Oh for a health care monopsony

Those who blame for-profit health insurers for high U.S. health care costs usually focus on administrative and marketing costs. As Ezra Klein has highlighted, however, these are difficult to calculate; they're not always significantly higher in the private sector than in the public; and they don't fly as a primary cause of the U.S.'s uniquely high per capita health care spending.

Yet our Balkanized health care payment system does have a huge impact on health care costs. Klein again, citing Kaiser Permanente CEO George Halvorson pointing out that CT scans cost about 3x as much in the U.S. as in Europe, links to a 2003 study published in Health Affairs ("It's the Prices, Stupid...", Gerard F. Anderson et al. ) analyzing why procedures cost so much more in the U.S. than in OECD countries with universal healthcare.

The conclusion of this study bears out T.R. Reid's reporting in The Healing of America. Countries with universal health care all accord government the power of monopsony - "a state in which demand comes from one source." That is, the governments of France, Germany, Japan, Canada and England all set the prices for every procedure (or patient, in a capitated system) -- regardless of whether or not payments are funneled through private (nonprofit) insurers. All of them, by American standards, squeeze doctors and hospitals. Anderson et al:

In the U.S. health system...money flows from households to the providers of health care through a vast network of relatively unccordinated pipes and capillaries of various sizes. Although the huge federal Medicare program and the federal-state Medicaid programs do possess some monopsonistic purchasing power, and large private insurers may enjoy some degree of monopsony power as well in some localities, the highly framented buy side of the U.S. health system is relatively weak by international standards. It is one factor, among others, that could explain the relatively high prices paid for health care and for health professionals in the United States.

In comparison, the government-controlled health systems of Canada, Europe, and Japan allocate considerably more market power to the buy side...

Even a pure monopsonist is ultimately constrained by market forces on the supply side -- that is, by the reservation (minimally acceptable) prices of the providers of health care below which they will not supply their goods or services. But within that limit, monopsonistic buyers enjoy enough market clout to drive down the prices paid for health care and health care inputs fairly close to those reservation prices. It can explain, for example, why Fuchs and Hahn found that "U.S. fees for procedures are more than three times as high as Canadian fees [and] the difference in fees for evaluation and management services is about 80 percent."

From this perspective, individual health insurance companies are not "to blame" for high U.S. health care costs. But the system that allows them to exist is. When the government abjures monopsony power, patients lose.

Doctors do consider themselves underpaid and in some cases overmanaged in monopsony systems. On the other hand, they generally have to cope with zero medical school debt, piddling malpractice insurance fees, and minimal administrative burdens (in France, where national health cards record every procedure and fee, the time and money doctors spend on administration is close to zero). Ironically, one reason U.S. insurers pay doctors and hospitals so much more than their rich country peers is that the balkanized payment and claims system imposes onerous admnistrative costs on providers.

Did Defoe really celebrate diversity? Yes

As an antidote to Patrick Buchanan's racist dreams of a pure white America, Andrew Sullivan has thrice recently drawn on* a "once-celebrated 1703 poem from Daniel Defoe, "The True Born Englishman", written to counter the Buchanans of his day (and to defend a foreign-born king)." The poem is truly magnificent. Tracing the Brits' multiple ethnic infusions, it concludes:

A true-born Englishman’s a contradiction,

In speech an irony, in fact a fiction.

Reading it, I did wonder, however, whether Defoe was not mocking his country's "mongrel" makeup even as he mocked those who pretended otherwise. Eighteenth century satire often disappoints our current sensibilities in that way. These lines at least could be read as mockery:

From whence a mongrel half-bred race there came,

With neither name, nor nation, speech nor fame.

In whose hot veins new mixtures quickly ran,

Infus’d betwixt a Saxon and a Dane.

While their rank daughters, to their parents just,

Receiv’d all nations with promiscuous lust.

This nauseous brood directly did contain

The well-extracted blood of Englishmen.

The tone throughout is complex, simultaneously mocking and celebratory. Rather than mock-celebrating the messy reality, however, the poem mocks to celebrate. There's a kind of self-canceling exceptionalism: England is blessed because it encompasses everywhere. Ultimately, the celebration has a religious dimension. The Christian contradiction of God becoming man in a sense sacralizes the omnivorous lust that fuses conquered and conquerer:

Some think of England ’twas our Saviour meant,

The Gospel should to all the world be sent:

Since, when the blessed sound did hither reach,

They to all nations might be said to preach.

Moreover, while the author glossing his own lines should not be granted an absolute interpretative authority, Defoe did, in an "Explanatory Preface" to a later edition, definitively spell out an inclusive ideology:

For why should not our neighbours be as good as we to derive from? And I must add that, had we been an unmixed nation, I am of opinion it had been to our disadvantage. For, to go no further, we have three nations about us as clear from mixtures of blood as any in the world, and I know not which of them I could wish ourselves to be like—I mean the Scots, the Welsh and Irish; and if I were to write a reverse to the satire, I would examine all the nations of Europe, and prove that those nations which are most mixed are the best, and have least of barbarism and brutality among them.

Defoe's response to the nativism of his day is indeed fully relevant today:

From hence I only infer that an Englishman, of all men, ought not to despise foreigners as such, and I think the inference is just, since what they are to-day, we were yesterday, and to-morrow they will be like us. If foreigners misbehave in their several stations and employments, I have nothing to do with that; the laws are open to punish them equally with natives, and let them have no favour.

Also astonishingly contemporary is Defoe's defense of a foreign-born (Dutch) king -- as is the abuse heaped upon that imported chief executive:

Nor would I be misrepresented as to the ingratitude of the English to the King and his friends, as if I meant the English as a nation are so. The contrary is so apparent, that I would hope it should not be suggested of me; and, therefore, when I have brought in Britannia speaking of the King, I suppose her to be the representative or mouth of the nation as a body. But if I say we are full of such who daily affront the King and abuse his friends, who print scurrilous pamphlets, virulent lampoons, and reproachful public banter against both the King's person and Government, I say nothing but what is too true. And that the satire is directed at such I freely own, and cannot say but I should think it very hard to censured for this satire while such remained unquestioned and tacitly approved.

Next up: Robin Crusoe's tips for neocolonialist counterinsurgents. Sketchy memory tells me that this will not be as satisfying.

*See also Sullivan's Sunday Times column on the U.S.'s mixed ethnic heritage.

Did McChrystal (or Petraeus) Read Henry V?

I was astonished to read in today's Times that the authors of the U.S. military's current counterinsugency doctrine are steeped in contemparary scholarship of the 100 Years' War (among many other conflicts).

Astonished, because apparently a bit of throwaway literary free association I indulged in last week, comparing McChrystal's articulation of how to win the local population's hearts and minds to that of Shakespeare's Henry V, apparently has some basis in reality.

I did wonder while writing the post whether Shakespeare's version of Henry's approach to "playing for a kingdom" by being "the gentler gamester" itself had any basis for in reality. The Times article indicates that it did:

...by the time Henry landed near the mouth of the Seine on Aug. 14, 1415, and began a rather uninspiring siege of a town called Harfleur, France was on the verge of a civil war, with factions called the Burgundians and the Armagnacs at loggerheads. Henry would eventually forge an alliance with the Burgundians, who in today’s terms would become his “local security forces” in Normandy, and he cultivated the support of local merchants and clerics, all practices that would have been heartily endorsed by the counterinsurgency manual.

Of course, Henry's aim, ruling a foreign country by remote control, would not be endorsed by the counterinsurgency manual - not consciously, anyway. But that's pretty much what critics of current and pending policy like Rory Stewart see the U.S. trying to do.

Steve Coll vs. Rory Stewart on the AfPak endgame

In almost perfect counterpoise on Obama's excrutiating decision on how to proceed in Afghanistan and Pakistan are two supremely well-informed former sojourners in that country, Rory Stewart and Steve Coll. Stewart sees futlity in what he casts as neoimperialist attempts to shape an alien culture; Coll outlines with great authority the dangers of letting the Taliban thrive, and advocates working to foster an Afghan government that negotiates and governs its way to a measure of legitimacy and adequate authority. They are not quite opposites, since Stewart would not cede the country to the Taliban and Coll is cautious and noncommittal about the degree of military engagement. But they're on different sides of the midpoint.

Considering the linked or not-so-linked goals of neutralizing al Qaeda and stabilizing Afghanistan, both emphasize the swallow-the-spider-to-catch-the-fly nature of pursuing the latter goal as a means to the former. But Stewart ravels out the chain of goals to mock it, while Coll demonstrates pretty powerfully that the concantenations are real. Here's Stewart's irony:

Policymakers perceive Afghanistan through the categories of counter-terrorism, counter-insurgency, state-building and economic development. These categories are so closely linked that you can put them in almost any sequence or combination. You need to defeat the Taliban to build a state and you need to build a state to defeat the Taliban. There cannot be security without development, or development without security. If you have the Taliban you have terrorists, if you don’t have development you have terrorists, and as Obama informed the New Yorker, ‘If you have ungoverned spaces, they become havens for terrorists.’

Coll breaks this circularity by widening the chessboard. The key to Pakistani stability, he emphasizes, is peace with India:

American policy over the next five or 10 years must proceed from the understanding that the ultimate exit strategy for international forces from South Asia is Pakistan's economic success and political normalization, manifested in an Army that shares power with civilian leaders in a reasonably stable constitutional bargain, and in the increasing integration of Pakistan's economy with regional economies, including India's. Such an evolution will likely consolidate the emerging view within Pakistan's elites that the country requires a new and less self-defeating national security doctrine. As in the Philippines, Colombia, and Indonesia, the pursuit of a more balanced, less coup-ridden, more modern political-military order in Pakistan need not be complete or confused with perfection for it to gradually pinch the space in which al Qaeda, the Taliban, and related groups now operate. Moreover, in South Asia, outsiders need not construct or impose this modernizing pathway as a neo-imperial project. The hope for durable change lies first of all in the potential for normalizing relations between Pakistan and India, a negotiation between elites in those two countries that is already well under way, without Western mediation, and is much more advanced than is typically appreciated. Its success is hardly assured, but because of the transformational effect such normalization would create, the effects of American policies in the region on its prospects should be carefully assessed.
Against this backdrop, a Taliban insurgency that increasingly destabilizes both Afghanistan and the border region with Pakistan would make such regional normalization very difficult, if not impossible, in the foreseeable future. Among other things, it would reinforce the sense of siege and encirclement that has shaped the Pakistan Army's self-defeating policies of support for Islamist militias that provide, along with a nuclear deterrent, asymmetrical balance against a (perceived) hegemonic India.

More directly to the point of how the U.S. should proceed in Afghanistan, Coll one by one recouples the delinkages of those who suggest the U.S. can 'contain' al Qaeda without working hard to foster a coherent state in Afghanistan. First, most arrestingly, he debunks the notion that chaos or Taliban rule in large swaths of Afghanistan and Pakistan don't matter much, because al Qaeda could find a haven in any of a number of failed or extremist states:

It is simply not true that all potential al Qaeda sanctuaries are of the same importance, now or potentially. Bin Laden and his No. 2, Ayman Al-Zawahiri, have a 30-year, unique history of trust and collaboration with the Pashtun Islamist networks located in North Waziristan, Bajaur, and the Northwest Frontier Province of Pakistan. It is not surprising, given this distinctive history, that al Qaeda's presumed protectors -- perhaps the Haqqani network, which provided the territory in which al Qaeda constructed its first training camps in the summer of 1988 -- have never betrayed their Arab guests.
These networks have fought alongside al Qaeda since the mid-1980s and have raised vast sums of money in Saudi Arabia and other Gulf states through their connections. They possess infrastructure -- religious institutions, trucking firms, criminal networks, preaching networks, housing networks -- from Kandahar and Khost Province, and from Quetta to Karachi's exurban Pashtun neighborhoods, that is either impervious to penetration by the Pakistani state or has coopted those in the Pakistani security services who might prove disruptive. It is mistaken to assume that Bin Laden, Zawahiri, or other Arab leaders would enjoy similar sanctuary anywhere else. In Somalia they would almost certainly be betrayed for money; in Yemen, they would be much more susceptible to detection by the country's police network. The United States should welcome the migration of al Qaeda's leadership to such countries.

Coll also rebuts the notion that the Taliban might not shelter al Qaeda this time around:

It would also be mistaken to believe, as some in the Obama administration have apparently argued, that a future revolutionary Taliban government in Kabul, having seized power by force, might decide on its own or could be persuaded to forswear connections with al Qaeda. Although the Taliban are an amalgamation of diverse groupings, some of which have little or no connection to al Qaeda, the historical record of collaboration between the Haqqani network and al Qaeda, to choose one example, is all but certain to continue and probably would deepen during any future era of Taliban rule in Afghanistan. The benefits of a Taliban state to al Qaeda are obvious: After the Sept. 11 attacks, the United States gathered evidence that al Qaeda used Afghan government institutions as cover for import of dual-use items useful for its military projects. Reporters with the McClatchy newspaper group's Washington bureau recently quoted a senior U.S. intelligence official on this subject: "It is our belief that the primary focus of the Taliban is regional, that is Afghanistan and Pakistan. At the same time, there is no reason to believe that the Taliban are abandoning their connections to al Qaeda ... The two groups ... maintain the kind of close relationship that -- if the Taliban were able to take effective control over parts of Afghanistan -- would probably give al Qaeda expanded room to operate." This assessment is consistent with recent history.

Coll has a nuanced view of history. He sees the parallels between U.S. attempts to pacify Afghanisan and the Soviet debacle there, but also the differences:

By comparison to the challenges facing the Soviet Union after it began to "Afghanize" its strategy around 1985 and prepare for the withdrawal of its troops, the situation facing the United States and its allies today is much more favorable. Afghan public opinion remains much more favorably disposed toward international forces and cooperation with international governments than it ever was toward the Soviet Union. The presence of international forces in Afghanistan today is recognized as legitimate and even righteous, whereas the Soviets never enjoyed such support and were unable to draw funds and credibility from international institutions. China today wants a stable Afghanistan; in the Soviet era, it armed the Islamic rebels. The Pakistani Army today is divided and uncertain in its relations with the Taliban, and beginning to turn against them; during the Soviet period, the Army was united in its effort to support Islamist rebels. And even if the number of active Taliban fighters today is on the high side of published estimates, those numbers pale in comparison to the number of Islamic guerrillas fighting the Soviet forces and their Afghan clients.
In other words, the project of an adequately stable Afghan state free from coercive Taliban rule for the indefinite future can be achieved, although there are no guarantees.

He also debunks the cliche that a cohesive state in Afghanistan is an impossible dream because it has never happened before:

Nor does the project of an adequately intact, if weak and decentralized, Afghan state, require the imposition of Western imagination. Between the late 18th century and World War I, Afghanistan was a troubled but coherent and often peaceful independent state. Although very poor, after the 1920s it enjoyed a long period of continuous peace with its neighbors, secured by a multi-ethnic Afghan National Army and unified by a national culture. That state and that culture were badly damaged, almost destroyed, by the wars ignited by the Soviet invasion of 1979 -- wars to which we in the United States contributed destructively. But this vision and memory of Afghan statehood and national identity has hardly disappeared. After 2001, Afghans returned to their country from refugee camps and far flung exile to reclaim their state -- not to invent a brand new Western-designed one, as our overpriced consultants sometimes advised, but to reclaim their own decentralized but nonetheless unified and even modernizing country.

The range of Coll's historical perpective - that the U.S. is not the Soviet Union (though prone to some of the same kinds of errors), that a coherent Afghan state is not a pipe dream, that the AfPak badlands are al Qaeda's native environment -- is really priceless. Equally nuanced is his sense of the possibilities and limitations of political pressure informed by goals that are political in the deepest sense: peace between Pakistan and India, inter-ethnic engagement and negotiation by the Afghan government.

None of this deep knowledge and balanced perspective means that Coll is necessarily right about the prospects of in some recognizable sense "winning" in Afghanistan and Pakistan. But he's come closer than either Richard Holbrooke or Stanely McChrystal to articulating what success might look like -- and even how the U.S. and international community might help foster it.

Stewart's view is as complex, nuanced and informed as Coll's. He details the unlikeihood that the U.S. can defeat the Taliban outright; the equal unlikelihood that the Taliban could overrun the entire country; the impossiblity of "building" a central government whose writ extends in modern nation-state style across the entire country; and the paradox that a relatively strong state can be a more dangerous haven for the likes of al Qaeda than a weak one. He emphasizes what can't be done more than what can, and Coll does the opposite; but both see a mixed outcome and the possibility for limited cooperation/collaboration with the Afghan government, infused by humility.

But a fundamental difference remains. Coll defends assumptions and ultimately (if equivocally) embraces goals that Stewart sees as delusive:

The fundamental assumptions remain that an ungoverned or hostile Afghanistan is a threat to global security; that the West has the ability to address the threat and bring prosperity and security; that this is justified and a moral obligation; that economic development and order in Afghanistan will contribute to global stability; that these different objectives reinforce each other; and that there is no real alternative.

But why delusive? In the end, Stewart's critique devolves into literary criticism - an analysis of the syntax of two 19th century British statesmen with different world views. His preference for the language and world view of the skeptic is not an argument. He highlights many perhaps insurmountable difficulties of attaining the vision outlined above, but he stops short of really indicating how to attain a messy but viable alternative. Coll, in the end, engages facts on the ground more relentlessly.

UPDATE 11/1: In retrospect I don't think I did justice to Stewart's argument here, which is cleaner in his Senate testimony. His case for why Afghanistan is unlikely to achieve a reasonably unified national government any time soon is at least as detailed as Coll's to the contrary, as is his policy recommendation -- 20,000 troops, aid targeted to selected projects.

I do think that there's a logical flaw in one of Stewart's syllogisms: a) Afghanistan is 30 years behind Pakistan in state-building capacity; b) Pakistan is a worse danger to us than Afghanistan, precisely because it's a cohesive enough state to preclude full-scale US military engagement in its tribal havens for the Taliban and al Qaeda; c) we're actually better off with a weak Afghanistan than we'd be with a relatively strong one. That sequence ignores the fact that Pakistan is so dangerous in large part because of the long Afghan Civil War and Pakistan's engagement with (creation of) the Taliban. Stewart lampoons the chicken-egg nature of arguments for counterinsurgency-as-counterterrorism, the interchangeability of alleged cause and effect But his attempt to pull the cause and effect chain straight is no more convincing than that of the counterinsurgency theorists.

More to come on this.

Obama to Karzai: No marriage, no dowry?

I have noted before that at least since September 20 Obama has been signalling that the ostentatiously public review of Afghan strategy is at least in part an attempt to force a credible outcome -- most likely a unity government between Karzai and Abdullah -- to the fraudulent Afghan election. In his talk show blitz at that time, Obama recast the troop increase he ordered in March as a bid to secure the election and stressed that he had at that time planned a second review in the election's wake.

The point may seem obvious by now - how could the U.S. go all-in to support a government re-seated by an election so fraudulent it insistently recalls the bogus election in Iran? In any case, the linkage was made explicit by a chorus of administration officials and allies this weekend. From the Times' talk show roundup:

WASHINGTON — The White House signaled Sunday that President Obama would postpone any decision on sending more troops to Afghanistan until the disputed election there had been settled and resulted in a government that could work with the United States.

As an audit of Afghanistan’s Aug. 20 election ground toward a conclusion, American officials pressed President Hamid Karzai to accept a runoff vote or share power with his main rival, Abdullah Abdullah, a former foreign minister. Although Mr. Karzai’s support appeared likely to fall below 50 percent in the final count, together he and Mr. Abdullah received 70 percent, in theory enough to forge a unity government with national credibility.

The question at the heart of the matter, said President Obama’s chief of staff, Rahm Emanuel, is not “how many troops you send, but do you have a credible Afghan partner for this process that can provide the security and the type of services that the Afghan people need?” He appeared on CNN’s “State of the Union” and CBS’s “Face the Nation.”

He echoed the thoughts of Senator John Kerry of Massachusetts, a top Obama ally and the chairman of the Foreign Relations Committee, who said in a separate interview from Kabul, “I don’t see how President Obama can make a decision about the committing of our additional forces, or even the further fulfillment of our mission that’s here today, without an adequate government in place.” His interview was broadcast on “Face the Nation.”

“It would be irresponsible,” Mr. Emanuel told CNN. Then he continued, paraphrasing the senator, that it would be reckless to decide on the troop level without first doing “a thorough analysis of whether, in fact, there’s an Afghan partner ready to fill that space that U.S. troops would create and become a true partner in governing.”

Looks awfully like no shotgun marriage, no dowry.

UPDATE 10/27: Joe Klein (10/24) also sees Obama's pause as a conscious application of political pressure:

Rahm Emanuel's television appearance last Sunday, in which he said that no decision could be made on more troops until the Afghan government resolved its electoral mess, was part of a coordinated effort to get Karzai to agree to a runoff election. And it worked, but not before a baloney-storm erupted among the wingers, criticizing the President and Emanuel for dithering about sending more troops. As soon as Karzai agreed to the runoff, a second message was sent by Secretary of Defense Robert Gates--plans were proceeding for the next stage of the war. The Emanuel-Gates statements were routinely described as "dueling" and, for a day or so, that's exactly how it seemed: a slight breech between the Pentagon and the White House.

But it wasn't. And Obama's effort to formulate a new strategy for Afghanistan is, by all accounts, a coherent effort to incorporate four information streams--the military situation on the ground (the McChrystal stream); the military situation across the Pakistan border, where a major offensive is taking place that will have an impact on the situation in Afghanistan; the Afghan political stream; and the latest intelligence about the size, strength and intentions of Al Qaeda.

Up the Great Chain of Being with Jalal a-Din Rumi

One corner of my mind remains open to the possibility that mystics tap into something real. Here's a poem by the Sufi Jalal al-Din Rumi Rumi (1207-1273), aka Mowlana, that seems pumped out of the central artery:

I died as mineral and became a plant.
I died as plant and rose as an animal.
I died as animal and I was Man.
Why should I fear? When was I less by dying?
Yet once more I shall die as Man to soar
With angels blest; but even from angelhood
I must pass on: "All save the face of God doth perish."
When I have sacrificed my angelic soul,
I shall become what no mind has ever conceived.
Oh, let me not exist! for nonexistence
Proclaims in organ tones: "To Him shall we return."

-- cited in Roy Mattadehedeh, The Mantle of the Prophet: Religion and Politics in Iran

"Let me not exist" -- a similar impulse was spun out a bit more than a century later (circa 1375) and a world apart in the anonymous English mystical primer The Cloud of Unknowing, which counsels the contemplative to seek a state in which

..in avoiding of all knowing He who is is always unknown he is knitted unto Him in the best manner; and in that he knows nothing, he is made to be knowing above mind.

Indeed, nonexistence, unknowing, erasure or dissolution of the self in the all-encompassing reality of God, is a staple of mysticism in many times and regions.

General McChrystal, the gentler gamester

As chronicled in this week's Times Magazine profile, General Stanley McChrystal, commander of NATO forces in Afghanistan, is taking the current counterinsurgency imperative to win hearts and minds to a new level:

In his first weeks on the job, McChrystal issued directives instructing his men on how to comport themselves with Afghans (“Think of how you would expect a foreign army to operate in your neighborhood, among your families and your children, and act accordingly”); how to fight (“Think of counterinsurgency as an argument to win the support of the people”); even how to drive (“in ways that respect the safety and well-being of the Afghan people”). At the heart of McChrystal’s strategy are three principles: protect the Afghan people, build an Afghan state and make friends with whomever you can, including insurgents. Killing the Taliban is now among the least important things that are expected of NATO soldiers.

The approach to occupation is not exactly new. Compare Shakespeare's Henry V in the midst of his campaign to assert his sovereignty over France, approving the execution of his former friend Bardolph for stealing a holy tablet:

We would have all such offenders so cut off: and we
give express charge, that in our marches through the
country, there be nothing compelled from the
villages, nothing taken but paid for, none of the
French upbraided or abused in disdainful language;
for when lenity and cruelty play for a kingdom, the
gentler gamester is the soonest winner (III. vi. 107-113).

Henry did eventually win effective sovereignty over France, though he died before he could be crowned, and his adversary the French-born Charles VII was crowned in 1429 (thanks to the galvanizing tactics of mujahideen Joan of Arc), fourteen years after Henry's first invasion. The Brits were driven out for good in 1453 -- 38 years after this order to win hearts and minds was allegedly delivered in Picardy.

Obama (re) declares war on lobbyists

It's on now. When the Baucus bill passed out of committee, it became clear that some form of health care reform will likely pass. That was the opening gong for lobbyists to start their final pushes to knock key cost control measures off of the end product -- the excise tax on expensive health care plans, the pending Sustainable Growth Rate cut to doctors' Medicare payments, the cuts in subsidies to Medicare Advantage plans, the tax on medical device makers, strong price control leverage for any public option, etc. etc.

The bogus and swiftly discredited (counter-swiftboated?) AHIP-commissioned study purporting to show that the Baucus bill will raise premiums was in turn a red cape to Democrats, who have gone out with gusto to paint the health insurance industry as public enemy #1. It is unlikely that AHIP is trying to prevent a reform bill from passing; they are rather trying to get what they can added in and taken out -- stiffer individual mandates, increased subsidies, no public option, no excise tax, weaker mimimum coverage standards. Give them all that, and reform is still worth doing -- insurance at least marginally worth having will still be made at least marginally affordable to most of those who now lack it. But the U.S. health care system will remain dysfunctional -- twice as expensive as that of other rich countries, riddled with coverage holes, wired for overtreatment. The battle now is about how eviscerated the final bill will be.

That is why Obama has returned to a major campaign theme: we can't reform our policies until we reform our politics. Here's how he put it on Jan. 30, 2008 in Denver:

we need to do more than turn the page on the failed Bush-Cheney policies; we have to turn the page on the politics that helped make those policies possible.

Lobbyists setting an agenda in Washington that feeds the inequality, insecurity, and instability in our economy.

Division and distraction that keeps us from coming together to deal with challenges like health care, and clean energy, and crumbling schools year after year after year.

Cronyism that gave us Katrina instead of competent government. And secrecy that made torture permissible and illegal wiretaps possible.

It's a politics that uses 9/11 to scare up votes; and fear and falsehoods to lead us into a war in Iraq that should've never been authorized and should've never been waged.

Compare his weekly address today:

This [rampant health care inflation] is the unsustainable path we’re on, and it’s the path the insurers want to keep us on. In fact, the insurance industry is rolling out the big guns and breaking open their massive war chest – to marshal their forces for one last fight to save the status quo. They’re filling the airwaves with deceptive and dishonest ads. They’re flooding Capitol Hill with lobbyists and campaign contributions. And they’re funding studies designed to mislead the American people.

Of course, like clockwork, we’ve seen folks on cable television who know better, waving these industry-funded studies in the air. We’ve seen industry insiders – and their apologists – citing these studies as proof of claims that just aren’t true. They’ll claim that premiums will go up under reform; but they know that the non-partisan Congressional Budget Office found that reforms will lower premiums in a new insurance exchange while offering consumer protections that will limit out-of-pocket costs and prevent discrimination based on pre-existing conditions. They’ll claim that you’ll have to pay more out of pocket; but they know that this is based on a study that willfully ignores whole sections of the bill, including tax credits and cost savings that will greatly benefit middle class families. Even the authors of one of these studies have now admitted publicly that the insurance companies actually asked them to do an incomplete job.

It’s smoke and mirrors. It’s bogus. And it’s all too familiar. Every time we get close to passing reform, the insurance companies produce these phony studies as a prescription and say, "Take one of these, and call us in a decade." Well, not this time.

Beyond slamming the most obvious target, Obama at the close broadened the scope and raised the stakes, framing the health reform bill as a test case for the functioning of American democracy:

Last November, the American people went to the polls in historic numbers and demanded change. They wanted a change in our policies; but they also sought a change in our politics: a politics that too often has fallen prey to the lobbyists and the special interests; that has fostered division and sustained the status quo. Passing health insurance reform is a great test of this proposition. Yes, it will make a profound and positive difference in the lives of the American people. But it also now represents something more: whether or not we as a nation are capable of tackling our toughest challenges, if we can serve the national interest despite the unrelenting efforts of the special interests; if we can still do big things in America.

I believe we can. I believe we will. And I urge every member of Congress to stand against the power plays and political ploys – and to stand up on behalf the American people who sent us to Washington to do their business.

Obama here is not only turning the spotlight on lobbyists just as they kick into high gear -- there's also a veiled threat to expose selected targets in Congress (Democrats, since there's no Republican votes except maybe Snowe's) who try to hold the final bill hostage to various giveaways.

It's been said by many that Obama needs to land a punch in a major domestic policy fight. Let's see specifically what he chooses to fight for as health care reform approaches the endgame.

Does the public option rest on a thin Reid?

Pre-gaming the Harry Reid-led meetings to merge the Senate Finance Committee bill and the HELP bill, Ezra Klein highlights an important inflection point for the public option:

If Reid decides to put a public option, or some sort of public option compromise, into the bill, then it would require 60 senators to remove it on the floor, and only 41 senators to defend it. Conversely, if he decides to leave the public option fight for the floor, then it will take 60 senators to add it into the bill, and only 41 to block it. That means that groups who see an issue decided in their favor during the blend have a huge advantage over groups that are left to fight it out on the floor.

Of course, if Reid and his gang of 3-4 do include a public option (or some ghost of one) in the bill they bring to floor debate, and thus make it difficult to remove the public option on the floor, it will still ultimately take 60 senators to achieve cloture and bring any bill to a vote in the Senate.

Gov. Palin, 2006--2009?

I'll leave it to Alaskans to shoot down the lies and distortions that doubtless pepper Sarah Palin's review of her record as governor in this deep foray into energy policy in NRO.

One representation, though, leaped out at a lower 48er:

— Sarah Palin was governor of Alaska from 2006 to 2009, and the Republican candidate for vice ­president in 2008.

2006-2009, eh? Sounds like three years, not 20 months. Wasn't Palin elected in 2006? Yes, but she took office on Dec. 4 -- so her tenure includes 27 days of that year. Sort of like a person who was born in 1899 and died in 2001 claiming a life spanning three centuries.

Would that all Palin's massagings of the truth stuck this close to the facts. Halcro, Mudflats et al, have at these sunny assertions:

The state’s government has made safeguarding resources a priority; when I was governor, for instance, we created a petroleum-systems-integrity office to monitor our oil and gas infrastructure for any potential environmental risks.

Over 20 percent of Alas­ka’s electricity currently comes from renewable sources, and as governor I put forward a long-term plan to increase that figure to 50 percent by 2025.

In Alaska, we’re developing the largest private-sector energy project in history — a 3,000-mile, $40 billion pipeline to transport hundreds of trillions of cubic feet of natural gas to markets across the United States.

For the Lord and for Gideon...

Xpostfactoid was forced to tangle on the pages of the FT with our favorite columnist, Gideon Rachman, after one of his periodic bouts of Obamaskepticism. Deja vu...

Another respondent to Rachman has an interesting scope on the rope-a-dope trope.

Ah, the FT...our home away from home.

The Japanese sway to Obamameter

The Times revisits the Japanese passion for Obama's speeches, which have become a staple of the country's multi-billion dollar English language instruction industry. While the CDs, books, etc. based on the speeches presumably break down the language, something nonverbal is at at work in their selling power:

But there are probably a large number of buyers who do not really possess the basic English skills to understand his speech, said Yuzo Yamamoto, an editor at Asahi Press. Since the sales took off, he has received postcards from readers saying they had been touched by Mr. Obama’s speeches, but “those same people have said they were moved even though they didn’t understand English well,” he said. “Some even said the only phrase they caught was, ‘Yes, we can.’ They said they were in tears nonetheless.”

Mr. Yamamoto said there was a sincerity about Mr. Obama’s speaking style that listeners could perceive phonetically, combined with a delivery that was almost musical.

I don't know what's more uncanny: Japanese enthusiasm or Obama's rhetorical power. I tried to capture some of its rhythmic and symbolic wellsprings the day after his election:

But Obama's speech is also "poetic" in a more primal sense, in its rhythms and pacing. Mostly it's a matter of strong repetition. The sentences are often long, with clause piled on clause. But those clauses are bound together by parallel structure -- most often by anaphora, the repetition of beginning words. There's really nothing fancy about it: anaphora is almost his only grammatical figure...A long Obama sentence is like a row of Doric columns. The mind follows without fatigue, buttressed by the graceful repetitive structure.

I am as susceptible myself as the customers in Utako Sakai's beauty parlor.

Bruce Bartlett, Keynsian?

Bruce Bartlett, semi-repentant supply-sider and quasi neo-Keynsian, on one of many valuable taboos Republicans blew through:

Indeed, by destroying the balanced budget constraint, starve-the-beast theory actually opened the flood gates of spending. As I explained in a recent column, a key reason why deficits restrained spending in the past is because they led to politically unpopular tax increases. But if, as Republicans now maintain, taxes must never be increased at any time for any reason then there is never any political cost to raising spending and cutting taxes at the same time, as the Bush 43 administration and a Republican Congress did year after year.

This is by way of long intro to Barlett's new book, The New American Economy.

A mantra for true health care reform

My takeaway from T.R. Reid's comparative look at national health care systems, The Healing of America, is distilled in this mantra from former British health minister John Reid:

We cover everybody, but not everything (p. 221).

That is the key to equitable, effective, sustainable health care delivery. As (T.R.) Reid's tour of successful health care systems makes clear, the very different systems at work in France, Germany and Japan (which channel payment through private but nonprofit insurers), Canada (single payer, Medicare model) and Britain (direct government funding) share these three elements:

1. Everybody has the same access to the same treatment
2. Every provider of each treatment (or of each patient, in a capitated system) gets the same pay as every other provider of that treatment.
3. One entity sets all treatment prices for the whole nation (or province, in Canada's case).

Establishing these conditions doesn't make cost control easy. It just makes it possible.

The health care reform bills pending in the U.S. won't create these conditions in one fell swoop. At best, they will establish adequate minimum insurance coverage standards and create viable nonprofit alternatives to the for-profit industry. Then, if we're lucky, those nonprofit options will indeed kill off for-profit insurance, exactly as AHIP fears.

AHIP Report: Disingenuous, but pushing toward broader coverage?

Ezra Klein and Jonathan Cohn fisk a PricewaterhouseCoopers study commissioned by the America's Health Insurance Plans (AHIP) purporting to show that the Baucus bill will drive up insurance premiums by a) not putting enough teeth in the individual mandate to purchase insurance, b) imposing new taxes on insurers that will be passed through to customers, and c) driving "cost shifting" from cost-cutting public plans to private plans that will allegedly pick up the slack in payments to providers. Klein and Cohn point out that lower fees paid by public plans should drive the for-profit competition's prices down, not up; that excise taxes on expensive plans should push companies into cheaper plans; and that PwC conveniently omitted the bill's likely impact on buyers' behavior.

All that said, this AHIP response is interesting:

Karen Ignagni, head of America's Health Insurance Plans, the trade group that released the report, stood by its findings. The CBO estimated that the Finance bill would cover 94 percent of legal residents by 2019, but Ignagni said insurers prefer coverage levels in the "high 90s."

Well, so do I, and so do most House Democrats, including the leadership -- who, for that matter, also want to get rid of the excise tax that the AHIP-commissioned report takes aim at. The report may be disingenuous. But it's actually trying to push reform to the left to the extent that doing so means stimulating more spending on health care -- by individuals, the government and employers.

Of course, AHIP is dead-set against the public option, which is designed to drive premium costs down; the argument that it would have the opposite effect on private plans seems particularly disingenuous. Still, the net effect of the pressure effected by this 'research' could be to strengthen and accelerate the move toward universal coverage, through stricter individual mandates softened by more generous subsidies. If the insurers gain those points, and lose on the pubic option, the result could indeed by "coverage levels in the high 90s." Which is still a few points short of where they should be.

UPDATE: Ezra Klein nicely encapsulates AHIP's argument: they want more customers dragooned via a strong individual mandate, but also want to kill all the proposed taxes and cost control measures that make the mandate viable.

Commonwealth Club: 78,000 Americans die yearly for lack of "timely and effective" health care

In a much-cited speech asserting the moral imperative for universal health insurance, Rep. Alan Grayson cited a Harvard study, published in the American Journal of Public Health, finding that just short of 45,000 Americans die prematurely every year for lack of health insurance.

A just-released state scorecard from the Commonwealth Club Commission on a High Performance Health System, scoring the relative effectiveness of each state's health care system, uses a somewhat different measure but comes up with an equally startling statistic: that if all states could reach the level of care achieved by top performing states,

Nearly 78,000 fewer adults and children would die prematurely every year from conditions that could have been prevented with timely and effective health care.

If this is true, more Americans die every year for want of "timely and effective" care than were killed in Vietnam or than die each year in car accidents. Moreover, even the "highest performing" state, Massachusetts, at the time of study ( when it had just begun to implement its universal health insurance plan) still left 7% of its adult working population uninsured -- and so significantly underperformed every industrialized nation in the world except the U.S. (The state with the highest percentage of working uninsured adults, at 32%, is Texas, where in the mid-90s Governor George W. Bush killed by neglect an attempt to establish a health insurance exchange for small businesses -- at least according to the exchange's chairman at the time of its demise).

The study also includes an incidental but striking congruity with CBO scoring of the Baucus bill. As noted, the study found that Massachusetts left 7% of its working adult population uninsured. Not surprisingly it concluded that if all states reached that level

Twenty-nine million more people would have health insurance - cutting the number of uninsured by more than half.

According to the CBO's estimate, the Baucus bill over ten years would cover 94% of legal U.S. residents and reduce the number of uninsured by...29 million. In other words, once fully implemented (by about 2014) it would achieve nationally the level of coverage that Massachusetts achieved in its first phase of implementation.

The Commonwealth Club report also includes some good news, most notably

that national efforts to measure, benchmark, and publicly report performance had a marked effect on quality improvements at the state level. Following a national effort to track and report hospital treatment data, nearly all states improved on measures of treatment for heart attack, heart failure, pneumonia, and prevention of surgical complications. In some instances, the lowest state rate now exceeds the average three years ago. In addition, most states improved significantly on several measures of the quality of care in nursing homes (reductions in pressure sores, pain, and use of restraints) following a national effort to make that data publicly available.

Those results suggest that measures in the Baucus bill to hold hospitals accountable for outcomes and infection rates could be effective and yield significant savings.

Health care endgame: lobbyist pressure vs. "deficit neutral" pledge

Raising a front-page alarm, the Times' David Kirkpatrick warns that lobbyists are knocking the teeth out of all the significant cost control measures in pending health care legislation. This narrative cuts against the grain of the media attention focused on the CBO's verdict that the Baucus bill would reduce the deficit by $83 billion over ten years and by more in the second decade.

While the Baucus bill seems also to be the White House's template, Kirkpatrick usefully points out that it's only one of five bills making their way through House and Senate, and that under intense lobbyist pressure House Democrats have lined up against two central cost-cutting measures, the independent "MedPAC on steroid" commission (dear to Obama's heart) empowered to make regular recommendations for Medicare cost savings, and the excise tax on so-called "Cadillac" health care (expensive) plans that some employers offer to (mainly unionized) employees. Resistance to lobbyist pressure against the MedPAC proposal has been undercut by the Obama Adminstration's side deals with pharmaceuticals and hospitals to limit the amount that MedPAC could cut their payments -- now all other interest groups are clamoring either for equivalent carve-outs or to kill MedPAC altogether.

Negotiation between the House and Senate could cut two ways. The House wants a public option -- arguably the strongest cost controlling measure on the table, which allegedly lacks support in the Senate. The Senate, in turn, is more amenable to the Baucus cost controls opposed by Democrats in the House. One would like to think that the natural compromise would be "both/and" -- a public option and an excise tax and MedPAC. Alas, that would mean frustrating all the lobbying interests. On the other hand, there is genuine pressure for the bill to be scored as deficit neutral -- so a compromise can't cut out all cost control measures regarded as credible by the CBO. So the worst-case compromise -- no public option and no MedPAC or attempt to tax expensive benefit plans -- is likewise hard to imagine. Perhaps we'll end up with a weak excuse for a public option (or potential, to-be-triggered public option), a wholly or partially neutered MedPAC, and other tax substitutes for the excise. That would mean getting two thirds of the way toward universal coverage in five years while leaving serious cost control to another, still-more-desperate day.

In fact, T.R. Reid's survey of national health plans that work makes it pretty clear that there can be no significant health care cost control unless the government sets the rates for all procedures offered by all providers, either through a single payer system or through a tightly regulated, probably nonprofit, insurance industry. As long as health insurance is dominated by for-profit insurers with the freedom to set their own rates and coverage rules, the U.S. will continue to spend twice as much as other developed countries on health care. The only hope I see is either a strong public option or other nonprofit alternative slowly killing off the health insurance industry -- or else, continued inflation so out of control that universal desperation finally becomes strong enough to legislate the death of the industry.

It should be remembered that Obama is a long-range planner, committed by philosophy and inclination to effect change by "turning the battleship a few degrees" at a time. Bill Clinton confessed, while chronicling other achievements, "We bit off more than we could chew on health care." Obama, using Clinton as cautionary foil as much as George W. Bush did his father, decided from the start to enlist the health insurance industry rather than fight it head on. I hope and trust that he recognizes that the U.S. will never have an efficient, affordable health care delivery system as long as private for-profit insurers are free to operate as they do now -- with broad freedom to set coverage rules and repayment rates (in the current legislation, there will be some curbs on their freedom to set coverage rules, but probably not enough). Newt Gingrich's long-range plan for Medicare -- "first we're going to cut it off, then we're going to kill it" -- should define Obama's approach to the U.S. health insurance industry.

Pitch perfect as usual

What else could Obama say about winning the Nobel just 37 weeks into his Presidency?

Mr. Obama said he doesn't view the award "as a recognition of my own accomplishments," but rather as a recognition of goals he has set for the U.S. and the world. Mr. Obama said, "I do not feel that I deserve to be in the company of so many transformative figures that have been honored by this prize."

But, he said, "I will accept this award as a call to action, a call for all nations to confront the challenges of the 21st century.''

Actually, the claim that Obama has so far accomplished nothing concrete on the world stage is exaggerated. Under his leadership, the G-20 meeting in March, at the depths of the financial crisis, exceeded expectations, producing a strong financial commitment to cushion the downturn for developing nations. The G-20 in late September also surpassed expectations, effectively establishing the G-20 as successor to the G-8 in real decision-making power and subjecting member nations to regulatory peer review. The meeting of the U.N. Security Council last month exceeded expectations, securing a commitment to revitalize and strengthen the Nuclear Nonproliferation Treaty. And the highest-level direct negotiation with Iran in 30 years exceeded expectations, yielding Iran's agreement to submit about 75% of its known nuclear stockpile to Russia for enrichment and to open its newly disclosed nuclear facility outside Qom to inspection.

Of the G-20 meeting in March, Philip Stephens wrote, "Mr Obama shows wisdom beyond his years in realising that to understand the extent of US power – and it is still unrivalled – a president must also map its limits" That's true of all four of the meetings referenced above. That's why each yielded something concrete.

Not the stuff of a Nobel by established standards, perhaps. But Obama has done far more than deliver a handful of uplifting speeches on the world stage. Though those speeches themselves were a key part of the paradigm shift that Stephens articulated.

Brooks v. Brooks on the Baucus bill

David Brooks continues to write nonsense about health care.

Professing ambivalence about the Baucus bill, he complains in one breath that it "will retard innovation by using monopoly power to squeeze costs." Two paragraphs later, lauding the bill's "many provisions to make government-run health care more rational," he includes that it "would create a commission to perpetually squeeze costs," also cataloging specific measures favored by health care experts -- bundling payments, encouraging doctors to work in teams, improving IT, measuring comparative effectiveness. He acknowledges that savings from these measures "could be significant."

As for that free market shibboleth that cost controls are always bad: in health care, virtually every industrialized nation has found them necessary. Is Brooks aware that in France, Germany and Japan, three countries that get better health outcomes than the U.S. at half to two-thirds the cost, the central government sets prices for every medical procedure performed in the country, and all insurers are required to pay all bills submitted under that schedule by all providers? That those countries provide universal comprehensive coverage at minimal cost to their citizens? That the fee schedules are completely transparent, posted on doctor's office walls in France, available in a phone book-sized reference in Japan? (For a doctor's- and patient's eye view of these systems, see T.R. Reid's The Healing of America.)

The only "innovation" squeezed by governmental cost controls is the innovation of insurers, ingeniously determining how not to cover procedures or how to wring out maximum premiums by charging different rates for different levels of coverage.

Yes, health care providers in all three countries feel squeezed by government cost controls. Yes, they make much less than doctors in the U.S. They also come out of medical school with zero debt, pay pennies by US standards for malpractice insurance, and spend almost no time or money on administrative costs -- in contrast to American doctors, who have to employ whole staffs to deal with the byzantine billing and claims approval processes of multiple insurers.

Brooks also claims that the Baucus bill (or any set of subsidy levels for people purchasing insurance on exchanges) "will impose huge costs on people as they rise up the income ladder, distorting the whole economy."

Subsidies keyed to income are only relevant to those who do not get insurance from their employer, including the self-employed. Right now, such people suffer "huge costs" indeed -- buying individual insurance on the open market with no subsidy. For many, a rising income will be the result of better employment, which likely means employer-provided health care. For the self-employed or those who work long-term in workplaces that don't provide insurance, it seems perverse to complain that reducing subsidies as their income increases is an imposition of "huge costs."

T.R. Reid: For-Profit Insurance Destroys Health Care Delivery

T.R. Reid's indispensable book about successful national health systems, The Healing of America, provides a patient's- and doctor's-eye view of health care delivery in France, Germany, Japan and other countries that provide complete coverage for all residents and pay half to two thirds of what the U.S. pays for health care (as a percent of GDP) with better outcomes. The book induces startling clarity about the key dysfunctions of our system.

Our primary dysfunction is simple. While France, Germany and Japan all rely on private insurance to pay for comprehensive health care, the private insurers are all nonprofit. In all three countries, the government sets uniform rates for all procedures; all providers charge the same rates, and all insurers must pay all claims. In France, every citizen's complete medical history, including procedures performed and their costs, are embedded in a national health card (the carte vitale). Doctors simply record each service performed - and get paid by one of the country's fourteen insurers within a week.

The lesson is clear: U.S-style for-profit insurance for basic comprehensive health care is purely parasitical (for-profits are in the mix in The Netherlands, but they're subject to strict price controls and risk equalization, by which plans with a higher concentration of sick members are paid more). Our for-profit health insurance industry creates a needless bureaucracy, matched in no other country, which it pays itself handsomely to manage, and it makes money by denying claims.

Any reform that makes health insurance available and affordable to all Americans is worth doing. Mandates requiring insurers to cover all eligible comers without differentiating cost according to condition are key; so are mandates laying out minimum coverage standards.

But to meaningfully narrow the gap between health care costs in the U.S. and other rich countries, reform would have to kill for-profit insurance, quickly or slowly. Health care co-ops are actually closer to the system that works so well in France and Germany than a single "public option." But in those countries, the "sickness funds" did not have to evolve in competition with for-profits.

Every industrialized country is wrestling with rising health care costs. In France, the sickness funds operate at a deficit; in Germany, doctors are up in arms because the government keeps imposing new limits on permissible treatments for given conditions. But both countries are continuing to reform from a position way ahead of us, with complete universal coverage, costs 1/2--2/3 of ours, and the government in complete control of rates and mandated coverage.

None of this should be secret. Legions of American health care experts know how things work in Europe and Japan. Senators are reading Reid's book. But as Reid stresses, it's political anathema in the US to suggest cribbing from other countries' successes. Our national 'debate' is obfuscated by lack of full discussion of how successful systems work.

Future Perfect on health care reform

Eyes on the prize: I have little doubt that Kevin Drum is right about this:

Healthcare reform might be controversial right now, but if Obama gets a bill onto his desk and signs it, it will become a huge triumph almost overnight. Support for both the bill and for Obama will rise steadily, and Democrats of all kinds will reap the benefit of being seen as tough enough and savvy enough to get it passed. This is the fundamental reason that I'm optimistic about healthcare reform.

Popular approval may have a "donut hole": there may be bumps in perception, even over years, in a rocky implementation. And assuming that the final product is weaker in several particulars than it should be, a key question is whether it creates a scaffold that can be built on : fair requirements for minimum coverage in health plans, controls against insurer cherry-picking to protect the exchanges, MedPAC or some near equivalent to keep the ball moving on cost control initiatives. But assuming the final legislation is not wired for failure -- like, say, the Texas Insurance Purchasing Alliance of the mid-nineties -- then Drum's "future perfect" should be on target.

Health care coverage continues to melt down

While Republicans scream about Democratic efforts to trim Medicare costs, working Americans' coverage continues to dissolve. Insurance Journal reports:

Aon Consulting, which surveyed 1,313 employers nationwide, found that 70 percent are planning to increase employee contributions and 67 percent are expecting to raise deductibles, co-pays, coinsurance or out-of-pocket maximums.

Add a bit of cold comfort:

In addition, more than half of employers are expecting to introduce or expand a wellness program next year, and 34 percent are planning to introduce or increase financial incentives for wellness programs in 2010.

Even more effective for employers than boosting employee payouts is trimming the rolls of the insured:

Employers have been implementing various types of audits as a short-term savings solution and the survey says more will follow suit. The survey found that 46 percent of organizations conducted a dependent eligibility verification audit in 2009 or earlier, and 20 percent are planning to do so in 2010 or later. These audits are designed to save on health care costs by ensuring only eligible dependents are covered.

"Employers who conduct dependent eligibility audits can see immediate savings ranging from 3 percent to 10 percent in dependent health care costs," said Tom Lerche, U.S. Health Care Practice Leader with Aon Consulting.

I wonder whether these roster trimmings fall disproportionately on gay couples?

Vengeance PR from the Pentagon?

I understand that the new strategy in Afghanistan emphasizes protecting and winning over the civilian population. You would think that metrics such as body counts would raise Vietnam ghostss. But in the wake of a week in which ten U.S. soldiers died, this latest from the Pentagon (as reported by the AP) seems to answer a visceral need:

KABUL, Afghanistan — Afghan and American forces killed 40 militants in 24 hours as they hunted in mountainous eastern Afghanistan for insurgents behind one of the deadliest attacks of the war for U.S. troops, the defense ministry said Tuesday.

Ministry spokesman Gen. Mohammad Zahir Azimi said 10 Afghan army troops were also killed in the same period around the country, most of them in Nuristan province's Kamdesh district, where eight Americans and two Afghan security troopers died Saturday after hundreds of Taliban militants overwhelmed their remote and thinly manned outposts.

David Brooks' lazy free market fantasy

Before publishing a disingenuous parable setting up false categories of free-market versus activist government reform, David Brooks should have had a chance to read a cautionary tale of failed health care reform that appeared on the very same Times op-ed page as his own column.

Brooks spins out the reform approaches of "Mr. Bentham" (Obama Democrat) and "Mr. Hume" (free market conservative, vaguely reminiscent of Bush). Presumably these are avatars of nineteenth century reformer Jeremy Bentham and philosopher David Hume, though the affiliations are too tenuous to be worth parsing.

Mr. Bentham is a type AAA superwonk with a solution to everything; Mr. Hume is a lazy skeptic who recognizes his limitations. While Brooks takes a few swipes at "Hume," his sympathies clearly rest with him.

Mr. Bentham comes up with the Baucus bill for health care reform and the Waxman-Markey energy bill; Mr. Hume proposes in both cases to let the market work its magic. Here he is on health care:

“Why don’t we just set up insurance exchanges with, say, 12 different competing policies? We’ll let everybody choose a policy, and we’ll let people keep any money they save. That way they can set off a decentralized cascade of reform, instead of putting all the responsibility on us here.”

Yeah, why don't we just. It's really easy to estblish robust competition benefiting consumers among for-profit health insurers, and every market has twelve competitors ripe for recruitment. That's where column B, an op-ed by the former chairman of the Texas Insurance Purchasing Alliance, Cappy McGarr, offers an appropos reality check.

McGarr chronicles the failure of Texas' effort in the early nineties to establish a health insurance exchange for small businesses--a failure he blames largely on neglect from Governor George W. Bush (the quasi-model, ironically, for Brooks' "Mr. Hume," with imagery borrowed from Maureen Dowd's Boy King columns). The exchange died, according to McGarr, for want of either a public option or strict rules to prevent insurers from cherry-picking small corporate customers outside the exchange:

Most important, though, our exchange failed not because it wasn’t needed, and not because the concept wasn’t sound, but because it never attained a large enough market share to exert significant clout in the Texas insurance market. Private insurance companies, which could offer small-business policies both inside and outside the exchange, cherry-picked relentlessly, signing up all the small businesses with generally healthy employees and offloading the bad risks — companies with older or sicker employees — onto the exchange. For the insurance companies, this made business sense. But as a result, our exchange was overwhelmed with people who had high health care costs, and too few healthy people to share the risk. The premiums we offered rose significantly. Insurance on the exchange was no longer a bargain, and employers began backing away. Insurance companies, too, began leaving the alliance.

The Texas exchange failed, in other words, for want of the very types of provisions that Brooks lampoons in the Baucus bill: "He’d design a set of insurance policy regulations to make sure everybody gets uniform care"( along with various crucial experimental measures to restrict overtreatment and overbilling that Brooks does not criticize in detail).

Brooks recognizes on some level that free market fundamentalism has failed. His Mr. Hume "never could very accurately predict how the market was going to move." But he holds reflexively to his contempt for good-faith efforts to create market conditions in which health insurance competition can flourish. He won't recognize, as Paul Starr has shown, that the Baucus bill -- and indeed, all the Democratic health care bills pending in both chambers -- are comprised entirely of ideas proposed by Republicans over the past four decades. He won't consider, with Jonathan Cohn, whether an exchange minus a public option might work with strict regulation of private insurers. He hasn't engaged the tough questions driving the debate -- for example, whether the Wyden amendment opening the exchanges to all employees might foster real competition, or whether co-ops might work, or how to bend the cost curve if he doesn't like the efforts to do so that he implicitly lampoons in the Baucus bill. He prefers, with his own Mr. Hume, to whine and fantasize easy answers.

Self-funded employers against the public option

Last week, Matt Miller expressed incredulity that the major business lobbies would help shoot down the Wyden Free Choice Amendment to the Baucus bill, which would enable all employees to opt out of their employer's health care plan and buy insurance on the insurance exchanges that the various health care reform bills will establish for the uninsured. Miller forecast:

Big business thinks that giving employees this choice would be a calamity. To which one can only ask: Have these business lobbies lost their minds?

When the post-mortems on the health-care reform debate are written, the biggest mystery will be why big business fought so hard to stay in the health-care business even as soaring health costs surpassed corporate profits and diverted executive time better devoted to actually running companies.

Excellent question. Miller can only speculate that corporate human resources chiefs have sold their companies a bill of goods. And that seems to be the case on another health care reform front: employers apparently also don't want their self-funded plans to be subject to competition from a public option, i.e. a government-administered plan offered on the new insurance exchanges.

More than half of Americans who get their health coverage through their employers work for companies that self-fund their own health plans, usually hiring an outside company to administer the plan. The organization representing such plans and the companies servicing them, the Self Insurance Institute of America, is dead-set against the public option, apparently fearing it would trigger a stampede out of employer-funded plans.

Why? As reported by Matt Brodsky of Risk & Insurance, Cliff Roberti, chief lobbyist for the group, recently issued a warning at the group's annual meeting:

Not to be "overly dramatic," said Roberti, addressing an audience of SIIA members, but if healthcare reform take a partisan turn (meaning the passage of government-run insurance plans), a lot of people at the conference could be in another business in two years.

Who might lose their jobs if employees stampeded out of employers' health plans? SIIA members include company executives who oversee self-funded plans (as well as at captive insurance companies, generally used for property/casualty insurance); Third Party Administrators (TPAs), the entities that run these plans, which include both subsidiaries of major health insurers and stand-alone companies specializing in this service; and stop-loss insurers, which offer coverage for big losses to self-funded plans. The SIIA website defines its constituency as follows:

If your company is a self-insured employer, group fund (SIF), third party administrator, stop-loss/excess insurance carrier or provider network, SIIA' s government relations services are a tremendous membership benefit.

Are corporate America's interests really aligned with those of TPAs and stop-loss insurers? Is corporate policy on this front really driven by HR executives, as Matt Miler suggests? Why is the prospect of reduced employer responsibility for employees' health care so threatening to employers?

Change you can believe in? By degrees...

Many who responded to Obama's promise of change, myself sometimes among them, are disturbed by his willingness to trim back major initiatives. A stimulus that's one third tax cuts, with aid to states and municipalities cut back. Health care reform without a public option. Financial regulatory reform that leaves "too big to fail" banks intact. An end to torture with a continued policy of preventive detention.

Against those frustrations, set Charles M. Blow's explanation for a marked uptick in conservative sentiment among the electorate:

The Obama administration’s response to the financial and automotive crises and its pursuit of a wide range of reforms is the epitome of new and untried. Major change has come much too quickly for far too many. The response: retreat to a cocoon of conservatism.

And recall Frederick Douglass's assessment of Lincoln:

Viewed from the genuine abolition ground, Mr. Lincoln seemed tardy, cold, dull, and indifferent; but measuring him by the sentiment of his country, a sentiment he was bound as a statesman to consult, he was swift, zealous, radical, and determined.

Obama won by raising hopes that he would "bend the arc of history" and specifically reverse this country's hard swing to the right over the past forty years. But he's spoken of that arc (in effect) mathematically, envisioning fundamental change as moving a battleship a few degrees. Let's see how things look when we've moved a ways around the bend.

Taliban verdict: George Bush let us back in

Newsweek has an incredible oral history of the Taliban resurgence -- six first-person narratives from current-day Taliban tracking their experience from the American overthrow to the present. It's excrutiating to follow their progress from the despair of 2002, when they never dreamed there would be a viable Taliban resurgence, to the present, in which they all brim with the confidence of the North Vietnamese that they can outlast the foreign invader.

The most politically sophisticated of the six, Maulvi Mohammad Haqqani, a former Taliban deputy minister and now a recruiter and propagandist, perhaps quite consciously verifies the dominant strategic rap against George , W. Bush. Here's his account of a pivotal period:

HAQQANI:Arab and Iraqi mujahedin began visiting us, transferring the latest IED technology and suicide-bomber tactics they had learned in the Iraqi resistance during combat with U.S. forces. The American invasion of Iraq was very positive for us. It distracted the United States from Afghanistan. Until 2004 or so, we were using traditional means of fighting like we used against the Soviets—AK-47s and RPGs. But then our resistance became more lethal, with new weapons and techniques: bigger and better IEDs for roadside bombings, and suicide attacks.

It's impossible to read these accounts without getting the sense that what may be prohibitively difficult now -- fostering a viable non-theocratic Afghan government -- may have been quite achievable in 2002-2003. The six jihadis chronicle a shift in Afghan attitudes toward the government and the insurgents - driven by errors of an undermanned U.S. force that had not yet been "Petraeusized" and an Afghan government that was corrupt and ineffectual from the start:

MOHAMMAD:Those first groups crossing the border were almost totally sponsored, organized, and led by Arab mujahedin. The Afghan Taliban were weak and disorganized. But slowly the situation began to change. American operations that harassed villagers, bombings that killed civilians, and Karzai's corrupt police and officials were alienating villagers and turning them in our favor. Soon we didn't have to hide so much on our raids. We came openly. When they saw us, villagers started preparing green tea and food for us. The tables were turning. Karzai's police and officials mostly hid in their district compounds like prisoners.

YOUNAS: After these first few attacks, God seems to have opened channels of money for us. I was told money was flowing from the Gulf to the Arabs.

Our real jihad was beginning by the start of 2005. Jalaluddin Haqqani's tribal fighters came actively back to our side because the Americans and the Pakistanis had arrested his brother and other relatives. He appointed his son Sirajuddin to lead the resistance. That was a real turning point. Until then villagers in Paktia, Paktika, and Khost thought the Taliban was defeated and finished. They had started joining the militias formed by the Americans and local warlords, and were informing on us and working against us. But with the support of Haqqani's men we began capturing, judging, and beheading some of those Afghans who worked with the Americans and Karzai. Terrorized, their families and relatives left the villages and moved to the towns, even to Kabul. Our control was slowly being restored.

That flow of money from the Gulf to the Taliban is a bitter historic replay of an earlier flow -- from U.S. coffers to the Mujihadeen fighting the Soviets and Soviet-backed Afghan government in the 1980s.

Haqqani, the propagandist also may be trying to get his two cents in to the Obama Administration's very public current strategic review:

Personally I think all this talk about Al Qaeda being strong is U.S. propaganda. As far as I know, Al Qaeda is weak, and they are few in numbers. Now that we control large amounts of territory, we should have a strict code of conduct for any foreigners working with us. We can no longer allow these camels to roam freely without bridles and control.

Newsweek closes the six interwoven narratives with this parting irony:

AKHUNDZADA: Sometimes I think what's happened is like a dream. I thought my beard would be white by the time I saw what I am seeing now, but my beard is still black, and we get stronger every day.

David Brooks lambastes Democrats for agreeing with him

Never one for logical rigor, David Brooks ignores himself to a breathtaking degree in today's column.

He begins with an intriguing hypothesis: our latter day Father Coughlins -- Rush Limbaugh, Glenn Beck, Sean Hannity & co. -- command plenty of attention but virtually no votes. His evidence is probably selective, but it's an intriguing hypothesis. They are puffed up by enablers. True enough. But...

They are enabled by cynical Democrats, who love to claim that Rush Limbaugh controls the G.O.P.

Just another politically expedient lie, right? Oh, wait --

And the saddest thing is that even Republican politicians come to believe it [that the shock jocks have real power]. They mistake media for reality. They pre-emptively surrender to armies that don’t exist.

They pay more attention to Rush’s imaginary millions than to the real voters down the street. The Republican Party is unpopular because it’s more interested in pleasing Rush’s ghosts than actual people. The party is leaderless right now because nobody has the guts to step outside the rigid parameters enforced by the radio jocks and create a new party identity. The party is losing because it has adopted a radio entertainer’s niche-building strategy, while abandoning the politician’s coalition-building strategy.

The rise of Beck, Hannity, Bill O’Reilly and the rest has correlated almost perfectly with the decline of the G.O.P. But it’s not because the talk jocks have real power. It’s because they have illusory power, because Republicans hear the media mythology and fall for it every time.

To anyone who believes that democracy can't function without viable choices, it was a sad and shocking spectacle to witness a parade of Republican leaders first calling out and then kow-towing to Rush Limbaugh earlier this year. Democrats would rather have an opposition they can work with; as Paul Starr demonstrated recently, their health care bills are comprised almost entirely of Republican ideas past, but there's no one on the other side negotiating in good faith.

But in David Brooks' still partisan mind, Democrats who agree with him that the Republican party is entirely in the grip of media demagogues are "cynical." And what is Brooks? Pure-minded?

Attention, Clive Crook: "uncertainty" is an antidote to "unintended consequences"

Clive Crook objects to the "uncertainty" that the public option injects into the health care reform debate. He also warns against unintended consequences. What he fails to recognize is that an element of uncertainty -- an "option" that may evolve in more than one direction -- is a way of coping with unintended consequences.

Below, Crook gets his "if...then" exactly backwards:

Democrats have been debating whether a "strong" public option should pay Medicare reimbursement rates, something an ordinary competitor could not do. If it did, this would drive down costs and have many other (not necessarily intended) consequences. It would be a big step towards Medicare for all. As I have argued before, there are worse things than Medicare for all, including in my view the present system. But this outcome is one of the things that the administration is saying it does not want. If you want Medicare for all, do what some Democrats do and make the case. If you don't, stop proposing a public option that would push the system towards it.

Politically, the problem with the public option is that it has added to the uncertainty, and hence the anxiety, that surrounds this reform. People want to know where all this is heading. The public option might be nothing, or it might be everything, depending on how it is done. But when advocates like Dionne say that it can be both everything and nothing at the same time, according to your preferences, then centrist voters are right to say, "No thanks."

Possible outcomes to creating a public option might be sorted into three categories: a) it has no great effect, becoming one health care 'option' for a limited percentage of the population; 2) it coexists in robust competition with private health care plans, as (to cite Obama's analogy) public universities do with private ones; or c) it proves a superior choice and causes private insurance to wither on the vine.

None of these outcomes is undesirable, unless a) transpires because the public option is neutered from the start and hence is never a viable option. Instituting a public option should either make private insurance better or prove it to be parasitical. It's a way of creating competition, not a prejudgment of the competitive outcome. "Uncertainty" is good. It's a condition of competition.

As for those lawmakers who would prefer "Medicare for all," i.e. a Canadian system, the public option is a rational -- not disingenuous -- way to get there. There's no virtue in ignoring political reality by pushing for a single payer system in the U.S. now. If the public option gets us there, it will do so in a prudent, incremental way, by earning its stripes as the best service offered. If the public option is a Trojan Horse, it's got to be one that runs, i.e., defeats the competition. If paying Medicare rates hurts quality, private plans ought to be able to differentiate themselves by paying higher rates, thereby presumably attracting better doctors.

Obama likes mechanisms that set the conditions for incremental, adjust-as-you-go change. That's how he's cast "MedPAC on steroids." A robust public option should be in that category.