Telling Max Baucus What He Already Knows
Arc de Triomphe, Paris (wikimedia)
Kevin Drum thinks someone should tell Max Baucus the truth about foreign health care:
Now, the fact that the French spend about half what we do doesn’t mean that we’d cut our costs in half if we adopted a French-style system. We wouldn’t. There’s too much path dependence and too many cultural differences for that. But what it does mean is that if we adopted something close to their system, we could certainly achieve high-quality 100% basic coverage — with the ability to purchase extra coverage for anyone who wants it — for no more than we spend now and possibly a bit less.
We won’t, of course, because too many people are still convinced that healthcare in the United States is better than it is in France — or anywhere else. It’s not. It’s worse and more expensive. Somebody tell Max Baucus.
The trouble is that as I’ve had occasion to note before the evidence suggests that Baucus already knows this:
Afterward, Sen. Ken Salazar, D-Colo., who has since become interior secretary, noted that other countries saw a conflict between profits and health. How could the United States possibly persuade insurance companies to give up profits? [Author T.R.] Reid answered that Switzerland, home to many powerful insurance companies, had done it in 1994 when it adopted the Bismarck model. The insurers fought it tooth and nail, of course, but now they compete energetically to sign up people for basic care on a nonprofit basis because they constitute a customer base for supplemental insurance that they’re allowed to sell on a for-profit basis. This answer didn’t satisfy Baucus. “Perhaps you don’t know how much money [U.S. insurers] have,” he told Reid.
As I’ve said before, it’s as if Baucus doesn’t realize that he’s the single most important person in Congress on this issue. He could just decide not to listen to the insurers no matter how much money they have. Instead we get things like Rahm Emannuel floating compromises about introducing a public insurance option only after a “trigger” test has been passed. This really only makes sense if you think protecting the profits of insurance firms is an independently desirable policy goal. You’re open to the possibility of a public plan, but you want to err on the side of avoiding its introduction because . . . well . . . because . . . it’s not really clear.
44 Responses to “Telling Max Baucus What He Already Knows”
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July 7th, 2009 at 10:03 am
As I’ve said before, it’s as if Baucus doesn’t realize that he’s the single most important person in Congress on this issue. He could just decide not to listen to the insurers no matter how much money they have.
And then he wouldn’t be the most important person in Congress on any issue, because he wouldn’t be *in* Congress.
Industry money is not just a bribe, it’s also a threat. There are billions of dollars held to Baucus’s head and if he makes one wrong (for the companies) move, they will blow his career out.
July 7th, 2009 at 10:09 am
Chris, that doesn’t make any sense. Baucus has massive incumbent protection, and his state is an archipelago of insanely cheap media markets. There’s no real benefit to having zillions of dollars, if you’re running against him. To top it off, a well-financed opponent’s money trail would be very damning, especially given Montana’s political culture.
Unless Baucus is worried that insurance companies will have him or his family killed, it’s not clear what’s so worrying to him about their resources.
July 7th, 2009 at 10:10 am
of course, if harry reid was an arm-twister, this would all be different….
July 7th, 2009 at 10:18 am
He’s a “moderate” Democrat, i.e. afraid of his own shadow.
July 7th, 2009 at 10:21 am
As I’ve said before, it’s as if Baucus doesn’t realize that he’s the single most important person in Congress on this issue. He could just decide not to listen to the insurers no matter how much money they have.
I guess you could say that he is more upfront and honest than any other Congressperson about his willingness to be bribed. There he is, saying in public that he will not support something because people with a vested interest in opposing it have a lot of money. In fact, “I guess you could say” is putting it too passively. Please start saying it and writing it. It’s true.
Unless Baucus is worried that insurance companies will have him or his family killed, it’s not clear what’s so worrying to him about their resources.
Maybe he recently watched Bulworth.
July 7th, 2009 at 10:32 am
When Baucus is in DC he has people constantly telling him what a wise and great man he is, and hosting little tributes to him where lobbyists can kiss his ring and give him money.
Back in Montana he has to listen to complaints and requests for this or that favor. Small men are easily moved by flattery.
And Rahm Emanuel is a pindejo of the first order. Having a war mongering agent of AIPAC and the DLC as chief of staff is a major Obama mistake.
July 7th, 2009 at 10:39 am
The funny thing is, health insurance companies don’t have that much money, at least relative to the scale of the healthcare system. The total market cap of the top five publicly traded health care companies — UnitedHealth, Wellpoint, Aetna, CIGNA, and Humana — is only about $100 billion dollars. Considering the health care bill is going to cost around $1 trillion and getting rid of the health insurance companies altogether would easily save more than $100B, maybe the government should just buy them out. (Only half kidding.)
July 7th, 2009 at 10:40 am
Where’s the Jesse Unruh rule: “If you can’t take their money, mess with their women and drink their liquor and go out on the floor the next day to vote against them, you have no business in politics?”
July 7th, 2009 at 10:42 am
Compromise isn’t necessarily bad.
The “trigger,” for example.
I’ll grant the “trigger” if the consequence is single payer.
July 7th, 2009 at 10:46 am
But of course part of what makes Baucus so important is not just his position, but the fact that he is using his position to obstruct Obama and his congressional allies. In other words, if he was just a reliable rubber stamp, then he really wouldn’t be all that important. And where is the fun (and money) in that?
Fortunately, the bottomline is that Baucus can’t really unilaterally impose his will on the final outcome: whatever emerges from the Finance Committee won’t be what emerges from the Senate, which in turn won’t be what emerges from the Conference Committee and hits Obama’s desk. Accordingly, I’m not going to panic if Baucus’s day in the sun ends up meaning the Finance Committee version has a trigger–to be sure the trigger is a horrible idea, but I also wouldn’t expect it to run the gauntlet and make it in the final bill anyway.
July 7th, 2009 at 11:03 am
You’re open to the possibility of a public plan, but you want to err on the side of avoiding its introduction because . . . well . . . because . . . it’s not really clear.
But who cares about a public plan? It is no different than all of the existing private health insurance plans, and thus will have no effect on either costs or the number of uninsured, as even the CBO admits:
July 7th, 2009 at 11:12 am
too many people are still convinced that healthcare in the United States is better than it is in France
For many of those people, it could very well be true.
July 7th, 2009 at 11:12 am
thus will have no effect on either costs or the number of uninsured, as even the CBO admits
From Al’s link:
Who would have thought he would reach a conclusion directly at odds with the text.
How fucking stupid are you Al?
July 7th, 2009 at 11:18 am
To be fair to resident idiot Al, my quote is about the total healthcare plan, his is limited to the “public option” but is for a watered down version that somehow doesn’t cut costs in spite of having less overhead (including no profit motive).
July 7th, 2009 at 11:37 am
I like the “even the CBO” phrase, as if the CBO was going out of its way to project favorable outcomes for these bills.
Anyway, it is true the HELP version of the public option does the least to automatically control costs. However, I think the CBO projections are at least potentially too conservative, because under the HELP bill HHS would have the power to negotiate lower-than-average rates. And although I understand why the CBO isn’t authorized to assume that will happen, I think that is the likely outcome.
Moreover, once there is an entrenched and popular public option, it can be used down the road to help control costs, regardless of how it is set up initially. Again, such considerations are outside the scope of the CBO, but I think that is very likely how the politics would play out.
And, of course, that is just the HELP bill, which may or may not resemble the final bill that Obama signs in the relevant details.
July 7th, 2009 at 11:41 am
To be fair to resident idiot Al, my quote is about the total healthcare plan, his is limited to the “public option”
Heh. It took you 6 minutes to figure out that there are other parts to the bill than the public option? “Resident idiot”, indeed.
July 7th, 2009 at 12:01 pm
Instead we get things like Rahm Emannuel floating compromises about introducing a public insurance option only after a “trigger” test has been passed. This really only makes sense if you think protecting the profits of insurance firms is an independently desirable policy goal.
Huh? Perhaps it makes sense as, you know, a way to get a public option enacted if that’s the only political compromise that can get enough votes. I don’t think any progressive should have a major problem with a “triggered” public option if A) the trigger is indeed automatic; and, B) the wait period is not overly long.
July 7th, 2009 at 12:01 pm
“Resident idiot”, indeed.
It takes about 20 seconds to check whether the subject is sports, after which it’s very easy to work out whether it’s On-Duty Al, Resident Idiot, or Off-Duty Al, Sometimes Coherent.
July 7th, 2009 at 12:07 pm
Do not forget that is exactly the way the current system of health insurance for government workers, including Congress, works. It is private insurance companies competing for the right to sell insurance to government employees.
July 7th, 2009 at 12:12 pm
Hey resident idiot, what is your plan for improving healthcare?
Have you figured out what’s wrong with the public plan scored yet? Or were you too busy reading time stamps to actually read the text of my post?
July 7th, 2009 at 12:14 pm
[...] Bartlett emails to point out that it’s probably not right to say, as I quoted Kevin Drum saying this morning, that France spends half of what we spend on health care. If you look at it in terms of percent of [...]
July 7th, 2009 at 12:21 pm
I should point out that is the Swiss Bismarck scheme is considered successful, why not adopt that very model in the United States?
Switzerland does not have a public option. Or must we be more socialistic than the Swiss to prove our cojones?
July 7th, 2009 at 12:34 pm
Switzerland does not have a public option.
Yes and no. The companies providing basic insurance in the Swiss system are basically like heavily-regulated utilities, with the government dictating the terms of coverage, a community ratings scheme, no denial of coverage, and open pricing for medical services. They also get a large chunk of their funding in the form of direct payments from the government (meaning in addition to the premiums they get from covered individuals).
And for all their trouble in avoiding a purely public option, the Swiss end up with one of the most expensive health care systems in the developed world outside the United States. So, I don’t see much to commend the Swiss approach, although it is true that it would be better than the status quo in the United States.
July 7th, 2009 at 12:40 pm
And for all their trouble in avoiding a purely public option, the Swiss end up with one of the most expensive health care systems in the developed world outside the United States. So, I don’t see much to commend the Swiss approach, although it is true that it would be better than the status quo in the United States.
According to Yglesias’s chart, the Swiss system, without public option, is cheaper than the French system.
I just don’t understand what the left’s fixation with a public option is all about. It’s absolutely silly and almost hysterical. If you want good health outcomes, copy Switzerland and the Bismarck model, which because of the absence of public option (and potentially for play field-tilting accounting systems and subsidy) I should not be forced to automatically reject. There is absolutely no need for a public option to achieve the desired outcomes.
I am forced to interpret the obsession as purely a socialistic instinct (by definition, unhealthy) grasping at straws.
July 7th, 2009 at 12:40 pm
Hey resident idiot, what is your plan for improving healthcare?
Socialist, single payer, single provider, abolishing all private health insurance companies, coupled with (and this is the important part) a constitutional amendment that provides that we will never pay health care costs in excess of [checking the OECD chart posted by Matthew above] 11% of GDP.
July 7th, 2009 at 12:43 pm
The problem with a public option is not so much what it does right now, but what it potentially could do down the road, which is turn into a complete hole sucking subsidy ad infinitum, and just about killing equal competition.
Did you even see the accounting standards they formerly wanted to give to the public option? It didn’t even have to fully account for payouts. That’s the sort of gerrymandering we are dealing with down the road.
With a purely private system, no matter how much you regulate the market, you can’t gerrymander it. If you do something stupid, no slice of the market is gonna make it up for you, so you are forced to act rationally. And that’s the important thing.
July 7th, 2009 at 12:45 pm
And by the way, saying the Swiss system is expensive is a bogeyman. The differences in expenditure per GDP are basically running errors; two or three percentages points away from the Canadian system, for example.
July 7th, 2009 at 12:48 pm
Of course he knows this, he just doesn’t care. He’s used to being bought and paid for, and until someone else comes along with a bigger, better bribe, he’s going to be in the pocket of these insurance companies. A ‘public option’ doesn’t grease his palms. ‘Single payer insurance’ doesn’t give him any contributions.
This is not that difficult, folks.
July 7th, 2009 at 12:56 pm
According to Yglesias’s chart, the Swiss system, without public option, is cheaper than the French system.
Right, and more expensive than the 22 other systems on the list. Hence, “the Swiss end up with one of the most expensive health care systems in the developed world outside the United States.”
I just don’t understand what the left’s fixation with a public option is all about. . . . If you want good health outcomes, copy Switzerland and the Bismarck model, which because of the absence of public option . . . I should not be forced to automatically reject.
I think you have the fixation the wrong way around. Speaking just for myself, if the Swiss system was one of the more efficient models, then fine, I would consider it. But in fact it is one of the least efficient (outside the U.S.), so why should I put it high on the list?
In contrast, you are the one who appears to be fixated on avoiding what you consider to be “socialism” at all costs. Of course that is pretty silly, since even the Swiss system has so much regulation and public funding that the distinction you are drawing is really a matter of degree and not kind.
The bottomline is that any basic health insurance system providing universal coverage is going to be “socialist” in one way or another, because a “non-socialist” system won’t provide universal coverage. So, to paraphrase the famous joke, once you have accepted the idea of providing universal coverage, we are really just negotiating about price. Hence, there is no reason to overpay at that point in the name of ideologies we have already de facto abandoned.
July 7th, 2009 at 1:02 pm
And by the way, saying the Swiss system is expensive is a bogeyman. The differences in expenditure per GDP are basically running errors; two or three percentages points away from the Canadian system, for example.
That is nonsense, of course. Saving even 1% of GDP on health care costs is a HUGE amount of money, particularly on a cumulative basis. In other words, I don’t see any particular reason to be wasting a couple hundred billions of dollars of resources a year just so Myles can draw meaningless distinctions over the degree of “socialism” in the U.S. healthcare system.
July 7th, 2009 at 1:03 pm
Regulating the private insurers into basically public utilities which is what Switzerland and Japan do is probably just as politically difficult as doing single payer, anyway.
July 7th, 2009 at 2:24 pm
Rahm Emannuel is a rabid dog. He doesn’t float little wussy compromises. He goes right for the vitals of wayward Senators and proceeds to tear flesh from bone.
Acquiesce or be consumed. Those are the only two options Rahm Emannuel makes available.
Just kidding. Rahm is actually more like a friendly, gentle little dachshund, willing to do tricks, for treats.
July 7th, 2009 at 2:30 pm
ri, Well, I’ll give you credit, you manage to come up with a plan that would work and you tack on some idiocy. Your basic plan (ignoring the idiot portion) would actually result in improved healthcare for the citizens of the nation.
This is much better than the phenomenal Will Allen plan of using the federal government to ensure insurance company profits and a lifetime cap which means that he puts a price on life.
July 7th, 2009 at 2:40 pm
Zaid,
And what makes the regulated utility model worse than single payer is that it’d quickly turn into an exercise in regulatory capture (which is the norm for insurance and energy regulation at the state level).
July 7th, 2009 at 2:41 pm
Oh right, I forgot about Japan, which also has a purely private system. I wonder where their costs in terms of GDP lie? It’s easy enough to be pointing at the Swiss, who are even more loaded than the U.S. and have more money to blow with, but you need to look at Japan and average it out that way.
The Bismarck model simply has not been as widely adopted due to ideological inhibitions. If it was, then the outcomes would reflect the subsequent diversity of jurisdictions.
In any case, there is the matter of the fact that it works for Switzerland (in the same way it would for the U.S.) because both countries support disproportionately sized pharmaceutical industries headquartered respectively, which generate huge amounts of national income from income abroad (think how much the prescription costs say, Egypt, pays, goes direct into Johnson or Roche and directly back into the U.S. and Switzerland). That’s a very effective, and desirable, economic outcome, and I would wage that one percentage point in GDP does not come close to the amount of additional GDP, directly and indirectly, from globally dominant pharmaceutical industries.
July 7th, 2009 at 2:43 pm
And what makes the regulated utility model worse than single payer is that it’d quickly turn into an exercise in regulatory capture (which is the norm for insurance and energy regulation at the state level).
Well, that’s just hearsay, because where the Bismarck model has actually been applied, there has been no evidence of your paranoia being substantiated.
July 7th, 2009 at 2:45 pm
I just don’t understand why must the left have a socialistic element to whatever health care reforms they are proposing; it’s utterly doctrinaire and unjustified.
If it wasn’t for the public option, the health care bill would have been passed in no time. But instead, the left insists on extracting its pounds of flesh, and making sure that no classical liberal and conservative objection are respected, to the bitter end.
July 7th, 2009 at 3:42 pm
I don’t think the phrase “purely private system” means what Myles thinks it means.
The Japanese achieve cost control through tightly regulating provider rates (procedure by procedure and drug by drug) via a single government-run payment system. Every person and employer pays into a national health insurance fund at defined rates, and they have public plans for those who are unemployed, self-employed, or employed by small employers. They also have a network of public hospitals, health insurance companies are forbidden from denying coverage, and they subsidize health insurance for the poor.
But, you know, other than that, it is “purely private”.
By the way, Myles should try asking an informed doctor in the U.S. what he or she thinks of Japanese-style health care.
July 7th, 2009 at 4:22 pm
I should point out that is the Swiss Bismarck scheme is considered successful, why not adopt that very model in the United States?
“Perhaps you don’t know how much money [U.S. insurers] have.”
I am forced to interpret the obsession as purely a socialistic instinct (by definition, unhealthy) grasping at straws.
I am forced to conclude, once more, that you’re a braying fool. If you can demonstrate that private insurers in the US are willing to work within the constraints of an existing Bismarckian system, then go right ahead. Given that a bunch of CEOs said that they had no intention of ending rescissions a few weeks back, you may have trouble with that.
If it wasn’t for the public option, the health care bill would have been passed in no time.
Assumes facts not in evidence. It’s equally plausible that if the parasites weren’t focused on killing the public option, they’d be paying millions of dollars right now to undermine something else in the bill.
July 7th, 2009 at 4:38 pm
By the way, Myles should try asking an informed doctor in the U.S. what he or she thinks of Japanese-style health care.
I know quite a few GP’s from Long Island, and they have all been resolutely opposed to socialized health care. If you add up the medical school fees and malpractice insurance, in between the kids’ college fees and soccer and lacrosse fees, those doctors don’t have much room for financial concession.
July 7th, 2009 at 5:06 pm
I know quite a few GP’s from Long Island . . . .
Good. Now go ask them if they are familiar with the Japanese health care system, and if they are, see what they think about the idea of having the government setting the prices they can charge, with the explicit goal of limiting how much is spent on health care in total.
July 7th, 2009 at 8:22 pm
There is not, and never has been, any such thing as a “purely private” health care system. Historically, before the widespread adoption of employment-based insurance instruments and modern government subsidy (through, in the US, programs like Medicare and Medicaid, investment in and support for medical research, public health measures, etc.) of the health care industry — both of which (insurance and government involvement) depend on and require that healthy people subsidize care for the sick — health care was considered, first and foremost, a familial and social obligation. For all but the most affluent, any care provided outside the family was most likely to be supported by charity and community obligation, and often provided by religous institutions. (Although, because empty promises are much cheaper to produce and profit from than real care and cures, the questionable and exploitive patent medicine market could be quite lucrative.)
Frankly, without the pooling of resources provided by insurance and/or government, without, that is, some willingness on the part of the young and healthy to provide for the care of the old, ill, disabled and poor, there isn’t much profit to be made from the hard, labor intensive and expensive task of caring from the sick. How could there be? Illness, disability, the declining health that comes with age, affect a person’s ability to work — which means the ill in general are often not a very lucrative market. Furthermore, dead people are quite difficult to collect from.
The first hospitals in my state, Washington, for example, were built and run by the Catholic Sisters of Providence. The Sisters cared for rich and poor alike, without regard for ability to pay. In addition to seeking charitable contributions, as well as payment for services, from well off members of the community, that supported care for poorer members of the community, the Sisters covered operating expenses by offering a quasi “insurance” scheme; collecting $1 a month from loggers — an occupation with a very high accident rate. The loggers’ monthly investment both assured that care would be available for them if and when they needed it (and when they would likely be least able to afford it), and helped maintain health care resources for people in the community at large. Given this kind of history, it is silly to worry that our health care might become too “socialistic.” Any health care system must be — because health care is a universal need that can only be provided universally through some type of system in which those who don’t, at the moment, need care help provide resources for those who do need care –(while hopefully assuring that those resources will be available for them when they, inevitably, will need them themselves).
Instead of trying to make sure our system isn’t “socialistic,” we should grow up and accept that health care has never been and never can be simply a business, accept that it is a social need and a social obligation that we all share, and start figuring out the best, most pragmatic, most cost efficient way to meet that universal obligation.
July 8th, 2009 at 2:55 am
dbeach
Ummm, that’s actually a pretty cool idea. Just buy out the insurance companies. That’s…yeah. I like that.
July 8th, 2009 at 12:19 pm
[...] Matthew Yglesias says no need to tell Baucus, he already knows: As I’ve said before, it’s as if Baucus doesn’t realize that he’s the single most important person in Congress on this issue. He could just decide not to listen to the insurers no matter how much money they have. Instead we get things like Rahm Emannuel floating compromises about introducing a public insurance option only after a “trigger” test has been passed. This really only makes sense if you think protecting the profits of insurance firms is an independently desirable policy goal. You’re open to the possibility of a public plan, but you want to err on the side of avoiding its introduction because . . . well . . . because . . . it’s not really clear. [...]