Julie Rovner: A GOP Senate likely to block many Biden health proposals

From Kaiser Health News

Former Vice President Joe Biden secured the 270 electoral votes needed to capture the White House on Saturday, major news organizations projected,  after election officials in a handful of swing states spent days in round-the-clock counting of millions of mail-in ballots and early votes.

The Democrat’s victory came after the latest tallies showed him taking an insurmountable lead in Pennsylvania, a state that both Biden and President Trump had long identified as vital to their election efforts.  Trump has signaled he will fight the election results in several states, filing a number of lawsuits and seeking recounts.

“America, I’m honored that you have chosen me to lead our great country,” Biden tweeted shortly after the news organizations called the race. “The work ahead of us will be hard, but I promise you this: I will be a President for all Americans — whether you voted for me or not.”

The Democratic celebration was tempered because it appeared the party would have a hard time taking back the Senate majority it lost in 2014. If that bears out, it will likely keep Biden and Democratic lawmakers from enacting many of the plans they campaigned on, including major changes in health care.

Party control of the Senate may not be determined until January — thanks to what preliminary returns suggest will be runoffs for both Senate seats in Georgia. No candidate for either seat reached the required 50% threshold.

Without a Democratic majority in the Senate, Biden will likely face strong Republican opposition to many of his top health agenda items — including lowering the eligibility age for Medicare to 60, expanding financial assistance for health insurance under the Affordable Care Act, and creating a “public option” government health plan.

However, his administration would be a bulwark to defend the ACA against Republican attacks, although the Supreme Court case challenging the health law — which will be heard next week — presents a major wild card for its future.

Health care was a key element of Biden’s campaign, especially improving the federal response to the coronavirus pandemic. He championed the use of face masks and blasted the Trump administration for shifting to states much of the responsibility for fighting the virus and helping hospitals. He was regularly mocked by the president for wearing a mask, working and campaigning from home, and not having an in-person Democratic convention.

Even before the latest vote tallies were released late Saturday morning, Biden had begun moving toward setting up his administration. On Thursday his transition team unveiled a website, BuildBackBetter.com, although it was only one page. And the former vice president held a meeting Thursday with health and economic advisers on the pandemic.

In a brief television statement Friday night, Biden reiterated his commitment to fight the pandemic, which he said “is getting more worrisome across the country.”

“We want everyone to know on day one we are going to put our plan to control this virus into action. We can’t save any of the lives that have been lost, but we can save a lot of lives in the months ahead,” Biden said.

The electoral outcome is not the one Democrats were hoping for — or, to some extent, expecting, based on preelection polling. Andy Slavitt, who ran the Centers for Medicare & Medicaid Services during the Obama administration, noted that frustration in a tweet Wednesday. “A large disappointment is that many hoped for a significant repudiation of Trump & his indifference to human life, human suffering, his corruption, and goal of getting rid of the ACA. No matter the final total it will be hard to make that claim,” Slavitt said.

Still up in the air is how willing a Republican-led Senate will be to provide further relief to individuals, businesses and states hit hard by the pandemic, and whether they will participate in previously bipartisan efforts to curtail “surprise” out-of-network medical bills and get a handle on prescription drug prices.

Julie Rovner is a Kaiser Health News reporter

Julie Rovner: jrovner@kff.org, @jrovner

Llewellyn King: The right judge at the wrong time

WEST WARWICK, R.I.

It’s not a trial. But last week’s hearing before the Senate Judiciary Committee on the nomination of Amy Coney Barrett to the Supreme Court seemed like one.

This juror’s verdict: Guilty as charged in one liberal indictment and a toss-up in the other. Judge Barrett seems destined to vote to overturn Roe v. Wade. But on the Affordable Care Act, which is of more immediate concern to more Americans, she may parse her judgment and endorse the doctrine of selectivity.

Two big things about Barrett: Her opposition to abortion is, one concludes, founded in her devout Catholicism and in her experience among lawyers of the right, led by Justice Antonin Scalia, for whom she clerked.

The other thing about Barrett is that she has seven children, two adopted from Haiti. She used this before the committee as a shield, a defense, and a statement, which said by implication, “See, I’m human, empathetic, caring, and maternal.”

This is important. As Barrett, who almost certainly will be confirmed, matures on the court, her family may be a moderating force, softening her otherwise rigid conservative views. As her children grow and experience the vicissitudes of life, she is likely to trade some of her harsh doctrines for a more humane ambiguity.

Take former Vice President Dick Cheney and his wife, Lynne. Their conservatism, devotion to the right, was never in question. But when their daughter Mary came out as gay, their view of that part of the social-political landscape softened.

It has been declared throughout the struggle to confirm Barrett that somehow it is not nice to bring in her religion.

This juror avers: It is.

When the religion of a public servant, affects political decisions, it has ceased to be a private matter. We’ve come a long way from the days when President John F. Kennedy’s Catholicism was cited in his election. Anti-Catholicism was then alive and well in parts of the political spectrum. Kennedy remained a committed Catholic, but he didn’t bring it into his governance of the country. That was as it should be.

Going forward, as the United States gets more diverse and when we can contemplate a time when Hindus, Buddhists, Muslims and other believers will take their place in national life, it is more, not less, necessary to ensure that separation of church and state is adhered to in everything, especially the Supreme Court. Ergo, it can be argued that Barrett should recuse herself from Roe v. Wade. How much stature she would gain if she did! But it’s most unlikely.

If the Democrats romp home with the White House and both houses of Congress, they would be in a position to legislate at least a quick repair to the Affordable Care Act and to start the process of legalizing abortion by federal law, not constitutional interpretation. But it will continue to fuel the culture wars.

It is not certain how much the Democrats will gain in the election and, as a longtime observer of Washington, I don’t believe long term a Democratic sweep would be good. A bit of tension in Congress is a net benefit. So, the Barrett nomination and confirmation weighed heavy as we watched her parry the Democratic questioners.

Extenuating fact: The judge is much smarter, more personable, and more in charge of her facts than expected. She charmed. She is a power to be reckoned with. Many observers expected to get a candidate who would simply channel Scalia, her old mentor, and that we could know her mind from his writing -- the way we can predict the attitudes of Justice Clarence Thomas.

That, it became clear, is not to be the case.

The verdict of this juror then is: After a rocky start on two difficult issues, Barrett will grow to be a serious, thoughtful justice. Possibly, with time, even a humane one.

Llewellyn King is executive producer and host of White House Chronicle, on PBS. His email is llewellynking1@gmail.com and he’s based in Rhode Island and Washington, D.C.

Website: whchronicle.com

Liz Szabo/JoNel Alecia: Trump may try to rush in COVID-19 vaccine before election

From Kaiser Health News

It “seems frighteningly more plausible each day.’’

— Dr. Jerry Avorn, Harvard Medical School

President Trump, who seems intent on announcing a COVID-19 vaccine before Election Day, could legally authorize a vaccine over the objections of experts, officials at the Food and Drug Administration and even vaccine manufacturers, who have pledged not to release any vaccine unless it’s proved safe and effective.

In podcasts, public forums, social media and medical journals, a growing number of prominent health leaders say they fear that Trump — who has repeatedly signaled his desire for the swift approval of a vaccine and his displeasure with perceived delays at the FDA — will take matters into his own hands, running roughshod over the usual regulatory process.

It would reflect another attempt by a norm-breaking administration, poised to ram through a Supreme Court nominee opposed to existing abortion rights and the Affordable Care Act, to inject politics into sensitive public health decisions. Trump has repeatedly contradicted the advice of senior scientists on COVID-19 while pushing controversial treatments for the disease.

If the executive branch were to overrule the FDA’s scientific judgment, a vaccine of limited efficacy and, worse, unknown side effects could be rushed to market.

The worries intensified over the weekend, after Alex Azar, the administration’s secretary of Health and Human Services, asserted his agency’s rule-making authority over the FDA. HHS spokesperson Caitlin Oakley said Azar’s decision had no bearing on the vaccine approval process.

Vaccines are typically approved by the FDA. Alternatively, Azar — who reports directly to Trump — can issue an emergency use authorization, even before any vaccines have been shown to be safe and effective in late-stage clinical trials.

“Yes, this scenario is certainly possible legally and politically,” said Dr. Jerry Avorn, a professor of medicine at Harvard Medical School, who outlined such an event in the New England Journal of Medicine. He said it “seems frighteningly more plausible each day.”

Vaccine experts and public health officials are particularly vexed by the possibility because it could ruin the fragile public confidence in a COVID-19 vaccine. It might put scientific authorities in the position of urging people not to be vaccinated after years of coaxing hesitant parents to ignore baseless fears.

Physicians might refuse to administer a vaccine approved with inadequate data, said Dr. Preeti Malani, chief health officer and professor of medicine at the University of Michigan in Ann Arbor, in a recent Webinar. “You could have a safe, effective vaccine that no one wants to take.” A recent KFF poll found that 54 percent of Americans would not submit to a COVID-19 vaccine authorized before Election Day.

After this story was published, an HHS official said that Azar “will defer completely to the FDA” as the agency weighs whether to approve a vaccine produced through the government’s Operation Warp Speed effort.

“The idea the Secretary would approve or authorize a vaccine over the FDA’s objections is preposterous and betrays ignorance of the transparent process that we’re following for the development of the OWS vaccines,” HHS chief of staff Brian Harrison wrote in an email.

White House spokesperson Judd Deere dismissed the scientists’ concerns, saying Trump cared only about the public’s safety and health. “This false narrative that the media and Democrats have created that politics is influencing approvals is not only false but is a danger to the American public,” he said.

Usually, the FDA approves vaccines only after companies submit years of data proving that a vaccine is safe and effective. But a 2004 law allows the FDA to issue an emergency use authorization with much less evidence, as long as the vaccine “may be effective” and its “known and potential benefits” outweigh its “known and potential risks.”

Many scientists doubt a vaccine could meet those criteria before the election. But the terms might be legally vague enough to allow the administration to take such steps.

Moncef Slaoui, chief scientific adviser to Operation Warp Speed, the government program aiming to more quickly develop COVID-19 vaccines, said it’s “extremely unlikely” that vaccine trial results will be ready before the end of October.

Trump, however, has insisted repeatedly that a vaccine to fight the pandemic that has claimed 200,000 American lives will be distributed starting next month. He reiterated that claim Saturday at a campaign rally in Fayetteville, N.C.

The vaccine will be ready “in a matter of weeks,” he said. “We will end the pandemic from China.”

Although pharmaceutical companies have launched three clinical trials in the United States, no one can say with certainty when those trials will have enough data to determine whether the vaccines are safe and effective.

• Officials at Moderna, whose vaccine is being tested in 30,000 volunteers, have said their studies could produce a result by the end of the year, although the final analysis could take place next spring.

• Pfizer executives, who have expanded their clinical trial to 44,000 participants, boast that they could know their vaccine works by the end of October.

• AstraZeneca’s U.S. vaccine trial, which was scheduled to enroll 30,000 volunteers, is on hold pending an investigation of a possible vaccine-related illness.

Scientists have warned for months that the Trump administration could try to win the election with an “October surprise,” authorizing a vaccine that hasn’t been fully tested. “I don’t think people are crazy to be thinking about all of this,” said William Schultz, a partner in a Washington, D.C., law firm who served as a former FDA commissioner for policy and as general counsel for HHS.

“You’ve got a president saying you’ll have an approval in October. Everybody’s wondering how that could happen.”

In an opinion piece published in The Wall Street Journal, conservative former FDA commissioners Scott Gottlieb and Mark McClellan argued that presidential intrusion was unlikely because the FDA’s “thorough and transparent process doesn’t lend itself to meddling. Any deviation would quickly be apparent.”

But the administration has demonstrated a willingness to bend the agency to its will. The FDA has been criticized for issuing emergency authorizations for two COVID-19 treatments that were boosted by the president but lacked strong evidence to support them: hydroxychloroquine and convalescent plasma.

Azar has sidelined the FDA in other ways, such as by blocking the agency from regulating lab-developed tests, including tests for the novel coronavirus.

Although FDA Commissioner Stephen Hahn told the Financial Times he would be willing to approve emergency use of a vaccine before large-scale studies conclude, agency officials also have pledged to ensure the safety of any COVID-19 vaccines.

A senior FDA official who oversees vaccine approvals, Dr. Peter Marks, has said he will quit if his agency rubber-stamps an unproven COVID-19 vaccine.

“I think there would be an outcry from the public health community second to none, which is my worst nightmare — my worst nightmare — because we will so confuse the public,” said Dr. Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota, in his weekly podcast.

Still, “even if a company did not want it to be done, even if the FDA did not want it to be done, he could still do that,” said Osterholm, in his podcast. “I hope that we’d never see that happen, but we have to entertain that’s a possibility.”

In the New England Journal editorial, Avorn and co-author Dr. Aaron Kesselheim wondered whether Trump might invoke the 1950 Defense Production Act to force reluctant drug companies to manufacture their vaccines.

But Trump would have to sue a company to enforce the Defense Production Act, and the company would have a strong case in refusing, said Lawrence Gostin, director of Georgetown’s O’Neill Institute for National and Global Health Law.

Also, he noted that Trump could not invoke the Defense Production Act unless a vaccine were “scientifically justified and approved by the FDA.”

Liz Szabo and JoNel Aleccia are Kaiser Health News reporters.

Liz Szabo: lszabo@kff.org, @LizSzabo

JoNel Aleccia: jaleccia@kff.org, @JoNel_Aleccia

Victoria Knight: Anti-Trump claims on alleged Medicare cuts are mostly wrong

From Kaiser Health News

Priorities USA Action, a Democratic super PAC, announced a new digital and TV ad series criticizing President Donald Trump’s response to the coronavirus pandemic.

Among the ads is a 15-second spot, titled “Pause,” that alleges Trump is trying to cut Medicare during the global health emergency.

“Our lives are on pause. We’re worried about our health. So why is Trump still trying to cut our Medicare? $451 billion in cuts in the middle of a deadly pandemic. Trump is putting us at risk,” the commercial’s narrator says.

The PAC, which was formed in 2011 to support President Obama’s re-election campaign, has been tapped by Joe Biden, the presumptive Democratic presidential nominee, as his preferred choice among Democratic super PACS for big-donor giving.

This ad caught our attention for two reasons. First, the term “Medicare cuts” has long been volleyed between both Republicans and Democrats in Congress and the White House — and often has proven to be a powerful political tool.

Second, the connection between “cuts” to Medicare and the coronavirus pandemic was a new concept we wanted to explore.

We reached out to Priorities USA Action to ask for the basis of these statements.

Josh Schwerin, a PAC spokesperson, sent us links to news articles and confirmed that the “$451 billion in cuts” referred to Trump’s 2021 proposed budget for Medicare.

Asked to pinpoint where the $451 billion came from, Schwerin pointed us to a February ABC News article that said the president’s budget plan would “whack away at federal spending on health care over the next 10 years … including $451 billion less spent on Medicare.” He also sent us links to a February Washington Blade article and February press release from Rep. Jahana Hayes (D-Conn.) — both of which also cited that figure.

Cuts Or A Reduction In Spending Increases?

In fall 2010, a few months after the Affordable Care Act was enacted, Republicans aired midterm campaign ads attacking Democrats for “cutting” or “gutting” Medicare. The reason was the law included a $500 billion reduction in projected spending for Medicare over 10 years, which would be used to help fund the ACA.

The Obama administration said the reductions in spending would come from lowering payments to Medicare Advantage plans and providers and would not affect the level of care that Medicare beneficiaries received. They also said it would help make the Medicare system more financially stable.

Now, almost 10 years later, Democrats are using the same language to criticize the White House’s long-term plan for Medicare spending.

“‘Cuts’ is a term that has been thrown around for many years,” said Tricia Neuman, executive director of the Program on Medicare Policy at the Kaiser Family Foundation. “This is a semantic issue that often gets politicized, often in an election year.” (Kaiser Health News is an editorially independent program of the foundation.)

Neuman explained that what is being considered here is a reduction in the projected increase in spending over a certain period. This reduction is based on estimates of how much the government is projected to spend on programs — factoring in proposed policy changes — for the following 10 years, taking into account current levels of spending, assumptions about economic growth and trends in the use of Medicare coverage, said Neuman.

Trump’s 2021 budget blueprint for Medicare estimated that spending would increase each of the 10 years. But the estimate also suggested that the administration’s proposed policy changes would reduce the spending increase compared with estimates of what would be spent if the changes were not implemented.

“Let’s say Medicare spends $100 in 2020 and is projected to spend $200 in 2021,” Neuman said. “If the budget said we’re going to reduce the growth in spending by $25, that’s a reduction in an increase. But other people might call that a cut.”

SOURCES:

ABC News, “3 Things to Know About Trump’s Budget Plan for Medicare, Medicaid,” Feb. 11, 2020

Centers for Disease Control and Prevention, “First Travel-Related Case of 2019 Novel Coronavirus Detected in the United States,” Jan. 21, 2020

Centers for Disease Control and Prevention, “CDC Confirms 13th Case of 2019 Novel Coronavirus,” Feb. 10, 2020

Center on Budget and Policy Priorities, “Medicare in the 2021 Trump Budget,” Feb. 13, 2020

Committee for a Responsible Federal Budget, “The President’s Budget Saves Medicare $600 Billion While Reducing Out-of-Pocket Costs,” Feb. 10, 2020

Commonwealth Fund, “That $716 Billion Medicare Cut: One Number, Three Competing Visions,” Aug. 16, 2012

Congressional Budget Office, “Proposals Affecting Medicare — CBO’s Estimate of the President’s Fiscal Year 2021 Budget,” March 25, 2020

Rep. Jahana Hayes press release, “Rep Hayes Condemns Trump Administration’s Proposed Cuts to Health Care, Social Security, SNAP, and Education Funding,” Feb. 13, 2020

CNN, “February 10 Coronavirus News,” Feb. 10, 2020

Email exchange with Josh Schwerin, senior strategist and director of communications, Priorities USA, May 21, 2020

FactCheck.Org, “Competing Claims on Trump’s Budget and Seniors,” Feb. 18, 2020

The New York Times, “How the Coronavirus Pandemic Unfolded: a Timeline,” May 26, 2020

Office of Management and Budget, “A Budget for America’s Future,” Feb. 10, 2020

Phone interview with Marc Goldwein, senior policy director, Committee for a Responsible Federal Budget, May 22, 2020

Phone interview with Tricia Neuman, executive director of the Program on Medicare Policy, Kaiser Family Foundation, May 22, 2020

Phone interview with Joseph Antos, scholar in health care and retirement policy, American Enterprise Institute, May 21, 2020

Phone interview with Paul N. Van de Water, senior fellow, Center on Budget and Policy Priorities, May 22, 2020

PolitiFact, “‘Honest Ad’ Mostly Wrong About Trump, Taxes and Medicare,” July 26, 2019

PolitiFact, “Republican Exaggerations About Cutting Medicare,” Oct. 11, 2010

Priorities USA, “Pause – Medicare” ad, May 19, 2020

Priorities USA, “Priorities USA Action Launches New TV and Digital Ads Linking Coronavirus Devastation to Trump’s Failure to Lead on Response,” May 19, 2020

Speaker of the House Nancy Pelosi Newsroom, “Pelosi Statement on Trump Budget Summary,” Feb. 9, 2020

The Washington Blade, “Trump’s Budget Seeks Increased HIV Funds — But Housing, Global Programs Cut,” Feb. 12, 2020

The Wall Street Journal, “Biden Campaign Indicates Priorities USA Is Preferred Super PAC,” April 15, 2020

The Washington Post, “Democrats Engage in ‘Mediscare Spin’ on the Trump Budget,” March 15, 2019

The Washington Post, “What Trump Proposed in His 2021 Budget,” Feb. 10, 2020

World Health Organization, “Statement on the Second Meeting of the International Health Regulations (2005) Emergency Committee Regarding the Outbreak of Novel Coronavirus (2019-nCoV),” Jan. 30, 2020

World Health Organization, “WHO Announces COVID-19 Outbreak a Pandemic,” March 12, 2020

The Number Itself And What It Means

We reached out to the Department of Health and Human Services, which oversees Medicare, for its take on that $451 billion figure but have not heard back.

Marc Goldwein, senior policy director for the nonpartisan Committee for a Responsible Federal Budget, said the actual figure could be anywhere from $400 billion to $600 billion, depending on how calculations are done. His analysis relied on the executive branch’s Office of Management and Budget calculations and landed on a figure close to $505 billion. Other variables, such as “likely savings from drug price reform” — yet to be enacted — move it closer to $600 billion.

The left-leaning Center on Budget and Policy Priorities came up with a similar estimate: $501 billion. The Congressional Budget Office’s estimate, not including savings generated from proposed drug pricing reforms, was closer to $400 billion.

In all cases, though, the reductions in Medicare spending would be achieved through proposals such as lowering payments to providers and paying the same amount for the same health service offered in different settings.

Goldwein said these proposals for Medicare reform are largely bipartisan and “either mimic or build upon” those advanced during the Obama era. He also said that, in his organization’s view, the “cuts” are savings to the Medicare program and beneficiaries, who would see lower premiums and out-of-pocket medical costs.

The policy experts said it’s likely the reductions in spending wouldn’t directly affect the care that Medicare beneficiaries receive. But provider groups have complained that lower reimbursements might drive some doctors to leave Medicare. Hospitals have argued against the proposal for equalizing payments for similar services because they say their overhead expenses are higher than those of a doctor’s office or off-site clinic and their higher rates help finance other necessary services.

Timing Matters

The Priorities USA Action ad also alleges that Trump is trying to cut Medicare “in the middle of a deadly pandemic.” But the timeline of events doesn’t support this statement.

The White House released the 2021 budget proposal on Feb. 10 — well before the COVID-19 outbreak had become a part of our national consciousness.

The first domestic case of COVID-19 was announced by the Centers for Disease Control and Prevention on Jan. 21. The World Health Organization declared the outbreak of the novel coronavirus a “public health emergency of international concern” on Jan. 30.

On Feb. 10, the day the budget was released, the CDC put out a press release stating there were 13 cases of the disease in the U.S. CNN also published an article that day stating the vast majority of COVID-19 cases and deaths had occurred in China. Authorities didn’t announce the first U.S. death from COVID-19 until Feb. 29. The WHO declared a pandemic on March 11.

“These budget proposals were probably developed well before the pandemic hit the U.S. and hit it hard,” said Neuman. However, she added, “the administration hasn’t disavowed these proposals, but they also haven’t pushed them forward.”

Joseph Antos, a scholar in health care and retirement policy at the right-leaning American Enterprise Institute, said it was a “ridiculous statement to connect cutting Medicare spending to the COVID crisis.”

“The implication of the video that this is going on actively while we’re in the middle of this crisis, that’s dead wrong,” said Antos.

Our Ruling

The Priorities ad said Trump is trying to make $451 billion in Medicare cuts “in the middle of a deadly pandemic.”

This is an exaggerated attack, even before the pandemic is layered on top of it. The dollar figure itself is “in the ballpark” of what the policy proposals would generate in spending reductions, giving this ad a sliver of truth. However, in the Trump budget, the amount is spread over 10 years — important context that was omitted.

What’s in Trump’s budget proposal is not a direct cut to Medicare. Instead, Priorities uses the age-old political tactic — employed on both sides of the aisle — of holding up a reduction in projected spending growth as a “cut.”

Moreover, the ad leaves the impression that Trump is trying to whack Medicare for seniors at a time when panic is particularly high because of the coronavirus. But that connection to the pandemic is also misleading. The presidential budget was released weeks before most of the nation began to comprehend the threat of COVID-19.

The claim contains an element of truth but ignores critical facts and context that would give a different impression. We rate it Mostly False.

Victoria Knight: vknight@kff.org, @victoriaregisk

David Warsh: The Great Depression and the possible 'Coronavirus Depression'

The course of the Great Depression in the United States, as reflected in per-capita GDP (average income per person.

SOMERVILLE, Mass.

People are searching for a way to talk about the economic consequences of the COVID-19 pandemic.  Veteran economic journalist Robert Samuelson wrote last week in The Washington Post, “For the first time in my life, I think a depression is conceivable.”  The Financial Times Saturday led the paper with a four-column headline: “Global Economy set for deepest reversal since Great Depression.”

Robert Gordon, a member for more than 40 years of the Business Cycle Dating Committee of the National Bureau of Economic Research, wrote to say: “Thinking ahead to the ultimate data that the Bureau of Economic Analysis will release on the decline in GDP in 2020:Q2, I should look back at my interpolated quarterly data for the 1930s to see what was the largest quarterly decline of GDP during 1929-32 or 1937-38.  Will this time be larger than that?”

Even without the BEA data, it seems reasonable to suppose that the next several quarters – and whatever financial fragility is exposed therein – will enter historical consciousness around the world as the Coronavirus Depression. Already the experience is very different from the W-shaped recessions of 1981-82, or the deep recession, lasting from December 2007 until June 2009, that accompanied the slow-fused Panic of 2007-08.

Samuelson listed three distinctive characteristics that distinguished the Great Depression from business contractions before and since: the scale of havoc and economic suffering that occurred; the “intellectual vacuum” that accompanied it, insofar as economists lacked a widely accepted theory to explain it; and the absence of a social safety net to cushion the human costs of collapse.

He might have added its length – two contractions, 1929-1933 and 1937-38 —gave it the shape of a 10-year lazy-W – and the fact that it culminated in a long global war.

But of course the Great Depression has not gone into history as altogether unexplained, even though Keynesians and monetarists continue to argue about it. And while the United States had very little in the way of a safety net at the beginning of the 1930s, many of the features that are cushioning the blow today were in place by the end of the decade – bank-deposit protection, unemployment insurance and the Social Security System.

Three years of Depression brought about a change in administration, and, after a false start (the National Recovery Administration), President Franklin Roosevelt and the 73rd Congress produced the lasting reforms of the New Deal – public works, safety nets, labor-market reforms and an array of new regulatory agencies. The onsets of both those later “great recessions,” in 1980 and 2008, also brought changes in the White House and Congress. In their respective ways, those elections, too, produced changes in the country’s long-term direction.

What might be expected to result if Democrat Joe Biden is elected in the fall?  Whatever his imperfections as a candidate, he is just one among many leaders who would come to the fore. I am just guessing, but perhaps health-care reform would top the agenda once again.

President Trump made yet another attempt to damage the Affordable Care Act last week, when he declined to open enrollment to millions of suddenly unemployed and uninsured workers and ordered Medicare to cover coronavirus treatment fr the uninsured instead..  For a Democratic administration, tackling reform of the health-care system in the wake of the Coronavirus Depression would be the logical place to start.

David Warsh, an economic historian and veteran columnist, is proprietor of Somerville-based economicprincipals.com, where this column first appeared.

Shefali Luthra: How insurers sank plan for 'public option' in Connecticut

Headquarters of the huge insurance company Cigna in Bloomfield, Conn

From Kaiser Health News

Health-care costs were rising. People couldn’t afford coverage. So, in Connecticut, state lawmakers took action.

Their solution was to attempt to create a public health insurance option, managed by the state, which would ostensibly serve as a low-cost alternative for people who couldn’t afford private plans.

Immediately, an aggressive industry mobilized to kill the idea. Despite months of lobbying, debate and organizing, the proposal was dead on arrival.

“That bill was met with a steam train of opposition,” recalled state Rep. Sean Scanlon, who chairs the legislature’s insurance and real estate committee.

Through a string of presidential debates, the idea of a public option was championed by moderate Democrats ― such as former South Bend, Ind., Mayor Pete Buttigieg, Minnesota Sen. Amy Klobuchar and former Vice President Joe Biden ― as an alternative to a single-payer “Medicare for All” model. Those center-left candidates again touted the idea during the Feb. 25 Democratic debate in South Carolina, with Buttigieg arguing such an approach would deliver universal care without the political baggage. (Buttigieg and Klobuchar have since ended their presidential bids.)

The public option has a common-sense appeal for many Americans who list health-care costs as a top political concern: If the market doesn’t offer patients an affordable health care insurance they like, why not give them the option to buy into a government-run health plan?

But the stunning 2019 defeat of a plan to implement such a policy in Connecticut — a solidly blue, or liberal-leaning, state — shows how difficult it may be to enact even “moderate” solutions that threaten some of America’s most powerful and lucrative industries. The health-insurance industry’s fear: If the average American could weigh a public option — Medicare or Medicaid or some amalgam of the two — against commercial plans on the market, they might find the latter wanting.

That fear has long blocked political action, said Colleen Grogan, a professor at the University of Chicago’s School of Social Service Administration, because “insurance companies are at the table” when health care reform legislation gets proposed.

To be sure, the state calculus is different from what a federal one would be. In the statehouse, a single industry can have an outsize influence and legislators are more skittish about job loss. In Connecticut, that was an especially potent force. Cigna and Aetna are among the state’s top 10 employers.

“They became aware of the bill, and they moved immediately to kill it,” said Frances Padilla, who heads the Universal Health Care Foundation of Connecticut and worked to generate support for the public option.

And those strategies have been replicated at the national level as a national coalition of health industry players ramps up lobbying against Democratic proposals. Beyond insurance, health-care systems and hospitals have joined in mobilizing against both public option and single-payer proposals, for fear a government-backed plan would pay far less than the rates of commercial insurance.

Many states are exploring implementing a public option, and once one is successful, others may well follow, opening the door to a federal program.

“State action is always a precursor for federal action,” said Trish Riley, the executive director of the National Academy for State Health Policy. “There’s a long history of that.”

Virginia state delegate Ibraheem Samirah introduced a new public option bill this session. In Colorado, Gov. Jared Polis is spearheading an effort. And Washington state is the furthest along — it approved a public option last year, and the state-offered plan will be available next year.

But in 2019, Connecticut’s legislators were stuck between two diametrically opposed constituencies, both distinctly local.

Health costs had skyrocketed. Across the state, Scanlon said, small-business owners worried that the high price of insurance was squeezing their margins. A state-provided health plan, the logic went, would be highly regulated and offer lower premiums and stable benefits, providing a viable, affordable alternative to businesses and individuals. (It could also pressure private insurance to offer cheaper plans.)

A coalition of state legislators came together around a proposal: Let small businesses and individuals buy into the state employee health benefit plan. Insurers’ response was swift.

Lobbyists from the insurance industry swarmed the Capitol, recalled Kevin Lembo, the state comptroller. “There was a lot of pressure put on the legislature and governor’s office not to do this.”

State ethics filings make it impossible to tease out how much of Aetna and Cigna’s lobbying dollars were spent on the public option legislation specifically. In the 2019-20 period, Aetna spent almost $158,000 in total lobbying: $93,000 lobbying the Statehouse, and $65,000 on the governor’s office. Cigna spent about $157,000: $84,000 went to the legislature, and $73,000 to the executive.

Anthem, another large insurance company, spent almost $147,000 lobbying during that same period — $23,545 to the governor, and $123,045 to the legislature. Padilla recalled that Anthem also made its opposition clear, though it was less vocal than the other companies. (Anthem did not respond to requests for comment.)

A coalition of insurance companies and business trade groups rolled out an online campaign, commissioning reports and promoting op-eds that argued the state proposal would devastate the local economy.

Lawmakers also received scores of similarly worded emails from Cigna and Aetna employees, voicing concern that a public option would eliminate their jobs, according to documents shared with Kaiser Health News. Cigna declined to comment on those emails, and Aetna never responded to requests for comment.

Connecticut’s first public option bill — which would let people directly buy into the publicly run state employee health plan ― flamed out.

So lawmakers put forth a compromise proposal: The state would contract with private plans to administer the government health option, allowing insurance companies to participate in the system.

The night before voting, that too fell apart. Accounts of what happened vary.

Some say Cigna threatened to pull its business out of the state if a public option were implemented. Publicly, Cigna has said it never issued such a threat but made clear that a public option would harm its bottom line. The company would not elaborate when contacted by KHN.

Now, months later, both Scanlon and Lembo said another attempt is in the works, pegged to legislation resembling last year’s compromise bill. But state lawmakers work only from February through early May, which is not a lot of time for a major bill.

Meanwhile, other states are making similar pushes, fighting their own uphill battles.

“It really depends on whether there are other countervailing pressures in the state that allow politicians to be able to go for a public option,” Grogan said.

And, nationally, if a public option appears to gain national traction, Blendon said, insurance companies “are clearly going to battle.”

They’re going to go after every Republican, every moderate Democrat, to try to say that … it’s a backdoor way to have the government take over insurance,” he said.

Still, when President Barack first proposed the idea of a public option as part of the Affordable Care Act, it was put aside as too radical. Less than a decade later, support for the idea ― every Democratic candidate backs either an optional public health plan or Medicare for All ― is stronger than it ever has been.

So strong, Grogan said, that it is hard for people to understand “the true extent” of the resistance that must be overcome to realize such a plan.

But in Connecticut, politicians say they’re up for a new battle in 2020.

“We can’t accept the status quo. … People are literally dying and going bankrupt,” Scanlon said. “A public option at the state level is the leading fight we can be taking.”

Shefali Luthra is a Kaiser Health News reporter.

Mass. keeps leading the way on medical matters

The main entrance of Massachusetts General Hospital, in Boston

From Robert Whitcomb’s “Digital Diary,’’ in GoLocal24.com

Massachusetts continues to lead the nation on health-care reform. It has long had among the greatest concentrations of medical care and research in the world, in large part because of its universities and associated hospitals. And the health-insurance law nicknamed “Romneycare,’’ after then-Gov. Mitt Romney, who helped lead it into law, morphed into the national Affordable Care Act, aka “Obamacare.’’

And now Gov. Charlie Baker, a former long-time CEO of the insurer Harvard Pilgrim Health Care, has come up with a big bill to further improve care in the commonwealth while trying to limit price increases.

Before I go on, consider the “super users’’ – the 5 percent of patients whose care comprises about half of America’s health-care costs. Some almost seem to live in hospital emergency rooms and many have mental illnesses and/or substance-abuse issues that sent them there.

The governor’s bill would require hospitals and insurers to increase by 30 percent over the next three years their spending on primary care and behavioral health, but without increasing overall spending. Given how many illnesses and injuries are made inevitable by thin primary care and often difficult to obtain mental-and-behavioral-health treatment, that makes sense. The governor says that less than 15 percent of percent of total medical expenses are spent on the combination of primary care and behavioral health. Instead, the big money goes to treat severe and chronic illnesses, many cases of which could have been prevented and/or at least diminished with much more available – and promoted -- primary care and mental-and-behavioral-health coverage. Mr. Baker’s package would also simplify insurance paperwork for mental-and-behavioral-health providers to help expand coverage in this sector, which is still woefully low compared to so-called “physical health,’’ as if the brain isn’t an organ.

American health care is pretty good at rescuing people in extremis but mediocre at preventing what they need to be rescued from.

There are other fine things in the package, including boosting state monitoring of drugs and their prices -- including those drugs bought through the private market and not just Medicaid -- that cost more than $50,000 per person per year – and expanding telemedicine, which cuts expenses in a number of ways.

I hope that other states, and the Feds, try some of these ideas, too. As usual, Massachusetts is a beacon for those seeking to build better health systems.

Chris Petersen: GOP wants to bring back 'pre-existing conditions' as a reason to deny health care

Via OtherWords.org

For my family, “pre-existing conditions” are more than a technicality. They’re a matter of life or death, of sickness or health.

My wife and I are Iowa family farmers. I have diabetes, and Kristi has a heart murmur. Without the Affordable Care Act (ACA) and its guarantees for people with pre-existing conditions, there’d be nothing standing between us and the insurance corporations.

We know firsthand what happens when insurance corporations can discriminate based on a pre-existing condition. Years ago, I had health coverage through an outside job and was diagnosed with a nickel-sized hernia that didn’t require immediate surgery. 

When farming started looking up, I began to farm full-time and applied for my own insurance. My wife and I disclosed our health conditions and were approved. Each month we religiously paid the $700 premium.

After about a year, I decided to fix the hernia and was pre-approved for surgery. Then the bills started. After months of back-and-forth, my insurer denied the claim, citing a pre-existing condition. They dropped me.

Then my wife had pre-approved tests for her heart, and the insurer dropped her, too. They cited “discrepancies” between medical records and the insurance forms we’d filled out two years earlier.

The discrepancies? A one-inch difference in her height and the fact that she’d gained 12 pounds!

It took us 14 years to pay those medical bills with no help from the insurer. After years of us sending them monthly premium payments, they’d left us holding the bag.

Then came the ACA. Kristi and I finally got quality, affordable health care, like many other small-business owners. The law isn’t perfect, but it provided a measure of stability we needed to keep our business going strong.

Now the Trump administration and some Republicans in Congress are attacking the ACA again. They want to let insurance corporations discriminate against people with pre-existing conditions, like my wife and me.

This comes after Republicans in Congress voted to pass the new tax bill — a huge giveaway to giant corporations that did nothing for farmers like us.

This tax bill doesn’t just funnel billions in preferential tax treatment to mega-corporations. It also eliminates the ACA’s penalty for not having health insurance. Trump is using that as an excuse to ask a judge to throw out the ACA’s pre-existing condition protections, too. A new Trump-appointed Supreme Court justice like Brett Kavanaugh just might help him do it.

Meanwhile, Republicans in Congress are advancing a budget that cuts health care and raises prices for all of us enrolled in Medicare, Medicaid, and the ACA.

Let’s not go backwards.

Any politician who believes in thriving family farms and small businesses should protect people with pre-existing conditions and support universal health care.

Any politician who believes in us should reverse the Republican corporate tax giveaways and adopt fair taxes that fund public investments and help fuel small business development.

And any politician who supports us should reject the finger-pointing. No more blaming our hard times on immigrants, people of color, or on those who seem “different.” Our strength comes from working together — on health care and all the other things that matter in our lives.

Last year, the GOP Congress tried to repeal our health care. People of all walks of life stopped them. Believe me, like my friends and neighbors, this family farmer is persistent. We’re not done fighting for everyone to get the health care they need.

Chris Petersen is an independent family farmer near Clear Lake, Iowa. He’s a leader of the Main Street Alliance, a national small business network. 

LeeAnne Hall: Many have jobs BECAUSE they're on Medicaid

On Jan. 11, the Trump administration issued a cruel announcement: If you can’t find a job, don’t count on being able to get health care.

Under an unprecedented new policy, the administration will let states kick people off Medicaid for the crime of being unemployed. Instead of providing good jobs to struggling people, the administration is offering threats and tougher times.

Those hurt could include the Carrier plant workers from Indiana, whose jobs Trump promised to save when he was campaigning for the presidency. Last year, the company announced 600 layoffs.

Now the last of these employees are being pushed out the door. One worker says she’s “a lost paycheck away from homeless.”

Imagine telling her Medicaid won’t be there for her on top of everything else she’ll lose. The heartlessness is incomprehensible.

Still, her state’s governor is one of ten that’s jumping on the administration’s new proposal to require work or work-related activities. Kentucky’s plan has already been approved.

This is no way to treat people you claim to care about — especially when lawmakers can improve our lives with policies providing child care, paid family and medical leave, and living-wage jobs in a clean-energy economy, to say nothing of affordable health care for all.

Simple facts show that this work requirement isn’t about jobs. Most working-age adults who use Medicaid already work, and many of them have jobs thanks to Medicaid — not despite it.

That’s because Medicaid helps them get and stay healthy enough to work. After Ohio expanded Medicaid, three quarters of those who signed up said getting coverage helped them get work. In Michigan, more than two-thirds also said it helped better at a job they already had.

This policy is another blow for those facing racial or other discrimination on the job. It punishes people in job-scarce communities. It hurts people struggling to find work when they have a past criminal conviction.

And, while the administration says people with disabilities won’t be affected, that could be by only by the strictest definition of disability. Those who’ve been hurt on the job won’t necessarily be protected. Neither may many people struggling with addiction, mental health concerns, or physical conditions that make working difficult or impossible.

We can see from Kentucky’s plan what this could look like. New premiums for struggling families. Paperwork lockouts. A financial or health “literacy test” reminiscent of tests that barred African American people from voting. State officials say 90,000-95,000 people will lose their coverage.

Last year, Americans demanded we not go backwards on health care. Thousands of us showed up at town halls to block the GOP effort to repeal the Affordable Care Act and the gutting of Medicaid.

Everyone should get the care they need.

The expansion of Medicaid under the Affordable Care Act was a step in that direction. It gave many of us hope for the country we can be: one where a family’s fortunes don’t depend on the good graces of a giant corporation, and our lives don’t depend on the size of our wallet.

We still have a long way to go. Many are shut out of health care because of citizenship status, because coverage is still too expensive, or because our states refuse to expand Medicaid.

But the Trump administration and GOP Congress are moving us backward. This new Medicaid scheme is just part of it. There’s also the recent tax bill that will raise insurance premiums while giving huge cuts to corporations like Carrier — which, according to one employee facing layoffs, is “getting money hand over fist.”

Americans want health care expanded, not taken away. They can’t trick us with yet another scheme. Let’s raise our voices again and protect Medicaid.

LeeAnn Hall is the co-director of People’s Action and a member of the executive committee of Health Care for America Now. Distributed by OtherWords.org.

Patty Wright: Maine governor puts brakes on Medicaid expansion

Maine State House, in Augusta.

Via Kaiser Health News

Just hours after Maine voters became the first in the nation to use the ballot box to expand Medicaid under the Affordable Care Act, Republican Gov. Paul LePage said he wouldn’t implement it unless the Legislature funds the state’s share of an expansion.

“Give me the money and I will enforce the referendum,” LePage said. Unless the Legislature fully funds the expansion — without raising taxes or using the state’s rainy day fund — he said he wouldn’t implement it.

LePage has long been a staunch opponent of Medicaid expansion. The Maine Legislature has passed bills to expand the insurance program five times since 2013, but the governor vetoed each one.

That track record prompted Robyn Merrill, co-chair of the coalition Mainers for Health Care, to take the matter directly to voters Tuesday.

The strategy worked. Medicaid expansion, or Question 2, passed handily, with 59 percent of voters in favor and 41 percent against.

“Maine is sending a strong and weighty message to politicians in Augusta, and across the country,” Merrill said. “We need more affordable health care, not less.”

Medicaid expansion would bring health coverage to about 70,000 people in Maine.

As a battle now brews over implementation in Maine, other states will likely be watching: groups in Idaho and Utah are trying to put Medicaid expansion on their state ballots next year.

With passage of the ballot measure, Maine is poised to join the 31 states and the District of Columbia that have already expanded Medicaid to cover adults with incomes up to 138 percent of the federal poverty level. That’s about $16,000 dollars for an individual, and about $34,000 for a family of four.

Currently, people in Maine who make too much for traditional Medicaid and who aren’t eligible for subsidized health insurance on the federal marketplace fall into a coverage gap. It was created when the Supreme Court made Medicaid expansion under the Affordable Care Act optional.

That’s the situation Kathleen Phelps finds herself in. She’s a hairdresser from Waterville who has emphysema and chronic obstructive pulmonary disease. She said she has had to forgo her medications and oxygen because she can’t afford them. “Finally, finally, maybe people now people like myself can get the health care we need,” she said.

Medicaid expansion would also be a win for hospitals. More than half of those in Maine are operating in the red. Across the state, hospitals provide more than $100 million a year in charity care, according to the Maine Hospital Association. Expanding Medicaid coverage will bolster their fiscal health and give doctors and nurses more options to treat their formerly uninsured patients, said Jeff Austin, a spokesman with the association.

“There are just avenues of care that open up when you see a patient from recommending a prescription drug or seeing a counselor,” he said. “Doors that were closed previously will now be open.”

But voter approval may not be enough. Though a legislative budget analysis office estimates Medicaid expansion would bring about $500 million in federal funding to Maine each year, it would also cost the state about $50 million a year.

The fate of the Medicaid expansion will now be in the hands of the Legislature, where lawmakers can change it like any other bill. Four ballot initiatives passed by Maine voters last year have been delayed, altered or overturned.

But state Democratic leaders pledge to implement the measure. “Any attempts to illegally delay or subvert the law … will be fought with every recourse at our disposal,” Speaker of the House Sara Gideon said. “Mainers demanded affordable access to health care yesterday, and that is exactly what we intend to deliver.”

Patty Wright is a journalist for Maine Public.

This story is part of a partnership that includes Maine Public, NPR and Kaiser Health News.

Martha Burk: Employees have 'religious' freedom, too

Via OtherWords.org

When Obamacare — aka, the Affordable Care Act — became law in 2010, it mandated coverage of birth control without co-payments.

Some employers didn’t like the rule, and Hobby Lobby hated it so much that the company filed a lawsuit to stop it. Company owners said they didn’t believe in contraception and claimed that covering it for female employees violated their religious freedom.

Understand, the Obama administration went to great lengths to exempt churches and church-related institutions from the rule, while still guaranteeing their female employees the right to birth control if they wanted it.

Then the Supreme Court stepped in, siding with Hobby Lobby and ruling that “closely held” corporations with religious objections could join religious employers in excluding birth control from their insurance plans.

Now the Trump administration has gone a giant step further. They’re now allowing any and all businesses, including publicly traded ones, to also cite “religious or moral objections” in denying their employees contraception coverage.

Wait a minute.

Corporations not only have religious freedom but now moral principles, too? I didn’t even know they went to church, and I’m pretty sure I’ve never seen one get down on its knees and pray.

On the other hand, I know women — who are actual people — have religious freedom under the Constitution, too. What about their right not to be forced to bow to their employers’ religious beliefs or highly suspect “moral” principles?

Massachusetts, California, and the ACLU have filed lawsuits to stop the rollback. Good luck. Besides Hobby Lobby, the conservative majority in the Supreme Court ruled years ago in the Citizens United case that corporations have constitutional rights, and they’ve consistently ruled in favor of their corporate buddies over women in employment discrimination cases.

On top of that, six of the nine justices are male, and most of them of rather conservative religious persuasions. The odds look to be stacked against women.

Expanding so-called corporate citizen rights deeper into health care could ultimately affect everybody, not just women.

Christian Scientists are opposed to all kinds of medical treatment, including for diabetes, cancer, and meningitis. Jehovah’s Witnesses don’t believe in blood transfusions. There are undoubtedly other religious taboos on medical procedures.

Enterprising businesses that want to save money could cite “religious freedom” to exclude virtually any medical treatment from their insurance plans. Surgery, antibiotics, immunizations — you name it.

Where will it end? We don’t know. Even if the lawsuits are ultimately successful, a decision could take years.

All I know is that I don’t want my neighborhood corporate citizen making my health care decisions.

Martha Burk is the director of the Corporate Accountability Project for the National Council of Women’s Organizations (NCWO) and the author of the book Your Voice, Your Vote. 

Martha Burk: 'Religious' companies and your health care

Via OtherWords.org

When Obamacare — aka, the Affordable Care Act — became law in 2010, it mandated coverage of birth control without co-payments.

Some employers didn’t like the rule, and Hobby Lobby hated it so much that the company filed a lawsuit to stop it. Company owners said they didn’t believe in contraception and claimed that covering it for female employees violated their religious freedom.

Understand, the Obama administration went to great lengths to exempt churches and church-related institutions from the rule, while still guaranteeing their female employees the right to birth control if they wanted it.

Then the Supreme Court stepped in, siding with Hobby Lobby and ruling that “closely held” corporations with religious objections could join religious employers in excluding birth control from their insurance plans.

Now the Trump administration has gone a giant step further. They’re now allowing any and all businesses, including publicly traded ones, to also cite “religious or moral objections” in denying their employees contraception coverage.

Wait a minute.

Corporations not only have religious freedom but now moral principles, too? I didn’t even know they went to church, and I’m pretty sure I’ve never seen one get down on its knees and pray.

On the other hand, I know women — who are actual people — have religious freedom under the Constitution, too. What about their right not to be forced to bow to their employers’ religious beliefs or highly suspect “moral” principles?

Massachusetts, California and the ACLU have filed lawsuits to stop the rollback. Good luck. Besides Hobby Lobby, the conservative majority in the U.S. Supreme Court ruled years ago in the Citizens United case that corporations have constitutional rights, and they’ve consistently ruled in favor of their corporate buddies over women in employment discrimination cases.

On top of that, six of the nine justices are male, and most of them of rather conservative religious persuasions. The odds look to be stacked against women.

Expanding so-called corporate citizen rights deeper into health care could ultimately affect everybody, not just women.

Christian Scientists are opposed to all kinds of medical treatment, including for diabetes, cancer, and meningitis. Jehovah’s Witnesses don’t believe in blood transfusions. There are undoubtedly other religious taboos on medical procedures.

Enterprising businesses that want to save money could cite “religious freedom” to exclude virtually any medical treatment from their insurance plans. Surgery, antibiotics, immunizations — you name it.

Where will it end? We don’t know. Even if the lawsuits are ultimately successful, a decision could take years.

All I know is that I don’t want my neighborhood corporate citizen making my health care decisions.

Martha Burk is the director of the Corporate Accountability Project for the National Council of Women’s Organizations (NCWO) and the author of the book Your Voice, Your Vote. 

David Warsh; McCain and looking for the road back to 'regular order'

I wasn’t surprised in the least when Sen. John McCain (R-Ariz.) flew back to Washington last week to put a stake through the heart of the Republican Party’s effort to kill  the Affordable Care Act. That’s because I remember the last time that McCain interrupted himself to fly back to town.

He was running for president then, against Illinois Sen. Barack Obama, in 2008. The financial crisis had come to a head after a year of growing apprehension. Lehman Brothers had failed on Monday, Sept. 15.  Panic was taking hold in global credit markets for the first time since 1933.

Acute problems had spread beyond the banks.  By Tuesday, Sept. 16, 2008, insurance giant American International Group was on the verge of failure, thanks to the effect of plummeting share prices on its derivative and stock-lending businesses. Treasury Secretary Henry Paulson Jr., had begun calling both candidates daily to brief them, hoping to keep them from saying something that might upset the markets.

On the stump Sept. 16, McCain said, “We cannot have the taxpayers bail out AIG or anybody else.”  Paulson phoned immediately to talk him back from that position. The next day McCain reversed himself, foreshadowing the days ahead.

Two days later, Paulson and Federal Reserve Chairman Ben Bernanke persuaded President George W. Bush and leaders of both parties, meeting in the office of Speaker of the House Nancy Pelosi, to accept the hastily drafted Troubled Assets Relief Program  (TSRP) bill.  And on Friday, Sept.  19, Friday, Bush stood in the White House Rose Garden, along with Bernanke, Paulson and SEC chairman Christopher Cox, to ask Congress to approve a hazy $700 billion bailout plan.  By the following Tuesday, it was clear that the measure lacked the necessary Republican votes to pass in the House.

With the first presidential debate scheduled for the following Friday, McCain announced  that he was suspending his campaign in order to fly back to Washington.  He asked for a meeting with President Bush and Obama. Paulson later wrote that he was “dumbfounded” that the president had agreed to such a conclave. (I am relying here on Paulson’s memoir, On the Brink: Inside the Race to Stop the Collapse of the Global Financial System.) Bush explained that he felt he had little choice.

The meeting was held; Obama and his chief economic adviser Lawrence Summers danced rings around the Republicans:  McCain spoke only when called upon at the end, and the meeting dissolved in chaos at its end. In their televised debate that Friday, Obama and McCain condemned Wall Street, but neither mentioned the bailout. Mostly they argued about Afghanistan and Iraq.  Obama decisively won the debate.

The following Monday the TARP bill was defeated in the House.  When it finally passed three days later, as the banking system continued to threaten to collapse, McCain got little credit for his dramatic gesture. Paulson wrote:

"His return to Washington was impulsive and risky, and I don’t think he had a plan in mind. If anything, his gambit only came back to hurt him, as he was pilloried in the press afterward, and in the end I don’t believe his maneuver significantly influenced the TARP legislative process.

"A number of people I respect on the Hill have a different view. They believe McCain ended up being helpful by focusing public attention on TARP and galvanizing Congress to action. And John did later try to find ways for House Republicans to support legislation.   But Democrats absolutely did not want him to get any credit. They wanted the economic issue as their own.''

Looking back, McCain was a central player in one of the great dramas of the 21st Century. The leaders of both parties in Congress, a reluctant administration, central bankers around the world, and both U.S. presidential candidates in an election year – they all agreed on measures that, after many adjustments behind the scenes, prevented a second Great Depression.

Granted, it had been ugly. Every actor displayed a wart or two. “There was no hiding McCain’s rudderlessness over the [first few] days, as he lurched from blunder to blunder,” was how John Heilemann and Mark Halperin described his introduction to the crisis in Game Change.  Sen. Lindsey Graham (R.-S.C.) repeatedly helped his good friend McCain maintain his bearings.  But strip away all the self-interested accounts of the matter by technocrats, and what’s left is a distinct harbinger of McCain’s dramatic action last week.

In a speech two days before his fateful vote last week, McCain took stock of the battles of the last eight years.

"Our deliberations today are more partisan, more tribal more of the time than any other time I remember…. Both sides have let this happen. Let’s leave the history of who shot first to the historians. I suspect they’ll find we all conspired in our decline – either by deliberate actions or neglect…

"The Obama administration and congressional Democrats shouldn’t have forced through Congress without any opposition support a social and economic change as massive as Obamacare. And we shouldn’t do the same with ours.''

Since I clearly remembered the White House event, in March 2009, with which Obama opened his campaign to reorganize healthcare-insurance markets, I couldn’t resist a taking a little peek back at the history of what happened next. Obama’s proposal’s was patterned on Massachusetts’'s 2006 adoption of “Romney Care,” itself based on a Republican proposal for an individual mandate advanced ten years before, in opposition to Hillary Clinton’s more ambitious plans. Obama invited 150 participants to a conference, drawn from all corners of the debate, including Congressional Republican leaders.

 In “The Party of No,” a chapter in The New New Deal:The Hidden Story of Change in the Obama Era, author Michael Grunwald describes the evolution of the Republican leadership’s thinking the wake of Democratic victories – not just the White House, but control of both houses of Congress. Eric Cantor (R.-Va.) was the minority whip then, transparently coveting minority leader John Boehner’s job.  Cantor’s deputy, Kevin McCarthy (R.-Calif.), and Paul Ryan (R.-Wis.) were said to be the GOP’s “young guns.” Rep. Mike Pence (R.-Ind. chaired an initial conference of the party’s leadership in Annapolis. Grunwald wrote:

"The new leaders who gathered in Annapolis had a new mantra.  Our mistake was abandoning our principles, not following our principles. They saw John McCain as a typical Republican In Name Only (RINO) who had sought electoral salvation in ideological equivocation – and look what happened to him.  They even revised their opinions of George W. Bush, who in retrospect seemed less a conservative hero, more a big-spending apostate.''

“Most important, Republicans need to stick together as a team,” exhorted Senate Minority Leader Mitch McConnell.  And so they did.  The Tea Party election came next, in 2010. Republicans took back the House.  Obama was re-elected in 2012. In 2014, Republicans took back the Senate. And by 2016, the strategy of full-throated opposition seemed to have worked. Republicans won the White House.

At least in the matter of healthcare legislation, the Republicans clearly fired the first shot, opposing a program of their own invention just because the opposition party had embraced it.  Let McCain’s exaggeration on this count pass. In the offer of olive branches, no more than in lapidary inscriptions, is a man upon his oath. The path back to the state of mind Senate rules describe as “normal order” is much as McCain described it:

Incremental progress, compromises that each side criticize but also accept, just plain muddling through to chip away at problems and keep our enemies from doing their worst isn’t glamorous or exciting. It doesn’t feel like a political triumph. But it’s usually the most we can expect from our system of government, operating in a country as diverse and quarrelsome and free as ours.

In “The Sanctimony and Sin of G.O.P, ‘Moderates',''  New York Times columnist Paul Krugman, writing last week before McCain’s vote last Thursday against his party,  invited readers “to consider the awfulness of Senator John McCain.” Indeed, Krugman condemned all politicians “who pretend to be open-minded, decry partisanship, tut-tut about incivility and act as enablers for the extremists again and again.” Krugman wrote:

"I started with McCain because so many journalists still fall for his pose as an independent-minded maverick, ignoring the reality that he’s a reliable yes-man whenever it matters.''

Krugman has got it exactly backwards.  On the two occasions of the last 10 years when it has mattered most, McCain stood in the center, with the majority consensus, against his party’s leaders (and, often enough, in matters of lesser issues as well, especially immigration and campaign finance). Krugman, himself an unbridled partisan, should stop insisting that there are no Republican moderates.  The road back to “regular order” begins with giving credit where credit is due.

David Warsh, a longtime business and political columnist and an economic historian, is proprietor of economicprincipals.com.

Llewellyn King: Start all over again with healthcare reform

The process now underway in Congress to repeal and replace the Affordable Care Act (Obamacare) reminds me of what would happen if you tried to thread a small darning needle with a strand of bulky yarn: It won’t go through the eye. The more you try to pull the strand through the eye, the less useful the yarn coming through it will be.

Therefore, isn’t it time to reconsider the whole proposition as though there were no Obamacare, no House version of its replacement, and no preconceived objective beyond affordable care for all?

Also, there should be no pre-established conditions, such as single-payer and multiple-payer; no pre-established goals, such as preserving particular insurance practices and expectations that employers will always be part of the deal; and no expectation that the health-care bill should also be a tax bill or a welfare bill.

Its simple goal should be to free people from fear of medical catastrophe and enable physicians and hospitals to care for the sick without commercial pressure.

I’ve come to the belief that big, new ideas are needed from my own experience as an employer-provider. For more than 30 years, as a small Washington publisher, I provided health insurance for my staff of 25. It was a nightmare that got worse as medicine got more expensive.

Of many strange situations, none was worse than the employee who developed nasopharyngeal cancer, a rare type of head and neck cancer. The insurance paid for chemotherapy and radiation, but refused to pay for expensive painkillers. These had to be brought in from France by a family member.

Maybe the most discouraging was a printing-press operator who wanted the premiums given to him, as he refused to see the point of insurance, although he was married with three small children. “We don’t use insurance,” he declared. “When the kids are sick we go to the emergency room and tell them we have no money.” When pressed, he said they did this because they didn’t want the bother of filling out forms.

If you think, as I do, that the system we have is less than perfect, one is immediately thought to be a believer in British-type national health insurance. Not necessarily so.

As a former citizen, I know something about Britain’s National Health Service and I think it is better than what is happening in the United States. I’ve received treatment in Britain under the system and members of my family in England are devoted to it. There is good treatment for major procedures. However for lesser ailments, there are long waiting lists. Bureaucracy is everywhere.

Worse, can you imagine a health-care system dependent on the budget cycle in Congress?

In Switzerland there is a totally private system, which looks like improved Obamacare. Everyone is obliged to buy insurance, just as everyone has to pay taxes. There are no limits on troublesome things like preexisting conditions. The government regulates the insurers. In a referendum, the Swiss rejected a switch to a single-payer system by 60-40 percent.

There also are mixed systems in Germany and Holland. The commonality is that everyone is covered and the governments regulate. That way, insurance pools are large and have the correct mix of old and young — otherwise the old will overwhelm any system.

Unless we devise a structure that caters to all, we will continue with overburdened emergency rooms, preposterous hospital charges and doctors who will pick and choose their patients.

No one on a gurney being wheeled down a hospital corridor should be thinking, “How will I pay for this?”

The chances are that when Congress has finished trying to thread the unthreadable needle, there will be a groundswell on the left for single-payer — better, possibly, but not a fit in the United States.

Meanwhile, there are too many pre-existing conditions in congressional thinking. We need a new prescription, a bigger needle and a finer thread.
 

Llewellyn King (llewellynking1@gmail,com) is host and executive producer of White House Chronicle, on PBS, and a veteran publisher, editor, columnist and international business consultant. He is based in Rhode Island and Washington. This piece first ran in Inside Sources.

Chuck Collins: Healthcare costs, not taxes, are the big hit on businesses

Members of the House GOP were in a hurry on May 4 to pass their bill to gut Obamacare. They rushed it through before anyone even had a chance to check its cost or calculate its impact on people’s access to insurance.

Their urgency, however, had little to do with health care. The real reason for the rush? To set the table for massive tax cuts.

Indeed, the House health plan would give a $1 trillion boon to wealthy households and pave the way for still bigger corporate tax cuts to come, as part of the so-called “tax reform” they’re pushing.

Meanwhile, dismantling the Affordable Care Act will cause up to 24 million people to lose their health coverage, according to the non-partisan Congressional Budget Office. (Though even that estimate is based on the less extreme version of the bill that failed to pass in April. The new plan may be even worse.)

Why would a GOP politician support an unpopular bill that fewer than 20 percent of voters think is a good idea? Why risk angry constituents showing up at town hall meetings?

Put simply, to please their wealthy donors and Wall Street corporations. For complex legislative reasons, repealing Obamacare’s taxes on the rich first will make it easier for them to slash corporate taxes next.

As the “tax reform” debate begins, prepare for sermons about how cutting taxes for rich and global corporations will be great for the economy. Slashing the corporate tax rate, we’ll be told, will boost U.S. competitiveness.

But if Congress were really concerned about the economy, policy wouldn’t be driven by tax cuts. The real parasite eating the insides of the U.S. economy isn’t taxes, billionaire investor Warren Buffett explained recently, but health care.

In fact, taxes have been steadily going down, especially for the very wealthy and global corporations. “As a percent of GDP,” Buffett told shareholders of his investment firm, the corporate tax haul “has gone down.” But “medical costs, which are borne to a great extent by business,” have increased.

In 1960, corporate taxes in the U.S. were about 4 percent of the economy. Today, they’re less than half that. As taxes have fallen, meanwhile, the share of GDP spent on health care has gone from 5 percent of the economy in the 1960s to 17 percent today.

These costs are the real “tax” on businesses. As any small business owner can tell you, health care costs are one of the biggest expenses in maintaining a healthy and productive work force.

Yet the GOP bill will weaken healthcare coverage and regulation, which will increase costs and hurt U.S. companies.

U.S. employers, remember, must compete with countries that have superior universal health insurance for their citizens and significantly lower costs. While health care eats up 17 percent of the U.S. economy, it’s around just 11 percent in Germany, 10 percent in Japan, 9 percent in Britain and 5.5 percent in China.

No wonder Buffett concluded that “medical costs are the tapeworm of American economic competitiveness.”

Buffett observed that the House healthcare bill would give him an immediate $680,000 annual tax cut, a break he doesn’t really need, while only allowing that tapeworm to bore deeper.

For all its limitations, the Affordable Care Act has expanded coverage and the quality of life for millions of Americans. It’s also put in place important provisions to contain exploding health care expenses, slowing the rise of costs.

The GOP plan to reduce coverage and deregulate health care will take us in the wrong direction. That’s a pretty poor bargain for yet another tax cut for the richest Americans.

Chuck Collins is a senior scholar at the Institute for Policy Studies and a co-editor of Inequality.org. He’s the author of the recent book Born on Third Base. 

GOP would cost-shift massive obligatory medical costs to states

Adapted from  an item in Robert Whitcomb's "Digital Diary'' in GoLocal 24

The Congressional Budget Office figures that the Republican healthcare bill would reduce the federal budget deficit by $337 billion through fiscal 2026. I doubt that, but even assuming that it’s true, it doesn’t project how much the bill could cost the states.

A problem is that every state mandates that all sick and/or injured people who show up in inefficient and expensive hospital emergency rooms (which is most of them), and indeed at many other providers, must be treated regardless of ability to pay. There will be a heightened flood of such people at ERs over the next few years if the GOP bill is enacted because many of these folks would no longer have coverage that has let them get preventive treatment as part of a regular clinical relationship with a physician, especially with a primary-care doctor.

Hospitals and other providers and state governments would have to eat much of the cost of caring for the low-income people cast off with the demise of the Affordable Care Act. Unless state governments decide that they’ll just let a lot of poor people die on the street. Now that’s libertarian!

As former Massachusetts Gov. Mitt Romney said in 2006 in explaining his health-insurance plan for the Bay State: “Some of my libertarian friends balk at what looks like an individual mandate {as in the future Affordable Care Act}. But remember, someone must pay for the healthcare that must, by law, be provided: Either the individual pays or the taxpayers pay.’’

As for the alleged evil of “individual mandates,’’ states have long had them for auto insurance, and generally those who want to own a home are compelled to buy property insurance to get mortgages.

In any event, the Republican healthcare plan, among other things, is a great big inefficient cost-shifting to the states.

There are elements of the GOP approach that, in principle, have merit. For instance, the Trump administration wants the states to charge Medicaid patients at least some premiums, require them to pay part of their emergency-room charges (Medicaid patients tend to overuse ER’s) and push recipients to get jobs. These changes might reduce some of the vast amount of waste pervasive in American healthcare. And everyone should be reminded that healthcare is never “free’’; it’s just a question of who’s paying for it. But what percentage of Medicaid folks can meet these demands is unknown.  Many of them are already under a lot of economic and other stress.

Josh Hoxie: Repealing the ACA another windfall for the rich

Via OtherWords.org

Great magicians are masters of diversion. They attract our attention with one hand while using the other to trick us into thinking a supernatural act is taking place.

But even the best street performers could learn a lesson from the folks in Congress who are trying to repeal the Affordable Care Act, also known as Obamacare.

When we talk about repealing Obamacare, we almost never talk about the windfall payday it would bring to multi-millionaires and billionaires. In fact, this massive tax cut is the proverbial card hiding in the sleeve of lawmakers pushing repeal.

A new study from the Center on Budget and Policy Priorities shows the 400 richest Americans, a group whose average annual income tops $300 million each, would get a combined annual tax cut of $2.8 billion if the Affordable Care Act is repealed.

In other words, people who already have more money than they could spend in a dozen lifetimes would get a massive pile of cash.

Meanwhile, those who make less than $200,000 per year — also known as “the rest of us” — would see no benefit. That’s because the two taxes that funded the expansion in healthcare coverage included as part of Obamacare don’t extend to these moderate-income households.

And many of us would do worse.

In fact, about 7 million low-income people would actually see their taxes go up if the law’s repealed, since they’d lose insurance premium tax credits that were enacted as part of the bill.

So, to be perfectly clear on this point, repealing Obamacare equals payday for the wealthiest households and higher taxes for the poorest households — millions of whom would also lose their health coverage.

Remember the story of Robin Hood? It’s just like that, but backwards.

Poll after poll shows Americans have no idea how concentrated wealth inequality is today — it’s far worse than most suspect.

A report I co-authored last year looked at the 400 wealthiest individuals in the country. This group together owns more wealth than the entire GDP of India, a country with over a billion people.

The report also showed this great concentration of wealth splits largely, although not exclusively, along racial lines. The 100 wealthiest Americans, none of whom are black, today own more wealth than the entire African-American population combined.

Unsurprisingly, most of us would like to live in a much more egalitarian society. If we can’t swing it, economist and author Thomas Piketty warns, we’re heading towards a hereditary aristocracy of wealth and power, where the children of today’s billionaires will dominate our economy and our government.

As we look back at the Obama legacy, we see a number of efforts aimed at beginning to bridge that massive wealth divide. From expanding opportunities for low-income children and families to asking the ultra-wealthy to pay their fair share, progress has been made on this front in the past eight years.

The Affordable Care Act was one of these efforts, and it touched directly on issues of life and death.

Don’t be fooled by the smoke and mirrors of today’s illusionists: Repealing it will directly counteract this progress. It will further concentrate wealth into fewer hands and strip low-income families of what little resources they have.

Josh Hoxie directs the Project on Taxation and Opportunity at the Institute for Policy Studies.

David C. Pate, M.D.: America's healthcare-payment system must be transformed

At this stressed moment in Washington, this is as good a description of American healthcare "system'' challenges as I've read in a while. 

-- Robert Whitcomb

David C. Pate, M.D., a physician and lawyer who has been president and CEO of St. Luke’s Health System, based in Boise, Idaho, since 2009, spoke Dec. 14 as part of the Boise Metro Chamber of Commerce’s CEO Speaker Series. These remarks are edited for length and clarity from a transcript prepared by the chamber’s public-relations director, Caroline Merritt.

There’s a lot of discussion about healthcare, a lot of fear about what’s going to be happening with healthcare from a national level. I think there are answers — answers that healthcare providers are best prepared to implement, not Washington.

For the seven years that I’ve been here, we have been working at St. Luke’s, building the capabilities and competencies necessary to manage healthcare in a very different world than has existed.

Six months after I got here, the Affordable Care Act was enacted. We at St. Luke’s did not support the Affordable Care Act. Not because it doesn’t have a lot of really good features. It does. The discussion at the time was that if we add tens of millions of people to the newly insured in what was at the time, and still is, a broken healthcare delivery system, we’re going to end up saving money. We did not believe that. We have seen with the Affordable Care Act the continued growth and cost in healthcare. Something different has to happen.

Now the discussion is, “Let’s repeal and replace the Affordable Care Act.” I think it’s going to miss the mark as well. In both cases, Republicans and Democrats are coming up with the right answers to the wrong question.

Get a service, pay a bill

Most experts in healthcare would agree that the single biggest problem is our reimbursement model. It’s what’s called fee-for-service. You go to the doctor, you get a bill. You get a lab test, you get a bill. You go to the hospital, you get a bill.

It leads to a fragmented healthcare-delivery system. Everything is being paid by this unit-of-service or episode-of-care. Regardless of whether it helped you or not. Regardless of whether it provided value. Regardless of whether there was a less costly alternative.

An ideal reimbursement system ought to align the incentives of the payment with what we say are the important objectives that we want. You go places and you’re always having to repeat the same things because nobody seems to have all the information. You get bills from all the different ones.

It’s estimated that, at minimum, 30 percent of all healthcare spending in the United States goes to low-value or no-value services. So we are spending money on things that don’t help people. With fee-for-service, we pay for a lot of duplication.

One of the consequences is that we have these consistently rising premiums, and they have outpaced the growth in incomes. In Idaho this is particularly serious, because premiums as a percentage of average income [are] about 17 percent, and even the federal government with the Affordable Care Act said affordable is less than 9.5 percent.

High-deductible health plans don’t help

What has been a response is, “Let’s create really high-deductible health plans that make the patients have skin in the game and make them a little bit resistant to buy these services unless they really need them.”

Most of us can remember the day when we thought a high deductible was a thousand dollars for an individual. These high-deductible plans now are in the neighborhood of up to $6,000 for an individual, $12,000 for a family. Nearly half of Idahoans don’t have enough liquid assets to be able to pay the deductible.

So insurance is increasingly become more like a catastrophic health plan, not something that you can really use. People do avoid getting care, but they avoid getting the care they need as well as the care that you’d like to discourage. This isn’t working.

Now imagine a new world that I’ll call pay-for-value. Imagine that I’m getting paid $500 a month for people to provide all of their healthcare, and that’s all I’m getting,

The majority of the population [accounts for] a very small amount of the healthcare spending – 4 percent. In fee-for-service, Saint Al’s {Boise-based St. Alphonsus Health System} and St. Luke’s would go broke. They just don’t use many services.

Today, in fee-for-service, what I want to know when I come to work is: Are all our hospital beds full? Are our emergency departments full? Are women lined up down the hallway to give birth? Because this is how we get paid.

When [a patient is] ready to be discharged, we’re going to wheel [her] out in a wheelchair to the front sidewalk, and her family members are going to pull up, and we’re going to put her in the car and close the door. We’re done. Now, if anything else happens to her, that’s fine, come on back. We’d be glad to have you, and we’ll do it again. Re-admissions aren’t really a problem for us under fee-for-service. It’s just an opportunity to make more money.

New financial incentives for better care

Think about pay-for-value. I’m getting $500 per month. Is there any hospitalization that you can have for under $500 that you can think of? No.

Now don’t misunderstand me. We’re still going to have hospitalizations, even under pay-for-value. But we’re looking at them differently: Could we have prevented this?

Under pay-for-value, complications are very expensive, and now they’re our expense, because we’re just getting that $500. And we’re looking at two things. How can we give the right care 100 percent of the time? And how can we get to zero complications?

If you have a knee or a hip replacement, one of the dangers is that the prosthesis, the artificial part of it, can get infected. We figured that if someone got an infection from their knee or hip surgery, it added about $120,000 to the cost. That’s a lot of $500 premiums to pay for that complication. So what we’ve been doing is trying to figuring out how do we get to zero complications.

With hip and knee infections — I’m going to oversimplify — there are two ways you can get infected. One is: There can be bacteria on the skin that we don’t get off, so in the operation we put the bacteria in it. But today, the bigger problem is there’s particulate material in the air. We’ve got your wound open. That particulate matter can settle in your wound.

So we partnered with Micron and Boise State University to come into our operating rooms and to study about these particulate counts. Who knew there were such things as air engineers, but there are, and Boise State has one. And what we found is that every time the OR door opened, it stirred up the particulate count in the room. Just by us making sure everything is needed is in the room, and putting in new procedures about minimizing traffic through the OR, we have cut what was already a very good infection rate in half. These are the kind of things that you have got to do in this new world.

A very small percentage of the population accounts for a lot of the healthcare spending. [A man] has diabetes and heart failure and chronic kidney disease, and he’s a couch potato and he’s not very active. He is just a mess. People in [his] category, on average, are going to have six to eight doctors. In fee-for-service, they’re not talking to each other.

‘We’re driving this forward’

In pay-for-value, that’s where we can reduce costs and make healthcare more affordable. Instead of concentrating all of my health systems’ resources on all of them, I’m going to focus my resources on this group, because there is so much we can do just by paying those doctors differently. They’re not just getting paid for the office visit. They are now paid to actually coordinate his care. You use other resources like care managers to help coordinate that care.

Starting Jan. 1,  25 percent of our revenue will be in this new model. We expect that sometime in 2018, it actually may be 50 percent. So we’re driving this transformation forward.

Now, the Boise/Meridian hospitals are five-star hospitals designated by CMS [the federal Centers for Medicare and Medicaid Services], the only one like that in the state of Idaho — in fact, in the surrounding six states. And our health system has been named, and that’s all of the hospitals, a top 15 health system for three years in a row. We’re showing that this can be done. We’re doing it.

The other piece is: Drive it at the lowest possible cost. That’s what we’ve got to deliver on.

We’re not counting on Washington to figure out how to fix healthcare.

Q: You’re talking about the transformation, but I’m wondering how that’s going to happen. You partner with SelectHealth, right? To deliver this model? Are you going to be able to work with the other insurance companies to make this happen? Or maybe it’s something bigger, like CMS changing from fee-for-service to pay-for-value. How are you going to get from 50 to 100 percent?

A: This is a great question, because the only way we can do it is if the payment system is transformed as well. It’s not going to work for us to transform the clinical model if the business model doesn’t change with it.

We have a great partnership with SelectHealth. That is certainly accelerating our efforts. One reason we went to SelectHealth was there wasn’t a lot of appetite for this in the market with the insurers at the time many years ago. Now other payers are getting aligned with this same concept.

In defense of my insurance-company colleagues, let me tell you, it’s really hard to change your business model. What we’ve gone through with our board to convince them that we should do this, and for them to understand you’re going to take 25 percent of our revenue and put it at financial risk? It’s a big step. And it’s hard for any business to transform their business when they’re doing well.

I think there’s going to be a competitive advantage to who can figure this out first. What I can do is: With the insurance companies that want to partner with us, we can now get by on a lower premium. So you can actually lower your premium, and we know that is what will shift market share.

As far as the federal government:

The Obama administration has been all in favor of this, and they would applaud what we are doing.

I am concerned with the new pick for secretary of HHS [President-elect Trump has chosen Rep. Tom Price,  M.D., a Georgia Republican congressman] because I’m not convinced based on what I’ve read about him that he believes in this. He’s a physician that came from the fee-for-service world and did well in that world.

I think the question is: How difficult is the new administration going to make it for us to do this? But I hope not.

This story appears in the December 21, 2016-January 17, 2017, edition of the Idaho Statesman’s Business Insider magazine.  To get to the magazine, hit this link.

Isaiah J. Poole: Give 'tax and spend' a chance

via otherwords.org

This time of year, a whole lot of Americans are feeling taxed enough already.

But the astonishing momentum of Bernie Sanders’s presidential candidacy reveals something else: Millions of taxpayers are willing to entertain the idea that some of us aren’t taxed enough, and that it’s hurting the rest of us.

Sanders has propelled his race against Hillary Clinton on a platform that would ramp up government investment — in infrastructure, education, health care, research and social services — while boosting taxes on the wealthiest Americans and big business to cover the cost.

Clinton’s own vision is less ambitious, but it’s also a far cry from “the era of big government is over” days of her husband’s administration.

The old conservative epithet against “tax-and-spend liberals” hasn’t completely lost its sting, says Jacob Hacker, a political-science professor at Yale University who pushed the idea of a public option for health insurance during the Affordable Care Act debate. But “we are moving toward the point where we can have an active discussion” about why “you need an activist government to secure prosperity.”

Hacker’s latest book, with Paul Pierson of the University of California at Berkeley, is American Amnesia: How the War on Government Led Us to Forget What Made America Prosper.

Hacker and Pierson argue that it was “the strong thumb” of a largely progressive-oriented government, in tandem with “the nimble fingers of the market,” that created the broad prosperity of the post-World War II era. Conservative ideologues and corporate leaders then severed that partnership.

Anti-government activism replaced the virtuous cycle of shared prosperity that existed into the 1970s with a new cycle that’s reached its depths in today’s radical Republican-run Congress: Make government unworkable. Attack government as unworkable. Win over angry voters. Repeat.

But in today’s mad politics, growing numbers of voters seem to have gotten wise to the routine and how it’s been rigged against them. Some are gravitating toward Donald Trump, as Hacker puts it, out of “the need to put a strong man who you know is not with the program in Washington in charge.”

Sanders has the opposite vision. He’s looking to spark a people-powered reordering of what government can do, with the biggest wealth-holders paying the share of taxes that they did when America’s thriving middle class and thriving corporate sector were, together, the envy of the world.

That vision is embodied in "The People's Budget.'' a document produced by the Congressional Progressive Caucus as an alternative to the House Republican budget.

It’s based on the premise that America can break out of its slow-growth economic malaise through a $1 trillion infrastructure spending plan that would create more than 3 million jobs, increased spending on green-energy research and development, and universal access to quality education from preschool through college.

“There are two messages that come out of the progressive budget,” Hacker said. One is that “we can actually increase investment if we don’t cut taxes further on the wealthy.” The other is that “if we got tougher with the modern robber barons in the healthcare and finance and energy industries, we could actually achieve substantial savings without cutting necessary spending.”

Unfortunately, The People’s Budget won’t get close to a majority vote in Congress — and that’s if it gets a vote at all in the dysfunctional Republican House.

Yet together with the debate provoked by the Sanders campaign, Hacker says, it shows that now “we have a little bit more of an opening for the kind of conversation we should’ve had 20 or 30 years ago, when we were trashing government and abandoning all of these long-term investments that are essential to our prosperity.”

Isaiah J. Poole is the online communications director at Campaign for America’s Future (OurFuture.org). 

Philip K. Howard: Congress needs to clean out the stables of long-outdated laws

Government is broken. So what do we do about it? Angry voters are placing their hopes in outsider presidential candidates who promise to “make America great again” or lead a “political revolution.”
 

But new blood in the White House, by itself, is unlikely to fix things. Every president since Jimmy Carter has promised to rein in bureaucratic excess and bring government under control, to no effect: The federal government just steamed ahead. Red tape got thicker, the special-interest spigot stayed open, and new laws got piled onto old ones.

What’s broken is American law—a man-made mountain of outdated statutes and regulations. Bad laws trap daily decisions in legal concrete and are largely responsible for the U.S. government’s clunky ineptitude.

The villain here is Congress—a lazy institution that postures instead of performing its constitutional job to make sure that our laws actually work. All laws have unintended negative consequences, but Congress accepts old programs as if they were immortal. The buildup of federal law since World War II has been massive—about 15-fold. The failure of Congress to adapt old laws to new realities predictably causes public programs to fail in significant ways.

The excessive cost of American healthcare, for example, is baked into legal mandates that encourage unnecessary care and divert 30 percent of a healthcare dollar to administration. The 1965 law creating Medicare and Medicaid, which mandates fee-for-service reimbursement, has 140,000 reimbursement categories today and requires massive staffing to manage payment for each medical intervention, including giving an aspirin.

In education, compliance requirements keep piling up, diverting school resources to filling out forms and away from teaching students. Almost half the states now have more administrators and support personnel than teachers. One congressional mandate from 1975, to provide special-education services, has mutated into a bureaucratic monster that sops up more than 25 percent of the total K-12 budget, with little left over for early education or gifted programs.

Why is it so difficult for the U.S. to rebuild its decrepit infrastructure? Because getting permits for a project of any size requires hacking through a jungle of a dozen or more agencies with conflicting legal requirements. Environmental review should take a year, not a decade.

Most laws with budgetary impact eventually become obsolete, but Congress hardly ever reconsiders them. New Deal Farm subsidies had outlived their usefulness by 1940 but are still in place, costing taxpayers about $15 billion a year. For any construction project with federal funding, the 1931 Davis-Bacon law sets wages, as matter of law, for every category of worker.

Bringing U.S. law up-to-date would transform our society. Shedding unnecessary subsidies and ineffective regulations would enhance America’s competitiveness. Eliminating unnecessary paperwork and compliance activity would unleash individual initiative for making our schools, hospitals and businesses work better. Getting infrastructure projects going would add more than a million new jobs.

But Congress accepts these old laws as a state of nature. Once Democrats pass a new social program, they take offense at any suggestion to look back, conflating its virtuous purpose with the way it actually works. Republicans don’t talk much about fixing old laws either, except for symbolic votes to repeal  the Affordable Care Act. Mainly they just try to block new laws and regulations. Statutory overhauls occur so rarely as to be front-page news.

No one alive is making critical choices about managing the public sector. American democracy is largely directed by dead people—past members of Congress and former regulators who wrote all the laws and rules that dictate choices today, whether or not they still make sense.

Why is Congress so incapable of fixing old laws? Blame the Founding Fathers. To deter legislative overreach, the Constitution makes it hard to enact new laws, but it doesn’t provide a convenient way to fix existing ones. The same onerous process for passing a new law is required to amend or repeal old laws, with one additional hurdle: Existing programs are defended by armies of special interests.

Today it is too much of a political struggle, with too little likelihood of success, for members of Congress to revisit any major policy choice of the past. That’s why Congress can’t get rid of New Deal agricultural subsidies, 75 years after the crisis ended.

This isn’t the first time in history that law has gotten out of hand. Legal complexity tends to breed greater complexity, with paralytic effects. That is what happened with ancient Roman law, with European civil codes of the 18th Century, with inconsistent contract laws in American states in the first half of the 20th Century, and now with U.S. regulatory law.

The problem has always been solved, even in ancient times, by appointing a small group to propose simplified codes. Especially with our dysfunctional Congress, special commissions have the enormous political advantage of proposing complete new codes—with shared pain and common benefits—while providing legislators the plausible deniability of not themselves getting rid of some special-interest freebie.

History shows that these recodifications can have a transformative effect on society. That is what happened under the simplifying reforms of the Justinian code in Byzantium and the Napoleonic code after the French Revolution. In the U.S., the establishment of the Uniform Commercial Code in the 1950s was an important pillar of the postwar economic boom.

But Congress also needs new structures and new incentives to fix old law.

The best prod would be an amendment to the Constitution imposing a sunset—say, every 10 to 15 years—on all laws and regulations that have a budgetary impact. To prevent Congress from simply extending the law by blanket reauthorization, the amendment should also prohibit reauthorization until there has been a public review and recommendation by an independent commission of citizens.

Programs that are widely considered politically untouchable, such as Medicare and Social Security, are often the ones most in need of modernization—to adjust the age of eligibility for Social Security to account for longer life expectancy, for example, or to migrate public healthcare away from inefficient fee-for service reimbursement. The political sensitivity of these programs is why a mandatory sunset is essential; it would prevent Congress from continuing to kick the can down the road.

The internal rules of Congress must also be overhauled. Streamlined deliberation should be encouraged by making committee structures more coherent, and rules should be changed to let committees become mini-legislatures, with fewer procedural roadblocks, so that legislators can focus on keeping existing programs up-to-date.

Fixing broken government is already a central theme of this presidential campaign. It is what voters want and what our nation needs. A president who ran on a platform of clearing out obsolete law would have a mandate hard for Congress to ignore.
 

Philip K. Howard, a New York-based lawyer, civic leader and writer, is the founder of the advocacy group Common Good and the author, most recently, of The Rule of Nobody.