Does the US Want Obama Health-Care Reform?

For Canadians the information has been somewhat distorted; I hear Canadians talking as though there is no safety net in the United States; that is not really true; they have Medicaid and Medicare.

Medicaid is available to certain low-income individuals and families  (see here)

Medicare is for people over 65 and some disabled people (see here)

Both programs are administered by the US Department of Health and Human Services (HHS), both of which are generous programs and certainly not inferior to our general services here, possibly better.

Here's what the HHS says about itself:

The is the United States government's principal agency for protecting the health of all Americans and providing essential human services, especially for those who are least able to help themselves.

My understanding is that there are other safety nets, programs and clinics; stories that people get turned away from hospital and die in the streets are not true.

Canadians also seem to be under the misapprehension that the Republican Party, or GOP (Grand Old Party) as it is sometimes called, does not want reform, but the Obama Government does.

That is incorrect, both the GOP and the Democrats are in favour of reform; the GOP had a 4-point plan proposed by Senator McCain, whereas the Democrats have tried to implement a "universal" or "socialised" health-care system in the past.

President Clinton put forward a plan in 1993, however the Democratic Party itself  offered a number of competing plans of their own, and the plan was declared dead in 1994 by Democratic Senate Majority Leader George J. Mitchell, who is the current special envoy to the Middle East for the Obama administration.

But where do the American people stand in the issue? Here's the results from "Pollster.com".

We see that there is a clear margin of Americans who oppose the Obama plans over those who support it.

Oppose = 47.8%

Favour = 44.9%

A word about the approach used by Pollster.com .
 
They do not conduct their  own polls, but analyze the results from a number of other major pollsters to arrive at a mathematical representation of all the polls under consideration. It is like an average, but it is more mathematically rigorous than that, and uses techniques used in science and statistics to properly treat the data (such as linear regression, least-squares regression); Pollster.com explains their methodology here, and the full result can be found here here.

Both Parties Propose Reform

The Official GOP Plan can be read here, but it's more instructive to look at the commentary by Charles Krauthammer in the Washington Post from August of this year; his opening statement summarises the Obama plans:

In overhauling any segment of our economy, the 1986 tax reform should be the model. Yet today's ruling Democrats propose to fix our extremely high-quality (but inefficient and therefore expensive) health-care system with 1,000 pages of additional curlicued complexity -- employer mandates, individual mandates, insurance company mandates, allocation formulas, political payoffs and myriad other conjured regulations and interventions -- with the promise that this massive concoction will lower costs.

4-Point Reform favoured by Republicans (simplified)

1. Tort Reform
2. Real health-insurance reform
3. Health Insurance Across State Lines
4. Reduce fraud and waste in Medicare / Medicaid
   

1. Tort Reform: A significant portion of US health costs result from the huge awards by US Courts in malpractice suits. These awards result in much higher premiums than would otherwise be required, and forces doctors to practice overly defensive, and unnecessary, medicine to reduce the chances of litigation. Kruathammer calls it "an epidemic of defensive medicine that does no medical good, yet costs a fortune."

Tort reform has been proposed by the GOP for some time but it has been blocked by the Democrats because a significant part of their revenue comes from litigation lawyers; the Democrats will not embark on reform to avoid alienating their supporters.

Here's the extent of the problem:

An authoritative (study by the) Massachusetts Medical Society, found that five out of six doctors admitted they order tests, procedures and referrals -- amounting to about 25 percent of the total -- solely as protection from lawsuits.

Defensive medicine, estimates the libertarian/conservative Pacific Research Institute, wastes more than $200 billion a year. Just half that sum could provide a $5,000 health insurance grant -- $20,000 for a family of four -- to the uninsured poor (U.S. citizens ineligible for other government health assistance). 

This one area of reform alone could have a huge impact on US health-care, but the Democratic party blocks it to protect their support base.

2. Real health-insurance reform (see the whole discussion here):

Tax employer-provided health-care benefits and return the money to the employee with a government check to buy his own medical insurance, just as he buys his own car or home insurance.

There is no logical reason to get health insurance through your employer. This entire system is an accident of World War II wage and price controls. It's economically senseless. It makes people stay in jobs they hate, decreasing labor mobility and therefore overall productivity. And it needlessly increases the anxiety of losing your job by raising the additional specter of going bankrupt through illness.

So why doesn't the Obama administration reform it?

Repealing the exemption has one fatal flaw, however. It was advocated by candidate John McCain. Obama so demagogued it last year that he cannot bring it up now without being accused of the most extreme hypocrisy and without being mercilessly attacked with his own 2008 ads.

3. Health Insurance Across State Lines: the current laws prohibit competition across states lines. This adds costs by duplication, causes problems with portability, and greatly adds to costs by eliminating widespread competition ensuring that rates remain high. This approach has also has been previously blocked by the Democrats.

4. Reduce fraud and waste in Medicare / Medicaid: the Democrats have blocked reforms to address this also on previous occasions. But savings have been included as part of the CBO's (Congressional Budget Office) financial plan for Obama's reform. The question is why wait for a massive, complex new bill to reduce fraud and waste? Why not start action on reducing fraud and waste the day after inauguration?

Obama's Plan
The core of Obama's plan is to ultimately replace the the US Medical Insurance industry with a single-payer, government run and controlled plan.

Chief objections to this are:

1. Governments are inefficient and wasteful, (example Medicare and Medicaid) therefore this will result in far higher costs than from private companies.
2. Government will be taking over control of one sixth of the US economy; Government control of business is opposed by many Americans on Constitutional grounds
3. Many people think that their health is a private matter between them and their doctor, therefore the Government should play no part in it. People see this as another intrusion by the Government into their private lives. 
   
4. It will be massively expensive (estimates of 1 -2 Trillion dollars, but nobody really knows), and will not reduce costs, which was Obama's original reasons for reform . The actual costs are likely to increase far more than estimated, probably by a factor of 2 or 3 or more (example Maine)
5. Emphasis should be on other more urgent issues, jobs, the war in Afghanistan, Iran and the burgeoning US deficit
6. The bill itself is not being developed along bi-partisan lines, and this is causing some concerns not only to Republicans, but also to Democrats. Members of both houses feel that the way to produce pass such major legislation is along bi-partisan lines. That is, both Republicans and Democrats work together to forge a bill.
7. Coupled with the lack of bi-partisan input, is the concern that the bill is being rushed through, and that such a large piece of legislation, with such major impact to the US economy and the US people, should be given proper time for consideration, debate, development and finally passage into law. Without proper time this presents an unreasonable risk without a corresponding benefit to the American people. The reason for the haste is political.
8. A very real concern is the complexity of the bill, which exists in 5 different versions and some as long as 1,500 pages. Can the bill administered effectively once passed into law? Or will the complexity lead tp  problems with administering this bill

Finally, Obama promised for open government - that was a very big point in his campaign. Obama said he would introduce a new way of government. In reality this bill and associated negotiations, have been done behind closed doors.

It was requested that the bill would be made available on-line for an adequate period of time to review. This request has been denied; the reason given is that it would be too complicated and too time consuming to do it. This is laughable.

Will it pass? Congressional elections are coming next year and many Democratic representatives fear for their seats and are unwilling to back an unpopular bill, so it is going to be interesting to see how this develops. My own hope is that the final bill is not the socialised form of medical care, but contains the reforms necessary to increase efficiency and lower overall costs, all of which will be good for Canada.


Gurth Whitaker
Calgary AB