Wall Street Journal
Note the operative word – "may". It doesn’t say it will, it doesn’t say it might, it says it "may" drop it because of the type of health insurance it offers and the impact of new regulations governing what amount of money must be spent by insurance companies for care. Specifically:
The requirement concerns the percentage of premiums that must be spent on benefits.
Last week, a senior McDonald’s official informed the Department of Health and Human Services that the restaurant chain’s insurer won’t meet a 2011 requirement to spend at least 80% to 85% of its premium revenue on medical care.
It is called the "medical loss ratio", but in reality it is government telling a business how it must spend its money. What the business is telling the government is, given the type of insurance offered by the business, driven primarily by the type of business it does, it won’t be able to comply with the regulation and will have to drop it’s present coverage altogether.
Of course this is bad news for the administration which is still out there pushing the lie that if you like your insurance nothing changes and you get to keep it. Naturally this flies right in the face of the lie and it’s such a high profile company that, well, something has to be done.
Like, make them an exception to the rule maybe? You know, special interest government. If you’re big enough and you can cause us enough embarrassment, we’ll “except” you from that which we require all the other drones to comply.
And that appears to be exactly what’s in the works if Jonathan Cohn is to be believed:
By this morning, both McDonalds and the administration were saying the story is overblown. McDonalds says it has no plans to drop the coverage and that it’s been in discussions with the administration over how to make sure it can keep offering the policies. The administration is saying much the same thing–that it’s aware of the issue, has been talking to industry representatives, and has already made clear these plans will be exempt from some of the early regulations on insurance.
Of course those plans obviously aren’t yet exempt since one assumes the legal team at Mickey D’s was able to successfully interpret how the new law would apply to them. So what Cohn is really saying is “nothing to see here citizen, move along, nothing to see” – a fairly routine attempt at spinning a situation in which the administration got caught with its pants around its ankles on the road in front of a school into one that’s “no big deal”.
But it is a big deal. And, if “these plans” are exempt, why? And which plans aren’t exempt. Is Burger King off the hook too? How about Taco Bell?
More importantly, where does the government get off telling a business how to spend its money? Cohn tells us it is because the want to make sure executive salaries and perks aren’t excessive and overhead is kept to a minimum. I say it is plain and simple unwarranted government intrusion that is becoming all too familiar since this administration has been in charge:
More important, the administration has yet to finalize the rule about how insurance companies spend their money (or what is known as the "Medical Loss Ratio".) It’s entirely possible the administration will phase in the requirement slowly. Most likely, then, McDonald’s employees who like these plans will get to keep buying them, at least for the immediate future.
Good thing we can read the bill now to find out what’s really in it, isn’t it?
All sorts of things to talk about under that title. So that calls for a bit of a ramble.
First and foremost, the title tells the story. Why is it we’re 20 months into this administration and we’re just now considering tax breaks to stimulate the economy? Note the word – considering. According to POLITICO, there’s been no decision at all made on doing such a thing – if you thought the administration dithered about its strategy change in Afghanistan, this makes that look like a snap decision.
Last November, Obama announced that he would turn his attention to unemployment, calling it "one of the great challenges that remains in our economy." He declared the same intent two months later, telling House Democrats he would focus relentlessly on job creation "over the next several months." Senior aides went on television pledging that the mantra would become "jobs, jobs, jobs."
But other matters – health care, the BP oil spill – continually stole the limelight, creating the impression, some Democrats complain, that the president was barely focused on the economy at all.
And now, “suddenly”, two months before an election, he’s “focused like a laser beam”. A soft weak lit laser that sort of doesn’t do much but emit, well,
words a bit of light.
I mean, read this explanation and tell me those who offered this as proof of his attention to the economy aren’t both tone deaf and just plain politically stupid:
His advisers described his attentiveness – noting, for example, that he discussed the economy with New York Mayor Michael R. Bloomberg (I) for 15 minutes before golfing – but got little traction.
Really? What in the freaking world has NY Mayor Michael Bloomberg got to do with anything to do with the economy. I mean, oh, goodie, he spent 15 minutes being "attentive" before they hit the links. That’ll fix everything. Oh, and what “traction” was he seeking?
In reality what happened was Obama was sold a bill of goods by his economic advisors about the effect of government stimulus. Congress got a hold of the idea and larded it up with pork. Result: spectacular FAIL.
They’re reduced to justifying the stimulus like this:
Many economists say Obama’s policies have been reasonably effective at pulling the nation back from recession. Last year’s stimulus package – now estimated to cost $814 billion – protected as many as 3.3 million jobs, according the independent Congressional Budget Office.
“Many” economists say his policies have been “reasonably effective” because some computer model says it may have “protected” – note the new word – “3.3 million jobs”? Really?
Back to the “this ain’t rocket science” theme, but even if that’s true (and it’s very suspect) that’s about $250,000 deficit funded dollars per job. And most of those, if I were to guess (oh, wait – “according to my model”) would be found in the non-productive government sector. Result? 9.6% unemployment, no growth and no jobs.
So why, you ask at this late juncture, is he and his economic staff finally considering tax cuts?
Well, common sense says that the way to immediately impact spending and consumption is to give consumers more money with which to consume. Make sense? Yeah, it made sense 20 months ago too. And there’s another reason that finally has seemed to penetrate their thinking:
All the talk about taxes—whether to raise them to address the deficit or cut them to stimulate the economy—may be having its own effect on growth. Allan Meltzer, an economics professor at Carnegie Mellon University, said the economy wouldn’t fully revive until Washington resolved uncertainty surrounding business costs, including taxes.
"Companies are cutting their expenditures and not hiring because they’re very uncertain" about these costs, he said.
Precisely. Why in the world – as we’ve been saying for months here – would any business hire and expand in the face of this government made market uncertainty?
Meanwhile the political battle rages with the expected blame-game in full swing:
"Obviously it’s going to be hard to get anything done before the election, but it’s really important for him to try, and to make the case to the American people that he’s trying to do something and the Republicans aren’t letting him," said Steve Elmendorf, a Democratic strategist. "We are at the final moments here."
What the GOP isn’t “letting” them do is wildly throw another huge amount of money we don’t have at the problem.
David Axelrod piles on:
"We’ll continue to do everything we can, understanding that recovery will require persistent effort. There are no silver bullets," senior Obama adviser David Axelrod said in an interview Thursday. "At the same time, we have to make clear our ideas and theirs, and the fact that the Washington Republicans, having helped create this recession, have attempted to block our every effort to deal with it."
Yet the bar to passing any of this may not be “Washington Republicans”. POLITICO reports:
But the administration will have a tough time selling nearly any package to some Democrats who increasingly blame the president and his ambitious legislative agenda for their own dismal prospects this November. And further states:
White House press secretary Robert Gibbs has repeatedly said the administration would go small-ball with any plans to boost the economy — and that the Democrat-controlled Congress had no appetite for costly, sweeping measures two months before what promises to be a difficult election cycle for the party. >
Emphasis mine, but you get the picture. Democrats aren’t sure they want anything but if they do, whatever it is it has to work and work quickly. Reality, however, is much more stark for the Democrats:
"Substantively, there is nothing they could do between now and Election Day that would have any measurable effect on the economy. Nothing," said the Brookings Institution’s William Galston, who was a domestic-policy adviser to President Bill Clinton.
Indeed. As I continue to watch the economic three-ring circus this administration has created, I’m reminded of the words of one of my favorite funny men, Oliver Hardy: “Well, here’s another nice mess you’ve gotten [us] into."
Next up, the Three Stooges do ObamaCare.
I‘ll never forget Dale telling me during a phone conversation, "the more I look at the economy and what the Austrians have been saying about it, the more I find their arguments compelling".
He’s not the only one.
"The Austrians", of course, are those economists from the "Austrian school", which is a true free market school. Probably the most famous of the Austrians is Frederic Hayek. Hayek wrote "The Road to Serfdom" and the "Constitution of Liberty". If you don’t mind my saying so, they’re "must have books".
Another "must have" is "Human Action" by Luwig von Mises.
The point, however, is their writings seem more and more valid each day as we watch the policies that are driving this economic debacle play out.
Anyway, the article tells about Prof. Pete Boettke at George Mason University who is leading the charge for the Austrian brand of economics. And, as you might imagine, there’s a increasingly bigger demand for information pertaining to it.
Economics, they [the Austrians -ed.] feared, was increasingly narrow and technical but not necessarily wise. They also remained skeptical of the Fed’s approach to targeting stability in consumer prices.
That shouldn’t be the Fed’s goal, says Mr. Boettke, who a friend lured back to George Mason a year after he was denied tenure. The Fed, he says, should be to make money "as neutral as possible, like the rule of law, which never favors one party over the other."
That sometimes means letting prices fall. There’s little to fear in deflation, he adds, when it accompanies periods of strong productivity growth. However, "anytime you saw the price level starting to fall, the Fed flooded the economy with cash," he says. "And that resulted in asset-price inflation, which set us up for these crises."
It wasn’t a lack of government oversight that led to the crisis, as some economists argue, but too much of it, Mr. Boettke says. Specifically, low interest rates and policies that subsidized homeownership "gave people the crazy juice," he says.
Boettke also participates in a group blog about Austrian economics if you’re interested. One of the posts is about the fact that in most cases, economics isn’t “rocket science”. That’s something I’ve been saying for years in various ways – human nature 101, common sense 101, economics 101.
All economics action is based deeply in individual actions of human beings driven by human nature. One of the reasons that von Mises named his book “Human Action” is he and the other Austrians recognize that fundamentally all economics is based in just that – human action. In other words, grassroots up. Not the other way – top down.
That’s precisely why you’ll constantly see Austrians claim “it ain’t rocket science” when they explain why central planning never works. And what we’re going through now is no exception. Boettke:
I don’t possess a crystal ball, so I cannot forecast the economic future. But I do know that it is not good to expand the monetary base 140% or to run deficits the size we have, or accumulate public debt as we have. See Laurence Kotlikoff in The Economist. This "ain’t rocket science"! There will be a day of reckoning due to the monetary mischief and fiscal irresponsibility.
I also know that the problems we are facing are not "market problems" — it is not that actors are all of a sudden ‘irrational’, and it is not that markets are inherently ‘unstable’. Everything we are seeing in market behavior is a rational response to the environment created by public policy. This is not a psychological problem we are dealing with, it is a public policy problem. Bad public policy produce bad incentives which in turn produce bad results. Ultimately, this is a problem of bad ideas which result in bad public policies. Again, this ain’t rocket science. The role of the economists in all of this should be like my Dad when I was a teenager (and truth be told an adult), and grab policy makers by the shoulders star them squarely in the face and state clearly "this isn’t rocket science" and explain clearly the Econ 101 basics of why the decisions we have made so far have not been correct.
Gerald O’Driscoll over at ThinkMarkets does precisely this today. Nothing that has gone on so far with the housing market would be unpredictable with a little return to the lessons of Econ 101 about incentives and information, and how markets work to coordinate plans through time via relative price adjustments and profit and loss accounting. Policies produce incentives, when individuals in the system follow the path those incentives lead them to pursue, we should not be surprised (and certainly not disappointed). The policies adopted produced the results we see, not individuals behaving badly or behaving ‘irrationally’. Unfortunately, in our efforts to be ‘sophisticated’ we often confuse simple economics with simple-minded economics. But there is nothing simple-minded about returning to simple basics of economic science. This ain’t rocket science, but individuals respond rationally to incentives and demand curves slope downward and supply curves slope upward.
Read through that carefully and recall how many times here we’ve discussed how humans respond to incentives and why a certain policy seems to ignore that and the "experts" seem "surprised" by the "unexpected" outcome.
It ain’t rocket science, for heaven sake, but like Boettke and the Austrians claim, we’ve decided mathematical models and technical arguments are more persuasive – in the policy making arena – than are human nature and common sense.
I mean, look around you at the shambles the other schools of economics have made this place.
If I had to give the Austrian school of economics another name it would be the common sense school. It is based exactly at the level it should be based, recognizes the fundamental role that individuals play in economics and economies, and the realize, from that fundamental truth – common sense – that top down, central planning is the wrong place to start when devising economic policy.
Unfortunately that’s precisely where our present economic policy is formulated and the result is fairly easy to predict.
The article ends with:
But as much as the Austrian diagnosis may resonate now, it doesn’t provide a playbook for what to do next, which could limit its current resurgence.
Mr. Hayek rightly warned of the dangers of central planning, Mr. Boettke says, but "he didn’t give a prescription for how to move from ‘serfdom’ back."
I disagree. If “serfdom” is found at the end of the policy road we’re traveling right now, then the prescription for how to move from “serfdom’ back is to reverse the route we’ve traveled.
It ain’t rocket science folks. We may not like the prescription, and it may include quite a bit of hardship, but there is a road back from the economic serfdom we’re destined for if we don’t do something and do it fairly quickly.
Because most Americans don’t share your evaluation of yourself. In fact, because of the dismal performance of the Democrats, you’re only slightly more “acceptable” than they are:
Americans are growing more pessimistic about the economy and the war in Afghanistan, and are losing faith that Democrats have better solutions than Republicans, according to a new Wall Street Journal/NBC News poll.
Underpinning the gloom: Nearly two-thirds of Americans believe the economy has yet to hit bottom, a sharply higher percentage than the 53% who felt that way in January.
The sour national mood appears all-encompassing and is dragging down ratings for the GOP too, suggesting voters above all are disenchanted with the political establishment in Washington.
In fact, just 24% have positive feelings about the GOP, which according to the WSJ, is a new low in the 21 year history of the poll. In fact, the only reason you’re under any sort of consideration at all is because we’re stuck with a two-party system –something you and the Democrats have been careful to manage – and you’re the only other choice.
If you’re thinking “mandate” in November, I’d change my thinking. I think it may be better described as “your last chance” … or maybe your “next to last chance”, the last chance coming on the heels of the 2012 presidential elections.
"The Republicans don’t have a message as to why people should vote for them, but it’s pretty clear why you shouldn’t vote for the Democrats," said poll respondent Tim Krsak, 33, a lawyer from Indianapolis and independent who has been unemployed since January. "So by default, you have to vote for the other guy."
Great reason to vote, isn’t it?
You guys better buy a clue (and if you do, use your own money).
It appears that Congressional Democrats are finally at the “acceptance” stage of the grieving process over their upcoming losses in Congress. And the reality of those losses is propelling some to look at the lame duck session of Congress as the last opportunity to pass some of their and their clientel’s most desired legislation.
In the House, Arizona Rep. Raul Grijalva, co-chairman of the Congressional Progressive Caucus, told reporters last month that for bills like "card check"—the measure to curb secret-ballot union elections—"the lame duck would be the last chance, quite honestly, for the foreseeable future."
And you can count on them pulling out all the stops to do so. The same goes for the Senate:
Iowa Sen. Tom Harkin, chair of the Senate committee overseeing labor issues, told the Bill Press radio show in June that "to those who think [card check] is dead, I say think again." He told Mr. Press "we’re still trying to maneuver" a way to pass some parts of the bill before the next Congress is sworn in.
Of course they are – the handwriting on the wall is in seemingly permanent marker. What they’re doing, frankly, isn’t surprising or unusual. But it could be very damaging. John Fund quotes Jay Rockefeller as saying, “I’ve got lots of things I want to get done”. The lame duck also said:
"It could be a huge deal," he told Roll Call last month. "We could get the country on a sound long-term fiscal path."
Which Fund opines, undoubtedly means new taxes in exchange for extending some (but not all) of the Bush tax cuts.
But wait there’s more. Fund lists a few probable lame duck priorities for the Democrats:
Senate ratification of the New Start nuclear treaty, a federally mandated universal voter registration system to override state laws, and a budget resolution to lock in increased agency spending.
Then there is pork. A Senate aide told me that "some of the biggest porkers on both sides of the aisle are leaving office this year, and a lame-duck session would be their last hurrah for spending." Likely suspects include key members of the Senate Appropriations Committee, Congress’s "favor factory," such as Pennsylvania Democrat Arlen Specter and Utah Republican Bob Bennett.
President Obama failed to mention climate change legislation during his recent, Oval Office speech on the Gulf oil spill was that he wants to pass a modest energy bill this summer, then add carbon taxes or regulations in a conference committee with the House, most likely during a lame-duck session.
That’s a very ambitious and, frankly costly and destructive lame duck legislative agenda.
Whether or not they can get all those balls in the air remains to be seen. Blue Dog Democrats, who face the toughest races of all, may not be as easily gulled into supporting any of these items given the fallout from health care reform.
But that probably won’t stop Pelosi and Reid – of Obama – from pushing the agenda since they have to be aware this is likely their last chance to do so. And they proved with health care that they’ll throw anyone under the bus to get what they want.
To include the American people.
As expected, bits and pieces of the contents of the speech President Obama will give tonight before a joint session of Congress are beginning to leak out (naturally they begin to do so right after I posted my thoughts on what he must do tonight). And, it appears, he’s going to go with his base on this one:
President Barack Obama, in a high-stakes speech Wednesday to Congress and the nation, will press for a government-run insurance option in a proposed overhaul of the U.S. health-care system that has divided lawmakers and voters for months.
White House officials say the president will detail what he wants in the health-care overhaul, as well as say he is open to better ideas on a government plan if lawmakers have them.
Democratic plans call for requiring most Americans to carry health insurance. Failure to comply could cost families as much as $3,800 a year, according to a new Senate proposal.
The president is likely to say that a government-run insurance plan, known as the “public option,” will not provide a level of subsidies that give it an unfair advantage over private insurers, according to aides familiar with the speech preparations.
Of course no one is going to believe the claim about the subsidies at all – they’ve seen promises such as that made and broken for decades. Any subsidy is certain to be raised at the whim of Congress at some time in the future. And if you recall, when originally discussed, the claim was there would be no subsidy, but instead an insurance plan paid for strictly by premiums. Any subsidy makes the playing field anything but level and won’t provide “competition” but an unfair advantage to the government plan.
The use of the term “subsidy” in conjunction with a “public plan” will be interpreted by the public as an attempt to do exactly what the public says it doesn’t want – subsidized government run health care.
By early accounts, the President will today deliver a big speech urging an only very slightly slimmed down version of the big health bill before the House of Representatives. Once again it seems that Barack Obama’s idea of “post-partisanship” amounts to: “Let’s everybody do what I say!”
Worse, it’s not even what he says. It’s what the liberal wing of his party in the House says – and what he does not dare to contradict.
Frum notes that the public option is “poison” to the moderate Democrats and Republicans. So tonight’s speech will likely make no attempt at a bi-partisan appeal and instead do what I think will lead to an epic failure – repackage unpopular Democratic ideas and attempt to ram them down the nation’s throat.
That’s not leadership. That just the exercise of power. But Obama has never demonstrated any leadership to this point. So it would come as no surprise if he opted to exercise the power Democrats have accrued while believing he was acting as a “leader”.
Why so stubborn?
Here’s why: What moderate Democrats most want from him is cost control – some assurance that a huge new expansion in government-guaranteed healthcare will not explode costs and burden the country with crippling deficits off to the wild blue yonder. Trouble is that while the Democratic plans contain promises of cost control, they contain scant mechanisms for cost control. Or rather – they contain only one mechanism, a public healthcare provider that can ultimately use the power of government to forbid price increases.
Conservatives warn that controlling prices does not work. They lead only to shortages – rationing – because the government-imposed price does not pay the cost of delivering the service. Instead, sellers and providers substitute a worse and cheaper service for the unaffordable former item.
But while the public option is a bad solution to the cost problem, it is the only solution the president has got. There are no other ideas for intensifying competition to find efficiencies and savings on the table. So… he is clinging bitterly to the religion of state control and betting everything on it.
Heh … I love the final sentence, but there’s certainly a lot of truth in Fthe ability to claim they didn’t participate.
It appears, Obama is going to rely on his rhetorical ability to make the unpalatable palatable again. If so, it’s an unseemly level of hubris which drives someone with an outsized ego to double down on failure instead of seeking a better path. Doing so isn’t leadership. It is, as Frum notes, plain old vanilla stubbornness.
It isn’t clear whether he will endorse mandatory enrollment and fines if people avoid doing so. Obviously if he does endorse it, he would be a direct contradiction of his stand during his campaign. He won’t be allowed to forget that.
If what the WSJ and David Frum are saying is true, Obama is headed for trou
rum’s description. The point, of course, is despite rhetoric in the speech claiming he wants ideas from the opposition (and despite the fact that the opposition has answered), there is no real desire whatsoever to include them. He only wants ble. As many on the left like to point out as they claim they’re going to “win” on this issue of health care reform, polls show the majority of people do indeed want health care reform.
That may be true. But “health care reform” covers as broad a spectrum of approaches to the problem as one could imagine. What polls have shown as well is the public isn’t at all happy with this narrow approach the Democrats are offering and calling reform. To ignore that and plow ahead with what the public has plainly made clear it doesn’t want is indeed stubborn, as David Frum points out.
It is also potentially suicidal, politically speaking.
They’re worse than a star-struck 16 year old girl screaming her lungs out on a rope line when it comes to Barack Obama. From Chris Matthews “thrill up my leg” to Newsweek editor Evan Thomas’s “he’s sort of God”, they’ve been so deep in the tank they’d have to undergo decompression to surface.
Some within the “journalistic community” are beginning to notice. Phil Bronstein points out “according to a new Pew Research Center poll, we are behaving…like fans”
It has been pathetic.
A recent and ongoing example of this continuing problem is the fictitious job “created and saved” claims the president has been making recently.
Any grade-school science student knows that non-falsifiable claims have no validity. Period. There is no metric through which “saved” jobs can be measured. None.
I mean, even a Democratic politician has figured it out:
The administration is playing a shell game with its “saved or created” job claims. Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, said as much to the tax-challenged Timothy Geithner at a March hearing.
“You created a situation where you cannot be wrong,” Baucus told Geithner. “If the economy loses 2 million jobs over the next few years, you can say yes, but it would’ve lost 5.5 million jobs.”
So how has the media handled this? By faithfully parroting the numbers with absolutely no scrutiny. They report these non-falsifiable numbers as having validity. With 9.4% unemployment, the highest in 25 years, Obama’s 150,000 “saved or created” jobs sailed through the media without challenge.
The Wall Street Journal is one of the few media outlets that is questioning the validity of the president’s numbers. And it also points out the obvious over and above that:
It’s true that almost any government spending will create some jobs and save others. But as Milton Friedman once pointed out, that doesn’t tell you much: The government, after all, can create jobs by hiring people to dig holes and fill them in.
The Journal quotes Tony Fratto, a former official of the Bush administration, about the MIA MSM:
“You would think that any self-respecting White House press corps would show some of the same skepticism toward President Obama’s jobs claims that they did toward President Bush’s tax cuts,” says Mr. Fratto. “But I’m still waiting.”
Well, don’t hold your breath Mr. Fratto – I certainly don’t think we’re going to see the decompression chamber in use any time soon.
IBD clues us in on some other numbers floating around out there:
Monday’s announcement of a new and improved stimulus is just old wine in new bottles. In the first 100 days of the stimulus, some $44 billion was spent as jobs continued to hemorrhage. Now we’re asked to do more of the same and expect different results.
Obama’s 600,000 figure includes 125,000 temporary summer youth jobs and is based on economic projections, not an actual count. The only thing you can accurately count is the number of Americans working — and that’s going down fast.
You can just imagine how this will be reported. My guess is just as the White House press release frames it.
I love the way the Wall Street Journal starts this editorial about health care reform and rationing. It is something I’ve been wondering for some time here at QandO:
Try to follow this logic: Last week the Medicare trustees reported that the program has an “unfunded liability” of nearly $38 trillion — which is the amount of benefits promised but not covered by taxes over the next 75 years. So Democrats have decided that the way to close this gap is to create a new “universal” health insurance entitlement for the middle class.
In fact what they’re proposing defies logic. It is counter-intuitive (some wag said that “counter-intuitive” is the new “stupid”). I mean think about it – they’re essentially saying “we’ve run the 46% of the health care segment we have into $38 trillion of unfunded debt. The way to fix that is to give us the rest”.
But the bulk of the editorial is about who, under this new grand scheme the Democrats are proposing, will be making decision about how to treat you. And in this case one example serves to make the point:
At issue are “virtual colonoscopies,” or CT scans of the abdomen. Colon cancer is the second leading cause of U.S. cancer death but one of the most preventable. Found early, the cure rate is 93%, but only 8% at later stages. Virtual colonoscopies are likely to boost screenings because they are quicker, more comfortable and significantly cheaper than the standard “optical” procedure, which involves anesthesia and threading an endoscope through the lower intestine.
Virtual colonoscopies are endorsed by the American Cancer Society and covered by a growing number of private insurers including Cigna and UnitedHealthcare. The problem for Medicare is that if cancerous lesions are found using a scan, then patients must follow up with a traditional colonoscopy anyway. Costs would be lower if everyone simply took the invasive route, where doctors can remove polyps on the spot. As Medicare noted in its ruling, “If there is a relatively high referral rate [for traditional colonoscopy], the utility of an intermediate test such as CT colonography is limited.” In other words, duplication would be too pricey.
Consequently, because there might be a percentage of referrals (that Medicare assumes might be “relatively high”) which then require a traditional colonoscopy, no Medicare patients may have the virtual colonscopies even if they are quicker, more comfortable and, as with any invasive procedure, less dangerous.
Now I assume I don’t have to lay out all the implications of this to readers here – this is prefect example of precisely what opponents of government health care have been saying for years. And it certainly gives lie to the claims by some that all government wants to do is offer “insurance”.
Led by budget chief Peter Orszag, the White House believes that comparative effectiveness research, which examines clinical evidence to determine what “works best,” will let them cut wasteful or ineffective treatments and thus contain health spending.
The problem is that what “works best” isn’t the same for everyone. While not painless or risk free, virtual colonoscopy might be better for some patients — especially among seniors who are infirm or because the presence of other diseases puts them at risk for complications. Ideally doctors would decide with their patients. But Medicare instead made the hard-and-fast choice that it was cheaper to cut it off for all beneficiaries. If some patients are worse off, well, too bad.
One of the complaints about private health insurers is that patients resent someone group on high deciding what is best for them. That should be their doctor’s decision. Yet here is that complaint being sanctioned for the largest purchaser of health care in America – Medicare. And, as the WSJ points out, since private carriers usually adopt Medicare rates and policies, the virtual colonoscopy could be a technology which is “run out of the market place”.
Mr. Orszag says that a federal health board will make these Solomonic decisions, which is only true until the lobbies get to Congress and the White House. With virtual colonoscopy, radiologists and gastroenterologists are feuding over which group should get paid for colon cancer screening. Companies like General Electric and Seimens that make CT technology are pressuring Medicare administrators too. More than 50 Congressmen are demanding that the decision be overturned.
All this is merely a preview of the life-and-death decisions that will be determined by politics once government finances substantially more health care than the 46% it already does. Anyone who buys Democratic claims about “choice” and “affordability” will be in for a very rude awakening.
Is this how you want health care decisions affecting your life to be made? Political fights in Congress? Look at the financial health of the US government right now and consider the huge unfunded liabilities in front of it. What side do you really think such decisions will come down on – yours or the least costly alternative regardless of your individual need?
[HT: Anna B]