Health Reform: Cocktail Party Edition

When Barack Obama reached the White House with 60 Democratic seats in the Senate and a sizable majority in the House, the political stars were supposedly aligned: health reform was a foregone conclusion. Well, you know what they say about assuming. We hit August and the crazies came out of the woodwork in every town across the country, with pistols strapped to holsters on their legs, holding angrily (and hilariously) misspelled signs declaring “No Pubic Option,” yelling for government to keep its hands off of their Medicare, and in some cases even biting off fingertips. Cue the death knells.

Well, not so fast. Congress returned to Washington and put its nose to the proverbial grindstone and soon the nonsensical chatter of death panels–a torch lit by Sarah Palin and carried proudly by Betsy McCaughey, Rush Limbaugh, and Sean Hannity–died down and now seems almost completely gone. The notoriously foot-dragging Senate Finance committee managed to pass a bill, and even managed to get a Republican, Maine’s Olympia Snowe, to vote for it in the process.

Just days ago, Senate Majority Leader Harry Reid announced that the version of the health care bill that makes it to the Senate floor for a vote will include a public plan option that allows states to “opt-out” if they so choose. This was big news given that the Finance bill included no such option. Reid really appears to be asserting himself in the process, but as Jonathan Cohn writes, there are still plenty of centrist Democrats who can sink even this “watered-down” public option.

What does all of this have to do with a cocktail party? Not much. No, it’s a rather weak analogy, but my beloved Georgia Bulldogs are headed to Jacksonville tomorrow to take on the number one team in the nation–The Florida Gators–in what is affectionately known as “The World’s Largest Outdoor Cocktail Party.” The conventional wisdom? A lop-sided victory for Florida and an embarrassing game for the Dawgs. The Gators are favored by 15. If I were a betting man, I’d put my money on Florida–and looking back at history, I’d put my money on a last-minute effort to derail health reform–oh, wait, AHIP is already doing that.

But there’s hope. In 1985 the Gators were #1 in the polls. The Dawgs were #17. UGA was far from great that year, but they came away with the win 24-3. In the same way, the conventional wisdom is that the status quo is #1 and will successfully resist health reform. But some things just seem to be going right. The key players–Pelosi and Reid of late–are playing one of the best games of their respective careers, and that’s the kind of showing that it will take to pull off the upset and get reform done this time around.

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The House and Senate Subsidies

A couple of weeks ago, I had the pleasure of meeting Rep. Jim Cooper (D-TN) for a few minutes during his visit to the UNC campus. We chatted briefly about my dissertation topic and then I went on my way. Then I saw this piece from Ezra Klein highlighting the work of James Leuschen, Rep. Cooper’s legislative director.

I’m not up for reinventing the wheel right now, so I’ll just suggest that you take a look at Ezra’s post. What you’ll find is a nifty comparison of the differing subsidy levels provided under House and Senate Finance health reform legislation. As Ezra notes, the House bill would cost taxpayers more, but individuals less, while the Senate Finance bill would do just the opposite. It’s all about incentives and reactions to them. Now if Harry Reid would just release the final Senate bill so Leuschen could update his graphs, I’d be ecstatic.

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Lobbying Is Too Big To Fail

The third quarter lobbying numbers have just been released, and as you might expect, health care lobbying is setting records. Here’s a quick look at the big hitters. Surprisingly, AHIP is not throwing as much money at stopping reform as one might think. Of course, it’s also important to note that it’s not possible to tell the intent behind the numbers. An industry lobby can spend a lot of money trying to ensure that good things happen or it can spend just as much trying to prevent bad things from happening. My guess is there’s a bit of both going on here.

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When Votes Trump Money

The conventional wisdom in politics is that one thing matters to a politician: getting re-elected. That, in turn, depends on two things: votes and money. Often, these two things are inextricably intertwined: the money is used to finance campaigns that garner the politician votes. Where does the money come from? Organized interests who hope to influence the politician’s vote in Congress. If the politician doesn’t vote the way the interest group would like, he or she can expect that the financial contributions will dry up almost immediately.

But political calculations are sometimes more complicated, and sometimes we learn that our Senators cannot be bought and sold quite so easily. Exhibit A: Chris Dodd, the Democratic Senator from Connecticut, who has received $774,000 from health insurers during the last two decades, but who currently supports a public insurance option that those same insurers strongly oppose. What explains this dramatic break from the conventional wisdom? Dodd got involved in a mortgage scandal that has harmed his credibility and threatened his prospects for re-election in 2010.

How does a politician get re-elected? Money and votes. Well, specifically, votes. The money just helps to secure those votes, and the health insurers aren’t going to be able to give Dodd the amount of money he needs to restore his public image. So, he has returned to his Democratic base and is championing the public option in hopes that he will put himself back in the good graces of the electorate in Connecticut. Is he burning bridges with the insurance industry? Probably not. Sure, they’ll be less than happy about a public option, but access to a Senator is too valuable to forgo.

If you want to read the full details of this story, see Tim Noah’s piece here.

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A Choice of Options

The buzz in the blogosphere since the end of last week was all about the fate of the public option in health reform. The question seemed to be shaping up not as “Will there be a public option?” but rather “What will the public option look like?” Last Thursday, Ezra Klein posted a quick guide outlining the options over the public option. There’s the “trigger option” favored heavily by moderate Republican Olympia Snowe, the “opt-in option” introduced by Democrat Tom Carper, and the “opt-out option,” which is essentially Democrat Chuck Schumer’s careful reframing of Carper’s proposal.

In every way this is an issue of political and technical feasibility. That is to say, which approach can actually get the public option through with enough Congressional support, and what will each option look like when it comes time for it to be implemented? In case you couldn’t guess, the two (political and technical feasibility) don’t exactly travel together. Here’s my graphical explanation of how it all works out, with heavy acknowledgment to both Ezra Klein and Jonathan Cohn.
The House is bringing the robust public option to the table. That’s old news. What the Senate bill will look like when Harry Reid finishes the “mash-up” of his bill with Max Baucus’ contribution is the big question, because Reid’s HELP effort has a public option and Baucus’ Finance bill does not. It matters for many reasons, not the least of which is it represents the Senate’s starting point for potential negotiations with the House during conference. If both the House and Senate bills include some type of public option, it looks like a done deal that health reform will include some variant of a government plan. Thus, all the hype.

Well, on Monday afternoon, Sen. Reid held a press conference and announced that the Senate bill would include a public option. Specifically, he outlined a version that would create a single federal plan and permit states to opt-out of participating if they chose. The demonstrated principle behind requiring opt-out rather than opt-in is one of inertia. For instance, studies have shown that more drivers are registered as organ donors in states where the default option is to donate rather than not to donate.

It’s simple really: people are generally unlikely to take action unless they feel very strongly about something. So, by changing the default category, you essentially move the more apathetic people into the group to which you’d like them to belong, but you’ve not in any way limited their freedom of choice. You’ve merely capitalized on human nature. The hope for Reid’s public option opt-out is that states work similarly to people. I’m guessing that they will. Besides, history shows us that even with opt-in programs, like Medicaid, all states eventually decide to participate.

In sum, I think Monday’s announcement is fantastic news. Of course, Olympia Snowe–whose vote was so coveted just a week ago–is adamantly opposed to the inclusion of the public option. But I have two thoughts on that. First, she’s just one vote, and as symbolic as that may be, it’s still just one vote. Second, it goes to show you how quickly the tide can turn in this debate. A week or so ago, everything was about the trigger option and bending over backwards to get Snowe to vote for Baucus’ bill. Now, it’s about the opt-out option and it doesn’t matter if Snowe supports it or not. So, on second thought, I’ll hedge my bets. Monday’s fantastic news is fantastic news for now. In the meantime, I’m not holding my breath.

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If Grocery Shopping Worked Like Health Care

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Pelosi’s Public Option Strategy

Will the public option make it in to health reform or not? Harry Reid’s hard at work in the Senate trying to merge his HELP bill, which includes a public option, with Max Baucus’ Senate Finance bill, which does not. But the real interesting merger will involve the House and Senate bills during conference, because the House bill in all its marked-up versions contains a public option.

Now, if Reid puts the public option into the Senate bill, it seems likely that the conference report will include a public option, but what if Reid makes some concessions to Baucus and the Senate bill lacks a public option? After all, this seems plausible, since Baucus’ bill is the most favorable in terms of its total cost as scored by the Congressional Budget Office. Or is it?

The word in Washington is that Speaker of the House Nancy Pelosi is hard at work to get the CBO to score the amended House bill in hopes that she will be able to present a bill that does more to cover the uninsured at a comparable cost to Baucus’ bill, all while including a public option. If she can do that, it would seem, then Democrats and perhaps even some moderate Republicans would be hard-pressed to vote against the public option. This is a “bang-for-the-buck” approach. We know reform will be expensive, but if Pelosi can demonstrate that a public option does more (i.e., covers more people) with the same amount of money, she–and the public option–just might be hard to say no to.

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Anecdotes Are Weak Evidence

Dr. Norbert Gleicher writes a piece in The Wall Street Journal that roundly criticizes the proposed role of expert panels that would make determinations about what treatments to cover by using comparative-effectiveness research. Like many opponents of the idea he writes “the idea of inserting a government panel between patients and physicians remains contentious…” and “evidence-based medicine has some value, but it can provide misleading information.” He then goes on to discuss at length the biases inherent in the process of conducting research, getting published in the peer-reviewed literature, and even conducting the meta-analyses central to identifying evidence-based guidelines. He then uses a personal anecdote to make his case.

So many things are wrong with his piece. First of all, the expert panel would not be a “government” panel, but a panel of medical experts commissioned by the government. Those two things are quite different. Furthermore, would one prefer that a panel of non-experts be convened? Or is it that we need no panel at all? I suppose the old adage “Two heads are better than one” no longer applies. Of course, we already have our allowable treatments meted out to us by the insurance companies. I guess it does make sense to have corporate profiteering trump medical expertise when trying decide which medical interventions work the best.

And what about evidence-based guidelines? You know, the more I think about it, I guess I really would prefer to go to my doctor and have her say “Well, Brad, we really have no reason to believe that this treatment will work. I mean, there’s not any evidence for it, but we’re just going to give it a try, okay?” Besides, the decisions of the panel aren’t legally binding. My doctor can provide me with any treatment deemed necessary. That’s why they’re called guidelines and not requirements.

My real beef, though, is with Dr. Gleicher’s use of a single personal anecdote to refute the worth of volumes of medical research. Can research studies be biased? Absolutely. Can anecdotes be completely misguiding? You bet. Exceptions to the rule can always be found, but that doesn’t mean that we should be bending to accommodate the “exceptions” in every instance at the expense of identifying the “rule” from which many more persons are likely to benefit. Is that a utilitarian perspective? It sure is, and I think it’s the best way to design a system that’s intended to apply to everyone as a whole.

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Public Favors Public Option? Who Knew?!

The most recent polling data available show that the public continues to support health reform that includes a public insurance option and an individual insurance mandate. Of course, the numbers break out differently depending on how the questions are asked. In general, nothing’s changed since August–the height of the angry town hall meetings–when the nation was relatively split down the middle on the reform issue, with sizable partisan gaps.

Considering the current health reform legislation in Congress:

• 45% Favor
• 48% Oppose

But by political party affiliation, the numbers are different:

• Democrats: 70% Favor 30% Oppose
• Republicans: 10% Favor 90% Oppose
• Independents: 42% Favor 52% Oppose

On the public option, however, support is strong:

• 57% Favor
• 40% Oppose

And if the public option were run by the states rather than the federal government:

• 76% Favor
• 20% Oppose
• Even 56% of Republicans Favor this option

And the individual mandate is also popular, especially if there are low-income subsidies:

• 56% Favor
• 40% Oppose
• 71% Favor with low-income subsidies

How is it that there is stronger support for some of the individual–and often more contentious–components of health reform than there is for reform overall? I think it boils down to public confusion. For starters there’s not one bill in Congress, but several. That makes it harder to evaluate as a whole. Then there’s the issue that the bills are themselves complex. People are more comfortable making up their mind about a specific provision, and they probably feel that they understand these particular aspects well, because they’ve been so frequently discussed in the media. The support dwindles when people are asked to consider the legislation as a whole, because they don’t understand its more complex parts. There’s a lesson in this, because overly complex legislation is one of the fatal flaws that killed the Clinton health reform effort. We’re a twittering, text messaging society. Perhaps Obama should tell people: Vote 4 Rfrm 2 B Hlthy & Save $.

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Insurers Know Exactly What They Want

The enemy in health insurance reform is well understood to be the health insurance industry. America’s Health Insurance Plans (AHIP) is the public face of the health insurance industry in Washington. Ergo, AHIP is the enemy of health insurance reform. But what about those days long ago when the push to fix health care in this country was actually called health care reform? Did AHIP oppose it then? They should have, because substantively little has changed in the legislation being proposed in Congress. The shift from health care reform to health insurance reform, in other words, is one of semantics–of more accurately framing the debate to reflect what these reforms aim to do.

The reality is, however, that only after they came under direct fire did AHIP begin to become so outspoken against reform–or at least certain elements of it. As I’ve written previously, the counterstrike came when AHIP had PriceWaterhouseCoopers release a now notorious study report showing that health reform as currently proposed would raise the premiums of those who are currently insured. That created a huge backlash, and on Tuesday, AHIP President Karen Ignagni went on the defensive in the op-ed pages of the Washington Post to set the record straight. What she actually did, for those who read between the lines, is make it abundantly clear that AHIP wants health reform that works solely in their favor and wants to improve their public image–no organization enjoys being vilified.

Here’s how Ignagni sees it:

“Health plans continue to strongly support health reform….The shared promise of health-care reform is guaranteeing access to affordable coverage for those outside of the system while ensuring that those who have coverage can keep what they like. That promise can be kept only if Congress puts the nation on a path to universal coverage and confronts what lawmakers have thus far been unwilling to address: the need for tangible, effective steps to reduce the growth in health-care costs and make the system sustainable for generations to come. “

Yet she also (predictably) opposes the excise tax that Congress wants to levy on the most expensive health care plans (the so-called “Cadillac Plans.”):

“…the proposed new taxes on health plans, pharmaceutical manufacturers and medical-device makers will increase the cost of coverage….[M]ore costs [will be] shifted to individuals and employers who purchase private coverage….[and] in a few years, far more employees’ health plans would be subject to the new tax on comprehensive benefit packages than is currently projected, quickly turning the so-called Cadillac tax into a Chevrolet tax.”

Do you see it? AHIP certainly doesn’t want to be seen as opposing reform, because they know that that’s not a popular position to take given that they are the object of reform. This is the old “If you can’t beat them, join them” mentality. Besides, many aspects of reform (e.g., mandating everyone to have coverage) would benefit insurers greatly. But AHIP takes the familiar saying and inserts its own clause: “If you can’t beat them, appear to join them, but once you’re on their side work like hell to make them see things your way.” Thus, AHIP’s strangely paradoxical position that controlling health care costs should be priority number one, but that Congress should abandon one of the primary means of bringing costs down (i.e., the excise tax) because it is unfavorable to insurers. Make sense?

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