Health Care: The Dutch Model

Jon Cohn had a nice article in the New Republic about how we could have a more effective health care system delivered primarily by for-profit, private insurers (and no public option).  It's what they've been doing in the Netherlands.  

But they [liberals] can take at least some comfort in looking overseas–where
one tiny country has managed to build a popular and successful
universal health care program based entirely on private insurance. That
country is the Netherlands, which several years ago overhauled its
health care system and achieved most of the goals the liberal reform
movement holds dear: near-universal coverage, affordable insurance, and
quality health care.

Under the new system, the Dutch government has required that
everybody gets insurance; in return, it makes sure insurance is
available to everybody, regardless of pre-existing medical conditions
or income. Although the government finances long-term care through a
public program, it has turned over the job of providing basic medical
coverage exclusively to private insurers, including some for-profit
companies. Surveys show that the Dutch are happier with their health
care than are Americans–or the people of any other developed country,
for that matter. There are even signs, albeit faint ones, that the
insurers are achieving what’s become the Holy Grail of health reform:
using their leverage to improve the quality of care that doctors and
hospitals provide–by improving the coordination of treatments for the
chronically ill or steering patients to providers that get the best
outcomes.

Great, right?

Still, there’s a catch. A big catch. Private insurance in the
Netherlands works because it operates more or less like a public
utility. The Dutch government regulates industry practices
tightly–more tightly than the reforms now moving through Congress
propose to do in the United States. The public insurance option was
supposed to make up for that deficiency, at least in part, by setting a
standard for service and affordability that the private industry would
have to meet–and by offering a fail-safe option in case the private
plans simply couldn’t keep up. If Congress ends up gutting the public
plan, in part or in whole, then it needs to work even harder on making
private insurance work. And it’s an open question whether that will
happen.

Pretty big catch.  With the current plans, health insurers are on-board– one of the big reasons that some reasonable version of health care reform most likely will pass.  Regulate them as much as they do in the Netherlands, and keeping them on-board becomes a much more dicey proposition.  Again, we're back to the issue I raised in an earlier post: public option or regulate the hell out of insurers.  Do neither and health reform, though worthwhile, is a lot less successful policy reform than it otherwise could be.

Book recommendation plus a little self analysis

I am reading an absolutely terrific book, Nurtureshock by Po Bronson and Ashley Merryman.  It’s basically a well-written run-through of all the latest social science research on parenting and child development.  Kind of a Freakonomics or Gladwell book on child development.  Some of the work was recently excerpted in a Newsweek cover story about how babies (i.e., humans) are essentially innate racists.  As I’ve known this since grad school, I didn’t actually find that part particularly compelling.  Some of the stuff I found most interesting: it is not a good idea to frequently tell your children they are smart; it is a good thing for adolescents to argue with their parents; kids lie to their parents at an amazingly distressing rate (maybe I’m forgetting, but I think I just lied to my parents much less than the average kid), IQ testing for kids younger than 3rd grade is an incredibly stupid idea (or at least tracking those kids in schools or programs based on those tests is), and much, much more.  If you are a parent, you so should read it.  If you’ve ever been a kid, you so should read it.

Okay, the self analysis you’ve been waiting for. When the book describes what happens to many kids who are over-praised for being smart, I realized that this unfortunately fit me to a T.  I heard throughout my whole childhood I was smart.  Anyway, when kids learn their smart and they can’t do something, they figure there’s not much point, because they are just not smart at it.  Despite the fact I have a PhD, perseverance in the face of adversity has always been a weakness of mine.  I got a PhD in Political Science because it wasn’t that hard for me.  Whenever I’ve run into academic difficulty, I always just figured it wasn’t for me and quit, rather than trying harder.  Maybe if I hadn’t always heard I was smart, I could have actually worked harder and received a PhD in Physics or Neuroscience or something (not that I’m not happy with PS).  There’s also a worthwhile lesson– praise your kids for working hard (something they have control over) not for being smart (something they don’t have control over).  And, like I said, read the book, maybe you’ll have your insight into your self.

Scared of a little competition

Ezra Klein nicely makes a very key point about the public option in this post.  The opponents are ultimately afraid of it outcompeting private insurance plans.  We only have a system of government-dominated insurance market if that's what citizens choose.  Otherwise, the public option fails.  Liberals are willing to bet the public option can outcompete private insurers– conservatives are afraid to give it a chance.  Ezra's explanation:

 Liberals don't think that Congress will pass a bill outlawing
private insurance. They don't think the Supreme Court will render a
decision naming WellPoint "cruel and unusual." Rather, they think the
market will, well, work: The public option will provide better service
at better prices and people will choose it. Or, conversely, that the competition will better the private insurance industry and that people won't need to choose it.

But that confidence rests on a very simple premise: The public
sector does a better job providing health-care coverage than the
private sector. If that proves untrue — and I would imagine most every
conservative would confidently assume that that's untrue — the plan
will fail. The public option will not provide better coverage at better
prices, and so it will not be chosen, and it will languish. Indeed, if
it languishes, it will lack customers and thus lack bargaining power
and economies of scale, and get worse even as the private insurers get
better. In that scenario, the public option not only fails, but it
discredits single-payer entirely.

The liberals are willing to bet that they're right. It's not a
sneaky strategy: It's an up-front wager. The conservatives are not,
however, willing to bet that they're wrong. They're willing to say the
public option will fail, but not give consumers the chance to decide
that for themselves.

I know I could sure use another choice, public or not. 

Why 2010 will not be 1994

Word on the street is that Democrats should be very worried about the midterm elections in 2010, perhaps fearing even a repeat of losing the House in 1994.  Truth is, 2010 will probably not be a good year for Democrats, but 1994 was in many ways a perfect storm of everything going wrong for the Democrats (massive retirements, the culmination of the Southern realignment, etc.) such that while 2010 may not be pretty, there's no reason to expect anything approaching the disaster of 1994.  Ed Kilgore explains it quite nicely (while relying on a healthy dose of Political Science) in TNR:

In the elections leading up to both 1994 and 2010, Democratic
victories, particularly in the House, left the party somewhat
over-exposed. In 1994, 46 of the 258 House Democrats were in
districts carried by President George H.W. Bush in 1992. The numbers
are comparable today, where 49 of the 257 House Democrats are in
districts carried by John McCain, with only 34 Republicans in districts carried by Barack Obama. Similarly, if you apply the Partisan Voting Index,
(PVI), which compares a district’s prior presidential results to
national averages, you find that there are 66 Democrats in districts
with a Republican PVI and only 15 Republicans in districts with a
Democratic PVI–a similar situation to the 79 Democrats in Republican
districts in 1994. Clearly, two straight "wave" elections have
eliminated most of the low-hanging fruit for Democrats in the House,
and created some ripe targets for the GOP.

But that's where the fear-inducing similarities end. The
Republicans' 1994 victory in the House was also enabled by a large
number of Democratic retirements: Twenty-two of the 54 seats the GOP
picked up that year were open. By comparison, the authoritative (and
subscription-only) Cook Political Report counts only four open,
Democrat-held House seats in territory that is even vaguely
competitive. That low number of open seats is significant because it
limits the number of seats Republicans can win; if there is a similar wave of retirements in the offing for 2010, the signs have yet to materialize.

Another disconnect between 1994 and 2010 involves patterns of
demography and ideology. The 1994 election was the high-water mark of
the great ideological sorting that occurred between the two parties.
That made the environment particularly harsh for southern Democrats, as
well as those in the Midwest and Rocky Mountain West, where many
ancestral attachments to the Donkey Party came unmoored. 

In the South, this sorting-out was reinforced by the decennial
reapportionment and redistricting process, during which both
Republicans and civil rights activists promoted a regime of "packing"
and "bleaching" districts–that is, the electoral consolidation of
African-American voters. While this had a salutary effect on
African-American representation in the House of Representatives, the
overall effect was to weaken Democrats. This dynamic was best
illustrated by my home state of Georgia, whose House delegation changed
from 9-1 Democratic going into the 1992 election to 8-3 Republican
after 1994.

Nothing similar to those handicaps exists today. The ideological
filtering of the parties is long over; any genuine conservative
Democrats or liberal Republicans left in the electorate clearly have
reasons for retaining their loyalties, which will be difficult to
erode. Moreover, whether or not you buy the "realignment" theories
that Democrats were excited about after the 2008 elections, there is
not a single discernible long-term trend that favors the Republican
Party. Bush-era Republican hopes of making permanent inroads among
Hispanics and women were thoroughly dashed in 2006 and 2008. Moreover,
as Alan Abramowitz recently pointed out,
the percentage of the electorate that is nonwhite–which is rejecting
Republicans by overwhelming margins–has roughly doubled since 1994.

In short: take the action from anyone who wants to bet you that Republicans will take over Congress in 1994.

Pearlstein on the Baucus Bill

The Washington Post's Stephen Pearlstein really likes the Baucus bill for the same reasons I do:

 My hat is off to Max Baucus. He's produced a credible plan to make
health care both a right and a responsibility of all Americans while
beginning to rein in health spending in a way that is politically
acceptable to a majority of Americans. In many ways it is the most
robust proposal so far because of its emphasis on changing the way
health care is organized, delivered and paid for. The chairman of the
Senate Finance Committee has put the reform back in health reform.

He also does a great job of calling the Republicans on their breathtaking irresponsibility and hypocrisy:

During the first two days of committee action on his bill, Baucus, a
Democrat from Montana, beat back repeated attempts by most of the
committee's Republicans to gut provisions that would slow runaway
growth in Medicare spending. Republicans want us to believe that they
care deeply about the federal deficit and about keeping Medicare from
going broke, while at the same time demanding that there should be no
cuts in benefits, no cuts in payments to insurers or providers, and no
reduction in the utilization of medical services. It was the most
craven, cynical, hypocritical performance by a group of elected
officials that I can remember, and a good measure of the political,
intellectual and moral bankruptcy of the Republican leadership in
Congress.

The rest is good, too, about the importance of the exchanges and opening them up more widely, but I really wanted to get those first two points out.  

TNR's Jonathan Cohn also puts this in the context of the Republican attempts to fund tax cuts out of Medicare cuts back in the 1990's:

Remember, this is the same party that promoted much larger, less
targeted cuts to Medicare in the 1990s–and did so not to shore up the
program or expand health insurance for working-age Americans, but to
create room for tax cuts that primarily benefited the wealthy.

So, just to review:

Modest Medicare cuts to make the program more efficient and help working-age people get insurance…bad.

Much larger Medicare cuts to give rich people get tax cuts…good.

And to think Americans still don't trust the GOP on health care.

I would never be so foolish as to claim that the Democrats are not guilty of the sort of hypocrisy Republicans are.  Yet, I truly believe if you put hypocrisy on an empirical scale, Congressional Republicans would be in a class by themselves.  Maybe I should create a hypocrisy scale for my next research project.

 

You are killing virgin forests to wipe your bottom

Pretty disturbing, eh?  But, apparently the physics of toilet paper are such that the softness everybody seems to crave only comes from old trees, rather than recycled paper products.  Interesting story on it in the Post this week:

 It is a fight over toilet paper: the kind that is blanket-fluffy and
getting fluffier so fast that manufacturers are running out of synonyms
for "soft" (Quilted Northern Ultra Plush is the first big brand to go
three-ply and three-adjective).

It's a menace, environmental groups say — and a dark-comedy example of American excess.

The reason, they say, is that plush U.S. toilet paper is usually
made by chopping down and grinding up trees that were decades or even a
century old. They want Americans, like Europeans, to wipe with tissue
made from recycled paper goods.

It has been slow going. Big toilet-paper makers say that they've
taken steps to become more Earth-friendly but that their customers
still want the soft stuff, so they're still selling it…

Toilet paper is far from being the biggest threat to the world's
forests: together with facial tissue, it accounts for 5 percent of the
U.S. forest-products industry, according to industry figures. Paper and
cardboard packaging makes up 26 percent of the industry, although more
than half is made from recycled products. Newspapers account for 3
percent.

But environmentalists say 5 percent is still too much.

Felling these trees removes a valuable scrubber of carbon dioxide, they
say. If the trees come from "farms" in places such as Brazil, Indonesia
or the southeastern United States, natural forests are being displaced.
If they come from Canada's forested north — a major source of imported
wood pulp — ecosystems valuable to bears, caribou and migratory birds
are being damaged.

And, activists say, there's just the foolish idea of the thing: old
trees cut down for the briefest and most undignified of ends.

I must admit, the I love my Cottonelle, but the Greene family will be switching over to recycled toilet paper.  An especially good idea when I consider how much of it Alex wastes by soaking rolls in the sink.

Save the Boobs

Personally, I find this breast cancer awareness ad (that I discovered here) horribly offensive:

(If you cannot watch it without signing into youtube, you should be able to at Salon at the link above)

Why so offensive, because it is a huge insult to men.  As Salon's Judy Berman writes:

But what really bothers me about the PSA, aside from the obvious — how
problematic it is to sexualize cancer, the implication that only hot
girls with nice racks are worth caring about — is its cynicism toward
young men. Does Rethink Breast Cancer really believe that the only way
to make guys care is to slap together a sexy ad with a
boobs-to-information ratio that's downright offensive? Is it impossible
to believe that men's interest in breast cancer research might go
beyond the selfish desire to "Save the boobs"? I'm all for reaching out
to get as many people involved in the fight against breast cancer as
possible. I just don't think insulting men's intelligence is the way to
do it.

Exactly.  Should we only care about the breasts of young, nubile, women?  Might men care about the fact that this disease could kill their wives, girlfriends, mothers, and daughters.  Anyway, so wrong.

Market failure (again)

As I like to say, markets are great, when they work.  The problem is that Republicans have a near religious faith in the virtue of markets, despite the compelling evidence that lots of times they simply don't work and lead to inefficient outcomes (hello, American health care).  Matt Yglesias (piggybacking on Paul Krugman) makes a good case that markets have certainly failed when it comes to the financial sector in America:

 

Having already noted the funny part of Paul Krugman’s case for banker compensation reform it’s worth turning to the serious part:

What’s wrong with financial-industry compensation? In a nutshell, bank
executives are lavishly rewarded if they deliver big short-term profits
— but aren’t correspondingly punished if they later suffer even bigger
losses. This encourages excessive risk-taking: some of the men
most responsible for the current crisis walked away immensely rich from
the bonuses they earned in the good years, even though the high-risk
strategies that led to those bonuses eventually decimated their
companies, taking down a large part of the financial system in the
process.

The Federal Reserve, now awakened from its Greenspan-era slumber,
understands this problem — and proposes doing something about it. According
to recent reports, the Fed’s board is considering imposing new rules on
financial-firm compensation, requiring that banks “claw back” bonuses
in the face of losses and link pay to long-term rather than short-term
performance. The Fed argues that it has the authority to do this as part of its general mandate to oversee banks’ soundness.

This makes sense to me, though I’m moderately skeptical it can really be made to work in practice.

But I do think it’s worth dwelling on the fact that this really a
pretty odd situation. Who doesn’t the market take care of this problem
itself? It really seems like investors would be reluctant to deal with
financial institutions that are organized this way. It seems like there
was a reason the major investment banks were traditionally organized as
partnerships—partnerships don’t have these incentives, and people
should prefer to do business with institutions that don’t have these
incentives. But the market’s not working like that. And it’s worth
trying to understand why. If regulators start playing cat-and-mouse
with compensation shenanigans, the mice are probably going to wind up
winning. But if there’s some specific thing that’s preventing market
discipline from adequately aligning incentives, we ought to be trying
to find out what it is and what can be done about it.

Clearly, the market is not doing its job.  Clearly investors are not behaving rationally.  The thing is, we should not be surprised by this.  Humans are extraordinarily irrational with their money.  Problem is that, until now, most economists have had a hard time accepting this.  The smart ones get this.   And, as I was just about to link to the site for Predictably Irrational, I discovered Dan Ariely's got a blog going and actually just addresses this very point!  Read it. 

Pro business, not pro market

As I think I must have argued before, one of the major flaws with the modern Republican party is that they are really just pro-business, not pro-market.  There's a big difference between the two.  There's plenty of evidence that they are more interested in protecting corporate profits than well-functioning markets.  Some great evidence for their desire to simply protect business profits is when it comes to the Medicare advantage plans.  Ezra Klein:

 At issue are payments to the Medicare Advantage program. Medicare
Advantage is a Medicare carve-out that allows private insurers to offer
plans for seniors. The original vision for the program was simple
enough: Private competition will drive costs down. The private market,
as you may have heard, is more efficient and effective and adaptable.
No reason seniors shouldn't benefit from that ingenuity. So Medicare
would give private insurers the money it would spend on a beneficiary,
and the private insurers could try to do a better job with it.

Medicare Advantage, however, failed in its mission: prices shot up.
Private insurers complained that they couldn't compete with Medicare
for the same amount of money Medicare spends. So Republicans
systematically increased reimbursement rates, and now Medicare has to
pay the average private plan 114 percent what it would've spent to
cover that beneficiary itself. That's helped the private plans provide
better service (as you would expect), and now 23 percent of seniors are
in an Advantage plan.

Democrats don't want to eliminate the Medicare Advantage program.
But they want it to live within the same budget that Medicare uses.
Republicans argue that pulling back these payments will force some
Medicare Advantage plans to trim their benefits. That may well be true.
But it is an argument against ever eliminating government overpayments
to any program. It is an argument, in other words, for waste and abuse.

It is also an interesting moment of insight into the conservative
philosophy on these matters. The problem with government programs,
we're often told, is that they are expensive and wasteful, and the
private market could do better. But faced with an instance where the
government program proved relatively lean and efficient, and the
private market expensive and wasteful, Republicans have mounted a
ferocious defense of the market's right to continue burning through
taxpayer dollars.

If you are interested in efficiency and not wasting government money, the solution is obvious.  If, however, your primary goal is protecting corporate profits, they you'll argue for wasting our "hard-earned taxpayer dollars"(!) on Medicare advantage plans.

My research on the radio

I was on WUNC's The State of Things today.  And for the first time, I was actually in the media for my research rather than my political expertise.  We talked about the politics of parenthood for about 15 minutes.  It was fun and I think I did alright.  You can listen on-line or download a podcast.

p.s.  I just listened to about the first-half and I have to say I think I sound much better and more confident as a political expert than I do talking about my own research.  It would have sounded much better if Laurel had been the one to talk about it.  Though, I'm still listening as I type, and I definitely got better as I went along.

 

Bush speechwriter tells all

Haven't had a chance to finish reading this yet, but there's all sorts of juicy tidbits from the waning days of the Bush White House.  My favorite: he didn't understand the TARP business at all.  

 

Pelosi Galore

It's video day!  Anybody who doesn't think this is sexist doesn't know what sexism is (it's a little old, but I just discovered it):