Health Summit Woes

I cringed as I watched Senator Tom Harkin’s political grandstanding at the start of the afternoon session of President Obama’s health care summit. Harkin began by reading a letter from Iowan farmer Ray Smith with such nonchalance that President Obama had to fix a stoic gaze on Senator Harkin in order to help Harkin project some semblance of candor.

Harkin then compared the concept of insurance to racism. According to Princeton’s lexical database (dictionary), insurance is “promise of reimbursement in the case of loss.” But Harkin complained that insurance does not cover losses that exist before the insurance is purchased. The Senator said: “We don’t allow segregation in our country […] and yet we still allow segregation in America today on the basis of your health. [..] It’s time to stop segregating people on the basis of their health.”

Harkin was going nowhere – and fast. “Whenever I hear the word ‘pool’,” Harkin said, ” – this pool, that pool – I think of segregation.”

After that embarrassing invective, Obama called on Jay Rockefeller. The West Virginia Democrat went on a tirade of sorts against the profit motive. Railing against the insurance industry for operating under this capitalistic motive, Rockefeller said: “They’re terrible. They’re in it for the money.” Mr. Rockefeller apparently has yet to acquire a robust grasp of the reality of business. People sell goods and services in order to receive dollars that they can use to purchase the goods and services that they want and need.

Rockefeller was not above demagoguery, and thus continued with some baseless theatrics: “The health insurance industry is the shark that swims just below the water, and you don’t see that shark until you feel the teeth of that shark.”

Surprisingly, Rockefeller did seem to have some understanding of competition and the natural regulation that results from competition: “[Insurance companies] so dominate the market that there isn’t any real competition. […] This is a rapacious industry that does what it wants.” The implication here, of course, is that health insurance providers would come out with cheaper products and better service if the market were more competitive. This is absolutely correct. Unfortunately, Mr. Rockefeller’s overly dramatized account of insurance company hegemony and his rant against the profit motive gave me little to no hope that he will support increased competition in health care markets.

Democratic Senator Kent Conrad addressed the issues with more candor than any of the other Democratic participants. Conrad offered a personal anecdote: his father had been struck with several severe ailments and was taking 16 prescriptions at the same time. His father’s prescriptions were uncoordinated, so some of the drugs actually worked against one another. Conrad encouraged leaders to beware of the deficit and get serious about reducing costs. He ended by warning that we will “rue the day” if we let costs get out of control. But Conrad did not offer specific solutions for coordinating drug delivery.

John Boehner did some grandstanding of his own, but the House Minority Leader stuck it to Obama by echoing other Republicans’ appeals to start over on a new bill without subsidies for abortion or other deeply controversial measures.

Rep. Javier Becerra (D-CA) may have exposed his partisanship in a more embarrassing way than any other participant in the afternoon session. Earlier, Rep. Paul Ryan of Wisconsin, the sharp and thorough ranking Republican on the House Budget Committee, had pointed out that a Congressional Budget Office analysis double-counted some savings. (Senator Chuck Grassely later read a letter from the CBO confirming as much.) Rep. Becerra rhetorically asked Ryan, “Do we believe in the Congressional Budget Office or not? […] If we can’t work with CBO numbers, we’re lost.”

Rep. Ryan had to jump in and repeat what he had said just minutes before – that the CBO’s baseline numbers were correct, but that the CBO analysis had simply not presented the big picture correctly. Becerra cut Ryan off and, pitifully, tried to hold up all CBO analysis as an infallible and indubitable; Becerra went so far as to imply that nobody in Congress should ever attempt to question CBO analysis.

All of the participants offered their own ideas for replicating the qualities of a market-oriented health care system in the context of a government-regulated, mostly government-funded health system. Most of the Democratic participants asked Republicans to shrug off concerns about cost and, instead, vote to spend vast amounts of money subsidizing health care costs. There’s a mechanism to deliver high quantities of a good or service at a reasonable price and a high level of quality, and it’s called a market. Few Democrats seem interested in pursuing such a mechanism; many aren’t even open to allowing consumers to purchase insurance across state lines.

In fact, the only ideas Democrats have to cut down on costs are reducing quantity of care, reducing quality of care by shifting spending from actual care to preventative care (though this probably wouldn’t actually reduce costs), and establishing a tax (or mandate). It seems that overall, cost doesn’t matter to the Democrats, and it seems that the plan going forward is to spend as much money on government-run health programs as necessary without regard to the consequences. Such unrestricted spending will not cure any of this country’s socioeconomic ails.

For all its shortcomings, the summit did serve a useful purpose for viewers: it confirmed that government should not engage in central planning. The disparate Democratic and Republican health plans both fail to utilize the price system, incentives, and competition as effectively as they could. Instead, both plans (but especially the Democratic plan) attempt, at least to some extent, to fit American health care to a predetermined image of the ideal health care “system.” After watching our senators, representatives, and President utterly fail to plan our health care, it’s clear that we should turn back their plans. Instead, the American people should demand, in both the political and economic senses, a competitive health care market free from the plotting of these petulant and profligate politicians. Go ahead – tell them that we will not comply.

President Obama’s most humorous line was his quip to Rep. Waxman: “We’re not makin’ campaign speeches right now.”

10 comments

  1. "There’s a mechanism to deliver high quantities of a good or service at a reasonable price and a high level of quality, and it’s called a market. Few Democrats seem interested in pursuing such a mechanism; many aren’t even open to allowing consumers to purchase insurance across state lines."

    The problem is that the market has utterly failed to deliver affordable, universal health insurance — instead of efficiently allocating health care resources, insurance companies are focused on maximizing their profits, which they do by denying coverage and care to the people who need it most. There's nothing wrong with that from a capitalist viewpoint, but it does illustrate how completely useless and parasitic the insurance companies are. The current health care debate has unfortunately taken it as a given that insurance industry profits are sacrosanct, demonstrating that both parties are corrupt and beholden to corporate interests, and the US system of private health insurance will continue to be a national embarrassment.

    Allowing the purchase of insurance across state lines is a joke — how will that possibly slow the rise of insurance costs? Insurance companies will simply incorporate in the state with the least regulation and continue to jack up their rates.

    Also, this is dumb:

    "Instead, both plans (but especially the Democratic plan) attempt, at least to some extent, to fit American health care to a predetermined image of the ideal health care “system"

    An ideal health care system is one in which everyone has access to affordable health care. I'm not sure what's so hard to comprehend about that. The details vary, but every other industrialized country in the world has figured out a way to do this better than the US has.

    1. "…but every other industrialized country in the world has figured out a way to do this better than the US has."

      Yeah, especially places like Canada and the UK where you get to wait in line for treatment. I really don't understand why the US still hasn't realized that this is the best method for providing health care.

      1. You are impossibly naive if you really believe that there are no lines or other, more significant barriers to treatment in the US.

        "I really don't understand why the US still hasn't realized that this is the best method for providing health care."

        Largely because of people like yourself who believe that health care should only be available to those who can afford it.

      2. Perhaps you'd care to enlighten me. Speaking from my own experience, I have been able to obtain surgeries and other medical procedures with about a 2-3 week wait (which considering these were non-critical procedures is not too bad). I was particularly impressed when my doctor was able to get me to a specialist in a matter of minutes with a simple phone call upstairs. Now, if my sources from across the pond are correct, the wait line for critical procedures (such as diagnosing/treating cancer) can be months or years. So, I'm really curious as to what these significant barriers to treatment are. As far as I'm aware, federal law allows a person to walk into the ER and receive treatment, regardless of ability to pay.

        No one has a right to health care. I think housing provides a good analogy here. Over the last few decades via the Housing and Community Redevelopment Act, housing was given to those who could not afford it. Look how well that turned out. Bestowing housing on everyone, regardless of whether they could afford it or not, managed to sink not only those who received the housing, but also the rest of the country. I think it would be prudent to avoid doing the same thing with health care.

  2. Yeah, just like the allowing the purchase of milk across state lines is a joke. How will that possibly slow the rise of milk costs? Grocers will simply incorporate in the state with the least regulation and continue to jack up their prices.

    You think a situation in which the government pays for almost 50% of health costs is a true "market" ? Hah.

    Yeah, let's eliminate profits. That way, the insurance companies can go under, and people can stop receiving care. You're a smart one.

    1. Your milk analogy is a poor one because food quality / inspections are subject to federal regulations. Consider the credit card industry, which is instead subject to state regulations — in 1980 the governor of South Dakota made a deal with Citibank: if Citi would move relocate its credit card operations to SD, its lobbyists would be allowed to literally rewrite SD credit card regulations. Something similar happened in Delaware in the late 80s. The result: many credit card companies moved to SD and DE. Maybe you can try to explain again why this would not happen with health insurance companies? The CBO actually scored a similiar policy proposal in 2005 and found it would have a negative impact: "[it] would reduce the price of individual health insurance coverage for people expected to have relatively low health care costs, while increasing the price of coverage for those expected to have relatively high health care costs," and it would not decrease the number of people without insurance.

      "Want to eliminate the insurance companies' already-thin profit margins so that they can go under, and people can stop receiving care?"

      What exactly do insurance companies have to do with people receiving care? They are parasites, not care-givers. It seems self-evident that eliminating them would save everyone quite a lot of money.

      1. "It seems self-evident that eliminating them would save everyone quite a lot of money."

        … which is what I say in the previous paragraph.

        As for your first point… recall that Congress is authorized "To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;" – that is, to make commerce regular among the states and help companies avoid tangled webs of state regulation. That was kind of the point of the federal government… and instead of executing that mission, they're trying to centrally plan health care. Ugh.

      2. Do you know what is the difference between health care and bananas? It doesn't sound like you do. I don't have a problem with other types of insurance that are property-based, but maybe you can explain to me what is the purpose of the health insurance industry.

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