Consumer Power Report #197

Published October 9, 2009

First, a bit of context. The CBO has been busy lately. Along with estimating the cost of the Senate Finance “framework,” it revealed this week that the deficit for this fiscal year, which ended on September 30, is $1.4 trillion — triple the FY 2008 deficit, which was itself the highest ever recorded.

This is bad enough, but in March the CBO released a “preliminary analysis” of the president’s budget that showed deficits of $9 trillion over the next 10 years. What is even worse, is that this analysis set 2012 as the lowest deficit in the period — $658 billion. After that the deficit increases every year without end (see illustration.)

Of course, since March the dollar has tanked, making the cost of borrowing higher, raising the cost of imported goods such as oil, and even prompting some countries to talk about ending the use of the dollar as a reserve currency for international trading.

Now, Congressional Democrats are tickled that CBO estimated the Senate Finance bill would be “deficit neutral,” and even reduce the deficit by $81 billion over 10 years (out of $9 trillion.) But the bill will still increase federal spending by $829 billion, and the offsetting taxes and spending cuts will not be available to reduce the deficit further.

This is madness. I keep asking economists what is the theory, or even the fantasy, that will get us out of this hole? I have yet to get an answer.

— Greg Scandlen



Word has it that Senate Finance will vote on the Baucus bill on Tuesday, October 13. Time is running out to make your voice heard if you have an opinion on these bills. But in these days of insta-communications, it is never too late. Here are some resources for you.

FreedomWorks has just opened its “War Room,” which will help you find rallies to attend, make phone calls to Senate offices, and provide the latest issue developments.

CapWiz is an instant e-mail service that FreedomWorks also has made available. You may write an e-mail or a hard copy letter, and you may use the template offered or write your own.

The National Center for Policy Analysis has more than 1.3 million signatures on its petition and is also offering a “take further action” site where you can communicate with your members of Congress.

Citizens Against Government Waste also has a service that allows you to customize a message to your Members of Congress.

The Association of American Physicians and Surgeons has a “Take Back Medicine” site that features an “action center” where you can sign a petition and e-mail the White House.

Another great resource is GrassFire.Org. It includes information on how to send faxes to every Member of Congress as well as an online petition.

ResistNet.Com is promoting a Virtual Tea Party ROC (Restore Our Constitution) Fest. It includes the phone numbers of key Members.


Former Senate Majority Leader Bill Frist has made a lot of news lately. Apparently the White House has been trying to round up well-known Republicans to come out in favor of ObamaCare and Mr. Frist was one of the first to answer the call. We mentioned last week that he wrote a point/counterpoint with Dick Armey about how wonderful it is to mandate that individuals buy health insurance. Since then he has been all over the place.

First he was interviewed by Karen Tumulty in Time magazine, saying if he were still in the Senate, “I would end up voting for it. As leader, I would take heat for it. That’s what leadership is all about.” He went on to say he especially liked the mandate. I mean, telling other people what to do — that’s what leadership is all about, eh, Billy?

Naturally, the “Democrats (were) Thrilled by (Former) Majority Leader’s Comment,” according to the New York Times. The article says they “spent the day e-mailing links to the Time interview with Mr. Frist, a heart surgeon who has published a new book about health care and who was Mr. McConnell’s predecessor as Senate Republican leader.” Yes, all of the sudden they are willing to overlook his relationship to Hospital Corporation of America, which is run by his family.

But then he started backtracking. U.S. News reported, “Voters will be angry and mount a backlash against Democrats in upcoming elections unless the five different healthcare reform bills working through Congress are redrawn to prevent higher taxes and insurance premiums, according to former Senate Majority Leader Bill Frist.” It went on to say, “he would not vote for any of the five bills without major changes.”

I guess that’s what leadership is all about, too. Say one thing in the morning and the opposite in the afternoon. No wonder the Congressional Republicans are held in such low esteem.

SOURCE: Tumulty Interview; New York Times; U.S. News

But then The New York Times reported on a statement distributed by the White House, in which Tommy Thompson, Bush’s Secretary of HHS, “gives strong praise to the health care legislation that is expected to be voted on by the Senate Finance Committee later this week.”

The article says, “Administration officials say the White House is making a concerted effort to court high-visibility Republican support of the health care legislation away from Capitol Hill, in what appears to be a strategy similar to one used during debate of the economic stimulus plan earlier this year.”

SOURCE: New York Times


Two stories from New Jersey crossed my desk recently. They illustrate how health care must ultimately be a process between a doctor and a patient. That is where the “care” part of health care comes from.

The first is from the incomparable Alieta Eck, MD. She writes:

USA — I saw an uninsured patient on Saturday, Sept 17th, a 50-year old woman with abdominal pain and a pelvic mass. I told her she needed a CT scan. I told her where she could get one for $225, she took the prescription and got it the same day, paying cash. I was called by the radiologist first thing Monday morning. There was fluid around the mass, so I sent her to a radiologist who saw her on Wednesday. He did not feel there was enough to tap. Then, because the mass was solid and probably ovarian, I sent her to an oncologic gynecologist — the best in the area. This uninsured woman had surgery today, October 7th. I do not know how the finances were discussed — BUT SHE GOT CARE. The surgeon, and the other doctors she has seen, are kind and compassionate.

Canada — I met a radiologist who escaped from Canada about 7 years ago. In the land of socialized medicine, my patient would not have had a CT scan for at least 3 months, and would not have seen an oncologic surgeon until after the 3 month wait to see a gynecologist. If she has cancer, she would have died in Canada, but may have a chance in the USA.

There is nothing like the free market, and the main flaw in US health care is government intervention. Government sets the rules that insurance companies must follow — rules that actually work against the patients because they cause premiums to rise.

America’s health care is closer to the free market and it is COMPASSIONATE. Canada’s “health insurance for all” just insures a spot on waiting lists, where people wait like sheep. It does not insure care and is CRUEL.

The next is from an article in the Washington Post. It describes a battle between Horizon Blue Cross Blue Shield and the Bayonne (NJ) Medical Center. The hospital was going bankrupt because of inadequate payment from the payers, so it decided to drop out of insurance networks. Horizon doesn’t appreciate losing control, so it has been refusing to pay for patients who go to that hospital. Here is a battle between warring corporate giants — and the patients get trampled beneath their feet. Where, exactly, is the “care” here?

SOURCE: Washington Post


Which raises the essential point — that real health care reform puts patients/consumers in charge of their own money and their own health care decisions. That is not what is happening in Washington. There it is a matter of balancing the rewards to the special interests to keep them “at the table.” That is not reform. That is simply elevating the federal government to Santa-in-Chief who doles out goodies to the good little boys and girls who do as they are told.

It’s an idea that is being picked up in some circles. For example, Investor’s Business Daily ran an editorial headlined, “HSAs: Real Reform.” It points out that while HSAs are “not at the center of the great debate over what the president and his allies call the ‘reform’ of American health care,” they are “alive and growing. Not only that, they seem to be working as planned.” IBD underestimates the impact, using the 8 million AHIP number in reporting the market penetration. (AHIP ignores HRAs and other high-deductible plans in its tally.)

But IBD is concerned that Congress’s insurance exchange would “have no place for cheap, basic plans that — like true insurance — cover just the big costs and require policyholders to pay out-of-pocket for routine care and drugs.” It concludes, “Letting HSAs die would preclude real reform — by which we mean reform that actually cuts costs without rationing by government or corporate bureaucrats.”

SOURCE: Investor’s Business Daily

Then John Commins in Health Leaders Media reports, “Most employers and account holders using health savings accounts and HSA-qualified health plans are satisfied with their coverage, spend less, and are more engaged in managing health benefits, two HSA industry-sponsored surveys indicate.”

A survey by Buck Consultants and ACS found:

  • 84 percent of account holders say their HSA-qualified plans are affordable.
  • 72 percent of account holders say they pay the same or less than a traditional type of health plan.
  • After moving to an HSA, more than half of account holders say they more closely monitor their health care costs, while 48 percent read their medical bills more closely than when they did not have an HSA, 46 percent have a better understanding of where their money goes, and 40 percent more closely evaluate costs before electing medical services.
  • 81 percent of account holders said the ability to personally control health care costs is an important factor that caused them to select an HSA.
  • Of the employers offering HSAs for more than three years, 86 percent indicated that plan costs were the same or less than the previous year.
  • 96 percent of employers said HSAs allow the company to continue offering group-sponsored health insurance.

SOURCE: Health Leaders Media

Stephen Moore conducted a follow-up interview with John Mackey in The Wall Street Journal. He was surprised that the article he wrote generated such a hostile response. Mr. Moore writes, “Why did he write the piece in the first place? ‘President Obama called for constructive suggestions for health-care reform,’ he explains. ‘I took him at his word.’ Mr. Mackey continues: ‘It just seems to me there are some fundamental reforms that we’ve adopted at Whole Foods that would make health care much more affordable for the uninsured.'”

The article goes on, “The Whole Foods health-care story has been largely ignored by proponents of a government-run system. But it could be a template for those in Washington who want to drive down costs and insure the uninsured.” The company’s health care costs run about $2,100 per single employee and $7,000 per family — about half of other companies. But, “This type of plan does not excite proponents of a single-payer system, who think that individuals can’t make wise health-care choices, and that this type of system is ‘antiwellness’ because it discourages spending on preventive care.”

Mr. Mackey rejects that notion, saying, “The assumption behind that is that people don’t care about their own health, and that somebody else has to — a nanny or somebody — has to take care of me because people are too stupid to make these decisions themselves. That’s not been our experience. We find our team members [employees], not surprisingly, seem to care a whole lot about their health.”

SOURCE: Wall Street Journal


Compare the satisfaction people have with HSAs to the alternatives kicking around in Congress. One provision in the Senate bill as reported by Janet Adamy in The Wall Street Journal would simply cut Medicare payments by 5 percent to any doctor that is in the top 10 percent of physicians in cost of care. Never mind that these services may be entirely appropriate or that there will always be a top 10 percent and a bottom 10 percent in any array of goods and services. This is how the government always does things — raw, crude, and clumsy.

SOURCE: Wall Street Journal

In The New York Times Andrew Pollack reports that Medicare is about to stop paying for Avastin as a treatment for eye diseases. He writes, “But the way the bureaucratic gears mesh in this case, the move could end up costing Medicare itself hundreds of millions of dollars a year, and individual patients thousands of dollars.” Apparently there are two drugs used for macular degeneration, both made by Genentech, Lucentis that costs $2,000 per injection, and Avastin that costs $50 or less when used in the dose needed for eye disease. Medicare has decided to pay $7.50 per shot for Avastin but will continue to pay full price for Lucentis. Physicians would lose money on every dose of Avastin, but not on Lucentis. According to Dr. David W. Parke II, chief executive of the American Academy of Ophthalmology, “about a million injections a year were given for macular degeneration, about half of them Avastin and the other half Lucentis.” Because patients pay 20 percent of the cost of the drug, both they and Medicare will have to pay a whole lot more to avoid going blind.

And there you have the future of medicine under ObamaCare. Like I said, raw, crude, and clumsy.

SOURCE: New York Times

The antidote to this rationing would be to listen to three former presidents of the AMA, Stormy Johnson, MD, Donald Palmisano, MD, and Bill Plested, MD. They collaborate on an article in which they discuss what they would have told President Obama if they had been invited to the White House, because by inviting only supporters, “Mr. Obama has missed an opportunity to learn more about the real issues facing patients and doctors and to formulate a plan that truly puts patients in control with doctors as trusted advisers.”

They are all in favor of reforming health care, but say it “can be accomplished without a costly and inefficient government overhaul of the entire system. One easy reform would be to enable individuals to buy policies offered in any state, not just where they live. This will enhance competition.”

They add, “There are many other ways to expand access to health care for uninsured Americans. We could strengthen incentives to purchase low-cost health savings accounts, provide tax credits for individuals and families buying health policies on their own, and extend subsidies for those who need financial help. Also, the right of patients to privately contract with physicians to ensure they have the medical care they want, without penalty–regardless of what the government pays–must be recognized and protected.”

There are a number of other things cited that would result in serious reform that is not raw, not crude, and not clumsy.

SOURCE: Wall Street Journal