Consumer Power Report #177

Published May 8, 2008

At this point it is all about money. One of the articles below mentions that the liberal group Health Care for America Now has $40 million to spend on inflicting government health care on us. This is just one of many similar efforts on the Left. Compare that to Rick Scott’s valiant investment of $5 million in Conservatives for Patient Rights. And he is basically alone.

We don’t need as much money as the Left. Our arguments are better and we are more in tune with the thinking of the broad majority of Americans. Part of the reason the Left needs so much money is because what they are trying to do is so abhorrent to most Americans. It takes a whole lot of marketing to get people to buy something they don’t want and don’t believe in.

But to date the discussion has been one-sided. People are not even aware that there are two sides to this story. If you care about the future of health care in America it is time to pony up some dough. Do it now. Every day is vital.

Go to to find out how.

Greg Scandlen

In This Issue:


Walt Francis, the incomparable publisher of the Washington Checkbook, a guide for federal employees looking at FEHBP options, has written the definitive rebuttal of proposals for a public option in any federal “insurance exchange.”

He summarizes his paper in his conclusion:

“Members of Congress and other advocates who argue for a coercive public plan along the lines proposed by Hacker, Davis, Holahan, and Blumberg should be asked to explain why they favor compulsory participation by health care providers, accompanied by stringent wage and price controls. They should also be asked to explain why they use free-market language like “competition,” “bargaining,” and “level playing field” to–falsely–describe such a system. They should be asked why they favor government coercion for most Americans’ health insurance.

“They should also be asked why Original Medicare should to be expanded to cover most of the American population in order for it to improve quality or better control costs through improved methods of payment and administration. Is Medicare, the largest health plan in America, and the plan that covers over three-fourths of all seniors, not large enough as is to achieve all those desirable reforms and innovations mentioned by Hacker and Davis? What potential reforms could be so difficult to achieve in a $400 billion program as to require doubling, tripling, or quadrupling the number of people it covers?

“Relatedly, they should be asked what reason exists to believe that Medicare can be expected to achieve innovations and reform that have somehow eluded it for the first forty years of its existence? What has changed that will ensure that Medicare will achieve brand new innovations in bundled payments, in case management, in disease management, in coverage decisions made on cost-effectiveness grounds, and in other areas of reform in vogue today? Considering that “Medicare” is not an independent entity, but one micro-managed by the Congress, what reason exists to believe that the Congress can newly empower itself to ignore constituent pressures, lobbying, lowest-common-denominator decisions, and above all the cardinal principal of politics in America: inflict no pain on the status quo? Put most succinctly, why would not the most likely outcome be that “the real price of a public health plan [is] less innovation and lower quality” than we can expect from private plans?

“Advocates of a public plan usually argue that Original Medicare’s administrative costs are lower than those of private plans, and a major source of savings that could finance health reform. But this argument ignores the problem that one of the main reasons Medicare’s administrative costs are low as a percentage of its overall spending is that it fails to control both wasteful spending–as much as one-third of all Medicare spending–and fraud. The worse Medicare performs, the better its ratio of administrative costs appears; and the less it spends on administration, the worse it performs. Some of Medicare’s inability to control waste is inherent in its structure, and some is due to congressional decisions to reduce administrative spending below the prudent levels recommended by each Administration. Why is this failure labeled a success, and why is this a management and oversight model to expand?”

SOURCE: The Heritage Foundation


Insurance Industry

Politico reports that the insurance industry is begging for “heavy regulations” if it will save them from a public option. AHIP President Karen Ignagni participated in a meeting with New York Senator Charles Schumer and said, “We are not asking any individual to trust us–we are asking them to trust the government.” The article explains, “Ignagni said the industry could be trusted to expand coverage if the government created a highly regulated private insurance marketplace.” But Mr. Schumer was not impressed–“Schumer, however, proved to be the most outspoken skeptic of the industry’s appeal. Those who reflexively oppose the public plan, despite efforts to make it competitive with private insurers, were ‘close-minded,’ he said. He added, ‘The bottom line is you need somebody who is not a private insurance company to be in the mix, and there are many of us who feel very strongly about that.'”

SOURCE: Politico

GOP Stumbling

Politico also ran an article noting, “GOP Stumbling in Health Care Fight.” The article points out that, “There’s no Republican plan yet. No Republicans leading the charge who have coalesced the party behind them. Their message is still vague and unformed. Their natural allies among insurers, drug makers and doctors remain at the negotiating table with the Democrats.”

Meanwhile, “The organizational strength behind Obama’s plan is enormous. The House speaker, the Senate majority leader and the committee chairmen have agreed to work together. The major labor unions have teamed up with business groups. An umbrella group for liberal organizations, Health Care for America Now, is spending $40 million on the fight.”

The article goes on to describe in depth just how disorganized the GOP is, and has been since the campaign when “Obama bombarded McCain with health care advertising. The Democrat spent $113 million, or eight times that of his rival, running almost 200,000 commercials to McCain’s 11,300.

The article concludes, “Republicans cannot just oppose a bill, and they cannot simply recycle the old ideas like health savings accounts and tax breaks. ‘We could have come out with the same health care principles that we have always talked about,’ Blunt’s spokesman Nick Simpson said Friday. ‘This group wants to come up with fresh solutions and not just party rhetoric–and that takes some time.'”

This is misguided. The Republicans don’t need “fresh” solutions. They need to look at what works (consumer-driven care) and what doesn’t (bureaucracy-driven care) in health care reform, and make the case articulately and intelligently. But that would require paying attention.

SOURCE: Politico

Fred Barnes

Writing in the Weekly Standard, Fred Barnes says, “In taking up health care legislation, this isn’t 1994. Back then, Republicans, conservatives, and queasy Democrats worked with doctors, pharmaceutical companies, hospitals, HMOs, and insurers to defeat the scheme cooked up by Hillary Clinton. It failed without being reported out by any committee in a Democratic Senate or House.” He writes, “Obama has learned from the Clintons’ mistakes.”

For one thing, he is letting Congressional Democrats write the bill–“This is both smart and politically safe. They’re in sync with Obama on a mandate that every American have health insurance with generous minimum benefits, that businesses offer it to employees or pay a stiff fine, and that people have the option of switching to government health insurance.” But instead of calling it “government insurance,” they are calling it the more benign-sounding “public option.”

He adds, “For now, the natural opponents of Obamacare are divided and fearful. Doctors are not engaged. Hospitals are concerned with the narrow issue of fees paid by the government. Insurance companies and the pharmaceutical industry are terrified of crossing Obama. The conservative movement hasn’t set its sights on stopping the president on health care.”

He calls on Republicans to “rally a well-financed army of relentless opposition–not for the good of the party, but for the good of the country.”

SOURCE: Weekly Standard

6 Deal Killers

The Consensus Group has come out with a list of “6 Deal-Killers For National Health Reform.” According to a press release, the group includes, “health policy experts from the American Enterprise Institute, the Center for Medicine in the Public Interest, the Ethics and Public Policy Center, the Galen Institute, The Heritage Foundation, the Independence Institute, the Institute for Policy Innovation, the Institute for Research on the Economics of Taxation, the National Center for Policy Analysis, the Pacific Research Institute.”

The six things it objects to are:

  • A new government-sponsored health insurance plan.
  • A move to force employers to provide health insurance.
  • A uniform, government-defined package of benefits.
  • A mandate that individuals must purchase insurance.
  • A National Health Insurance Exchange that extends federal regulatory powers over private insurance.
  • Federal interference in the practice of medicine through a federal health board, comparative effectiveness review or other government intrusions into medical decision-making.

The Heritage Foundation’s Bob Moffit says, “the Consensus Group believes that the industrial age, top-down proposals put forth by the administration and congressional leaders would undermine choice, competition and innovation in our health care system, rather than improve it.”

SOURCE: Press Release


HIT Security?

The Washington Post reports that in Virginia hackers broke into a state-run database intended to track prescription drug abuse. They actually stole the records of 8 million Virginians and deleted the information on the state Web site. Now they are demanding $10 million in ransom to restore the data. Something similar happened last October to ExpressScripts, according to the article. At that time the hackers threatened to disclose the personal medical information of millions of Americans unless the company paid them not to do so.

SOURCE: Washington Post

Individuals Can Do Better than Big Groups

The Newark Star Ledger reports on a local retiree from AT&T who discovered he could save a whole lot of money by buying an individual MediGap policy over the HMO coverage the company provides to retirees. The AT&T plan was costing him and his wife $350 per month, but the individual plan (both from Aetna) would cost only $208 per month–for better benefits. The article wonders about the conventional thinking that large employers are able to “negotiate” better deals than individual consumers shopping on their own.

SOURCE: Newark Star Ledger

Need Help Planning your Life Style? Ask the Governor

Jonathan Miller, a legislator in West Virginia, was kind enough to supplement my state report from last week with information on West Virginia’s efforts. Like other places, that state beat down a bunch of pie-in-the-sky proposals including raising cigarette taxes, requiring restaurants to post the caloric content of the food they sell, allowing childless adults to enroll in Medicaid, and offering coverage of primary care on a capitated basis. The one thing that was passed was creation of the “Governor’s Office of Health Enhancement and Lifestyle Planning,” or GO HELP. So, in West Virginia the governor will now help you plan your life style. This is not a parody.

SOURCE: West Virginians for Affordable Health Care

Small Biz Divided?

An article by Kent Hoover in various Business Journals looks at small business attitudes towards health reform. The version I have (from MSNBC) is headlined, “Small-Biz Divided on Health Care Reform,” but that isn’t the thrust of the story at all. The actual story cites several business groups (NFIB, NSBA) as being skeptical of current proposals, especially the public option. Only one small business owner is quoted as supportive and he was a witness at a Ways & Means Committee hearing.

SOURCE: Business First of Buffalo via MSNBC

Swiss Docs Go On Strike

In a harbinger of what may happen in the U.S., physicians and other medical workers in Switzerland went on a one-day strike to protest new payment cuts for laboratory services, according to an article in the Turkish Weekly. The paper reports, “More than 5,000 angry GPs, medical assistants, laboratory assistants and specialists marched in Lausanne and Geneva on Tuesday in protest. The one-day strike in western Switzerland is due to be followed by demonstrations across the country on April 1.” Jean-Pierre Pavillon, president of the Vaud Medicine Society, said, “We’re not fighting for our salaries, as we don’t make a living with the laboratory activities. We don’t want to lose this important working tool.” The president of one of the Swiss insurance companies dismissed the protestors as “a movement of bad-humoured people disorientated by the evolution of the current system.”

SOURCE: Turkish Weekly