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Tag: funding health care reform

Krugman slams the media for health care coverage

Paul Krugman has been tough on Barack Obama at times, but he’s behind him on health care. Today he mocks the media for focusing on everything but the actual policy issues.

The talking heads on cable TV panned President Obama’s Wednesday press conference. You see, he didn’t offer a lot of folksy anecdotes.

Shame on them. The health care system is in crisis. The fate of America’s middle class hangs in the balance. And there on our TVs was a president with an impressive command of the issues, who truly understands the stakes.

Mr. Obama was especially good when he talked about controlling medical costs. And there’s a crucial lesson there — namely, that when it comes to reforming health care, compassion and cost-effectiveness go hand in hand.

Of course, the policy issues are too boring for our brain-dead media when compared to all the drama surrounding the process.

Krugman also focused on one of the most important policy developments over the past several days.

I don’t know how many people understand the significance of Mr. Obama’s proposal to give MedPAC, the expert advisory board to Medicare, real power. But it’s a major step toward reducing the useless spending — the proliferation of procedures with no medical benefits — that bloats American health care costs.

And both the Obama administration and Congressional Democrats have also been emphasizing the importance of “comparative effectiveness research” — seeing which medical procedures actually work.

So the Obama administration’s commitment to health care for all goes along with an unprecedented willingness to get serious about spending health care dollars wisely. And that’s part of a broader pattern.

Many health care experts believe that one main reason we spend far more on health than any other advanced nation, without better health outcomes, is the fee-for-service system in which hospitals and doctors are paid for procedures, not results. As the president said Wednesday, this creates an incentive for health providers to do more tests, more operations, and so on, whether or not these procedures actually help patients.

MedPAC was originally created by Republicans to look for ways to cut costs in Medicare and Medicaid, so you would think they would be openly in favor of this development of giving this panel real power, but most Republicans are too busy trying to kill the reform effort.

Going after the insurance companies

Anyone who wondering why health care premiums are exploding just needs to take a look at the insurance industry.

Schumer pointed to the profits of the 10 largest insurance companies — which shot up 428 percent between 2000 and 2007, from $2.4 billion to $12.9 billion — as a reason health care reform is needed.

The insurance industry has not been playing ball on reform, and now Senate Democrats are getting fed up.

With other industry groups pledging savings to help pay the cost of health care reform, Senate Finance Committee Democrats slammed insurers for holding out — and threatened to impose new fees on the industry that could cost it as much as $100 billion.

The Finance Committee members are currently hunting for hundreds of billions of dollars to help finance reform, and with the hospital and pharmaceutical industries having pledged $235 billion, the senators said it was time that the insurers paid their share.

“We need the insurance companies to step up to the plate and be part of the solution. Most of the negotiations so far, the insurance industry has been at the table but you can only sit there at the table with your arms crossed for so long,” said Sen. Chuck Schumer (D-NY).

Schumer and Sens. John Rockefeller (D-WV), Debbie Stabenow (D-MI) and Robert Menendez (D-NJ) pounded the insurers, who they portrayed as unwilling to help pay for reform even while they have enjoyed exploding profits.

“The insurance companies are the people who are just rapaciously, greedily and unstoppably making money by underpaying the patient, by underpaying the provider and by overpaying, therefore, themselves,” Rockefeller said.

We’re seeing a new urgency from the White House and other Democrats on the health care reform issue, and it’s refreshing to see them ratchet up the pressure on the insurance industry.

House Democrats release health care reform proposal

Health care month is here. President Obama wants the House and the Senate to both pass health care reform bills before the August recess. It will be very difficult to get his done, but the House made progress as the Democrats released their proposal yesterday.

Liberal commentator Ezra Klein likes the proposal.

The Process Is the Message: Three separate committees — Energy and Commerce, Ways and Means, and Education and Labor — have come together on one bill. This is an incredible achievement. If you read histories of the 1994 health-care reform fight, all of them have a substantial section on the committee crack-up: One passed a version of single-payer, another a variant of Bill Clinton’s reform, another went further to the right. There was no unity.

There is unity now. And if it holds — if the House of Representatives manages to pass this plan with a substantial majority of enthusiastic Democrats — that significantly strengthens the House’s hand in its eventual negotiations with the more fractious Senate. That’s a big “if.” But so too would have been the idea that three separate committees could cooperate on a bill of this size.

The House proposal includes a tax surtax to help pay for the bill.

If I’m reading this correctly, about half is paid for through $500 billion or so in savings from Medicare and Medicaid. The rest comes from a surtax on the richest 1.5 percent. The surtax is 1 percent on income between $350,000 and $500,000; 1.5 percent on income between $500,000 and $1,000,000; and 5.4 percent in income above $1,000,000. The surtax can vary if the bill is less or more expensive than initially anticipated. There are also revenue expectations from the employer and individual mandates, though they’re relatively modest ($200 billion over 10 years is one estimate I’ve heard).

I’m not a big fan of this part of the proposal, though it’s important to get something on the table. Obama’s proposal to limit charity deductions for high-income taxpayers made more sense. A small surtax in the neighborhood 1% would be fine, but going up to 5% seems like a bad idea.

I would much rather see a tax on soft drinks. Liberals don’t like it because it’s regressive, but as we’ve seen with cigarette taxes an increase in price does affect consumption, and the American people are getting way too fat. That alone contributes to our soaring health care costs, so a tax on sugary drinks, just like taxes on alcohol and cigarettes, makes sense when we’re considering ways to fund health care reform.

Perhaps a compromise can be struck where we include a much more modest surtax along with a soda tax.

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