American Elephants


Top Down Mandates or Bottom-Up Choice? by The Elephant's Child

We are a nation of something around 310,000,000 people.  How many people do you know with whom you agree completely on everything?  Yes, I thought so.  To me that suggests that there is something deeply wrong with the assumption that  you can fix everything with lots of rules and mandates established by wise but faceless bureaucrats in Washington DC.  We have a hard enough time enforcing the laws that everybody pretty much agrees on.

The Liberals’ theory is that a big and encompassing government can protect all the stupid and vulnerable people from their own folly and the troubles they encounter with wise and careful laws and regulations.  Republicans consider that to be folly, and think people will do fine on their own with only a minimum of laws that are fully enforced.  Liberals think that is mean and hard and unfair and Republicans should stop eating babies and let the people who know better run things.

Well, I drifted off there a little, but you get the general drift.  My Grandfather was a doctor, horse and buggy type, who did the best he could to take care of people who, accustomed to the wide-open spaces and vast mountains of the West, were generally pretty healthy except for the usual amount of sprains and breaks, wounds and babies. Which was just as well because his supply of palliatives to deal with illness and disease was not large. Antibiotics and diagnostic machines were unheard of, aspirin was new and sulfa and penicillin were far in the future. He was a good diagnostician, and fixed what was fixable at the time.

So how did we get here, with all sorts of miraculous medicines, tests and diagnostic machines to determine what might be wrong. Within a few blocks of my house you can find an acupuncturist, two drug stores, a chain store that sells only dietary supplements, a couple of chiropractic offices and a foot doctor, and eye doctor and a couple of dentists. Three hospitals are about fifteen blocks away, with all the medical practices and supporting businesses that accompany hospitals.

The problem with ObamaCare is that it has no proven ways to keep health care costs down.  So what happens when it goes into effect in 2014?  The best guide we have is Massachusetts, whose 2006 health-care overhaul was the model for ObamaCare. RomneyCare attacked the problem of “the uninsured” by fining them and their employers for their lack of being insured. It also subsidized premiums to make it possible for the uninsured to avoid paying the fine.

Costs have skyrocketed far beyond 2006 projections.  The administrators’ solution is to raise taxes, increase fines on employers, and put price controls on insurance premiums, which would force the insurers to further cut their reimbursements to hospitals and doctors. The flood of new patients and  the government’s underpayment for treating them has resulted in a critical shortage of doctors. And patients who cannot find doctors head to the emergency room.

The Harvard School of Public Health has issued a report on the urgent need for a comprehensive, unified, enforceable, inescapable tax-financed system to control every component of health care that a state can realistically control. An “independent board” should define the benefit packages and provider payments, set the budget that will determine the payroll tax rates.  This all powerful board will include all the major players.  There, that will fix everything. It is the inevitable liberal solution to a mess that they have created.

We really have quite a bit of experience with top down systems of control. Imposing an all-controlling and all-embracing system to control the lives and behavior of large numbers of people has never worked well.  We already have a critical shortage of doctors, particularly those who are willing to treat Medicaid patients. So ObamaCare plans to add another 18 million uninsured to the Medicaid rolls.  Medicaid is a shared a shared state-federal program created in 1965 designed as a limited safety-net program for low-income Americans.

At the state level, Medicaid spending consumes nearly a quarter of state government budgets.  One in four Americans in on Medicaid.  Federal mandates often preclude alternatives developed by states to save costs.  The Centers for Medicare and Medicaid services make it impossible for states to innovate.  The proponents of ObamaCare do not consider state flexibility and innovation to be useful for effective reform.

It always seems to the fixers that everything could be made better with the proper set of regulations.  And it never, never works.  How about a bottom-up consumer-driven system? A what?  You could call it freedom, surely that is a familiar term.



Democrats Are Giving Up on Dr. Donald Berwick! by The Elephant's Child

In July of 2010, in a brief Senate recess, President Obama took advantage of the recess in a highly irregular manner to appoint Dr. Donald M. Berwick as head of the Centers for Medicare and Medicaid Services (CMS), The recess appointment ensured that he would not have to face a Senate hearing.  The idea that someone who would oversee an $800 billion annual budget that is larger than the budget of the Defense Department, should not  have to endure questioning by the United States Senate is disturbing, to put it mildly.

Dr. Berwick , the dean of progressive policy wonks, is deeply opposed to “the darkness of private enterprise,” and a rapturous admirer of Britain’s National Health Service (NHS). Dr. Berwick’s own statements and scholarship indicate that he sees rationing as the correct way to reduce the costs of Medicare and Medicaid.  In early February, Dr. Berwick appeared before the now-Republican controlled  House Ways and Means Committee. You can watch the hearing on C-Span here.  When you get through everyone’s opening statements, and Dr. Berwick is asked to respond to questions, you will see a remarkable example of non-answers to direct questions.

The difference between the two parties is a chasm, deep and wide.  Democrats believe that if their intention is to improve health care, then it will be improved. If it needs some jiggering, or more money, well, they’ll fix that if they get there.  Liberals do not understand incentives, nor do they think they are important.

An example occurs early in Dr. Berwick’s testimony. When the Democrat Congress passed the Medicare Drug Benefit, the Bush administration managed to get in an incentive that is referred to as “the donut hole.”  Drugs are divided into four cost-sharing tiers: 1)  preferred Generic; 2) Generic;  3) Non-Preferred Generic/Preferred Brand; 4) Non-Preferred Brand.  The divisions are based on how much of the cost you have to pay, ranging from nothing to quite a bit.

This year when you have reached an out-of-pocket cost for medications of $2,840, you have reached the “donut hole” when you must pay the full cost of the drugs.  [This is the incentive.  If you rigorously ask for generics when they are available, you will keep your costs down and may never reach the donut hole, or reach it very late in the year. It works!  The Drug benefit is perhaps the only federal program that has cost less than it was forecast to cost.]

[All the way through the program, and in the "donut hole" there is assistance for those who cannot afford to pay, but those who can afford it have to pay their way.] On the other side of this gap, if you reach $4,550 in out-of-pocket costs, the government pays all costs with only a very small co-pay.   Democrats see the “donut hole” as a great burden and have eliminated it in the ObamaCare plan, which eliminates the incentive to choose less expensive drugs when available.  Berwick clearly doesn’t get the incentive. If there is no incentive, why bother?

Heartland Institute has posted a nice summary of questions and answers from the hearing that will give you the sense of it.  See the video at that site as well, for Berwick’s speech to NHS.

President Obama re-nominated Dr. Berwick, which removed him from further House questioning; but 42 Republicans have signed a letter to the president opposing the nomination, and Politico reports that Democrats are giving up on the nomination.  This means that Berwick will only serve till the end of the year,  doing what damage he can.



Judge Vinson to the DOJ — Yes, I Meant Just What I Said! by The Elephant's Child

“The Obama administration received a well-deserved rebuke” on Thursday from Judge Roger Vinson in the Florida lawsuit challenging the constitutionality of ObamaCare (The Patient Protection and Affordable Care Act).  “Judge Vinson issued a new order in response to a bizarre “motion to clarify” that the Department of Justice (DOJ) filed on February 17.”

Judge Vinson’s original order on January 31 was a model of clarity. ” He declared the entire law unconstitutional and specifically said that because he presumed the Officials of the executive branch would adhere to the law as declared by a court, his declaratory judgment striking the law down was the functional equivalent of an injunction.  Judge Vinson wrote then that  he presumed that the executive branch would follow his order, which any lawyer (including a lawyer President) would know requires them to cease implementing ObamaCare with respect to the 26 states that are plaintiffs and the National Federation of Independent Business.  That turned out to be a faulty presumption.”

The Obama administration waited more than two weeks and then filed an insulting motion that essentially said that the federal government would not comply with the judgment unless Judge Vinson issued another order “clarifying” that he actually meant what he said — that the executive branch was enjoined from implementing this unconstitutional law.  This was a political move, not a serious legal motion.

Judge Vinson said that “if the government was really unable to understand his original order, it was not expected that they would effectively ignore the order and declaratory judgment for two and one-half weeks, continue to implement the Act, and only then file a belated motion to “clarify.”

Judge Vinson reaffirmed that he meant exactly what he said. DOJ lawyers said the reason for delay was that the order needed “careful analysis”, yet this was contrary to media reports, “the White House had declared within hours after entry of [Vinson's] order that implementation will proceed apace regardless of the ruling.” Judge Vinson added that the government’s legal citation borders on misrepresentation.

In order to avoid a further delay, the judge interpreted the administration’s request for “clarification” as a request for a stay, which he granted for just seven days.  If the government fails to file an appeal within seven days, then all work to implement the law must stop.

The appeals process would normally take much longer, but Judge Vinson has challenged the federal government to speed up the appeals process.  The administration has been attempting to stall as much as possible so that as much of ObamaCare can be implemented before it gets to the Supreme Court as possible.   This is a serious loss for the government.

Also on Thursday, the House voted to repeal the law’s 1099 provision which would have required business owners to file a 1099 tax form with the IRS for every vendor that sells them $600 worth of goods or services, creating an unsupportable burden for business for no purpose.  75 Democrats joined the 238 Republicans in voting to kill the mandate, and the president said he will sign the legislation.




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