Ezra Klein's post on today's announcement (4.00 / 4)

seems right on target. I recommend reading it.

I agree with you--Obama cannot substantially change our health care system without making some enemies. He needs a dose of FDR's "I welcome their hatred" tonic.

Join the Iowa progressive community at Bleeding Heartland.

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by: desmoinesdem @ Mon May 11, 2009 at 15:12:57 PM UTC

Health Industry WILL NEVER REDUCE BENEFITS C'MON!!!!!!!!!!!!! (4.00 / 1)

Let's cut the bullshit.

The Health Industries "Voluntary" reduction in health benefits is a lie. It's a deception. Of course it would never happen and no one should for a moment even consider that it could ever occur.

Please.

Obama is Pro Health Industry, Pro Capitalist, Pro Freemarket. That's what he has said.

So it follows that he can dupe people into believing the Health Industry will reduce it's profits voluntarily rather than promote Universal Coverage.

I mean Paul, you have taken this seriously by suggesting that "IF" the health industry does reduce it's profits then great. That's shameful. Don't even think about it for a second.

This is all a very obvious lie and it should be called out as that in ANGER and rejected as an insult to the (alleged) intelligence of the American (Sheeple) people.  

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by: Stu Piddy @ Mon May 11, 2009 at 15:28:01 PM UTC

Yes, Read Ezra (4.00 / 4)

The two bigs issues that progressives need our allies in Congress to hold firm on are the public option and Comparative Effectiveness Review (CER), including cost effectiveness.  If the Progressive Caucus sets those markers, and sticks to them, there is a chance that whatever health care reform comes out of Congress  --  and it is increasingly clear that something will come out -- will have the mechanisms for real reform.

The public option is the real genie in the bottle.  Once it gets out, the bloated insurance options will not stand a chance and, over time, the public option will erase them and we will end up with the single-payer system that could never be obtain legislatively.  For once the free market may work toward progressive ends.

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by: ArthurKC @ Mon May 11, 2009 at 15:32:54 PM UTC

Exactly right, David. (4.00 / 5)

Health executives have a fiduciary responsibility to private shareholders to maximize profits. Voluntarily lowering those profits would violate that fiduciary responsibility. Are we really expected to believe these health executives will, out of the goodness of their hearts, violate their fiduciary responsibilities? What has actually changed to suggest that they will violate their fiduciary responsibilities and help health care consumers?

They seek the 48 million uninsured with gov't subsidies to cover and profit off of them, but no public plan.

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by: Tom Wells @ Mon May 11, 2009 at 15:35:34 PM UTC

multi-layered problems (0.00 / 0)

Taking the financial incentive out of healthcare could be the hardest fought battle with Congress.

President Obama lacks the will for real reform (HR676).

The Healthcare and pharmaceutical industries are the "middle men" in this system.

There is also a shortage of qualified medical professionals, the existing pool of doctors is tilted towards specialties.

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by: mariann @ Mon May 11, 2009 at 15:59:33 PM UTC

It's not the 'will for reform' that is the problem ... (0.00 / 0)

HR676 (Universal Health Care) is a drastic change.

Everyone always touts the benefits of the plan without mentioning that the entire economic and health care landscape will change.

I am not saying that HR 676 should not happen but there needs to be time for that to happen. Obama will push for a public option which can lead to that but HR 676 cannot happen with over 30% of the Democratic party blue dog conservatives.

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by: ckoeber @ Mon May 11, 2009 at 18:44:44 PM UTC

[ Parent ]

Getting there (0.00 / 0)

Even if we had a pure dictatorship and no political issues at all, we wouldn't want the full single payer implemented tomorrow.  We would want to take a series of steps to modify the system from where it is currently at to where we need to be while continuing (and phasing out) what is in place today.  Even ideally this would take several years.

This is one reason why the public option is so important and why some are fighting it so strongly.  The public option gives us a path to single payer.

Also note that a great health care plan does not necessarily mean private insurance is completely out of the picture.  My understanding is France has what is considered by many to be the best health care in the world, but they still have a role for private insurance to supplement the public plan.

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by: Mark Matson @ Mon May 11, 2009 at 19:38:36 PM UTC

[ Parent ]

presumably your reasons #1 and #2 are (4.00 / 2)

why Obama jumped on this letter from them and turned it into a "major announcement."  He now has the industry on record as saying that reform is needed and a large fraction of spending is wasteful.

As for #3, he literally said "insurance companies will have a seat at the table" in his stump speeches so that boat sailed a long time ago.  

New Jersey politics at Blue Jersey.

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by: Hopeful in NJ @ Mon May 11, 2009 at 16:25:18 PM UTC

How does the current proposal by the (4.00 / 1)

health care insurance industry to cut the rise in costs for health care differ from the Oregon Health Plan, described in this paper:

The Oregon Health Plan (OHP) has been widely heralded as an important innovation in medical care policy and rationing. Oregon's pioneering method of prioritizing funding for health care through systematic and public ranking of medical services has drawn substantial international interest. This paper reviews the experience of the Oregon plan since it began operation in 1994. We argue that widespread misconceptions persist about the significance of the OHP. In particular, there is little evidence that the OHP has operated as a model of explicit rationing. In reality, Oregon has not rationed services, nor has its policy of cutting public coverage for services produced substantial savings. These findings have important implications regarding the desirability and feasibility of adopting a policy of removing items from the list of insured medicare services in Canada. Oregon's experience suggests that drawing the line on medicare coverage would be more difficult and less financially rewarding than advocates claim.

If it's basically the same warmed over empty promises, why take it as a serious proposal instead of another shiny object?

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by: frankly0 @ Mon May 11, 2009 at 16:31:55 PM UTC

because much of the savings would come from (0.00 / 0)

efficiencies re: billing and records, savings which are actually not going to be easy for these companies to reverse course on once they are implemented.  

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by: seabrook @ Mon May 11, 2009 at 17:00:04 PM UTC

[ Parent ]

That is not the way Krugman himself described it (4.00 / 1)

and rightly so, given that what he was focusing on was the rise in cost of health care from year to year.

And you are missing a critical point (as does most everybody discussing this issue so far)

Any reduction in the costs of health care, which can recur year after year, must, of necessity, come from something other than cutting administration costs.

The point is simple. Let's suppose that the administrative costs of private health care insurance are, in fact, 31%, as has been claimed. Suppose further that the administrative costs of Medicare are in the order of 3%. Suppose still further that the private options might be streamlined to get their own administrative costs down even to 3%.

This sounds great, and it is important to do. But, once the savings in overhead have been implemented, they are done with; they are not going to do anything to prevent further rises in cost in health care. They are a one time hit.

The only way to reduce the overall rise in health care costs -- the true killing feature of our current health care financial crisis -- is to do something that will prevent various interested parties, such as health care providers, health care device manufacturers, and pharmaceutical companies, from raising their costs year to year. This has nothing whatever to do with administrative costs.

The Oregon experiment would seem to demonstrate that a half-measure, corporate friendly attempt to curtail the rise in health costs is essentially useless. Almost certainly, the only way to effect real change on this score is to do what Medicare does, and negotiate down the prices of all services with health care providers, etc.

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by: frankly0 @ Mon May 11, 2009 at 17:29:52 PM UTC

[ Parent ]

i agree that we need much more, (0.00 / 0)

but i was specifically answering the question of why this is different than oregon.  the answer is that some of these reforms couldn't have been done within a single state, they need federal coordination, as well as federal approval.  

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by: seabrook @ Mon May 11, 2009 at 18:01:37 PM UTC

[ Parent ]

Also, (0.00 / 0)

notice one important thing about one of the administrative reforms proposed by the insurance industry: the use of a uniform form, across all insurers, for submitting health care claims.

Whose administrative costs does this reduce? The insurers? No -- they still presumably have the same people evaluating this new form, as opposed to their older, proprietary form.

It's only on the health care provider side that administrative costs are really reduced -- hospitals and doctors.

Such a great sacrifice the health care insurance industry is making, you know?

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by: frankly0 @ Mon May 11, 2009 at 18:01:24 PM UTC

[ Parent ]

who cares if they sacrifice or not, if the costs for (0.00 / 0)

consumers are reduced?  and your logic is actually backwards -- if the insurance companies are still employing the same number of form-readers, then they won't be saving costs on labor, or making more of a profit.  so, assuming that they also can't cut costs, they will be the only ones who don't benefit from the reforms...

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by: seabrook @ Mon May 11, 2009 at 18:05:32 PM UTC

[ Parent ]

nevermind; i now see your point. (0.00 / 0)

this just goes to show that we need a real public option -- if we have one, then there will actually be pressure for the insurance companies to pass on whatever cost savings they have to those of us who are buying their policies.  

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by: seabrook @ Mon May 11, 2009 at 18:09:45 PM UTC

[ Parent ]

Look, (0.00 / 0)

the question is whether the insurance industry should be granted any real credibility as a trusted partner in health care reform. Giving them credit for proposals that do nothing to reduce their profits is exactly what they want people to do. When the day comes that they push back on other proposals that are both necessary but do hurt them, they will have trust and credibility they don't deserve as to their making their claims in good faith.

And from the standpoint of the insurance industry, keeping their own administration and size of company intact is a crucial part of the game in maintaining the status quo of their current profit structure. If indeed they are forced to cut the size of their own overhead, it's very likely that the total amount of profits will go down even if they manage to have a higher percentage of profits. A company with, say, 10 Billion in revenue with a 10% profit makes a lot more profit than a company of 5 Billion in revenue running at a 15% profit.

And share price is mostly dependent on total amount of profits, not percentage -- that's what P/E is about.

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by: frankly0 @ Mon May 11, 2009 at 18:21:28 PM UTC

[ Parent ]

If the Oregon experiment (0.00 / 0)

is being fairly described by the paper I pointed to, I would say it would be the perfect model for the health care insurance industry.

It has, demonstrably, two great features:

1. It sounds absolutely great as an idea for reform.
2. It doesn't work.

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by: frankly0 @ Mon May 11, 2009 at 17:38:41 PM UTC

[ Parent ]

Obama just came out (0.00 / 0)

he's on now.

New Jersey politics at Blue Jersey.

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by: Hopeful in NJ @ Mon May 11, 2009 at 16:35:48 PM UTC

I didn't catch any specifics (0.00 / 0)

Did anyone notice something I didn't?

Now it's time to wait for the space shuttle launch.


New Jersey politics at Blue Jersey.

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by: Hopeful in NJ @ Mon May 11, 2009 at 16:47:15 PM UTC

[ Parent ]

David... (4.00 / 2)

You said in this diary how Obama doesn't take on people directly and alienate them, even though your previous diary says the opposite (in regards to Big Farm, which could hurt him even in his home base of Iowa), so, lets not try to figure out Obama's motivations here...

The blogosphere is all on fire over something that is really minor, policy-wise, but bigger politically.  Agreeing to these savings does not hurt the industry one bit.  Standardizing policy claim procedures and billing across the industry will save their providers and themselves a good amount of change and won't cost anything on their part...  So, it's a net win for them... They look like they are giving up something without really giving up much at all...  Which is why they didn't have any issues making this deal...

But, it is a positive development, since any reduction in costs is necessary and helpful, and government is necessary to oversee and approve national standards for claims (due to antiturst regulations)... so, nothing to get upset about here...

It is not the end all and be all of health care reform.  It is step 3 of 100, and there will be much, much more to deal with in the coming months.... People are freaking out 'cos they think that this is the health reform package... it isn't!  It's just one small part...

It's a huge deal, politically, though... The agreement today just gave Obama a huge amount of political capital to move health reform forward... the Health insurance industry also blinked first.  While they are going to leverage this as "good faith" to try and and push what they want, in reality, it's clear now that the president has them by the gonads.  The health lobby is now all in... they are officially pro reform... and they can't get out.

So, this announcement should be welcomed  for what it is... a great step politically to keep health reform moving through congress, and a small step to make that reform actually happen.

REID: Voting against us was never part of our arrangement!
SPECTER: I am altering the deal! Pray I don't alter it any further!
REID: This deal keeps getting worse all the time!

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by: lord_mike @ Mon May 11, 2009 at 16:40:20 PM UTC

Ezra gets it right (4.00 / 1)

But Matthew Yglesias (quoting Igor Volsky) has an interesting point that would not have occurred to me.

But the real import of today's event isn't in its signal for what industry insiders may do in the future, it's for the Congressional Budget Office. The main impediment to a health care deal, at this point, is cost. The up-front costs are large. [...]

That means that to make the costs work, it's going to be necessary to rely on reform's inherent potential to wring some of the massive waste out of the system. The problem here is that the CBO has been reluctant to "score" such savings in its official account of the bill. As Igor Volsky emphasizes, this industry statement is an important challenge to that CBO reluctance:
[...]

The industry is suggesting that these cost containment measures - which don't score too well with the Congressional Budget Office - would in fact yield cost savings and help finance health reform.  The letter blunts conservative critics who argue that health reform is unsustainable or too expensive, and it also takes on the CBO, whose models are likely under-scoring the savings from reforms.

I tend to agree that nothing serious comes out of this announcement.  But if it makes it easier to pass real reform due to stupid number tricks, I'll take it.  We'll see, I guess.

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by: Mark Matson @ Mon May 11, 2009 at 18:22:56 PM UTC

. (0.00 / 0)

Once again, I quote the insightful mark schmidtt:

One way to deal with that kind of bad-faith opposition is to draw the person in, treat them as if they were operating in good faith, and draw them into a conversation about how they actually would solve the problem. If they have nothing, it shows. And that's not a tactic of bipartisan Washington idealists -- it's a hard-nosed tactic of community organizers, who are acutely aware of power and conflict. It's how you deal with people with intractable demands -- put 'em on a committee. Then define the committee's mission your way.

Let Obama handle the politics.

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by: NeonBlack @ Tue May 12, 2009 at 03:47:31 AM UTC