Health Care Back In Focus

With the economy stuck firmly in its jobless trajectory, and with the Senate obdurately refusing to do anything at all, we shift our attention this week back to health care reform. After all the fuss in the wake of the Massachusetts election health care reform was presumed to have died, at least in its then existing form. Apparently not: the drop from 60 to 59 votes did nothing since there was no coherent package that could have elicited 60 votes. Those of us who railed against the lack of democracy in the Senates obsession with that mystical 60 vote threshold can now breath a little easier. Reconciliation is the way to go.

This week we have the great gathering summoned by the President as he seeks to continue his futile search for a middle ground. There is none. Health care reform is a life and death issue for the Republican leadership who have fought for decades to kill all our social programs from Social Security to Medicare. For them government interference in health care is one bridge too far on the road to socialism.

I admire the consistency of the GOP. Not once have they avoided stating their views. They are not willing to ‘come to the middle’ because, for them, the middle is as treacherous as the left. I reserve my criticism for their unwillingness to come clean in public to the voters and say outright that they want to abolish all these programs and so see no reason to support any reform of health care at all.

Far from being a breakdown of democracy the deep divide between the parties offers us all a clean and clear choice. There is no muddy or murky consensus where we don’t quite know who wanted what or who to blame. No, this one is as simple as it gets: the Democrats – most of them – want reform. The Republicans – all of them – don’t.

This should have been a no brainer. We went through an election last year during which health care reform was a major feature. The candidate offering reform won that national election handily. In other words the voters went with reform by a very clear margin. Democracy should have then seen to it that reform took place. After all we like to think of America as a democracy.

The reason things bogged down was the Senate’s evident lack of a democratic ideal. The minority there can thwart the will of the people by asserting their ‘right’ to filibuster. It is as if last year’s presidential election never took place.

But the Senate is an endless mine of procedures and rules. Now, after having frustrated, confused, and annoyed the populace for a whole year our leaders discover the infamous ‘reconciliation’ method of legislation. In plain language reconciliation is the enforcement of the democratic will – a simple majority will get something passed into law.

Whoever would have thought of that? A majority can get laws passed? In America?

Snark aside: it’s about time.

The President has come out and said explicitly that if the Republican don’t budge then he will seek a straight up and down vote. I have to assume, although with this crowd it may prove to be a dangerous assumption, that the White House is confident that it can get 50 or 51 votes in the Senate.

I therefore assume that reform will now get passed.

Perhaps the most important shot fired in this protracted war was that in California where insurance premiums are now being re-set to take into account the damage done by that state’s economic slide. As more and more healthy people seek to cut costs and abandon health insurance California’s insurance pool has shrunk rapidly and unbalanced the ability of the insurers to spread the premium costs across a diverse pool. So the cost of covering treatment is falling more on the sick. This is the classic way in which insurance collapses. All insurance pools rely on having many more non-claimants than claimants. That way the cost of care is absorbed by a wide spectrum of people – even those who never make a claim. Once that pool starts to shrink and the concentration of claimants becomes more concentrated premiums have to rise rapidly. Eventually, of course, if all the healthy people dropped out, premiums would be set at the cost of care. Which is precisely the opposite outcome from that envisaged by the concept of an insurance pool.

I mention this because California’s experience is exactly what the government is trying to avoid. Any privately provided insurance pool will be susceptible to the selection problem outlined above. Insurers will always be forced to pass on the cost of the shrinking pool. This is why one of the most important reforms is to mandate insurance coverage: it is a way of spreading the cost across the entire population and produces the most stable and least cost insurance pool possible.

And it is elementary economics.

That the GOP opposes it is simply an indication that they value opposition to government more than they value health care. They are caught between these two positions. Their attack on ‘big government’ implies that they would be willing to see voters without coverage. Sick people without health care is a lesser evil than having the government involved in care provision. Their conundrum is how to sell this anti-social policy. So far they have succeeded simply because our health care system has held up despite the strain. It hasn’t collapsed and enough middle class voters get their coverage as an employee benefit that the illusion of strength can be projected onto the system. The true cost of our system is also hidden since we have made the employer cost tax deductible and thus a burden on the taxpayer: even if you have no employer program you are implicitly paying for health care for others through the lost federal revenue caused by that tax deductibility. It is only when the inefficiency and danger of reliance upon private insurance pools gets exposed, as it now is in California, that people realize how precarious our system really is.

I think the crisis in California is focusing some senators on the issue. About time. This was not a difficult issue to figure out.

Plus, as the other big debate – the one about the Federal budget – gets under way we all need to realize that any solution has to incorporate adjustments to entitlement programs, especially Medicare which has all the potential to bankrupt us. So instilling cost control over the health care industry and demanding results for all that cash we throw at it is an essential part of fiscal reform. Using the pricing power of the government is the only way we can square the two goals of keeping care affordable, and balancing our budget.

Let’s see how the week unfolds. This is one moment when the GOP has to take a stand and quit its obstructionist mode. It shouldn’t be difficult. Anyone with a fiscally conservative bent should support health care reform as a first step towards balancing the budget. As long as left wingers realize that the trade-off has to include cost control in Social Security and Medicare a deal should be possible.

But that sounds too simple for our leadership, so look for more conflict and posturing before any resolution.

Addendum:

I shouldn’t accuse the Senate of doing nothing at all. Plenty of lesser legislation has been passed and that rotten stimulus bill did get enacted. The year long discussion of reform in health care and banking has given me a jaundiced perspective. That’s because they happen to be the most important things we need to get done. So I will amend my criticism: the Senate does nothing important.

Also: I cannot disagree with the Economist magazine more strongly. Last week’s edition placed a good heap of the blame for inaction in the Senate on Obama’s pandering to the left wing of the Democratic party. That’s just a joke. He spent too much time pandering, or trying too at least, to so-called ‘centrists’. If anything his attempts to get consensus annoyed the left into sullen opposition to him. Plus those anti-democratic rules don’t actually help matters. Apparently the Economist gets all teary eyed over the obstructionist role the founding fathers gave to the Senate. The radical slowing down or even the abrogation of the will of the majority is seen, by that magazine, as a valuable service: it allows a more considered legislative process to emerge.

Phooey.

That’s sentimental nonsense. In the days of the founders a ton of time was necessary for debate because information had to to travel across great distances. Slowing things down allowed all voices to be heard from the various distant corners of the land. Now the debate rages in real time and in a myriad of places all instantly connected. The pace has picked up a little from the late 1780’s. Duh.

The Senate is an antiquated, quaint, and anachronistic anti-democratic citadel. It should be abolished. Even the British have taken a good stab at reforming their aristocratic legislative body – the House of Lords is a shadow of its former self and probably will go completely in the near future. The Economist supports that reform, but loves the Senate which plays the same role here.

Our democracy should move at a more contemporary speed.

And the Economist should stop getting so caught up in its worship of all things American.

A little modernization would do us all good.