Posts Tagged ‘health care’
Just in: Doctors respond to incentives, are human
A new study by Harvard health policy professor Joseph Newhouse finds that when Medicare payments to doctors for chemotherapy are cut, doctors respond by prescribing chemotherapy to more patients than they previously had, thus making up the difference. Predictable or unintended consequence, it’s still Econ 101. Still, policymakers act as if people (and doctors are people) can be immune to incentives. Since the Obama health reform pays for itself in part with medicare payment cuts, expect to see more of this sort of thing.
What’s especially interesting to me is how this underscores the insanely asymmetric relationship we have with doctors. The only difference between a doctor and a car mechanic telling you that you need to replace your Johnson rod is that you’re probably in a much more vulnerable position talking to a doctor.
Two thoughts on Peterson Fiscal Summit
Today, I attended the Peterson Foundation’s star/wonk-studded Fiscal Summit. Speakers included Pres. Clinton, Alan Greenspan, Robert Rubin, Peter Orzag, Paul Ryan and more. Great coverage at the Fiscal Times. Two thoughts.
First, Paul Ryan continues to impress and he commanded an out-sized influence on the days events. Ryan’s observation that the fiscal crisis is the most “predictable economic crisis” in history, was the quote and idea that kicked off the proceedings. Though outnumbered, Ryan managed to draw the key ideological distinctions on his panel about the roll and purpose of government. And during the luncheon address, Peter Orzag continued to call attention to Ryan’s ideas. If Ryan can command this much attention–in a room full of politicos that includes President Clinton!–just imagine how much attention other Republicans could get if they too started talking as candidly and forthrightly about ideas.
Second, I was struck about how elliptical the whole panel on health care reform sounded. Dr. Elliot Fischer at Dartmouth described how various new business models have innovated to reduce costs and increase quality care. And all the other panelists agreed, saying yeah, we should reward that by giving a bonus payment, or tinkering with the Medicare reimbursement formula, or empowering the government “innovation center” to do more of this. But isn’t this missing the surprising thing about these examples? Because in every other sector, you don’t need a politician to pass a bill or tweak a payment formula to reward such innovation. If it’s good for consumers, you make a profit and grow on your own. Why isn’t this true for health care sector? No one seemed to see this as odd. But it’s more obvious why if you read David Goldhill’s piece in The Atlantic. And, the analysis points towards a much different path for reform.
Overall, an impressive day of speakers and I hope an encouraging sign of momentum for the Commission.
The angry Rorschach movement
The Republican leadership, such as it is, seems to have settled on a strategy of “repeal and replace” for healthcare reform and the coming election. I’m sorry to have to tell them, but even with gains in November, they won’t be able to overcome a veto. The best hope for repeal is if the incumbent president is defeated in 2012 and both the Senate and House are in Republican hands. Good luck with that.
Still, that’s the strategy they’re going to pursue. Not so much because Republicans have any principles, as Dan has been pointing out, but because they want to tap into the anger and discontent that’s manifesting as the Tea Party movement. What I’m afraid of, though, is that the Republicans, and the broader “liberty movement” in general, have little idea of what the Tea Party is all about.
In his latest column, Ron Brownstein describes skepticism about the health care bill, and big government in general, as centered in the white non-college-educated middle class:
Obama has already been hurt by the perception, fanned by Republicans, that the principal beneficiaries of his efforts to repair the economy are the same interests that broke it: Wall Street, big banks, and the wealthy. The belief that Washington has transferred benefits up the income ladder is pervasive across society but especially pronounced among white voters with less than a college education, the group that most resisted Obama in 2008. Now health care could threaten Democrats from the opposite direction by stoking old fears, particularly among the white working class, that liberals are transferring income down the income ladder to the “less deserving.”
Without commenting on the validity of the perceptions he describes, think Brownstein’s right about the demographic provenance of the Tea Party folks. This reminds me of two things.
One is an essay by Michael Brendan Dougherty about the late radical right-wing writer Sam Francis. It was in that article that I first learned about the anti-elitist social commentary of Francis and James Burnham. The gist is that democracy is a sham masking control by a managerial class of elites at the expense of the traditional (read white) working class. Michael’s article is worth a read, and I’ll probably plumb Francis’s and Burnham’s work as I look more into the Tea Party movement.
The other thing I’m reminded of is the 1993 Michael Douglas movie Falling Down. It’s probably not a coincidence this movie came out when it did, sandwiched between the Perot candidacy and the Republican Revolution in Congress. The movie is a garbage heap of cliches, but it anticipates the directionless anger that I see in the Tea Party today.
I’m not sure where I’m going with this, but let’s just say that it’s a general unease with the siren song of a relatively successful mass movement. I see it luring not just the Republican Party, but the somewhat more intelligent parts of the free market movement as well.
I think I can be forgiven a lack of specificity in my unease since there’s no one who can tell me what exactly the Tea Party is about. Someone recently told me quite astutely that the Tea Party is like Barack Obama’s candidacy, a blank canvas on which we can all project our hopes and aspirations. And that’s what I’m worried about. Well-meaning folks are trying to co-opt the movement for their more-identifiably-pro-liberty ends, but I’m not sure it’s going to be a fit.
The Tea Party seems to be an anti-elite, anti-intellectual, anti-immigrant, populist grab bag of emotion. And while I can’t blame them for the sentiment given how Washington’s been performing as of late, I’m not crazy about the amorphousness of it all.
That’s not quite right
Did passing healthcare reform help or hurt the chances of Republicans taking over the House? Nate Silver over at FiveThirtyEight looks at the relationship between the two Intrade contracts:
The chart below tracks the daily close of the ‘Obamacare’ contract at Intrade — which has been live since January 21st — and compares it against the contract representing a GOP takeover of the House. The correlation is positive (and statistically significant) but the magnitude of the effect is small: Intrade infers that Republicans would have had a 40 percent chance of taking over the House had the Democrats not passed Obamacare, but about a 47 percent chance now that they have.
I agree that you can say the correlation is positive. But you can’t conclude from this data that the magnitude is small. We’re humble here at SometimesRight. But, Nate, that’s not quite right.
Prediction markets aggregate knowledge at a particular time. And the key piece of knowledge to track here is sort of a hidden third variable–call it “potency of healthcare as an election winning issue for House Republicans” or “healthcare potency” for short. You’d be interested in measuring the slope of this line–that would tell you whether the magnitude is small or large. Of course, there isn’t an Intrade contract for healthcare potency, so you’re left to guess like everyone else.
But as long as we’re guessing, we can likely infer that both of these contracts would be positively correlated to healthcare potency. The Democrats effort to pass healthcare reform certainly kept the issue in the public eye. And House Republicans are more likely to go with a “repeal” campaign on health care reform, adding to the potency of healthcare to their overall election chances.
But how much more potent is the issue between January and today? Because when Scott Brown won Massachusetts, it was already obvious that the issue would be potent. The question is this: given our knowledge today, what is the relative additional contribution to healthcare potency–given the economy, jobs, Afghanistan, Iran, and the many other potentially potent election issues–to Republican’s chances of taking the House?
The fact that you could see any relationship at all between these two contracts implies that the movement in healthcare potency is fairly large, not small. That’s counter to Nate’s wisdom for Democrats: “if you told the Democrats that the price of passing their health care bill was to go from having a 40 percent chance of losing the House for two years to a 47 percent chance, do you think they would have done it?”
Boring as political strategy
Obama and the Dems seem to have (perhaps inadvertently) arrived at an effective messaging strategy on health care–boring.
I tried to watch the health care summit, but found it painfully boring. Many others did too. Even this weekend’s Saturday Night Live skit mocking the president on health care was boring.
Makes me wonder whether all this boring isn’t strategic. In grad school, I used to marvel at David Gergen’s ability to be strategically boring. If he was confronted with a tough or controversial question, he’d just talk boring at it until people would give up. Boring is perhaps the best defense against angry. And angry is definitely what the Dem’s don’t want as they make a final push to pass health care.
Paul Ryan Actively Discouraged Co-Sponsors
Over at Newsweek, Peter Suderman explains why the GOP is ignoring Paul Ryan’s comprehensive health care plan, Roadmap for America’s Future. He notes
“To date, his proposal, which is actually an update of a plan he initially put forth in 2008, has a mere nine cosponsors—mostly conservative stalwarts.”
But I think Suderman is missing the top reason why. Paul Ryan himself actively discouraged co-sponsors of the bill. In June 2008, Ryan spoke to a group of young leaders at the Youth Entitlement Summit, where he freely admitted that the point of the bill was never about getting co-sponsorships or political feasibility. To Ryan, the bill was always about ideas. So he advised his colleagues not to co-sponsor and to stay away.
In many ways, Paul Ryan crusade with the Roadmap is a feat of political courage similar to that of John Sununu and Liddy Dole in 2002. In the 2002 election cycle, national Republicans urged candidates to steer well clear of Social Security. But Sununu and Dole, both in tight races, decided to address Social Security, betting that voters would give them credit for dealing with a tough issue honestly and forthrightly. They both won. This showed other Republicans that you can win on Social Security reform.
I think Ryan’s up to the same thing with the Roadmap. Look past 2010 to 2012. Ryan is trying to show that you can talk about the nation’s dire fiscal situation and present the tough choices on health care entitlements clearly and logically and voters will understand. We should evaluate his success on whether or not Republican presidential candidates pick up the issue and run with it in 2012.
