Amid reports that the Senate Finance Committee’s version of health care reform does not include a “public option” for insurance, and after many weeks of line-drawing by various progressive organizations making the inclusion of a public option a sine qua non, Ezra Klein has an important post challenging the whole premise that this issue is central:

The public option, as it exists in any bill moving through Congress, is not the core of reform, nor anything near it. It is, for one thing, limited to the Americans who buy into the Health Insurance Exchanges, and the exchanges are in turn limited to the unemployed, the self-employed and small businesses. In the House bill — which is the strongest of the bills — the Congressional Budget Office estimates that 27 million Americans would be in the exchanges by 2019. That’s not nothing, but it’s not much. Imagine half choose the public option (CBO estimates many fewer than that). You now have 13.5 million Americans in a public insurer with no substantive advantages over private insurance. That’s not a gamechanger, it’s a tweak.

Even if you dispute some aspects of Ezra’s analysis of the substantive importance of the public option, it’s worth listening to his broader, historical argument: progressives have in the past supported a variety of health reform proposals that did not include a public option:

The public option is not now, and has not ever, been the core of the argument for heath-care reform. It is the core of the fight in Washington, D.C. It is an important policy experiment. But it was not in Howard Dean or John Kerry or Dick Gephardt’s plans, and reformers supported those. It was not in Bill Clinton’s proposal, and most lament the death of that. It is not what politicians were using in their speeches five years ago. It is a recent addition to the debate, and a good one. But it is not the reason were are having this debate.

But I would observe that Ezra doesn’t mention one of the reasons for the current focus on the public option: a significant element of health care reformers didn’t really support the Dean or Kerry or Gephardt plans, or the Clinton plan as it was eventually shaped, other than as a compromise with an unacceptable status quo. They supported, and still support, a single-payer system, and now either (a) hope, just as reform opponents claim, that a public option is simply a way-station to single-payer, or (b) want to maintain the priniciple of a public insurance provider as the only way to curb the abuses associated with private health insurance.
So while some progressives view the public option as merely a means to an end that is perhaps less important than several other aspects of health reform, others do indeed view it as “the core of reform.” It’s not clear at this point whether they are willing, this time, to take a dive on health care reform if the eventual legislation lacks a public option, but there’s no particular reason to doubt their sincerity or its origins.
I don’t happen to share the reflexive enthusiasm for single-payer of many progressives, but I do understand why its advocates feel frustrated. There was a moment a few years ago when single-payer seemed finally to be sweeping the progressive world; it was endorsed by Al Gore way back in 2002, and by the Editors of The New Republic, and by most if not all progressive health wonks. But in the 2004 and 2008 presidential campaigns, all of the Democratic candidates other than Dennis Kucinich rejected the single-payer approach.
Moreover, single-payer fans may rightly note that for the second time in fifteen years, a health reform proposal by a Democratic president is being imperiled by its complexity. Single-payer is nothing if not easy to understand, and while a public option in a competitive system isn’t that simple, comparisons to Medicare make it somewhat more comprehensible than, say, health insurance exchanges.
Still, Ezra is issuing the right challenge to those who make the public option non-negotiable out of a displaced preference for another approach to health reform altogether: is failure acceptable, given how rarely the opportunity for health care reform comes around?
Maybe progressives won’t ultimately have to make the choice between a bill without a public option and no bill at all. But I wouldn’t bet the farm, or health reform, on it.

Businessweek, via MSN Money has an article, “What’s most likely to bankrupt you” that ought to be required reading for every Democrat. And, as President Obama takes the campaign for health care reform on the road, it wouldn’t hurt to include this graph from the article as selling point #1 for those who think their health insurance is adequate and reform may not be so necessary:

Medical problems caused 62% of all personal bankruptcies filed in the U.S. in 2007, according to a study by Harvard researchers. And in a finding that surprised even the researchers, 78% of those filers had medical insurance at the start of their illnesses, including 60.3% who had private coverage, not Medicare or Medicaid.

If anyone can find a better short paragraph that explains why we need a public option, please share. Wondering if health security has been getting better or worse? Here’s the next graph:

Medically related bankruptcies have been rising steadily for decades. In 1981, only 8% of families filing for bankruptcy cited a serious medical problem as the reason, while a 2001 study of bankruptcies in five states by the same researchers found that illness or medical bills contributed to 50% of all filings.

The article goes on to add that the bankruptsy filers were “for the most part solidly middle class before medical disaster hit. Two-thirds owned their homes, and three-fifths had gone to college.”
In other words, those poll respondents we’ve been reading aboout who feel secure about their health insurance may be marinating in self-delusion. As the authors of the cited study, which is being published in the American Journal of Medicine, Drs. David Himmelstein and Steffie Woolhandler of Harvard Medical School, Elizabeth Warren of Harvard Law School and Deborah Thorne, a sociology professor at Ohio University, conclude:

“For middle-class Americans, health insurance offers little protection. Most of us have policies with so many loopholes, co-payments and deductibles that illness can put you in the poorhouse,” said lead author Himmelstein. “Unless you’re Warren Buffett, your family is just one serious illness away from bankruptcy.”

Woolhandler adds,

Covering the uninsured isn’t enough,” she said. “Reform also needs to help families who already have insurance by upgrading their coverage and assuring that they never lose it.”

As President Obama takes his case on the road, this is the kind of information that can help him persuade middle-class, insured Americans why they need health care reform. It’s important that all Democrats — office holders, rank and file and others use it as well. The uninsured know why we need health care reform. It’s time to educate the insured as well, and that’s a worthy challenge for all progressive journalists at this critical moment.

One of this week’s “must-reads” is an eloquent, angry piece by Hendrik Hertzberg for The New Yorker that explains and laments America’s “health care exceptionalism,” and attributes it largely to our constitutional system. An extended quote is in order:

In other free countries, legislation, social and otherwise, gets made in a fairly straightforward manner. There is an election, in which the voters, having paid attention to the issues for six weeks or so, choose a government. The governing party or coalition then enacts its program, and the voters get a chance to render a verdict on it the next time they go to the polls. Through one or another variation of this process, the people of every other wealthy democracy on earth have obtained for themselves some form of guaranteed health insurance or universal health care.
The way we do it is, shall we say, more exciting. For us, an election is only the opening broadside in a series of protracted political battles of heavy artillery and hand-to-hand fighting. A President may fancy that he has a mandate (and, morally, he may well have one), but the two separately elected, differently constituted, independent legislatures whose acquiescence he needs are under no compulsion to agree. Within those legislatures, a system of overlapping committees dominated by powerful chairmen creates a plethora of veto points where well-organized special interests can smother or distort a bill meant to benefit a large but amorphous public. In the smaller of the two legislatures—which is even more heavily weighted toward conservative rural interests than is the larger one, and where one member may represent as little as one-seventieth as many people as the member in the next seat—an arcane and patently unconstitutional rule, the filibuster, allows a minority of members to block almost any action. The process that results is less like the Roman Senate than like the Roman Games: a sanguinary legislative Colosseum where at any moment some two-bit emperor is apt to signal the thumbs-down.

He’s right, of course; America does differ fundamentally from countries with parliamentary systems where parties run on manifestos that are almost immediately implemented; intraparty dissent may well exist, but not on such basic issues as health care. Hertzberg could have gone further in his analysis of American exceptionalism: here party identity among candidates for Congress is largely self-selected, with primary voters offering the only (and rarely exercised) curb. Currently, 49 Democratic House members represent districts won by John McCain in 2008; ten Democratic senators represent states carried by McCain. There’s a strong presumption that the switch from total control of the federal government by Republicans prior to 2006 to total Democratic control today will create a natural backlash against Democrats in 2010 and perhaps beyond, especially given the dire economic situation. This is one of many factors in our system and our traditions that militate against big legislative reform efforts, particularly when, as is the case today, the “out” party decides to operate as an obstructionist force.
Add in the chronic mistrust of the federal government and particularly Congress among Americans from both parties and no party, and the power and money deployed by a threatened private-sector health care industry, and the extraordinary difficulty facing the Obama administration and its congressional allies in enacting meaningful health care reform is no big surprise.
So let’s continue to cut Barack Obama some slack in how he’s handled health care reform. He could have postponed action for a year, pleading the economic emergency; had he done so, he would have earned standing ovations from many pundits of the center and center-right. He could have “gone incremental” right away, and lowered expectations to a manageable level. Instead, for all the tactical manuevering going on right now, he’s still pushing pretty much the same ideas for reform that he campaigned on. But make no mistake: reforms of similar magnitude in the past required either gigantic majorities beyond anything Democratic currently hold (the New Deal, Medicare and Medicaid), or significant support from Republicans (the Civil Rights and Voting Rights Acts). Hertzberg is right in finding many aspects of our system frustratingly reactionary. But if we wait for, say, a parliamentary system to save us, we’ll be like premillienialist Christians waiting for the Rapture: standing in place, looking beyond the skies for redemption.

The California budget crisis has gotten a lot of deserved attention over the last few weeks, leading to all sorts of theories, some bordering on collective psychotherapy, about the Golden State’s fiscal dysfunction.
But it doesn’t seem to have quite penetrated the consciousness of the chattering classes that California’s only an extreme example of a fiscal meltdown that’s occurring all over the country, and probably isn’t getting any better any time soon.
New figures published last week by the Center for Budget and Policy Priorities paint the full bleak picture. For fiscal year 2010 (which began on July 1), states faced cumulative shortfalls during their budgeting processes of $162 billion, which amounts to 29.3 percent of state budgets. That’s significantly more than the $111 billion in shortfalls the states had in FY 2009, when the financial crisis hit.
But if current trends hold, states are expected to encounter an even higher level of shortfalls–$180 billion–in Fiscal Year 2011, for which they are just beginning to make plans. They are far past the ability to borrow from reserve funds, cancel major new investments, or cut out “waste.” We’re talking serious cuts in services and employment, and the kind of tax increases that no one likes and that could combine with spending cuts to further depress state and even national economies. And it would all be a lot, lot worse if funding for the states (albeit primarily just for Medicaid) hadn’t been included in the economic stimulus package.
So mock California all you want: as is often the case, they really have been a trend-setter in the advent of unmanageable fiscal problems.

Count me in as one of the more pro-Obama bloggers. I am generally pleased by the leadership he has provided to far, although I still sometimes have difficulty getting my head around the concept of being proud of a president — it’s been a long time. Yes I admire his speeches, but I also admire President Obama’s low-key, no drama leadership style, which is a good way to get things done — most of the time.
With respect to health care, however, there is something that should be said, and Frameshop‘s editor-in-chief, Jeffrey Feldman says it exceptionally well in his article “On Health Care, Obama Needs More Drama“:

Given the widespread fear that has spread throughout the national healthcare debate, I was surprised by the virtual absence of emotion in President Obama’s press conference performance…As a candidate, his speeches about “change” were so powerful that they spawned a pop culture industry. And yet, now that he is President and talking healthcare “change”–a national policy that will end the daily suffering and humiliation of tens of millions of Americans–Obama’s rhetorical passion has been displaced by the soporific drone of a mid-grade federal accountant. Where is the passion, Mr. President?

Feldman quotes a ho-hum passage from the President’s press conference, and adds “Obama’s words seemed to be governed by the logic of balance sheets rather than the emotion of lives in the balance.” Feldman may be overstating the President’s lack of discernable passion about health care reform, but he has a point. The balance sheet stuff is important — Americans want to know that proposed reforms are fiscally sound, and they are not going to get screwed by higher taxes. But it is up to the President, more than anyone, to arouse the citizenry’s anger at the gross injustice of the current “system.” Voters should be reminded of the urgency of heath care reform as a life or death issue for many Americans, because it is. With that accomplished, Feldman argues, then the President can shine the light on his fiscal prudence. Feldman adds,

OK, sure…The cost of inaction is greater than the cost of action, true. I agree. But healthcare reform is also about: the infuriating inhumanity of the current system…!
People are living lives in fear–children are dying, for goodness sakes. This is about injustice and the anger that tens of millions of people have been trapped in lives of fear as a result of health insurance business model that Congress has been too cowardly to confront for decades. And this is about the very real, very legitimate fears that people have as a result of thinking about the social and cultural shift that will result from having a public healthcare system that did not exist before…These are legitimate fears, and people are talking passionately about them all over the country.

Feldman calls for corrective action:

Obama’s single greatest strength as a politician has been his ability to speak in such a way that it makes Americans feel that we are soaring to new heights together…Franklin Roosevelt had that gift. John Kennedy had that gift. And Barack Obama has that gift, too. And needs to use it.

It’s going to take every bit of leverage the President can muster to get a decent health care bill enacted, and Feldman is right that the President’s remarkable ability to arouse and inspire is a weapon that should be unsheathed before it’s too late.

Republicans don’t much like to talk out loud about their party’s problems (unless they are talking about the increasingly rare species of “moderates”), so it was noteworthy when Ohio Sen. George Voinovich had this to say at an editorial board meeting of the Columbus Dispatch:

The GOP’s biggest problem? “We got too many Jim DeMints (R-S.C.) and Tom Coburns (R-Ok.). It’s the southerners. They get on TV and go ‘errrr, errrrr.’ People hear them and say, ‘These people, they’re southerners. The party’s being taken over by southerners. What [the] hell they got to do with Ohio?

I wish there was video or audio of the statement, to discover if “errrr, errrr” represents Voinovich’s impression of a southern accent, or was instead indicating that DeMint and Coburn have a tendency to growl like beasts, which might well be true.
What annoys me about Voinovich’s moment of candor isn’t so much the anti-southern animus it suggests, but the idea that Jim DeMint and Tom Coburn are giving the good people of Ohio the impression that they are typical southerners.
But that’s the price the South pays for some of the folks they elect to Congress. On a separate front, Poltico’s Anne Schroeder Mullins, looking for a mid-summer amusement, interviewed Georgia’s looniest House member, Paul Broun, Jr. Here’s an excerpt:

What do you miss most about your home state?
Fried chicken, fiscal and personal responsibility and the right to bear arms.
What’s the strangest thing a member has said to you?
That there is a scientific consensus that human-induced global warming is real.

How has your life changed?
Very little time now to do things I used to enjoy, like golf and hunting. But it’s all worth it in order to put America back on the right path and stop that steamroller of socialism.

Errrr, errrr.

This item is cross-posted from The New Republic.

Politico is reporting today that U.S. Sen. Jim Bunning (R-KY) is, by popular bipartisan demand, withdrawing his re-election candidacy, with a characteristic blast against the back-stabbers in his party who allegedly “undermined” his puny fundraising efforts.
Bunning nearly lost his first re-election in 2004 (to Daniel Mongiardo, subsequently elected Lt. Governor of Kentucky, and now a candidate for Bunning’s open seat) despite a Republican presidential landslide in the state. He hasn’t done a lot to improve his popularity at home or in the Senate since then. A substantial field of Republicans has lined up to succeed him, or, had he insisted on staying in the race, to beat him like a gong.
But what’s interesting is the sense of entitlement that Bunning appeared to possess, at the age of 77, about a third Senate term. To hear Bunning, the only obstacle to his desire to drift into his ninth decade on earth as a Senator was his reluctance to be concerned about attendance at “DC cocktail parties.”
The oldest of Republican Senators has, of course, has long had his problems with rumors of something less than laser-like mental agility, dating back to his 2004 attacks on Mongiardo as “limp-wristed” and looking “like a son of Saddam Hussein,” and then this interesting disclosure on the campaign trail:

Let me explain something: I don’t watch the national news, and I don’t read the paper. I haven’t done that for the last six weeks. I watch Fox News to get my information.

Bunning is the most senior member of what might be called (with props to Rick Perlstein) the Orthogonian Club, the band of pseudo-populist Republican politicians spawned by Richard Nixon who treat every setback as the product of a conspiracy of elitists. Sarah Palin is the most prominent junior member, and it’s fitting that Bunning’s trip to the showers followed so closely her unforced resignation as Governor of Alaska, accompanied by a similar claim of victimization.
Though I doubt we’ll hear much more about Bunning, once the baseball clichés about his retirement have subsided, Palin will mine the same mother lode of right-wing cultural resentment for quite some time. It will be interesting to see if the famous high school point guard Sarah Barracuda develops the same sense of blind invulnerability as the Hall of Fame hurler—and if she also learns when finally to take herself out of the game.

With so much of the fight over health care reform now coming down to issues of health care cost containment, it’s a pretty good time to take a look at the available evidence about where our system seems to “over-price” care as opposed to other countries.
TDS Co-Editor William Galston did a fascinating piece for The New Republic last week detailing the results of a McKinsey & Company study comparing health care spending patterns in the U.S. to those of other OECD (i.e., advanced) countries. Unsurprisingly, the U.S. has higher costs (about $2,000 per capita higher each year) and poorer health outcomes, and not because we are unhealthier to begin with.
One of the differential costs factors is pretty well known: Rx drug prices in the U.S. are on average 50 percent higher than in other OECD countries, and it’s attributable to marketing expenditures, not just R&D.
But two other factors are less well known:

* Much of the spending gap is attributable to the soaring use of out-patient services, which generate much higher profit margins than do hospital-based services. The ability of physicians to control the number of procedures patients receive drives up costs, and physicians’ ownership of testing facilities and ambulatory surgical clinics give them an incentive to drive up utilization….
* Generous physician compensation also contributes to higher costs. On average, U.S. general physicians earn 4.1 times per capita GDP, compared with the OECD average of 2.8 times. For specialists, the gap was even greater: 6.5 times per capita GDP, compared with 3.9 times elsewhere. McKinsey finds that higher than average physician incomes added $64 billion to total U.S. health care expenditures in 2006.

This has two big policy implications: the first is that there is indeed a tension between cost containment and the well-known desire of Americans to let physicians call most of the shots in terms of tests and treatments. The second is that the President is right in claiming that there are often less expensive ways of delivering quality health care, and that insisting on them is not, as conservatives so often argue, a form of “rationing.”
Still another important McKinsey finding is that cost-shifting from public to private insurance programs is in fact a significant problem in the growth of private health care costs. This is important in terms of proposed changes in Medicare and Medicaid reimbursement policies, and in the design of any “public option.”
Here’s Galston’s bottom line:

[W]e must look for ways of cutting the link between physicians’ earnings and the multiplication of high-cost procedures. Eliminating the loopholes in laws preventing physicians from owning test facilities would be a good start, as would reducing the compensation for high-tech tests to more reasonable levels. In the long run, fee-for-service is an unsustainable model of physician compensation, and health insurance reform should create incentives to move away from it.
We also need ways of exposing consumers more fully to the cost of the services they want without discouraging them from using the services they need. One strategy is to focus insurance coverage more on truly insurable events–the big-ticket medical events that can disrupt lives and bankrupt families–and less on routine medical expenditures and elective procedures. It should be possible to protect average families from spending an unaffordable share of their income on health care without entirely eliminating their awareness of trade-offs and costs.

Unfortunately, identifying unnecessary costs and then overcoming the institutional resistance to steps to reign them in, tough as that is, may not be enough in the current political climate. There’s also the problem of getting official recognition of costs savings–particularly by the Congressional Budget Office, which refuses to “score” some of the most fundamental structural changes as big cost-savers because, well, they haven’t been tried before.
And that’s why despite the understandable obsession with cost containment and the associated issue of covering the uninsured, we must continue paying attention to the third item on the health care reform agenda aside from cost and acces–health care quality. What we are buying for our dollars is as important as the price, and may well determine whether universal health coverage can achieve a more effective health care system both for individuals and for the country. And if we don’t pay attention to quality, then health care reform could be caught up in a destructive triage between cost and access factors that pit the insured against the uninsured with no common higher ground.

For all the ideological talk about divisions among Democrats on health care reform, there are some institutional issues that are equally important. Ezra Klein did a good job of analyzing the House-Senate dynamics over the weekend:

Some sources are speculating that the Blue Dogs are getting cold feet as they watch Max Baucus dither. Many of them felt burned by the hard and damaging vote on the cap-and-trade bill, as it looks like nothing will come of it in the Senate. Committing themselves to a health-care bill before the Senate shows its hand carries similar risks, and they’re no longer in a risk-taking mood. The worst outcome for conservative Democrats in the House is that they’re on record voting for a health-care reform bill that dies in the Senate and is judged a catastrophic example of liberal overreach.
The problem, of course, is that the more dissension there is among Democrats in the House, the less pressure there’ll be on the Senate Democrats to make a hard vote on health-care reform. This makes health-care reform something of a prisoner’s dilemma for conservative Democrats. If Blue Dogs in the House and centrists in the Senate both put it on the line to pass the bill, they’re both better off. But if one puts it on the line and the other whiffs, then the other pays the price.

Matt Yglesias notes the obvious way out of this “prisoner’s dilemma:”

[T]hey call it a “prisoner’s dilemma” because the idea is that the players are held incommunicado in separate cells. House and Senate Democrats can all get together in a room and talk this stuff out.

That’s all true, but from my own experience as a public-sector lobbyist and as a Senate staffer, I’m reasonably sure that getting House and Senate Members “together in a room” to “talk this stuff out” is really difficult, regardless of partisan or ideological issues. The institutional divisions between the two Houses are ridiculously, but obstinately, real. It goes beyond the problem of House members walking the plank on legislation that Senators may reject or significantly modify. Senators and House Members belong to very different clubs, with very different electoral cycles, committee systems, floor voting mechanisms, and constituencies. These institutional differences aren’t as large, at least lately, as partisan and ideological differences, but they can’t be discounted. And it’s yet another reason that the president must play a crucial role in leading, not following, congressional action on health care reform. The White House–the institutition, if not the actual physical location–is the only place you can get bicameral members from one party, much less from both, “together in a room” to “talk this stuff out.”

It’s a little early for high fives over at the Democratic Congressional Campaign Committee, but 15 months out, the DCCC ought to be encouraged by a new CQPolitics report indicating House Dems are in solid position for the 2010 elections. The report, by Greg Giroux and Bob Benenson, analyzes “100 congressional districts with races where either major party stands a chance of winning the seat” and concludes that the Dems House majority appears “secure.” Further,

The only three contests in which CQ Politics rates an advantage to the challenging party are all for seats now held by the Republicans and targeted by the Democrats…The Democrats’ two most vulnerable seats, currently rated Tossup, are in districts where McCain outran Obama by wide margins

The only other seat rated “tossup” in the report (NY 23) is now held by a Republican. CQPolitics provides updated ratings for all 435 House districts here, with links offering electoral and demographic data for each district and personal information about its representative.
Benenson and Giroux caution that “the party holding the White House often loses seats during a president’s first mid-terms” and a DCCC report in early June noted turnout concerns regarding two key constituencies:

African-Americans and college-age students turned out in considerable numbers for Obama, and it is far from clear whether they will do so again in the midterms. In fact, exit polls over the past few elections have shown that turnout for both groups has dropped in nonpresidential years.
For example, African-Americans made up 11 percent of all voters in 2004 and 13 percent of all voters in 2008, but only 10 percent of the 2006 midterm electorate. For younger voters, the drop-off is even more stark. Voters 18-29 years old constituted 18 percent of all voters in 2008 and 17 percent of all voters in 2004. But in the intervening 2006 midterm, they accounted for only 12 percent of all voters.

Mid-term turnout concerns notwithstanding, Giroux and Benenson conclude:

While at least some net gain is a very plausible possibility for the Republicans, it would take a huge reversal of political fortune for the party to reclaim a House majority. Of the 335 contests that CQ Politics’ election analysts rate as Safe for the incumbent party, 198 are currently Democratic (including that one vacant seat) and just 137 are Republican.
In addition, the Democrats are solidly favored in 31 of the 59 competitive contests for seats they currently hold, plus the Republican seat in Louisiana’s 2nd District. So if the Democrats were to win only their Safe seats and those rated Democrat Favored, they would have a total of 230 — well above the majority threshold of 218 seats.

It’s unclear at this juncture, what impact, if any, the current health care reform struggle in the House will have on Dems’ prospects, although it is hard to imagine it not helping if they pass a good bill.