Dienstag, Oktober 20, 2009

America’s Healthy Future Act of 2009...and 1502 Pages

That is the official title of the Senate Bill that to date is numberless.

It starts off with a falsehood:

Mr. BAUCUS, from the Committee on Finance, reported the following original bill; which was read twice and placed on the calendar.

This is the first falsehood: no one has read the bill. Yes, I know that this is a formalistic language that pervades such works, but it does not mean that anyone has actually read the bill.

The AHFA (the acronym I'm going to use here) starts off thus:

To provide affordable, quality health care for all Americans and reduce the growth in health care spending, and for other purposes.

Fair enough: the problem is, of course, in how they want to do this. And there is always a problem with "other purposes"...

My first question (and it must be the first question of anyone seriously looking at the problem): is there tort reform?

Surprisingly, there is mention of malpractice. Under Subtitle H, Sec 3701, the Senate Bill recognizes that this is:

an opportunity to address issues related to medical malpractice and medical liability insurance

Not so much tort reform as a directive for the States to deal with this:

States should be encouraged to develop and test alternatives to the existing civil litigation system as a way of improving patient safety, reducing medical errors, encouraging the efficient resolution of disputes, increasing the availability of prompt and fair resolution of disputes, and improving access to liability insurance, while preserving an individual's right to seek redress in court; and Congress should consider establishing a State demonstration program to evaluate alternatives to the existing civil litigation system with respect to the resolution of medical malpractice claims.

Pay attention to the verbs: should...reduce...encourage...increasing...improving...preserving...should...evaluate

Yep, that's all of them.

No where is this binding: the emphasis is nowhere on costs, but rather on safety, errors, resolution, access and preservation of the right to sue. The terms that would otherwise be used are shall...will...must...require. Unless those words are used, it's optional. A nice thing, but not a requirement.

In other words, the States should figure this problem out, but let's not change the right to seek redress in court. If anything, it remains the responsibility of doctors and health care providers not to make mistakes: hence there are no incentives to reduce overtesting (patient safety and reduction of medical errors), but rather an additional layer of bureaucracy (dispute resolution councils) while at the same time not addressing the problem of punishing liability insurance premiums brought about by high malpractice claims awarded by juries and the work of trial lawyers (and of course no mention of tort reform to remove the profit motive from lawyers: after all, the aim of these bills is to remove the profit motive in the insurance industry, isn't it?).

Before going forward on this, the very beginning of the Bill states what the real goal is, there for any and all to read:

The Social Security Act (42 U.S.C. 301 et seq.) is amended by adding at the end the following:



It is the purpose of this title to ensure that all Americans have access to affordable and essential health benefits coverage—

(1) by requiring that all new health benefits plans offered to individuals and employees in the individual and small group markets be qualified health benefits plans that meet the insurance rating reforms and essential health benefits coverage requirements established under parts A and C;

(2) by establishing State exchanges under part B that provide individuals and employees in the individual and small group markets greater access to qualified health benefits plans and to information concerning these health plans;

(3) by making health benefits coverage more affordable by establishing premium credits and cost sharing subsidies under part C for individuals enrolling in a health benefits plan through an exchange;


(4) by establishing the CO-OP program under part D to encourage the establishment of nonprofit health care cooperatives.

Interestingly, this is not a separate set of laws, but will be attached to the Third Rail of American politics, Social Security. Mess with Social Security and you will get fried (for the non-English speakers: the "third rail" in subway systems is the rail carrying the current: climb down to the tracks and touch it: You Will Die).

First, right off the bat: all new health benefit plans are to be "qualified" plans.

In other words, the government will decide what health insurance plans you may buy and you can no longer choose what you want: you may only buy government-approved (that is, after all, what "qualified" means).

Bye-bye market: given the intention to ensure that everyone is covered, the government will determine what plans you may buy. They control the supply: with government control of supply, the market ceases to function efficiently. Period.

And don't think this is my silly interpretation:

For purposes of this title, a health benefits plan which is offered in the individual or small group market shall be a qualified health benefits plan with respect to a State if—
(1) the plan has in effect a certification (which may include a seal or other indication of approval) issued or recognized by the State that such plan meets the applicable requirements of—
(A) this part (relating to requirements for insurance market reforms); and
(B) part C (relating to requirements to make health insurance affordable); and
(2) the offeror of the plan—
(A) is licensed by the State (and in good standing with the State) to offer a health benefits plan in the State; and
(B) complies with such other requirements as the Secretary or the State may establish pursuant to this title for qualified health
benefits plans.

Hence: the Senate Bill means that you may only choose health insurance based on what the government decides is good for you.

Nothing more, nothing less.

Next: to remove the profit motive for health care.

If the government establishes a co-op program, you can be sure that this is, at the end of the day, the desired result: further, given the fact that the government decides what health plans you can purchase, you can be sure that the plans will be so structured that it will drive for-profit companies out of business.

Now, there is a cute twist: the word "Co-op" is actually an acronym:

Consumer Operated and Oriented Plan (CO-OP)

This turns the cooperative idea around: rather than emphasizing the idea of cooperative efforts, it changes the meaning of the word and makes it consumer operated and oriented: however, it is anything but either.

It is the purpose of the COOP program to foster the creation of qualified nonprofit health insurance issuers to offer qualified health benefits plans in the individual and small group markets in the States in which the issuers are licensed to offer such plans.

In other words, the profit motive is to be removed from the industry.

That is not what cooperatives do: classic cooperatives, such as housing cooperatives and dairy cooperatives, bundle capital and purchasing power to reduce costs. Dairy cooperatives are profit-oriented industries that simply pool capital and process to reduce the individual costs for dairy farmers, as well as helping dairy farmers present a unified sellers' front that helps them keep prices up in order to make money; profits are distributed amongst the farmers. Housing cooperatives exist to control access to who lives in such a building, as well as to make it impossible for speculators to drive housing costs up. While perhaps not explicitly profit-oriented, there is the goal of maintaining quality of life without falling prey to speculators who want to sell that quality of life to those who aren't in the cooperative. This is an post-materialist profit motive.

But here, the word co-op means non-profit, nothing more, nothing less.

In Section 2251 of the Senate Bill, the government will subsidize those deemed qualified to set up a coop and will ensure that there is at least one coop in each and every state in order ...

In order to what, really?

Simple: remove the profit motive from the industry as a whole. This is the only real reason, this is the real threat to the livelihood of everyone working in the system who does not want to work for a non-profit (with attending low wages for all but the managers of the non-profit).


Because only the profit motive ensures that scarce resources are used to maximum economic efficiency.

Without it, there will be politically motivated waste and fraud: if anything, this guarantees that the market for health care will no longer behave as a market, but rather will be distorted in order that the market behaves in a politically mandated way.

We've already seen what happens when the government subsidizes activity in order to change markets: this is what happened with the sub-primes.

Now the government, in its oh so infinite wisdom, wants to do the same to the Health Care industry.

Have fun with that one. Reading the rest of the bill is merely an exercise for the masochistic: it just tells you how you are going to be screwed.

You only have to read the first few pages to realize: you are going to be screwed.

Welcome to the Brave New World of politically mandated health coverage and availability. Doctors and care providers remain vulnerable to malpractice suits fueled by the profit motive, while they themselves will be denied that exact motive in providing their services.

A perfect trifecta. However, only for government bureaucrats, trial lawyers and managers of co-op programs. Everyone else?

You're screwed.

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