Blogs

The Cost of Technology Revisited

| Mon Nov. 2, 2009 2:03 PM EST

A few days ago Ezra Klein quoted the CEO of Kaiser Permanente, George Halvorson, telling us that CT scans cost "a few hundred dollars in Europe and over $15,000 here."  This didn't seem quite right to me, and today Ezra gets the goods straight from Halvorson in lovely chart form.  Turns out the "few hundred dollars in Europe" part is right, but there was some kind of mistake about the U.S. pricing.1  As you can see from the chart, a head CT scan costs about $950 in the U.S. vs. an average of $276 in six other countries.  That's a difference of about 3.5x.

Which is still a very big difference.  As I've mentioned before, here in the U.S. we pay higher fees to our doctors, we pay higher prices for drugs, we pay higher prices for diagnostic tests, and we pay higher administrative costs to our insurance companies.  If we want to reduce healthcare costs, we have to do something about all that, but both Obama and the Democratic leadership in Congress have (quite accurately) decided that doing so right now would earn the undying wrath of doctors, Big Pharma, insurance companies, hospitals, and device manufacturers, and together they could easily kill any chance of passing healthcare reform at all.  So instead we'll pass reform now without addressing prices and then hope that maybe we can do something about it later.

And maybe we can.  But don't bet on it: interest groups fight like crazed weasels to keep what they have, and they usually win.  We might be able to freeze cost increases a bit if we put some serious muscle into it, but that's probably about all we can reasonably hope for.  Or maybe technology will save us.  You never know.

More charts here.  I'm sure everyone will have their own favorite.

1Apparently it was a mistranscription.  Halvorson actually said $1,500, not $15,000.  Ezra has since corrected the original post.

Advertise on MotherJones.com

A "Gang of Six" Tick-Tock, Please

| Mon Nov. 2, 2009 1:25 PM EST

In the New York Times today, Lamar Alexander claims that the White House was never really interested in a bipartisan healthcare bill.  Matt Yglesias isn't buying it:

Chuck Grassley is not just some guy, he’s the top Republican on health care issues. And the Grassley courtship process took a long time. And Grassley abandoned it in a blaze of hypocrisy, eventually slamming Democrats for embracing an individual mandate to purchase health insurance that he had long supported.

The larger context is that the president laid out some goals for health reform. He wants a bill that expands coverage in a way that’s deficit neutral in the medium-term, doesn’t disrupt people’s existing health insurance in the short-term, and bends the long-term cost curve. A lot of different ideas were put forward in Congress about how to do this. None of them were put forward by Republicans.

You know what this country needs — aside from strict rules limiting the volume of commercials on TV?  A really good tick-tock about the seemingly endless healthcare negotiations this summer among the "Gang of Six" on the Senate Finance Committee.  Did Republicans put forward any good ideas?  Were they truly trying to find a bipartisan compromise?  Was the president deeply involved in any of this?

There's no question that Republicans had some ideas about healthcare.  But that's not the correct measure of whether they were working in good faith to fashion a bipartisan bill.  Given that Democrats control both Congress and the presidency by wide margins, it was always going to be the case that the fundamental structure of healthcare reform would be a liberal one.  So the real measure of Republican good faith is whether they provided suggestions and compromises that worked within that structure but would have made it more acceptable to conservative sensibilities.

That was never my impression, at least in the more public arenas.  Republican contributions, such as they were, essentially boiled down to tossing out the liberal framework entirely and pretending that conservatives had won the 2008 election.  These ideas were transparently DOA, designed primarily to rally the base, not to produce a serious conversation on healthcare.

But is that what happened in the Finance Committee negotiations?  Or did Enzi, Snowe, and Grassley really, sincerely try to figure out a way to take a liberal superstructure and modify it in ways that might make it genuinely acceptable to at least some Republicans in the Senate?  Inquiring minds want to know.  Is there anyone out there with the sources to take a serious crack at writing this story?

Liberals' Doug Hoffman Problem

| Mon Nov. 2, 2009 1:17 PM EST

Three elections scheduled for Tuesday—the New Jersey and Virginia gubernatorial races and the special House election in New York's 23rd district—have garnered national attention in recent weeks. Now it seems possible, and perhaps likely, that Democrats will lose all three contests. Creigh Deeds looks dead in the water in Virginia, John Corzine could easily lose in New Jersey, and the conservative party candidate, Doug Hoffman, looks set to win in NY-23. The actual impact of losing all three races would not be nearly as large as the perceived impact. But in Washington, perception often morphs into reality. 

Californiafication: A Good Idea (for Conservatives)

| Mon Nov. 2, 2009 12:48 PM EST

There's been much talk of the "Californiafication" of Washington in recent days. Rich Yeselson summarizes the idea: "We are living through the Californiafication of America—a country in which the combination of a determined minority and a procedural supermajority legislative requirement makes it impossible to rationally address public policy challenges." Kevin wrote about this on Friday:

All I can say is this: for years I was basically uninterested in Sacramento politics because it was such a cesspool.  It made Washington DC look like a model of good government.  But no longer: Sacramento is still a cesspool, but DC is catching up fast.  If we keep it up much longer, the entire country may end up in the same mess we've made for ourselves here.  That would be decidedly not a good thing.

Actually, if you're a conservative, it might be a good thing. The Californiafication strategy makes it much easier to achieve otherwise-unpopular conservative policy goals like slashing health, education, and other popular government programs. (Remember, the largest parts of the federal budget—Social Security and Medicare—are also among the most popular. If you really wanted to drastically reduce the size of government and the tax burden, that's where you'd go.) The strategy goes a little like this: first, make it politically or structurally impossible to raise taxes (check). Next, allow liberals to enact their policy goals—but without raising taxes to pay for them. Then, when a recession hits, revenue on existing taxes will crater and the budget deficit will explode. Spending will have to be cut drastically since it's impossible to raise taxes—even more impossible now that there's a recession. Voila: you've reduced the size of government. This seems like a great way to get around the fact that a political agenda centered around the idea that government shouldn't try to solve people's problems isn't actually popular.

The Frakt Curve

| Mon Nov. 2, 2009 12:24 PM EST

You've heard of the Laffer Curve?  Today we get the Frakt Curve, courtesy of Austin Frakt, who suggests that trying to increase competition in the healthcare insurance market might reduce costs, but it might not.  It all depends on where we are on the curve:

[When insurer concentration is high] premiums are above the minimum possible level. Insurers are charging above the competitive premium level because they have excessive market power. In this region, higher premiums stem from higher insurer profits and/or lack of administrative efficiency....

[When insurer concentration is low] premiums are again above the minimum because insurers can’t negotiate down to the lowest possible price with providers. Providers have too much power relative to insurers and are charging prices above the competitive minimum. Insurers pass those high prices onto consumers through higher premiums. In this case, higher premiums stem from higher medical costs.

Austin's point is that to a large extent the healthcare battle is waged between insurers and providers.  Since the American healthcare system relies primarily on both private providers and private insurers (and this will be true even if a public option passes), we don't necessarily get the lowest costs when one side or the other is weakened, but when the two sides are fairly equally matched.  Thus, removing antitrust protection for insurers might lower costs or it might not.  It all depends on where we are on the curve right now.

Alternatively, we can try to move the entire curve downward.  Or we could ditch the whole thing and ask the Swedes to please design us a new healthcare system.  But in the absence of either of those things, where you are on the curve dictates whether and how much you need to rein in one half of the healthcare market vs. the other.

UPDATE: Michael Hiltzik makes the case for more insurance industry competition here.

Trita Parsi, NIAC, and AIPAC

| Mon Nov. 2, 2009 11:49 AM EST

Spencer Ackerman and Matt Yglesias have both weighed in on my post this morning about the attacks on Trita Parsi, the founder of the National Iranian American Council. Unlike Michael Goldfarb, Jeffrey Goldberg backed off the implications of his original comments (that Parsi does "legwork for the Iranian regime") when I emailed him. But Goldberg is still embracing a double standard, Spencer says:

Goldberg has a fairly low bar for people who write that, say, AIPAC does anything untoward or is an organization that represents anything nefariously deviant from the norm in ethnic American lobbies. He insists on, shall we say, a certain precision in discourse. Yet he has absolutely no problem saying that a guy who stood out in front in the U.S. in cheering on the anti-regime protesters is soft on the regime! “I assume, though I don’t know, that Parsi doesn’t take Iranian government money or Iranian government instruction, either.” Let’s employ a thought experiment. Say, I don’t know, Steven Walt or John Mearshimer wrote that about AIPAC. Would Goldberg consider that a judicious statement or a weasel-worded slander?

The Faster Times' Dan Luban made a similar point in his original post on the Parsi attacks:

It need hardly be said that these are the same commentators who would scream anti-Semitism if anyone were to level similar allegations against Jewish-American political figures. Yet it is undeniable that Goldfarb, Goldberg, and Kramer hold positions that are far closer to the Israeli government’s than Parsi’s position is to the Iranian government’s. Would it therefore be fair to label Goldfarb as “the Israeli government’s man in Washington,” or Goldberg as someone who “does a lot of leg-work for the Israeli government?”

Yglesias says the campaign against Parsi is "soon to be joined, according to my information, by a larger set of right-wing pundits and 'reporters.'" When I spoke to Parsi, he suggested that the allegations against him are based on charges that were made by Daioleslam Seid Hassan, a man Parsi sued for defamation last year. That case is ongoing, but it would definitely be easy for someone who was interested in attacking Parsi to reprint and draw more attention to Hassan's original charges. That's fine, but anyone who writes about those charges should make sure to note that Parsi disputes the allegations and is suing Hassan for defamation.

Advertise on MotherJones.com

Who Has the White House's Ear on Climate and Energy?

| Mon Nov. 2, 2009 11:41 AM EST

What could ExxonMobil CEO Rex Tillerson be discussing with the White House?

Tillerson, the head of the wold's largest oil company, has made three visits to the White House this year, according to the vistor logs released on Friday evening. Tillerson was the only energy company CEO listed on the logs, though the logs only include names specifically requested.

Tillerson met with both Larry Summers, the director of Obama's National Economic Council, and Carol Browner, director of the White House Office of Energy and Climate Change Policy. This is the same Rex Tillerson who has questioned climate science, but also advocated for a tax on carbon rather than a cap-and-trade plan. Oh, and Exxon continues to fund climate change denial despite pledging to stop.

Notably, the list doesn't seem to include any coal industry executives, a topic that drew attention earlier this year when Citizens for Responsibility and Ethics in Washington filed a Freedom of Information Act request for the records of visits from the CEOs of 16 major coal companies and lobby groups. It appears that none of those CEOs have been hanging out at the White House after all.

Other interesting visitors with an interest in climate and energy policy: General Electric CEO Jeff Immelt, who visited five times; Al Gore, who visited four times, and Newt Gingrich, who visited once.

UPDATE: Sebastian Jones also searched the logs and notes that that Chevron CEO David J. O'Reilly appears to have dropped by for five meetings with high-ranking administration officials.

Meet the Crooks Behind Your New Knee

| Mon Nov. 2, 2009 7:21 AM EST

You've read about all the jostling behind the scenes in Washington's quest to reform health-care: Big Pharma cutting a $80 billion backdoor deal with the White House, health insurers fighting tooth and nail against a public option, all affected parties and industries positioning themselves to reap the benefits of an overhaul of our $2.5 trillion health-care system. But there's another industry, one you've likely heard less about in the debate, that also stands to win or lose from reform: medical device makers.

The companies bringing you artificial hips, stents, defibrillators, and much more, medical device makers have not cut a deal with the White House or Democratic lawmakers, and face new taxes costing $20 billion or more if the legislation now circulating in Congress becomes law. But as writer Peter Stone points out in his story "Take Two Kickbacks" in Mother Jones' November/December issue, a lot more than tougher taxes is in order to reform the fraud-ridden, flawed medical device industry.

Stone's story highlights the prevalence of doctors receiving lucrative kickbacks in exchange for using and promoting a company’s medical products. This kind of illegal plying is so widespread, Stone reports, that between June 2006 and July 2009, device makers paid $535 million to the federal government for illegal marketing activities. One example: In 2006, Stone writes, device maker Medtronic "agreed to pay the feds $40 million to settle allegations that from 1998 through 2003 it had set up sham consulting and royalty agreements, trips to strip clubs in Tennessee, and other incentives to entice surgeons to use its spinal products." Though the consequences of these kinds of deals can be fatal, they're hardly novel in an industry plagued by graft and fraud. 

If Stone’s story shows us anything, it's that, like health insurers and drug makers, the medical device industry is long, long overdue for reform, too.

This Is the TARP That Never Ends...

| Mon Nov. 2, 2009 7:00 AM EST

It was a tall order last fall when then-Treasury Secretary Hank Paulson Jr. asked Congress for $700 billion and nearly unilateral power over how to spend it. With the nation on the precipice of economic Armageddon, Paulson's request was granted. But now, as financial reform legislation makes its way through Congress, some lawmakers are worried that Paulson's replacment, Timothy Geithner, may be attempting another Paulson-like power play.

Currently circulating on Capitol Hill is a draft of the House financial services committee's "Financial Stability Improvement Act," a wide-ranging effort to rein in too-big-to-fail institutions and bolster oversight of the financial-services industry. The legislation, spearheaded by Rep. Barney Frank (D-Mass.), the committee's chairman, and Secretary Geithner, who helped to craft the bill, would also create an oversight council staffed by government financial regulators, and would abolish the Office of Thrift Supervision, an agency faulted for its flimsy regulation before the crisis. (The Wall Street Journal has a good run-down of the legislation here.)

The legislation is meeting stiff oppostion, though, from members of both parties. What has lawmakers like Rep. Brad Sherman (D-Calif.) and Rep. Spencer Bachus (R-Alab.) riled up is a provision in the bill they say gives the White House and Treasury unchecked authority to spend taxpayer money, without Congressional approval, to bail out any too-big-to-fail bank that's poised to topple the economy. Sherman calls the provision "TARP on steroids," writing in The Hill:

Geithner's proposal reminds me of the Troubled Asset Relief Program (TARP), the $700 billion Wall Street bailout adopted last year, but the TARP was limited to two years, and to a maximum of $700 billion. Section 1204 is unlimited in dollar amount and is a permanent grant of power to the executive branch. TARP contained some limits on executive compensation and an array of special oversight authorities. Section 1204 contains absolutely no limits on executive compensation and no special oversight.

Disconcerting, indeed. The economy reached the point of near collapse, in large part, due to a gross absence of oversight. And the TARP as well has been marred by a lack of transparency and oversight: As bailout watchdogs have consistently pointed out, we still know very little about how TARP money was spent by institutions that received billions in bailout cash. With that in mind, do we want financial regulation that institutionalizes this opacity?

Health Care Reform: What Would LBJ Do?

| Mon Nov. 2, 2009 6:46 AM EST

As the Democratic leadership keeps rolling over to one health care industry demand after another, I'm reminded of a post that I wrote on my Unsilent Generation blog nearly a year ago, as Obama prepared to take office after promising to reform the American health care system. It's about President Lyndon B. Johnson's successful effort, back in 1965, to create the Medicare and Medicaid programs–-the only single-payer health care this nation has ever known. Like a lot of LBJ's War on Poverty programs, they were far from perfect. But compared with what today's Democrats are offering, they were something close to radical, and represented a triumph of political will on Johnson's part. 

I suspect that if if LBJ were alive today, he might have been able to get a decent reform bill through Congress, without all of the concessions to corporate interests that have rendered the Democrats' current legislation—including the public option—so weak that it is getting close to meaningless.

When it came to getting bills through Congress, LBJ—both as Senate Democratic leader and as president—had skills that make Nancy Pelosi, Harry Reid, and Rahm Emanuel, along with President Obama, look like rank amateurs. But more than this, he had the level of commitment—and the spine—required to stand up to opposing interests when it came to a basic need like health care.

I'm going to run most of that December 2008 post here, since its relevance has only increased with each passing month.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .