Friday, December 15, 2006

Wydening Gyre

In the pre-blog world, Senator Ron Wyden’s health care bill, the Healthy Americans Act, would be just another pie-in-the-sky version of HillaryCare, and would be consigned quickly to oblivion. It is, after all, based on flawed premises and suspect assumptions (which is not to say that it’s entirely without merit; more on that in a bit).
But a funny thing happened on the way to the backbench: Senator Wyden recognized the burgeoning influence of the blogosphere, and its ability to both shape and publicize the debate. As I remarked to the Senator, I have long envied my colleagues in the political blog world for their growing access to key political decision-makers and players.
But hold on a minute, Prof, what do you mean “as I remarked to the Senator?" Since when do members of congress discuss things with you?
Earlier this week, the Senator’s office sent out an email announcing his bold new health care initiative. Among the recipients were both myself and Bob, as well as (one supposes) several thousand of our colleagues. I responded by asking for an interview; turns out, he’d already anticipated such invitations, and had arranged for a conference call with a dozen bloggers from the “health policy wonk” side of the blogosphere. Bob was unavailable for the call, but I was able to participate. Also attending were such medblog luminaries as Joe Paduda, Matthew Holt and Ezra Klein, along with several other interesting bloggers, including econblogger Max Sawicky. Most everyone, myself excluded, were proponents of either single-payor or universal coverage systems, and were quite receptive to the Senator’s plan.
On the face of it, the bill offers a lot of bang for the buck. For one thing, it phases out employer-based health insurance. I’m all for that, with some caveats. For another, it appears to recognize the value of the “private” (i.e. non-government program) insurance channel.
There are, however, two fundamental flaws in the proposal:
First, it relies on a model called “Community Rating.” Basically, CR is the health insurance equivalent of “pay at the pump” auto insurance. It sure sounds nice: everyone pays the same rate, simple to administer, universal coverage (every car needs gas, right?). The problem is that not every car is the same, and not every driver has a flawless record. Same with health insurance: absent underwriting, folks who routinely run (and win) 26 mile marathons would pay the same as obese folks with diabetes. Thus, everyone ends up paying more.
The second problem is that it relies heavily on prevention to hold down rising health care costs. There are, for example, tax incentives for parents to have their kids vaccinated. While prevention issues are, of course, important and helpful, they are not going to significantly hold down the rising cost of health care. As one of our commenters has previously noted, “(I)f health care were not expensive, health insurance would not be expensive. If the cost of health care were not rising the cost of health insurance would not be rising.” There is precious little in this bill that addresses this basic problem.
And there’s this: the bill is touted as having bipartisan support, as well as support from various union leaders and titans (or at least captains) of industry. But, as usual, no one who actually works in the insurance field was involved. Rather like assessing how to get the car running better, but eschewing the advice of the mechanic. That is, we’re the folks who actually see how this stuff works, and doesn’t work, in the real world. We understand that study after study has shown that 85% of insureds are satisfied with their coverage. We also understand that mandatory coverage is no panacea (why don’t auto insurance rates go down every year?). The only insurance industry “representative” involved in putting this plan together was the president of Oregon’s Blue Cross/Blue Shield. Small wonder, that: who else is going to administer the plan (and reap the financial rewards)?
I would urge IB readers to check out the reports of the other attendees; each one of us had, of course, our own agenda and biases, as well as our own conclusions.
My own take is that this bill, while interesting in itself, is unlikely to get much traction. There are just too many problems with it, not the least of which is its unfavorable propensity to look like the Medicare D debacle writ large(r). That is, while it may look good on paper, the reality is that it will lead to a rapid increase in health insurance costs, while doing very little to rein in health care costs.
What did impress me, however, is that Senator Wyden was perceptive enough to understand that, by taking his case to the blogs, he gets a built-in publicity bump, with (mostly) favorable reviews. Thus, his bill will enjoy an immediate advantage over others that come down the pike. And he wasn’t afraid to engage in a bit of friendly debate with yours truly; he asserted that community rating would hold down insurance costs, and opined that cost-shifting from the private sector to the government was a major reason for high health care costs.
I pointed out that he had both of these phenomena bassackwards; that is, community rating increases premiums, and that the gummint’s cost-shifting habits (especially Medicare’s) unnecessarily increase costs. His answer was, unsurprisingly, to try to water down my point by saying that all sectors shift costs, which (for some unknown reason) somehow increases costs to the others. I found his arguments unpersuasive, but appreciated his candor and enthusiasm.
This was a tremendous opportunity, and I thank the Senator for sharing his time and insights with us. Hopefully, other congresscritters will follow suit, and we’ll have more such opportunities. If nothing else, it shows that medblogs are quickly coming into their own.


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