Who, Exactly, Does Congress Represent?

The following post was authored by Wright on Health blogging partner, Nicole Fisher.

2012 has been quite a year for those in the world of health policy. We’re only three-fourths of the way through and we’ve seen incredibly nasty Affordable Care Act battles, a monumental Supreme Court decision and are still working hard before the upcoming tough and divisive presidential election. Despite all the hours we spend buried in HHS data and fighting our wonky skirmishes in OpEds, every now and then we are confronted by the remarkable and often misinformed rhetoric of politicians. It is at those times we must take a step back and contemplate the big picture of health policy and the impact, or lack thereof, of our work on those making policy decisions.

The past few months have sadly shown us just how bad politicians in particular can be at understanding their constituents, science and health (and, some would argue, how the world works in general). Granted, not all gaffes and misinformation are as bad as Tom Akin’s assertions about “legitimate rape”, but with each day it appears that another piece of the Affordable Care Act becomes political fodder or another state finds that it can’t make ends meet for the fiscal calendar and programs need to be cut. Many of these tough decisions are directly related to health care and health policy. But when we hear ignorance publicly being touted by those elected to represent us we have to ask, just whom, exactly, does Congress represent?

The easy answer: old, white men.

Although I would never argue that we need any form of required representation based on gender, race, ethnicity or religion, it is important to look at the trends of those making decisions on our behalf.

Out of 541 Congressional seats, there are exactly 93 filled by women (or 17.2 percent of the Members). There are presently eight percent, or exactly 43 African Americans, with none being elected to Senate. Hispanics and Latinos combined in Congress are 31 strong, with only two in Senate. Twelve Members in total are Asian or Native Hawaiian/other Pacific Islander. The only American Indian (Native American) serves in the House.

Here is a current breakdown of your 112th Congress:

House of Representatives
-Republicans: 240
-Democrats: 197
-Vacancies: 4
-Number of Women: 76
-Number of African Americans: 43
-Number of Hispanic or Latinos: 29
-Average Age: 57
-Average Time In Office: 10 years (5 terms)

Senate
-Republicans: 47
-Democrats: 51
-Independents: 2 (Caucus with Democrats)
-Number of Women: 17
-Number of African Americans: 0
-Number of Hispanic or Latinos: 2
-Average Age: 62
-Average Time In Office: 11.5 years (2 terms)

It should be no surprise to anyone then that those making health care and health policy decisions on our behalf not only do not represent us, they don’t necessarily relate to us or use the same working knowledge of the world that we do. While there are plenty of older, white men who make well informed, thoughtful decisions about health care and minority health, it is important to stop and reflect as health care recipients, voters and for some of us advisors, that the people we are electing and advising are not the same people they are representing.

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The Ultimate Liberal/Conservative Irony

Two of my favorite programs, Comedy Central’s Daily Show and The Colbert Report, make a living by closely observing political news, finding instances where politicians disagree with themselves in some way, and splicing together footage to demonstrate those inconsistencies to highlight how ridiculous it all is. A wonderful example would be the Romney-Ryan campaign attacking Obama for stealing $716 billion from Medicare when they themselves have embraced the exact same cuts and more.

On the surface, criticizing someone for doing precisely what you intend to do might simply appear to be a bit hypocritical, but a little more reflection reveals that it’s actually much more ironic than that. To illustrate, I am borrowing the following from my friend, Jonathan Cohn, who writes for The New Republic. Cohn, in turn, quotes Steve Benen here, and I wanted to acknowledge both sources. Here’s the excerpt:

“What is Medicare? It’s a massive, government-run system of socialized medicine. It’s wildly popular, very successful, and one of the pillars of modern Democratic governance. This government-run system of socialized medicine was created by Democrats against the opposition of conservative Republicans, and it’s Democrats who’ve fought to protect it for more than a half-century.

Or to summarize, the left loves Medicare and always has; the right hates Medicare and always has. For liberals, the system is a celebrated ideal; for conservatives it’s an unconstitutional, big-government outrage in desperate need of privatization.

In 2012, once we get past all of the talking points and attack ads, we’re left with this: Romney/Ryan wants you to believe they’re liberals. No, seriously. Think about what the Republican presidential ticket, Fox News, Krauthammer, Donald Trump, and the Republican National Committee have been saying all week: those mean, rascally Democrats cut our beloved Medicare and voters should be outraged.

In other words, the argument pushed by the most right-wing major-party ticket in a generation is that Barack Obama is a left-wing socialist who wants government-run socialized medicine and that Barack Obama is a far-right brute who wants to undermine government-run socialized medicine.”

Ironic, isn’t it? There’s one simple explanation: When it comes to Medicare, America’s senior citizens are liberals insofar as they value the program and are wary of any threats to its continued existence, but many of them are conservative in every other way, including their opposition to “socialized medicine.” Obama’s position on Medicare is clear. It’s not going anywhere. The right is just exploiting the fears of the people for political gain. If this doesn’t make you feel exploited, maybe you should check for a pulse.

 

Unequal Cuts: Understanding Obama’s and Romney’s Vision for Medicare

As a health policy wonk, I am encouraged by the fact that the Medicare program is finally receiving the level of attention it deserves during this presidential campaign season. At the same time, I am discouraged by the tremendous amount of misinformation swirling around in print, online, and over the airwaves. It seems that both the Obama/Biden and Romney/Ryan camps agree that we need to fix Medicare, but both sides blame each other for doing just the opposite. Obama says that Paul Ryan will “end Medicare as we know it.” The Romney campaign fires back, charging Obama with “stealing $700 billion from Medicare to pay for Obamacare.” Somewhere in there, are the facts, and since campaigns aren’t about educating the public, forgive me for taking some of that responsibility upon myself here.

Let’s start with Paul Ryan’s plan, which has changed over time. Now, the initial disclaimer that needs to be issued is that Paul Ryan’s budget isn’t necessarily synonymous with Romney’s, but Romney has made statements in support of the Ryan plan in the past, so until I hear otherwise, I am going to consider them a package deal. Ryan’s budget also addresses much more than Medicare. For example, it proposes to turn Medicaid–the program that pays for care for low-income women and children and long-term care for the elderly and disabled–into a block grant. More about that in a later post. For now, back to Medicare.

Paul Ryan claims that he wants to ensure the survival of Medicare, which is widely agreed to be on an unsustainable course. To do so, he initially proposed replacing the current Medicare program with a voucher program. When that received pushback from even members of his own party, he softened just a bit: Now he wants to give seniors a choice between the traditional Medicare program and the Medicare voucher program. Here’s how that works: Currently, Americans who are age 65 or older or disabled, are eligible for Medicare, which promises to pay for all of their medical care, as long as the service is a covered benefit.

By contrast, the proposed voucher gives seniors a fixed amount of money and sends them shopping for coverage, with the idea that this will lead to increased competition and will keep costs down without harming access or quality. While that idea might sound appealing, there are at least four problems with it:

First, because most patients don’t have the first idea about how to “shop” for health care and are prone to get the care that their physician recommends, the supply and demand of medical care don’t responded so well to traditional market forces.

Second, we’re talking about the elderly and disabled. Can you imagine a 93-year old woman taking her voucher each year and trying to comparison shop for insurance coverage through an online health insurance exchange? Neither can I.

Third, while the vouchers are set to be indexed for inflation, they may not keep pace with the costs of medical care, leaving seniors to pick up more and more of the tab themselves.

Fourth and finally, there is the threat of the death spiral. As currently proposed, it will be more likely that the younger and healthier beneficiaries will select the voucher option and purchase private insurance, while the older and sicker beneficiaries remain in traditional Medicare. This “adverse selection” is already apparent in the decision to enroll in Medicare managed care, which markets almost exclusively to more active and healthy seniors. Over time, this will make the traditional program more expensive and lead to its collapse. These are not good things.

Of course, in an attempt not to alienate seniors who might vote for Romney in November, none of this applies to anyone age 55 or older. I suppose the assumption is that people discount the future such that an 11-year window is enough to ignore these threats to Medicare and support Romney for other reasons. In fact, the only positive thing I can say about Ryan’s Medicare proposal is that it provides smaller vouchers to the wealthy than it does to those with lower incomes, which actually makes sense.

Then there’s Obama’s plan law. It keeps traditional Medicare just like it is today. There are no vouchers here. So, why all this talk of his administration stealing $716 billion from Medicare? Because the Affordable Care Act does make changes to the Medicare program to make it more efficient, and because saying he stole it will scare old white people more than the truth. Especially considering that Paul Ryan’s budget includes the very same cuts. Specifically, the ACA does things like reducing reimbursements to hospitals and other health care providers and eliminating the excess subsidy currently provided to the private insurers who administer Medicare managed care plans. There’s NOTHING in the law about cutting benefits for the elderly. Not a single thing. So, for starters, if Obama were stealing from Medicare, he’d be stealing from providers, not beneficiaries.

So, big difference number one is that Paul Ryan (and by extension Mitt Romney) proposes to turn Medicare into a voucher program, while Obama leaves the traditional Medicare program intact. Big difference number two is the $716 billion in cuts. Astute readers may be asking: If both Obama/Biden and Romney/Ryan favor the same cuts, how is that a difference. Well, for starters, Romney and Ryan want to repeal the ACA, which means those cuts would go away, and our deficit would increase. In reality, though, they don’t want to do that. They want to keep Obama’s cuts, they just have a different idea on what to do with the money. Obama, via the ACA, takes those savings and uses them to extend health insurance coverage to the uninsured, provide the elderly with free preventive care, and shrink the so-called “donut hole”–or coverage gap–that seniors face when paying for their prescription medications. The Romney/Ryan camp wants to take those savings and pass them along to the wealthy in the form of tax cuts.

The bottom line is that Obama’s vision for Medicare and the rest of the health care system would cover most of the country’s 50 million uninsured Americans. By contrast, Ryan’s vision for Medicare and the rest of the health care system would leave these people uninsured, and would actually increase the uninsured by between 14 and 27 million through Medicaid block grants, to say nothing of the uninsured and underinsured that may well result from turning Medicare into a voucher program. Sure, it may be cheaper, but that’s like saying your grocery bill was cheaper because you only ate on the weekends. Moreover, it won’t reduce the deficit, because the plan is simply to match the programmatic cuts with reductions in revenues. That’s right. If we stop taking care of our most vulnerable citizens, we can afford to give bigger tax cuts to the wealthy. One of the visions will soon become a reality. Do you want to wake up in a nation where nearly everyone has health care and everyone pays their fare share or in a nation where 77 million people have no health insurance, so that the rich can keep getting richer than everyone else? The choice is yours.

 

 

The Cautionary Tale of Private For-Profit Hospitals

A sizable proportion of Americans are opposed to government involvement in health care. They think that a minimally regulated free market will promote competition, thereby reducing costs and improving quality in health care. In fact, they are quick to label anything other than that approach “socialized medicine” and start wildly misguided discussions of “death panels.” They see government as an inhibiting force, that promises to interfere with the doctor-patient relationship. In fact, that concern is what led to the managed care backlash of the 1990s. When private insurance companies started implementing utilization review, requiring preauthorization, and denying benefits, people felt that the doctor-patient relationship was being limited by a third party and they were understandably displeased (to put it mildly).

You see, it doesn’t particularly matter to us individually whether the interference comes from the public or private sector. We are simply opposed to the idea of interference. We also seem to have an amazing ability to grow accustomed to a certain amount of interference–perhaps constraints on choice is a better phrase–over time. This is the only way I can think of to explain how people can be comfortable with the idea that their employer doesn’t have to offer them coverage, can stop offering benefits at any time, decides which benefits will be available to them, and so on. We seem okay with the total lack of security that exists in our current system. In fact, we are so okay with it, that we’d prefer the risk of losing our current coverage (which we discount) to the risk of being negatively affected by health reform (which we inflate).

It’s particularly easy to do when you really have no idea how your current coverage compares to other plans or even what it covers, and you have very little to no idea about the provisions the Affordable Care Act actually contains. Of course, for many of you, it’s equally easy to discount my very words, dismissing my doctorate in health policy by labeling me “elitist.” So let me appeal to more common ground.

If you or a loved one were to get seriously ill, to the point that you had to be hospitalized, would you want those providing your care to be focused on taking care of you and restoring your health as quickly as possible, or would you prefer that they actively looked for ways to cut corners while hoping you got better, so that they could maximize their profits? Based on the enormous sums of money people throw away in ultimately futile attempts to avoid death, I’m guessing that most of you reading this would want the best care you could get, and the rest of you are lying.

And that’s the problem. Somehow, we seem to have bought into the notion that the government wants to cut corners with our health care, but that the private for-profit sector doesn’t. But if you stop and think about the motivations of each group, that logic breaks down rather immediately. The government, fortunately, is not a profit-seeking entity. If it was, we’d be in trouble, given the size of our budget deficit and national debt. The government does, however, have a vested interest in keeping society healthy and restoring the ill to health. That means that they can focus on doing the things that yield better health outcomes and they don’t have to maximize profits in the process.

For-profit health care providers, by contrast, are motivated by maximizing profits above all else. They are much less concerned, and certainly less invested, in what happens to you. Sure, one could argue that they care about health outcomes, because a lower quality hospital, for example, will not attract as many patients. The problem is, there will always be more patients, and the demand for health care is rivaled only by other basic necessities like food, water, and air. That means they can do a mediocre job and probably continue making loads of money. But they do not derive the same benefit from keeping the population healthy in the way that the government does. To see this with amazing clarity, imagine if the government and public health officials could snap their fingers and make everyone perfectly healthy. They would do it immediately. Health care providers, meanwhile, would be adamantly opposed to this, because they would go bankrupt.

If you think that I’m being too harsh on for-profit health care providers, I suggest you read this piece in the New York Times from Julie Creswell and Reed Abelson, which paints a very vivid picture of HCA (once Hospital Corporation of America) and the tactics it put in place to make as much money as it could. Apparently, some patients also received some health care in the process. Even their own doctors and nurses are speaking out against some of their practices and the negative implications they have for patients.

And don’t think that just because a hospital is non-profit it doesn’t make any money. It just means that it doesn’t have as overwhelming of an incentive to generate profits, because it isn’t accountable to shareholders. I am talking about what happens when greed meets health care. This is Our Lady of Gordon Gekko Hospital. Now, by way of a solution, I’m not suggesting a system of socialized medicine where the government owns the hospitals and salaries the physicians. While such a system has worked splendidly for England (as highlighted by the segment of the Olympic opening ceremony celebrating the National Health Service) it would never work here. On the contrary, I see promise in the words of HCA’s chief executive, Richard Bracken, who told the Times “Size and scale definitely provides an advantage in terms of lowering our cost structure and sharing best practices.” He’s referring to the benefits inherent in economies of scale, and he’s absolutely right. Perhaps if he thought about his words as I have, he’d realize that a single-payer health care system represents the ultimate embodiement of that model. But then how would he make all of his money?

 

A Tale of Two Medicares

With the announcement of Paul Ryan as Mitt Romney’s running mate in the 2012 presidential election, American voters are now faced with an easy decision. I say this because the two sides (Romney and Obama) espouse starkly different positions on almost every issue. I think it’s more difficult for people to identify their preference among two choices if those choices aren’t easily distinguished from one another, and easier the more they different they are. I think you’d probably agree. Today, I want to focus on just one major distinction between the two campaigns: the Medicare program.

Let’s start with some basics, so that we’re all on the same page. Medicare is a federal health insurance program that provides coverage for US citizens over the age of 65 as well as those under age 65 who are disabled. American workers pay into the program through a small deduction from their paychecks, and everyone qualifies for the program once they turn 65 (if not before due to disability). The rich and the poor alike get Medicare. Unlike Medicaid, the states don’t pay anything towards Medicare, which helps to simplify our discussion here.

The other thing that you might have heard about Medicare is that, similar to Social Security, it is going bankrupt. Now, I happen to be of the opinion that federal programs can never go “bankrupt,” because the federal government has the ability to print more money (ignore the implications for inflation for the moment), but the general idea is that Medicare costs are outpacing Medicare revenues. In short, there is widespread agreement that the program needs to be reformed if it is to continue providing our seniors with health care coverage.

With the passage of the Affordable Care Act, President Obama and the House and Senate Democrats put in place a plan that improves care for seniors by shrinking the amount of  money they have to pay out-of-pocket for their prescription drugs (essentially undoing a gift to the pharmaceutical industry from George W. Bush et al.) and provides free preventive care. At the same time, the law identified enormous inefficiencies in the program, and was able to cut some $700 billion from the program. In recent days, critics have accused President Obama of “stealing” from Medicare as if he was somehow syphoning off the billions to his private Swiss bank account. Ladies and gentlemen, if that accusation is true, then I submit that you are stealing from yourself everytime you adjust your thermostat or turn the lights off in a room to save money on your electric bill. Aside from removing these inefficiencies from the program to save money, Obama leaves the Medicare program just as it is. That program that seniors love so much that they don’t want government to touch it, remains intact.

On the other side of this issue, is what Paul Ryan has proposed: dismantling the Medicare program as we know it and replacing it with a voucher system that would permit seniors and the disabled to go shopping on the private market for their own coverage. The inevitable result of that will be that healthier older adults will end up with better and less expensive coverage than sicker ones. That, of course, assumes that the amount of the subsidy will even be sufficient enough for them to purchase coverage. What’s particularly ironic is that this approach, which Republicans support, is the same mechanism that the insurance exchanges established by the Affordable Care Act rely on, which–in that case–Republicans oppose.

The bottom line is this: If you like Medicare the way it is, you should vote for Obama in November. If you’d rather trade in your Medicare coverage for whatever your federal subsidy can buy you from a health insurance compay, you should vote for Romney in November. If you’re undecided, take a moment to reflect on how well the housing market performed when the private market was allowed to do as it pleased with minimal federal regulation.

 

How the Supreme Court’s Decision Saves Money, Leaves People Uninsured

At the end of July, the Congressional Budget Office (CBO) released a report that revised estimates of insurance coverage under the Affordable Care Act to reflect the Supreme Court’s decision, particularly letting states opt-out of the Medicaid expansion without penalty. Reading the document (pdf here) really provides a wonderful example of the multiple moving parts affected by a single policy change, but since most of you probably won’t do that, here’s a very brief summary.

The Supreme Court’s ruling has removed the teeth from the ACA’s Medicaid expansion efforts, allowing states to opt-out without penalty. At last count, seven states have decided not to participate. Result number one? Uninsured individuals with incomes below 138 percent of the federal poverty level (133% plus the 5% income disregard) will not gain coverage in these states as once expected. That effect will be more significant in larger states with a significant proportion of uninsured residents (e.g., Texas and Florida) than in smaller states with a lower uninsurance rate (e.g., Iowa and Nebraska). Overall, CBO estimates that 6 million people who would have qualified for Medicaid won’t get the chance. If more states refuse to participate, that number could rise substantially. That saves the federal government about $6,000 per person at the expense of each person’s health.

Things don’t stop there, though. While two-thirds of the uninsured (4 million) will have incomes too low to be eligible for federal subsidies, the other one-third (2 million) will qualify for federal assistance to help them purchase private insurance coverage. The CBO conservatively estimates that they all will, while acknowledging that many won’t. If that sounds confusing, it’s really not. They’re just saying, we don’t expect the number to be higher than 2 million, we’re not sure how much lower it will actually be than that, but to be cautious we’re assuming everyone eligible for a subsidy gets insurance through the exchanges.

Putting it all together, the federal government is expected to save $289 billion because 6 million fewer individuals will be covered by Medicaid, while spending an additional $210 billion to provide subsidies to the 2-3 million of those individuals who are expected to buy private coverage through the exchanges. Toss in another $5 billion in savings for various odds and ends, and the CBO expects the net result of the Supreme Court’s decision to be something in the neighborhood of $84 billion less expensive over the next decade, with an additional 3 million Americans remaining uninsured. And that’s how the Supreme Court’s decision saves money, but leaves more people uninsured.

 

Deconstructing Conservative Excuses For Not Expanding Medicaid

One of the bigger points to emerge from the Supreme Court’s decision over the Affordable Care Act is the striking down of the provision that the federal government could cut existing Medicaid funding to the states if they opted not to participate in the ACA’s Medicaid expansion. While this aspect of the decision didn’t get much media attention, at least initially, it has generated an enormous amount of dialogue among policy circles–especially now that several states, among them Texas and Louisiana, have vowed not to participate in the expansion.

The immediate consequence of states opting out is that fewer uninsured Americans will gain coverage from the ACA, and those that continue to be uninsured will be some of America’s poorest citizens. Considering how much financial help the federal government is going to give states to participate in the expansion, the decision not to participate seems like nothing more than political retaliation at the expense of the most vulnerable members of the public. But could there be more to it than that?

Conservatives say yes. In fact, I was intrigued to read a post entitled “Why not expand Medicaid?” from Keith Hennessey, who spent time as the Director of the National Economic Council under George W. Bush. You can read his original post here. For the most part, the points are valid, but they aren’t exactly the complete story. Allow me to rectify that.

1. “Leaving federal money on the table” looks at the problem backwards.
The federal government is going to pick up the entire tab for the expansion for the first three years. After that it phases down so that, by 2020, the feds pay 90% and the states pay 10%. Liberals have been acting like this is free money to the states. Conservatives are saying “Not so fast. We have to spend money to get money.” Miraculously, both sides are right. The states will have to spend some money after the three years are up, but they’re still getting a great deal. In fact, one could easily argue that if they had any intention of ever extending coverage to the low-income uninsured in their state, this will be the cheapest option they’ll ever have. That they are passing on the opportunity strongly suggests that they really don’t care if the poor go without coverage.

2. A smart Governor recognizes that a commitment to expand Medicaid eligibility is likely to be permanent, so she may be risk averse.
Here, the thinking is that once you expand Medicaid, you’ll never be able to go back, and signing up for an expanded entitlement program seems a bit risky. I actually tend to buy this argument, insofar as it explains the psychological resistance to change that has shaped the majority of incremental American policy-making, including our seeming inability to reform health care in the past. Perhaps the Governors of these red states are taking a wait and see approach before joining the expansion. This wouldn’t be the first time. The basic Medicaid program is optional for states. While it was created in 1965, the last state to participate, Arizona, did not get with the program until 1982. In other words, there is a precedent for this sort of thinking from the states. Of course, I also find this encouraging in that it means that all states are likely to fully participate in the Medicaid expansion sometime around 2031.

3. A Governor must also worry about creeping federal requirements for this new population.
This is just #2 with slightly different wording. In other words, if we join in the expansion now, what protects us from you changing the rules of the game later? This is a fair point, but if the federal requirments grow that oppressive, the states can always stop participating in the expansion. Moreover, they can do so without fear of federal repurcussions, thanks to the Supreme Court ruling.

4. There are hidden costs to this expansion.
The hidden cost argument is that choosing to participate in the expansion will also cause other individuals who are currently eligible for Medicaid but not enrolled, to enroll in the program. This troubles states because the generous federal coverage applies only to the newly eligible population under the expansion, not to currently eligible but not enrolled individuals. I find this one a bit laughable, despite the fact that it’s absolutely true. If people are eligible for benefits, but not enrolled, it saves the state money. Clearly, this argument belies the states’ preference that eligible individuals remain unenrolled rather than add to the budget. The poor uninsured lose again.

5. Adding new people increases government spending and total spending on health care.
In the explanation for this argument, an equation is provided: More People X More Medical Care = More Spending. If you don’t engage your brain very hard, that makes sense, but here’s why it’s wrong: The real equation is Volume X Price = Spending. Yes, more people and more medical care means more volume, but for which types of services? If providing people with coverage means that they get more preventive care and stay well, the price of the care they use will be lower than if they went without care for years and then showed up at the emergency department rife with comorbidities. In short, we don’t really have enough data to know if this expansion will increase or decrease health care spending. As an aside, there’s also this point: If people are acknowledging that Medicaid coverage will lead to increased utilization of medical care, that means that they are acknowledging by default that the low-income uninsured aren’t getting all the care they need now. So, if conservatives want to raise this argument, I don’t want to hear them say that everyone has access to care because they can just go to the emergency room.

6. A Governor creates negotiating leverage with the Feds by saying no, even temporarily.
Yeah, this is absolutely true. In fact, I think this is the most honest of all the arguments in favor of not participating in the Medicaid expansion.

7. If it’s such a good deal, why did the Feds mandate it?
Um, because they realized the strong attraction of the immediately preceding point #6? Democrats probably decided to do this sometime around the moment they realized that the GOP was going to vote against everything they proposed without reading it.

So, there you have it. There are 7 reasons why conservatives might choose not to participate in the Medicaid expansion. I think my rebuttal to these arguments indicates that some of them are better than others, and that the bottom line is that red states are more concerned with playing political games in the name of fiscal conservatism than they are with making sure that their most vulnerable citizens have health insurance.