Robert J. Samuelson has a good article at the Washington Post on some of the Illusions of Cost Control. He makes a pretty good point about politics in this country: We ALWAYS take the easy/obvious way out:

There’s a parallel here: housing. Most Americans favor home ownership, but uncritical pro-homeownership policies (lax lending standards, puny down payments, hefty housing subsidies) helped cause the financial crisis. The same thing is happening with health care. The appeal of universal insurance — who, by the way, wants to be uninsured? — justifies half-truths and dubious policies. That the process is repeating itself suggests that our political leaders don’t learn even from proximate calamities.

Argument 1: The uninsured use expensive and ineffective emergency rooms for primary care. Once they’re insured, they’ll have regular doctors. Care will improve; costs will decline.


A study by the Robert Wood Johnson Foundation found that the insured accounted for 83 percent of emergency-room visits, reflecting their share of the population. After Massachusetts adopted universal insurance, emergency-room use remained higher than the national average, an Urban Institute study found. More than two-fifths of visits represented non-emergencies. Of those, a majority of adult respondents to a survey said it was “more convenient” to go to the emergency room or they couldn’t “get [a doctor's] appointment as soon as needed.” If universal coverage makes appointments harder to get, emergency-room use may increase.

Argument 2: Insuring the uninsured will dramatically improve the nation’s health and thus decrease healthcare costs.


Medicare’s introduction in 1966 produced no reduction in mortality; some studies of extensions of Medicaid for children didn’t find gains. In the Atlantic recently, economics writer Megan McArdle examined the literature and emerged skeptical. Claims that the uninsured suffer tens of thousands of premature deaths are “open to question.” Conceivably, the “lack of health insurance has no more impact on your health than lack of flood insurance,” she writes.

How could this be? Possible explanations include: (a) many uninsured are fairly healthy — about two-fifths are age 18 to 34; (b) some are too sick to be helped or have problems rooted in personal behaviors — smoking, diet, drinking or drug abuse; and (c) the uninsured already receive 50 to 70 percent of the care of the insured from hospitals, clinics and doctors, estimates the Congressional Budget Office.

Here’s the bottom line on healthcare cost control:

Unless we change the fee-for-service system, costs will remain hard to control because providers are paid more for doing more. We have to change the provider INCENTIVE! Just giving people free health insurance makes the problem worse. Healthcare providers will be able to continue doing more and getting paid more because there will be NO INCENTIVE for consumers to shop for the best prices OR control their own costs!

In the president’s SOTU last night, he said regarding health care:

But if anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know.

Here is a simple approach that will work:


Part A. will:

  • because all workers will be required to pay for 100% of their insurance out of their own pocket, they will have shop and negotiate for the lowest insurance rates.
  • remove the disparity between what the self employed pay for insurance and what regular, previously employer-subsidized workers pay.
  • Just as self-employed workers presently do, to keep their insurance premiums low, all workers will negotiate larger deductibles, giving them a strong incentive to question and negotiate the charges of their healthcare providers…driving down costs.

Part B. will:

  • remove in-state and regional  monoplies of insurance companies … increasing competition and driving down rates.

Part C. will:

  • drive down the cost of insurance since legal fees that need to be paid by that insurance will be less.

Part D. will:

This 4 point approach will accomplish the goals the president outlined, but it requires real change, the kind of change that Mr. Obama’s special interest backers (like unions and banksters) will not support.  McCain had a proposal in his campaign to tax the employer paid part of health insurance, but the special interests and Mr. Obama shouted it down.  McCain ran a poor campaign and deserved to lose, but this proposal was on the right track.  Too bad,  Obama’s offer for real change is a farce


For almost the entirety of the health care debate, the Obama Administration has relied on economist Jonathan Gruber to make the public case for its idea of reform – even the most unpopular parts. But as Firedoglake revealed on Friday, the Obama Administration has failed to disclose that it paid the same economist more than $780,000. Jonathan Gruber’s work has been cited by the White House, Members of Congress, and countless media outlets, but not once did the Obama Administration disclose it was paying him more than $780,000 in tax dollars.  This is a huge ethical violation that undermines the entirety of health care reform.

Once we broke this scandal, The New York Times, Washington Post, Time Magazine, and other publications all said they should have disclosed Gruber’s lucrative contracts if they were aware of the conflict of interest. Dozens of Members of Congress cited Gruber’s work in their floor speeches. The White House pushed Gruber hundreds of times to the press and on its website.  While Gruber’s ethical lapses are his own personal and professional issue, the true problem here is that the White House used Gruber and his research as a seemingly unbiased source in support of its unpopular reforms. When Obama wanted to tax middle class health care plans, Gruber defended the tax. When Obama wanted to force people to buy private insurance, Gruber defended the individual mandate. When Obama did not want a public option, Gruber said a public option was not important. When Obama needed to pretend the bill had cost controls, Gruber said it had the greatest cost controls ever. It is simply not right for the White House to cite Gruber’s analysis to illustrate the benefits of the bill they support without disclosing that Gruber is on the government payroll. A biased insider can’t be an unbiased outside observer. But that’s exactly the approach of the Obama Administration, to the tune of $780,000 in tax dollars.

The Obama Administation’s $780,000 “buy-an-economist” scandal threatens to shake the foundation of health care reform. We need to get to the bottom of this.

Sign our petition to Obama: come clean on tax dollars used to pay any other undisclosed contracts.

This list provides a brief but we know, incomplete description of the corrupt deals for special treatment of SOME states for their senator’s support of the Obamacare takeover of 17% of the US economy.  If these deals are not unconstitutional, we need to amend the constitution so that they are.

The Weekly Standard:

The Democrats are irresponsibly and disingenuously claiming that the bill would cost $871 billion over 10 years. But that’s not what the CBO says. Rather, the CBO says that $871 billion would be the costs from 2010 to 2019 for expansions in insurance coverage alone. But less than 2 percent of those “10-year costs” would kick in before the fifth year of that span. In its real first 10 years (2014 to 2023), the CBO says that the bill would cost $1.8 trillion — for insurance coverage expansions alone. Other parts of the bill would cost approximately $700 billion more, bringing the bill’s full 10-year tab to approximately $2.5 trillion — according to the CBO.

In those real first 10 years (2014 to 2023), Americans would have to pay over $1 trillion in additional taxes, over $1 trillion would be siphoned out of Medicare (over $200 billion out of Medicare Advantage alone) and spent on Obamacare, and deficits would rise by over $200 billion. They would rise, that is, unless Congress follows through on the bill’s pledge to cut doctors’ payments under Medicare by 21 percent next year and never raise them back up — which would reduce doctors’ enthusiasm for seeing Medicare patients dramatically.

And what would Americans get in return for this staggering sum? Well, the CBO says that health care premiums would rise, and the Chief Actuary at the Centers for Medicare and Medicaid Services says that the percentage of the Gross Domestic Product spent on health care would rise from 17 percent today to 21 percent by the end of 2019. Nationwide health care costs would be $234 billion higher than under current law. How’s that for “reform”?

Even says that the bill is “a massive giveaway” to private insurance companies. The CBO estimates that, from 2015-25, private insurers would receive $1.0 trillion in subsidies from the American taxpayer — the insurers’ apparent price for giving up their freedom and being controlled by the government. Congress would mandate that Americans buy the insurers’ product and would redirect massive sums of taxpayer money to make that mandate more feasible. So, if insurance companies are your idea of a worthy object of philanthropy, then Obamacare is for you.

This Obamacare vote is a clear indicator that our country has really taken a turn for the worst.  Can we undo this? Can we get these bums out of office now?  Any incumbent, Republican or Democrat who voted for any two of these three measures: the .700 trillion TARP, the $.787 trillion Pork Stimulus or the $2.5 trillion Obamacare … should be removed from office.

First Senator Mary Landrieu of Louisiana is bribed with $300 million in pork to support Obamacare, then Blanche Lincoln of Arkansas “suddenly” removes her objections. Lincoln appears to be resigned to being voted out of office and likely has cut a deal to be hired by the Obamunists once she is removed from the Senate.  Landrieu is unashamed for taking the bribe for her state, but she should be, and we expect, Louisianians will increasingly be outraged. And what was the bribe Senator Nelson agreed to for Nebraska?  Time will reveal this mystery. This also makes us wonder what the going state bribe will be for making Obama President for Life...$500 million, maybe $1 billion?   The Obamunists don’t care how much these bribe schemes cost since it’s all newly printed money anyway and a hidden inflation tax on the American public and further, their ideology trumps all public welfare considerations.

Sen. John Ensign (R-Nev.) received a handwritten note Thursday from Joint Committee on Taxation Chief of Staff Tom Barthold detailing the penalty for failing to pay the new proposed “fee” for not buying health insurance.

Barthold said violators could be charged with a misdemeanor and could face up to a year in jail or a $25,000 penalty.

From Newt Gingrich’s site:

Dr. Ezekial Emanuel is a key health care advisor to President Obama and the brother of White House Chief of Staff Rahm Emanuel. Earlier this year, Dr. Emanuel wrote an article that advocated what he called “the complete lives system” as a method for rationing health care.  You can read it here. The system advocated by Dr. Emanuel would allocate health care based on the government’s perception of the societal worth of the patients.  Accordingly, the very young and the very old would receive less care since the former have received less societal investment and the latter have less left to contribute. “The Complete Lives System” would also consider the prognosis of the individual. Quoting Dr. Emanuel:  “A young person with a poor prognosis has had few life-years but lacks the potential to live a complete life.  Considering prognosis forestalls the concern that disproportionately large amounts of resources will be directed to young people with poor prognosis.” When fully implemented, Dr. Emanuel’s system, in his words, “produces a priority curve on which individuals aged between roughly 15 and 40 years get the most substantial chance, whereas the youngest and oldest people get chances that are attenuated.” “Chances that are attenuated” is a nice way of saying the young and the old are considered less worthy of health care and, under this system, will get less.

Our unborn and newly born children and our aging parents are considered low value by the Obama Administration.  It took a few years before the British decided that if it took more than $45,000 to keep you alive for a year, the government would not pay the cost.  But that’s where they are now.  And the US will be doing the same thing with Obamacare.  We need to heavily regulate the insurance companies to stop their abuse, but we also need to stop law suit abuse – something the Obama administration cannot do since it owes so much to the American Trial Lawyers.  We need to do things that increase the supply of doctors, nurses and hospitals in the US.  Reducing the cost of practicing medicine by capping the billions ($4 B in 2003, probably up to $10B today) paid out to lawyers in malpractice awards will encourage more doctors to practice.   It’s really Econ 101: when the supply curve shifts favorably, the price goes down.  If we take ALL the profits away from the “evil” health insurance companies, it’s just a drop in the bucket- and does nothing to increase the supply of health care or of health insurance. For example, below is a list of the 2006 profits (in millions) of the top for-profit health insurers:

Industry: Health Care: Insurance & Managed Care
Company Revenues ’06 Profits
UnitedHealth Group 71,542 4,159
Wellpoint 56,953 3,095
Aetna 25,569 1,702
Humana 21,417 487
Cigna 16,547 1,155
Health Net 12,908 329
Coventry Health Care 7,734 560
WellCare Health Plans 3,763 139
Amerigroup 2,835 107
Centene 2,279 -44
Medical Mutual of Ohio 2,039 100
Molina Healthcare 2,005 46
Sierra Health Services 1,719 140
Total 11,975

Even if the whole industry were making 2 times this 12 billion figure, its not enough to pay the insurance bill for the presently uninsured…  Obama blames the insurance indutry, but it’s a straw man. His motivation is government control – socialism – for it’s own sake.

Obama opened his speech by saying Americans are too often “held hostage” by insurance companies that deny or drop their coverage or charge fees they cannot afford.

Who would you rather be “held hostage” by – Aetna or the US government?  The government will drop your coverage when you are too old or too young to defend yourself.  At least now, if Aetna “drops” you,  there are other insurance companies to appeal to, but once the government drives the private insurers out of business there will be no one to appeal to – no alternative – but to resign yourself to the government’s death sentence.  There is a free market, non government takeover alternative…see for example this WSJ piece.

The insurance industry should be properly regulated to prevent abuse such as the rescission game, but to argue that private insurance should be driven out of existence because of such “lowlife” practices is absurd.

Please don’t try to tell us that the government is more benevolent (less inclined to be “lowlife”) to those who use a lot of health care dollars than private insurers.  The government is in the choosing business too.  It’s criteria, will not be based just on who is using up the most health care, but also on who the patient voted for in the last election…or who will be alive to vote in the next one.

If the present government is allowed to choose, who will get a hip replacement? — the 20 year old illegal immigrant or the 80 year native american?  I’m betting on the illegal immigrant. False choice- you say? Well, there is only so much health care to go around. The government is not trying to increase the supply of health care, it simply wants to ration what exists based on its “wise and benevolent judgment” rather  than price.

In the video below (granted the clip used is rather dated), Obama explains how his health care plan would “eliminate” private insurance over time and that he is for a “single payer universal health care plan“:

The Grand Rapids Press reports on a Ron Paul visit:

Former Republican presidential candidate Ron Paul has a frank prescription for the health care plan making its way through Congress: Scrap it.

“I think it’s monstrous,” Paul said.

“I don’t think it will improve medical care in this country. I think it’s very, very costly and we don’t have any money. And they don’t have any way of paying for it.”

Elsewhere, Congressman Paul has touted his own health care proposal:

Universal Healthcare never quite works out the way the people are led to believe before implementing it. Citizens in countries with nationalized healthcare never would have accepted this system had they known upfront about the rationing of care and the long lines.

As bureaucrats take over medicine, costs go up and quality goes down because doctors spend more and more of their time on paperwork and less time helping patients. As costs skyrocket, as they always do when inefficient bureaucrats take the reins, government will need to confiscate more and more money from an already foundering economy to somehow pay the bills. As we have seen many times, the more money and power that government has, the more power it will abuse. The frightening aspect of all this is that cutting costs, which they will inevitably do, could very well mean denying vital services. And since participation will be mandatory, no legal alternatives will be available.

The government will be paying the bills, forcing doctors and hospitals to dance more and more to the government’s tune. Having to subject our health to this bureaucratic insanity and mismanagement is possibly the biggest danger we face. The great irony is that in turning the good of healthcare into a right, your life and liberty are put in jeopardy.

Instead of further removing healthcare from the market, we should return to a true free market in healthcare, one that empowers individuals, not bureaucrats, with control of healthcare dollars. My bill HR 1495 the Comprehensive Healthcare Reform Act provides tax credits and medical savings accounts designed to do just that.

Congressman Paul also said he believes the Republican party needs to return to its core principles:

“They are going to have to earn that trust back. They should be more concerned about personal liberties. They shouldn’t be the great defenders of government secrecy and torture…”

“The young people aren’t supporting Republicans. The worst group for the Republicans is (age) 15 to 25. If they can’t appeal to that group, what kind of future is there for the party?”

The truth is the Republican party has no core principles.  Their “principles” are as transitory as the Democratic party’s.  The Republican party needs to be given the coup de grace and a new party without the Big government and special interest baggage formed.

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