Monday, July 3, 2017

The Legend of Health Care

Once upon a time, in a kingdom by the sea, broad consensus has been reached, which seems rather weird nowadays. America, you see, was spending too much money on health care for too little in return. We spent almost twenty percent of our GDP on health care, which was much more than any other developed country in the world, but our health outcomes were middling at best. And the costs just kept rising. Something had to be done before health care terminally crowded out every other public need. The Affordable Care Act, Obamacare, was that something. It was supposed to “bend the cost curve” and everybody was supposed to learn that “less is more”.

And so the nation rolled up its sleeves and got to work. Insurance companies were supposed to limit their administrative waste and tightly mange care. Hospitals were supposed to bundle and warrant episodes of care. Doctors were burning out trying hard to cut the volumes of their expensive services, while exercising stewardship of scarce resources (i.e. dollars). Pharmaceutical companies were to be taken to the shed for regular beatings. Patients were educated to choose wisely and seek value for every insurance penny. And in a bizarre remake of Fantasia, the government was cheerfully orchestrating the entire effort with rules, regulations, computerizations and spontaneously generated armies of consultants.

It didn’t work. Not even a little bit. Yes, across the board industry profits and stocks were soaring, as were the loudly lamented loses from sky-scrapping premiums paired with ballooning deductibles (don’t ask, health care is complicated). And yes, Obamacare put a big dent in the “free loader” problem (as the uninsured issue was described to the Supreme Court by the Obama administration), but other than that, everything else was in the “showing potential” or “more research is needed” stage. It wasn’t for lack of trying either. The levels of “disruptive innovation” were positively dizzying. Ever increasing heaps of monies were getting shuffled relentlessly from here to there and back again, amidst vigorous debates on the merits of this or that “initiative”, but for some peculiar reason, not one dollar was ever taken off the health care table.

And then the warm and cozy incubator, where health care expenditures were being raised and nurtured for ages, experienced the mother of all disruptions. Donald Trump got himself elected President. Bluster and bravado notwithstanding, Mr. Trump is a weak President, with no political machine and no support inside the criminal beltway, or the moneyed power-centers that rule this country. The raging crowds that propelled Mr. Trump’s unusual ascent turned back into pumpkins at midnight on November 8th, 2016. He is virtually alone in Washington DC and it seems that slowly but surely the President is realizing that you gotta dance with the one that brung ya.

The Republican Party is now aiming in earnest to take a good portion of government money off the health care table. After seven years of planning, plotting, squirming and howling, the conservative wing of the GOP finally got its hands on the chips’ rake, and they intend to use it. This should not come as a surprise to anybody, but the Obamacare repeal and replace theater can be very instructive in ways that have little to do with a succession of wacky bills that will never become law. For starters, it’s worth noting how beautifully the current commotion validates that Paul Ryan and his fiscally responsible buddies are, and always have been, less than concerned with the infamous 47% of Americans who would never vote for Mitt Romney (but somehow voted in droves for Donald Trump).

Heath Care Hopscotch

Most importantly though, the responses to Mr. Ryan’s slash and burn reform proposals, from both sides of the fake ideological aisle, teach us that we will never be able to “bend the curve” of health care costs through a regular parliamentary process. Never.  And here are some vignettes that might explain why.

When President Obama signed his landmark health care reform legislation, an individual mandate to purchase insurance was included. The mandate was originally proposed by a premier conservative think tank, and copiously derided by the President himself during his 2008 primaries. Once Obamacare became law, the Republican Party took its objection to the individual mandate all the way to the Supreme Court, and when it lost its case there, embarked on a seven years (and counting) quest to repeal and replace Obamacare. Somewhere in the middle of that journey, the GOP fielded presidential candidate Mitt Romney, the first implementer of the individual mandate in Massachusetts (with Paul Ryan, the greatest Obamacare warrior, as his running mate).  How much of the Republican opposition to forcing people to buy insurance had to do with conservative ideology and how much it had to do with political opportunism, and how much it had to do with Mr. Obama himself, is up to you to decide.

Back during the 1995 budget wars President Clinton proposed a “"per capita cap" on federal spending for Medicaid, in which federal payments would be made for each eligible person but with the amount rising each year only according to adjusted inflation increases”. Although the Medicaid cap never came to be, according to then Senate Minority Leader Thomas A. Daschle (D-S.D.) "Virtually every Democrat indicated today that they could support it. In fact no Democrat indicated that he could not support it”. Fast forward twenty years or so, and the GOP proposal to impose inflation adjusted per capita caps on Medicaid is equivalent to the murder of millions of Americans in the eyes of current Congress Democrats, many of whom were also there in 1995.

Heath Care is just a political bludgeon. There are two ideological bookends for the theoretical idea of health care: equality vs. free markets. But when it comes to gory details, and heath care is a cornucopia of goriness, there are no principled positions to be taken. Everything can be twisted and fit into all but the most extreme ideologies (i.e. either everybody has a right to all the care they want or you get what you can pay for) and there are few, if any, people firmly entrenched at each end of the spectrum. Once you acknowledge that there is a morally valid spectrum, you can hop, skip and jump all over the place to serve your immediate political needs, which easily explains the vignettes above and many more acts of intellectual and linguistic chicanery commonly employed in health care policy propaganda.

The Unbending Curve

When the Democratic Party had its chance to bend the curve, they chose to spend more upfront and hope that harassing doctors and managing patients will bend the curve in mysterious ways. Republicans seem more inclined to use brute force to push the curve down at its weakest point, while hoping that the same doctor and patient harassment tactics will counteract the damage caused by any shortages in health care funding.  Whereas Obamacare brought us a flurry of innovations designed to move the system to value-based payments so we can save a few bucks, GOPcare will be bringing us a flurry of equally impotent innovations designed to move the system to value-based care so we can squeeze more quality from fewer bucks. In other words, the more things change, the more they stay the same.

If we want to spend less money on health care, then we need to spend less money on health care.  That pesky curve is not going to bend itself. All industry innovations claiming to save money are simply moving coins from one profit center to another, usually where the profit margins are higher and efficacy is lower or practically nonexistent. Curbing patients’ utilization of proper medical services, which is already lower compared to other developed countries, is a virtuous endeavor. Curbing the wanton rise in prices of said services is either evil Communism, or heartless Capitalism, depending on how the winds blow in Washington DC. The simple truth is that bending the curve means paying less than the industry feels entitled to, and the medical industrial complex shall not be denied. But there is new hope now…

Dollar Store Care

The progressive half of our ruling class seems to have had an epiphany of sorts. Medicaid, you see, is now an array of no frills, managed care, commercial health plans with atrociously narrow and underpaid networks. Medicaid is the Dollar Store of health care and as such it is the ultimate value-based solution. Wouldn’t it be nice if we could put the entire former middle-class on Medicaid and call it universal health care or even single payer? Besides, Medicaid accessorizes very nicely with that new and so very hip universal basic income pushed by progressive billionaires who are sucking up every bit of wealth from every living thing. The conservative half of the ruling class would much rather see a free market of Dollar Stores for health care. The GOP value-based solution is to reduce public funding for health insurance and let the market for Medicaid style commercial plans do its thing unencumbered by the heavy hand of government and the excessive burden of Federal dollars.

The existential question now before us is whether the government will be charitable enough to subsidize our Dollar Store purchases or not so much. There is no longer any debate about the race to a Dollar Store standard of care in America. The goal posts have been moved. Expectations have been reset. Mission accomplished. A win for progressives is Medicaid for all. A win for conservatives is Medicaid for some. The final score: Billionaires 1, America 0. What’s next?