Kevin Drum

Paul Ryan Goes Small on Medicare Reform

| Mon Apr. 21, 2014 9:11 AM PDT

If you have a good memory, you may recall that a couple of years ago I had an unexpectedly positive reaction to Paul Ryan's latest Medicare reform plan. His 2013 edition was still based on premium support (i.e., vouchers), but he'd made some changes. Instead of simply capping the vouchers at the rate of overall inflation, which wouldn't come close to keeping up with medical costs, Ryan proposed that insurers would bid for Medicare business. Vouchers would be set at the cost of the second-lowest bid, and seniors could use their vouchers to buy into traditional Medicare if they preferred.

Not bad. In fact, it was basically Obamacare with a public option. But there were still problems. Ryan kept his inflation-based cap, which suggested he didn't really believe in the power of competition after all, and seniors would still end up paying more under his plan than they do now.

But over at TPM, Sahil Kapur points out something I missed: Ryan's 2014 Medicare plan is different still. The voucher is now based on the average bid, not the second-lowest bid, and the inflation cap is gone. The market will either produce savings or it won't.

That's good news. But it also goes to show the difficulty of truly reforming Medicare, especially if you don't tackle the broader problems of health care costs at the same time. The CBO has analyzed the effect of Ryan's 2014 changes, and they conclude that by 2020 the Ryan plan would save a grand total of $15 billion per year. That's 2 percent of net Medicare spending.

Now, this is nothing to sneeze at. Savings are savings. However, like the cost containment proposals that are part of Obamacare, this represents a highly speculative estimate. We might get the 2 percent, we might get nothing.

The bottom line is this: Without root-and-branch changes to our health care system, you're simply not going to get big cost savings. If you make radical changes, as Ryan originally tried to do, it comes out of the pockets of seniors. If you keep seniors whole, you're going to get small savings at best. Ryan's 2014 plan might be a good one, but is it worth the experiment for such a small and questionable payback? Hard to say.

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The Right Wing Trains Its Hysterical Eye on Renewable Energy

| Mon Apr. 21, 2014 8:10 AM PDT

Evan Halper of the LA Times filed a story this weekend about new conservative efforts to fight America's biggest energy scourge: solar power. And they're dead serious:

The Koch brothers, anti-tax activist Grover Norquist and some of the nation's largest power companies have backed efforts in recent months to roll back state policies that favor green energy. The conservative luminaries have pushed campaigns in Kansas, North Carolina and Arizona, with the battle rapidly spreading to other states.

....At the nub of the dispute are two policies found in dozens of states. One requires utilities to get a certain share of power from renewable sources. The other, known as net metering, guarantees homeowners or businesses with solar panels on their roofs the right to sell any excess electricity back into the power grid at attractive rates.

....The American Legislative Exchange Council, or ALEC, a membership group for conservative state lawmakers, recently drafted model legislation that targeted net metering. The group also helped launch efforts by conservative lawmakers in more than half a dozen states to repeal green energy mandates.

"State governments are starting to wake up," Christine Harbin Hanson, a spokeswoman for Americans for Prosperity, the advocacy group backed by billionaire industrialists Charles and David Koch, said in an email. The organization has led the effort to overturn the mandate in Kansas, which requires that 20% of the state's electricity come from renewable sources.

There are, technically speaking, some colorable objections to the way net metering (or feed-in tariffs, a similar concept) operate. Sometimes the incentive schemes go awry, and sometimes the pricing goes awry. It's reasonable to insist that these programs be evaluated regularly and rigorously, and modified where necessary. Mandates need to be designed properly too, though in practice they tend to have fewer problems since they allow a lot of flexibility in implementation.

But does anyone think this is what's going on here? A calm, technocratic effort to make sure these programs work better? Of course not. We've now entered an era in which affinity politics has gotten so toxic that even motherhood and apple pie are fair targets if it turns out that liberals happen to like apple pie. There are dozens of good reasons that we should be building out solar as fast as we possibly can—plummeting prices, overdependence on foreign oil, poisonous petrostate politics, clean air—but yes, global warming is one of those reasons too. And since global warming has now entered the conservative pantheon of conspiratorial hoaxes designed to allow liberals to quietly enslave the economy, it means that conservatives are instinctively opposed to anything even vaguely related to stopping it. As a result, fracking has become practically the holy grail of conservative energy policy, while solar, which improves by leaps and bounds every year, is a sign of decay and creeping socialism.

Does it help that the Koch brothers happen to be oil barons who don't want to see the oil industry lose any of the massive government support it's gotten for decades? It sure doesn't hurt, does it?

If there's anything that liberals and conservatives ought to be able to agree on, it's the benefit of renewable power. It's as close to a no-brainer as you can get. But President Obama made green programs part of his stimulus package, and that was that. When tea-party hysteria took over the conservative movement, renewable energy became one of its pariahs. Griping about Solyndra is ancient history. Today's conservatives oppose renewable energy for the same reason they've gone nuts over Benghazi and the IRS and Syrian rebels: to show solidarity to the cause. Welcome to modern American politics.

Nope, There Are No Russians in Eastern Ukraine. Why Do You Ask?

| Sun Apr. 20, 2014 10:59 PM PDT

Imagine my surprise:

For two weeks, the mysteriously well-armed, professional gunmen known as “green men” have seized Ukrainian government sites in town after town, igniting a brush fire of separatist unrest across eastern Ukraine. Strenuous denials from the Kremlin have closely followed each accusation by Ukrainian officials that the world was witnessing a stealthy invasion by Russian forces.

Now, photographs and descriptions from eastern Ukraine endorsed by the Obama administration on Sunday suggest that many of the green men are indeed Russian military and intelligence forces....More direct evidence of a Russian hand in eastern Ukraine is contained in a dossier of photographs provided by Ukraine to the Organization for Security and Cooperation in Europe, a Vienna-based organization now monitoring the situation in Donetsk and other parts of the country. It features pictures taken in eastern Ukraine of unidentified gunmen and an earlier photograph of what looks like the same men appearing in a group shot of a Russian military unit in Russia.

Nope, nobody here but us surprisingly disciplined, well-trained, and Russian-armed guys in masks taking over government buildings. Anybody got a problem with that?

Housekeeping Notes

| Sat Apr. 19, 2014 8:50 AM PDT

These are real housekeeping notes. That is, notes about stuff around my house. First topic: LED light bulbs.

I've purchased several LED floods that are can-mounted in my ceiling. They're great. The quality of the light is good; they turn on instantly; they don't flicker; and they use hardly any electricity. There's only one problem: they seem to last less than a year. The LEDs themselves last for decades, of course, but the circuitry that drives the bulb doesn't. As near as I can tell, there's eventually enough heat buildup in the can to burn out the chip that controls the whole thing, and when the chip burns out, no more bulb.

I'm just guessing here, but this has now happened three times out of five bulbs I've purchased, and in all three cases the case of the bulb was hot to the touch when I unscrewed it from the base. So here's my question: Does anyone know for sure what's going on here? Is my guess that a chip is burning out probably correct? Am I just buying cheap bulbs? Can anyone recommend a can-mounted flood that's reliable and will actually last for the 25 years that manufacturers so cheerfully promise?

Second: a cell phone update. In last weekend's thread, the Google Nexus 5 got a lot of love, but so did the Motorola Moto X. I had actually made up my mind on the Nexus 5, but the T-Mobile store only sold it in a 16GB version, so I decided to go home and buy one online. But then I started dithering because of all the nice things people had said about the Moto X. Eventually, after far more dithering than makes sense for someone who doesn't use a cell phone much, I decided the slightly smaller Moto X was the better choice. So: thanks, folks! I don't think this would have come across my radar otherwise.

Friday Cat Blogging - 18 April 2014

| Fri Apr. 18, 2014 10:50 AM PDT

I have to leave early today for yet another pulmonary checkup, so Friday catblogging comes a little ahead of schedule this week. Here is Domino pretending she doesn't notice the fabulous feline shadow she's casting in the late afternoon sun. But it is fabulous, no?

Krauthammer Lights the Way for Tidal Waves of Secret Campaign Cash

| Fri Apr. 18, 2014 10:03 AM PDT

Charles Krauthammer writes today that he used to think there was a simple and elegant solution to the fight over campaign finance reform: "For a long time, a simple finesse offered a rather elegant solution: no limits on giving — but with full disclosure." But now he's changed his mind:

This used to be my position. No longer. I had not foreseen how donor lists would be used not to ferret out corruption but to pursue and persecute citizens with contrary views. Which corrupts the very idea of full disclosure.

It is now an invitation to the creation of enemies lists. Containing, for example, Brendan Eich, forced to resign as Mozilla CEO when it was disclosed that six years earlier he’d given $1,000 to support a referendum banning gay marriage. He was hardly the first. Activists compiled blacklists of donors to Proposition 8 and went after them. Indeed, shortly after the referendum passed, both the artistic director of the California Musical Theatre in Sacramento and the president of the Los Angeles Film Festival were hounded out of office.

....The ultimate victim here is full disclosure itself. If revealing your views opens you to the politics of personal destruction, then transparency, however valuable, must give way to the ultimate core political good, free expression.

Our collective loss. Coupling unlimited donations and full disclosure was a reasonable way to reconcile the irreconcilables of campaign finance. Like so much else in our politics, however, it has been ruined by zealots. What a pity.

I wonder if Krauthammer feels the same way about free speech? Or gun rights. Or fair trials. The scope of zealots to abuse the system in those cases is infinitely greater than the sparse, weak-tea "harassment" he points to in the case of campaign finance disclosure.

On a larger scale, I realize that the Koch brothers think they've suffered abuse akin to the Holocaust at the hands of Harry Reid, but that's what happens when you enter the political arena in a big way. You take your lumps. That's no reason to allow billions of dollars to influence the political system with not even the slightest shred of accountability for where it's coming from. With allies as weak as Krauthammer, ready to cave at the slightest provocation, campaign finance disclosure is now just the latest victim of conservative goal post moving.

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How Will We Know If Obamacare Is a Success?

| Fri Apr. 18, 2014 9:26 AM PDT

Will Obamacare be a success? Ross Douthat thinks we should all lay down some firm guidelines and hold ourselves to them. Here are his:

For my own part, I’ll lay down this marker for the future: If, in 2023, the uninsured rate is where the C.B.O. currently projects or lower, health inflation’s five-year average is running below the post-World War II norm, and the trend in the age-adjusted mortality rate shows a positive alteration starting right about now, I will write a post (or send out a Singularity-wide transmission, maybe) entitled “I Was Wrong About Obamacare” — or, if he prefers, just “Ezra Klein Was Right.”

Let's take these one by one. I'd say a reduction in the uninsured of 25 million is a pretty good metric. If, by 2023, the number is substantially below that, it would be a big hit to the law's success. Getting people covered, after all, has always been the law's primary goal. What's more, I'd be surprised if more states don't expand Medicaid and get more aggressive about setting up their own exchanges by 2023. At some point, after all, Republican hysteria about Obamacare just has to burn out. (Doesn't it?)

On health inflation, I think running below the post-WWII average is a pretty aggressive standard. That would require health care inflation of about 1 percent above overall inflation. If we manage to keep it to around 2 percent, I'd call that a reasonable result.

But my biggest issue is with the age-adjusted mortality rate. I know this is a widely popular metric to point to on both left and right, but I think it's a terrible one. Obamacare exclusively affects those under 65, and mortality just isn't that high in this age group. Reduced mortality is a tiny signal buried in a huge amount of noise, and I very much doubt that we'll see any kind of clear inflection point over the next few years.

So what to replace it with? I'm less sure about that. Maybe the TIE guys would like to weigh in. But this is a longtime hobbyhorse of mine. Medical care does people a ton of good even if it doesn't save their lives. Being able to afford your asthma inhaler, or getting a hip replacement, or finding an antidepressant that works—these all make a huge difference in people's lives. And that's not even accounting for reduced financial strain (and bankruptcies) and lower stress levels that come from the mere knowledge that a doctor is available if you need one—even if you don't have a life-threatening emergency that requires a trip to the ER.

In addition, I'd probably add a few things. Douthat doesn't include any negative metrics, but critics have put forward a whole bunch of disaster scenarios they think Obamacare will be responsible for. It will get harder to see doctors. Pharmaceutical companies will stop innovating. Insurance companies will drop out of the exchanges. Premiums will skyrocket. Etc. Without diving into the weeds on all these possible apocalypses, they count as predictions. If, in 2023, we all have to wait months for a routine appointment, or we can't get the meds we need because drug companies have gone out of business, then Obamacare is a failure regardless of what else it does. I don't think these things will happen, but they're surely on my list of metrics for judging the law's success.

UPDATE: Whoops. It turns out that one of the TIE guys, Austin Frakt, has already weighed in on this. You can read his comments here.

It's Spring, So California Refineries Are Suddenly Having a Few Problems

| Fri Apr. 18, 2014 8:11 AM PDT

The swallows may no longer return to Capistrano, but don't worry. We still have an annual rite of spring here in California:

A gallon of regular gasoline hit a statewide average of $4.196 on Thursday, up about 13 cents in a week, according to AAA. That's the highest price since March 2013....Problems at a few refineries in the Golden State undergoing routine spring maintenance have squeezed inventory and boosted prices, analysts said. And only a handful of refineries outside the state are capable of making the ultra-clean type of gasoline mandated in California.

"A couple of refinery issues have started to flare up, which is fairly normal this time of the year," said Patrick DeHaan, senior petroleum analyst at GasBuddy.com, a fuel price tracking website.

I used to keep a file of clippings of this exact same story running each spring and summer. I mean, literally the exact same story. Every year, right at the point where the winter/summer switch squeezes supplies from out of state, there would suddenly be a bunch of "glitches" that took some local refinery capacity offline and prices would spike.

I haven't bothered with that for a while, but seeing this story today brought back memories, so I just thought I'd share. It's an amazing annual coincidence, isn't it?

Doctors Begin to Notice That Health Care Is Really Expensive

| Fri Apr. 18, 2014 7:46 AM PDT

Andrew Pollack reports that some doctors are starting to notice that the health care they provide can be really, really expensive:

Saying they can no longer ignore the rising prices of health care, some of the most influential medical groups in the nation are recommending that doctors weigh the costs, not just the effectiveness of treatments, as they make decisions about patient care....Traditionally, guidelines have heavily influenced the practice of medicine, and the latest ones are expected to make doctors more conscious of the economic consequences of their decisions — even though there is no obligation to follow them.

....Some doctors see a potential conflict in trying to be both providers of patient care and financial overseers. “There should be forces in society who should be concerned about the budget, about how many M.R.I.s we do, but they shouldn’t be functioning simultaneously as doctors,” said Dr. Martin A. Samuels, the chairman of the neurology department at Brigham and Women’s Hospital in Boston. He said doctors risked losing the trust of patients if they told patients, “I’m not going to do what I think is best for you because I think it’s bad for the health care budget in Massachusetts.”

Generally speaking, this is overdue. Some doctors are highly sensitive to patient costs, but some aren't. I'm often surprised at how little doctors know about how much their treatment recommendations cost or how they're delivered. Even if you have the presence of mind to ask, sometimes they simply don't know their own systems well enough to find out.

That said, I'd recommend baby steps. First, plenty of doctors are already very cost conscious—but in the wrong direction, pushing lucrative, highly expensive treatments because it's good for their own bottom line. Sometimes it's because they have a part ownership in a diagnostic facility. Other times they're just gaming the system, as some high-volume ophthalmologists do by routinely prescribing Lucentis ($120 reimbursement from Medicare) vs. Avastin ($3 reimbursement from Medicare) for treatment of macular degeneration. Guidelines that rein in this kind of behavior are an obvious target.

Second, Congress could allow Medicare more discretion about how much it pays for various drugs. It's flatly crazy that taxpayers are the only people in the entire medical system who, by law, have virtually no leverage to negotiate pricing with pharmaceutical manufacturers.

Third, doctors should be more proactive about simply being aware of costs and sharing this information with patients. Some patients care more than others, depending on their incomes and quality of insurance coverage. But every doctor should have at least a basic idea of what different treatment options cost their patients, and they should have it quickly available right in the exam room. Nobody should get stuck with a huge bill—or even just a large bill—simply because they got sent to an out-of-network specialist or got prescribed a drug that turned out to be off their provider's formulary.

I suspect this is harder than I think. It could only be done by computer, and the software would have to have access to a ton of information. Doctors alone couldn't get it done. But electronic medical records are already taking over the profession, and with some help from the federal government I'll bet this kind of thing could be done. One way or another, cost transparency is the first step toward cost reduction.

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| Fri Apr. 18, 2014 6:00 AM PDT

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