Negotiating With Ourselves

Paul Krugman's arguments on behalf of universal health care are well known and widely agreed upon by progressives. Then he gets controversial:

But now is the time to warn against plans that try to cover the uninsured without taking on the fundamental sources of our health system’s inefficiency. What’s wrong with both the Massachusetts plan and Senator Wyden’s plan is that they don’t operate like Medicare; instead, they funnel the money through private insurance companies.

Everyone knows why: would-be reformers are trying to avoid too strong a backlash from the insurance industry and other players who profit from our current system’s irrationality.

But look at what happened to Bill Clinton. He rejected a single-payer approach, even though he understood its merits, in favor of a complex plan that was supposed to co-opt private insurance companies by giving them a largely gratuitous role. And the reward for this “pragmatism” was that insurance companies went all-out against his plan anyway, with the notorious “Harry and Louise” ads that, yes, mocked the plan’s complexity.

I tend to agree with that. I'd happily take something like Wyden's proposal as a compromise measure, but it takes two to compromise. I'm not sure it makes sense for liberals to be pre-emptively offering concessions to the insurance industry with no guarantee that the insurance industry will support the measures being contemplated. To me, it makes more sense to just try and build as much support as possible for a single-payer system and then be prepared to compromise if special interests come to us with alternative universal schemes they're happier with.

Comments

Back in '93, it seemed like our side was scared of being called socialist. I assume we still are. The result, of course, is that we have to compromise before the other side even opens its mouth.

Posted by Kyle | January 1, 2007 5:14 PM

Does anyone have a vote count or even a good informed-by-data estimate of current Senators and/or House members who might support a single payer healthcare plan? 10%? or 40%? I.e. in project of building as much support as possible for a single payer plan, where are we now?

Posted by otto | January 1, 2007 5:28 PM

I really don't get the timidity by those who support universal health care. It is time to take on the insurance industry. Even people who work in the insurance industry hate the insurance industry.

Posted by Cal | January 1, 2007 5:44 PM

Good points. I'd add that the memory of Harry and Louise has to be a negative for the insurance industry. It's not like most Americans have had a wonderful experience with health insurance since 1993. You could even turn the old ad around and mock the complexity of the employer-based system with its multiple intermediaries. If Karl Rove were on our side, he'd say keep it simple, frame the issue as one of justice, simplicity, economy, and choice (and better-operating labor markets), and refuse a deal rather than compromise.

Posted by Jim M | January 1, 2007 6:03 PM

Not sure if this was intentional or not, but your title "Negotiating with ourselves" is a nice echo of a statement Paul O'Neill told us (via Ron Suskind) Bush made about his superjumbo tax cuts. When O'Neill tried to persuade Bush that there should be triggers built in to condition part of the tax cuts on fiscal or economic events (dialing them back if needed to maintain a semblance of fiscal balance), Bush's reply was "I won't negotiate with myself." If the Democrats weren't going to push back any harder, Bush wouldn't do it for them for the sake of something as silly and abstract as "good governance" for God's sake!

In the case of healthcare, I'm sure there is absolutely no risk of too little assertiveness from either the insurance lobby or the right wing in Congress. But the Democratic establishment probably is still too scared of the "socialist" label to negotiate from a position of strength.

Posted by STS | January 1, 2007 6:18 PM

Great point Matt. Exactly the same thing is happening with the minimum wage increase. If the Dems really want a 2 dollar increase, they should have started out by proposed a 4 dollar increase. They'll have to negotiate with Bush to avoid a veto, and he'll talk them down from their opening bid.

Posted by beowulf | January 1, 2007 6:59 PM

It would be nice if people would fill in the details on how they would expect single payer to work. Do people really expect the top 10% or 20% of America to really use the same medical system was homeless people and crack mothers? Are you going to pass a law that physicians cannot take money from anyone but the government? Do you really expect people who would never send their children to public schools to use public health insurance?

Also, do you really want medical providers to face the same economic situation as wheat farmers (price taking)?

Posted by superdestroyer | January 1, 2007 7:16 PM

Superdestroyer: "Do people really expect the top 10% or 20% of America to really use the same medical system was homeless people and crack mothers? physicians cannot take money from anyone but the government? ...etc

These issue have been dealt with in other national health systems. For example, in Australia there is universal free health care (with limitations, long waiting lists and all the other problems of such as system). And then people can choose private health insurance (with significant government control), which means the rich can opt for private coverage and doctors can earn significant private income (as many consumers and doctors do). Of course the consequence is that most of the real big medicine is done in the public system because that is where the money and the staff are.

but fundamentally, the issue you have raised are certainly able to be addressed.

Posted by flapple | January 1, 2007 7:58 PM

A single-payer plan can pass because nearly all voters want it. The only opposition is from insurance company executives and their lobbyists and campaign contributions. If voters saw Democrats in Congress do something that important for them against the pure greed of insurance company lobbyists, they'd remember and vote for Democrats again.

Posted by Gary Sugar | January 1, 2007 8:01 PM

Jim M -- I like the idea of dragging out Harry and Louise and wrapping them around the insurance industry's necks. I'd also find some way to bring up WMDs, seriously. By now most of America's population has been burnt by anti-progressive propaganda and realizes it has been burnt. That creates better conditions for breaking thru and winning a critical mass of support for real change.

Posted by Kyle | January 1, 2007 8:38 PM

"Once we accept the framework that American taxpayers already pay for health care coverage for everyone, we just do it in the worst way possible, the argument changes from 'should the government pay for health care' to 'who's ripping us off'. And the answer is the health insurance industry.

These companies render our health care system bloated and inefficient, but let's be honest, that's somewhat dry language to describe what they are really doing. Through their immoral decisions to deny care and coverage based on excessive bureaucracy, the executives of these companies are simply killers. Their wealth is literally built with blood money. And their chief lobbyist, Tom Donahue, probably believes that there should be a special tax exemption for equipment to clean the blood off their hands. You might think I'm being rhetorically hot or irresponsible, but dealing with horrible customer service designed to deny you care when you have, say, cancer, demands a certain level of honest outrage. It isn't wrong to disdain these people, though I suppose that Very Serious People like to pretend that decisions made by a corporate elite denying millions medical care isn't actually murder by spreadsheet. But it is.

As progressives, we are going to be fighting these terrible people who use poisonous political tactics for a long time. They are well-funded, they are smart, and they have a lot of institutional allies. I don't know what it's going to take to convince Democratic wonks that this is a very aggressive time in politics, and we ought to change our strategies to emphasize public persuasion. But we ought to.

So anyway, to recap, we already have universal health care, it's just run by psychos. These psychos happen to wear nice suits and drive fancy cars and have titles like 'CEO' and credentials like 'Harvard Business School' graduate. These psychos will resist any attempt to take away their power. Taking away their power is a necessary part of any solution.

You do the math." ...Matt Stoller at MyDD

Posted by bob mcmanus | January 1, 2007 8:50 PM

otto: John Conyers introduced a single-payer bill, HR 676, in April, 2005. It got 78 cosponsors, listed here. There may be a few extra signatories on similar legislation in 2007 with the new freshman class, although I don't know how many that would be. Keith Ellison in Minnesota's 5th district frequently emphasized his support for single-payer as part of his campaign, but that's the only specific example I'm aware of.

I don't think there was any companion single-payer legislation introduced in the Senate in the 109th Congress. I remember Russ Feingold being an advocate for this in '92, although he's been focusing his recent attention on a plan where three states get to design trial universal health systems and then apply to the federal government for any funding help they might need. Bernie Sanders is a single-payer supporter. Sherrod Brown was one of the 78 House cosponsors last session. Sen.-elect Amy Klobuchar from Minnesota, whenever the topic was raised, told people that she supported getting to universal health care, "wasn't against" single-payer on the merits, but also wasn't convinced it was achievable in the current political environment, and that she'd probably focus more attention in the short term on doing what might have a chance of becoming law in the next few years, i.e., insuring all children, allowing small businesses access to FEHB-style plans for their employees, etc. I don't know enough about anyone else to comment.

I think, broadly speaking, there is a growing support for making universal health care a branding issue for the Democratic Party, although not necessarily for making single-payer a branding issue.

Posted by Chris | January 1, 2007 9:00 PM

One problem with my fellow liberals is that they--or we--don't know how to bargain (maybe that's why so many of us went into academe instead of trade). You never open negotiations, especially with Republicans, by indicating that you're ready to meet them halfway. Unless, that is, you're ready to have your clock cleaned. You have to ask for the moon--insist on it, in fact--and be ready to walk away if you don't get it.
Get it?

Posted by Henderstock | January 1, 2007 9:01 PM

I'm not sure how I feel, but I can think of some counter-arguments to Matt/Krugman's point here.

It's conceivable that some compromise proposal might stand a much better chance of passage and therefore pose a much stronger threat to special interests than difficult-to-pass single payer plans and cause them to propose much nicer counter-proposals than they otherwise would. It isn't the special interests alone that restrain single-payer--people are just naturally adverse to sudden radical changes in domestic policy that will effect them directly yet they don't understand (and who the heck does understand health care?) A more modest proposal might not stop "Harry and Louise" ads, but it might make those ads less effective.

And if both sides refuse to "negotiate with themselves", doesn't that mean that no negotiation takes place?

Posted by Consumatopia | January 1, 2007 9:07 PM

Never underestimate the stupidity of the American people, especially with our timid corporate media as the only source of mass information. Single payer health care can and will be branded as socialism, bureaucracy, medical care with all the compassion and effectivenss of the DMV.

I agree with Krugman in principle, but going straight to single-payer will not work. Instead, you need to build a system that will transition easily to single-payer at some future time, that allows the insurance companies to gradually be undermined. Easier said than done, I know.

Posted by MQ | January 1, 2007 9:18 PM

Gary Sugar: A single-payer plan can pass because nearly all voters want it. The only opposition is from insurance company executives and their lobbyists and campaign contributions.

The state of Oregon voted on a ballot initiative called Measure 23 in 2002 that would have implemented a single-payer system. Results: Yes: 21.5% No: 78.5%

California voted on Proposition 186, a single-payer plan, in 1994. Yes: 27% No: 73%

You can get most people to agree to anything when you only explain one side to them. Wait until it's been bashed repeatedly on TV for months on end. We have some evidence from the Left Coast as to which side voters will find more convincing. That's the problem inherent in trying to do universal health care in one big huge leap. Politically, trying to build the Starship Enterprise - however it's designed - and ram it through at warp speed is going to scare people.

Doing reform in small-to-medium size steps, showing - not just telling people, and asking them to take a leap of faith in you because you're a well-meaning liberal; but showing - you can save money in the process, is the politically safest way to do it, although problems can arise if the steps aren't thought out in terms of the long-range goal, or if, like with the small step of McCain-Feingold, activists' energy gets drained and politicians say, "There, we've fixed the problem. Now we can turn our attention to other issues" and walk away from it. So it's tough. There are real choices to be made in terms of what the best political strategy is.

In terms of substance, I think the Canadian model gets held up as if it's the Holy Grail without appreciating that there are differences between the Canadian economy in 1966-71, and the American economy today. Canada's actually unique among nations with universal health care in that it completely bans any supplementary private insurance from being offered in the marketplace. Is that a fight U.S. health care advocates want to get into? The U.S. has a lot of R&D money, private and public, tied up in the medical technology industry, which would take a big hit under a Canadian-style plan. Is that something a health care plan should try to accomodate or not? There are legitimate questions about this stuff.

Anyone interested should definately take the time to read Ezra Klein's Health of Nations series, also written in April, 2005. The systems of France, England, Canada, Germany and Japan all get analyzed.

Posted by Chris | January 1, 2007 9:27 PM

Gallup: "From what you have heard or read about the plan so far, do you favor or oppose President Clinton's plan to reform health care?"

............Favor/Oppose
09/24/93: 59/33
10/28/93: 45/45
11/15/93: 52/40
11/19/93: 52/41
01/17/94: 56/39
01/28/94: 57/38
02/26/94: 46/48
03/28/94: 44/47
04/20/94: 43/47
05/20/94: 46/49
06/11/94: 42/50
06/25/94: 44/49

Posted by Chris | January 1, 2007 9:50 PM

In terms of substance, I think the Canadian model gets held up as if it's the Holy Grail

This is utterly untrue. Most US advocates of health care reform advocate something closer to the French or German models. Both permit supplemental insurance; indeed the German model is largely composed of private insurance, with a government basic package of universal coverage setting the floor. Both provide universal health care and health outcomes comparable to or (in the French case) superior to the American system, at somewhere between 50 and 60 percent of the cost.

Posted by brooksfoe | January 1, 2007 10:04 PM

Chris, thanks for that. So about one third of the Democratic caucus is openly for single-payer? Seems like there's a long way to go even within the Democratic party.

Posted by otto | January 1, 2007 10:14 PM

The poor, or at least the working poor who make too much for public assistance yet not enough to actually purchase health care, do not care about "models" or "outcomes" or your stupid intellectual debates. They just want to be covered. These debates have become ridiculous, trying to theoretically change an entire system. Get kids under 18 covered. Now. In the current system. It costs a lot? Fine. It's inefficient compared to Uruguay's blah blah blah and expensive when compared to France's blah blah blah and Model A's outcomes are better than Model B's, and advocates argue that so and so, and polls show that GOD DAMN you're all making me sick. Cover kids now, we'll go from there. It's called leadership.

Posted by xjerryx | January 1, 2007 11:55 PM

Matt writes: I'm not sure it makes sense for liberals to be pre-emptively offering concessions to the insurance industry with no guarantee that the insurance industry will support the measures being contemplated.

Well, I too don't think it makes sense for liberals (or anybody) to be "pre-emptively offering concessions" to insurance companies. But what about, rather than offering concessions, actually, you know, consulting with them (as with all the other players who are going to need to be consulted if anything substantive is going to be accomplished) to find out what elements are going to have to be included to get their support. I wonder how much actual, productive discussion the Clintonistas did with the insurance industry back in '93; one suspects they came up with a plan that liberal healthcare activists said might pass muster with the insurance industry, not one that actually had much in the way of insurance industry substantive input. If I'm wrong, then what we really had in '93 was a veritable Charlie Brown/Lucy football episode, and the insurance industry shouldn't be trusted as a good faith participant in healthcare reform discussions. Unfortunately, they're a powerful player, and any legislation that doubles as their death warrant is unlikely to become law anytime soon. It would be easier, if one's goal is genuinely is universal coverage, to get their support. Of course, if one's goal is not to see universal coverage, but rather to fantasize about Scandamerican utopia, I guess it doesn't matter much either way.

These issue have been dealt with in other national health systems. For example, in Australia there is universal free health care (with limitations, long waiting lists and all the other problems of such as system).

Right. Largely it's an issue of loose language. People use the term "single payer" to mean "universal healthcare that is mandated, regulated and (at least partially) funded by the government." In other words, they use it to describe the healthcare systems of the non-American rich world. There's a lot of diversity therein, including plenty of private sector participation, including by insurance companies.

Posted by Jasper | January 2, 2007 1:06 AM

We have a single payer system, its called Medicare. You don't need to travel to some alternate universe (or Canada) to figure out how a single payer system would work, just call your grandmother.

Posted by beowulf | January 2, 2007 9:31 AM

We have a single payer system, its called Medicare.

No. We don't have (as in "currently possess") a "single payer system" in any meaningful sense. You have to be old to use Medicare. Taking away the age requirement and increasing taxes to pay for it would mean lots of votes in Congress that aren't there. We're about as close to adopting "Medicare for all" as we are to adopting the medical system of France.

Posted by Jasper | January 2, 2007 9:47 AM

Re: Through their immoral decisions to deny care and coverage based on excessive bureaucracy

Coverage is frequently denied, it is true, but care as such is very seldom denied. It's rather uncommon for precert and authorization staff to outright refuse to authorize or certify a requested procedure (assuming it is a standard treatment for a documented condition and fraud is not suspected). These people are NOT accountants or bureaucrats as is often supposed: they are usually RNs or even MDs employed by the insurance company for purposes of determining the medical appropriateness of complex and expensive treatment regimes, and they do so based on medical criteria. It's a pretty well known fact that insurers save very little money by this process. Where the savings come in is in the complexities of the claims adjudication process where the payout is whittled down in every possible way. And of course providers play this game from the opposite end trying to bulk up their requested amounts by every maneuver they can think of, usually but not always, just short of outright fraud. And does anyone think this isn't going to happen in a single payor system? Government programs are among the worst offenders in this regard. Their fee schedules are more byzantine than a tome on quantum mechanics, they too demand prior authorization and precert for complex treatment regimes, and they are quite merciless at refusing to pay more than some set amount, often reducing even that by unappealable fiat.

Posted by JonF | January 2, 2007 1:02 PM

We know that universal coverage can pay for itself through savings if the agency bargains aggressively with providers and can keep paperwork to the Medicare standard. This is the baseline demand- that we reform our healthcare system and save about 5% of our GDP by providing coverage universally and bargaining nationwide with providers.

The piecemeal reform is worse than no reform at all. Most of the money appropriated to implement it would go to "training" staff members who would "help" needy patients find coverage- if they were qualified for coverage, which most would not be, and if a provider could be found, which usually will not be the case.

The fact is that 99% of what goes on in healthcare is entirely predictable and doctors and nurses have a very good idea of what Medicare will reimburse, and how much they will pay. Medicare won't pay for something until it is proven to work, and that's a good thing. As you may know if you follow the endless stream of stories about drugs that turn out to be deadly, surgical procedures that don't actually improve outcomes, etc.

As for the charge of "socialism", it's time to step right up and hit that one out of the park. Of course it's socialist- just like our highways, our airports, our schools, our universities, our agricultural system, our car companies, and the defense of the nation. Our capitalism only lives with socialistic supports, and healthcare is the poor relation left out in the cold. It's time to get with the program.

Posted by serial catowner | January 2, 2007 1:24 PM

The piecemeal reform is worse than no reform at all.

serial: Depends on what you mean by "piecemeal" and it also depends on whose perspective we're talking about. Certainly for somebody who can't obtain or afford insurance coverage under the status quo, just about any reform that gets them covered is a whole lot better than no reform.

Now, if, by "piecemeal" you mean: reform that is far less than ideal and also doesn't get us to universal coverage, I'd be inclined to agree there's not much in the way of improvements.

But if, by "piecemeal" you mean: reform that is far less than ideal (inadequate cost controls, say, or, overly onerous rationing, or whatever) but gets us to universal coverage, I have to strenuously disagree.

Why? Because I think once the American people have gained universal health insurance coverage, it will be politically impossible to get them to relinquish it. Moreover, I have a notion that cost pressures would rather quickly nudge a (say) Massachusetts-style reform (an individual mandate) toward a more comprehensive, sustainable single-payer model. My advice to liberals is to push for universal coverage attained by any means necessary. And then sort things out once this goal has been achieved.

Shorter Jasper: make coverage percentage (say, at least 99%), and not cost, sustainability or even quality be the benchmark by which to measure success in the short term. In the long term, these other things can be dealt with.

Posted by Jasper | January 2, 2007 4:12 PM

I'm speaking from 17 years of experience with the healthcare system as seen by people who can only afford Medicare- or not even that.

The only kind of piecemeal reform you're going to get starts with a means test, and normally you not only must have a low income (a lot lower than you think) but belong to some other subgroup (mothers with children, live in a certain county, etc). Then, the programs are usually not funded to provide for everyone who is eligible. Then, many providers don't choose to participate. The ones who do have long waiting times or can't accomodate all patients. And that's if you're lucky enough to know about the program at all- in my experience programs are sometimes hidden (yes, on purpose) from clients to keep the cost of the programs down.

None of this goes one step in the direction of universal care and the savings from scale. The clients are taught to be helpless, the agency learns to manipulate programs and results to their own ends, the legislators end up hopelessly confused about which legislative provisions will actually produce results on the ground, and the insurance companies make hay by exploiting the entirely-justified fears of the slightly better-off that they might fall into the health gulag of poverty.

The equation is pretty simple- the savings and system performance come from going nationwide and insuring the healthy as well as the sick. Piecemeal reforms go exactly the opposite direction and magnify the appearance of cost and confusion in "socialized" medicine.

Posted by serial catowner | January 2, 2007 5:34 PM

"If the Dems really want a 2 dollar increase, they should have started out by proposed a 4 dollar increase."

It works both ways:

"If the Republicans want no minimum wage increase, they should have started out by proposed a 2 dollar decrease."

Both sound pretty nutty to me. By putting up proposals that reach to far, too many americans in the middle are alienated.

Posted by pjgoober | January 3, 2007 10:09 AM

Look, clearly you can't make such an extreme offer that the other side walks away (let's raise the minimum wage to $100 an hour!) but if you can make a reasonable case for your position, that's your opening bid.

For example, the minimum wage in 1968, adjusted for inflation, was $9 an hour. If you adjust it for productivity increases (growth in GDP per person), it was more like $14 an hour.

So anywhere between a $9 and $14 an hour minimum wage would impose less of a burden on the economy than the minimum wage did in 1968 (when unemployment was only 3.6%). So the Democrats explain this and magnamimously say they'd agree to the lower end of that range-- $9 an hour. THEN the negotiation with Bush will begin. Since the current MW is $5.15 an hour, its likely the compromise will shake out to be somewhere in between. If the Democrats start with $7.25, Bush will end up settlng for $6.25 or so.

As for the Republicans, they don't have to propose anything-- if nothing happens inflation will continue to decrease the value of the MW. The dollar has inflated about 30% in the last 10 years. The Republican proposal, such as it is, has been the $1.50 decrease from when the last increase was passed (10 years ago). Another few years of doing nothing and we'll get to that $2 decrease.

Posted by beowulf | January 3, 2007 6:28 PM