Sunday, December 20, 2009

Health Care Reform

With proposed Senate passage on December 24, 09; legislative process for Health Care Reform (HCR) is in the final inning. After that it will be Conference and then the bill will be on President's table to sign into the law of the land.

There have been many types of reporting about this year long saga - fiscal conservatives fighting for tight cost controls (Fred Hiatt of WaPo, Megan McArdlee of The Atlantic ); wonkish coverage by bloggers like Ezra Klein of WaPo, Chait of TNR and Karen Tumulty of Time; liberal coverage by NYT; Netroot Progressive / Lefty coverage by Daily Kos and Huffington Post and finally of course the GOP Media (Fox, Rush, NRO, etc.). Each of these media outlets and interest groups are finally passing their verdict on the final passage of this bill.

Left folks like Daily Kos and Huffington Post are withdrawing their support to the bill which they extended so far. In an anger directed towards to President Obama; these guys are opposing the bill (exemplified by the celebrated Op-Ed of Howard Dean) because it does not contain Public Option (PO). CBO has confirmed that PO would not have solved American Health Care issues given the limited play accorded to it - insurance for folks who are not covered at work. President Obama was right to be wary of this route from start and it is absolutely foolish and wrong to oppose this bill for the lack of PO. Further, it is wrong for Daily Kos os to take the high ground of claiming that Democrats who supported Iraq War are supporting this bill. That is BS. First of all, there is no logical reasoning to equate politics of Bush Iraq War with a domestic issue like HCR. Next, I opposed Bush's Iraq War from the start and for sure do not oppose HCR for the reasons Daily Kos is opposing, lack of PO. So that line of argument is yet another 'crap' coming out of Lefty organizations.

Another serious line of attack from Left is as espoused by Greenwald and Matt Taibbi types - Obama and Congressional Democrats are sold out to protecting interests of Corporate America. When Howard Dean argues that the proposed HCR is sell out to Insurance companies, it is a variation of this type of attack. This line of argument is bit sophisticated than the standard Lefty argument of 'lack of PO'. To be sure Daily Kos continues to criticize that the bill is way to easy on Insurance companies as well. In general this criticism is more valid regarding 'pro Banker' policy stance of this Administration and Congress. White House and Congress have been far more lenient towards Corporate Interests of Wall Street Bankers than players in Health Care Industry. Deals with Big Pharma companies (which also prohibit cheaper drug imports) and big hospitals (many of the strict cost control measures are not applicable to these big hospitals); do reflect the proclivity of this Administration in being soft with Corporate America. But without those buy-ins from Big Pharma and Hospitals, there would not have been backing of those industries to the HCR so far. Otherwise with multi-million dollar lobbying efforts and advertisements; HCR would have been derailed long back.

As President Obama points out, Howard Dean is wrong in saying that the bill is soft on Insurance companies. Substantial constraints on their existing industrial practices are proposed in these bills while the market is expanded by pulling in 30 million new patients. Further, in any case, as Ezra Klein has effectively argued, the real problem with American Health System is underlying runway costs and Insurance companies are just one bit upper layer on those provider costs. The fundamental mistakes done by Howard Deans and Progressives on Left are:
- to brow beat Insurance companies as if they are the ones who set the price (which is completely dictated by providers on which Insurance also have much less control in many cases to negotiate reasonable rates) and
- then to erroneously argue that PO is the answer to control the health care costs (which it cannot be due the huge % of population covered by employer provided care who will be outside of PO).

Progressives also forget that the mandate of 2008 election was 'for improving Health Care System' and was not for 'bringing Single Player System'; so none of these options like Medicare buy-in or so are relevant.

But it is not only Progressives or Lefty who are screwed up here. There has never been a consistent and logical argument in opposing HCR by Conservatives or GOP. They all have reduced to the pathetic levels of Sarah Palin and hence not worth to even bother about their criticism. Of course, late in the inning GOP does not have to undertake any political opposition when Howard Dean, Daily Kos, Huffington Post and MoveOn Org are doing their job so effectively and with aplomb! The Progressive Netroots are really running the true Opposition to Obama.

This leaves the group of Centrist or Fiscal Hawks or at times Budget Vigilantes (like our Bond Vigilantes in financial market). Fred Hiatt of WaPo and Megan McArdlee at The Atlantic have been vociferously opposing this bill for its lot weaker cost control provisions. But today WaPo Editorial comes with conditional, guarded endorsement of the bill. Essentially the editorial argues that the bill at least tries to put some cost controls where there are none today and it is worthwhile to grant this opportunity to the young Administration of President Obama. That is right and a worthwhile endeavor. However, one fact of the proposed HCR is certain - costs to government are increasing and it is an entitlement expansion. No matter what such fiscal expansion is going to happen. The bill is paying that expansion by proposed cost control measures and argument is those are weaker.

It is the question of what is worse - Fed budget busting by the existing runway costs because there are no effective cost controls at present (the so called status quo option) or increased risk to Fed budget by effective but weaker cost controls while cost / entitlement expansion is for sure (proposed HCR).

Megan McArdlee says the second choice is the worse and hence her opposition to the bill. I see lot of merit in that argument because as my earlier blog post shows, there are still many more loop holes in the proposed HCR from cost containment point of view. No matter how much scolding OMB chief Peter Orzsag does on Media (his famous rip of WSJ Editorial comes to mind), this bill of 2000 pages is full of 'land mines' where proposed cost control measures are going to blow. I am dumb, but even I slow learner like me can see how Democrats in Congress have stacked up the politics of this bill:
- first Senate Finance Committee proposes what is the high water mark of fiscal prudence,
- then full Senate dilutes that further which is what Sen. Reid has done (I believe single handedly Sen. Reid has done more damage, chaos and mess of this whole process than anyone else) and
- then finally when the bill is merged with House bill in Conference; it gets more near to the rank fiscal insanity of House Members.
No wonder with process like that McArdlees of the world see much less merit in supporting this bill.

Given all these different point of view, the persuasion of Ezra Klein and guarded endorsement of WaPo Editorial, the Editorial which has been quite vigilant so far; I feel more towards Left of Megan but not up to the point of backing this bill full heartedly . This is for the reason that every government guaranteed entitlement commitment is always fulfilled (that is what electoral democracies are for) but cost control measures are always 'iffy'.

May be as WaPo Editorial points, with every passing day as our budget crisis starts tightening up around America's financial neck; the political pressure to attack costs will keep on increasing and may be that will make the Congress eventually address underlying problems of HCR . However, one wonders between now and then whether the price will be as steep as like what America is paying now for the mistakes of Bush starting the Iraq war (so many lives and Trillions of Dollars?). I hope it is not.

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