Consumer Power Report #190

Published August 13, 2009

Nancy and I went to Ben Cardin’s town hall meeting in Hagerstown this week. We couldn’t get in to the hall, but from news reports the inside was much like other town hall meetings around the country–worried people afraid of what the politicians are doing to their health care.

But we spent some time talking to the 500 or so people outside. Some observations:

We were stunned at how many people showed up. Hagerstown is not a hotbed of political activism. The event was held at the community college and we got there half an hour early, but every parking space was taken and a line of people hoping to get in went around the block.

Senator Cardin had a young staffer outside inviting people who couldn’t get in to fill out comment cards. This was a very good move on his part. It indicated that he cared what people thought. And people took the opportunity seriously, writing extensive comments on the cards.

The only signs of “organized protest” I could see was a group from Organizing for America (Obama’s own organization), and a small group of Lyndon LaRouche supporters who were passing out flyers portraying Obama as Hitler. The LaRouchies were a surprise. I didn’t know they still existed or that LaRouche was still alive.

Opponents of the bills outnumbered supporters by at least 10 to one. Nancy thinks it was a lot more than that, like 50 to one.

The people we spoke to were very well informed. Many of them had read the House bill (H.R. 3200), but not so much the Senate bill. They are extremely concerned about government bureaucrats interfering with their health, and even more concerned about the massive debt that is being left for their children and grandchildren.

There was no audio coming from the hall, but one person had a radio, which was broadcasting the event inside. He put it up in a tree and 30 people stood around listening to every word. These folks want to be engaged.

Everybody we saw was civil, with Obama supporters and opponents talking to each other. There was no yelling, no chanting, just fervent conversation.



The best analysis I have seen about the current debate is written by Peter Ferrara and published by The Heartland Institute. In a press release announcing the new study, Dan Miller writes:

The health care overhaul bills championed by the Obama administration and congressional Democrats would result in less health care for consumers and higher taxes for all, a veteran health care policy analyst concludes in a study published Thursday.

Peter Ferrara writes in The Heartland Institute policy study that the Obama health care overhaul legislation would:

  • Impose rationing of health care procedures that will deny consumers care they seek.
  • Restrict consumers’ freedom of choice over doctors and hospitals.
  • Expand the number of health care entitlements to new groups of consumers.
  • Trigger sharply higher taxes to pay for the overhaul.

“There is no rule of reality that says America must have the highest standard of living in the world. Under the Obama health care plan, it soon would not,” writes Ferrara, director of entitlement and budget policy for the Institute for Policy Innovation in Texas. “Today, Americans enjoy the best health care and medical services in the world, an important part of our high standard of living. President Obama … would tear down what is good about the current system and replace it with old-fashioned and outdated socialized medicine policies adopted by other countries, reflecting their lower living standards.”

Mr. Ferrara has always been a terrific writer and analyst and he has outdone himself on this one. I urge you to download it and keep it handy as the debates heat up.

SOURCE: Ferrara study


Max Pappas from FreedomWorks forwarded Section 1145 of H.R. 3200, “Treatment of Certain Cancer Hospitals.” He said, “it seems to give the Secretary the power to put price controls on specialty cancer centers,” and he was wondering if he was reading it right.

Like everything in this bill, it is impossible to know for sure, but it certainly seems like it. At a minimum, it appears to give HHS the power to reduce payment to any facility whose charges are above average, and it appears to be independent of any case mix adjustment where facilities with more difficult cases get paid at a higher rate.

Particularly telling are three additional paragraphs that seem to carve-out particular hospitals in certain Congressional districts from being subject to this. It is impossible to know what facilities those might be or who is benefiting. Here is an example of one:

“A hospital that was recognized as a comprehensive cancer center or clinical cancer research center by the National Cancer Institute of the National Institutes of Health as of April 20, 1983, that is located in a State which, as of December 19, 1989, was not operating a demonstration project under section 1814(b), that applied and was denied, on or before December 31, 1990, for classification as a hospital involved extensively in treatment for or research on cancer under this clause (as in effect on the day before the date of the enactment of this subclause), that as of the date of the enactment of this subclause, is licensed for less than 50 acute care beds, and that demonstrates for the 4-year period ending on December 31, 1996, that at least 50 percent of its total discharges have a principal finding of neoplastic disease, as defined in subparagraph (E).”

Any time legislation is this specific it is a hint that it is aimed at only one favored party, but Congress doesn’t want you to know about it. There is certainly only one facility in the entire United States that meets all these criteria. And that one facility almost certainly has a CEO who is the brother-in-law of or campaign contributor to the Member of Congress who wrote the paragraph. While every other treatment facility will have its payments slashed, this one is exempted.

This is one paragraph in a 1,000-page bill. The rest of the bill is chock-full of similar provisions, all aimed at rewarding friends and punishing opponents.

There is nothing new about this. Two years ago, Robert Pear wrote an article in The New York Times about similar shenanigans in the SCHIP bill, but he was able to identify specific hospitals and the Congressmen who were carrying their water. For instance, he reported that one hospital in Green Bay, Wisconsin was “deemed to be located in Chicago” for purposes of future Medicare payments. The provision was inserted by Rep. Bart Stupack (D-MI) because the facility also serves Michigan’s Upper Peninsula. And Rep. Maurice Hinchey (D-NY) determined that two hospitals in Kingston, New York will be paid at the rate for hospitals in New York City.

But there has never been a health care bill as big or as corrupt as this one. It takes an awful lot of pages to reward all your campaign contributors. No wonder it is so long.

SOURCE: New York Times


Part of the reason regular citizens are so agitated is because they sense intuitively that they have been sold out by everybody in Washington. One might think that at least physicians would be concerned about the well-being of their own patients, if not for their own professional integrity. One would be wrong.

It is almost comical how much abuse these groups will take and still keep licking the boots of their Washington masters. The sado-masochism of this charade is enough to make John Waters gag. Obama accuses doctors of ripping out children’s tonsils and amputating the feet of diabetics, all to put a few bucks in their pockets, and the AMA announces it is joining an advertising effort to spend $12 million to support the very president who is so contemptuous of them.

Mike Allen of the Politico reports, “The new group, funded largely by the pharmaceutical industry, is called Americans for Stable Quality Care. It includes some odd bedfellows: the American Medical Association, FamiliesUSA, the Federation of American Hospitals, PhRMA and SEIU, the service employees’ union.”

Let’s see — “Stable Quality Care.” Is that the kind of health care horses get?

SOURCE: Politico

The New York Times reveals just how the administration has been able to keep these groups in line. The article says,

“Lobbyists for the drug and hospital industries say that, as early as June, White House officials directed them to work out cost-saving deals with Mr. Baucus’s committee. Drug industry lobbyists said they negotiated a deal to contribute $80 billion over 10 years toward the cost of an overhaul with Mr. Baucus, under White House supervision, before taking it to the president for final approval.

“Hospital industry lobbyists, speaking on the condition of anonymity for fear of alienating the White House, say they negotiated their $155 billion in concessions with Mr. Baucus and the administration in tandem.

“Several hospital lobbyists involved in the White House deals said it was understood as a condition of their support that the final legislation would not include a government-run health plan paying Medicare rates — generally 80 percent of private-sector rates — or controlled by the secretary of health and human services.”

So the message from the White House, obviously, is “support the program and give us some modest cost savings, or we will hit you hard.” And the industry response is, “Yes, Sir!”

SOURCE: New York Times


Interesting that AHIP is not part of this coalition. They seem to be like a deer in the headlights. They want to play patty cake with the administration. They have offered to surrender every principle they ever had if only they could get mandatory coverage and no federal competition. But still, the Dems are using them as whipping boys — “immoral,” “villains,” etc. It’s like the Democrats don’t know how to act if their enemies surrender.

An article by Reed Adelson in The New York Times sums all this up. He writes that AHIP President Karen Ignagni was “one of the main architects of the friendly approach.” And, “For a while, it seemed to be working — until recently, when the insurance industry re-emerged as Washington’s favorite target. “Villains,” Nancy Pelosi, the House speaker, called health insurers. And Mr. Obama derided the industry for pocketing “windfall profits.” (Actually, the health insurance industry is not particularly profitable.)

The article goes on to say Ignani was “taken aback,” wondering “why insurers were being singled out when, in her view, they had accepted that change was necessary.” The article concludes, “Despite her efforts to ally the industry with Washington, however, it risks being thrust in the same role it played 15 years ago when it helped derail reform.”

SOURCE: New York Times

Time magazine echoes many of these thoughts in an article headlined, “What Insurers Are Trying to Get Out of Health Reform.” The article by Kate Pickert starts by saying,

“Insurance companies have always been an effective villain in the health-care-reform debate, but this year the industry thought things might be different. Recognizing the growing sentiment for some kind of change and fully aware that universal coverage would help bulk up their rolls as baby boomers age into the Medicare system, private insurers early on declared their (albeit qualified) support for President Obama’s health-reform effort. So when word came last month that the Democrats were drawing up a new public-relations battle plan, the insurance companies were sent reeling — and seemed to be caught off-guard. A late July memo from the House Democratic leadership about how to sell reform during the congressional August recess told members, ‘Hold the insurance companies accountable.’ House Speaker Nancy Pelosi called private insurers ‘villains,’ and President Obama, in an exclusive interview with TIME, framed his push for changes to the U.S. health-care system as ‘insurance reform.'”

SOURCE: Time Magazine

And then, HealthLeaders magazine piles on with this, “The Obama administration’s pugnacity toward the nation’s private health plans intensified today with the release of a short, but sharply worded HHS talking points memo detailing what federal officials say is the industry’s widespread ‘discrimination’ against people with pre-existing conditions.”

It goes on, “America’s Health Insurance Plans President and CEO Karen Ignagni — who last week complained of attempts to ‘demonize’ her industry — today took issue with the HHS report and insisted that her industry is leading reform efforts. Health plans last year proposed health insurance reform to make sure that no one is denied coverage because of a pre-existing condition.”

SOURCE: HealthLeaders Magazine


Whole Foods President John Mackey had an op-ed in The Wall Street Journal that is just outstanding. I wish I had the space here to simply reprint it. He starts out writing,

“While we clearly need health-care reform, the last thing our country needs is a massive new health-care entitlement that will create hundreds of billions of dollars of new unfunded deficits and move us much closer to a government takeover of our health-care system. Instead, we should be trying to achieve reforms by moving in the opposite direction–toward less government control and more individual empowerment. Here are eight reforms that would greatly lower the cost of health care for everyone:

1. Remove the legal obstacles that slow the creation of high-deductible health insurance plans and health savings accounts (HSAs).

2. Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits.

3. Repeal all state laws which prevent insurance companies from competing across state lines.

4. Repeal government mandates regarding what insurance companies must cover.

5. Enact tort reform to end the ruinous lawsuits that force doctors to pay insurance costs of hundreds of thousands of dollars per year.

6. Make costs transparent so that consumers understand what health-care treatments cost.

7. Enact Medicare reform.

8. Finally, revise tax forms to make it easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance and aren’t covered by Medicare, Medicaid, or the State Children’s Health Insurance Program.

I couldn’t have said it better myself.

SOURCE: Wall Street Journal


Finally, we can’t wrap up this issue without a quick comment on the article Nancy Pelosi and Steny Hoyer wrote for USA Today. Most of the commentary has been about their calling their opponents “un-American.” That is indeed offensive, but I want to focus on something else and that is their feeble attempt at history.

They begin the article by saying, “Americans have been waiting for nearly a century for quality, affordable health care.” Really? Americans haven’t gotten any quality affordable health care for 100 years?

They go on to remind readers of past attempts to install national health insurance, by Teddy Roosevelt in 1912, Harry Truman in 1945, Lyndon Johnson in 1965, and even Bill Clinton in 1994. And now it is Barack Obama’s turn.

What this tells me is, first, that Democrats can’t learn from history. There have been four earlier efforts and every one has been rejected by the American (not un-American) people. Golly, could there be a lesson there?

And, second, these people are still trying to install something that goes back to the Industrial Age society of the mid-twentieth century. But times have changed, and so have the economy and the very make-up of American society. Think about that. In 1945 people tended to work for the same employers all their lives, women didn’t work at all outside the home, divorce was rare and racial discrimination almost universal. Industrial societies were highly structured, top-down, command-and-control systems. Information was available only to the elite and communications were primitive.

Why in the world should we still be following that legacy today? Are politicians really that myopic? Yes, I am afraid they are. And if they get their way this year, we will still be living with the exact same system in 2059. Keep in mind that Medicare is still organized on the Blue Cross Blue Shield model of 1965.