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September 18, 2007
ClintonCare 2.0: The Cons
All in all, I'm very positive on the plan. But there's a substantial distance between Clinton's proposal and my perfect plan. If I wore the crown, I wouldn't allow the fragmentation it leaves in place: Medicare, Medicaid, and S-CHIP would be dissolved. Private and public insurance would be offered from within a single, coherent structure -- like FEHBP. The Clinton plan, in contrast, goes to great lengths to preserve every existent program and insurance option so as to minimize disruption for those currently pleased by their coverage choices.
This is, sadly, the smarter way to go. One of the lessons Clinton clearly took from 1994 is that you don't touch the care that millions of Americans already rely on and trust -- not in a country where 80-some percent profess satisfaction with their personal coverage. So though I'd prefer something more integrated, I wouldn't advise any politician to cater to my instincts. That's why I'm positive on Clinton's plan: I think this is damn close to the best policy you can get while retaining something politically sellable.
But since I'm not a politician, the reason I'd fight for such system-wide integration is simple: Costs. It's very hard to impose any sort of coherent cost control -- either on the supply or the demand side -- when you're simultaneously trying to change the behavior of Medicare, Aetna, Blue Cross, the VA, Metlife, the VA, the Indian Health Service, etc, etc. Put it in one place, and you can try out a lot of cost control mechanisms, from smart cost-sharing (wherein more cost-effective treatments have no copay, while less proven therapies require a substantial out-of-pocket contribution) to HMO-style care reviews to government bargaining. You can do much more to popularize better treatments, best practices, preventive care, and healthy living incentives.
Indeed, a plan that detonates and then reintegrates the healthcare system is better in every way save the most important one: You can't pass the damn thing. That is one of the lessons of 1994, in which the Clintons' sought to reconstruct the entire health care system and got mauled for it. For a really good explanation of the political difficulties inherent in healthcare reform, read this post of Mark Schmitt's. I don't agree with all of it, but I think everyone interested in the debate should be required to commit it to heart.
September 18, 2007 | Permalink
Comments
There is another reason to go Clinton's way; it is quicker to implement. Changing existing structures isn't just politically difficult, it is physically difficult as well.
Your long term goal is correct and we can and should go there, but we need to take each step. Don't confuse long term goals with the steps to get there.
The next president can implement a great government efficiency program that goes in a cleans all this up to save the taxpayer money. Heck, it may even be a Republican, if they ever get around to electing reasonable people who remember what physical conservative used to mean.
Posted by: Mark | Sep 18, 2007 2:23:01 PM
I have some antecedent nitpicking ... towards the end of the post, it's unclear whether than 1993 or 2007 plan is "it" or "the damn thing". I eventually figured out that your point was that the Klein Pony Plan and/or the 1993 plans are "better", except that they would have no hope of passing. But it's not obvious on first read.
The one problem I have with the "the new plan is more politically feasible" analysis is that the 1993 plan did have the support of many big businesses and large insurers, and at least initially the Chamber of Commerce (!), whereas it's not clear to me that, say, GM gets anything out of the 2007 deal (in 1993 they could shed lots of retiree costs and remove health insurance from the bargaining table). The Business Roundtable might support it out of the kindness of their heart, but it seems like a triple bank shot to get the executives of unionized grocery stores to lobby for the bill to put upward pressure on Wal-Marts labor costs.
Posted by: Nicholas Beaudrot | Sep 18, 2007 2:25:20 PM
Ezra, what do you make of the "individual mandate;" i.e., the provision that all citizens will be required by law to have heath insurance? This seems like a fatal flaw to me- voters from both sides of the aisle can find something not to like about that.
Posted by: nikkos | Sep 18, 2007 2:28:31 PM
I agree completely on dissolving Medicaid, SCHIP and Medicare. That's one thing I love about Wyden's plan. But you probably do have to take this interceding step before you can get to the promised land of the poor truly getting the same care as everybody else.
Posted by: spike | Sep 18, 2007 2:29:42 PM
Nikkos: I like individual mandates, and think they're a promising policy tool.
Posted by: Ezra | Sep 18, 2007 2:37:49 PM
Ezra-
Thanks for the reply. Can you elaborate on how and why you think they are a promising tool,as well as the logic behind this thinking?
For example, I can see the logic in requiring drivers to have auto insurance: when you are involved in an accident that you caused, you are responsible for the damages to the other drivers' vehicle.
Is there an analogous argument for health care? Perhaps. I suppose one could argue that one person letting their state of health deteriorate ultimately will be paid for by others, so therefore the law must step in and tell someone to carry health insurance, but that feels like a bit of a stretch to me.
I support universal health care, but this provision makes me very, very uncomfortable. I suppose my ultimate question is: would Hillary's plan differ substantially if this provision were excised? If not, then why not do away with it? What does it add to the stew?
From one standpoint, it's clear now why she has spent so much time talking about "choices"- with this plan you have no choice if you are legally mandated to enroll.
In addition, from a practical, political perspective, her opponents on the right will have a field day with this mandate, not to mention that it makes it even harder for those of us that are already sympathetic to help carry forth the message to those that are not.
Thanks again!
Posted by: nikkos | Sep 18, 2007 2:45:59 PM
Ezra,
I appreciate the post-- this was more what I was expecting than the "horse race" coverage.
That said, this does cover a crucial topic, IMO-- how best to innovate with respect to cost control. Its fundamentally a driver of my opposition to single-payer, so would be very curious in hearing the alternative view here.
Put it in one place, and you can try out a lot of cost control mechanisms, from smart cost-sharing (wherein more cost-effective treatments have no copay, while less proven therapies require a substantial out-of-pocket contribution) to HMO-style care reviews to government bargaining.
I think putting it in one place prevents you from trying out different cost control mechanisms. You can't be changing the process of a National Health Plan every year or every three years for that matter. So whether its increased cost-sharing on certain procedures, differential co-pays based on quality of provider/facilities, utilization review, capitation for multi-physician groups, putting restrictions on access to certain procedures, etc.-- all of these have merit. You can't be swapping these features into and out the National Health Plan on a yearly basis to figure out what's best.
A multi-payer approach allows for a diversity of cost-control mechanisms to be developed, optimized and then utilized by other payers. Its a far better approach for determining what the most effective way to control costs than having one organization try on its own.
Posted by: wisewon | Sep 18, 2007 2:50:25 PM
The business/corp view of Hillary's plan is yet to unfold, but this WSJ article gives some possible hints on business/corp and healthcare lobby responses:
Democratic front-runner Hillary Clinton's health plan for covering the uninsured was crafted in hopes of turning old enemies into friends, starting with small business, which would be offered the carrot of a tax break rather than threatened with a stick.
Lobbyists for small businesses and insurance companies reacted somewhat positively to her new approach, which was unveiled yesterday at a campaign stop in Iowa.
Taking a page from Republicans, her plan would use the tax code to help people afford the premiums. Those forced to spend more than a certain percentage of their income on insurance would get a tax credit to help. It would be refundable and therefore valuable even to people who make too little to owe taxes.
"I intend to be the president who accomplishes that goal -- finally -- for our country." She promised to do so in a first term.
She tries to woo small businesses by offering a new tax credit to companies that offer health insurance to their workers. Under the previous Clinton plan, small businesses that failed to cover their workers would have been forced to pay fines. Mrs. Clinton didn't give full details for how the tax plan would work, but aides said that businesses with about 25 or fewer workers would qualify for the help, with the credit phased out as the businesses' work forces grow larger.
The Clinton plan also offers a new temporary tax credit to aid auto, steel and other manufacturing companies that spend a huge sum on retiree health costs.
Lobbyists for small-business owners were tentatively optimistic, though awaiting details. "One of the standout features of this is it specifically looks to help small business owners, and that's a good thing," said Michael Donohue, spokesman for the National Federation of Independent Businesses.
In a sign that the campaign was working hard to at least nullify opposition from the group, the NFIB was invited to participate in a briefing on the plan with Clinton aides. The outreach is just one in a series of steps Mrs. Clinton is taking toward trying to win over business. For months, she has been meeting with business leaders one-on-one and in small groups to explore health-care issues. Many have come away impressed, including Eric Schmidt, chief executive of Google Inc. "She was organized; she knew her stuff; she listened carefully; she responded to ideas," he said.
Reaction from insurance lobbyists was hardly confrontational. "The new Clinton plan includes important ideas to make coverage more affordable," said a statement from Karen Ignagni, president of the lobby group America's Health Insurance Plans. "Unfortunately, some of the divisive rhetoric seems reminiscent of 1993."
[emphasis added, above.]
Ezra has it right:
One of the lessons Clinton clearly took from 1994 is that you don't touch the care that millions of Americans already rely on and trust -- not in a country where 80-some percent profess satisfaction with their personal coverage.
That is one of the lessons of 1994, in which the Clintons' sought to reconstruct the entire health care system and got mauled for it.
People like choices, and Hillary's approach is based on giving stability to those who want that, choices for those who currently unhappy, subsidies and support for those individuals who don't currently participate, and lower burdens (or tax support) on businesses big and small.
I'd say she's made a big impact on the discussion, and is in reach of obtaining a rare consensus to move ahead on reform.
Posted by: JimPortlandOR | Sep 18, 2007 3:06:11 PM
I think that there are several "technical fixes" that could be passed, that would make sense in any plan that retains private insurers, and that wouldn't be that controversial.
1) An insurance clearinghouse. Make the health insurance system like the checking system--to participate, you have to submit claims/pay claims through a clearinghouse that works like the Fed. (Standard submission form, immediate payment--it makes doctor's interaction with the insurance companies cheaper.)
2) A standard list of treatments, by cost-effectiveness, that insurers can use and have no contest of covered/not covered so long as everything up to a certain level is covered, and only named coverage is available beyond that.
Posted by: SamChevre | Sep 18, 2007 3:28:36 PM
Ask yourself this: Under Hillary's (or Edward's or Obama's plan, for that matter) what happens to somebody who loses their job?
Posted by: Brautigan | Sep 18, 2007 3:33:02 PM
I think Clinton's plan may be a good first step. In the long run, I think we'd have a situation where there is a basic level of care provided by a government insurer or carefully regulated private inusrers. This would basically be provided by the government to everyone and paid for from the general tax fund. On top of that there would be optional private plans. One of the differences here is the level of involvement of private insurers. The question in the long run will be whether or not the Clinton plan has the effect of making further steps in the right direction or if the health care lobby remains to strong to permit this. We could end up with perfectly decent health care coverage but overly expensive coverage from private insurers. It would be like the defense industry. At least our military is the best, even if we pay too much for it.
Posted by: mpowell | Sep 18, 2007 3:34:15 PM
I suppose my ultimate question is: would Hillary's plan differ substantially if this provision (individual mandate) were excised? If not, then why not do away with it? What does it add to the stew?
Guaranteed issue and community rating don't work without mandatory participation. If there were no mandate, people would be able to just wait until they need insurance before they buy it. It's called adverse selection. Do you expect to wait until you are in a car accident, skiing accident or are diagnosed with cancer before you spend the money to buy health insurance? Or, do you expect to just show up at the ER without insurance or the ability to pay knowing the hospital has to treat you under EMTALA? One of the byproducts of universal coverage is that it eliminates uncompensated care and free riding.
Posted by: BC | Sep 18, 2007 3:44:48 PM
Apparently Democrats still haven't learned what I saw as the real political lesson of the 1993 Clinton debacle -- it was TOO DAMN COMPLICATED TO SELL!! It was very easy for opponents to portray that plan as a bureaucratic, expensive headache. Know why? Because that's just what it was... and the new Clintoncare proposal sounds even worse. The mandatory purchase alone is enough to kill it. Know anybody who likes dealing with auto insurance? Real change will only happen when the general public gets enthusiastic enough to scare the politicos into going along, and a simple concept like Medicare-for-all is much easier to explain and promote and harder to attack than the latest mess of pottage the Dems are trying to push.
The right-wing dominance of the past several decades is almost wholly a function of marketing. That's all they are about, really. If you want to win, you have to deal with that. The usual timid Democratic political calculations have a proven record of failure over decades. Incrementalism is just a recipe for more of the same.
Posted by: redkitty | Sep 18, 2007 3:58:07 PM
BC:
Those are all excellent points, few if any of which I had considered. Thanks for your thought-provoking reply. While I'm still uncomfortable with the legal mandate, at the very least I fell I now better understand the logic underpinning it.
Posted by: nikkos | Sep 18, 2007 3:58:28 PM
Clinton has said, and I haven't heard this refuted yet (so if I am wrong please say so) that she will not implement her plans until her second term.
My problem isn't whether her plan is or is not good or perfect, but how can you take it seriously given what she has said about when she will implement it? You seemm to be giving it credibility without reference to what else she has said. Shouldn't your 'cons' include the context of whether this is her real plan or merely one to seem credible.
Posted by: akaison | Sep 18, 2007 3:58:55 PM
I think Wisewon hits the nail on the head with his 2:50 PM post. Ezra is right in that, eventually, it will be great to get to a point where we know what the best way of spreading out the costs is, and we can implement the most efficient model for everyone. But people of good conscience honestly disagree over almost every aspect of what the 'ideal' plan is.
This kind of fragmented plan allows for innovations to be implemented on a small scale. Those which work the best will, eventually, bubble to the top, provided the system is built to allow them to do so. All while keeping the whole system under the superstructure of the government, which allows you to maintain the goals of true universal coverage and might allow you to start implementing some of the things we know work, like universal record-sharing.
Posted by: David S | Sep 18, 2007 3:59:43 PM
Akaison: She said that she would promise that every American would have insurance by the end of her second term -- which is to say, she's saying the transition willto the new system will be finished by then. That's not, according to her people, when she promises to pass legislation by -- they say she's committed to make it the top domestic priority from the moment she's sworn in.
Posted by: Ezra | Sep 18, 2007 4:07:24 PM
Ezra:
Thanks but that seems bogus. Mostly on the political level she is saying that any programs she creates will only have their effect after she leaves. I want to know which part are going to have effect under her watch? This will give me insight about where she is willing to place her political capital. You seem to accept without question that all of stated policy efforts are equal. I do not. I would have to know timetables and whether not terms will grandfather, etc. Someone else has said the devil is in the details, and here, I feel you are so focused on the wonkist that plan versus this that you aren't providing enough discussion to the process of passing the legislation. Why should the Congress be willing to pass a bill that basically offers no political danger to the President offering it? I know there are examples. My point is why aren't these details being asked.
Posted by: akaison | Sep 18, 2007 4:12:05 PM
By the way- what would be the healthcare reasons for waiting for her to not win one election, but two in passing the full legislation?
Posted by: akaison | Sep 18, 2007 4:14:32 PM
I spent four years on this issue as a deputy for policy in the NYS Dept of Health, where we developed a model plan (UNY-Care) with single payer features as a platform to advance Governor Cuomo's run for the nomination, if he ran. We also proposed a plan built around Medicare to take the issue to the national level. Well, we know how well all that turned out. I am convinced that we liberals need to stop bickering on this issue and get behind the two or three plans that have a decent chance for passage, if one of the three leading candidates winds up in the White House. Sooner or later we are going to have to have far more uniforming in plans than Edwards, Clinton, or Obama are proposing but we can't have that now. So let's admit that, and let skilled politicians like Mrs. Clinton and the others go to work trying to sell the nation and the U.S. Congress on getting us far closer to a national system than we are now. We can beat the insurance industry and others opponents but only if we stop trying to "wonk" this thing to death. The fate of progressive democracy rides on this issue more than any other.
Posted by: dan beauchamp | Sep 18, 2007 4:21:38 PM
I spent four years on this issue as a deputy for policy in the NYS Dept of Health, where we developed a model plan (UNY-Care) with single payer features as a platform to advance Governor Cuomo's run for the nomination, if he ran. We also proposed a plan built around Medicare to take the issue to the national level. Well, we know how well all that turned out. I am convinced that we liberals need to stop bickering on this issue and get behind the two or three plans that have a decent chance for passage, if one of the three leading candidates winds up in the White House. Sooner or later we are going to have to have far more uniformity in plans than Edwards, Clinton, or others are proposing but we can't have that now. So let's admit that, and let skilled politicians like Mrs. Clinton go to work trying to sell the nation and the U.S. Congress on getting us far closer to a national system than we are now. We can beat the insurance industry and others but only if we stop trying to "wonk" this thing to death.
Posted by: dan beauchamp | Sep 18, 2007 4:26:26 PM
Ask yourself this: Under Hillary's (or Edward's or Obama's plan, for that matter) what happens to somebody who loses their job?
From what I understand in Hillary's plan insurance companies can't kick you off if you lose your job.
Posted by: Phil | Sep 18, 2007 4:51:51 PM
By the way- what would be the healthcare reasons for waiting for her to not win one election, but two in passing the full legislation?
She said health care reform would be her top domestic priority
Posted by: Phil | Sep 18, 2007 5:00:25 PM
top priority is defined by what you are willing to spend political capital on while you are still around in DC. Not what you say yo are willing to spend it on. I still want to know why it will take 8 years to fully implement her plans after she leaves DC.
Posted by: akaison | Sep 18, 2007 5:13:58 PM
by the way- many you don't strike me as that naive as to not know this so I m curious why you are willing to accept such an argument. I was hoping for some policy reason that would give her the benefit of the doubt. not merely- 'trust her because she says its her top priority.'
Posted by: akaison | Sep 18, 2007 5:15:14 PM
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