Dr. Reinhardt's US Chamber of Commerce paper:
Don:
I had referenced an angry paper I had once written for the US Chamber of Commerce. Unsure of whether I had sent it to you for distribution, I send it to you now.
I had agreed to appear on one of their panels, but when I saw that our topic was "Why are there so many uninsured, and what does it mean to us, the insured?" I balked. I told them I won't blow a day to participate in such a panel but I would write them a statement, if they promised to distribute it. They did, I wrote it, and they distributed it. It was written in some haste, as you can tell, but I did want to register a few points with that crowd.
Best,
Uwe
Note: This paper provides a clear explanation for the perpetuation of the deficiencies of our current health insurance system. Because it is inappropriate to send a 180 KB attachment in a mass mailing, it is not included with this message. If you would like to receive this paper (as a Microsoft Word attachment) please respond to this message, and we will send it to you.
Don McCanne
Uwe Reinhardt, Ph.D. responds to Ellen Shaffer, Ph.D.:
(Dr. Shaffer's previous comments are marked ES, and Dr. Reinhardt's inserted comments are marked UR.)
UR: Ellen:
I appreciate your comment on our ongoing debate and shall offer some rejoinders in the body of your text. Before doing so, however, I would like to address an issue of methodology.
You write off my and Norm Ornstein's comments as "cynical" and "unanalytical." Although I would not characterize Norm Ornstein's commentary thus, I am prepared to plead vaguely guilty as far as my commentary is concerned, because I had not intended it to be a scholarly, tightly reasoned, analytically rigorous piece. It was a rather quickly written comment, injected into something akin to a chat room--a rather loose statement of a hypothesis which is this: The structure of our government alone, and the power of the elite that uses that structure to its advantage, cannot fully explain the half century of failure to move the US towards universal coverage--let alone toward a single-payer system. The myopia and apathy of the electorate also played a part. Furthermore, unless that electorate can be awakened and mobilized politically, mere appeals to the ruling elite, and finger-pointing in that elite's direction, are unlikely to bring us closer to your goals.
Now, having said that much, and in view of your professional judgment of my and Norm's comments, I deem it fair to look to your commentary for an example of "analytical" thinking. Presumably, you would not contribute an "unanalytical" piece to this debate. Therefore I am asking you, quite sincerely in fact, to identify for me just where your commentary is analytical, in the sense that it could be a role model for an economist like me. I do know very well what is and what is not a rigorous analysis within neoclassical economics. I am curious to know what political scientists mean by "analysis," and I would like you to use your commentary to show me the way.
I shall proceed with my rejoinders, paragraph by paragraph.
ES: Here is why Uwe Reinhardt's comments, and Norm Ornstein's, are cynical, unanalytical, demoralizing and wrong:
Whatever nods they may offer to the actual structural political obstacles to achieving universal health care in the U.S., the ultimate villain is the stupid American populace (teenagers, plebes, what have you -surely not the well educated, who read this list).
UR: Is this what you mean by "analysis", Ellen?
By the way, I would not call the plebs the "ultimate villain." In fact, I am not sure what "ultimate" means in this context any more than I know which blade in a scissors "ultimately" cuts the paper. My point was merely that the electorate does have more power than it chooses to exercise and that its failure to exercise that power is an integral part of the failure so far of the movement for universal health insurance coverage.
Furthermore, I do believe that the general public suffers from a degree of myopia. In many opinion surveys that I have seen, a large majority of respondents (usually over 80%) declare themselves satisfied with their health care and even with their health insurance. I wonder how many Americans actually worry about being uninsured, while they are employed and well insured. One of President Clinton's stronger selling points for his plan was that insurance card he waved, "insurance coverage that you cannot lose." Why did that powerful message not get better political traction with the electorate in 1994? Why did Americans vote as they did in 1994? Did the preferences of the electorate have nothing to do with Newt's ascendancy?
Let me hasten to concede that I share the economist's deep suspicion of opinion polls of any kind, even those that might support one of my hypotheses. I am more impressed by actual votes and plebiscites.
ES: And the econometrician's solution to engaging these dunderheads is: make them pay more! Then they'll pay attention and we can really get somewhere. Economic shock therapy for the ailing of America. Great news for insurance companies, hospitals, doctors and employers. Defined contribution plans will finally make Americans real consumers, with direct control over their health care choices. Then they can really call up that doctor and tell her to conform to national standards of quality, balancing over- and under-service. Yes indeed. (Or maybe the theory is that once they have realized the futility of becoming individual consumers, Norm Ornstein will lead us in calling for rescinding the tax rebate, and funding federal enforcement of national quality guidelines, as well as universal coverage.)
UR: Is this what you would call rigorous "analysis", Ellen? Can this serve as a role model for economists who might venture into political analysis?
I should mention to you that econometricians are, basically, positive analysts who usually do not engage in normative economics. You must be thinking of normative economists, such as Mark Pauly or Stuart Butler and many others who tend to think along those lines.
Personally, I have never argued that more cost sharing will make the individual patient a smarter "consumer" of health care. On the contrary, I have written that I do not subscribe at all to that hypothesis. Many economists on the right of the political spectrum, of course, do make that a working hypothesis. They seem to have much sway in the political arena..
On the other hand, it would not surprise me to see greater interest in a single-payer system among the American people if the full fiscal brunt of a defined contribution scheme rained down on them. As you probably know, the percentage of the American health bill that was paid out of pocket actually fell during the 1990s. Using the CMS data, which you can download off the web, I find that total private out-of-pocket spending as a percentage of total national spending on personal health care was 24.1% in 1988, 22.6% in 1990, 17.6% in 1995 and 17.7% in 2000. That is averaged over all Americans, including the uninsured. If one took only insured Americans, the fraction spent out of pocket would be even lower. My point is that, by and large, insured Americans really are not yet hurting, fiscally. The only problem they have is hassle over the interpretation of the myriad of fine-print clauses in their increasingly customized insurance contracts, but that is another issue. The hypothesis that much heavier cost sharing under a defined contribution plan could, conceivably, kindle greater interest in a single-payer system with comprehensive coverage is not, in my view, totally off the wall.
ES: Well, yes, power does flow in many directions between the ruling/corporate elite and the rest of us, and sometimes our side wins. (Medicare. Medicaid. Happened at a time when many of us were inspired and united by the civil rights movement, not demoralized by invective.)
UR: Just a question: were you, Ellen, personally part of the movement that brought us Medicare and Medicaid? I ask, because I believe that an important factor at the time was that America was then run by a generation that had suffered the Great Depression together and had gone through W.W.II together--a generation that understood that luck is just luck and not (as many of my students seem to think, deserved), and a generation that had experienced first hand that government can be benevolent and get things done. Government organized the Allied victory. I wonder whether that generation of Americans did not emerge from its travails with a greater sense of social solidarity (and greater faith in government) than is typical of the younger generations--a lingering racism at that time notwithstanding.
ES: Specific analysis of particular political events needs to inform us, and determine when we are mistakenly blaming the victim, and when instead we can rightly blame a stratum of society for intentional and heartless pursuit of self-interest.
UR: Do you consider this statement rigorous analysis, Ellen? I sense a distinct prejudgment here.
ES: People are regularly abused and treated unfairly by those with more power, whether raped and slaughtered, unfairly fired, or given a bad grade; some fight back, many don't, usually successful organizing and intelligent leadership helps.
UR: Is this analysis or a polemic?
ES: The prevailing rules and institutions societies develop over time (very long periods of time) to safeguard justice also play a role.
UR: Precisely what do you mean here?
ES: Without dwelling on some lapses in bonhomie among certain Europeans during the 20th century ...
UR: I'm glad you don't, Ellen, but it really does not have any bearing on the issue of universal health insurance coverage. On the other hand, it is a nice personal dig in this debate, I'll grant you that. Touché!
ES: ... it is important to recognize that in the case of the failure of universal coverage in the U.S., the problem lies not primarily in failures in the national character of the American population, however amusingly this elitist view of our people is served up.
UR: Is this a statement of fact, your opinion, or analysis, as you understand that term?
ES: If Uwe wishes to make the case that this is really the central problem, he might present some evidence that links cause and effect, or at least a logical line of argument beyond observations about spoiled stockbrokers in the Hamptons.
UR: I don't know what will pass muster, Ellen. I cite the sorry American voting record by income class to shore up my point; but apparently that does not count. I cite the fact that in a clear-cut plebiscite on the single-payer system, in a generally progressive state, the majority of those citizens who did bother to vote voted against the single payer system. I make the logical inference that failure on the part of the poor to vote more heavily in presidential or Congressional elections (cause) has as one of its consequences (effect) that the poor will be disregarded in the political process, especially when candidates (such as Bill Bradley) who do take up the cause of the disenfranchised lose at the ballot box for want of political support. In my view, this is a legitimate hypothesis about cause and effect.
ES: (If the American people really were that stupid I'm not sure that yelling at them to get off their duffs would be very effective.)
UR: Yelling at them when they are basically comfortable probably won't work. Yelling at them when they are in great discomfort might work.
ES: Uwe has already well described the failures of our systems of financing and organizing politics and politicians. Will imposing further financial hardship, e.g. through defined contribution plans, truly mobilize the populace to overcome these obstacles?
UR: As noted, it might.
ES: What is the evidence that this would be the best or even one effective stimulus to political activity in the case of health care?
UR: As I mentioned above, the evidence may be lacking because the bulk of Americans have been reasonably well insured and the bulk of them declare themselves satisfied with their coverage in Humphrey Taylor's and others' surveys. But is it surely acceptable, even in political science, to entertain the hypothesis that greater financial hardship associated with brittle and shallow insurance might kindle among the electorate a greater interest in comprehensive, permanent health insurance. Are hypotheses off limits in political science?
ES: (If it were, we should be seeing armies of the uninsured waving their hospital bills in the faces of policymakers, rather than retreating into defeat, homelessness and bankruptcy.)
UR: Perhaps you will explain to us, Ellen, why they just retreat--why it is so hard to mobilize their voting power? A little analysis here might help.
ES: What is even the analytical connection? Is there precedence for this in the US or elsewhere?
UR: You ask me: is there precedence in the US for cases where widespread among the electorate perceived hardship led to remedial political action? Maybe someone else can answer it better than I can. But I believe Social Security is such a case, as is Medicare and Medicaid. There was plenty of suffering there among the people, and fiscal duress among providers, and things did begin to click politically.
ES: Truly, Americans have a proclivity towards individualism. Additionally, many of us do not vote, (As Jim Hightower has noted, if God intended us to vote she would have given us candidates.)
UR: Is this, then, an analytical statement, Ellen? There is no difference at all between Al Gore and George W. Bush that might bestir a citizen to vote? Bill Bradley was not a candidate?
ES: How does this factor balance against the immense financial and political power of the private insurance industry, with its attendant ability to command publicity and the fealty of politicians? No other nation has had to face and overcome this force.
UR: Other nations do have these forces, too. But, as Ted Marmor points out, and I fully agree, these powers do not hold nearly the sway in parliamentary systems as they do in our system.
ES: This is not a reason to give up; it has to be done. It is a difference between the US and other countries that we must acknowledge and address. Further, health care is a difficult stand-alone organizing issue in industrialized countries, absent other national crises: most people are healthy, poor people have other pressing priorities, sick people are sick; both problems and solutions are complex, and the industry has far greater access to the media than do reformers.
What is the actual position of the American people on universal health care, through single payer or any other means? Uwe tells us the vote against single payer in California was definitive; in this case the electorate was swayed by a last-minute, well-financed campaign by the insurance industry alleging huge resulting cost increases.
UR: Are you simply asserting this, or is that a fact? And if you were right, does it not underscore a point I made about the fickle American voter with a short attention span who is easily swayed, one way or the other? Why is it that the proponents of the single-payer system could not apprise California voters of the empirical record all around us, which shows that single payer systems generally cost less per capita and as a percentage of the GDP than does our system? Why were these facts disregarded by the California electorate?
ES: This was a false allegation, this kind of tactic is not unexpected, and activists need to be able to confront this kind of thing.
UR: Yes, indeed. Why haven't you?
ES: But it is far from the last word. Kip and others point out alternative results through polls, the Maine legislature, the Jefferson Jury, and countless local ballot initiatives.
UR: Like Massachusetts recent ballot initiative? Did the single-payer movement prevail? I thought it had not.
ES: The answer is murky, and often depends on the point the presenter is trying to make.
UR: I sincerely do wish you and yours luck, Ellen, but I won't hold my breath. In the meantime, I support ugly ducklings, such as the Families USA--HIAA two-pronged approach the reduce the number of uninsured. Ideological purity is not my shtick. I'd just like to see the number of uninsured reduced by as much as is politically feasible, by whatever means.
ES: I like to ask people whether they would prefer the current for-profit, market-driven, inequitable system of health care that leaves 45 million people without coverage; or a fair, publicly financed, publicly delivered and equitable system of universal coverage that would provide high quality health care to all. Usually gets a pretty good response.
UR: Talk some time to pollsters, Ellen. I recommend Humphrey Taylor of Lou Harris, or Bill McInturf, the Republican pollster--both as straight as they come. Pollsters will tell you that the response you get from respondents in surveys depends significantly on the way you ask your question. Look at how you phrase your question. Are you at all surprised to receive the answers that you get? A pollster engaged by the HIAA or AAHP, surveying the very same people, but phrasing the question differently, could most likely extract the conclusion that the respondents would not like a "government run, single-payer, one-size fits all etc etc" system and prefer our "free-enterprise system that stresses innovation etc etc." In short, Ellen, I hardly consider what you offer here hard data or even analysis. Do you?
ES: Ok, how do we address the myriad obstacles to health care reform in the US, including developing support among our fellow citizens, besides further impoverishing them? Whoever knows this for sure is likely to be rich or assassinated but here are a few points of departure: 1. It may take some time.
UR: Agreed. Half a century down without success. How many more decades to go? Give me a guestimate!
ES: 2. Undermine the credibility and power of the opposition (why the fight over the patients' bill of rights is a good thing).
UR: As you know, I would debate that, and so would many other detached observers. You are stating your opinion here, which is all right. It is not a statement of fact, and surely not analysis. How far, do you think, would that PBOR movement have gotten without the coffers and the lobby of the AMA, which has its own agenda, and that is surely not enforcement of insurance contracts between insurers and the insured. The AMA, by the way, favors MSAs, not a single-payer system. So you won't have the AMA on your side in the next round.
ES: 3. Incremental programs like Healthy Families are failing to recruit and retain members; call for states to pay the full premiums, for good.
UR: By all means, call for it. But will the fiscally hard pressed states comply? I've seen them make a mush of Medicaid.
ES: 4. Link the fight for a just health care system to other calls for social justice, and thereby ally with political movements with some clout. Opposing "free" trade in health care via GATS and FTAA would be a start.
UR: Has such linkage worked in the past? Honestly, I don't know.
ES: 5. Point the finger at powerful forces like businesses that prefer to give away their profits to the insurance industry rather than turn the enterprise over to the government as enlightened capitalists do abroad.
UR: Good heavens! You think this will work any better tomorrow than it has in the past? But, ok, point the finger and see the elite blush. Point it at Jack Rowe, M.D. of Aetna, Inc. and see him blush! Point it at Karen Ignani of the AAHP and see her blush. Having unsuccessfully tried to shame members of the elite on many occasions--openly, in my testimony before Congress--I would not expect much from the strategy. No one ever did blush.
ES: 6. Demand some rigor from ourselves and our leaders in analyzing successes and failures, and figuring out which forces are required to and likely to do what in order to advance the issue.
UR: By all means! Agreed!
ES: (Did Bill Bradley's campaign really fail because he championed a tepid proposal to expand health insurance coverage? Is that what scared the Democrats into the arms of Al Gore? Fascinating!)
UR: I am not sure what you are asking us here. "Tepid"? Bill Bradley offered by far the most generous and far-reaching proposal on the uninsured among the candidates last year. In fact, Al Gore's health insurance proposal was hardly more generous than Bush's. A bit of Medicaid and SCHIP expansion, some tax credits to employers, and so on, all on the back of a paltry budget. Anyone who really cared about the uninsured should have favored Bradley.
ES: 7. Get Uwe to write us a polemic from time to time.
UR: OK, Ellen, let's specialize. I'll do the polemics, and you do the cool analysis, like the present one.
ES: Apparently some readers found his comments bracing and challenging. It's a good opportunity to think through why they are misleading, though appealingly presented.
It's frustrating to have been propounding an intelligent and effective solution like single payer for all these years, and not to be getting very far.
UR: Yes, indeed, As you said, you will need some rigorous analysis to explore why you have failed.
ES: It is worth examining why not, and what we might do differently. I look forward to seeing us all move forward.
UR: I'd like to see it, too. But I don't expect much.
UR: Let me repeat that I challenge you, Ellen, to explain to me in what way your commentary is more "analytical" and less "polemical" than mine, or than Norm Ornstein's commentary. I insist upon it, because I am not well pleased by debates in which arguments one does not like are simply written off with adjectives like "cynical" or "unanalytical" or "polemic" and so on. The proper approach is to engage on the substance and I encourage you henceforth to follow that route.