Consumer Power Report #184

Consumer Power Report #184
June 26, 2009

Greg Scandlen

Greg Scandlen is a senior fellow of The Heartland Institute and founder and director of... (read full bio)

The Heartland Institute is holding two Town Hall Meetings on health reform next week, one on June 30 in Indianapolis and another in Grand Rapids, Michigan on July 1. We are also planning similar events in Dallas on July 8 and Atlanta on July 14. Attendance is free and all are invited. Please check the roundtable Web site for more detail.


IN THIS ISSUE:


WHITE HOUSE TOWN MEETING

ABC and President Barack Obama teamed up to push the president's health reform agenda on Wednesday with a special televised Town Hall meeting at the White House.

I used to attend town hall meetings when I lived in Maine, and I never remember them being by invitation only, or the questions being pre-selected by the town media. I guess all that openness is old-fashioned in the New Utopia.

In any event, I tuned in to see what was going on and was so bored after 20 minutes that I turned off the TV and went to bed. Mr. Obama had no interest is actually answering the questions that were asked. Instead he looked inside his head (there was no TelePrompter) for the talking points and droned on forever with a string of platitudes we've heard before. This is what passes for dialogue in the New Utopia.

But I noticed that Gail Wilensky and Grace Marie Turner were both in the audience. I guess that is considered bipartisan in the New Utopia.

Other people stayed awake for the whole shindig. Here are a couple of reports.

SOURCE: Business and media; ABC News


ATR'S PRESPONSE TO THE TOWN MEETING

Grover Norquist of Americans for Tax Reform decided to hold a session in the afternoon to illustrate what might have been said at the White House if the White House had any interest in actually having a discussion.

The event was held in the Cannon House Office Building and was filled to capacity. There was a lot of broadcast coverage, including at least Fox News and C-Span. I counted six TV cameras on tripods and a lot of handheld video recorders, plus quite a few print reporters.

Speakers in order of appearance were:

  • Grover Norquist, (ATR) as host and moderator
  • Rep. Tom Price (R-NC)
  • Sen. Jim DeMint (R-SC)
  • Seton Motley (Media Research Center)
  • Doug Holtz-Eakin (former CBO Director)
  • Merrill Matthews (CAHI)
  • Me
  • Victor Schwartz (Tort Reform)
  • Katherine Serkes (AAPS)
  • Rick Scott (CPR)
  • Amy Menafee (Patients First)
  • Shona Holmes (Canadian patient)
  • Jenny Beth Martin (Tea Party Patriots)
  • Tony Perkins (Family Research Council)

The Tea Party Patriots streamed the video live on their Web site (http://www.ustream.tv/recorded/1705150). Pretty cool how they did it. They had someone sitting in the front row with a laptop and recorded the whole thing. It is amazing what can be done these days.

The event also was aired on C-Span, see: http://www.c-span.org/Watch/Media/2009/06/24/HP/A/20119
/Americans+for+Tax+Reform+Discussion+on+Health+Care+Reform.aspx

CNS News (http://www.cnsnews.com/public/content/article.aspx?RsrcID=50064) ran a story with substantial coverage of the comments of Sen. DeMint and Rep. Price, especially that they both say President Obama and the Congressional Dems are not telling the truth--they are trying to "create a crisis" by "misrepresenting everything."

The event also was written up in a number of blogs, including this one by Philip Klein in American Spectator. (http://spectator.org/blog/2009/06/24/conservatives-counter-abc-obam)


HIDDEN COSTS?

The "misrepresenting" charge by the Congressmen is certainly borne out by a short paper, "Hidden Costs of Health Care," released by Kathleen Sebelius and the Department of HHS last week. The paper cherry-picks the data to make a case that "Americans are spending more than ever on their monthly premiums while simultaneously being forced to pay higher out-of-pocket costs as a result of rising deductibles, copayments, and other cost sharing mechanisms." It goes on to complain that out-of-pocket costs, including premiums, rose by 30 percent from 2001 to 2006. Yet, elsewhere Mr. Obama frequently claims the cost of employer-sponsored rose 100 percent in the same time frame, so apparently consumers are getting a pretty good deal.

Sebelius's report also says, "Seventeen percent of people with employer-based coverage have high out-of-pocket burdens (defined as out-of-pocket costs that consume 10 percent or more of a family's total income)." Of course, she forgets to mention that people on Medicare pay on average of 14 percent of their incomes on out-of-pocket costs, so a "public option" might not solve this particular problem.

She goes on, "The economic burden is even more pronounced for people in the individual market purchasing directly from an insurer. Total out-of-pocket costs per person (including costs of health care used and premium) have increased by 45 percent from an average of $5,008 in 2001 to $7,280 in 2006." Well, yes, by definition people who buy individual coverage are paying 100 percent of the cost of their care. There is no one else to pay for it AND they don't even get a tax break on it. But if their costs went up 45 percent at a time when employer costs went up 100 percent, they would seem to be doing something right.

Whatever else might be said about these costs, it's hard to see how they are "hidden" given that people are paying them directly. But, like many others who spout this line, Ms. Sebelius seems to think that paying for health care directly is a burden, but paying the taxes to have government pay for your health care would not be a burden.

SOURCE: "Hidden Costs of Health Care"


TALE OF TWO SURVEYS

It isn't just the administration that cherry-picks information to ram a political agenda through. The New York Times is teaching them how it should be done. It recently conducted a survey of public opinion on health reform. I will let the paper speak for itself.

"Americans overwhelmingly support substantial changes to the health care system and are strongly behind one of the most contentious proposals Congress is considering, a government-run insurance plan to compete with private insurers, according to the latest New York Times/CBS News poll. The poll found that most Americans would be willing to pay higher taxes so everyone could have health insurance and that they said the government could do a better job of holding down health-care costs than the private sector."

It goes on to report that, "72 percent of those questioned supported a government-administered insurance plan." And it quotes respondents who are eager to give up what they have to cast their lot with the Collective. Matt Flurkey says, "Even though it might not be quite as good as what we get now, I think the government should run health care. Far too many people are being denied now, and costs would be lower." And Juanita Lomaz says, "It is the responsibility of the government to guarantee insurance for all, but my care will get worse because they'll have to limit care in order to cover everyone." Apparently that's okay, though, as we all must sacrifice in the New Utopia.

SOURCE: New York Times

Writing in Real Clear Politics, Froma Harrop is thrilled by these results. She says, "President Obama has a green light and open eight-lane highway for health-care reform." For evidence, she writes, "On the allegedly controversial 'public option'--a government-run plan that would compete with private insurers--72 percent are in favor. And that includes half of self-identified Republicans."

SOURCE: Real Clear Politics

It's always dangerous to believe your own propaganda. Writing in the New Republic, John R. Graham deconstructs the New York Times survey. He points out that, far from being random or representative, 48 percent of the respondents voted for Obama while only 25 percent voted for McCain. In case you've forgotten, Mr. Obama did not win by a two-to-one margin. Even with that tilt, he points out that support for reform in this survey is less than it was while ClintonCare was being debated.

SOURCE: National Review

Washington Post

Meanwhile, the Washington Post did a similar survey. But this one was more balanced and therefore far more informative. The story begins, "A majority of Americans see government action as critical to controlling runaway health-care costs, but there is broad public anxiety about the potential impact of reform legislation and conflicting views about the types of fixes being proposed on Capitol Hill."

It goes on, "Most respondents are 'very concerned' that health-care reform would lead to higher costs, lower quality, fewer choices, a bigger deficit, diminished insurance coverage and more government bureaucracy."

Like most good surveys, this one asks follow-up questions to better understand what the respondent is saying--"Survey questions that equate the public option approach with the popular, patient-friendly Medicare system tend to get high approval, as do ones that emphasize the prospect of more choices. But when framed with an explicit counterargument, the idea receives a more tepid response. In the new Post-ABC poll, 62 percent support the general concept, but when respondents were told that meant some insurers would go out of business, support dropped sharply, to 37 percent. Support for an 'individual mandate,' requiring every American to carry health insurance, ranges from 44 percent to 70 percent depending on the specific provisions."

SOURCE: Washington Post


MASSACHUSETTS

'Tis the season for Hill Briefings. Cato hosted one on Massachusetts on June 22. The speakers were Mike Tanner of Cato, Greg D'Angelo of Heritage, and me. Mr. Tanner presented a new paper he has written, "Massachusetts Miracle or Massachusetts Miserable." As with everything he writes, it is comprehensive and well researched. Mr. D'Angelo hasn't yet published his paper but he is working on some new research. And I further developed some ideas I have written about here.

In particular, the recent numbers about waiting times to see a physician developed by Merrit Hawkins has gotten me thinking. They found that Boston has the longest wait times of any state in the country--twice as long as the next highest city, Philadelphia. And yet, Massachusetts also has the highest number of physicians per capita of any state and it had one of the lowest rates of uninsured of any state even before it enacted its health care bill. It started out with 9.4 percent uninsured and 4.53 physicians per 1,000 residents, but post-reform its average waiting time for five specialties is 49.6 days. Given that, what will happen in Los Angeles, which currently has 20.5 percent uninsured and only 2.6 physicians per 1,000 residents? The current wait is 24.2 days. With twice the uninsured and half the doctors of Massachusetts, will the waiting times be double or quadruple that of Boston? I don't have an answer to the question, but it seems like someone should want to know the answer before rushing into things.

SOURCE: Video available on Cato web site

Massachusetts also illustrates the problem with relying on government to secure your coverage. Faced with lower revenues in a time of recession, the state finds it necessary to reduce spending. So it is cutting 12 percent, or $115 million, from Commonwealth Care, the subsidized program for lower-income working people. This will be in the form of reduced payments to the four health plans that participate, slower enrollment of new applicants, elimination of dental coverage, and dropping coverage of 28,000 legal immigrants. So, the state government is allowed to drop coverage when it needs to tighten its belt during hard economic times, but working people are not allowed to make that same choice. There is one set of rules for politicians but another set for the rest of us.

SOURCE: Boston Globe


ARNOLD KLING ON DODGING THE REAL ISSUES

Finally, I can't wrap this up without giving a very big shout out to Arnold Kling for a marvelous article he wrote for National Review. He calls the current discussions a "non-debate over non-reform" and says, "The Democratic proposals promise to entrench the status quo, which does not fit with the principles of personal responsibility and fails to allocate resources sensibly."

His essential argument is that there is no incentive to restrain spending or take personal responsibility because 90 percent of all the money we spend is paid for by someone else. He says, "Some form of restraint in our choice of medical procedures is going to be necessary. The debate we should be having is over whether restraint in our use of medical services should be initiated by government officials or left to consumers."

He agrees that, "Both government rationing and consumer cost-sharing seem unpleasant," but argues that this is the debate we need to have--which is a better solution? He would argue for consumer cost-sharing, but that would require three things:

  • First, government assistance should take the form of vouchers, given to people based on need.
  • Second, Medicare should be phased out, by gradually raising the age of eligibility.
  • And third, private health insurance should be deregulated.

Until this real debate takes place, he says, "the public ought to be under no illusion that what the politicians are calling health-care reform offers any hope for a real solution to the compounding cost of American health care."

SOURCE: Arnold Kling.

Greg Scandlen

Greg Scandlen is a senior fellow of The Heartland Institute and founder and director of... (read full bio)