you are talking about the affordability of health *services.* Those are two very different things, yes? It would be important for the Director of the White House Office of Health Reform to understand that.

Because, you know, if we are going to start talking about medical bills and the actual cost of health care services then we have to start a whole different conversation.

50/50 is the latest number in 'Health Reform by the Numbers,' our online campaign to raise awareness about why we just can't wait any longer for health insurance reform. Help spread the word by sharing this message with your family, friends and online networks.

Oh, dear, you're wrapping up already and we never got to talk about medical bills! Like, why can't we talk about the cost of chemotherapy drugs? You know, the kind poor Natoma will need for her cancer treatment? Maybe we can't talk about the cost of chemotherapy drugs for Natoma because of the $80 billion dollar sweetheart deal you cut with big pharma. From the LA Times:

Under the deal, the Pharmaceutical Research and Manufacturers of America, or PhRMA, agreed to provide $80 billion in cost savings over 10 years. It also promised to promote healthcare reform in a multimillion-dollar ad campaign. In return, the White House agreed to consider the $80 billion as a cap on PhRMA's costs in the overhaul legislation. In addition, the White House agreed not to require rebates on sales of commonly prescribed drugs to patients enrolled jointly in Medicaid and Medicare.

So, Ms. DeParle, your boss traded the support of the pharmaceutical industry in exchange for TAKING ANY DOWNWARD PRESSURE ON PRESCRIPTION DRUG COSTS OFF THE TABLE FOR THE NEXT TEN YEARS. This is how our elected leaders are dealing with the "biggest threat to our nation's balance sheet?"

Hey, um. The Kaiser Foundation had this to say about prescription drugs: "While prescriptions are a relatively small share of overall health spending (11%), they are a key driver of health spending trends, growing almost twice as fast all other health services in recent years."(1-1)

And when Barack Obama was running for President he said: "The 2003 Medicare Prescription Drug Improvement and Modernization Act bans the government from negotiating down the prices of prescription drugs, even though the Department of Veterans Affairs’ negotiation of prescription drug prices with drug companies has garnered significant savings for taxpayers. Barack Obama and Joe Biden will repeal the ban on direct negotiation with drug companies and use the resulting savings, which could be as high as $30 billion [a year], to further invest in improving health care coverage and quality."(2-2)

So is it clearer now why we're not talking about health care costs? Obama traded away $300 billion dollars worth of potential savings in health care costs in order to get pharma's support for his current health insurance reform effort. They're untouchable now. And they got it for a promise.

Let's get it done.

Yeah. I'm feeling pretty "did" these days. Can't wait for tomorrow . . .

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1 Department of the Treasury, The Risk of Losing Health Insurance Over a Decade
(1-1) Kaiser Family Foundation, Prescription Drugs
(2-2) BARACK OBAMA AND JOE BIDEN’S PLAN TO LOWER HEALTH CARE COSTS
AND ENSURE AFFORDABLE, ACCESSIBLE HEALTH COVERAGE FOR ALL

I Was Wrong And I Admit It

In an earlier post I said this about Obama's health care proposal:

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.

Boy was I wrong about that. I had overlooked a then very-recent re-analysis of the President's 2011 budget proposal by the Congressional Budget Office. Kind of buried in there was the following line:

Under the President’s budget, debt held by the public would grow from $7.5 trillion (53 percent of GDP) at the end of 2009 to $20.3 trillion (90 percent of GDP) at the end of 2020. (emphasis mine)

And then this:

Mandatory outlays under the President’s proposals would be above CBO’s baseline projections by $1.9 trillion (or 8 percent) over the 2011–2020 period, about one-third of which would stem from net additional spending related to proposed changes to the health insurance system and health care programs. (emphasis mine again)

So I take back may analogy; it was a poor one. I should have said this:

Imagine a salesman that walked up to your house that had just been hit by a tornado, looked at your missing front doorgiant scrap heap, 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 doorthe fact that the rest of your house is completely fucking wrecked.

In 2020 my oldest child will be 22, and on the verge of entering the job market for the first time. I'd like someone to explain to him the rationale for increasing the debt load that is ALREADY expected to be crushing by the time he is of working age. I'd like someone to explain why the President is focusing on health care instead of righting our economy and getting our national balance sheet back where it belongs. I'd like someone to explain to him why the biggest threat to our nation's balance sheet - - THE COST OF HEALTH CARE - - goes completely unaddressed in his reform proposal. I'd like someone to explain to this sweet boy, who goes to bed dreaming about hockey and video games, who loves the New York Yankees, who wants to manage a professional sports team one day, why our so-called representatives are lining up to pass a bill in service of a slogan championed by a vulgar stand-up comic: "Let's get it done." He deserves more than that.

This is serving in-flight meals on a plane that has no hope of a safe landing.

Enjoy the peanuts.

What About Health Care Costs?

If someone magically came up with a way to run a health insurance company for free (no employee costs, no building rent, no supplies, no software licensing fees) everyone with health insurance under that company would see something like a 15% discount (13% if you believe health insurers' numbers, 25% if you believe the U.S. Senate Commerce Committee numbers) for the first year. That would be the extent of the reduction.

Health care costs, on the other hand, rise 4% each year. So somewhere between three and six years, whatever gains had been got by running the health plan for free would be eliminated. And yet the medical inflation trend would continue unabated. Health care consumers would be right back to unsustainable costs, with no help in sight and another 4% price hike on the horizon each successive year.

That is why Obama called health care costs the biggest threat to our nation's balance sheet. Eliminating health insurers entirely makes for nice theatrics but in reality accomplishes little to benefit health care consumers.

In an article in the Salt Lake Tribune, two researchers from the Heritage Foundation point out that:

Today's health-care system is fraught with perverse incentives that generate artificially increased spending. But nothing in the House- and Senate-passed health bills, or in the president's plan, would reduce these incentives. And some provisions would make them worse.

In most fields, such as computers and cell phones, new technology usually increases quality and reduces prices. Health care prices, though, often go the opposite way. Not always; drug prices drop when generics replace brand-name drugs, and expensive drugs sometimes replace even-more-expensive surgical interventions. But often, new health technologies increase prices. Why? Health-care prices are determined by a bureaucratic process that prevents competition from driving prices down.

They conclude that the current proposals would bend the health care cost curve, but in the wrong direction.

Advocates of the current reform proposals say that free markets are what got us into the current health care crisis. I say phooey. Our current state is nothing of a free market.

A successful "up" vote on health reform would be a pyhrric victory for Americans who actually work and pay for their health care. They will feel momentarily better for having struck a blow against "evil" health insurers. They will soon find the gains erased and subsumed in the inexorable rise of health care costs. More importantly, lawmakers will have squandered the opportunity to address health reform in a meaningful way while the attention and will to do so were in place.

Macy Foundation Recommendations on Primary Care Reform

Recently the Macy Foundation held a conference on issues concerning the delivery and payment of primary care services. The conference was co-chaired by two professors at Duke University and included 49 participants representing a broad range of views on primary care.

The conference report makes some astute observations, including the following:

We are facing an economic situation in which the current rate of rise of medical cost is unsustainable, and this situation is exacerbated by an aging population with higher care needs and expectations. These events have created a climate in which it is necessary and appropriate to question the models of care and health professions education on which we have relied.

I agree with this wholeheartedly. Among other recommendations submitted by the panel, this one makes the most sense:

. . . state and national legal, regulatory, and reimbursement policies should be changed to remove barriers that make it difficult for nurse practitioners and physician assistants to serve as primary care providers and leaders of patient-centered medical homes or other models of primary care delivery.

This is a simple and straightforward example of how mundane - - some might say pedestrian even - - changes in existing laws could support profound changes in health delivery and reimbursement. Sure, changing licensing laws is not as flashy as a hatching a "national plan." But in effect, rolling back laws instead of creating new ones would provide room for primary care providers to come up with different delivery models to meet patient needs without sacrificing quality. I don't know exactly what that model would look like, and neither does anyone in Congress. Which is why the model itself should not be legislated, but need only be given space to grow.

The health care market is suggesting that there are better and cheaper ways to delivery primary care. Laws and regulations stand in the way. Those laws should be changed.

THAT is health *care* reform. THAT is what will provide downward pressure on health *care* costs. THAT is what will actually address the "biggest threat to our nation's balance sheet." THAT is something that should get done.

I'm Not the Only One That Thinks The President's Bill Won't Cut Health Care Costs

People far smarter than I am don't think so either:

CBO expects the cost of the new entitlement spending aimed at coverage expansion in the Senate bill – the premium subsidies in the exchanges and the expansion of Medicaid -- to reach about $200 billion by 2019 and then grow at a rate of 8 percent every year thereafter. In other words, this new health entitlement spending is expected to escalate just as rapidly as Medicare and Medicaid have in the past. CBO does not expect the “delivery system reforms” in the Senate bill, which are mainly small initiatives and pilot programs, to amount to much of anything in terms of cost control.

Read the rest of the bad news at KaiserHealthNews.

And if I didn't say it enough yesterday, I'll say it again: President Obama thinks health care costs are the single greatest threat to our nation's balance sheet.

But nevermind that. Now the mantra is: "let's get it done."

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.