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Go Home Health Care And Deficit Madness

JONATHAN CHAIT MARCH 7, 2011

Health Care And Deficit Madness

BY JONATHAN CHAIT

The long-term budget deficit is primarily a function of explosive health care cost growth. We have a new law in place attempting to resolve the problem. The Republican Party is working feverishly to undermine that law. One of the oddities of the current moment is that the political class (though not the public as a whole) is laser-focused on the budget deficit as the central problem in American life, yet the discussion of the deficit is taking place as though none of the above facts were true. On national television, Mitch McConnell is sadly proclaiming that the administration is not serious about the long-term deficit.

Meanwhile, Michael Millenson reports from a health care conference at which some Republican staffers spoke:

The Prevention and Public Health Fund? "You mean, the prevention health slush fund, as we like to refer to it?" replied a GOP staffer.

The Innovation Center at the Centers for Medicare & Medicaid Services? "An innovation center at CMS is an oxymoron," responded a  Republican aide, before adding a personal barb aimed at the attendees: "Though it's great for PhDs who come to Washington on the government tab."

There was also no reason the government should pay for "so-called comparative effectiveness research," another said.

"Everything's on the chopping block," said yet another.

Everything? At HIMSS, where GOP staffers also spoke, attendees were chagrined to learn that "everything" applied to them, too. The subsidies for health information technology that were part of the American Recovery and Reinvestment Act were targeted in legislation introduced in late January by Rep. Jim Jordan, R-Ohio, chairman of the Republican Study Group. His bill would repeal this funding and eliminate all remaining stimulus spending, including about $45 billion in unspent health IT funds.

Those focused on the substance of health policy might be forgiven for feeling blindsided. After all, the McCain-Palin health policy platform in the 2008 presidential election called for coordinated care, greater use of health information technology and a focus on Medicare payment for value, not volume. Once-and-future Republican presidential candidates such as former governors Mike Huckabee (Ark.), Mitt Romney (Mass.) and Tim Pawlenty (Minn.), as well as ex-Speaker of the House Newt Gingrich, have long promoted disease prevention, a more innovative federal government and increased use of information technology. Indeed, federal health IT "meaningful use" requirements can even be seen as a direct consequence of Gingrich's popularization of the phrase, "Paper kills."

It's hard to capture the sheer absurdity of the situation. You have Republicans attempting to kill even no-brainer reforms to curtail the single greatest cause of skyrocketing spending. That's crazy enough. On top of that, they're doing so while lambasting the administration that pushed for these reforms for failing to address the deficit. And meanwhile, groups that are driving the deficit discussion are handing out fiscal responsibility awards to the Republicans behind this approach.

To be sure, we need to do more about the long-term deficit. But the entire discussion is ignoring the fact that one party is working very hard to make things vastly worse.

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17 comments

"The long-term budget deficit..." -- Okay, but that "explosive growth" is predicated on the projected increase in Private Insurance rates (and more retirees needing care). I would argue that PAST increases in Private Insurance rates have more to do with Private Insurance Company profits and stock-market values, than with the cost of providing care. That's one of the premises of the ACA -- if you remove the ability of the Private Insurance companies to raise rates arbitrarily, then you control costs much more than is the case today. That "long-term budget deficit..." is ALSO the product of irresponsible tax-cutting. I'd hope you wouldn't leave THAT out.

- AllanL5

March 7, 2011 at 10:13am

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It is depressing that this dynamic isn't public knowledge. The Republicans are cynically playing the ends against the middle.

- liberalref

March 7, 2011 at 10:25am

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Look, everything every uttered by the Republicans is lies, propaganda, and lying propaganda. There simply is no there there as far as policy is concerned. It is all empty rhetoric designed to push as many buttons of the ignorant and disaffected as possible. The search for anything coherent completely misses the point of what they are up to. Time for pundits to stop expressing surprise and start talking about the coherent political strategy of deception about everything all the time and what can be done to defeat it decisively. That is all that matters. Nothing much can be accomplished as far as the grave problems of the day until that has been achieved.

- roidubouloi

March 7, 2011 at 10:33am

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The Republicans treat government like it's an amusement park with free rides. Ten years ago it was cut taxes, wage two wars, and run up a precription drug benefit. After that, the debt shot up, the income gap widened, and the wealthy got wealthier. Now it's: "We can't raise taxes to pay for the debt, we have to cut spending." They started with the idea that top incomes shouldn't have to shoulder a fair share of 6 years of Republican spending and that was followed by more of the same thing. Why cut medical costs when you can just cut whole programs?

- Nusholtz

March 7, 2011 at 11:36am

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"And meanwhile, groups that are driving the deficit discussion are handing out fiscal responsibility awards to the Republicans behind this approach." This is one of the reasons I quit supporting The Concord Coalition at least 10 years ago. They were morphing into a teabagger organization and becoming unhinged in how they wanted to attack federal budgets. They still waste their money on sending me "renewals" though. And Roid is dead on. The GOP is a bunch of liars. Say it JC, the GOP lies. Here in North Carolina the new GOP-dominated legislature, which promised to only concentrate on budget and jobs issues, has done pretty much anything but concentrate on those two issues; gay marriage is one of their latest, along with allowing guns about anywhere. Yup, those are jobs issues.

- tmmats

March 7, 2011 at 11:37am

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I'm with tnmats and Roid: the most notable quality of Republican policy and Congressional action is cynicism. Cynical disregard for truth. Shameless and uninhibited lying. Accordingly, the major strategic challenge for Democrats is to figure out ways of making that reality crystal clear to an apparently gullible American public. This will not be an easy task, especially with our President so fixated on civility and polite discourse. I admire many things about Obama, but on this issue, I'm nostalgic for "Give 'Em Hell" Harry Truman.

- JackR

March 7, 2011 at 11:53am

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Obama could use some help on this from the pundit class, both in terms of ideas for tactics and strategy and cheerleading. It helps just to keep calling the Republicans out for what they are doing as that serves to legitimize counter-attack (not necessarily in the sense of a verbal attack but in the sense of an effort intended to blunt and turn back the offensive Republican offensive). Why are we still getting breathless wonderment that Republican "policy" arguments are completely incoherent? Has there ever in history been a coherent pack of lies?

- roidubouloi

March 7, 2011 at 12:28pm

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Allan, the biggest component of premium costs is the cost of providing care. It seems like people don't want to confront the elephant in the room--that doctors, physical therapists, prescription drug manufacturers and hospitals are charging more and more and more every year, raising prices far above the cost of inflation. I am not an apologist for private insurance companies, and some of their practices are abhorrent, but they are NOT the big cost drivers of health care. I have read that the percentage they take has stayed the same (though the dollars have gotten bigger, of course). Either we are going to have to consume fewer services, or the cost of those services is going to have to level out or even come down.

- ReganaD

March 7, 2011 at 12:31pm

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Help from the pundit class? Would this be the same class that treats Paul Ryan like a budget wunderkind?

- liberalref

March 7, 2011 at 12:32pm

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Yes, that very same pundit class, although obviously not those members who think Ryan is anything other than a slick nutcase.

- roidubouloi

March 7, 2011 at 1:14pm

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Thanks ReganaD. Some sanity injected into the din. There indeed have been miracles in modern medicine but it's still one of the few industries where costs rise instead of fall over time. Education is the other one that comes to mind. I don't know what the answer is but neither sector can continue on it's price trajectory.

- tmmats

March 7, 2011 at 1:24pm

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Yes, medical costs are the fundamental problem. The market cannot control them because for a market to work we have to allow care to be allocated based on willingness and ability to pay. We are not willing to do this. If the market cannot do the job, because we want care to be available based on medical need, something else has to. There are only two other alternatives: insurers or the government. Insurers have relatively little incentive to do so as long as they can pass on the costs as premium increases. Their control over providers is limited and they are profoundly conflicted as every dollar of care denied goes right into their own pockets. We have seen the consequences of relying on insurers to serve this function and we ought to be convinced by now that it cannot work. This means government control, both in allocation of care and control of the price. The real point of single-payer is not that one entity writes the check but that that entity has the power to control demand and price. This is how it is done in other advanced industrial economies. No one has suggested a plausible alternative that would achieve the goal of universal care based on medical need. Time to join the modern world. That is a completely separate issue from Republican savagery and mendacity since it is hardly the case that this is what the Republicans want. They want care to be allocated based on willingness and ability to pay and whoever cannot afford the coverage is welcome to drop dead, literally. Goodbye grandma, unless she has rich children and grandchildren willing to foot the bill.

- roidubouloi

March 7, 2011 at 2:18pm

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I love you Roid. That is it...There is no THERE, THERE. You are right about the narrative. Look here: http://www.public-consultation.org/studies/budgetcomparisons_mar11.html Even the TP according to David Frum doesn't buy the absolute horsecrap put out by Heritage, Cato, Norquist, etc. THey just dig believing they are huge victims of culture out to get them. In some ways this is very disturbing. The American people seem to be as a whole to the left of President Obama on the budget. They want a MORE progressive income tax, reflecting the Third World levels of income inequality we have in America now. They want deep cuts in the bloated Defense budget. They want increasing in education/research. Yet this is all drowned out by a corporate media that controls the debate. A media that annoints a total fraud with childish Ayn Rand fantasies as a deep thinker, just because Paul Ryan claims that he is. Obama and Reid should be calling these people out and drawing REAL contrasts!

- MikeB.

March 7, 2011 at 5:49pm

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Great link, MikeB. Really, we should stop fussing over the latest Republican nonsense and start figuring out what will work politically to destroy their hold on any significant portion of public opinion, so that we can get on with the serious work that needs to be done. Anyone who is still not convinced that the Republicans are lying the moment they open their mouths can never be persuaded.

- roidubouloi

March 7, 2011 at 5:59pm

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Have you not noticed that the Republicans themselves have been hard at work destroying their own hold on public opinion? Congressional Republicans do not at all poll well. Our resident George Lakoff gets upset when I call him an Enlightenment rationalist, but here is another example that results from this orientation.

- liberalref

March 7, 2011 at 9:23pm

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Have you not noticed that the Republicans themselves have been hard at work destroying their own hold on public opinion? Congressional Republicans do not at all poll well. Our resident George Lakoff gets upset when I call him an Enlightenment rationalist, but here is another example that results from this orientation.

- liberalref

March 7, 2011 at 9:23pm

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You're kind of stuck on that "Enlightenment rationalist" hobby-horse, aren't you, lib? As if that is somehow the appropriate response to everything even when plainly irrelevant even if it were true. While your confidence that all will soon be right because the Republicans will destroy themselves is very heartwarming, there is not much historical evidence that elections can be won without well-tuned political rhetoric, reality be damned. Contrariwise, despite all of the Republican failures during the Bush administration, the Republicans managed a stunning victory last November due to their successful political rhetoric and tactics and the failure of the Democrats to muster anything to counter. I don't know how your über-pragmatist self imagines that elections are won and lost, but, trust me, political rhetoric really does matter. A lot. If you had ever run a successful election campaign, and I have run several, you would know that rationalism is the last thing any successful campaign manager thinks about.

- roidubouloi

March 7, 2011 at 11:24pm

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