Consumer Power Report: In Massachusetts, Government-Run Health Care Forever

Consumer Power Report: In Massachusetts, Government-Run Health Care Forever

Benjamin Domenech

Benjamin Domenech (bdomenech@heartland.org) is a senior fellow at The Heartland Institute. Domenech... (read full bio)

In Massachusetts, the ramifications of then-Governor Mitt Romney’s health care law are clear: more people are covered (though not everyone), the overwhelming number of whom are taxpayer-subsidized, by health insurance; access is an increasingly troublesome issue; and costs have only continued to rise.

The last aspect of this concerns the Bay State’s current politicians, particularly Gov. Deval Patrick and Attorney General Martha Coakley. But don’t worry, they have a plan:

Attorney General Martha Coakley’s office is quietly circulating a proposal to more tightly regulate hospitals and doctors and the prices they are paid to care for patients. Coakley’s staff has drafted legislation and has briefed providers, business leaders, key legislators, and the governor’s office on the plan to contain health care spending …

Legislative leaders have been promising for months to file cost-control legislation, but the timing and details are still unclear. Governor Deval Patrick filed a bill more than a year ago to rein in health care costs and has since urged the Legislature to take up the issue quickly …

Unlike the governor’s proposal, Coakley’s plan would give patients specific information in advance about how much they would be required to pay out-of-pocket for a particular test or treatment. They generally would not be responsible to pay more than the disclosed amount.

Similar to the governor’s plan, Coakley wants to give the Division of Insurance the explicit authority to review the prices insurers pay to providers and reject them if they are “excessive, inadequate, unreasonable, or predatory.” After Jan. 1, 2015, rates that are more than 15 percent above or 15 percent below average would be disapproved; after Jan. 1, 2017, the range would decrease to 10 percent above or 10 percent below average.

While insurers in Massachusetts already are heavily regulated, Coakley wants to increase provider regulations. The public health department, for example, could initiate a market impact review if it believes a provider is engaged in unfair competition.

What’s happening in Massachusetts is nothing less than a total government crackdown on the insurance/provider relationship. Not content to merely regulate insurers out of profitability, Coakley now intends to regulate providers to a greater degree--eventually reaching a point where the government has total and unmitigated say over what providers can charge and what insurers can charge, turning the entire spectrum into the equivalent of a public utility. They will set prices on both ends, and competition will disappear.

This is hardly unexpected. It’s an inevitable consequence of an approach that promised vague cost savings without actually delivering anything of the sort, and sought to solve the mythical free-rider problem through methods that invested the taxpayers in a process where high health care costs put greater and greater strains on state budgets.

Coakley’s actions are certainly objectionable, but they’re consistent with the statist ideology of the left, where no market forces have any place. And they illustrate the danger of a technocratic approach that leaves behind increased power for government to wield over any marketplace.

-- Benjamin Domenech


IN THIS ISSUE:


NYT: WHITE HOUSE AND FDA AT ODDS ON REGULATORY ISSUES

Is the White House actually doing a good thing here and there?

Nancy-Ann DeParle, the whip-smart and sometimes caustic White House deputy chief of staff, picked up The Wall Street Journal one summer day in 2010 and got an unwelcome shock. The Food and Drug Administration was proposing as part of the new health care law to require that movie theaters post calorie counts for popcorn – and this was the first she had heard of it.

In the F.D.A.’s view, the law called for moviegoers to know that many a buttery bucket of popcorn had more calories than two Big Macs, but Ms. DeParle, President Obama’s chief health adviser, thought the requirement was unnecessary and would probably be lampooned on Fox News as an especially silly example of the government intrusions that conservatives often mocked as the nanny state.

Dr. Margaret A. Hamburg, the F.D.A. commissioner appointed by Mr. Obama, soon heard about the White House’s displeasure and called Ms. DeParle at home one evening, people with knowledge of the call confirmed. The women had a decidedly chilly conversation. Within days, the F.D.A., an agency charged with protecting public health, backed down and dropped the notion of calorie counts for foods served in movie theaters and on airplanes.

Similar tussles have erupted between top administration officials and the F.D.A. over issues from the regulation of sunscreens and asthma inhalers to the enforcement of an agency decision on a drug to prevent premature births.

Should makers of lotions that do not prevent skin cancer be prohibited from calling them sunscreens, as the F.D.A. advocated, or should the lotions just be labeled ineffective, as the White House insisted? Should regulators weigh the cost of a drug or only the drug’s efficacy and safety?

The internal clashes over F.D.A. policy played out against a broader backdrop of regulatory politics. Republicans have made the charge that Mr. Obama is an overzealous and job-killing regulator a central element of their case against his re-election. And on issues from clean air to investor protections, the White House has been carefully calibrating its election season positions.

SOURCE: New York Times


AEI: FACT CHECKING THE FACT CHECKER ON RYAN’S PLAN

Joe Antos takes up the cause where we did last week with the Washington Post’s terrible fact checker, Glenn Kessler.

It is no coincidence that Ryan adopts the same spending target that Obama proposes in his latest budget: GDP plus 0.5 percent. The GDP plus 0.5 percent target is a budget gimmick used to generate savings that CBO can score, whether or not those savings are actually achieved in future years. If seniors are harmed in any way under Ryan’s plan as a result of the spending target, they suffer the same harm under Obama’s.

The debate is over how Ryan would achieve budget savings, and again there is no mystery despite the White House’s best efforts to obfuscate the matter. Contrary to the claim from an unnamed Administration official, the spending target would not be met simply by slapping a cap on the federal subsidy and leaving seniors with unaffordable premiums. Congress would reduce program costs by cutting payments to providers, reducing program overhead, raising premiums to high-income beneficiaries – in other words, all the actions that Congress could take today if it had the will to rein in Medicare’s runaway spending.

In fact, enrollment in traditional Medicare is likely to be so great even a decade from now that any serious effort to reduce program costs would have to rely on such policies. According to the Medicare trustees, about 55 million people will be enrolled in traditional Medicare in 2022. Roughly $900 billion of the trillion dollars that Medicare will spend that year will be through the traditional program.

It is ludicrous to argue, as the White House does, that deficit reduction efforts under the Ryan plan would ignore opportunities to reduce Medicare’s operating costs and simply pass the high costs onto seniors. Although Ryan’s plan does not spell out in great detail all of the mechanisms it would use to slow Medicare spending, it is clear that Congress would have all the policy tools needed to ensure affordable health care for our seniors. But Congress would have to find the political guts to use them. That has been our problem all along.

A related Reason report is here.

SOURCE: American Enterprise Institute


THE HILL: WHITE HOUSE DIVERTS HALF A BILLION TO IRS TO IMPLEMENT OBAMACARE

What your tax dollars are funding:

The Obama administration is quietly diverting roughly $500 million to the IRS to help implement the president’s healthcare law.

The money is only part of the IRS’s total implementation spending, and it is being provided outside the normal appropriations process. The tax agency is responsible for several key provisions of the new law, including the unpopular individual mandate.

Republican lawmakers have tried to cut off funding to implement the healthcare law, at least until after the Supreme Court decides whether to strike it down. That ruling is expected by June, and oral arguments last week indicated the justices might well overturn at least the individual mandate, if not the whole law.

“While President Obama and his Senate allies continue to spend more tax dollars implementing an unpopular and unworkable law that may very well be struck down as unconstitutional in a matter of months, I’ll continue to stand with the American people who want to repeal this law and replace it with something that will actually address the cost of healthcare,” said Rep. Denny Rehberg (R-Mont.), who chairs the House Appropriations subcommittee for healthcare and is in a closely contested Senate race this year.

The Obama administration has plowed ahead despite the legal and political challenges.

SOURCE:
The Hill


BALTIMORE SUN: MARYLAND ENACTS HEALTH INSURANCE EXCHANGE

Maryland plows ahead despite SCOTUS uncertainty:

Maryland continued its aggressive implementation of health care change Thursday despite uncertainty surrounding the issue nationally, as the General Assembly passed legislation to create open markets where people will buy insurance.

The law to set up the health benefit exchanges was sent to Gov. Martin O’Malley, who supports the legislation.

Passage of the bills in the House and Senate comes as the U.S. Supreme Court is deciding whether it is constitutional to require everyone to have insurance, a key component of President Barack Obama’s overhaul of the health system.

“The Affordable Care Act offers tremendous value to our state, and it is the law of the land,” said Lt. Gov. Anthony G. Brown, who is leading the state’s effort. “Maryland intends to meet federal deadlines for establishing our health benefit exchange and must take steps now in order to utilize over $34 million in federal grants.”

SOURCE: The Baltimore Sun


USA TODAY: COSTS FOR PREVENTIVE MEDICINE VARY WIDELY

An interesting report on an issue that becomes all the more troublesome as such care becomes “free”:

Over the past year, health plans and self-insured employers began paying for wellness exams – diabetes screening, mammographies, Pap smears and colonoscopies – as required by the law, without charging consumers a deductible or co-payment. But in looking at 15,000 consumers, a research group has found cost differences of hundreds of dollars charged for the same tests. Colonoscopy costs, for example, ranged from $786 to $1,819.

“I wasn’t surprised that there was variability, but the degree of variability surprised me,” says Doug Ghertner, president of Change Healthcare, which works with businesses to determine costs of health care procedures. “The absolute dollars for colonoscopies were pretty big.”

The U.S. Department of Health and Human Services predicted a 1.5% increase in premiums because of the new exam requirements. Doug Ghertner, Change Healthcare president, says consumers will see a direct correlation between premium increases and their choice of health provider. The “consumer is typically isolated from the cost,” he says. “People think they have zero financial responsibility.”

Several factors affect prices: whether a provider is in a rural or urban area; whether the service is performed at a hospital, a doctor’s office or an ambulatory clinic; and whether a clinic specializes in a certain procedure, such as a colonoscopy.

SOURCE: USA Today


REASON: THE LIBERAL LEGAL BUBBLE

Peter Suderman on how the left misjudged the Supreme Court:

Liberal analysts maintained their enthusiasm even after multiple losses in the lower courts. The case against the mandate is “analytically so weak that it dissolves on close inspection. There’s just no there there,” wrote former New York Times legal correspondent Linda Greenhouse a few days before the arguments began. Slate’s Dahlia Lithwick seconded Greenhouse and argued that the health law’s individual mandate to purchase health insurance “is a completely valid exercise of Congress’ Commerce Clause Power.” Mother Jones’ Kevin Drum suggested that the pro-ObamaCare side had a “slam dunk legal case.”

But after three days of Supreme Court back and forth in which many of the justices seemed willing to entertain and perhaps even accept the basic premise of the argument against the mandate – and possibly the rest of the law as well – liberals seemed much less confident.

After this week’s arguments concluded, Jeffrey Toobin, a legal analyst for CNN and The New Yorker who had predicted that the law would easily secure Supreme Court approval, declared that “the last three days were a disaster for the Obama administration.” Some were downright distraught: Lithwick warned the Supreme Court’s skepticism that Congress might not be able to compel individuals to purchase a private product constituted a “dark vision of freedom.” An even bigger surprise was that Solicitor General Donal Verrilli, who argued the case in front of the Supreme Court, seemed unprepared for the tough questioning from the justices.

What can explain liberals’ widespread failure to anticipate the Court’s wariness of the mandate? Research conducted by University of Virginia psychologist Jonathan Haidt suggests one possible answer: Liberals just aren’t as good as conservatives and libertarians at understanding how their opponents think. Haidt helped conduct research that asked respondents to fill out questionnaires about political narratives – first responding based on their own beliefs, but then responding as if trying to mimic the beliefs of their political opponents. “The results,” he writes in the May issue of Reason, “were clear and consistent.” Moderates and conservatives were the most able to think like their liberal political opponents. “Liberals,” he reports, “were the least accurate, especially those who describe themselves as ‘very liberal.’”

SOURCE: Reason.com

Benjamin Domenech

Benjamin Domenech (bdomenech@heartland.org) is a senior fellow at The Heartland Institute. Domenech... (read full bio)