Consumer Power Report #191

Published August 21, 2009

A new survey by United Benefits Advisors finds that enrollment in consumer-driven plans now exceeds that of HMOs. The survey included more than 12,000 employers and discovered that 15.4 percent of all employees are now in CD plans, compared to 13.6 percent in HMOs. PPOs remain the Big Daddy with 63.9 percent market share.



Last week, I wrote an op-ed defending Sarah Palin’s concern about “death panels.” Certainly her expression was shocking and designed to get attention. It succeeded extremely well in that regard. The case I tried to make was that, if we follow the British model, we will indeed end up with a federal agency that makes life-and-death decisions for all of us based on a cost-effectiveness standard.

I got some amazing responses to the op-ed. Almost everyone who contacted me agreed and thanked me for saying it, but most interesting was the intense hostility from academics and policy wonks. You would think I had kidnaped their baby or something. I have never seen such a visceral reaction to any issue in health care.

Maybe it was Palin Derangement Syndrome, but I think it is deeper. I think these folks are completely baffled and frustrated by what is happening. It is all slipping away — yet again!

How can this be, they wonder. We have big majorities in the House and Senate. We have a smooth talker in the White House. We have bought off the special interests. We have learned from the Clinton mistakes. We have done everything right. How can we be losing again?

There are two big reasons.

First, they believed their own propaganda. For years, these folks have cherry-picked the data and exaggerated the problems to make it seem like there is a BIG CRISIS! They did this to justify changing American health care from top to bottom and gain more power for themselves. That is fine as a tactic. It’s a way to stampede less-informed people, especially the media, into echoing your talking points. But if these folks actually believed it, they are bigger fools than I realized. People have been talking about a CRISIS in health care since the 1960s.

In a remarkably candid interview in 2001, Brandeis economics professor Stuart Altman said, “When I was 32 years old, I became the chief regulator in this country for health care. At that point, we were spending about 7.5 percent of our GDP on health care. The prevailing wisdom was that we were spending too much, and that if we hit 8 percent, our system would collapse.”

Obviously the system did not collapse, even though the share of GDP now exceeds 15 percent, and the fear mongers were proven to be blowing smoke. But that didn’t stop the exact same people from pitching the exact same line every year since.

The other reason is that the current advocates completely misread the lessons from the Clinton years. Every generation of new parents swears it will not make the same mistakes their own parents made. So they make a bunch of new mistakes instead. So it is here.

The advocates have convinced themselves that Clinton was defeated by a small cabal of Washington special interests who spent a lot of money opposing the plan. They figured if these special interests could be neutralized, it would be clear sailing. Plus they figured Clinton’s big mistake was in writing a massive bill in secret with little Congressional participation, so if they let Congress write it, everything would be okay.

They were wrong on both counts. In fact in 1993-1994, there was the same kind of grassroots fervor there is today. People in Washington didn’t notice it. They noticed only what the special interests were doing, and they assumed any grassroots concerns were orchestrated by these special interests. Not true then, and not true today.

On the second point, the issue isn’t who wrote the massive bill in secret. The issue then, and today, is that a massive bill was written in secret at all. The folks don’t care if it is written by a Congressional elite or a White House elite. The simple fact that any elite group is massively changing everything about their personal health care with the sweep of a pen is enough to raise alarms.

Every time over the past 100 years that Washington has tried to enact massive health reforms affecting every man, woman, and child among us, it has been defeated. Not by the insurance companies and not by the doctors, but by the people of America. It is, quite plainly, not how we want change to be done.

Yes, we may want change to happen, but we want it to be gradual, so it can be revised and amended as we go along. Why is that so hard to understand?


In contrast to the push-back I got from some academics, Martin Feldstein, former chairman of the Council of Economic Advisers under President Ronald Reagan, wrote in The Wall Street Journal, “ObamaCare is all about rationing.”

He says, “The White House Council of Economic Advisers issued a report in June explaining the Obama administration’s goal of reducing projected health spending by 30% over the next two decades. That reduction would be achieved by eliminating “high cost, low-value treatments,” by “implementing a set of performance measures that all providers would adopt,” and by “directly targeting individual providers … (and other) high-end outliers.” In other words, using a British-style NICE board to determine what services are cost-effective, and disallow those that are not.

Now, you can be for this or against this, but it is disingenuous to argue that Palin was completely wrong in warning about this cost-based rationing. What kind of democratic process is it that asks the American people to accept this approach, while pretending this is not what the administration is trying to do?

Americans may decide that such rationing is worthwhile, but they should not be fooled into thinking it is the only way to control costs. Mr. Feldstein points out one alternative. He writes, “The rising cost of medical treatments would not be such a large burden on future budgets if the government reduced its share in the financing of health services. Raising the existing Medicare and Medicaid deductibles and coinsurance would slow the growth of these programs without resorting to rationing. Physicians and their patients would continue to decide which tests and other services they believe are worth the cost.”

If the people were allowed to vote on which approach they would prefer, I wonder which would win?

SOURCE: The Wall Street Journal

Writing in Jewish World Review, Nat Hentoff says, “I am finally scared of a White House administration.” He says he wasn’t afraid of tackling J. Edgar Hoover or criticizing Bush/Cheney, but the prospect of government rationing of health care frightens him, “as the Center for Health Outcomes Research and Evaluation in a current Democratic bill decides whether your quality of life, regardless of your political party, merits government-controlled funds to keep you alive.”

He says, “No matter what Congress does when it returns from its recess, rationing is a basic part of Obama’s eventual master health care plan.” He cites Obama as saying, “Our government will undertake a ‘very difficult democratic conversation’ about how ‘the chronically ill and those toward the end of their lives are accounting for potentially 80 percent of the total health care’ costs.” He adds, “This end-of-life consultation has been stripped from the Senate Finance Committee bill because of democracy-in-action town-hall outcries but remains in three House bills.”

SOURCE: Jewish World Review


The “leaders” of this country are turning out to be some of the worst extremists we have ever produced. The Speaker of the United States House of Representatives (two heartbeats away from the presidency) calls Americans who participate in town hall meetings with their own Congressmen, “UnAmerican” and says that law-abiding insurance companies are “immoral.” The Majority Leader of the Unites States Senate thinks these town hall attendees are “evilmongers” because they disagree with him. This is the same Harry Reid who welcomed the new Capitol Visitors Center because it would protect his precious nose from those foul-smelling American tourists who would like to visit their own Capitol, where laws get written.

Now, the Powerful Chairman of the Powerful Energy and Commerce Committee, Henry Waxman, has written to 52 insurance companies demanding they provide him with information that is none of his business. It is raw intimidation to punish them for not supporting a government-run health care plan.

Newt Gingrich calls it “Sopranos-style tactics in health care,” in an op-ed in the Washington Examiner. He also says it is “in the spirit of Joe McCarthy.” And he adds, “Waxman and Stupak are attempting to use raw political power to silence their opponents, plain and simple. If that’s not the case, why single out one sector of healthcare and not others, like physician groups, hospitals, and drug companies? Could it be because many of these groups have publicly supported the emerging Democratic legislation?”

Let’s see how much more AHIP will give up to keep its “seat at the table.”

SOURCE: Washington Examiner

Red State reports on a segment from Air America, the ultra-liberal radio network. Apparently they aren’t too thrilled with “dancing with the devil,” either. Only to them, the devil is PhRMA. They accuse Obama of being a fascist for cutting a deal with the drug manufacturers.

SOURCE: Red State

The Left is clearly agitated about deal-making between Obama and PhRMA, as reflected in a Huffington Post article. It claims to have a memo outlining the deal, although both PhRMA and the White House say the memo is not authentic. The article by Ryan Grim says, “Obama is walking a tightrope here. He wants to keep PhRMA from opposing the bill, and benefits by having its support, which now includes a $150 million advertising campaign. That’s a fortune in politics — more than Republican presidential candidate John McCain spent on advertising during his entire campaign — but it’s loose change in the pharmaceutical business. Opponents of the deal with PhRMA hope that Obama is playing a multilayered game, making a deal in order to keep the drug makers in his camp for now, but planning to double-cross them in the end if he needs to in order to pass his signature initiative.”

SOURCE: Huffington Post


Don’t pay heed when the president expresses compete confidence about getting health reform done. If there is one thing politicians pay attention to it is polling numbers, and the results this summer are simply devastating for Obama and Congressional Democrats.

The Washington Post has released a new survey that tracks the answer to “Do you approve or disapprove of the way Obama is handling health care?” The results make a perfect “X” form 57 percent approve and 29 percent disapprove in April to 46 percent approve and 50 percent disapprove now. The erosion comes almost entirely from independents. In January 61 percent said they had confidence in Obama’s ability to “make the right decisions for the country’s future.” That is now down to 41 percent.

SOURCE: Washington Post

Zogby’s interactive poll of 1,500 likely voters finds that Obama’s approval rating has reached a new low of 45 percent, mostly due to the disaffection of Independents, 59 percent of whom now disapprove of the job he is doing.