Consumer Power Report #192

Consumer Power Report #192
August 27, 2009

Greg Scandlen

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

Senator Ted Kennedy has died, as we knew he would. His legacy is profound, being a sponsor or cosponsor of most of the significant legislation of the past forty years, including the "Kennedy/Kassebaum" bill that became HIPAA, which created the original Medical Savings Accounts in 1997.

Beyond legislative accomplishments, Mr. Kennedy is a model of persistence. He was willing to support anything that advanced his agenda and oppose anything that deterred it. Despite all his personal and political setbacks, he never quit. He would take what he could get and push for more. A colleague sent me the following quote from an AP story:

Generations of aides recall Kennedy telling them the biggest mistake of his career was turning down a deal that President Richard M. Nixon offered for universal health care. It seemed not generous enough at the time. Having missed the opportunity then, Kennedy spent the rest of his career hoping for an elusive second chance.

Perhaps even more pertinent to the current debate is the Senator's "end-of-life" care. We all knew nine months ago that he had a terminal condition. But no one begrudged him the care he received, futile as it might have been. It enabled him to see the first black president sworn into office. It enabled him to help push a health reform bill through his committee.

Our country can well afford to pay for Uncle Teddy's care, even if it is hopeless. We would be a much meaner nation if we did not. But that standard must apply to your Uncle Fred and my Aunt Mildred as well. Anything less would be not only mean, but evil.


IN THIS ISSUE:


SHORT TAKES

March on Washington

Once your Congressmen and Senators return to Washington battered and bruised from their town hall meetings this summer, they may think they can get back to business as usual out of sight of those unruly constituents. But you can let them know that you know where to find them by coming to Washington yourself on Saturday, September 12. That is the date for the Tea Party March on Washington. Get all the details at the 9/12 Web site.

1.5 Million Signatures

The National Center for Policy Analysis (NCPA) has gotten more than one million signatures on its "Free Our Health Care Now" petition. It hopes to have 1.5 million by September 9 when it will present the petition to the leaders of Congress. Go to the Web site to sign and circulate the petition.

Goodman on Town Halls

NCPA President John Goodman uses the experience of collecting these signatures to explain what the town hall protests are really all about in The Wall Street Journal. He says, "The new tactics it is employing show the White House is completely out of touch with the American people. Those who attend town-hall meetings know they are not being organized or funded by anyone. And when the administration attacks their character and their motives and intentionally distorts the truth, it only adds to the anger people already feel."

Post Mortems

Already the post mortems are coming in on this health reform effort, including this one from Investor's Business Daily.

The Chicago Way

There may be more to the ObamaCare efforts than just a naïve hope of government being the Santa Claus for all Americans. Given his administration's grounding in the Chicago way of governing, these folks may be looking at ensuring prosperity and power -- for themselves, as I explain in an op-ed in the Chicago Observer.


WHOLE FOODS

Boy, politics is weird (or should I say, are weird?). A couple of weeks ago we reported on an excellent op-ed written by John Mackey, the CEO of Whole Foods, about his own thoughts on health care reform.

They were entirely reasonable and based on the experience he has had with his own company and his 50,000 employees. He has succeeded in holding down costs, improving health, and satisfying his employees. It is a proven case study of health reform that works.

But because it is an approach that varies from the government-driven proposals of Obama and the liberal Democrats, he has suddenly been cast as a monster, his company is being boycotted, and his board of directors is being pressured to remove him from his position.

My God, what is wrong with these people? One might think they would take a look at the Whole Foods experience and find some interesting lessons there. But, no, they would prefer to plug their ears and close their eyes and conform to the ideological dogma of expanding government at all costs.

Should they prevail and get what they want enacted into law, they will be equally blind to the failures of their ideas.

Here is some of the reaction:

Whole Foods' Forum

Investor Attack on Mackey


INDIVIDUAL MANDATES

Two senior attorneys wrote an op-ed in the Washington Post that an individual mandate may be unconstitutional. They ask, "can Congress require every American to buy health insurance?" And answer, "In short, no. The Constitution assigns only limited, enumerated powers to Congress and none, including the power to regulate interstate commerce or to impose taxes, would support a federal mandate requiring anyone who is otherwise without health insurance to buy it."

They go through some relevant case law and conclude, "The federal government does not have the power to regulate Americans simply because they are there. Significantly, in two key cases, United States v. Lopez (1995) and United States v. Morrison (2000), the Supreme Court specifically rejected the proposition that the commerce clause allowed Congress to regulate noneconomic activities merely because, through a chain of causal effects, they might have an economic impact. These decisions reflect judicial recognition that the commerce clause is not infinitely elastic and that, by enumerating its powers, the framers denied Congress the type of general police power that is freely exercised by the states."

SOURCE: Mandate Unconstitutional

Paul Mulshine writes that, "mandatory health insurance is a scam on young people." He references a column he wrote in March when Democrats in New Jersey were considering mandatory coverage in that state. He says, "As part of the package unveiled by state Sen. Joe Vitale, a Democrat from Middlesex County, every New Jersey resident will be required to provide proof of health insurance at tax time. If you don't have insurance, the state will sign you up and start charging you for it. The pols aren't doing this because they're worried about the younger generation. They're doing it because they're worried about the older generation."

He explains, "The ideal target for mandatory health insurance, said David Knowlton (head of an advocacy organization), is 'somebody who graduates from college. They haven't started their new job yet. They haven't got a family. They haven't got a house yet, so they're uncovered but they're a good risk, and that spreads the risk of the people who are older who need the care. That's how insurance works.'"

"'But then they're being forced to subsidize people who have greater demand than they have,'" I protested. 'That's right,' Knowlton replied. "That's how insurance works.'"

Mulshine isn't persuaded by the comparisons to auto insurance. He writes, "But you can avoid mandatory car insurance by not driving. The only way to escape mandatory health insurance is by not breathing. That alone should be reason for every young person in the state to oppose the approach."

SOURCE: Mulshine on Mandates

Phil Kerpen of Americans for Prosperity echoes these concerns. He says the "public option" is a distraction from the real threat in the current bills, mandatory coverage. He says, "Mandates--either an employer mandate that requires all employers to provide health insurance, an individual mandate requiring all Americans to have health insurance, or a combination of the two, as envisioned in the House bill H.R. 3200--are, in my view, now the biggest threat we face."

He continues, "The insurance companies will insist on, and probably receive, an individual health insurance mandate that will make it illegal not to buy their products. The penalty for violating the mandate will be a sizable new tax (2.5 percent of gross income in H.R. 3200), or garnishing your wages. President Obama beat Hillary Clinton in part by opposing such a mandate, but now he supports it." And Kerpen adds, "The big insurance companies will spend tens if not hundreds of millions of dollars supporting a mandates bill, because their smaller competitors will be regulated out of business while they can mint huge profits from all of the new customers now required by law to buy their products."

He says once coverage is mandated, the politicians will get to define what it is you must buy, and "Vast new subsidies will be required to ease passage of a bill that would otherwise slam lower income constituents--those subsidies mean businesses and the middle class will be slammed twice--once to pay higher premiums for the now-legally-mandated purchase of health insurance, and again with higher taxes to subsidize coverage for others."

SOURCE: Fox News


GAWANDE AND FRIENDS

Atul Gawande is back with another op-ed, but this one is co-authored with Con Berwick, Elliott Fisher, and Mark McClellan. His co-authors have done a good job in balancing his views. This time, the argument is not that we should all move to Rochester, Minnesota and sign up for the Mayo Clinic. It is far more reasoned.

The authors say, "We have reached a sobering point in our national health-reform debate" in how to lower costs and expand coverage. "We have really discussed only two options: raising taxes or rationing care. The public is understandably alarmed." They say we have to find a way to deliver care more effectively and less expensively, but "evidence that places like the Mayo Clinic in Minnesota or the Cleveland Clinic are doing it is likewise dismissed because their unique structures make them seem as far from Middle America as Sweden is."

Well, thank you very much for acknowledging that Americans are justly apprehensive about what the social planners are up to.

In this article, the authors concede a lot. For instance, that Medicare data may not be representative of the entire population. More importantly, they look at 10 different locations across the United States that seem to be doing a pretty good job. But each of these areas is doing it DIFFERENTLY. There is no one cookie cutter approach for everybody. They write, "In their own ways, each of these successful communities tells the same simple story: better, safer, lower-cost care is within reach."

The one thing the authors fail to do is acknowledge that all of these areas are improving their systems under the payment system AS IT EXISTS TODAY! So, apparently massively changing the health financing system is NOT a prerequisite for outstanding care. Is it possible -- just maybe -- that what is needed is not some Washington-dictated massive health reform, but to allow and encourage innovation at the local level? As things are tried out locally, word spreads and other communities duplicate and improve on the model. That is how effective change usually comes about. Why not in health care?

SOURCE: Gawande, et al.


BEFORE WE GET TOO FAR ...

Drew Altman, president of the Kaiser Family Foundation, wrote an excellent essay on the unanswered questions about the current reform proposals. He writes, "Possibly the biggest issue--the biggest real issue, that is--standing in the way of movement forward on health reform has been how to finance a plan." But he adds, "There's been a lot less talk, however, about what people will get for that financing. What level of subsidies will be available to make coverage more affordable for people? What kind of coverage will people receive and will it meet the public's expectations?"

He goes on to flesh out five specific questions:

1. How high up the income scale will subsidies go?

2. Is there an individual requirement to obtain coverage and how severe are the penalties for not complying?

3. What coverage will people get?

4. How much will insurers be allowed to vary premiums by age?

5. What will be available for the lowest income Americans?

Excuse me, but we are eight months into this process, with bills advancing to the floor of both Houses, and we don't know the answers to these questions? There is something very wrong with this picture.

SOURCE: Kaiser Family Foundation


MAGICAL THINKING

The magical cure for all our health care woes is, we are told, pay-for-performance as dictated by comparative effectiveness research. That will ensure that only the very best is delivered by each physician to each patient. Right. Pity there is no empirical support for the notion.

In fact, most of the experience we've seen contradicts the premise. A recent article in The New York Times illustrates the problem. The article says, "It sounds like a simple idea for improving health care: draw up guidelines on how best to treat a particular illness and then pay doctors to follow them."

But alas, "setting guidelines that are good for every patient, it turns out, can get messy, with some experts warning that a big national plan of this sort poses risks. A recent case involving treatment for diabetes, one of the nation's most pervasive illnesses, illustrates the difficulties."

It seems that the National Committee for Quality Assurance "adopted [guidelines] in 2006 that called for aggressive control of blood sugar, or glucose." But, last year it abruptly pulled those guidelines "after a large federal study indicated that lowering glucose too quickly or too much in some patients could harm or even kill them."

The article says that many experts warned at the time, "that it was medically ill-advised for some patients," but the panel plowed ahead anyway possibly under pressure from drug companies.

But the bigger issue, according to the article, is "that many guidelines are based not on rigorous studies like clinical trials but on weaker types of medical evidence. And critics like Dr. Groopman have argued that the guideline-setting process is often influenced by industry or by medical ideologues looking to advance their personal agendas." Plus, "To many experts, the diabetes case shows how setting one guideline that works for all patients suffering from the same disease can be tricky."

The article concludes, "faulty guidelines can pose risks to patients, particularly when linked to doctors' pay, which is an idea under consideration in Washington."

SOURCE: New York Times

Other physicians are also weighing in with objections to this kind of cookie cutter medicine. Writing in The Wall Street Journal, Dr. Scott Gottlieb says President Obama "has revealed his lack of understanding about aspects of medical practice and the reasons for rising health-care costs." He rebuts the examples Obama has provided of physician avarice and says, "This jaundiced view on medical decision-making may explain why programs the White House is proposing to lower health-care costs rely on the direct regulation of medical decisions."

He emphasizes, "Regulating medical decisions should not be the responsibility of a remote Washington bureaucracy. The only way to instill more reflection at the point of medical decision making is to give doctors and patients reasons to consider the cost of various options."

SOURCE: Wall Street Journal

Greg Scandlen

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