Consumer Power Report #186

Published July 17, 2009

Wow, the cracks are really beginning to show. Everywhere the “aura of inevitability” that President Barack Obama and Congressional Democrats tried to use to stampede people into supporting their plans is breaking.

Too bad groups like the AMA and AHIP got caught on the wrong side of history. While they were busy licking the president’s boots, the American people woke up and said, “No thanks. That’s not my style.” Folks are rising up all over the country.

The Washington elite will never believe it, but the American people are a lot smarter than they think. We understand intuitively that centralized, bureaucratic control doesn’t work. We didn’t have to wait for the evidence to come in. But now the evidence is arriving anyway. The Massachusetts experiment, which is the model for what Obama wants to do, is collapsing under its own weight. It has become a lesson in what NOT to do in health reform. No wonder Obama is trying to rush his plans through before people have a chance to comment on them.



I spent a wonderful day in Davenport, Iowa on Wednesday. I was there at the invitation of Iowa’s Public Interest Institute and its president Don Racheter. They set up an editorial board meeting at the Quad Cities Times, got me on an influential talk radio show on WOC hosted by Jim Fisher, and wound up the day with a town hall meeting at St. Albans University.

The evening meeting attracted about 65 people, mostly small business owners, retirees, housewives, and a few physicians. Unlike other such meetings I have spoken at, this time the SEIU sent a couple of people to try to disrupt it. Don Racheter did a good job of keeping order, but the Left is clearly getting nervous or they would not have bothered.

Here is a write up: Quad Cities Times

You don’t need to go to Iowa, or even leave your living room, to get involved. There are a host of ways to express your views on-line. Here are a few.

  • The Galen Institute has put together a “Do no harm” ( petition calling on Congress to follow the Hippocrates oath to “First, do no harm” when it tries to heal health care.
  • I like this one a lot. It is put together by the Social Security Institute and it invites you to “Opt Out of Government-Run and Government-Mandated Healthcare.” (


Speaking of “take back medicine,” the AMA’s recent endorsement of the horrendous House bill has awakened an awful lot of physicians. Many have told me they are just stunned. These include people who have held senior positions in AMA governance for decades. They say the AMA position contradicts everything that was discussed at the House of Delegates just last month.

Now, understand that the AMA endorsement was not the usual mealy-mouthed waffle — “Thank you, Mr. Chairman for your significant contribution. We stand ready to help you work through the remaining issues.” This was a full-throated, unambiguous endorsement of the bill as written, signed by Michael Maves, MD, the executive vice president (CEO) of the AMA. He wrote, “This legislation includes a broad range of provisions that are key to effective, comprehensive health system reform. We urge members of the House Education and Labor, Energy and Commerce, and Ways and Means Committees to favorably report H.R. 3200 for consideration by the full House.” There is not a word of reservation or concern.


The media is accurately reporting on the position. The Associated Press writes, “The American Medical Association on Thursday endorsed a liberal health overhaul bill that includes a public insurance option.” Even liberal advocates were surprised by the endorsement. The article quotes Dean Baker, co-director of the Center for Economic and Policy Research, a liberal think-tank, as calling it, “a tremendous coup,” and that, “(the AMA’s) full-hearted backing of a proposal that includes a public option could be a turning point.” “I was certainly surprised,” he said. “I didn’t really expect them to be on board.”

SOURCE: Associated Press

The endorsement has even made news in the UK. This article in the Guardian says, “The American Medical Association’s endorsement of the House healthcare reform bill on Thursday could be the game changer that Democrats need to make history.” It goes on to say that the AMA has now joined with its friends at Physicians for a National Health Plan in supporting nationalized health care.

SOURCE: The Guardian

Meanwhile, the physician Members of Congress do not seem to share the AMA’s position. The Medical Society of DC held a forum recently featuring seven physicians who are also in Congress. The program was aired on C-Span and provides some insights into the thinking of these folks. Moderator Peter Lavine, MD, president of the Medical Society, for instance, states clearly that we don’t need bureaucrats in the examining room, we need empowered patients. Too bad the AMA doesn’t listen to its own members.



As of this writing the House bill has been voted on favorably by two of the three committees of jurisdiction. The members obviously have not had the time to read the 1,000-page bill, let alone air these ideas with their constituents. But none of that matters when you’re on a steam roller.

More and more interesting things are being discovered as people have the time to read through this leviathan. Investor’s Business Daily got to page 16 and discovered that people will no longer be able to buy health insurance outside of the Connector.

SOURCE: Investor’s Business Daily

The Chicago Tribune looked at the bill and decided the “public option” is a “scam.” Writer Steve Chapman is not persuaded that a public option will “increase competition” since there are already 1,300 health insurance companies in the country. He concludes, “the president’s real enthusiasm is not for competition but for government expansion.”

SOURCE: Chicago Tribune

The Congressional Budget Office has reviewed the bill and discovered there is no real cost containment in it at all. Director Douglas Elmendorf delivered the bad news to Kent Conrad’s (D-ND) Budget Committee. He reported that rather than “bending the cost curve, the curve is being raised.” That kind of belies the argument that health reform will pay for itself over time.

SOURCE: Washington Post

Passing committee is one thing, but Blue Dog Democrat Mike Ross (D-AR) says, “there’s no way they can pass the current bill on the House floor. Not even close.” He says many Democrats will not vote for any bill that fails to reduce costs and relies on deficit funding to pay the bills.

SOURCE: Politico


The results keep coming in from Massachusetts and they aren’t pretty. The Wall Street Journal calls it “a mess.” It reports, “the returns are rolling in, and a useful case study comes from the community-based health plan Harvard-Pilgrim. CEO Charlie Baker reports that his company has seen an ‘astonishing’ uptick in people buying coverage for a few months at a time, running up high medical bills, and then dumping the policy after treatment is completed and paid for.” People can do that because of the guaranteed issue provision in the law that requires plans to sell coverage to anyone at any time with no denials or waiting periods. Yippee!

SOURCE: Wall Street Journal

The New York Times reports that, faced with a tight budget and high costs, Massachusetts is cutting people from the rolls. It writes, “The new state budget in Massachusetts eliminates health care coverage for some 30,000 legal immigrants to help close a growing deficit, reversing progress toward universal coverage just as Congress looks to the state as a model for overhauling the nation’s health care system.” The article goes on to report that the president of the Blue Cross Blue Shield Foundation, Phillip Johnston, thinks the solution is simple — “an income tax surcharge on the wealthiest.” There you go. Raise taxes and pass the money on to Blue Cross. Such a deal.

SOURCE: New York Times

The New York Times also reports that, “A high-level state commission recommended Thursday that Massachusetts seek to rein in health care costs by radically restructuring the way doctors and hospitals are paid.” It would institute a super capitation scheme known as “global budgeting.” That is, each institution would be rewarded a fixed amount of money.

This amounts to HMOs on steroids. The article says, “Global payments would reward health care providers for keeping their patients well rather than for merely treating their ailments. If the cost of treating a patient was less than the global payment, the provider networks, called accountable care organizations, would keep the difference as profit.” That is exactly the same idea that fueled the HMO movement in the 1990s. It resulted in drastic under-treatment of patients and was roundly rejected by the American people. Tell me again what Einstein’s definition of insanity was?

SOURCE: New York Times

Yet, the Times also reports on a hospital that is suing the state for underpayment. The article says, “The hospital, Boston Medical Center, faces a $38 million deficit for the fiscal year ending in September, its first loss in five years. The suit says the hospital will lose more than $100 million next year because the state has lowered Medicaid reimbursement rates and stopped paying Boston Medical ‘reasonable costs’ for treating other poor patients.”

Perhaps you thought the Massachusetts reforms were supposed to fix all these problems. But, “According to the suit, Massachusetts is now reimbursing Boston Medical only 64 cents for every dollar it spends treating the poor. About 10 percent of the hospital’s patients are uninsured — down from about 20 percent before the law’s passage in 2006. But many more are on Medicaid or Commonwealth Care, the state-subsidized insurance program for low-income residents.”

Just imagine the suits to come if the state starts doing global budgets!

SOURCE: New York Times

In spite of all this chaos, Mitt Romney is still enthusiastic about what he wrought while he was governor. In a recent interview, he gives the program an A grade. I’ll leave the conclusion to you. Which leaves me wondering. Is that man a fool, is he insane, or is he just another politician who will never admit when he has made a mistake?

SOURCE: The Boston Channel