A Middle Road for Health Care Reform

Medicare is on track to be broke by 2016. To skirt this progress, the President wants to institute vast reforms with front loaded costs in the billions or trillions (depending who you talk to), and to commit the government even deeper to entitlements to conjure universal health care. Republicans offer nothing but an ideological call for a free market health care system… We’re in trouble. But former HHS Secretary Mike Leavitt offers a middle road that makes a lot of sense.

Leavitt recently spoke on the Salt Lake based radio show, Radio West, about our health care system. Following are quotations from his interview.

To begin with, Leavitt sees our country heading toward economic disaster that will affect generations if the health care system isn’t dealt with effectively and soon. But he doesn’t believe either party is offering a viable solution.

If fact, he said republicans proposing a free market solution don’t understand the complexities of the situation.

I think my own party has been deficient in it’s capacity to talk about this issue. We have defaulted to an ideology as a response as opposed to a plan. And I believe my party has an obligation to step up and speak in a far more specific way than they have.

The democrats have a plan, but not a good one. Leavitt rejects the idea that a government run system is the answer because it relies on two wide spread myths. First: That the bureaucracy can effectively reform and manage the health care system. Second: That ramped up spending constitutes reform.

The WHO reports that in 2005 the U.S. spent 15.2 percent of it’s GDP on health care. The closest “developed” nation to that was Switzerland with 11.4 percent. The WHO ranked the U.S. 24th in life expectancy in 1999. According to NPR’s 2005 comparison of health care coverage, 18 percent of Americans under 65 are uninsured. In the other six developed nations listed, nearly all were covered. Clearly money doesn’t fix everything.

Obama’s plan would pour money into developments like computerizing medical records. In the long run, this might save money. But remember, 2016 is when Medicare goes bust. Other systems around the world teach us we can do things to create a much more efficient and cost effective system without these upfront costs. There are a plethora of blaring inefficiencies in our system that, if we fixed, would save money right off the bat. For example, ending Medicare coverage for tests that aren’t proven to give any benefit whatsoever. (See first comment by Maggie Mahar following the article)

In Leavitt’s view, government has a strong role in health care reform -- not managing it, but creating a framework for an organized market system. He poses the question whether health care reform should use food or national defense as a model.

We’ve made a decision that we’re not willing to let people go hungry. But does government make all the decisions about food? No… They set up guidelines to make certain it’s safe. We even have a system that if people can’t afford it we’ll subsidize. It’s called food stamps. And if you can’t go to the store and get your own, we’ll take Meals on Wheels to you. …

On the other hand there’s defense. You wouldn’t want to have more than one. That would be a bad thing. But the government should decide how it’s deployed, should decide how much we need, should decide where it goes.

As you might guess, Leavitt said he sees health care as being more like food -- a system overseen by the government to meet the needs of our citizens, but not planned by it. The government’s role here would be to regulate the insurance market to see that it is affordable, ensure people are made aware of the costs of health care as well as the quality of services, and to iron out inequities including subsidizing people who can’t pay for needed health care services.

Leavitt sees a slow moving congress and an inefficient bureaucracy as incapable, by themselves, of instituting the kind of reforms we need in health care.

Influence from powerful lobbyists is one reason for this. True reform would require shaking up the status quo and rebuilding a fair and organized system. As long as the decision is in legislators’ hands lobbyists will hold undue influence.

One person’s waste is another man’s living. And it’s very difficult to begin, in a congressional atmosphere, creating a conundrum and then resolving it in a zero sum game. They just can’t do it. So why are market forces important here? Because market forces, when they’re organized, are dispassionate enough to find their way to the highest quality at the lowest cost. Legislative bodies can’t do that.

Leavitt said some aspects to health care reform need innovative solutions. So he doesn’t believe the national government is best suited for the role as chief reformer. He would rather see the states take the lead.

We could solve the problem of access to health insurance within four years. … If the national government would say, ‘there is a compelling national interest for everyone in this country to have access to an affordable insurance policy.’ And if congress were then to fix the tax laws, do something about fixing the way hospitals are financed and then say to the states, ‘your job is to figure out how to provide a market place that’s organized and we’ll help you pay for parts of the subsidies.’ The states would figure this out. I know they would, because I’ve worked with as many as 30 of them who’ve been trying, but they’ve been blocked by policies at the national level.

The Federal government doesn’t need to micromanage health care reform or borrow another trillion dollars from our grandkids. Of course there will be upfront costs associated with getting people health care who haven’t been to a doctor in years. That would be a huge problem for a government funded program like Medicare, but it's an investment opportunity in a well organized market.

An organized market will quickly guide health care to a more sustainable path by cutting out waste. The government will need to do a better job regulating to smooth out inequality and catch those who would cut corners and compromise safety, but this is the government’s role in most sectors of the economy. This kind of reform will fix our health care system, not just shift who pays for it.

Congressional Dems Showing Shell Shock over Iraq

Friday, President Obama announced a timetable to withdraw troops from Iraq. Republicans, including John McCain, applauded the action. Democrats were bummed. Even as they get the deadline for which they've been chanting for six years, they can't control the knee-jerk reaction to oppose anything but a Vietnam style airlift out of Iraq.

The President acknowledged this deadline of August 31, 2010 is two months longer than the 16 months he promised during his campaign. Apparently, those two months are quite offensive to Congressional democrats. I think Obama did a pretty decent job of juggling his firm 16-month deadline and his promise to withdraw with advice of the Joint Chiefs of Staff. Thank goodness the situation in Iraq has improved sufficiently to allow that balance, or at least close enough.

Harry Reid and Nancy Pelosi also protested Obama's suggestion that he might leave as many as 50,000 troops until the end of 2011. From the moment Hussein's regime was overthrown, democrats adopted the popular stance to oppose anything but an imminent timetable for our last soldier to leave Iraq.

I guess It's fair. Bush was pretty slippery about giving clear expectations for how long it would take to rebuild a nation almost from scratch. So the dems felt justified it playing a political game of "Are we there yet?" that they can't stop even now.

We educated Americans should have taken our cues from history to anticipate how long it would take to stabilize Iraq. We still have troops in Japan and Germany – now it's because there's a strategic advantage for doing so, but there was never any illusion before this war that rebuilding a nation should be a quick and easy job, as we have painfully relearned. History going back to the British empire also tells us we would have achieved our current peaceful state in Iraq much faster if we had maintained surge levels of troops from the beginning.

I assume and pray that the number of troops Obama leaves to advise and provide security will have something to do with the needs in Iraq, the lessons of history, and the advice of the Joint Chiefs. Maybe Nancy Pelosi should look into it. I hope things work out well enough for President Obama to keep that promise to have all troops out in 2011. We'll see.

The Only Thing to Fear: Money Vanishing into Thin Air?

Wednesday, Diane Rehm cited a statistic that the world has lost 40% of it's wealth in this financial crisis. What does that mean? In physics, the law of conservation of energy states that energy cannot be created or destroyed. Isn't there a law of conservation of wealth? I don't buy the idea that the world's wealth just spontaneously combusted. The world's confidence in the markets is all that has disappeared?

Miscalculations in finances and physics can cause great unpleasantness. These are the roots of our current financial problems. But wealth doesn't just disappear. During the housing bubble, a lot of people paid too much for houses. But that means someone else received too much. So where is the money now? Vaporized? No, it's under people's mattresses and sealed in bank vaults. The money is still here; it just isn't moving. If movement of money is what defines wealth, then we just wake up tomorrow and start loaning, rehiring and spending. There's that 40 percent back. No body burned the money supply. Our means of production are still intact. We still remember how to build houses, don't we? The wealth didn't disintegrate. Our confidence in the markets did.

So we've decided the U.S. economy is too big to fail. I can accept that. The powers that be have determined the best way to prevent that is to take the housing bubble, the credit crunch, the tanking auto industry and every other disaster we are experiencing and send them through the pipes to become one big National Debt Bubble (to expire when we all lose confidence in the phrase “full faith and credit of the United States”).

But we live to pay another day I guess.

What troubles me most is that this solution doesn't do anything about the confidence factor, and without that I don't see our great grandkids getting their money's worth. I don't believe there is a magical amount of money that will save the economy. A few months ago, I thought $100 billion was a lot of money. If Doctor Evil demanded that amount now we would all die laughing. We're well into the trillions with all these bailouts. If Secretary Paulson had asked Congress for $200 billion with conditions that financial institutions must use the money proactively or get flushed, and the architects of the bailout had convinced me it would be enough to stop the downward trends, I would have gone out and bought a house. So would you at these prices. Given, some Wall Street execs. would have had to weather a year of smaller bonuses, but they would have pulled through I'm sure.

President Obama's stimulus package is the same story. Americans would do a lot more with $819 billion in a confident mindset than they would in a “depression” mindset.

Bankers, employers and consumers only part with their money with expectations that more will come. If our leaders and media stop using claims of the world's wealth evaporating as hooks, I believe we could be well on our way to recovery by the end of the year. We need more than a comprehensive list of what the money will be used for. We need to know our leaders are confident what they are doing is going to work. Then it has a much better chance of actually working.

Here's my theory about what ended the Great Depression. It wasn't the New Deal or WWII. Roosevelt actually got those poor saps to believe the only thing to fear is fear itself. Then they ended the Depression.

Midnight Bush-Bashing

Bush's presidency is done, but some Democratic leaders aren't finished bashing him yet. Politico reports that this week House Majority Leader Steny H. Hoyer distributed a video showing how Bush failed America. House Judiciary Chairman John Conyers Jr. released a 486-page list of grievances about the Bush administration. I'm no fan of GWB, but this makes Kenneth Starr look like Ryan Seacrest.

These last minute jabs seem even lower than the usual Washington partisan fighting. There aren't many conservatives still waving GWB's banner. The guy is no longer a threat. So why attack him now?

If there is justice to be done to the Bush administration leadership, I'm all for that. But I find it hard to believe after all the administration has been accused of off the cuff in the last eight years, the democrats are just now getting their case together.

I felt many times that GWB overstepped his bounds as president, but the congressional leadership never seemed to be able to do anything about that while he was in office. It seems Democratic leaders are finally getting heroic now that he has no power. Conyers wants President-elect Obama to launch an investigation of whether the Bush administration broke any laws. Somehow I don't see President Obama making that a priority.

Kenneth Starr is remembered today by many democrats as a politically motivated vigilante for his investigations of Bill Clinton during his presidency. But Starr didn't follow Clinton after his eight years were up. There wasn't any point.

Nothing of what the democrats are now bringing forward appears to contain pointed evidence of any crime, just more of the same politicking and negative campaigning.

In my opinion, the democrats saw how well the anti-Bush rhetoric worked in 2008, so they want to try to stretch it to 2012.