Did Ronald Reagan cause the Health Care crisis?

No, but his 1986 Tax Reform did make it worse.

I was reading a letter to the editor in Saturday’s Wall Street Journal, and the subject matter hit me like a lightning bolt. Ronald Reagan, patron saint of all things conservative, made the health care crisis worse. Here’s how.

A History of Medical Tax Incentives

All this changed in 1986 when Ronald Reagan orchestrated bipartisan tax reform. Individual medical expenses were no longer deductible until they reached 7.5% of gross income. Voila, individual incentives were virtually eliminated. In 1985, individual out-of-pocket expenses were still 22% of the total health-care market. After tax reform everyone was incentivized to move all medical expenses to health insurance. Out of pocket expenditures plunged and today are less than 10% of the market.

Ronald Reagan knew that his tax reform was not perfect. Individual interest payments were no longer tax deductible, but the home mortgage interest deduction remained. Personal tax deductibility of medical expenses was curtailed, but employer health insurance was still a tax-free benefit.

President Reagan was relying on future Congresses to fix these problems after the economic benefits of his tax reforms were manifested. Sadly, this never happened.

While one can say that it is generally a good idea to take “social engineering” out of the tax code, the fact is that maybe some social engineering isn’t a bad idea. The individual deductibility of not only EVERY DIME of health care expenditure, but also of any and all health insurance premiums, is one simple fix that would immediately start alleviating medical cost inflation.

Reagan was wrong, and plummeting of out of pocket expenses is proof of this. We do not insure our cars for flat tire’s, oil changes, and tune-ups. We also have hefty deductibles for scratches and dents.

First dollar coverage for health expenses is horrible policy for nations, states, and individuals. It’s that simple. Let us ration our own care.

Extreme Wisdom on Beyond the Beltway tonight!!

Hey all,

Yours Truly will be on Bruce Dumont’s excellent “Beyond the Beltway” program tonight from 6 – 8 PM Central Time.

The topics will be national, with a likely extensive focus on Health Care.

Tune in. You can get WLS streaming live everywhere right here.

How greed, inertia and corruption impact Health Care debate

First let me start by reiterating my personal definition of corruption. It is far more expansive than merely an indictable act. Let me quote directly from our book, “Illinois Deserves Better.”

Many people may object to our use of the word “corrupt” in describing something as broad as “Illinois’ political class.” We do not apologize. Corruption takes many forms, and most of them are not “indictable offenses.” As you find out more and more about Illinois government, you will see that it allows many people to engage in things that are “wrong” even if they are not illegal.
We think “corrupt” is a valid term for these acts and actors.

With that definition in mind, let me introduce you to a corrupt business practice of the American Medical Industry.

A Simple Health-Care Fix Fizzles Out

The study, known as “Courage” and published in the New England Journal of Medicine in 2007, shook the world of cardiology. It found that the most common heart surgery—a $15,000 procedure that unclogs arteries using a small scaffold or stent—usually yields no additional benefit when used with a cocktail of generic drugs in patients suffering from chronic chest pain.

The Courage trial was led by William Boden, a Buffalo, N.Y., cardiologist, and funded largely by the Department of Veterans Affairs. It tracked 2,287 patients for five years and found that trying drugs first, and adding stents only if chest pain persisted, didn’t affect the rate of deaths and heart attacks, although stents did produce quicker pain relief.

Steven Nissen, then chairman of the American College of Cardiology, called the study a “blockbuster.” Shares of leading stent maker Boston Scientific Corp. fell on the day the news broke, as many doctors and investors expected stent usage to fall off.

For a brief while, they were right. U.S. stent implants declined 13% in the month after the study’s release. But as the headlines about Courage faded, stentings soon began to rise again, and are now back at peak levels of about one million a year, according to hospital surveyor Millennium Research Group.

There you have it. A procedure that we can almost certainly do without, and it still lives on. Why?

In 2008, the Courage study faced a key challenge. A Washington state agency called the Health Technology Assessment Program, or HTAP, announced it would consider putting Courage’s findings into practice.

The agency, empowered to change coverage decisions for the state’s Medicaid program and some public-employee health plans, commissioned a review of the evidence backing stents. That process could have led to limiting the procedure’s use in the state’s Medicaid program and health plans for some state employees.

Certain cardiologists, as well as stent manufacturers, rallied to resist the review. In policy papers submitted to the agency, they argued that the Courage study had not included the latest models of stents, which were introduced after the study began, and should not be used to require all patients to attempt drug therapy first.

Other than Leah Hole-Curry, an attorney who heads HTAP, the agency has only one employee. State law requires it to outsource its reviews to private research firms. For the stent review, it hired a Seattle firm, Spectrum Research Inc.

Spectrum decided it needed more medical expertise to tackle the issue, and convened an August 2008 conference call with Ms. Hole-Curry, representatives of stent makers, and a number of interventional cardiologists.

According to an audio recording of the call, Spectrum’s researchers asked for assistance paring down the question of comparing stents to drug therapy, such as what kinds of patients should be considered and how to define different kinds of heart disease.

The industry and doctors declined to help. “We don’t want to end up being our own willing executioners,” said Mitchell Sugarman, the senior director of health economics for Medtronic Inc., a stent maker, on the call. (Rob Clark, a Medtronic spokesman, later said there was “widespread consensus amongst physician and industry groups that the [agency’s] questions were off-base and heavily misguided.”)

Greed, corruption, and personal financial interest is destroying our society. If that sounds socialist to you, you’re merely a misguided fool. Capitalism requires information, freedom of choice, transparency, and competition. The corporations, governmental agencies, and doctors involved in this issue are anti-capitalist, and pro-corruption.

That is why they get along so well with the Obama Administration.

Citizen!! Ration Thyself!!

This isn’t rocket science. You have 3 choices folks. You can have your health care rationed by;

1. The Government (Single Payer)
2. Your Insurance Company (Third Payer) or
3. You.

There is going to rationing in any event. Grow up and take control of your own health care, or have those decisions made by Obamunism and Obamunists. The answers are out there. Learn them, and fight for them.

Once Patients Pay, Health Costs Will Fall

Health Care: The push to reform the system is going in exactly the wrong direction. Instead of minimizing patient involvement in payment for treatment, Washington should be seeking to increase patients’ role.

The cost of American medical care is so high that it’s thought by some to be a tragedy. About one-sixth of the economy is made up of health care expenditures. On average, each American runs up $7,290 a year in medical bills. Bringing down the costs — without sacrificing quality of care — is a reasonable objective.

But supporters of the health care legislation recently passed in Congress have lost sight of the spending problem — if they ever had any clear concept at all.

There are two reasons why per-person health care spending in the U.S. is far higher than even Switzerland at $4,417 a year, or Luxembourg at $4,162, which rank second and third in the world.

One, America has the best health care on the planet. The smartest doctors, the finest in diagnostic equipment, top-flight treatment and advanced drugs don’t come cheap.

Two, our system encourages overuse. And, as any ninth-grade economics student will confirm, an increase in demand forces prices higher.

Rush explains health situation

You can listen on Real Clear Politics here.

Robert Samuelson eviscerates Obama

Why not just end the sentence at “A Parody.”

A Parody of Leadership

WASHINGTON — Barack Obama’s quest for historic health care legislation has turned into a parody of leadership. We usually associate presidential leadership with the pursuit of goals that, though initially unpopular, serve America’s long-term interests. Obama has reversed this. He’s championing increasingly unpopular legislation that threatens the country’s long-term interests. “This isn’t about me,” he likes to say, “I have great health insurance.” But of course, it is about him: about the legacy he covets as the president who achieved “universal” health insurance. He’ll be disappointed.

Even if Congress passes legislation — a good bet — the finished product will fall far short of Obama’s extravagant promises. It will not cover everyone. It will not control costs. It will worsen the budget outlook. It will lead to higher taxes. It will disrupt how, or whether, companies provide insurance for their workers. As the real-life (as opposed to rhetorical) consequences unfold, they will rebut Obama’s claim that he has “solved” the health care problem. His reputation will suffer.

So Obama’s plan amounts to this: partial coverage of the uninsured; modest improvements (possibly) in their health; sizable budgetary costs worsening a bleak outlook; significant, unpredictable changes in insurance markets; weak spending control. This is a bad bargain. Benefits are overstated, costs understated. This legislation is a monstrosity; the country would be worse for its passage. What it’s become is an exercise in political symbolism: Obama’s self-indulgent crusade to seize the liberal holy grail of “universal coverage.” What it’s not is leadership.

Olberman gets something right

I’m about as much an Olberman fan as I am a Beck fan. But like Beck, who occasionally knocks one out of the park, Olberman nails this one for his (left) side of the aisle. His answers are wrong (Single Payer, Public Option, Medicare Buy-In), but his prescription for what to do if this passes is dead on.

Mass civil disobedience is something that might bring left and right together once in a blue moon.

Health Care in the Democratic Matrix…

Just keep telling yourself and your friends…

“There are no “savings”

A Savings Mirage on Health Care

Let’s start with the numbers. Unfortunately, the word “savings” is used misleadingly. It doesn’t mean (as is usual) actual reductions; it signifies smaller future increases. There’s a big difference.

In 2009, national health spending will total an estimated $2.5 trillion, or 17.7 percent of gross domestic product. By 2019, it’s projected to rise to $4.67 trillion under present policies, or 22.1 percent of GDP. With CAP’s “savings,” it rises a little less sharply to $4.49 trillion, or 21.3 percent of GDP, according to Harvard economist David Cutler, the study’s co-author who provided these figures. Similarly, family health insurance premiums rise from 19 percent of median family income in 2009 to 25 percent in 2019 under present policies and 23 percent with CAP’s “savings.”

The point is simple: Even with highly optimistic assumptions, health spending remains out of control. It absorbs more of government, business and family budgets. Higher health spending would put pressure on future budget deficits, already projected to total about $9 trillion over the next decade. If new taxes and Medicare “savings” are real, they could be used exclusively to pay down deficits, not finance new spending.

But many may not be real. Writing in The Wall Street Journal, Dr. Jeffrey Flier, dean of the Harvard Medical School, gave the various health bills a “failing grade” and said they wouldn’t “control the growth of costs or raise the quality of care.” Quoted in Newsweek, Dr. Delos Cosgrove, head of the Cleveland Clinic, said much the same. Richard Foster, the chief actuary of the federal Centers for Medicare & Medicaid Services, doubts the cost-saving provisions touted by CAP would save much money. He’s also skeptical that Congress, facing complaints from hospitals and a squeeze on services, would allow all the Medicare reimbursement cuts to take effect. True, Congress has permitted some reimbursement reductions to occur but has repeatedly blocked the Sustainable Growth Rate adjustment for doctors, which most resembles the new proposals.

[Read more…]

Obama’s Lie

When Obama stated (on national television) that he is against “Single Payer” health care, he was lying. There are plenty of You Tube Videos to prove that.

He also campaigned on making sure “you won’t lose the insurance you have.” He lied about that too. There never was a way to achieve any of his goals without destroying the private health insurance market.

You Will Lose Your Private Health Insurance

So let’s get straight what the real essentials of the bill are-and how disastrous they are. Three provisions constitute the vicious heart of the Democrats’ health-care overhaul.

The first is “guaranteed issue” and “community rating.” This is the requirement that insurance companies have to offer coverage to people who are already sick, and that they be limited in their ability to charge higher rates for customer who pose a higher risk. The extra expense to the insurance companies of covering people with pre-existing conditions will get passed on to existing customers in the form of higher premiums. But why spend years paying these inflated premiums for insurance you’re not using, when you can get exactly the same benefits by waiting until you actually fall ill? The obvious result is that million of people, especially healthy young people, will quickly realize that there is no reason to buy health insurance until they get sick.

Following the usual pattern of government intervention, the health-care bill offers another intervention as the solution for the problem created by the first. The “individual mandate” requires everyone to buy health insurance and subjects us to a tax if we fail to do so. But this is an especially onerous new tax, the first tax not tied to any kind of income or activity. It’s not a tax on stock-market profits, say, or a tax on buying cigarettes. It’s just a tax for existing.

So fearing a public backlash, Congress didn’t have the guts to make this new tax very large-only $750. Yet actual insurance can cost more than $3,000 per year-and as we shall see, this legislation goes out of its way to drive up those rates by mandating more lavish coverage. So we end up getting the worst of both worlds. This provision won’t actually drive anyone to buy health insurance and prop up the risk pools for those who are insured. All it will accomplish is to create a brand new form of tax.

But the biggest power-grab in the bill is the government takeover of the entire market for health insurance. The bill requires all new policies to be sold on a government-controlled exchange run by a commissioner who is empowered to dictate what kinds of insurance policies can be offered, what they must cover, and what they can charge.

Right now, your best option for reducing the cost of your health insurance is to buy a policy with a high deductible, which leaves you to pay for routine checkups and minor injuries (preferably from savings held in a tax-free Health Savings Account) but which covers your needs in catastrophic circumstances-a bad car accident, say, or expensive treatment for cancer. This is the kind of coverage I have.

But the health-insurance exchange is intended to eliminate precisely this kind of low-cost catastrophic coverage. Its purpose is to force health-insurance companies to offer comprehensive coverage that pays for all of your routine bills-which in turn comes at a higher price. So under the guise of making health insurance more affordable, this bill will restrict your menu of choices to include only the most expensive options.

So there we have the real essence of this bill. It restricts our choice of which insurance to buy and pushes us into more expensive plans. At the same time, it destroys the economic incentive to purchase insurance in the first place and replaces insurance with a free-floating tax on one’s very existence.

What these people are doing is evil. Not wrong, but evil.

If you are looking for a strategy to stop this bill, forget calling your senator, and focus instead on funding opponents of Blanche Lincoln, Mary Landrieu, Dorgan, and Bayh (and/or any other so-called moderate). Once you’ve made a donation, call their office and tell them you will donate even more if they pass this bill.

It is my most fervent hope that someone in the Republican Party is working on a strategy to a) stop this, and b) base an entire campaign strategy not on its repeal, but its “improvement” under a new president and Congress in 2010 and then 2012. Running on “Repeal” will rally Republicans, but running on its “Improvement” will allow the party to make the case that they can get the issue right. We have to produce the proper alternative.

If the Democrats are stupid enough to pass such a destructive and evil bill, it is the responsibility of the Republican party to convince the electorate to punish them severely. This is a vile bill, and I hope you all work to stop it by virtually any means you can.

If health care is a right, then your Doctor is a slave

Jacoby nails this one.

What ‘right’ to health care?

My right to free speech or to own property does not give me a claim on anyone else’s time or labor or resources. But if I have a “right’’ to health care, someone else must be compelled to provide or pay for that care. Compulsion comes in different forms – higher taxes, insurance mandates, health-care rationing, intrusive regulations – but the bottom line is the same: a right to health care would leave society less free.

You have a right to stop shooting each other, to shooting up, to eating less crap, and to eating less. You do not have a right to make everyone in America pay for your foibles, nor to make some doctor fix what you could have avoided.