Wes Clark Endorses Transition to Single-Payer

Unlike Matt, I was not present at today's "Real State of the Union 2006" event at the New America Foundation. But thanks to the miracle of satellite radio, I did listen in on a good portion of General Wes Clark's headline speech on C-SPAN Radio.

Overall, I liked what I heard. Though it was billed as a foreign policy event, Clark was clearly putting forward a broad vision for a Democratic platform. But to my ears, he was also laying the groundwork for another White House run in 2008, discussing everything from Beltway corruption and early childhood education to labor and economic policy. And perhaps the most interesting part of his speech came with the section on healthcare.

In health care, we need to take better advantage of modern technology to practice evidence-based medicine, in which treatments and practices are based on statistically proven results - not commercial advertising - and doctors and hospitals are held accountable for their performance, not just by the threat of malpractice but by the day-to-day quality of their results. We need to harness the innovation of our biotech, pharmaceutical, and health insurance industries better to serve the public good, not just the private gain of shareholders. No child in America should grow up without regular medical check-ups and care - or regular exercise and physical fitness - and every adult should be provided access to the kinds of diagnostic testing and preventive treatments which can slow the onset of aging diseases like diabetes, atherosclerosis, and Alzheimer's. Additional insurance coverage should be directed to catastrophic illness and injuries, the kind that wreck families and shatter productive lives. And inevitably this will mean transitioning over time from a work place centered, private payer system toward greater reliance on some form of single-payer system to ease administrative burdens and reduce costs.

Even using the phrase "single-payer system" is a somewhat gutsy move on his part. As President Bush is set to announce his 'less insurance, not more' plan for HSAs, Clark is boldly willing to move the other way, not just accept compromise. Of course, he's talking about an eventual transition, but at least he acknowledges that it is the ultimate goal. The proposals many Democrats have put forward in the past have been pretty sound (like Kerry's call for government-sponsored catastrophic reinsurance), but too many seem to shy away from explicitly endorsing the one system that makes the most sense. I'm glad to see Clark join the ranks of Democrats who aren't afraid of speaking up.

More Bad News for HSA Proponents

Much has been made of the fact that President Bush is preparing to announce a plan to shift the burden of paying for healthcare from risk-pooling to personal savings in the form of health savings accounts, or HSAs. For a wide variety of reasons, this is an obviously terrible idea. It won't reduce the cost of healthcare overall, it will mean higher costs specifically for the sick and the elderly, and it will likely lead to bad healthcare decisions by understandably uninformed patients. We're already seeing an outcome similar to the latter with Medicare Part D.

As if to highlight how bad of an idea this is, the Commerce Department released numbers this morning indicating that the personal savings rate has dropped into negative territory. It is, as Martin Crutsinger of the AP puts it, "the lowest level since the Great Depression."

A negative savings rate means that Americans spent all their disposable income, the amount left over after paying taxes, and dipped into their past savings to finance their purchases. For the month, the savings rate fell to 0.7 percent, the largest one-month level since a decline of 3.4 percent in August.

The 0.5 percent decline in savings for the year followed a savings rate of 1.8 percent in 2004. There have only been three years that the savings rate has fallen into negative territory. The savings rate dipped by 0.9 percent in 1932 and the record 1.5 percent decline in 1933, years when Americans exhausted their savings to try to meet expenses in the face of soaring unemployment as the country struggled with the worst economic crisis in its history.

Bush's idea -- that has not yet been fleshed out in an actual policy proposal -- is that people should increasingly leave health insurance plans and put more money into health savings accounts. While this is obviously bad health policy, it's even worse as economic policy. These latest figures from the Commerce Department show that the American people are already at the end of their ropes, dipping into savings to pay their everyday bills. But the Bush administration thinks they're going to find money in the cushions to pay for medical bills? There is no guarantee that workers will see any extra money in their paychecks if they drop their insurance coverage. So they will likely be forced to choose between their HSA, their 401(k), their children's 529, and basics like food, shelter, and clothing. This is what the GOP calls "consumer-driven healthcare."

There's more...

The Economist Call for Partially-Socialized Medicine

This week, the writers at The Economist offer up some strong words about the state of America's healthcare system and offer some big government solutions that might surprise the free-marketeers who tend to read the magazine.

America's health system is unlike any other. The United States spends 16% of its GDP on health, around twice the rich-country average, equivalent to $6,280 for every American each year. Yet it is the only rich country that does not guarantee universal health coverage. Thanks to an accident of history, most Americans receive health insurance through their employer, with the government picking up the bill for the poor (through Medicaid) and the elderly (Medicare).

[...]

In the longer term, America, like this adamantly pro-market newspaper, may have no choice other than to accept a more overtly European-style system. In such a scheme, the government would pay for a mandated insurance system, but leave the provision of care to a mix of public and private providers. Rather than copying Europe's distorting payroll taxes, the basic insurance package would be paid for directly by government, though that cash might be raised by a "hypothecated" tax which would make the cost of health care more evident. The amount of cash given to insurers would take account of individual health risks, thus reducing insurers' incentives to compete by taking only the healthiest patients. [emphasis added]

If the editors of the self-proclaimed "adamantly pro-market newspaper" are ready to start talking about a European-style healthcare system -- albeit a hybrid system with certain market aspects -- why are the Democrats still afraid to offer up real ideas to help grant coverage to America's 46 million uninsured?

I understand that many current Democratic members of Congress were in Washington in 1993-1994 -- the last time the Party tried in earnest to fix the healthcare system -- and still harbor bad memories from the political fallout that resulted from the failed Clinton healthcare program. It's quite possible that many of them believe that they would have remained in the majority, perhaps even until today, had it not been for that tactical disaster. If only the party had maintained the safe rout, not attempting any sweeping changes...

This line of thinking is of particular detriment to the party, however. Playing it safe does not win elections, at least for a party in the minority. The Democrats cannot cede responsibility for fixing America's healthcare problems to President Bush and the Republicans. First, the GOP is calling for a plan that would only exacerbate the problem (even the folks at The Economist say as much). Second, by shirking their responsibility to offer real solutions to the very real heathcare problem in this country, the Democrats run the risk of being viewed as a party devoid of ideas and vision.

Do the Democrats need to call for a socialized system of healthcare, such as the one used in Canada and elsewhere? No. But they must offer some solution to the problem, whether it is a centrally-administered federal program, a hybrid system (such as the one advocated by The Economist), a series of 50 interlocking statewide systems subsidized by the federal government or whatever.

please take a look at the attached poll in the extended entry

There's more...

Fighting Back Against Bush's Nightmare Healthcare Plans

A few days ago, it came out that a major point in President Bush's upcoming State of the Union address will be promoting his plans to shift the healthcare burden from a risk-pooling insurance system to an every man for himself system of health savings accounts. As many have pointed out, this is nothing short of nuts.

As busy as we are with Alito, warrantless wiretaps, the war, 2006, and the laziness of the traditional media, I would encourage everyone to become intimately familiar with the details of the Bush plan, as the misinformation and spin will be flying fast and furious post-SOTU. The healthcare system in America isn't so hot, but it's far better than this anti-working family, anti-poor, anti-sick, and anti-elderly disaster Bush is about to put his weight behind. This is a serious fight we're going to have to engage in.

Former Senator Tom Daschle has a post up at Think Progress that does a fairly good job of providing a brief primer on the proposal. The links, which I'd suggest checking out, are from the original post.

This is a bad idea for three reasons:

  1. It makes the wrong assumptions about health care. A person with chest pain is not in a position to decide on which tests to take and what drugs he needs. A $1,000 deductible is not going to make a person switch hospitals to get an extra hour of hospital care, which is all that the deductible can buy. Health care is not a commodity. When we buy a car, we don't want to have the parts dropped off on our front lawns. Consumer-driven care just doesn't make sense for health care.

  2. It assumes that individuals can go up against industry and win. Look at the Medicare drug benefit. My mother has to choose from 73 plans. It is impossible for her to figure out which has the lowest prices. Rather than pooling the purchasing power of seniors to leverage lower prices, this drug benefit allows for drug companies to charge higher prices and insurers to profit. So, if you like the Medicare drug benefit, you will love consumer-directed health care.

  3. It pits the healthy against the sick. About 70 percent of costs in the U.S. health system are for the top 10 percent most expensive people. These people's costs are well above the deductible, so a high deducible won't change their behavior.

Ezra Klein also turned in a solid backgrounder piece on Bush's HSA plans a few days ago at Tapped, which I would wholeheartedly recommend for those interested in a bit more in-depth discussion of the issue. He cites a good deal of evidence to indicate that Bush's plans won't even come close to accomplishing their stated goals.

In other words, Bush isn't really interested in improving healthcare. He's only interested in achieving his ideological goal of making sure that the shared burdens of American society are foisted upon individuals, whether or not they can handle them. Every man for himself.

The Bush Healthcare Plan - Increasing the Uninsured

Despite what you may have heard, the prevailing faith among the Republican leadership is actually not Fundamentalist Christianity. It's laissez-faire capitalism. No matter how many examples of the failures of unregulated markets they are presented with (see also: Enron), they continue to espouse the belief that free market economics will save all. (This doesn't begin to explain the hypocrisy of their insistence on no-bid contracts for their cronies, however.)

With this in mind, it's not surprising that the centerpiece of Bush's upcoming State of The Union address is apparently going to be shifting the healthcare system to private healthcare savings accounts. One of the many obvious problems with HSAs is that the system assumes that employees will have surplus income to contribute to them. In the Wal-Mart economy, that's becoming increasingly rare. And health insurance works by spreading the cost of healthcare out among a large group of people, both healthy and sick, ensuring that those most in need are not those least able to pay. Bush's system, by incentivizing healthy people to leave insurance pools, would essentially destroy that balance, making healthcare more expensive for those who can least afford it.

In a sense, this is exactly like Bush's Social Security privatization plan. Why share a burden that can be forced upon the individual? Bush's National Economic Council chairman Al Hubbard sings the praises of "trying to give consumers the opportunity to be engaged in the process." But don't 'consumers' (see also: patients) have enough to worry about without seeking out and then poring over healthcare industry data they don't really understand?

At the end of the day, these are band-aids on a mortal wound. We don't have a very good healthcare system in the United States. The problems that Bush's adviser cites are indeed actual problems. But further privatization of the system is the exact wrong answer. It's too dangerous to leave the health of our nation to a private pay-to-play system like the one Bush is pushing. The only answer that truly makes sense is the one used in every other industrialized nation -- a universal system of public healthcare.

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