Saturday, January 16, 2010
More Government Health Care
The stories about Veterans Administration health care keep flowing in to counteract New York Times Nobel laureate Paul Krugman's claim that the the VA system "manages to combine quality care with low costs." The latest is from Senator Grassley, who reports that "the wrong filter was used in dialysis machines at the V.A. Palo Alto Health Care System last year, putting 83 patients and possibly more who were treated using the contaminated machines at risk of being infected with hepatitis, HIV, or other infectious diseases." Says Mr. Grassley, "this is not the first incident of contaminated equipment in the VA health system. The Associated Press reported that in February 2009 the V.A. started notifying more than 11,000 patients treated at three VA medical centers to get their blood checked because they may have been exposed to infectious body fluids. It was discovered two months earlier that equipment used for colonoscopies at these three hospitals was not properly cleaned or sterilized."
This report comes on top of news of the Philadelphia V.A. prostate cancer unit that, according to the New York Times, "botched 92 of 116 cancer treatments over a span of more than six years." And on top of a finding that at a V.A. Medical Center in Marion, Ill., seven out of 180 patients between October 2006 and December of 2006 died during or after surgery. "This mortality rate was more than four times greater than expected when considering the patients' physical conditions prior to surgery," a government report said, in part because "physicians had privileges to perform procedures without evidence of competence to perform the procedures."...
The High Cost of No Price
Economists have shown that if a good’s price is zero or decreasing, then the demand for this good will likely increase. In 2008, consumers were only directly responsible for 11.9 percent of total national healthcare expenditures, down from 43 percent in 1965, according to new data from the U.S. Department of Health and Human Services. This means that someone other than consumers pays roughly 88 percent of all healthcare costs, giving consumers little incentive to mind costs and much incentive to over-consume.
The graph below shows out-of-pocket payments by consumers and spending by Medicaid, Medicare, and private insurers on healthcare from 1965 to 2008. Since the passage of Medicare in 1965, consumers’ out-of pocket spending on healthcare has decreased steadily as a percentage of overall U.S. healthcare spending. While real and nominal out-of-pocket healthcare payments increased over the period, growth in these costs was dwarfed by a much more rapid growth in overall spending. On average, consumers’ out-of pocket healthcare costs increased 6.7 percent each year, while national healthcare expenditures increased by an average 9.8 percent each year....
Obama received $20 million from healthcare industry in 2008 campaign
...A new figure, based on an exclusive analysis created for Raw Story by the Center for Responsive Politics, shows that President Obama received a staggering $20,175,303 from the healthcare industry during the 2008 election cycle, nearly three times the amount of his presidential rival John McCain. McCain took in $7,758,289, the Center found.
The new figure, obtained by Raw Story through an independent custom research request performed by the Center for Responsive Politics -- a nonprofit, nonpartisan group that tracks money in politics -- is the most comprehensive breakdown yet available of healthcare industry contributions to Obama during the 2008 election cycle.
Currently, the Center's website shows that Obama received $19,462,986 from the health sector, which includes health professionals ($11.7m), health services/HMOs ($1.4m), hospitals/nursing homes ($3.3m) and pharmaceuticals/health products ($2.1m). Miscellaneous health donations (from which Obama received $860,411) are also factored into the current total health sector numbers but are not accessible on the site.
Health insurance industry contributions, however, are not included within the Center's current health sector totals. Rather, contributions from the health insurance industry are contained within the site's finance and insurance sector. Seeking a more complete total, the Center culled health and accident insurance donations from this sector (for which Obama received $712,317) and combined them with his existing health sector total ($19,462,986) to arrive at his healthcare industry total ($20,175,303)....
Obama's Prescription for Low-Wage Workers: High Implicit Taxes, Higher Premiums
House and Senate Democrats have produced health care legislation whose mandates, subsidies, tax penalties, and health insurance regulations would penalize work and reward Americans who refuse to purchase health insurance. As a result, the legislation could trap many Americans in low-wage jobs and cause even higher health-insurance premiums, government spending, and taxes than are envisioned in the legislation.
Those mandates and subsidies would impose effective marginal tax rates on low-wage workers that would average between 53 and 74 percent— and even reach as high as 82 percent—over broad ranges of earned income. By comparison, the wealthiest Americans would face tax rates no higher than 47.9 percent.
Over smaller ranges of earned income, the legislation would impose effective marginal tax rates that exceed 100 percent. Families of four would see effective marginal tax rates as high as 174 percent under the Senate bill and 159 percent under the House bill. Under the Senate bill, adults starting at $14,560 who earn an additional $560 would see their total income fall by $200 due to higher taxes and reduced subsidies. Under the House bill, families of four starting at $43,670 who earn an additional $1,100 would see their total income fall by $870.
Michael F. Cannon is director of health policy studies at the Cato Institute and coauthor of Healthy Competition: What's Holding Back Health Care and How to Free It.
More by Michael F. Cannon
In addition, middle-income workers could save as much as $8,000 per year by dropping coverage and purchasing health insurance only when sick. Indeed, the legislation effectively removes any penalty on such behavior by forcing insurers to sell health insurance to the uninsured at standard premiums when they fall ill. The legislation would thus encourage "adverse selection"—an unstable situation that would drive insurance premiums, government spending, and taxes even higher....
The patsies catch on to Obamacare
...To fund more coverage of the not-quite-poor (the poor and near-poor already are covered), the Senate and House must scrape up hundreds of billions of dollars from somewhere. It'll be worth it, they say, since care will get cheaper. But last week, Medicare's chief actuary said the plans would bend the nation's cost curve upward by $222 billion over their first decade. The figure's a lowball because of Congress' accounting trick of excluding four years of costs. And, said actuary Richard Foster, the presumed cuts in Medicare (if ever made) mean lots of doctors will have to drop such patients.
All this to raise the nation's coverage rate from 83% to 93%.
Nor is it just money. The ticked-off people in Pewaukee weren't telling Feingold not to tax them to cover the not-quite-poor. They were telling him not to mess with their coverage, because Obamacare does just that, corralling millions of people into federally designed plans. Federal panels may tell doctors what treatments to use. The Internal Revenue Service may tell us all what kind of plan we must, or must not, buy.
Or not. Word on Wednesday was that Congress might drop some employer mandate to get a bill passed. Lawmakers might drop a tax on really rich people. This isn't reassuring: The logrolling shows exactly how key details of everyone's coverage will be subject to constant politicking.
This is what's revealing about the turn of the Obamacare debate toward revenue: We see that the House and Senate plans are really about how to redistribute the costs of health care. The plans avoid anything like patients assuming responsibility and control of their own care - the one thing that could restrain costs. Instead, Congress hustles more money to and fro in the name of fairness, politically determined.
So people assume, correctly, that the cost will fall on those with the least political juice. That's why middle-class people were shouting at Feingold this week. They aren't poor and sympathetic. They aren't rich enough to hire sharp tax lawyers. They aren't doctors who hire lobbyists; they aren't unions, owning lawmakers. Someone's going to get milked, and they sense a bucket headed their way....
