A number of smart folks on the Left, who have never and would likely never do something so crass as actually participate in a productive enterprise, have argued that complaints about regime uncertainty by business people is all so much whining.  The problem, they argue (not without some truth) is with demand — if business people were being presented with profitable market growth, they would invest to capture it, irregardless of the President’s personal disdain for business people.

And yes, given that scenario, they would likely invest.  But would they hire?

Already, the true cost of an employee dwarfs what is on his or her paycheck.  Bad employees are increasingly difficult to hire, as employees immediately run to the eager, waiting arms of an attorney when they are fired for cause.  But if one doesn’t fire a bad employee quickly, he or she is a walking liability time bomb, with my company liable for any boneheaded action an employee might engage in.    With rising minimum wages, family and medical leave laws, an increasing number of protected groups who will sue over any bad outcome — is it any wonder we have jobless recoveries?

“Denmark finds every sort of way to increase our taxes,” said Alisa Clausen, a South Jutland resident. “Why should the government decide how much fat we eat? They also want to increase the tobacco price very significantly. In theory this is good — it makes unhealthy items expensive so that we do not consume as much or any and that way the health system doesn’t use a lot of money on patients who become sick from overuse of fat and tobacco.  However, these taxes take on a big brother feeling.  We should not be punished by taxes on items the government decides we should not use.”

As an aside, given that Scandinavians tend to have among the world’s highest tolerances for taxes, when they get fed up, it must be getting bad.

Anyway, as part of the great Leftish dogpile on all things Texas, Kevin Drum argues it failed because … the total percentage of people in Texas with health insurance did not change.

Huh???  First, only the Left believes that the statistic on percentage of people with health insurance means anything when evaluating the health care system.  Percentage insured is more a proxy for the type of jobs in the state and the number of illegal aliens as it is a measure of anything meaningful about health care access or quality.

But second, the whole point of malpractice reform was to bring down insurance rates for doctors and try to keep doctors from leaving the state.  Further, it was a basic fairness issue of trying to deal with large settlements no reasonable person thought were really the fault of the doctor.  So how about stats on malpractice rates, or doctor retention, or doctor satisfaction, or queue times?  He’s got nothing.

Via Q&O, Heritage has done a similar analysis, and come to a similar observation, though with much nicer and more professional graphics than I had.

Correlation is not causation, but in fact we have a lot of independent evidence (including my own experience) that many small and middle sized companies have changed their hiring plans based on costs and uncertainties of Obamacare.

Almost all discussions about Medicare reform ignore one key factor: Medicare utilization is roughly 50% higher than private health-insurance utilization, even after adjusting for age and medical conditions. In other words, given two patients with similar health-care needs—one a Medicare beneficiary over age 65, the other an individual under 65 who has private health insurance—the senior will use nearly 50% more care.

Several factors help cause this substantial disparity. First and foremost is the lack of effective cost sharing. When people are insulated from the cost of a desirable product or service, they use more. Thus people who have comprehensive health coverage tend to use more care, and more expensive care—with no noticeable improvement in health outcomes—than those who have basic coverage or high deductibles.

Its amazing that we still have serious public debates about which way demand curves slope.

He tries to use the above chart to make the point that Medicare is superior to private insurers because it is more “accurate.”  Accuracy in claims seems like a good thing, but I started to wonder how it was defined in this study.

So I spent like 30 whole seconds clicking through to the study.  It turns out the data is based on surveys of doctors.  This chart is explained this way:

Description:  On what percentage of claim lines does the payer’s allowed amount equal the physician practice’s expected allowed amount?

So really, this chart is not a measure of insurance company accuracy, it is really a measure of doctor accuracy in estimating insurance company claims payment behavior, or perhaps of insurance company claims transparency.  Because Medicare pays fixed, published, below-market rates, and because they are so large, it is not at all surprising doctors are better at predicting what Medicare will pay on a claim.

In other words, doctors disagree with Aetna on claims more frequently than they disagree with Medicare?  Is this bad or good.  I have no idea.

But one could go further and say that another way of heading this chart, rather than “accuracy,” would be “willingness of insurer to roll over and pay whatever the doctor asks for.”

In the past, Drum and others on the Left have also bragged that Medicare’s overhead is lower than private insurers.  These are all related issues.  Private insurers put more scrutiny on claims, which costs more in overhead and causes claims to get paid slower, but presumably results in lower claims payments and less fraud.

Medicare’s approach may be net better (ie overhead savings could be larger than claims and fraud savings) or it could be worse, but this chart in isolation tells us nothing.

PS – this is not the first time I have found Drum running health care numbers that do not mean what he thinks they mean.

Just to give one a flavor of just how undemocratic the folks were who crafted Obamacare, check this provision out:

Any resolution to abolish the IPAB must pass both houses of Congress. And no such resolution can be introduced before 2017 or after Feb. 1, 2017, and must be enacted by Aug. 15 of that year. And if passed, it cannot take effect until 2020. Defenders of all this audaciously call it a “fast track” process for considering termination of IPAB. It is, however, transparently designed to permanently entrench IPAB — never mind the principle that one Congress cannot by statute bind another Congress from altering that statute.

So, for the rest of eternity, there is theoretically only a single 31-day window six years hence when this board can be abolished.  Of course, I am not sure future Congresses can be bound in this way, but it shows you the heart of a dictator possessed by the folks who wrote this law.

By the way, not always a big fan of Justice Scalia, but there is little doubt he is smart and this dissent written 12 years ago certainly was prescient

“I anticipate that Congress will find delegation of its lawmaking powers much more attractive in the future. . . . I foresee all manner of ‘expert’ bodies, insulated from the political process, to which Congress will delegate various portions of its lawmaking responsibility. How tempting to create an expert Medical Commission . . . to dispose of such thorny, ‘no-win’ political issues as the withholding of life-support systems in federally funded hospitals.”

Postscript: Could the IPAB pass nanny-type rules under the justification they could reduce health care expenditures?  For example, what if the IPAB said that mandatory motorcycle helmets would reduce doctor spending, would that automatically become law?  How about limits on salt or fatty foods?  Many current dystopic novels begin with growth in government power, sometimes of one agency, due to security fears over terrorism (e.g, the movie V).  I bet I could write a good one with the core being the IPAB.

• I have always understood the “trust funds” for these programs were a crock, that we had spent the money in these funds years ago.  But the accounting fiction is important for a reason I did not know – when the trust fund is used up from an accounting standpoint  (vs. a cash standpoint, where it is not only already used up but never existed) in 2036 or whenever, statutory authority for spending is capped at annual tax collections, which at that point will be way, way below programmed spending levels.
• Medicare alone is projected to grow to 6% of GDP.  wow.
• The reality of Obamacare’s promises of cost reductions is starting to appear, as already these supposed cost reductions are being discounted by folks who have accountability for getting the numbers right.

One thing to note — Social Security actually has some shot at being repaired, because benefits are a fixed, predictable amount (as long as your actuarial tables are right).  Medicare and Medicaid are far harder, because the benefits are open ended, and every recent “fix” has tended to shift incentives to encourage rather than discourage more spending.  Note, for an example, the political pressure to eliminate the part D donut hole that actually is there to provide incentives to camp drug spending and prices.

First, from the WSJ

A new survey released yesterday by the Massachusetts Medical Society reveals that fewer than half of the state’s primary care practices are accepting new patients, down from 70% in 2007, before former Governor Mitt Romney’s health-care plan came online. The average wait time for a routine checkup with an internist is 48 days. It takes 43 days to secure an appointment with a gastroenterologist for chronic heartburn, up from 36 last year, and 41 days to see an OB/GYN, up from 34 last year….

Massachusetts health regulators also estimate that emergency room visits jumped 9% between 2004 and 2008, in part due to the lack of routine access to providers. The Romney-Obama theory was that if everyone is insured by the government, costs would fall by squeezing out uncompensated care. Yet emergency medicine accounts for only 2% of all national health spending.

The emergency room data is fascinating, as crowded emergency rooms supposedly overwhelmed by the uninsured was such an important image in the campaign to pass Obamacare.  More on this from Q&O:

Hospital emergency rooms, the theory goes, get overcrowded because people without health insurance have no place else to go.

But that’s not the view of the doctors who staff those emergency departments.
The real problem, according to a new survey from the American College of Emergency Physicians,isn’t caused by people who don’t have insurance — it’s caused by people who do, but still can’t find a doctor to treat them.

A full 97 percent of ER doctors who responded to the ACEP survey said they treated patients “daily” who have Medicaid (the federal-state health plan for the low-income), but who can’t find a doctors who will accept their insurance….”The results are significant,” said ACEP President Sandra Schneider in prepared comments. “They confirm what we are witnessing in Massachusetts — that visits to emergency rooms are going to increase across the country, despite the advent of health care reform, and that health insurance coverage does not guarantee access to medical care.”

As I have been saying for a long time, the Obama health care nuts do not have any secret, magical idea or plan for cutting health care costs.  In fact, as I have written here and here, we should expect Federalization to exacerbate the bad information and incentives that make health care more expensive.  The only idea they have, in fact, is the only one that anyone ever has in government for this kind of thing — price controls

Over the weekend, The Washington Postpublished a Q&A-style explainer on the Independent Payment Advisory Board—the panel of federal health care technocrats charged with keeping down spending growth on Medicare.

The details are complicated, but the gist is simple: If spending on Medicare is projected to grow beyond certain yearly targets, then it’s IPAB to the rescue: The 15-member panel appointed by the president has to come up with a package of cuts that will hold Medicare’s growth in check. If Congress want to override that package, it only has two options: Vote to pass a different but equally large package of cuts or kill the package entirely with a three-fifths supermajority in the Senate.

The Post lays out the basic framework above. But what it doesn’t explain in any detail is exactly how those cuts will be achieved. And that, of course, is where the difficulty begins: Here’s how The Wall Street Journal’s editorial board explained it last month: “Since the board is not allowed by law to restrict treatments, ask seniors to pay more, or raise taxes or the retirement age, it can mean only one thing: arbitrarily paying less for the services seniors receive, via fiat pricing.” Medicare already centrally sets the prices it pays for the services of doctors and hospitals. Given the board’s limitations, the most likely cuts we’ll see from IPAB, then, will be arbitrary, quality-blind reductions in these payments (though hospitals will be exempt from cuts for the first couple years).

We know what happens next: Providers stop taking on new Medicare patients, or drop out of the system entirely. In Medicaid, which pays far lower rates than Medicare (which pays somewhat lower rates than private insurance), this is already common: As one emergency physician recently told The New York Times, “Having a Medicaid card in no way assures access to care.” If IPAB cuts Medicare provider payments down to the bone, it could end up transforming Medicare into a seniors’-version of Medicaid.