#254: Obamacare – This Cannot Stand

Published January 10, 2011

Welcome to the first Consumer Power Report of 2011.

This New Year has brought an influx of new Congressmen in Washington and new state legislators and governors across the country. For many, the first topic of conversation when they enter these halls of the republic concerns health policy and entitlement reform.

In the next few days on Capitol Hill, we’ll see the first major vote to repeal President Barack Obama’s health care law. This is a vote that must happen, and ought to be politically easy given the jobs numbers involved – it’s a sign of commitment to the reason many of these new members got elected. What’s more critical is a vote that will come later, one that some observers and pollsters will declare must not happen politically – a vote that will offer America a clear choice about our budgetary future under the leadership of Budget Chairman Paul Ryan (R-WI).

If House Republicans heed the siren calls of pollsters who urge them to sit on their hands and do nothing by shirking this vote, we will know little has changed in Washington. So often in prior congresses, conservatives could not sway their hand-wringing colleagues to take firm stands in favor of balanced budgets, entitlement reform, and an approach to health policy reform that empowers individuals within open markets. We’ve seen the consequences of this failure: a budget picture that is growing worse with each passing day, a health care system in desperate need of reform, and a deficit graph line that expands with the entrance of the Baby Boomers into Medicare like a pig in a python.

This cannot stand, or we will reap the consequences. The left’s unchanged leadership, Nancy Pelosi (D-CA) and Harry Reid (D-NV), will do everything they can to stop the necessary reforms. But new legislators in Washington should take their cue from the boldness of the states, where it’s far more difficult to play shell games with budgets. This honesty breeds defiance, and I expect we will soon see governors, Democrats and Republicans, banding together to demand more flexibility from Washington as they await the outcome of the court challenges.

Every week I talk to more state legislators asking what they can do to battle back against Obamacare. Grace-Marie Turner has written an excellent column for Health Care News describing nine steps, which I strongly recommend as a starting point. Not all these votes will be politically easy – but it’s those votes, after all, that you were elected to make.

— Benjamin Domenech



How long will Donald Berwick last as head of the Centers for Medicare & Medicaid Services if the White House continually silences and overrules him? That’s the question I’m asking after the White House did exactly that, it appears, on Berwick’s pet end-of-life counseling project. Writing for Time magazine, reporter Kate Pickert outlines what happened:

“Well, this week, it looks like the Administration let politics guide policy once again, deciding to scrap a provision quietly inserted into new Medicare regulations that would have paid doctors to talk to patients about end-of-life care. … After the dustup became a ‘death panel’ firestorm, the provision was dropped, only to be quietly inserted again a few months ago by newly installed Medicare and Medicaid chief Donald Berwick. Doctors, hospice groups and advocates who new [sic] about the reinsertion supported the move. To the Administration’s dismay, the New York Times found out about the end of life counseling regulation – which was posted publicly in November but not in a way public comments could be accepted – and published a story about it on Dec. 25, 2010. Less than two weeks later, it was gone again.”

The rule had been issued by Berwick, effective January 1 (along with several other provisions of Obama’s law), and it has been for many years the kind of rationing-based approach which he favors. The end-of-life planning sessions in Britain, expanded while Berwick was consulting for their National Health System, have come under significant criticism in recent years for guiding the elderly toward morphine drips instead of treatment.

The larger question is this: will Berwick actually go back to the Senate for approval next year at the end of his initial recess-appointed tenure? With every passing week it becomes clear that the higher-ups in the administration are sheltering Berwick from media interaction, preventing him from speaking out on his views except in very controlled circumstances, and in this case, overruling his policy decisions as head of Medicare. How long will an ideologue like Berwick tolerate such disrespect from the White House? I suspect we’ll find out soon enough.


One story the press ran with regarding the end-of-life counseling issue was that this was an extension of the “death panel” concept credited to former Alaska Gov. Sarah Palin and her Republican allies. This is false, or at the very least, a vast oversimplification. Palin and Republicans were talking about a lot more than end-of-life counseling, as Avik Roy details at The Apothecary:

“The entire reason death panels exist in Britain is because, when the NHS was founded in 1948, few people understood that making health care ‘free at the point of care’ would lead people to use more of it: much more. To the point that today, in Britain, the U.S., and nearly every other country, health care is sinking the budget.

“No country with a socialized system, including ours, has found the political will to attenuate the universal, unlimited health care entitlement, once installed. So governments come up with politically non-transparent ways to deal with the problem. One routine tactic is to pay doctors and hospitals and companies less for their services and products, leading to poorer and poorer quality.

“There comes a point, however, when you’ve cut all you can cut out of hospitals’ and doctors’ pay. At a certain point, the brightest people stop applying to medical school, because they can make more money by going to law school or business school instead. At a certain point, the cost of care becomes greater than what the government pays you for that care, leading providers to do the rational thing and stop providing care.”

SOURCE: The Heartland Institute

This is as good an explanation for why rationing happens as I’ve read, and it extends to President Obama’s health care law in many areas beyond end-of-life counseling. Read the whole thing.


Here’s an interesting study at Health Affairs concerning the ability of institutions like the Cleveland Clinic and others to provide care with less expense than other institutions. Written by John Kastor of the University of Maryland and Mark Kelley of the Henry Ford Health System in Detroit, the study examines 12 different institutions – and among their findings is this:

“Most organized group practices, known for lower cost and higher quality, reward physician productivity. Some health reform proposals, like capitation and bundled payments, will change revenue flow and may disrupt the conventional RVU metrics. For example, physicians may be asked to perform ‘non-RVU’ work, like coordination of care. Health policy makers should be aware that even among practices cited as exemplary, physician productivity is embedded deeply in the current system of rewards.

“In conclusion, our study reports that, in the 12 groups we studied, salary without supplements or consideration for volume is the exception rather than the rule. We also learned that, driven by competition to recruit doctors, most of our multispecialty group practices compensate at levels that approximate or nearly approximate what the physicians could earn in private practice.”

Rewarding physicians based on productivity can lower costs? What a concept!

SOURCE: Health Affairs


Friend of CPR Roger Bate at the American Enterprise Institute sends along this newly released working paper that examines the quality issues for drugs made in emerging markets, which he describes as “a disturbing picture”:

“Some drug makers, most registered in the countries where they sell products, are either cutting corners or are incapable of making good enough products to maintain consistent standards. So who performed well? Three types of producers formed about 60 percent of our sample – western innovators, western generic manufacturers, and large Indian generic manufacturers. All three of these types of players consistently made good products. The rest: small Indian producers, those from other Asian countries, and especially those made in Africa, had notable numbers of drugs fail variability tests. The conclusion is that it is not safe to assume that all medicines are created equal. It really is a case of caveat emptor.”

I’ll be curious to see the final version of this one.


If there’s one thing the press loves, it’s bipartisanship for the sake of bipartisanship. That’s what we see in one measure being introduced in the new Senate by Sens. Ron Wyden (D-OR) and Scott Brown (R-MA), who have left Washington’s press corps gushing over their alliance on a measure to tweak the individual mandate waiver allowed under Obama’s law. In this case, absent from the Washington Post profile of this union is any real description of what Wyden-Brown’s proposal would actually do. Nor is there any indication Brown himself knows:

“Brown’s office declined to make him available to discuss his own bill. On a recent afternoon, after he had passionately declared to a near-empty Senate chamber that ‘I worked with the senator from Oregon and other senators to find common-sense solutions,’ Brown walked off the floor and to the elevator bank, where, in response to a reporter’s question, he explained the legislation thusly.

“‘Well, you know I think the health-care bill is deeply flawed,’ Brown said, stone-faced, as aides quickly converged around him. ‘I would like to see it repealed, but for my state and other states like it, who want to participate and do things in their own states, like we’ve done in Massachusetts, it’s a good, bipartisan, common-sense solution.'”

“His aides ushered him toward an opening elevator. Brown stepped in and denied a reporter extra time to talk about his legislation. ‘I don’t really have anything more to say about it,’ he said. As the doors slid shut, he shrugged off the odd-couple suggestion by saying, ‘I treat every senator equally.'”

Brown may not know better, but Wyden should. As I’ve noted at The Oregonian, all that Wyden-Brown does is allow states greater flexibility in timing, giving them the freedom to opt out of the individual mandate sooner than they can under the original legislation (2014 instead of 2017). But it doesn’t change the steep requirements necessary to receive that waiver – requirements that include proving to HHS Secretary Kathleen Sebelius that just as many or more people will purchase or receive insurance under their plan as would be covered under the mandates.

Yes, you read that right: In order to get a waiver from the individual mandate, states must prove that as many or a greater number of people will purchase insurance as would under a law requiring them to purchase insurance. If that’s not the definition of a pointless nod toward state innovation, I don’t know what is. Enough of pointless moves – time’s a wasting on real reform.