Tag: deval patrick

Obama’s ‘Best’ Idea? Rationing Care via Clinton-esque Price Controls

Hoping to revive his increasingly unpopular health care overhaul, President Obama has invited Republicans to a bipartisan summit this Thursday and plans to introduce a new reform blueprint in advance of the summit.  On Sunday, the White House announced that a key feature of that blueprint will be premium caps, a form of government price control that helped kill the Clinton health plan when even New Democrats rejected it.

The New York Times reports on President Obama’s blueprint:

The president’s bill would grant the federal health and human services secretary new authority to review, and to block, premium increases by private insurers, potentially superseding state insurance regulators.

It bears repeating what Obama’s top economic advisor Larry Summers thinks about price controls:

Price and exchange controls inevitably create harmful economic distortions. Both the distortions and the economic damage get worse with time.

For example, as I have written elsewhere, artificially limiting premium growth allows the government to curtail spending while leaving the dirty work of withholding medical care to private insurers: “Premium caps, which Massachusetts governor Deval Patrick is currently threatening to impose, force private insurers to manage care more tightly — i.e., to deny coverage for more services.”  No doubt the Obama administration would lay the blame for coverage denials on private insurers and claim that such denials demonstrate the need for a so-called “public option.”

As the Progressive Policy Institute’s David Kendall explained in a 1994 paper, the Clinton health plan contained similar price controls.  Kendall explains why they would be a disaster:

In spite of the late hour in the health care debate, Congress has not yet decided how to restrain runaway health care costs. The essential choices are a top- down strategy of government limits on health care spending enforced by price controls or a bottom-up strategy of consumer choice and market competition. History clarifies that choice: Previous government efforts to regulate prices in peacetime have invariably failed. Moreover, government attempts to control prices in the health care sector would undermine concurrent efforts to restructure the marketplace…

The idea of controlling costs by government fiat is seductively simple. But it rests on a conceit as persistent as it is damaging: that government bureaucracies can allocate resources more wisely and efficiently than millions of consumers and providers pursuing their interests in the marketplace. The alternative – one rooted in America’s progressive tradition of individual responsibility and free enterprise – is to improve the market’s ground rules in order to decentralize decision-making, spur innovation, reward efficiency, and respect personal choice.

As centrally planned economies crumble around the world, many in the United States seem bent on erecting a command and control economy in health care. This policy briefing examines the reasons why government price regulation would fail to constrain health care costs and create many adverse side effects…

Ultimately, government price regulation will always fail because it does not change the underlying economic forces driving up prices. If we are serious about slowing the growth of health care costs, we have to change the ways we consume and provide medical care. Price controls evade the hard but essential work of structural reform in health care markets: They are a quintessentially political response to an economic problem. The alternative is to allow well-functioning markets to set prices and allocate resources, while ensuring that all Americans have access to affordable health care coverage. The market-oriented approach leaves decisions to cost-conscious consumers and health care providers rather than bureaucrats.

Any of that sound familiar?  It’s worth reading the whole thing.

This is not hope.  This is not change.  (Much less a game-changer.)  It is, to pinch a phrase, a return to “the failed theories that helped lead us into this crisis.”

The Seat-Warming Senate

With Gov. Deval Patrick’s appointment of longtime Kennedy courtier Paul Kirk to Sen. Edward M. Kennedy’s seat in the U.S. Senate, there are now at least three close aides holding on to Senate seats while their states go through the formality of an election. The governor of Delaware appointed Joe Biden’s longtime friend and former chief of staff to fill the rest of his term in the Senate. Can you name him? It is generally thought that he is obligingly holding on to the seat until Biden’s son Beau gets back from National Guard service and is able to run to succeed his father. And in Florida, Gov. Charlie Crist named his former chief of staff to fill the seat of retiring Sen. Mel Martinez until the 2010 election in which Crist is running for the seat. There are more seat-fillers in the Senate than at the Oscars.

Of course, Kennedy himself took his seat when he attained the age of 30, after it was kept warm for him by family retainer Benjamin A. Smith III.

Meanwhile, as of 2005 there were 18 senators who gained office at least partly through their family ties – sons, daughters, wives, nephews of former senators, governors, presidents, and so on.

The Founders envisioned the Senate as an assembly of wise and accomplished men, chosen for their experience and judiciousness. Political campaigns that favor the handsome, the glib, the panderers, and the best fundraisers are bad enough. But a Senate full of legacies and seat-warmers is especially unfortunate.

Drop the Soda, or Else!

Government is busy trying to protect us from ourselves.  It tosses nearly a million people in jail every year for marijuana offenses.  City councils, state legislators, and Congress all add ever more restrictions on cigarette smoking.  Legislators demand action to stop steroid use by athletes.  And the Senate Finance Committee is considering a “fat tax” on sugared drinks.

This isn’t the first time legislators have considered trying to squeeze a little money out of us while micro-managing our lives.  Editorializes the Boston Herald:

Earlier this year Gov. Deval Patrick proposed a 5 percent tax (more if the sales tax is raised) on sweetened drinks and candy bars under the pretext of battling obesity (while thinning out our wallets). Happily we haven’t heard much about it lately. But yesterday on Capitol Hill the Senate Finance Committee heard testimony about helping to fund President Barack Obama’s massive health care expansion in part with a similar tax.

The Congressional Budget Office estimates that a 3-cent tax per 12-ounce sweetened drink - including sports drinks and iced teas - would bring in $24 billion over four years.

“Soda is one of the most harmful products in the food supply,” said Michael Jacobson, head of the Center for Science in the Public Interest, which gives you some idea of the mindset here. Jacobson would also like to raise taxes on alcoholic beverages.

If the American people don’t start saying no, there won’t be much liberty left to preserve.

What ‘Universal Coverage’ Really Means: Higher Taxes, Government Rationing

An editorial in today’s Wall Street Journal earns that page a membership in the Anti-Universal Coverage Club.

The editors explain that the universal-coverage scheme Massachusetts enacted in 2006 is a perfect microcosm of what congressional Democrats are trying to foist on the rest of the nation: compel universal coverage now, worry about the costs later.

Massachusetts is three years into that strategy, thus its experience shows us where that strategy leads.  Much as my colleague Mike Tanner predicted (repeatedly), it leads to higher taxes and government rationing.  The WSJ editors write:

The state’s overall costs on health programs have increased by 42% (!) since 2006.

Like gamblers doubling down on their losses, Democrats have already hiked the fines for people who don’t obtain insurance under the “individual mandate,” already increased business penalties, taxed insurers and hospitals, raised premiums, and pumped up the state tobacco levy. That’s still not enough money.

So earlier this year, [Gov. Deval] Patrick appointed a state commission to figure out how to control costs and preserve “this grand experiment”…

The Patrick panel is considering one option to “exclude coverage of services of low priority/low value.” Another would “limit coverage to services that produce the highest value when considering both clinical effectiveness and cost.” (Guess who would determine what is high or low value? Not patients or doctors.) Yet another is “a limitation on the total amount of money available for health care services,” i.e., an overall spending cap…

[Patrick] reportedly told insurers and hospitals at a closed meeting this month that if they didn’t take steps to hold down the rate of medical inflation, he would.

The editors conclude:

The real lesson of Massachusetts is that reform proponents won’t tell Americans the truth about what “universal” coverage really means: Runaway costs followed by price controls and bureaucratic rationing.