Protection and Affordable Care Act. And the “affordable” bit wasn’t just about subsidizing premiums. It was also supposed to be about “bending the curve” — slowing the seemingly inexorable rise inhealth costs.
Fred R. Conrad/The New York Times
Paul Krugman, New York Times
Much of the Beltway establishment scoffed at the promise of cost savings. The prevalent attitude in Washington is that reform isn’t real unless the little people suffer; serious savings are supposed to come from things likeraising the Medicare age (which the Congressional Budget Office recently concluded would, in fact, hardly save any money) and throwing millions of Americans off Medicaid. True, a 2011 letter signed by hundreds of health and labor economists pointed out that “the Affordable Care Act contains essentially every cost-containment provision policy analysts have considered effective in reducing the rate of medical spending.” But such expert views were largely ignored.
So, how’s it going? The health exchanges are off to a famously rocky start, but many, though by no means all, of the cost-control measures have already kicked in. Has the curve been bent?
The answer, amazingly, is yes. In fact, the slowdown in health costs has been dramatic.
O.K., the obligatory caveats. First of all, we don’t know how long the good news will last. Health costs in the United States slowed dramatically in the 1990s (although not this dramatically), probably thanks to the rise of health maintenance organizations, but cost growth picked up again after 2000. Second, we don’t know for sure how much of the good news is because of the Affordable Care Act.
Still, the facts are striking. Since 2010, when the act was passed, real health spending per capita — that is, total spending adjusted for overall inflation and population growth — has risen less than a third as rapidly as its long-term average. Real spending per Medicare recipient hasn’t risen at all; real spending per Medicaid beneficiary has actually fallen slightly.
What could account for this good news? One obvious answer is the still-depressed economy, which might be causing people to forgo expensive medical care. But this explanation turns out to be problematic in multiple ways. For one thing, the economy had stabilized by 2010, even if the recovery was fairly weak, yet health costs continued to slow. For another, it’s hard to see why a weak economy would have more effect in reducing the prices of health services than it has on overall inflation. Finally, Medicare spendingshouldn’t be affected by the weak economy, yet it has slowed even more dramatically than private spending.
A better story focuses on what appears to be a decline in some kinds of medical innovation — in particular, an absence of expensive new blockbuster drugs, even as existing drugs go off-patent and can be replaced with cheaper generic brands. This is a real phenomenon; it is, in fact, the main reason the Medicare drug program has ended up costing less than originally projected. But since drugs are only about 10 percent of health spending, it can only explain so much.
So what aspects of Obamacare might be causing health costs to slow? One clear answer is the act’s reduction in Medicare “overpayments” — mainly a reduction in the subsidies to private insurers offering Medicare Advantage Plans, but also cuts in some provider payments. A less certain but likely source of savings involves changes in the way Medicare pays for services. The program now penalizes hospitals if many of their patients end up being readmitted soon after being released — an indicator of poor care — and readmission rates have, in fact, fallen substantially. Medicare is also encouraging a shift from fee-for-service, in which doctors and hospitals get paid by the procedure, to “accountable care,” in which health organizations get rewarded for overall success in improving care while controlling costs.
Furthermore, there’s evidence that Medicare savings “spill over” to the rest of the health care system — that when Medicare manages to slow cost growth, private insurance gets cheaper, too.
And the biggest savings may be yet to come. The Independent Payment Advisory Board, a panel with the power to impose cost-saving measures (subject to Congressional overrides) if Medicare spending grows above target, hasn’t yet been established, in part because of the near-certainty that any appointments to the board would be filibustered by Republicans yelling about “death panels.” Now that the filibuster has been reformed, the board can come into being.
The news on health costs is, in short, remarkably good. You won’t hear much about this good news until and unless the Obamacare website gets fixed. But under the surface, health reform is starting to look like a bigger success than even its most ardent advocates expected.
A version of this op-ed appears in print on November 29, 2013, on page A39 of the New York edition with the headline: Obamacare’s Secret Success.
A reader named Keith reflected a coruscating chorus when he protested: “If kids are going hungry, it is because of the parents not upholding their responsibilities.”
A reader in Washington bluntly suggested taking children from parents and putting them in orphanages.
Jim asked: “Why should I have to subsidize someone else’s child? How about personal responsibility? If you procreate, you provide.”
After a recent column about an uninsured man who delayed seeing a doctor about a condition that turned out to be colon cancer, many readers noted that he is a lifelong smoker and said he had it coming.
“What kind of a lame brain doofus is this guy?” one reader asked. “And like it’s our fault that he couldn’t afford to have himself checked out?”
Such scorn seems widespread, based on the comments I geton my blog and Facebook page — as well as on polling and on government policy. At root, these attitudes reflect a profound lack of empathy.
A Princeton University psychology professor, Susan Fiske, has found that when research subjects hooked up to neuro-imaging machines look at photos of the poor and homeless, their brains often react as if they are seeing things, not people. Her analysis suggests that Americans sometimes react to poverty not with sympathy but with revulsion.
So, on Thanksgiving, maybe we need a conversation about empathy for fellow humans in distress.
Let’s acknowledge one point made by these modern social Darwinists: It’s true that some people in poverty do suffer in part because of irresponsible behavior, from abuse of narcotics to criminality to laziness at school or jobs. But remember also that many of today’s poor are small children who have done nothing wrong.
Some 45 percent of food stamp recipients are children, for example. Do we really think that kids should go hungry if they have criminal parents? Should a little boy not get acurved spine treated properly because his dad is a deadbeat? Should a girl not be able to go to preschool because her mom is an alcoholic?
Successful people tend to see in themselves a simple narrative: You study hard, work long hours, obey the law and create your own good fortune. Well, yes. That often works fine in middle-class families.
But if you’re conceived by a teenage mom who drinks during pregnancy so that you’re born with fetal alcohol effects, the odds are overwhelmingly stacked against you from before birth. You’ll perhaps never get traction.
Likewise, if you’re born in a high-poverty neighborhood to a stressed-out single mom who doesn’t read to you and slaps you more than hugs you, you’ll face a huge handicap. One University of Minnesota study found that the kind of parenting a child receives in the first 3.5 years is a better predictor of high school graduation than I.Q.
All this helps explain why one of the strongest determinants of ending up poor is being born poor. As Warren Buffett puts it, our life outcomes often depend on the “ovarian lottery.” Sure, some people transcend their circumstances, but it’s callous for those born on second or third base to denounce the poor for failing to hit home runs.
John Rawls, the brilliant 20th-century philosopher, argued for a society that seems fair if we consider it from behind a “veil of ignorance” — meaning we don’t know whether we’ll be born to an investment banker or a teenage mom, in a leafy suburb or a gang-ridden inner city, healthy or disabled, smart or struggling, privileged or disadvantaged. That’s a shrewd analytical tool — and who among us would argue for food stamp cuts if we thought we might be among the hungry children?
As we celebrate Thanksgiving, let’s remember that the difference between being surrounded by a loving family or being homeless on the street is determined not just by our own level of virtue or self-discipline, but also by an inextricable mix of luck, biography, brain chemistry and genetics.
For those who are well-off, it may be easier to castigate the irresponsibility of the poor than to recognize that success in life is a reflection not only of enterprise and willpower, but also of random chance and early upbringing.
Low-income Americans, who actually encounter the needy in daily life, understand this complexity and respond with empathy. Researchers say that’s why the poorest 20 percent of Americans donate more to charity, as a fraction of their incomes, than the richest 20 percent. Meet those who need help, especially children, and you become less judgmental and more compassionate.
And compassion isn’t a sign of weakness, but a mark of civilization.
Good Afternoon All,
A reminder that the tri-town holiday party is Monday night, December 2, 6:00-9:00P.M. , at the home of Jim & Judy Walsh, 33 High Street, Nahant (If you proceed over the Nahant Causeway, stay on Nahant Street and it is the first left after the police station.).
If you are planning to attend, please let me know. I need this information by Sunday. Also MDTC members have been asked to bring a dessert. If you are able to bring a dessert, please let me know.
I have posted a correspondence below from Nahant Chair Jim Walsh outlining the details of the event.
Phil Sweeney, Chair Marblehead Democratic Town Committee
Plans are shaping up for the party.
John Tierney will be there if Congress is not in session. Candidates who intend to primary him–Marisa Defranco and Seth Moulton have also indicated they will attend. We expect representation from the five gubernatorial candidates, for Lt. Governor, Attorney General. I have told all prospective candidates that they will be introduced…but no speeches.
Sen. McGee, Chair of the Mass Dems and his predecessor, John Walsh, will also be in attendance (John representing Governor Patrick).
There will also be a special guest with an electrifying announcement to make.
Coats for Kids
We have joined with our friends in Swampscott to urge folks to bring serviceable used winter coats for donation to this effort. You can leave them at our house and we will deliver them to be cleaned and distributed.
The Committees will supply food and soft drinks. Attendees may bring their own wine.
Finally…please let us know if you will attend. We want to have enough of everything for everyone.
The excitement builds…
Jim Walsh, Chair
Nahant Democratic Town Committee
By Michael Goldman, Lowell Sun
UPDATED: 11/25/2013 09:01:26 AM EST
How many words can be written about a man who lived only 46 years? It seems tens of millions.
How do you explain why this single man’s death a half century ago still touches the responsive chord in millions also alive back then who remember the moment, the death, the aftermath with the assassin, the funeral, the solitary rider-less horse, a widow veiled in black, the child’s salute and the legacy of a life?
Time magazine recently called his murder “the moment that changed America.”
That may sadly be true, but that’s really a question for historians to ponder on the 100th anniversary of his passing after all of us alive at the time are also gone.
That said, this weekend there is perhaps a more concrete exchange spoken at the time of his death that can help us understand the pain and passion that continues to haunt so many of us to this very day.
The famous alleged exchange took place between famed political journalist Mary McGrory and the future U.S. Sen. Daniel Patrick Moynihan of New York.
On hearing the news of the assassination of President John F. Kennedy, the stunned McGrory told Moynihan she felt like “none of us would ever be able to laugh again.”
To which Moynihan famously replied, “Oh, Mary, we’ll laugh again. It’s just that we’ll never be young again.”
He was right. No matter how young you were that day in 1963 — 7, 14 or 21 — no one was really as innocent as they were the moment before the bullet that killed JFK flew through the air.
And we did laugh again, and feel joy again, even on Nov. 22 in the years that followed.
On Nov. 22, 1979, my twin daughters were born, a day I recall with the same vividness, but totally different emotions, than that horrid day 16 years earlier.
But on Nov. 22, 1963, I saw my father cry for the first time. In the days after, I wrote my first published piece, one of many heartfelt outpourings that sprang from the hearts and pens of those who sincerely doubted at the time that we indeed might ever be able to laugh again.
My poem, which I penned to a grandchild I hoped might someday be, was printed in Stylus, the yearbook for the Class of 1964 at Malden’s Lincoln Junior High School, and wasn’t half bad for a 14-year-old, even when I look back a half century later:
I remember it well,
It started out sunny, but I had a test.
Still, I took it and passed.
Then it happened.
It started as a big, ugly joke, but I entered in time to hear,
“The President of the United States is…”
They say his name is Oswald.
Lee Harvey Oswald.
Now we’ll never know for sure.
But if by chance my grandchild should someday ask of the assassination,
I will start by saying
“I remember it well…”
This year, on June 22, my first grandchild, Elliot, was born to one of my twin daughters.
If I make it to the 60th anniversary of the death of JFK, I’ll take down that tattered old Stylus and read to Elliot the poem I wrote to him during the week in November of 1963, and try to explain: Why it still hurts all these years later.
And, yes, I know exactly how I’ll begin.
I’ll say, “Believe it or not, Elliot, I remember it well.”
Michael Goldman is a paid political consultant for Democratic candidates and president of Goldman Associates in Boston.
By Dana Milbank, Published: November 25, The Washington Post
Republicans are opposed to President Obama’s deal with the Iranians — whatever it is.
A couple of minutes after 9 p.m. on Saturday, word crossed the news wires that negotiators in Geneva had reached an agreement on Iran’s nuclear program. Then, at 9:08 p.m. — before any details of the pact were known — Ari Fleischer delivered his opinion on the agreement, via Twitter.
After Senate Majority Leader Harry Reid changed the chamber’s rules to lower the hurdle for executive nominations, the Post’s Jackie Kucinich and MSNBC political analyst Robert Traynham reflect on the move’s advantages—and potential downsides.
“The Iran deal and our allies: You can’t spell abandonment without OBAMA,” he wrote.
This is the sort of trenchant judgment Fleischer was known for as chief spokesman for President George W. Bush at the start of the Iraq war. His anagram analysis was so relevant to the topic that it deserves application to his name, too. Turns out you can’t spell “Re: Chief Liars,” “Hi, false crier,” “Hire Sir Fecal” or “I relish farce” without ARI FLEISCHER.
But Fleischer’s instant and reflexive response — even knees don’t jerk as quickly as he did — set the tone for Republicans. Three minutes after Fleischer’s tweet came one in agreement from Ron Christie, another veteran of the Bush administration. “Precisely,” he wrote, also without the benefit of knowing what was in the agreement. “A disgraceful deal.”
An hour later — still before Obama detailed the accord in a statement from the White House — John Cornyn of Texas, the No. 2 Republican in the Senate, had analyzed the administration’s motives in reaching the deal.
“Amazing what WH will do to distract attention from O-care,” he tweeted at 10:15 p.m., 19 minutes before the president spoke.
Aha! So the agreement to suspend Iran’s nuclear program, negotiated over several months, was actually a clever (and prescient) ruse to turn attention away from problems with the health-care law, which surfaced in the past several weeks.
This was a variant on the “wag the dog” accusation, named after the 1997 film. But in the movie, and in the way critics applied the accusation to President Bill Clinton, a devious commander in chief was distracting attention from domestic troubles by waging war.
Cornyn’s usage, however, would appear to be the first time a president has been accused of distracting the public’s attention by making peace. Call it “wag the dove.”
In the eyes of Republicans, the agreement with Iran has a fatal flaw: It was negotiated by the Obama administration. This president could negotiate a treaty promoting baseball, motherhood and apple pie, and Republicans would brand it the next Munich.
The opposition in this case is particularly mindless. Certainly there are reasons to be skeptical that Iran will act in good faith. But the deal is temporary — six months — and easily reversible. In the (likely) event that Iran doesn’t agree to a permanent accord to end its nuclear program, the tougher sanctions contemplated in Congress could be applied. Would it be better to go to war now without exhausting diplomatic options? We’ve been there and done that — when Ari Fleischer stood on the White House podium.
But Republicans were being reflexive, not reflective. They went right to 1938. Rep. John Culberson (R-Tex.) tweeted the message “Worse than Munich” and a link to a Breitbart News article with that headline and images showing Secretary of State John Kerry and hisIranian counterpart juxtaposed with Hitler and Chamberlain.
“America just had a modern-day Neville Chamberlain moment,” former congressman Allen West (R-Fla.) declared. Hawkish elements in Israel embraced the analogy, too.
All the great minds of the Republican foreign policy establishment joined in:
“Placing your trust in #Iran is like betting on a blind horse on a wet track,” tweeted Rep. Vern Buchanan (Fla.).
Rep. Michele Bachmann (Minn.) called it a “total surrender by Obama administration.”
Rep. Ted Poe (Tex.) determined it to be a “bum deal.”
“In addition to domestic debacle of Obamacare,” wrote Rep. Tom Price (Ga.), “now POTUS and Dems accelerate crisis in Middle East.”
Sen. Mark Kirk (Ill.) said the administration won only “cosmetic concessions.” House Majority Leader Eric Cantor (Va.) quickly branded the pact a “mistake.” Sen. Marco Rubio (Fla.) said it “makes a nuclear Iran more likely.”
And Cornyn kept right on going, sending out links to articles titled, “Abject Surrender by the United States” and “Our ‘Suckers Deal’ with Iran.”
In the stampede to judgment, Sen. Jeff Flake (Ariz.) risked getting trampled. He actually waited until hearing Obama speak before issuing a statement, and then declared that he would “look forward to studying details.”
A member of the opposition party who wants to think before criticizing the Obama administration? Good thing “JEFF FLAKE” doesn’t lend itself to anagrams.
Those who lament the Senate Democrats’ vote to end filibusters for presidential nominations say the move will escalate partisan warfare and destroy what comity is left in Congress. Some also charge hypocrisy, since Democrats once opposed the very step they took last week.
In fact, seeing the world as it is rather than pining for a world that no longer exists is a condition for reducing polarization down the road. With their dramatic decision, Senate Democrats have frankly acknowledged that the power struggle over the judiciary has reached a crisis point and that the nature of conservative opposition to President Obama is genuinely without precedent.
What happened on Nuclear Thursday has more to do with the rise of an activist conservative judiciary than with the norms of the Senate. From the moment that five conservative justices issued their ruling inBush v. Gore, liberals and Democrats realized they were up against forces willing to achieve their purposes by using power at every level of government. When the Bush v. Gore majority insisted that the principles invoked to decide the 2000 election in George W. Bush’s favor could not be used in any other case, they effectively admitted their opportunism. Dec. 12, 2000, led inexorably to Nov. 21, 2013.
Bush v. Gore set in motion what liberals see as a pernicious feedback loop. By giving the presidency to a conservative, the five right-of-center justices guaranteed that for at least four years (and what turned out to be eight), the judiciary would be tilted even further in a conservative direction.
Bush was highly disciplined in naming as many conservative judges as he could. Hisappointments of Chief Justice John Robertsand Associate Justice Samuel Alito bolstered the Supreme Court’s conservative majority. The court later rendered such decisions asCitizens United, which tore down barriers to big money in politics, and Shelby County v. Holder, which gutted a key part of the Voting Rights Act. Both, in turn, had the effect of strengthening the electoral hand of conservatives and Republicans.
With the conservatives’ offensive as the backdrop, Senate Democrats and liberals on the outside revolted in 2005 against the Republican threat to use the nuclear option when the GOP controlled the Senate. Progressives felt they had no choice but to throw sand into the gears of a juggernaut.
Liberals said things eight years ago that are being used by conservatives to accuse them of hypocrisy now. I didn’t have to look far for an example of what they’re talking about.
In a column in March 2005, I called the GOP’s effort to speed the confirmation of conservative judges “a blatant effort to twist the rules” that ignored “the traditions of the Senate.” I might take back the “traditions of the Senate” line, a rhetorical attempt to call conservatism’s bluff. But what animated my argument then is the same concern I have now: This era’s conservatives will use any means at their disposal to win control of the courts. Their goal is to do all they can to limit Congress’s ability to enact social reforms. At the same time, they are pushing for measures — notably restrictions on the right to vote — that alter the electoral terrain in their favor.
And it is simply undeniable that in the Obama years, conservatives have abused the filibuster in ways that liberals never dreamed of. Senate Majority Leader Harry Reid cited the Congressional Research Service’s (CRS) finding that in our history, there have been 168 cloture motions filed on presidential nominations. Nearly half of them — 82 — happened under Obama. According to CRS, of the 67 cloture motions on judicial nominees since 1967, 31 occurred under Obama. Faced with this escalation, senators long opposed to going nuclear, among them Reid and California’s Dianne Feinstein, concluded it was the only alternative to surrender.
Republicans gave the game away when all but a few of them opposed Obama’s three most recent appointments to the Court of Appeals for the D.C. Circuit not on the merits but by accusing the president of trying to “pack the court.” In fact, Obama was simply making appointments he was constitutionally and legislatively authorized to make. His nominees were being filibustered because they might alter the circuit court’s philosophical balance. The GOP thus demonstrated beyond any doubt that it cares far more about maintaining conservative influence on the nation’s second most important judicial body than in observing the rules and customs of the Senate.
This is why the Senate Democrats’ action will, in the end, be constructive. The first step toward resolving a power struggle is to recognize it for what it is. The era of denial is finally over.
Lyle Denniston Reporter
Posted Tue, November 19th, 2013 5:51 pm, Scotusblog
Splitting five to four, theSupreme Court late Tuesday afternoon refuse to block a Texas abortion law that critics say is forcing the closing of one-third of all clinics in the state. The Court had been studying the issue for the past week. The majority said that the challengers had not met the requirement for setting aside a federal appeal’s order permitting the law to take effect on October 31.
The majority specifically included Justices Antonin Scalia, who wrote separately in a concurring opinion joined by Justices Samuel A. Alito, Jr., and Clarence Thomas. But Chief Justice John G. Roberts, Jr., and Justice Anthony M. Kennedy presumably voted with those three, because it would have taken five votes to act definitively on the plea by doctors and clinics when there were four Justices who wanted to block the law.
There was no indication in the opinions released by the Court that Roberts and Kennedy had not taken part, so it is a fair assumption that they provided the added votes needed. The specific order denying the application (13A452) was unsigned. Both Justice Scalia’s opinion and that of the dissenters referred to the result as the action of “the Court.”
The application had been filed with Justice Scalia, as the member of the Court who acts on emergency matters from the geographic region that includes Texas. He then shared the case with his eight colleagues.
The law requires any doctor in the state who is going to perform an abortion to have professional privileges to admit patients to a hospital within thirty miles of the site where the abortion will take place. The challengers had argued that this provision, enforced by a criminal fine of up to $4,000 for a violation, will have a particularly harsh impact on preagnant women in Texas’s rural areas.
Justice Stephen G. Breyer wrote for the four dissenters, including Justices Ruth Bader Ginsburg, Elena Kagan, and Sonia Sotomayor. Their dissenting opinion argued that the Fifth Circuit Court order in the case “seriously disrupts” the status quo in Texas. They said that the women who are denied access to abortion while the law is in force will suffer permanent harm. They did not give their view on whether the professional privileges law was unconstitutional, although they did say that was a “difficult question.”
The dissenters suggested that at least four members of the Court “will wish to consider” the constitutionality of the provision no matter what the Circuit Court ultimately decided.
Justice Scalia wrote that the dissenters’ stance in favor of blocking the law’s effect “would flout core principles of federalism by mandating postponement of a state law without asserting that the law is even probably unconstitutional.” He noted that the Fifth Circuit had based its order on four factors, and he argued that the dissenters were unable to refute any of those.
A federal judge in Austin, District Judge Lee Yeakel, had ruled last month that the professional privileges requirement was unconstitutional, finding that it put up a “substantial obstacle” in the path of the constitutional right of women in Texas to terminate a pregnancy. The Fifth Circuit overturned that order, and cleared the way — at least temporarily — for the law to become effective. The Circuit Court is reviewing the constitutionality of the law on an expedited basis, with a hearing scheduled in January.
The Supreme Court’s split decision means that the privileges requirement will continue to limit abortions for at least the next two months, and perhaps longer. There is no timetable for the Circuit Court to act. It seems likely that, whatever it decides, the case would return to the Supreme Court for an ultimate test of its validity.
November 19, 2013, The Commonwealth Fund
By David Blumenthal
Until now, virtually every president who has dabbled with comprehensive health reform has failed spectacularly, often at huge political cost. Think of Harry Truman’s lonely campaign for national health insurance, Jimmy Carter’s devastating conflict with the late Senator Edward Kennedy over universal health care coverage, the first George Bush’s ineffectual (and little-remembered) health insurance proposal, or Bill Clinton’s damaging first-term effort to pass health reform.
Health reform is a presidential nightmare. No sane presidential consigliere would ever recommend his or her boss try it. Our health care system is so complicated and convoluted that any conceivable proposal is bound to make someone worse off. And in health care, worse off can mean real pain and suffering that creates powerful, emotional stories that echo through the news cycle. There is simply no way for presidential health care reformers to avoid grievous political harm, as the experience of President Barack Obama is now demonstrating in spades.
Which raises the question: why bother? It would have been so easy for President Obama, in the midst of the Great Recession of 2008, to kick the health care can down the road, saying that his all-consuming priority was economic revival, and that health reform could wait.
The answer provides critical context for the relentless stream of troubling news—and the cacophony of charges and counter-charges—about the implementation of the Affordable Care Act (ACA) that fill the media each day. The reason to proceed with this painful technical and political process is that there is no alternative. Before the ACA, the current health care system—and especially its private insurance market—was collapsing before our eyes, like a house tipping into a sinkhole.
Last week the Commonwealth Fund released its 13th cross-national survey documenting health care experience in the developed world. Based on responses from more than 20,000 individuals in 11 countries, the survey shows unequivocally that the United States has the worst health insurance among industrialized nations. Whether you’re talking administrative hassles, out-of-pocket expenses, costs of administration, complexity of policies, or adequacy of coverage, the U.S. consumer gets a bad deal.
The system is not only bad, but getting worse. Every year, more people lose insurance as they or their (usually small) employers get priced out of the health insurance market by rising premiums. The Commonwealth Fund biennial health insurance survey shows that 55 million Americans are now uninsured and, equally telling, another 30 million are underinsured, meaning that they spend more than 10 percent of their income on medical expenses despite having health care coverage (5 percent if their income is under 200 percent of poverty). The U.S. has more uninsured and underinsured citizens than the entire population of Germany, where, by the way, private insurance organizations compete, no one is uninsured or underinsured, and the economy is thriving.
The individual and small-group insurance markets in the United States—now ground zero in the ACA rollout war—are particularly dysfunctional, and were imploding prior to the enactment of the law. In these markets adults report paying high premiums and facing high deductibles and copayments for plans that are often insurance in name only: they lack prescription drug and dental coverage, exclude services covered for subscribers in larger groups, and limit annual payouts. Not surprisingly, consumers in the individual market spend a larger share of their income on out-of-pocket costs and experience medical debt and bill problems at higher rates than those with employer-based insurance.
And people with these problematic policies are in some ways the lucky ones. Prior to reform, insurers had the unfettered ability to set premiums based on an individual’s age and health history, creating financial barriers that were difficult or impossible to overcome for many older adults or those with chronic health problems. A 2011 Fund survey found nearly half of those who tried to purchase individual coverage never ended up buying a policy, with 80 percent of those who tried to buy it saying the premium was too high, the deductibles and copayments were too high, or the plan did not cover a preexisting condition.
Individual and small-group insurance policies are products with no future unless those markets are reformed to make coverage affordable, and to protect consumers against insurance that, while seemingly cheap, provides no meaningful protection against the cost of illness. Private insurers recognize this fact, which is why they have been such steadfast (though quiet) supporters of the ACA and the marketplaces it is trying to create.
Reforming the individual and small-group markets is precisely the purpose of the ACA marketplaces and their regulations, which set a floor under the quality of individual and small-group policies. It is these minimum standards and expanded consumer protections that many pre-reform individual and small-group market policies did not meet. The new regulations have prompted insurers to notify many subscribers that such plans would not be available beginning next year. Policies meeting new minimum requirements will cost some currently insured individuals more, especially the young and healthy, who were more likely to purchase the skimpy policies that have been so prevalent. While some of these consumers will be unhappy with premium increases, they will be grateful later if they get sick. They will also be guaranteed that, as they age and come to really need insurance, a private insurance industry will exist from which they can purchase meaningful protection against the cost of illness.
Until 2013, we’ve never had the chance to see what would happen when a president who wanted health reform got what he wished for. The sight isn’t pretty, but that was inevitable. This is hard, costly, painful but essential work. It could have been managed better. But there is no turning back.
November 12, 2013
By David Blumenthal, The Commonweath Fund
Last week, the president of the United States, the most powerful person on earth, the man whose finger rests on the nuclear button, struck a bold blow for . . . procurement reform?
“There are a whole range of things that we’re going to need to do once we get [the Affordable Care Act (ACA) rollout] fixed—to talk about federal procurement when it comes to IT and how that’s organized”, the president said Nov. 4th , speaking to a group of donors and supporters.
People are clamoring for heads to roll, and the president is talking about what just could be the geekiest, most obscure topic ever to clog a federal bureaucrat’s inbox. Procurement reform? Has he gone off the deep end?
Well, not really. Among the causes of healthcare.gov’s difficulties, the federal process for purchasing goods and services could rank right up there with toxic politics, lack of funding for ACA implementation, and management goofs. Let me explain why, from personal experience.
From 2009 to 2011, I served as National Coordinator for Health Information Technology. My job was to implement the HITECH ACT, which aims to create a nationwide, interoperable, private, and secure electronic health information system. As national coordinator I had to let a lot of federal contracts.
This is how that went.
Our staff would decide what services we needed, write a request for proposals (RFP), and send it off to a totally independent contracting office. That office could be within the Department of Health and Human Services (DHHS), but if the DHHS office was too busy, the RFP could go almost anywhere: the Department of the Interior, the Department of Housing and Urban Development, the Department of Education—whatever contracting office had time to process the work. Officials extensively trained in the details of federal procurement, but lacking familiarity with our programs or field of work, would put the RFP out to bid. An expert panel—over which we had minimal control—would evaluate the responses. Months later, the contracting office would present us with the signed contract.
The winner was usually picked from a group of companies with considerable experience working the federal procurement process. If we weren’t happy with the firm, or with their later performance, there was virtually nothing we could do about it. Getting out of this shotgun marriage meant months of litigation, during which the funds would be frozen and the work itself would grind to a halt.
After I left the federal government, I became Chief Health Information and Innovation Officer at Partners Health System, a large, Harvard-affiliated integrated health system in Boston. There, I was responsible for managing another procurement: the choice of a new electronic health record (EHR) for the organization’s many hospitals, clinics, and clinicians. This was one of the largest capital projects in Partners’ history. The experience was very different.
I led an expert team of clinicians, IT professionals, financial analysts, clinical managers, materials management professionals, and external consultants who spent months comparing the EHRs and companies that were finalists in our selection process. The vendors’ CEOs and senior leadership met with our CEO and senior leadership to get a sense of whether there would be mutual rapport and trust. To see the EHRs in action, we visited other customers who were using the products. The vendors came to Partners and demonstrated their EHRs to hundreds of clinicians, IT professionals, and managers, who then voted on which they preferred.
That’s not all. A Partners team visited their headquarters and interviewed their key staff. Our technologists and programmers consulted with theirs to assess in detail their skill and vision for their product. We evaluated the companies’ culture, financial plans, and likely stability over time. After we selected a leading candidate, we spent weeks going over the contract line by line with IT professionals, lawyers, and contracting experts.
The Partners’ procurement process may not be perfect, but the federal process is clearly broken. I have no personal knowledge of how it worked in the case of the federal website, but I can’t imagine that it was up to the task of managing the subtle, technologically complex, and unprecedented challenge of putting together a consumer-friendly website that would seamlessly connect multiple legacy state and federal databases that were never designed to work together.
Why is the federal procurement process so dysfunctional? Mostly because the public seems not to trust government officials. The process is designed to protect against conflict of interest and fraud. When faceless, interchangeable contracting officers manage the process behind closed doors, companies find it difficult to cozy up to federal officials for the purpose of influencing outcomes. There is something to be said for these boundaries when it comes to routine procurements such as furniture, transportation services, maintenance, and cleaning. But when it comes to the incredibly complex technical work that is required in the IT space, a process in which the people overseeing a project don’t have a chance to interact with potential vendors in advance is a prescription for the kind of problems we are now witnessing with healthcare.gov.
Does this mean that the federal government is incapable of managing complex IT projects? Not at all. In our military and intelligence, we have information technology capabilities that amaze the world. Their consequences, for good and ill, now rival healthcare.gov for time and space in the American media.
Published: November 9, 2013
AT the recent New York Times forum in Singapore, Eleonora Sharef, a co-founder of HireArt, was explaining what new skills employers were seeking from job applicants, but she really got the audience’s attention when she mentioned that her search firm was recently told by one employer that it wouldn’t look at any applicant for a marketing job who didn’t have at least 2,000 Twitter followers — and the more the better. She didn’t disclose the name of the firm, but she told me that it wasn’t Twitter.
Josh Haner/The New York Times
Thomas L. Friedman
At a meeting with students at Fudan University in Shanghai a few days earlier, I was struck by how anxious some of the Chinese students were about the question: “Am I going to have a job?” If you’re a software engineer in China, you’ll do fine, also a factory worker — but a plain-old college grad? The Times reported earlier this year that in China today “among people in their early 20s, those with a college degree were four times as likely to be unemployed as those with only an elementary school education.”
Stories like these explain why I really hope that Obamacare succeeds. Say what?
Here’s the logic: The Cold War era I grew up in was a world of insulated walls, both geopolitical and economic, so the pace of change was slower — you could work for the same company for 30 years — and because bosses had fewer alternatives, unions had greater leverage. The result was a middle class built on something called a high-wage or a decent-wage medium-skilled job, and the benefits that went with it.
The proliferation of such jobs meant that many people could lead a middle-class lifestyle — with less education and more security — because they didn’t have to compete so directly with either a computer or a machine that could do their jobs faster and better (by far the biggest source of job churn) or against an Indian or Chinese who would do their jobs cheaper. And by a middle-class lifestyle, I don’t mean just scraping by. I mean having status: enough money to buy a house, enjoy some leisure and offer your kids the opportunity to do better than you.
But thanks to the merger of globalization and the I.T. revolution that has unfolded over the last two decades — which is rapidly and radically transforming how knowledge and information are generated, disseminated and collaborated on to create value — “the high-wage, medium-skilled job is over,” says Stefanie Sanford, the chief of global policy and advocacy for the College Board. The only high-wage jobs that will support the kind of middle-class lifestyle of old will be high-skilled ones, requiring a commitment to rigorous education, adaptability and innovation, she added.
But will even this prescription for creating enough jobs with decent middle-class incomes suffice, asks James Manyika, who leads research on economic and technology trends at the McKinsey Global Institute. While these prescriptions are certainly “correct,” notes Manyika, they “may not be enough to solve for the scale and nature of the problem.” The pace of technologically driven productivity growth, he said, suggests that we may not need as many workers to drive equivalent levels of output and G.D.P.
As the M.I.T. economists Erik Brynjolfsson and Andrew McAfee show in their book “Race Against the Machine,” for the last two centuries productivity, median income and employment all rose together. No longer. Now we have record productivity, wealth and innovation, yet median incomes are falling, inequality is rising and high unemployment remains persistent.
To be sure, notes Manyika, a similar thing happened when we introduced technology to agriculture. We did not need as many people to produce food, so everybody shifted to manufacturing. As the same thing happened there, many people shifted to services.
But now, adds Manyika, “a growing share of high-paying services and knowledge work is also falling prey to technology.” And while new companies like Twitter are exciting, they do not employ people with high-paying jobs in large numbers. The economy and the service sector will still offer large numbers of jobs, but many simply may not sustain a true middle-class lifestyle.
As a result, argues Manyika, how we think about “employment” to sustain a middle-class lifestyle may need to expand “to include a broader set of possibilities for generating income” compared with the traditional job, with benefits and a well-grooved career path. To be in the middle class, you may need to consider not only high-skilled jobs, “but also more nontraditional forms of work,” explained Manyika. Work itself may have to be thought of as “a form of entrepreneurship” where you draw on all kinds of assets and skills to generate income.
This could mean leveraging your skills through Task Rabbit, or your car through Uber, or your spare bedroom through AirBnB to add up to a middle-class income.
In the end, this transition we’re going through could prove more exciting than people think, but right now asking large numbers of people to go from being an “employee” to a “work entrepreneur” feels scary and uncertain. Having a national health care safety net under the vast majority of Americans — to ease and enable people to make this transition — is both morally right and in the interest of everyone who wants a stable society.
A version of this op-ed appears in print on November 10, 2013, on page SR11 of the New York edition with the headline: Why I (Still) Support Obamacare.